Climate change, inflation, economic diversification all interconnected challenges: Chinese professor

By Hatem Hussein and Khoder Nashar

SHARJAH, 14th September, 2023 (WAM) — Professor Fan Gang, Director of China’s National Economic Research Institute (NERI), believes that climate change, inflation, and economic diversification are all interconnected challenges that need to be addressed together.

Speaking to the Emirates News Agency (WAM) on the first day of the International Government Communication Forum (IGCF 2023) in Sharjah, the economist called for international cooperation and a rethinking of the global financial system in order to deal with these challenges.

The Chinese professor stated that the current investment in green energy is not enough, and that more government support is needed. “The current investment in green energy is really not enough. Why? Because some of the short-term investments cannot make money while others only cover the cost. So that is why in many areas at the beginning, we need government support.”

He called for international cooperation to address climate change, emphasising that the 28th United Nations Conference of the Parties (COP28) is an “important opportunity to share responsibilities and create new ways for countries and companies to cooperate.”

On inflation, Professor Fan Gang said that inflation needs to be dealt with from two aspects: the demand side and the supply side. “One needs to deal with inflation from two aspects. Normally, people think about the demand side, right? Increase the interest rate, for example. They are trying to lower down the demand. But also, we need to think about it from the supply side because inflation is a supply-demand issue. If supply is low, the price will increase, so we need to pay attention to the supply side.”

He suggested that countries increase imports from China, which is currently experiencing deflation. He also called for rethinking the global financial system and supply chain to make them more stable and resilient to inflation.

On economic diversification efforts made by various countries around the world, Professor Gang said that the countries that rely on natural resources need to make efforts to diversify their economies. He pointed to the UAE as an example of a country that is making progress in this area.

He added that all countries need to work together to address the challenges of climate change and economic diversification and that they should not retreat from globalisation.