G20 sum­mit will yield blue­print for growth

... so the up­com­ing G20 Sum­mit in Hangzhou can blaze new trails for the world’s eco­nomic de­vel­op­ment.

China Daily (USA) - - VIEWS - The au­thor is China Daily Tokyo bureau chief. cai­hong@chi­nadaily.com.cn

The lin­ger­ing ef­fects of the 2008 fi­nan­cial cri­sis still pre­vent the global econ­omy from re­turn­ing to its nor­mal track. The re­cov­ery re­mains both slow and weak, and is full of un­cer­tain­ties. The risks of fur­ther eco­nomic slow­down re­main, and the fi­nan­cial mar­kets con­tinue to be tu­mul­tuous. Trade and in­vest­ment pro­tec­tion­ism is on the in­crease, and eco­nomic de­vel­op­ment is un­bal­anced. Ac­cord­ing to the lat­estWorld Bank re­port, the 2016 global growth fore­cast has been scaled down from 2.9 per­cent in Jan­uary to 2.4 per­cent in June.

At such a crit­i­cal junc­ture, China has the duty, the ca­pac­ity and the con­fi­dence to seek greater con­sen­sus with the other G20 mem­bers, so the up­com­ing G20 Sum­mit in­Hangzhou can blaze new­trails for the world’s eco­nomic de­vel­op­ment.

China’s theme for the sum­mit— “To­wards an In­no­va­tive, In­vig­o­rated, In­ter­con­nected and In­clu­sive World Econ­omy”— could not be more per­ti­nent.

What is more, China has pro­posed four prin­ci­pal items for the agenda: ex­plor­ing more ef­fi­cient growth mod­els through in­no­va­tion, im­proved global eco­nomic and fi­nan­cial gov­er­nance, stronger in­ter­na­tional trade and in­vest­ment, and in­clu­sive and in­ter­con­nected paths of de­vel­op­ment.

It is es­sen­tial for the G20 mem­bers to agree on prac­ti­cal ways to achieve the theme and agenda.

The core task for theHangzhou Sum­mit is find­ing new­sources of growth and ex­plor­ing ways to tap their growth po­ten­tial. The Hangzhou Sum­mit will come up with a “G20 Blue­print for Growthre­lated In­no­va­tion”. By seiz­ing the newop­por­tu­ni­ties brought about by emerg­ing newtech­nolo­gies, newin­dus­tries and new­fac­tors of struc­tural re­forms, we can ex­pect to fun­da­men­tally solve the prob­lem of weak growth. In the con­text of this blue­print, the sum­mit will for­mu­late a num­ber of ac­tion plans to pro­mote in­no­va­tion.

The G20 mem­bers will strengthen macroe­co­nomic pol­icy co­or­di­na­tion and com­mu­ni­ca­tion with a viewto mit­i­gat­ing the un­cer­tainty and neg­a­tive spillover ef­fects of their re­spec­tive poli­cies. In the mean­time, the G20 mem­bers will un­der­take not to go for com­pet­i­tive de­val­u­a­tion of their cur­ren­cies while pledg­ing to step up co­op­er­a­tion in fi­nan­cial over­sight, in­ter­na­tional tax­a­tion, en­ergy, anti-cor­rup­tion and other ar­eas of en­deav­ors. Agree­ing to step up the pace of re­form of the in­ter­na­tional fi­nan­cial in­sti­tu­tions, in­clud­ing the IMF’s quota sys­tem and gov­er­nance struc­tures, and the­World Bank’s share­hold­ers’ gen­eral meet­ing sys­tem, is also nec­es­sary to in­crease the voice of emerg­ing coun­tries in in­ter­na­tional fi­nan­cial or­ga­ni­za­tions.

To pro­mote in­ter­na­tional trade and in­vest­ment, so as to in­ject greater vi­tal­ity into the world econ­omy, theHangzhou Sum­mit will for­mu­late, for the first time, a “G20 Strat­egy for Global Trade Growth” and a “G20 Guide­line for Global In­vest­ment Pol­icy”. Those G20 mem­bers that have not rat­i­fied the Trade Fa­cil­i­ta­tion Agree­ment will be pushed to do so by the end of the year so as to ad­vance its im­ple­men­ta­tion as soon as pos­si­ble.

TheHangzhou Sum­mit will voice an ex­plicit op­po­si­tion to trade pro­tec­tion­ism, and make a de­ci­sion to ex­tend the “mora­to­ri­u­mon new­trade re­straints and pro­tec­tion­ist mea­sures” un­til 2018. Fi­nan­cial pol­icy, fis­cal pol­icy and trade and in­vest­ment pol­icy are of­ten de­scribed as the three pil­lars of global econ­omy. How­ever, the last seems a lit­tle too weak. The forth­com­ing sum­mit should wit­ness a strength­en­ing of that pil­lar.

For the first time, the Hangzhou Sum­mit will ac­cord top pri­or­ity to the is­sue of de­vel­op­ment within the global macroe­co­nomic frame­work and for­mu­late an ac­tion plan cen­tered on im­ple­ment­ing the United Na­tion’s 2030 Agenda for Sus­tain­able De­vel­op­ment. Such an ac­tion plan will help African coun­tries and the least-de­vel­oped coun­tries to ac­cel­er­ate their in­dus­tri­al­iza­tion process and in­ject pow­er­ful im­pe­tus to world­wide ef­forts to re­duce poverty and pro­mote sus­tain­able de­vel­op­ment.

