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The G20 Hangzhou Summit to Promote World Economy

Jul 14 , 2016
  • Yin Chengde

    Research Fellow, China Foundation for International Studies

The G20 Hangzhou summit scheduled for early September is an important conference at the time when the world economy and the development of the G20 face a turning point. As the host country, China is making full preparations and coordination, while the theme, aim and the tone have been set, representing the change of times and the common desire of all members. All of this will ensure that the G20 Hangzhou summit will be a fruitful and historic meeting.

The first G20 summit of government leaders convened in 2008 to deal with the global financial crisis; it was also the product of the changing world economic pattern. It has replaced the G7 as the leading platform to govern the world economy since its establishment. The G20 covers the world’s major developed and emerging economies that account for 90 percent of global GDP and 80 percent of global trade. The Hangzhou summit will take place under the theme “Building an innovative, invigorated, interconnected and inclusive world economy”, which demonstrates that the G20 is the main body of the world economic cooperation. The G20 Hangzhou summit should make significant breakthroughs under the joint efforts of all sides and become a milestone in the G20 history.

As the host country, China will play an important role in having a successful summit and will make a unique contribution to promoting a strong world economy, and to its sustainable and balanced development. China will also benefit a lot from the summit. The summit will further integrate China’s economy into the world and will have significant and far-reaching effects on China in pushing forward the reform and opening up, in carrying out the 13th Five-Year Plan and realizing the “two centenary” goals.

First, the theme of the summit lines up well with the goals of China’s 13th Five-Year Plan.

China’s 13th Five-year Plan puts forth five development concepts including innovation, making it the driving force behind development and the core of China’s development endeavors. The Hangzhou summit makes innovation the first theme, emphasizing innovation and structural reform as the key elements for promoting development. China has a rule to follow in economic development: The further the opening up, the closer China’s integration with the world economy; the more powerful the driving force, the more secure a sustainable strong growth. The G20 Hangzhou summit will give China more strength and support to further integrate into the world and realize the Chinese Dream.

Second, the summit will upgrade China’s foreign economic cooperation to a new level.
China is an export-oriented economy, having a 50 percent dependence on foreign trade and foreign capital. So China’s economy greatly depends on the world economy and China’s foreign economic relations. The G20 Hangzhou summit takes the revitalization of the international trade and investment as one of the main agendas, highlights establishing an open world economy, requires the member counties to abolish the trade and investment barriers, advocates trade and investment liberalization so as to comprehensively achieve interconnection and interaction. The proposal and implementation of these consensuses will further tighten and deepen China’s economic relations with the G20 and the countries around the world, enhance the level of foreign trade and foreign capital absorption as well as the outbound investment, and pump more energy and vitality into China’s economic development.

Third, China is much engaged in global governance, producing gains for China and other developing countries.

The G20 Hangzhou summit is an important mark of China’s involvement in the world economic governance and its rule setting, and will move the global governance mechanism and world economic order towards fairness, reason and nondiscrimination. This is reflected by the fact that the following three important items on the agenda, put forth by China will become the summit consensus.

The first is to perfect the global economic and financial governance through reform, giving the emerging economies a higher representation and a greater say in the international economic and financial institutions, to make them reflect and adapt more to the profound changes of the world economic pattern.

The second is to innovate and perfect the G20 mechanism, speeding up its transition from crisis response to long-term effective governance. That requires reinforcing its position as the main global economic governance platform in order to terminate the Western developed countries’ manipulation and monopoly in the world economy and “the rules of the game” through the G7.

The third is to push forward the world economic development in an inclusive and interconnected way with the focus on carrying out the 2030 UN Agenda for Sustainable Development. The goal of the agenda is to implement the multiple-action plan through close and effective international cooperation so that all countries can achieve sustainable and inclusive growth and eliminate poverty and hunger by 2030. This will provide the developing countries with more a favorable environment and conditions for development, strengthen their power, energy and potential for development, and promote a sustainable and balanced global economic development.

Fourth, the summit is a main forum for China to discuss the world’s economic recovery with the major economies. President Xi Jinping will meet other world leaders to fully discuss ways to improve bilateral cooperation and brainstorm about the global economy. Particularly, President Xi and President Obama, leaders of the two largest economies and the two large engines of the world’s economic growth, will hold bilateral talks to coordinate the macroeconomic policies with successful results expected. The bilateral talks will have major effects on promoting China-US economic cooperation and the global economic recovery. China’s economy will undoubtedly continue to gain a strong growth as a result.

Holding the G20 Hangzhou summit will boost China’s reform and will be a new starting point for China to keep rising to a higher level. The Hangzhou summit will also be a starting point for the G20 and the world economy to achieve the new vision of the G20 and create a new pattern of world economic growth, thus benefiting the entire international society.

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