G20 Cooperation Sets Sail Again for the Next Decade
Many of the consensuses reached at the G20 summit have significant positive effects on building an open economy.
AT the end of 2018, Argentina’s capital Buenos Aires welcomed the 13th summit of the G20 leaders. Chinese President Xi Jinping attended the summit for the sixth time, which fully demonstrates the great importance China attaches to G20, and the country’s willingness to contribute to improving global governance. Taking the opportunity of this summit, President Xi paid a state visit to Spain and Portugal, two important southern European countries, to promote China-EU cooperation and contribute to the construction of the Belt and Road Initiative. His state visits to Argentina and Panama, two South American countries, have further expanded the initiative’s scope, and added a brilliant stroke for China-Latin America cooperation.
Many of the consensuses reached at the G20 summit and the bilateral meetings between Chinese leaders and leaders of other countries at the summit have signifi-
cant positive effects on building an open world economy, resisting trade protectionism, tackling climate change together, and promoting inclusive and sustainable growth.
Needless to say, Buenos Aires is yet another eyewitness to the positive actions of the international community, with China’s full support, to address global challenges, promote transnational cooperation, and improve global governance. The G20 cooperation will set sail again in Argentina for the glory of the next decade.
A Hard-Won Mechanism
Time is fleeting, and the G20 cooperation mechanism has gone through a decade of ups and downs. At the critical juncture of the international financial crisis in 2008, the Group of Eight was upgraded into the Group of 20, significantly expanding the power of emerging economies and developing countries and
After 10 years of development, G20 has become an important platform for equal dialogue and consultation between major developed countries, emerging economies, and developing countries.
becoming one of the most important multilateral cooperation platforms in the world. At that time, through dialogues on an equal footing and coordinated actions, all parties pulled up the world economy, which was rapidly sliding, back on the track of stability and growth. From stabilizing the market, rebuilding confidence, and promoting reform to planning a blueprint; from fiscal taxation, monetary finance, trade and investment to employment and livelihood; from energy and sustainable development to digital economy and the future industrial revolution, G20 is playing an irreplaceable role at every link of the world economy, taking its pulse and exploring its direction.
After 10 years of development, G20 has become an important platform for equal dialogue and consultation between major developed countries, emerging economies, and developing countries, reflecting the important progress in global economic governance. It plays multiple important roles, such as a defender of multilateralism, an advocate of partnership spirit, a reformer of global governance, a leader in innovation and growth, and a promoter of inclusive development.
Risks of the World Situation
It should be noted that although the world economy is still growing, risks and downward pressure cannot be ignored. At present, unilateralism and protectionism in some developed economies have greatly affected the development of international trade and brought about a negative impact on the world economy. The monetary policy adjustment in some developed economies has had a significant negative spillover effect on emerging markets and developing countries, resulting in sharp fluctuations or even severe devaluation of their currencies. Major international agencies, including the International Monetary Fund, have lowered their expectations for world economic growth for the first time in recent years.
From a longer-term perspective, fundamental problems such as insufficient momentum of world economic growth, relatively lagging global economic governance, and unbalanced international development have not yet been effectively resolved. Moreover, with the further intensification of populism and identity politics, economic and trade conflicts are spreading to politics, security, and other
fields, and new global challenges and risks are brewing. These are rather unfavorable signals for world peace and prosperity.
At the first session of the G20 summit in Buenos Aires on November 30, 2018, President Xi Jinping delivered a speech entitled “Look Beyond the Horizon and Steer the World Economy in the Right Direction.” In his speech, Xi stressed that the world economy is once again facing a historic choice, and that G20 should closely follow the historical trends so as to chart the course for the future.
What is the historical trend? As President Xi said, the general trend towards openness and integration remains the same. “The industrial chain, value chain, and supply chain have been continuously extended and expanded, driving the global flow of production factors, and helping billions of people get rid of poverty. Cooperation and leveraging complementary advantages among countries are the objective requirements of productivity growth, and also represent the direction of the evolution
of production relations. In this process, countries are increasingly becoming a community with shared interests, shared responsibilities, and a shared future. Winwin cooperation is the only choice for us, be it in good times or bad.”
This is not only the inevitable result of economic laws, but also conforms to the development logic of human history. In the face of such a global development trend, G20 should not only be unimpaired, but also be given greater responsibilities, continue to lead international multilateral cooperation, and grasp the general direction of the world economy in a responsible manner.
