Audiences listen to a panel discussion at the Business 20 Summit as part of the G20 Summit in Hangzhou, East China's Zhejiang Provinc on September 3. Photo: IC

The world's eyes are on Hangzhou as the 11th G20 summit is being held in the East China city.

Several important meetings and dialogues have already been held, as leaders from across the world join Chinese President Xi Jinping in seeking solutions and breakthroughs to crucial issues such as spurring global economic growth, strengthening international economic cooperation and building a new scheme of economic governance against the background of slowing world growth.

It is the first time China has held a G20 leaders' summit. With "Toward an Innovative, Invigorated, Interconnected and Inclusive World Economy" as the theme, the Hangzhou summit is being attended by not only the leaders of the G20 members, but also the leaders of eight guest countries and seven heads of international organizations. The list covers all the major economies in the world and many developing countries, making it the most inclusive and representative summit in G20 history.

Though it is a non-binding dialogue platform, the Hangzhou meetings are highly anticipated.

Against a sluggish world economy, rising protectionism and reversing globalization, it is anticipated that China, the second largest economy and the biggest emerging one, will play an essential role in jointly pioneering a new trajectory for world economic development and injecting vitality into the world economy.

And China is answering these hopes with an agenda that not only addresses financial problems and global economic growth but also sustainable development of the world.

Meanwhile, given the G20's growing influence, the mechanism that was originally meant to deal with economic crises is expected to move toward becoming a long-term global economic governance scheme in this summit, though not without challenges.

 

Born out of crisis

The G20, an international forum initiated in 1999, consists of 20 major economies including China, Canada, the UK, Russia, South Africa, Turkey and the US. Following the financial crisis in Asia in 1997, it was established in Germany to prevent future financial threats.

For a long time, it was just a forum for finance ministers to irregularly discuss policies and issues. Meetings were held to discuss international financial and monetary policies; the promotion of international of financial stability and global economic development; and the reform of international financial institutions.

But starting in 2008, when the world was shaken by the financial crisis, meetings of G20 finance ministers and central bank governors expanded to involve national leaders to handle the new challenges through cooperation between developed and developing countries.

The biggest feature of the G20 is its representativeness. The 20 major economies are home to two thirds of the world's population, 60 percent of the Earth's landmass, 85 percent of the whole globe's GDP and 80 percent of world trade turnover since the 2008 financial crisis.

As the world economy is stumbling, all economies are growing increasingly interdependent, and emerging countries are rising to become an important force to handle financial issues. It is generally accepted that only when developed and emerging economies work together can major economic problems be solved.

"The G20 adds a feasible choice in terms of the macro control of the world economy, which also makes decision-making about the world economy more balanced," Jin Canrong, professor of international relations from Renmin University of China, wrote in an article published in journal Contemporary International Relations.

"The G20 provides a platform for more emerging economies to have their voices heard and have a say in policy coordination… The increasingly equality in the number of developed and developing countries no doubt will help balance the overly-concentrated global economic power structure," Jin added.

 

China as the host

Since the group got together for the first time in 1999, China has contributed many proposals on coping with financial problems. Chinese leaders have been pushing hard for reforms of international financial institutions, innovation in growth patterns, coordinated macro policies and an open world economy.

Hosting the G20 leaders' summit for the first time, the largest emerging economy is placing unprecedented emphasis on the meeting. Since taking on the G20 presidency at the end of 2015, China has already done a lot, including proposing the establishment of the G20 Trade and Investment Working Group and overseeing the institutionalization of the G20 Trade Ministers Meeting, to lay the foundations for the Hangzhou summit.

Some are describing scientific and technical innovation, which includes the G20 blueprint on innovative growth and a set of action plans to build innovation, the new industrial revolution and the digital economy, as the biggest highlight of the summit. It is the first time that encouraging innovation has been put at the top of the meeting's agenda.

Chinese President Xi Jinping said at the Antalya summit last year that G20 members should make innovation-driven development and the cultivation of new growth areas their cooperation priorities.

