By William Gonzalo Vega Salas (龔偉力), Phd student of Management in Renmin University，Researcher and consultant in International Business
We live in a globalizing world that encourages cross-border coordination to overcome difficult times, and to enhance development. The G20 has become a premier forum for global economic cooperation. Meanwhile, China plays an important role in the world economy and in South American countries, including Peru.
It is the first time for China to chair the G20 with Hangzhou as the host city for the Summit, while Shanghai and Chengdu held the Financial Ministers and Central Bank Governors Meetings. The three G20 member nation conferences before the Summit had focused on financial regulations and fiscal monetary coordination. A country's development can emerge through strong economic growth rates, along with the creation of more jobs, food security, inclusive green growth, and etc. This year's G20 Hangzhou Summit theme, "Innovation" would favor cooperation, development and growth between China and Latin-American countries including Peru. China is passing through a historical transformation based on its services sector, technological breakthroughs and creativity. A big economy that relies too much on manufacturing is not sustainable, however Peru can learn from China's economic growth pattern.
Peru should find mechanisms to work with China to focus on the most important aspects of a country's development, including "Human capital." Peru and China have very different histories, cultures, and points of view, which may be considered disadvantages, but this is not the case.
Diversity can be an important vehicle for research, private companies and other teams to ensure successful results. Peru must enhance its multilateral research teams in the scientific field and in public institutions while business groups can work together on common goals.
Peru and China can coordinate on research projects. Education is the most important topic for both countries as they face major challenges. Better education measures would benefit both countries.
Peru, a country with a stable economy and strong growth in international business could be seen as a model for other economies. But the Peru model is not sustainable in the long run. Specialists are calling for more export diversification, since Peru has mainly exported its natural resources.
What is the role of government in this aspect? Should we improve Peru geo-political presence in other countries? Should we promote the country abroad? Such measures are essential but not the most important. The solution can be found inside the country.
Peru should reform its institutions to respect laws and promote a safe environment. So, what is the relationship between export diversification and a nation's institutions?
We need a country where institutions are strong so when there is problem between firms, businesses, partners, and employers it could be resolved. Strong institutions can enhance the right conditions for innovation.
Economic agents should not waste natural resources, but upgrade their business practices to innovate in more competitive surroundings. We cannot ask a country to export new and different products to the world if the country can not create, innovate and develop. China has some experience in this field and is combating corruption to reinvigorate its institutions.
Peru and China rely heavily on small and medium-sized enterprises to generate higher employment and improve national standard of living conditions. Both countries enjoy stronger financial, human capital resources and technological developments that can be transferred from one country to another.
Mutual cooperation between entrepreneurs, investors and incubators could merge with government institutions, universities and other agents to support small and medium-sized enterprises. In the services industry, China is expanding rapidly. Peru should work more with China in the tourism sector as well. China has a lot to share with Peru, since both countries can work better together.
This year's G20 summit is a big opportunity for Peru and China to improve ties that would implement more effective structural changes for Peru to support stronger mutual benefits for both countries in the long run.
William Gonzalo Vega Salas (龔偉力), Phd student of Management in Renmin University，Researcher and consultant in International Business
( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )
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