The main lesson from the financial crisis is that the economic problems that the world now faces will always in future be global problems and the solutions will have to be global, said Andrew Cahn, CEO of UK Trade and Investment.
He told Xinhua in an exclusive interview that the global economic crisis is the first truly global event of its kind. "We as a global financial community and as a group of nations can only address the sort of challenges that the credit crunch has created if we work together in partnership," he said.
"It is also clear to me that now and for the future we must involve what we call the 'emerging economies,' like China, but which really are economies that have already emerged and which are important vital partners in finding any solution to the future of the global economy."
He said that everyone could learn that appropriate, well targeted, expert regulation is essential if the financial markets are to work effectively.
"We cannot do our financial regulation alone; we cannot manage our markets alone. We must do it in partnership with the other major economies of the world, which includes China which is clearly now a major economy," Cahn added.
"We must ensure in future that we have appropriate regulation agreed at a global level and that we have the appropriate financial infrastructure, including the international financial institutions, which can deal with future crises."
He admitted that there will be future crises and that is the nature of all financial systems. But he said: "We need the right institutional architecture and the right regulatory systems to reduce the severity of the crises and to deal with them effectively when they do arise."
As for the recent recovery signs of the global economy, Cahn said the most important thing is that "we have averted and avoided the really serious crisis that could have happened."
"We looked over the precipice, decided we didn't like what we saw and we moved back. Governments have found the way to avoid falling over the precipice. In that sense, it's a very optimistic thing."
When asked how to sustain the economic recovery, he said that the most important thing is to keep markets open and to avoid a fall into protectionism.
"When life is difficult, when unemployment is high, when production is falling, when exports are difficult to achieve, the natural political response is to say we will close our borders, we will look inward," he said.
"But that way will make all of us poorer. The right response is to not only keep markets open but to liberalize them further because that will promote trade, that will increase economic activity, that will increase efficiency and competitiveness and that will make us all the more prosperous."
He believed keeping markets open and increasing the amount of trade and investment is absolutely key to returning prosperity.
He is satisfied with the efforts made by British and Chinese governments to promote bilateral trade and reach the target of 60 billion U.S. dollars set for 2010.
"We will have new, even higher targets to reach because only by setting ourselves targets and achieving those targets for the amount of trade and the amount of investment between our two countries, in both directions, only that way I think can we help our economies to thrive," he said.
Cahn added that China was the market that Britain had to serve properly, really effectively and China was the market Britain had to learn about, to understand, to enter into for the long term. "I am particularly impressed with China's performance this year, where growth remains robust."
As for the upcoming G20 Pittsburgh summit, he said Pittsburgh Summit is another vital step in the process of returning the global economy to normality. "There are many issues to be addressed and they have to do with the future architecture of global financial arrangements," he said.
He said that G20 now provides a Forum with the right membership. "China is there, as it should be, at the top table, participating in the debate. There can be no solutions, no answers to the global crisis without China's participation," he said.
The International Capital Conference of Bo'ao Forum will be held again in London on September 15-16. Cahn said: "Bo'ao forum is a key way of increasing understanding between our two countries and the understanding between politicians, the understanding between regulators, and the understanding between business people."