China is also taking the opportunity to push forward structural reforms. A seminar held in Shanghai this February laid out nine fields that should be given priority in reforms, 48 guiding principles and an index system to evaluate the reforms, which is to be further discussed at the Hangzhou summit.

Swiss Finance Minister Ueli Maurer has said that innovation and other structural reforms are essential to raise productivity and ensure the quality and sustainability of growth.

"In this respect, the G20 Blueprint on Innovative Growth represents an ambitious agenda toward a new paradigm for growth based on knowledge and on new and cleaner technologies," he told the Xinhua News Agency. "Many countries have, since the global financial crisis of 2008/09, relied too heavily on monetary and fiscal easing."

"It is the first G20 summit with a focus on the long-term impetus of global growth," said Chinese Foreign Minister Wang Yi at a briefing in late May.

Zhu Jiejin, a professor from Shanghai's Fudan University, regards the consensus on innovation as a hard-won achievement under China's presidency.

"It is not easy for China to stay focused on a long-term agenda when some are calling for short-term stimulus packages," Zhu told Xinhua.

Jin shared with the Global Times in a previous interview that China's practice in reform and innovation not only will raise confidence in global economic growth but will also be of milestone significance to the whole world's economic structure and governance reform.

A far-sighted G20

Though eight years have passed since the world financial crisis began, the global economy is yet to fully recover and developed countries are still seeing sluggish growth. Meanwhile the emerging countries are rising to be an important force to handle the crisis.

As Jin believes, the change in the world economic domain is the essential reason behind the changes in the G20 as the world is turning to developing countries for solutions. Against this background, though the G20 was initiated to cope with financial crisis, it is increasingly anticipated to be a long-term global governance platform for the economy and beyond.

There have been high hopes that China will play a bigger role in global governance from both home and abroad.

Wang Wen, executive dean of the Chongyang Institute for Financial Studies at Renmin University of China, observes that China is seizing the chance in this year's G20 to expand its global influence and leadership.

"It invited the most developing countries ever to attend a G20 summit, making the summit in Hangzhou the largest G20 ever and the most representative one. In terms of the agenda, this year's G20 summit includes many concrete contents," Wang told the Global Times, "Meanwhile, China has done its best in arranging complementary activities and publicity. By all standards, China has made unprecedented efforts to host the summit."

As Wang noticed, besides the focus on innovation as a long-term priority, several other aspects also show that China is leading efforts to make the G20 a long-term governance platform for global economic development.

"With China's efforts, the G20 summit expands its functions, including putting the UN 2030 Agenda for Sustainable Development on its agenda, striving to make contributions and realize the goal with the whole globe," Wang said.

It is also the first time the summit will make a special statement about climate change and include green finance on its agenda. Meanwhile, the summit will support Africa and industrialization in developing countries, showing that as the host country, China is actively speaking for such countries and trying to build a new global economy governance system that can see their wide participation.

As many experts see, the attention to developing countries shows China's sense of duty, which is also the root to solve problems like unbalanced and unsustainable development.

"Following these efforts, the Hangzhou summit could become a turning point for the G20 to become a long-term governance mechanism," noted Wang.

Jin said that even though the G20 is just a forum and lacks effectiveness in implementation, compared with the G7, it is more representative and is more timely given the new balance of international powers.

But Wang pointed out that challenges for the G20 remain and it is probably not yet ready to replace the G7.

"The difficulties lie in the coordination between the members of the G20 and the implementation capacity of the respective countries. Meanwhile, the G20 needs to figure out how to represent the whole globe," Wang said, adding that uncertain factors like terrorism and splittism all will impact global governance and add to the difficulty.

"It is impossible for the G20 to replace the G7 in a short term. On the one hand, after four decades, the G7 has become a relatively solid scheme after years of coordination and its members have the same values, ideology and goals," said Wang, "The bottleneck for the G20 is that its members don't have the same ideology, values or goal, which means G20 still has a long way to go in these aspects."

Global Times