With th­ese out­comes, the G20 Sum­mit in­Hangzhou will go down as an im­por­tant mile­stone in in­ter­na­tional de­vel­op­ment.

CAI HONG

The au­thor is a se­nior re­search fel­low at the China Foun­da­tion for In­ter­na­tional Stud­ies. Cour­tesy: chin­aus­fo­cus.com

Aug 6 and 9 are days of mourn­ing forHiroshima and Na­gasaki. On Aug 6, 1945, the United States dropped an atomic bomb on Hiroshima. Three days later, it dropped a sec­ond one on Na­gasaki. Ja­pan sur­ren­dered in­WorldWar II on Aug 15.

The atomic bombs in­cin­er­ated build­ings and peo­ple, leav­ing life­long phys­i­cal and psy­cho­log­i­cal scars on the sur­vivors and the ci­ties.

Since be­ing re-elected Ja­pan’s prime min­is­ter in De­cem­ber 2012, Shinzo Abe has at­tended the two ci­ties’ an­nual ob­ser­va­tion days ev­ery year. At the lat­est gath­er­ing in­Hiroshima, he said Ja­pan will “con­tinue to make… ef­forts to bring about a world free of nu­clear weapons by calling for co­op­er­a­tion from both nu­clear weapons and non-nu­clear weapons’ states”.

But his acts be­lie his words. Along with Bri­tain, France and the Repub­lic of Korea — all the United States al­lies— Ja­pan has been pri­vately lob­by­ing the WhiteHouse to not adopt a pol­icy of “no first use” of nu­clear weapons that US Pres­i­dent Barack Obama is said to be con­sid­er­ing.

In fact, Oba­ma­could an­nounce the change inUS nu­clear pol­icy in Septem­ber when he at­tends theUNGen­er­alAssem­bly for the last time asUS pres­i­dent.

The gov­ern­ment of Ja­pan has not ruled out a pos­si­ble use of nu­clear weapons by the US. That is broadly at odds with the sen­ti­ment of the Ja­panese pub­lic, which does not want a re­peat of the rav­ages of a nu­clear at­tack.

The Ja­panese me­dia re­ported that Abe per­son­ally in­ti­mated Ad­mi­ralHar­ryHar­ris Jr., the head of the US Pa­cific Com­mand, of Ja­pan’s con­cern about US pres­i­dent’s nu­clear move, ar­gu­ing that if Obama de­clares a no first use pol­icy, de­ter­rence against coun­tries such as the Demo­cratic Peo­ple’s Repub­lic of Korea will weaken and the risks of con­flict will rise.

The Janus-faced Abe has an­gered Ja­panese atomic bomb sur­vivors, who say his op­po­si­tion to Obama’s move is coun­ter­pro­duc­tive to global ef­forts to elim­i­nate nu­clear weapons.

The­may­ors ofHiroshima and Na­gasaki have sent a let­ter to Obama sup­port­ing the US’ po­ten­tial nu­clear pol­icy change, say­ing the move would “mark an im­por­tant step to­ward re­al­iz­ing a world with­out nu­clear weapons”.

In an open let­ter calling for Ja­pan to sup­port a US no first use pol­icy, 14 US physi­cists and schol­ars said the path to a safer world re­main blocked as long as the US re­fuses to make this change.

Putting it­self un­der the US nu­clear um­brella, Ja­pan has not sup­ported a no first use pol­icy. Ja­panese news­pa­perMainichi Shim­bun crit­i­cized the Abe ad­min­is­tra­tion for go­ing against the trend of nu­clear dis­ar­ma­ment. And the Asahi Shim­bun called the nu­clear de­ter­rence the­ory “a relic of the ColdWar pe­riod”.

“The gov­ern­ment of Ja­pan has not ruled out a pos­si­ble use of nu­clear weapons by the US. That is broadly at odds with the sen­ti­ment of the Ja­panese pub­lic, which does not want a re­peat of the rav­ages of a nu­clear at­tack,” the Asahi Shim­bun said.

This news­pa­per ap­pealed to the Abe ad­min­is­tra­tion to seek a se­cu­rity pol­icy that does not rely on the US nu­clear um­brella and be­gin hold­ing talks with Wash­ing­ton to achieve that goal.

Read­ing a peace dec­la­ra­tion on Aug 9, Na­gasak­iMayor Tomi­hisa Taue ap­pealed to the Ja­panese gov­ern­ment to play a lead­ing role in the ef­forts to cre­ate a nu­clear weapons-free zone, a con­cept that, in his words, em­bod­ies mankind’s wis­dom.

The Asahi Shim­bun’s ad­vice to Abe, who stood be­side Obama in Hiroshima in­May: co­op­er­ate ac­tively with the US pres­i­dent in his bid to pro­mote the no first use pol­icy.

Yet Abe has made him­self a case study in hypocrisy.

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