Language : English 简体 繁體

Leading the Way for World Economic Growth

Aug 16 , 2016
  • Wu Zhenglong

    Senior Research Fellow, China Foundation for Int'l Studies

The much-anticipated 11th G20 Summit will soon take place in China’s Hangzhou. The international community is expressing ardent hopes that this important meeting will rise to the challenging times, guide the world economy out of its prolonged sluggishness and open the way towards sustainable, vibrant and balanced growth.

Logo of G20 Hangzhou Summit, representing the bridge of world economic growth, the bridge of International cooperation, and the bridge of win-win in the future.

Bridge on the West Lake in Hangzhou

Our world today is pregnant with a new round of scientific revolution and industrial transformation. New types of industries and new business models are continually emerging. Innovation, which is deeply influencing our people’s work and life, has increasingly become one of the key drivers for economic development, with a prospect that no one can predict.

At the same time, the lingering effects of the 2008 financial crisis still keep the world economy from returning to its normal track. Recovery, both slow and weak, is full of uncertainties. The risks of further economic slowdown remain. The financial markets continue to be tumultuous. Trade and investment protectionism is on the increase. The uneven and unbalanced economic development has made further inroads. According to the latest World Bank report, the 2016 global growth forecast has been scaled down from 2.9% in January to 2.4% in June.

At such a critical juncture for world economic cooperation, China’s proposal for the theme of G20 Summit in Hangzhou — Towards an Innovative, Invigorated, Interconnected and Inclusive World Economy — could not be more pertinent. What is more, China suggested four principal agenda items, i.e., exploring more efficient growth models through innovation, improved global economic and financial governance, stronger international trade and investment, and inclusive and interconnected paths of development. The proposed theme and agenda items form an integral whole, with the agenda items addressing directly the major challenges and problems of the world and the theme highlighting the need for an innovative, invigorated, interconnected and inclusive world economy. Both are essential in guiding the G20 Summit to its success.

Facing the current difficulties in the world economy, China has the duty, the capacity and the confidence to seek greater consensus with the other G20 members, sharing Chinese wisdom by contributing more durable solutions, tapping new forces for growth and blazing new trails for world economic development.

First, finding new sources of growth and exploring greater growth potential. This is the core task for the Hangzhou Summit and also marks the first time for G20 to focus on the subject of innovation. The Hangzhou Summit will come up with the “G20 Blueprint for Growth-related Innovation”. By seizing the new opportunities brought about by emerging new technologies, new industries and new factors of structural reforms, we can expect to fundamentally solve the problem of weak growth. In the context of the blueprint, the Summit will formulate a number of action plans for innovation, new industrial revolution, digital economic development and cooperation initiatives, to name a few.

Second, stepping up reforms on international financial institutions and systems. G20 will continue to push for reforms of IMF’s quota system and governance structures as well as World Bank’s system of shareholders’ general meeting for deliberation with a view to increasing the emerging countries’ voice in international financial organizations. G20 members will strengthen macroeconomic policy coordination and communication with a view to mitigating the uncertainty and negative spillover of their respective policies. In the meantime, G20 members will undertake not to go for competitive devaluation of their currencies while pledging to step up cooperation in financial oversight, international taxation, energy, anti-corruption and other areas of endeavors.

Third, promoting international trade and investment so as to inject greater vitality into the world economy. The Hangzhou Summit will formulate, for the first time, the “G20 Strategy for Global Trade Growth” and the “G20 Guideline for Global Investment Policy”, and push members to ratify the “Trade Facilitation Agreement” by the end of the year while implementing it as soon as possible so as to bring down global trade costs by 15%. The Hangzhou Summit will voice an explicit opposition to trade protectionism, make a decision of extending the “moratorium on new trade restraints and protectionist measures” until 2018, and stand firmly to promote recovery and development of global trade. Financial policy, fiscal policy and trade and investment policy are often described as the three pillars of global economy. To the G20, however, the last pillar seems a little too weak. The forthcoming G20 Summit in Hangzhou will witness a strengthening of that weak link for the first time.

Fourth, promoting inclusive and interconnected development in implementing the UN’s 2030 Agenda for Sustainable Development. Again for the first time, the Hangzhou Summit will accord top priority to the issue of development in a major global macroeconomic framework and formulate an action plan centering on implementing the 2030 Agenda for Sustainable Development. Such action plan will help African countries and the least-developed countries to accelerate their industrialization process and inject powerful impetus to worldwide efforts for poverty reduction and sustainable development.

To make the Hangzhou Summit a success, China has organized, in addition to relevant ministerial meetings, a number of related functions that include a G20 business summit, a women’s conference, a labor conference, a non-governmental meeting, a youth conference and a think-tank meeting, with a view to pooling extensively the views and suggestions of various parties and forming a broadest possible consensus.

The G20 Summit in Hangzhou is expected to produce over 30 tangible results which, while serving the immediate and long-term interests of the world, help bring about sustainable, strong and balanced global growth and chart a new direction for world economic development, namely, towards an innovative, invigorated, interconnected and inclusive world economy.

Obviously, the G20 Summit in Hangzhou will go down as an important milestone in international development.

You might also like
Back to Top