Significance of G20’s Hangzhou Summit for the world

John Kirton

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Significance of G20’s Hangzhou Summit for the world


By John Kirton    Source: CRI    Published: 2016-8-22

As China prepares to host the 11th G20 summit in Hangzhou on September 4-5, 2016, the world is wondering how China will lead the summit to success. Expectations are high, for this is a historic event. It is the first time that China - the world’s second most powerful country - will host. It is the first time that the summit will be hosted by two emerging countries in a row, as Turkey hosted in 2015. It is the second time the summit will be hosted by a member of the BRICS group of Brazil, Russia, India, China and South Africa, rather than one from the Organisation for Economic Co-operation and Development. The choice of China over neighbouring Japan to host in 2016, suggests that China is the leading power in the rapidly rising Asian region. Hosting will allow President Xi Jinping to showcase his vision for global governance as a whole. He is likely to lead in a bigger, broader way than he ever has before. He will build on China’s careful, cumulating leadership in the G20 and will follow the ambitious, innovative agenda outlined at the start of his hosting year.

The Firm Foundation: China’s G20 Leadership, 1999-2015

Such leadership at Hangzhou will flow from the firm foundation of China’s leadership in the G20 since the start, as I describe in my new book China’s G20 Leadership published by Routledge last month. Indeed, China always offered careful, cumulating G20 leadership, acting as a cautious, constrained but increasingly active, expansive, effective G20 leader. It’s China’s G20 leadership came in institutional, material and policy forms, increasing through three phases: creating a successful crisis response from 1999 to 2009, ensuring effective crisis prevention from 2010 to 2013 and steering broader global governance from 2013 to 2016. Throughout, it emphasized incremental reforms, avoided unilateral initiatives, led and built issue-specific winning coalitions with several other members, and willingly adjusted to the consensus of the group.

President Xi’s Innovative Vision for Hangzhou

For 2016 China is offering bolder leadership. On December 1, 2015, upon assuming the G20 presidency, China called for the G20 to seize the opportunities offered by “technological breakthroughs and a new industrial revolution,” to build an “innovative, invigorated, interconnected and inclusive global economy,” and improve the effectiveness of the G20 in decision-making and implementation.

By May 26, 2016, China’s foreign minister Wang Yi could outline ten major likely outcomes at Hangzhou. The first five were: 1) a blueprint for innovative growth, focused on the medium term, through action plans on innovation, the new industrial revolution and the digital economy; 2) implementing the UN 2030 Agenda for Sustainable Development; 3) structural reform in nine priority fields, with guiding principles and an index system to measure progress and results; 4) trade; 5) investment, through the world’s first framework for multilateral global investment rules.

The others were: 6) reform of the international financial architecture; 7) anticorruption, through creating principles, a research center and action plan on international fugitive repatriation and asset recovery; 8) industrialization of Africa and least developed countries; 9) entrepreneurship and 10) climate change, through a call for the early entry into force of the 2015 Paris Agreement and for international cooperation.

This list signals a new level of China’s G20 leadership. Before, China’s rising relative capabilities had led it to contribute through the G20 to a beleaguered world beyond. Now, China’s own relative vulnerabilities are calling forth its more ambitious leadership, to help China itself thrive in an intensely interconnected world.

Promising Prospects for Hangzhou

Many of these ambitions are already being achieved. The G20 Research Group’s 2015 Interim Compliance Report shows that the priority commitments made at last years’ Antalya Summit  have already been implemented at a level of 63%. China ranked fifth among the 20 members, with compliance of 75%.

G20 summits are also often spurred to success by global shocks that make all the G20’s interconnected members aware of their common vulnerability. Such shocks are now arriving in force at an escalating rate, from the terrorist attacks in France; the attempted coup in Turkey; the ongoing war against Daesh; the surging flows of migrants into Europe; Britain’s surprising decision to exit the European Union; the financial fragility in indebted Greece, Italian banks and several oil-exporting states; and the low and slowing growth in the global economy. With the major multilateral organizations unable to cope, the world looks to the G20 and the supporting new Chinese-led institutions of the BRICS New Development Bank, the Asian Infrastructure Investment Bank and the Silk Road Fund.

China’s recent fiscal stimulus, stable exchange rate and more market-oriented economy and financial system makes it the leading engine of global growth and provider of financial security, even as its own need for help from its G20 partners grows. Backed by a high degree of domestic political cohesion, President Xi brings to his role as G20 chair, substantial international and G20 summit experience and an approach to international affairs that puts the G20 in first place. Above all, he offers a vision of an “ecological civilization” that the world badly needs. It can serve as the inspiration and blueprint for making the G20’s Hangzhou Summit the most successful one ever in shaping global governance for the medium and longer term.

The author is a senior fellow of Chongyang Institute for Financial Studies at Renmin University of China.