G20 photo:VCG

The G20 will hold a series of ministerial meetings and leaders' summits with international impact from the end of June to the end of October. Italy, which hosts the rotating presidency this year, has been preparing for the summit since December 2020 in an attempt to coordinate the orderly recovery of major global economies from the pandemic as soon as possible under the G20 framework. In terms of global economic governance reforms, US Treasury Secretary Janet Yellen even explicitly said that she hopes the G20 finance ministers can approve the proposal to adopting a global minimum corporate tax before the Rome summit at the end of October. The proposal has recently won support from the G7 finance ministers.

As a communication and coordination mechanism covering major developed countries and major emerging economies, the G20 played an important role in coordinating the response to the 2008 international financial crisis. After more than a decade of reform and practice of governance, it has become the major forum for international economic cooperation. It is more authoritative and representative than the G7. This is because its members account for two-thirds of the world's population and 86 percent of the world's GDP. It has been led by the emerging economies represented by China. It has played a key leadership role on major international issues concerning global security, climate change and human development, economic growth and financial stability, as well as fighting against COVID-19.

It is well known that the G7 has been widely seen as the pivot point for the US' institutionalized hegemonic system - long playing a central role in global governance. These countries tend to show a sense of institutional, cultural and economic superiority. But because G7 members failed to strike a balance between global responsibility and power-sharing, especially as the BRICS and other emerging economies start to play a more active role in the world economy, the G7 has gradually degenerated into a talking shop with ambitions that are far bigger than their capacity. 

Under the impact of the once-in-a-century financial crisis, the US financial system, once regarded as a synonym for resilience and robustness, was in turmoil. And the G7 at that time was incapable of saving the situation. Former US president George W. Bush at the time could only turn to activating the G20 mechanism for help. At the G20 Summit in Washington on November 14, 2008, countries reached a consensus on collectively rescuing the market, laying a solid foundation for the ultimate stabilization of the international economic and financial situation.

As a major platform for international economic cooperation, the G20 does have some shortcomings. This includes a lack of a complete implementation system, which leads to the lack of binding force in the agreements reached during the summit. But over the past decade, the G20 has proved to be the golden "bench mark" of the global governance system and an emerging global public good with internal change factors.

In recent years, the impact of protectionism, unilateralism and bullying has led to the danger of the polarization of global economic governance system. As the world's largest emerging economy, China proposed an action framework for improving global economic governance when it assumed the rotating presidency in 2016. China calls for equal rights, opportunities and rules for all countries, and seeks to share benefits and achieve win-win results instead of seeking hegemony. 

Thanks to China's efforts, the G20 Hangzhou Summit for the first time placed "development" in a prominent position in global macro policy coordination. It also formed a framework for multilateral global investment rules, issued the first presidency statement on climate change under China's proposal and put "green finance" on the G20 agenda. This demonstrates that China is responsible, forward-looking in mechanism design, and also capable of coordination on major issues of global economic governance.

The realization of balanced global economic governance requires the G20 and its member countries to show due international responsibility in strategic competition and cooperation - and thus become the common guarantor of global governance.

The author is dean of the School of Economics & Finance at Shanghai International Studies University. opinion@globaltimes.com.cn