G20 Hangzhou: Hud­dling for Warmth

China Pictorial (English) - - Fea­tures - Text by Li Xia

Apop­u­lar Chi­nese ex­pres­sion ad­vises to “hud­dle to­gether to keep warm” to bet­ter uti­lize body heat to warm each other dur­ing a chilly win­ter, but more widely im­ply­ing that hu­man be­ings should unite to con­front com­mon chal­lenges. This is the heart of the found­ing of the Group of 20 (G20).

The 1997 Asian fi­nan­cial cri­sis stunned the world just as the glob­al­iza­tion trend was hit­ting full stride. The Group of Eight (G8), com­prised of ma­jor de­vel­oped economies, found it­self pow­er­less in the face of such a dev­as­tat­ing cri­sis. In this con­text, on Septem­ber 5, 1999, the G20 was for­mally es­tab­lished at the G8 Fi­nance Min­is­ters’ Meet­ing in Ber­lin, Ger­many, in a bid to pro­vide a plat­form aimed at in­ter­na­tional co­or­di­na­tion of eco­nomic and fi­nan­cial poli­cies, to pre­vent fi­nan­cial crises like the one that struck Asia with sta­ble in­ter­na­tional fi­nan­cial and mon­e­tary sys­tem.

Along with the G8 mem­bers, the G20 in­cor­po­rated 12 other ma­jor economies in the world, in­clud­ing both de­vel­oped and de­vel­op­ing coun­tries. Col­lec­tively, the G20 economies ac­count for two thirds of the world pop­u­la­tion, 85 per­cent of global GDP, and 80 per­cent of global trade. Thanks to its con­sid­er­able cov­er­age and rep­re­sen­ta­tion, the G20 pro­vides a new path and hope for pro­mot­ing di­a­logue and co­op­er­a­tion be­tween de­vel­oped and emerg­ing coun­tries and bol­ster­ing in­ter­na­tional fi­nan­cial sta­bil­ity and sus­tain­able eco­nomic growth.

Since the First G20 Lead­ers’ Sum­mit was held fol­low­ing the 2008 global fi­nan­cial cri­sis, the world has en­dured a se­ries of dif­fi­cul­ties in­clud­ing the U. S. subprime mort­gage cri­sis, the Eu­ro­zone debt cri­sis, and the re­ces­sion of emerg­ing economies while China shifts from rapid to steady growth. In the process, the key top­ics of the G20 sum­mits changed ac­cord­ingly, from col­lab­o­rat­ing to tackle the 2008 fi­nan­cial cri­sis at the 2008 Wash­ing­ton Sum­mit and the 2009 Lon­don and Pitts­burgh sum­mits to re­spond­ing the Euro­pean sovereign debt cri­sis at the 2010 Toronto Sum­mit. Later, the G20 grad­u­ally trans­formed from a plat­form for cri­sis re­sponse to a mech­a­nism of long-term gov­er­nance, and its fo­cus ex­panded from fi­nance and macro­eco­nomics to broader ar­eas in­clud­ing trade, in­vest­ment, de­vel­op­ment, and struc­tural re­form. The G20 is meant to usher the en­dan­gered world econ­omy into a safety zone and pre­vent it from con­tin­u­ous wan­ing. How­ever, the sit­u­a­tion re­mains con­cern­ing given the lin­ger­ing af­ter­math of the global fi­nan­cial cri­sis, the rise of trade pro­tec­tion­ism, surg­ing un­easi­ness about glob­al­iza­tion, and dilem­mas sur­round­ing global eco­nomic gov­er­nance.

The 2016 G20 Sum­mit is ar­riv­ing in Hangzhou amidst all of these is­sues. De­spite the se­vere chal­lenges that China has faced since the 2008 global fi­nan­cial cri­sis, the fun­da­men­tals of its econ­omy re­main sound, and the tremen­dous eco­nomic achieve­ments the coun­try has made since its re­form and open­ing up be­gan in 1978 are not to be for­got­ten. More im­por­tantly, the Chi­nese gov­ern­ment, with firm de­ter­mi­na­tion and unique wis­dom, is push­ing its econ­omy to­wards healthy, steady de­vel­op­ment through sup­ply-side struc­tural re­form. In 2015, China con­trib­uted more than 25 per­cent of global eco­nomic growth. As Chi­nese Pres­i­dent Xi Jin­ping ever said, China’s “an­nual in­cre­men­tal GDP is equiv­a­lent to the to­tal GDP of a medium-sized de­vel­oped coun­try.”