China’s Solution
The theme of the 2018 G20 summit in Argentina is “Building Consensus for Fair and Sustainable Development.” In the current situation, the summit should send a clear signal of opposing protectionism and supporting the multilateral trading system, and urge the international community to jointly build an open world economy. It is necessary to adhere to multilateralism and meet common challenges, to persist in open development and achieve win-win cooperation, to focus on the future and discover potential drivers of growth, to stay development-oriented, and ensure that growth
China is in favor of carrying out necessary reforms, but the key is to uphold the core values and basic principles of the WTO.
benefits the whole world. In his keynote speech, President Xi Jinping clarified China’s stand and initiatives on these important issues.
First of all, China calls for adhering to open cooperation and safeguarding the multilateral trading system. Because of growing international trade frictions, international trade has become the top issue of concern at the Argentina summit. The world is looking forward to the negotiation among the world’s major economies to eliminate trade disputes and promote further development of free trade. Worryingly, the average monthly increase in trade restrictions among the G20 members had doubled compared with six months before, and the growth rate of global trade in goods declined by 0.3 percent in 2018. This highlights the severe situation facing world trade at present, for which all parties should firmly uphold free trade and the rules-based multilateral trading system.
As for the reform of the World Trade Organization, which has recently become a hot topic, China is in favor of carrying out necessary reforms, but the key is to uphold the core values and basic principles of the WTO, such as openness, inclusiveness and non-discrimination, and to safeguard the interests and policy space of developing countries.
Secondly, China calls for upholding a spirit of partnership and stronger macro-policy coordination. It successfully responded to the last global financial crisis, and worked together with other countries to put the world economy and international trade back on the track of growth. This has given G20 the valuable asset of partnership. No matter what difficulties and challenges we may face in the future, all members should unite and address differences constructively. Strengthening macro-policy coordination is both an inevitable requirement for international and multilateral cooperation among major economies and an objective requirement for world economic growth.
In recent years, the monetary and fiscal policies adopted by some developed economies have to some extent shifted their economic problems to others, causing emerging economies to encounter greater external pressure, currency fluctuations, and growth stagnation. The developed economies should not think of themselves only when adjusting their monetary and fiscal policies, and should pay more attention to and strive to reduce
the impact on emerging markets and developing countries. In short, all parties should adhere to the “trinity” policy tool of fiscal, monetary, and structural reforms and strive to promote strong, balanced, sustainable, and inclusive growth of the world economy. As for the reform of the International Monetary Fund, it is also necessary to continue to accelerate towards diversification, build a stronger global financial safety net, and prevent the occurrence of a new global financial crisis.
Moreover, China calls for persistence in leading by innovation and discovering new drivers of economic growth. After 10 years of development, the growth momentum of the world economy is still weak, and the development of global trade is often seriously affected by protectionist policies of some economies. The reason for this is that the momentum of growth is insufficient, and the way out lies in innovation.
Leading world economic growth is the common responsibility of the G20 members. At present, we happen to be at an important point of the new technology revolution. The G20 members should firmly seize this historic opportunity to promote the application of new technologies, the digital economy, and major innovation practices, conform to the general trend of digital transformation of the world economy, and demonstrate the vitality and leadership of G20 with tangible cooperation results and growth performance.
Of course, in integrating the digital economy with real economy and encouraging innovation, we should also pay attention to the risks and challenges brought about by the application of new technologies, strengthen institutions and legal systems, attach importance to education and employment training, so that innovation can benefit more countries and more people, and avoid new gaps when reaping the dividends brought by the development of new technologies and new industries. In order to better lead and adapt to technological innovation, China suggests that G20 make the application and impact of new technologies a key item for in-depth study and explore ideas and measures for cooperation in this respect.
Finally, China calls for a win-win progress for all and inclusive global development. At the G20 summit in Hangzhou in 2016, inclusiveness was listed alongside the goal of strong, sustainable, and balanced growth for the first time, reflecting a new understanding of growth by the international community. China has been active in calling on the G20 members to take more measures to implement the 2030 Agenda for Sustainable Development, strengthen infrastructure connectivity and help developing countries. “Leave no one behind” should be a clear slogan of G20 to support the development of the world economy in a truly equitable manner, especially the development of Africa and its industrialization.
Against the backdrop of the accelerated evolution of the international landscape, rising protectionism and unilateralism, and the coexistence of opportunities and challenges in the world economy, the G20 members adopted the Buenos Aires Declaration, sending a positive signal to the international community and the market, and maintaining the momentum of G20 as the main forum for international economic cooperation. China has once again made an important contribution to the success of the G20 summit, highlighting China’s plan for maintaining free trade in the world, building an open economy, improving global governance, promoting climate change collaboration, and facilitating inclusive and sustainable development. The G20 Buenos Aires summit marks a successful conclusion of multilateral diplomacy in 2018.