Expectations on G20 Brisban Summit

the AIIA’s <WORDS INTO ACTION: G20 BRISBANE 2014> | 作者: Wei Min | 时间: 2014-11-15 | 责编: Li Minjie
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Wei Min

Associate Research Fellow, China Institute of International Studies

 

At the Pittsburg Summit, G20 was designated as the “premier forum for international economic governance”. Now four and a half years later, we see growth coming back, but not exactly the strong, sustainable and balanced growth as expected by far. The global economy still confronts challenges, including but not limited to sluggish demand, volatile financial markets, mounting debt and stubborn unemployment figures. With all these and many other issues on the table, G20 is not gaining, but shedding relevance, not least because with the crisis ebbing away, the will to cooperate among members also tapers due to different economic cycles.

 

In this context, the recent G20 Finance Ministers' and Central Bank Governors' meeting in Sydney agreed on shifting global focus from austerity to growth, and set a first-of-kind 2-trillion-dollar growth target for global economy in the coming five years. As good as it can bea target is not enough though. A plan to get us there is more urgently needed.

 

To begin with, the world needs more cooperation, not less. Ever since the Federal Reserve first hinted about tapering the QE, emerging markets have suffered quite a few shocks, from economic slow-down and exchange rate slump to inflation hike and financial vulnerabilities. The risks are there for the world economy as well. Economies around the world, developed or emerging, have all the reasons to step up cooperation and policy coordination lest negative macro-policy implications spillover even further. Discussions can cover, among others, specific preventive measures and even joint efforts for a financial firewall if necessary.

 

Then it comes to the old issue of trade liberalization. The Doha Round has stalled for years, while regional and bilateral free trade agreements are making fast progress, leading to ever greater fragmentation of the multilateral trade regime. Now that the Bali package deals have broken the Doha Round deadlock, the international community should seize the opportunity to safeguard the authority and integrity of the multilateral  trade regime, which is in the fundamental interest of sound and healthy development of the world economy.

 

Financial-wise, developed nations need to honor their commitment by completing their domestic approval procedures for the 2010 IMF quota and governance reform to take effect as scheduled. It is pivotal in maintaining confidence in the global financial system and credibility of G20 itself.

 

As to G20, it is still the forum for global economic governance it was designated to be. But its role has been spread thin over the years by too many preoccupations. G20 needs to highlight its focus on issues of shared global interests and, on top of that, improve the efficiency of its decision-making process and global influence.

 

As a member of the G20, China stands ready to take up its responsibilities and obligations. The country’s economy is slowing down, but with relatively high and steady growth and economic reforms going ever deeper, it still remains the engine for the world economy, ready to work with other G20 members in promoting steady and sound development around the globe.

 

Source: the AIIA’s publication Words Into Action: G20 BRISBANE 2014, published in October 2014

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