Global economic governance is not friendly to emerging economies' transformation. In recent years, growth in emerging economies has slowed down because of double extrusion of "re-industrialization" in developed countries and more and more serious homogeneous competition among emerging economies.

Under existing conditions, developed countries can transfer their crises to emerging economies through various means while the latter have to face risks, such as turbulent capital flow, exchange rate volatility and deterioration of the trade environment, because they don't have enough voice to match their economic positions in global governance.

In 2010, the International Monetary Fund passed a reform program to increase emerging economies' voting rights. Unfortunately, it has not been fully implemented. And in the absence of a specially designed mechanism in global governance, their huge demand for infrastructure investment cannot be really taken care of.

The aim of global economic governance reform should be to promote the economic transformation of emerging economies, because it is very important to the sustainable development of the world.

Global economic growth is now uncertain. But with economic transformation becoming a major driver of global growth, the reform of global economic governance should be conducive to economic transformation.

In this regard, accelerating the free trade agreement (FTA) process will not only facilitate the economic transformation of emerging and developing economies, but also drive global investment and trade liberalization. Emerging economies find it difficult to build FTA networks because they cannot adopt the same standards as developed countries. But despite gradual upgrade of free-trade standards becoming a mega-trend, the threshold should not be raised too high to build new barriers and exclude emerging economies.

Since China's "Belt and Road Initiative" is aimed at jointly building FTA networks with reasonable standards and wide coverage, the need is to organically combine it with the Trans-Pacific Partnership and Trans-Atlantic Trade and Investment Partnership in order to boost the China-US Bilateral Investment Treaty and China-EU Investment Treaty negotiations, as well as the joint feasibility studies on China-US FTA and China-EU FTA.

Major emerging economies have entered the late middle period of industrialization, reflecting the trend of becoming service-led economies. Indeed, the service sector has emerged as a new driver of growth. For instance, China's service sector could become worth 48 trillion yuan ($7.73 trillion) to 53 trillion yuan, accounting for 55 percent of its total GDP.

Yet emerging economies face two big challenges in promoting service trade. Their service markets are not open enough, and developed countries still exercise very tight export controls. This makes expediting the opening-up of emerging economies' service markets and loosening the control of developed countries on exports the two major tasks of global economic governance reform.

Global infrastructure interconnectivity is low, constraining economic transformation and growth. In this background, the Asian Infrastructure Investment Bank will be able to boost infrastructure investment in Asia and closely cooperate with multilateral development organizations to become another important platform for global economic governance.

To reform global economic governance, therefore, G20 should be allowed to play a bigger role. There is an urgent need to make G20 a solid global governance mechanism by forming a secretariat, an executive board and other coordinating mechanisms that will enable it to work more closely with the IMF and other global financial organizations.

Global economic governance should be more open and inclusive. The process of building a new global economic governance system will be full of conflicts and risks. Inclusiveness, respect for diversity and the exploration of multiplayer global governance mechanisms are critically important. And any attempt to prioritize national interests or exclusiveness over global interests should be prevented.

Building a "new type of major-power relationship" is also very important for reforming global economic governance. For instance, the joint efforts of China and the US in the past few years to narrow their differences and avoid strategic miscalculations have become a new driver of global economic governance reform.

The author is president of China Institute for Reform and Development.

(China Daily 07/18/2015 page5)