What roles does G20 play in the world?
Economic factors brought the G20 to global significance. In 2009, the United States was too weak to address the financial crisis and needed the economic resources that the developing world, particularly China, could bring to rescue the global financial system.
In the seven years after the G20 meeting in London in 2009, much has changed. Today, the 10 emerging countries included in the G20 account for more global GDP than the developed countries, adjusting for local cost differentials using purchasing power parity.
Has the G20 really replaced the G7 as the main global forum for major issues, from climate change through to tax, corruption and refugees? And has China, this year's host, really cemented its position as a global superpower after a long period of standing backstage and avoiding the limelight?
The meeting this month addressed the weak global recovery after the 2008 crisis by issuing the Hangzhou Consensus, which emphasizes structural and supply-side reform as the foundation of long-term, noninflationary economic growth, while at the same time subtly drawing attention to the limitations of monetary policy driven by central banks as the main pillar of global economic growth.
The statement in the Hangzhou Consensus that central banks cannot support economic growth on their own must have become obvious to everyone (except perhaps for a small group of economic theorists who see no limit to monetary easing). Thus, the emphasis of the G20 on structural economic reform, on a global scale, is welcome, although one wonders how effective such exhortations will be to politicians whose main interest is holding onto power, while always facing stiff resistance to important fundamental change from powerful vested interests.
Certainly China, the G20 host, has shown the way in making structural economic reform the main pillar of its economic policy, even if the progress so far has not satisfied some commentators.
Even though the consensus will not alone bring about economic recovery, it's a good start. It underlines the importance of the G20 as an organization that can set a global tone in key issues, where formerly the US, supported tacitly by a few European countries, gave the lead in global affairs.
The extent of the issues addressed by the final G20 communique underlines this growing importance. They include green finance, corruption, infrastructure, refugees, trade, climate change, terrorism and global governance via International Monetary Fund and World Bank voting changes, which would recognize the increasing role played in the world economy by emerging countries. But without an effective champion, emerging countries will not get recognition from the established powers (led by the US) and institutions (like the IMF) that they deserve.
The summit in Hangzhou underlined China's vital role as an emerging country that can stand toe to toe with the US, and can therefore provide the leadership and credibility that the emerging world needs to develop its voice and agenda.
“China can go further, by developing a new economic and social agenda that pulls otherwise isolated and uncommitted parts of the world into the global network.” Steven said, he adding that the G20 Summit developed this theme by underlining the significance of the Belt and Road Initiative, which links Asia with Europe via many poor countries in Central and South Asia. China's role as a link between the developed and the undeveloped world, one that only it can play, will prove an essential part of economic and social progress over the next 50 years.
The agreement between the US and China to address global warming by limiting carbon emissions set up the G20 summit as a platform for developing global cooperation on a wide range of issues. In turn, this achievement has promoted China's global image as an economic superpower that can bring key players together to address key issues and search for practical solutions.
“That's how important cooperation between the two superpowers has become. But the summit in Hangzhou underlined that it's the G20, and not the G2, that China wants to be the key global organization.” Steven said, “Actually, for our company, it is a good chance to develop. We have exceedingly advantages in this situation: economic globalization, limiting carbon emissions. All we should do is to comply with the new development trend changing in new era. Providing the best service to all over the world. With the advantages of resources, talents, and qualified products, we must in constant progress, constantly enrich, explore potential, get progress and mature constantly.”