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Foreign Policy

G2 at G20: The Significance and Limits of Reconciliation at the Osaka Summit

Jul 29, 2019
  • Tian Feilong

    Associate Professor, the Law School of Beihang University

Is it G20 or G2? This is a critical but sensitive question in the global governance system. China upholds multilateralism, and it is therefore natural that China would not simply accept the G2 framework. In terms of power and influence, however, the G2 would still play a decisive, structural, and directional role in any multilateral framework.

This was the case with the Osaka G20 Summit. The topics and agenda of the summit were diverse, but the most eye-catching event was naturally the talk between Chinese President Xi Jinping and his US counterpart Donald Trump. During their meeting, they agreed to restart trade talks. Although the Xi-Trump meeting did not produce a comprehensive trade deal, it helped achieve the important goal of political reconciliation, it eliminated some speculations about “decoupling,” and it pushed forward the difficult process of trade negotiations.

The strategic significance of the China-US reconciliation is widespread. First, it’s good to the global economy, the stability and development of which is reassured by China-US cooperation. Second, it benefits other countries who no longer have to choose sides and can continue developing and maintaining good business relations with the two largest economies. Third, by creating space for reform and sustainable development, the reconciliation will be conducive to the grand rejuvenation of the Chinese nation. Reopened talks allow China to continue improving its technologies and systems and strengthening its economic and political stamina to better prepare for tough and complicated international political challenges ahead. Fourth, the reconciliation allows Trump to respond to voters’ pressure as he runs for re-election while easing American hostility toward China, even if it is impossible to fully eliminate such hostility. Fifth, the trade framework agreement reached after the reconciliation could serve as a benchmark in the US’s talks with other trading rivals, running counter to the “over-Americanized” US-Mexico trade deal. Therefore, China’s unyielding stance can have strategic influence in representing the international community’s fight for rights and justice.

This was a hard-won reconciliation. If China accepted the conditions set by the US in the original deal, China would have given up its “Made-in-China 2025” plan and been placed under rigorous and unfair enforcement supervision and unilateral sanctions. China’s stance represented its national interest and the basic principles of its political system, and though it could compromise some specific interests, it would never sacrifice its political autonomy or its long-term development. The US should gradually adapt itself to China’s bottom line. Judging from Trump’s stance during the summit at the G20, the US has started to change and show some respect when China fought for its interests.

However, this is not enough for us to predict an end to the China-US trade war, nor should we expect the US to return to the framework of multilateral global governance. The reconciliation reached at the Osaka summit naturally had its limitations. First, Trump's “America First” principle remains unchanged, and the US’s temporary compromise by under the pressure of its election politics and China’s defiance should not be interpreted as any structural change. Therefore, any trade deal at this moment in time could not serve as a reliable guarantee for continued China-US relations. Second, the goal of the grand rejuvenation of the Chinese nation and the goal of global community governance would not change. With China’s technological upgrades and its achievements in global governance, the global leadership race between China and the US will become fiercer unless the US recognizes the legitimacy of the rise of China and the China model for development. Third, all third-party countries are actively seeking self-protection and do not wish to see their interest damaged by continued conflicts between China and the US. With the growing strength of third parties, the regulating power and influence of China-US deals will be limited. Fourth, the effects of American economic stimulus are probably on the wane. The failure of “Trumponomics”, particularly his tariff doctrine, could escalate domestic political and social conflicts, propelling further anti-globalization and populism, and these risk factors could likely further affect the China-US agreement and the stability of the global governance. And fifth, the risks of regional wars (for example, Iran and Ukraine) could possibly break out if the economy slows drastically. This would put the fragile peace between the big powers at risk and would further undermine the foundation for global governance consensus.

In a word, the China-US reconciliation at the Osaka G20 Summit means new opportunities for a trade deal between the two and opportunities to further the stability and development of the global economy. It also means a short and critical strategic window of opportunities for China’s comprehensive reform and opening-up. However, structural competition between China and the US has developed, and the post- World War II international order is being challenged. This means that the effect of the reconciliation is inevitably limited or short-lived, and there is a possibility of repetition and uncertainty. With a steadfast and unyielding stance when it comes to sovereignty, security, and development interests, China will naturally become more confident and at ease when coping with these risks, both during the trade negotiations and if the parties reach a deal.

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