"New world order needed"

Former chancellor of Germany Helmut Heinrich Waldmar Schmidt

Photo: Steffen Wurzel

Editor's Note: Helmut Heinrich Waldemar Schmidt (Schmidt), former chancellor of Germany, is a legend on the international political stage. On November 25, he accepted an interview with Global Times reporter Duan Congcong (GT) at the interval of the Hamburg Summit held by the German Chamber of Commerce.

GT: You are one of the few Western politicians who experienced the economic crisis of 1933. During your term as chancellor from 1974 to 1982, the German economy underwent tremendous growth. Compared with the 1933 economic crisis, what do you think will be the historical lessons drawn from the recent financial crisis?

Schmidt: It's hard to compare these two economic crises. The crisis in the 1930s affected only some Western countries, including Japan. But now China, Russia and Eastern Europe are all involved in the global economy. China has become the second- or third-biggest economic entity in the world. So I don't think it's proper to compare the present with the past.

Governments and leaders from the central banks of the 20 most important economies decided in 2008 that the circumstances of the 1930s crisis would not arise again. Deflation policies led to a decrease in capital liquidity, spiraling into the Great Depression. Inversely, governments stimulated spending on a large scale, which successfully avoided deflation and another depression. Although growth has slowed, China's economic status is better than other countries' and safe from a backlash. However, China should be criticized for its vast trade surplus.

GT: Did the economic crisis change the world? In the post-crisis era, is a new world order forming now? What roles will China, the US and Europe play in the change?

Schmidt: There is no new world order. What we have is disorder. There is no order in capital or monetary markets, and only limited order in the bulk stock markets. The price of oil is up and down constantly. The general tendency is rising, but it's hard to see order there. This is the same situation as what is occurring with other raw materials.

I don't want to use the word "order" or "system" to describe politics. For example, after Deng Xiaoping took office, China played an increasingly important role in the world, both in economics and politics. India is also catching up, as well as Brazil. A series of emerging countries are developing so fast that they start to exert significant impact on world affairs. I can assure that as long as the Chinese government is able to avoid wars, its importance to the world economy and politics will be on the rise.

GT: What do you think can change this disordered world?

Schmidt: Now we enter the era of economic globalization. If China doesn't export, its economy will be affected. It's the same as if China didn't import oil or raw material. China, Germany and other countries all rely on the world economy. It's also true for the US. In fact, what we really need is a world order. We have the WTO and IMF, but we don't have a consistent supervision mechanism for global capital, monetary and bond markets. It's essential for every country to cooperate closely in order to set up such an order, though it will be a painstaking process.

GT: You have met many Chinese leaders. You view Deng Xiaoping as a talented political strategist. You believe Zhu Rongji is an extraordinary economic genius. How much do you know about the present Chinese leadership; and what challenges do you think they are facing?

Schmidt: It's hard to answer. The current Chinese leaders are almost 30 years younger than I am. In general, China's economic development has been unexpectedly successful in the past 30 years. But at the same time, this high-speed development has brought problems, like the huge gap in living standards between urban and rural residents. Chinese leaders, for generations, have devoted themselves to transferring the results of economic development from coastal regions to the inlands, the northeast, the west and even Tibet. I want to emphasize that it will take 100 years.

GT: You wrote a book called Nachbar China (Neighbor China). You have a unique understanding of issues related to China, such as human rights, Tibet, Taiwan and Chinese development. What makes you hold this balanced and positive view on China's rise and development?

Schmidt: Western politicians' opinions of China come from two important roots. One is the arrogance and superiority coming from the history of the big Western powers colonizing Asian countries, especially China. The other is the long-held notion that China was a close friend of the Soviets and obeyed Soviet commands. This is a mistake many Western politicians failed to realize, but I saw this much earlier than they did.

GT: China has gained confidence from its achievements over the past 30 years, and it has a stronger position from which to safeguard its rights. But the West criticizes China as "tough" and "arrogant." What do you think of this?

Schmidt: Not all Western countries have this view. In fact, only the US does. It's not all about the Americans and their strong sense of superiority. Compared with the US, Europe has a clearer understanding about the real situation in China and the role the country can play in the future.

GT: You have been the publisher of Die Zeit (a German magazine) since your retirement. Some Chinese think German media reports are biased and unfair. How do you see this misunderstanding between Chinese and German media?

Schmidt: Compared with US media, you will find German media as being quite objective. It's the same all over the world. Every country will say that foreign reports are different from their reality. China is not the only country that has such problems. The main reason is a lack of knowledge of the country reported.