chip Photo:VCG

 
Ideology-skewed industrial subsidy policies of major Western countries, such as the US CHIPS and Science Act, are bound to fail, Lou Jiwei, China’s former Minister of Finance, said at Global Asset Management Forum on Saturday.

“There are very few successful cases of industrial policies for specific enterprise support. The CHIPS Act stipulates that US companies receiving subsidies are not allowed to expand their investments in China. This kind of ideology-skewed industrial subsidy policy will fail,” Lou noted.

The decisive role of the market in the allocation of resources is the role, and excessive dependence on the role of the government, instead of the market, is doomed to fail sooner or later, Lou said.

Given the current international environment, the malfunctioning fiscal and monetary policies of major Western countries and the outbreak of geopolitical conflicts have also directly shaken the foundation of globalization.

“Trade protectionism will not solve any problem, and trade protectionism itself is the problem,” Lou said, noting that the process of economic globalization over the past four decades has enabled countries to make greater use of their comparative advantages and improve production efficiency.

According to Lou, economic globalization may encounter ups and downs, but in the long run, it will prevail. “China will continue to work together with the world to gather more certainty for globalization and inject impetus to shore up stability of the world economy,” he said.

After more than 40 years of reform and opening-up, China has been deeply integrated into the global economy. "China is one of the most important beneficiaries of globalization, and also the most firm supporter and defender of globalization," Lou said.

In order to improve opening-up of China’s financial services industry, Lou suggested that the government strengthen the support of financial institutions including cultivating their market competitiveness of Chinese financial institutions so that they can become truly independent market players.

Foreign exchange, securities, commodity futures and other related financial markets should accelerate innovation to provide diversified trading services and risk hedging tools for the asset management industry, Lou said.

Global Times