By Jia Jinjing Source: Chinese Social Sciences Published: 2016-8-29
In the 21st century, many are quite justifiably filled with anxiety over the uncertainty and instability visible in an increasingly complex global landscape.
The world economy is experiencing a difficult recovery and a period of major adjustments. At the same time, low growth rates, interest rates and demand coexist with high unemployment and debt as well as the looming threat of an economic bubble.
Brexit, turbulence in financial markets, stagnation in some emerging economies and other factors have further diminished the world’s already gloomy economic prospects.
Against this backdrop, the world’s most important platform for economic cooperation the G20 will convene its 11th summit in Hangzhou on Sept. 4. What can we expect from the summit?
In terms of the global economy, the summit marks a shift in the driving forces. Since 2008, monetary and fiscal policies have been used by most countries to cope with financial crises. However, the unrestrained use of these policies has failed to bring prosperity to the world economy. Instead, these measures created new problems and produced negative spillover effects.
At the Hangzhou Summit, China will put forward a model for the world economy based on the four “I”s: innovation, invigoration, interconnection and inclusiveness. This year marks the first time innovation has been included as a core theme of the summit, which will focus on discovering new engines for growth. Discussions on the theme will be geared toward finding fundamental solutions for intransigent problems in the world economy as well as generating new forces to drive growth from below.
For global governance, the Hangzhou Summit marks the transition from a strategy of pursing steady growth to one that promotes development. The goal of strong, sustainable and balanced growth has long been at the top of the G20’s agenda, but realizing this task requires the mass mobilization of political resources.
It was last year when G20’s Antalya Summit shifted its focus to implementing the UN’s 2030 Sustainable Development Goals. These benchmarks cover all aspects of human development, and growth is just one. By uniting the goals of all mankind into a singular vision, the G20 aims to realize a transformation of the world’s industrial structure.
This year, G20 is placing a high premium on development in its global framework, and it has included the UN’s goals in its action plan. Because it coincides with the start of the plan, the Hangzhou Summit will be instrumental in achieving these goals.
In terms of the G20 itself, the Hangzhou Summit marks the transition from a crisis-response mechanism to a form of long-term governance. The G20 Leaders Summit emerged in response to financial crisis, while the mission to implement the 2030 goals requires G20 to adopt a long-term perspective. In 2016, G20 has improved its governance structure by establishing more ministerial meetings to strengthen its capacity to carry out long-term governance.
To achieve global development, the G20 Hangzhou Summit has invited the presidency countries of the Association of Southeast Asian Nations, African Union, the New Partnership for Africa’s Development and the Group of 77, as well as other international organizations to attend the meeting, which shows the element of “inclusiveness” in the theme.
For China, the summit represents a transition in its role from contributor to a leading member. China has played an indispensable role in global economic growth and recovery. From 2008 to 2015, China led in economic growth, contributing to 47 percent of world GDP growth in total. Last year, world trade declined by two digits, but China’s proportion in world trade rose from 12.2 percent to 13.8 percent, almost singlehandedly promoting world trade. China has the opportunity to make an even greater contribution by improving global economic and financial governance to boost the world economy.
Today, all countries are bound together in a community of common destiny. No single country can come out of the economic crisis and realize sustainable development independently. Only by developing an innovative, invigorated, interconnected and inclusive world economy can the world realize common prosperity. The G20 Hangzhou Summit is an important opportunity for China as much as it is for the world.
The author is Director of the Macro Research Department at the Chongyang Institute for Financial Studies, Renmin University of China.