Sum­mit is cru­cial for role of G20

China Daily (USA) - - VIEWS -

Ed­i­tor’s note: Chi­nese lead­er­ship dur­ing G20 pres­i­dency can help res­cue group from ir­rel­e­vance, in­ter­na­tional gov­er­nance ex­pert says. Barry Carin is a se­nior fel­low of the Cen­ter for In­ter­na­tional Gov­er­nance In­no­va­tion, based in Water­loo, Canada. He held sev­eral se­nior Canadian gov­ern­ment po­si­tions and also taught at uni­ver­si­ties. He has been a par­tic­i­pant and close ob­server of the G7, G8 and G20, in­clud­ing work­ing on China’s G20 pres­i­dency and the prepa­ra­tion process for this sum­mit. He spoke with China Daily on Aug 11.

What is the spe­cial sig­nif­i­cance of the G20 in Hangzhou un­der the cur­rent global eco­nomic sit­u­a­tion?

Hangzhou is per­haps the best hope for res­cu­ing the G20 as a re­spected and ef­fec­tive global steer­ing com­mit­tee. The G20 risks evolv­ing into ir­rel­e­vance. Its record for the last five years has been dis­cour­ag­ing. Lead­er­ship will not come from an in­ward­look­ing and po­lit­i­cally stale­mated United States or from a Euro­pean Union con­sumed by Brexit, the euro cri­sis and the flood of mi­grants and refugees. But there is no alternative to the G20 for ef­fec­tive global cri­sis man­age­ment or a steer­ing com­mit­tee. The only hope is that China, ex­ploit­ing its in­ge­nu­ity, can pro­vide the nec­es­sary lead­er­ship.

What’s your view of the econ­omy af­ter this G20? global

It ap­pears that what I learned as a PhD econ­o­mist and taught as a pro­fes­sor of eco­nom­ics is all wrong. I be­lieved that if cen­tral banks flooded the world econ­omy with liq­uid­ity — quan­ti­ta­tive eas­ing — that in­fla­tion and hy­per­in­fla­tion would re­sult. But in­fla­tion seems to be lim­ited to cer­tain as­set classes. So I am pes­simistic. More bub­bles should burst, with un­for­tu­nate con­se­quences. ButIhaveno­con­fi­dence in my as­sess­ment. I need more study to be able to pre­dict the macroe­co­nomicim­pact of the mass of peo­ple who are “pre­dictably ir­ra­tional”.

What do you ex­pect China to do and con­trib­ute in the years ahead?

Lao Tzu is cited as say­ing that “Gov­ern­ing a large coun­try is like fry­ing a small fish. You spoil it with too much pok­ing”. I ex­pect China to con­tinue to avoid the risks of ag­gres­sive, en­er­getic lead­er­ship. The G20 is too large and het­ero­ge­neous to achieve con­sen­sus on highly com­plex and con­tro­ver­sial is­sues in the short, one-year G20 pres­i­dency. Longer term, the best hope would be for China to first ar­range a bi­lat­eral agree­ment with the US; then sub­se­quently of­fer the EU and per­haps In­dia to join the agree­ment. Then the agree­ment can be brought to the G20.

What do you sug­gest for the G20 in Hangzhou?

Oneof the con­struc­tive con­tri­bu­tions China can make is to shape the fu­ture in­ter­na­tional pol­icy re­search agenda by call­ing for re­ports for next year’s G20 sum­mit in­Ger­manyfromG20of­fi­cials, G20 min­is­ters or from in­ter­na­tional or­ga­ni­za­tions. There are­many prece­dents for these re­mits, com­mis­sion­ing work with spe­cific terms of ref­er­ence. As G20 pres­i­dent, China has the pre­rog­a­tive to make this type of re­quest. Two ideas that would be in the com­mon in­ter­est are to re­quest re­ports to the Ger­man G20 on op­tions for global re­spons­eson­cy­ber se­cu­rity (par­tic­u­larly in ref­er­ence to in­ter­na­tional fi­nance) and on rules to de­lin­eate ac­cept­able re­search on cli­mate en­gi­neer­ing.

Barry Carin

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