China’s eco­nomic per­for­mance has given the world some con­fi­dence. Through host­ing the G20 Sum­mit in Hangzhou, China is like a gi­ant gath­er­ing ev­ery in­di­vid­ual coun­try that emits dif­fer­ent amounts of heat, who hud­dle to­gether to keep warm in the chilly eco­nomic win­ter. Mem­bers of the G20 in­clude de­vel­oped and de­vel­op­ing coun­tries, as well as emerg­ing economies. China is urg­ing G20 mem­bers to fo­cus on Africa’s con­cerns and sup­port its in­dus­tri­al­iza­tion process. Chi­nese For­eign Min­is­ter Wang Yi re­cently an­nounced that China will alert de­vel­oped coun­tries at the G20 Sum­mit of the ur­gent needs of African peo­ple. Themed “To­wards an In­no­va­tive, In­vig­o­rated, In­ter­con­nected and In­clu­sive World Econ­omy,” this year’s G20 Sum­mit will have four pri­or­i­ties: “trail­blaz­ing a new path for growth,” “more ef­fec­tive and ef­fi­cient global eco­nomic and fi­nan­cial gov­er­nance,” “ro­bust in­ter­na­tional trade and in­vest­ment” and “in­clu­sive and in­ter­con­nected de­vel­op­ment.” More­over, China will un­veil a con­struc­tive plan to urge all par­ties in­volved to reach a con­sen­sus on is­sues such as pro­mot­ing sus­tain­able de­vel­op­ment of the world econ­omy. The Hangzhou Sum­mit is ex­pected to achieve at least two ma­jor break­throughs: Rais­ing de­vel­op­ment to the top of the global macroe­co­nomic pol­icy agenda for the first time and re­serv­ing more seats for de­vel­op­ing coun­tries than all pre­vi­ous sum­mits.

Ac­cord­ingly, the in­ter­na­tional com­mu­nity has high ex­pec­ta­tions for the up­com­ing G20 Sum­mit in Hangzhou. Paul Edgar Philippe Martin, for­mer Cana­dian Prime Min­is­ter who is con­sid­ered “fa­ther of the G20,” be­lieves that the G20 Sum­mit’s ar­rival in China will mark the re­birth not only of the G20 it­self, but also the global co­op­er­a­tion. Den­nis J. Snower, Pres­i­dent of the Kiel In­sti­tute for the World Econ­omy, points out that the theme pro­posed by China this year will ig­nite dis­cus­sion of a wide range of top­ics in­clud­ing not only tra­di­tional eco­nomic is­sues, but also is­sues of so­ci­ety, the en­vi­ron­ment and in­clu­sive de­vel­op­ment, which are all es­sen­tial to solve the prob­lems the world faces with to­day.

An ar­ti­cle pub­lished on the U. S. Coun­cil on For­eign Re­la­tions web­site notes that as the host coun­try of this year’s G20 Sum­mit, China is ex­pected to play three roles: bridge builder to merge the di­ver­gent in­ter­ests of de­vel­oped and de­vel­op­ing economies, fa­cili- tator to ad­vance im­ple­men­ta­tion of past pol­icy com­mit­ments, and cat­a­lyst for in­no­va­tion-based global eco­nomic growth.

For­mer Mex­i­can Pres­i­dent Ernesto Zedillo hopes that China will help pro­mote in­ter­na­tional co­op­er­a­tion in the three key realms: for­mu­lat­ing in­te­grated macroe­co­nomic poli­cies, ac­cel­er­at­ing mul­ti­lat­eral trade ne­go­ti­a­tions, and con­trol­ling green­house gas emis­sions. Gus­tavo Gi­rado, co­or­di­na­tor of the Asia Pa­cific Ob­ser­va­tory at Ar­gentina’s Na­tional Univer­sity of Matanza, ex­pects that China will serve as a pro­tec­tor of emerg­ing economies’ in­ter­ests. Ev­i­dently, all par­ties hope China will serve as a torch­bearer, lead­ing the world out of the lengthy win­ter of global eco­nomic re­ces­sion.

“Hud­dling for warmth” means that co­op­er­a­tion ben­e­fits all in­volved. China will spare no ef­forts to in­spire all par­ties to col­lab­o­rate in an open, in­clu­sive man­ner, to kin­dle enough warmth to dis­pel the chills of the global eco­nomic win­ter.

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