G20 Summit and its importance for China
- By Shafei M. Hali
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E-mail CRI, August 29, 2016
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A passenger walks past a G20 themed poster at a subway station in Hangzhou, capital of east China's Zhejiang Province, Aug. 27, 2016. The 11th G20 summit will be held from Sept. 4 to 5 in Hangzhou. (Xinhua/Chen Yehua) |
The Group of twenty is an international forum comprising of the economically strongest countries of the world and the forum specifically deals in bringing together these economies to strengthen trade and economic ties. Group of twenty accounts for a colossal 85 percent of the global GDP and trade accounts for more than 80 per cent of global total and the combined population of the 20 accounts for two-thirds of the global population making it one of the most important events in a calendar year as the world's economic trajectory can be calibrated at this forum.
In past couple of years and to be more precise after the 2008 global financial crisis the forum has gained greater importance. Even though the major repercussions arising from the crisis have been streamlined but a lot of work remains to get the world economy back on a robust track. For the past eight years, the recovery process has been observed to be slow and fragile. The global economic growth has been very ordinary, if we look at most of the most common economic indicators of economic health the picture doesn't seem rosy; unemployment is on the rise, debts which have reached a record high, trade, investment, financial and commodity markets are still lethargic.
Oil prices are facing a downward trend and have fallen sharply over the past seven months, leading to a curtailing effect if revenues in many of the energy exporting nations and have caused a huge strain on the economies of the Middle East.
Brexit has caused uncertainties within the global governance system and is fast becoming a starting point for new debates. Two months on from the referendum, very little tangible steps have been taken except for declarations of commitment for the future of the European project, these declarations for now seem hollow as there is still widespread confusion as what needs to be done even though within the EU everyone agrees to the fact that something needs to be done to respond to the Brexit vote, but no one can agree to what that something needs to be.
As mentioned above, that ever since the outbreak of the financial crisis the recovery has been very lethargic causing a huge spike in dept. this is primarily so, because the economies have been focusing more on the monetary side of economics to tackle the problem by injecting money into the system through fiscal stimulus and monetary easing as a defibrillator to revive the economy. However, this has come with serious side-effects which are now evident as these monetary policy measures are not only raising debts and in return limiting fiscal policy options in the developed world but are also causing problems in other parts of the world.
Apart from problems relating to the financial crisis the world is also undergoing a refugee crisis originating from Syria and also the threat of terrorism, these problems have repercussions of new dimensions. Enhanced security threats, hindering foreign investments and lowering confidence. It is now an accepted fact that owing to the intertwined economies of the world due to globalization, the solutions for jumpstarting the world economy no longer lies in a single pair of jumper cables, rather a collective action has to be taken and the salvation lies not only in greater ties within the G20 but in also jumpstarting the economies of the developing world where there is massive potential for growth. China has not only accepted this fact but is actively pursuing this policy through its progressive "Belt and Road" initiative.
G20 is a perfect platform for the G20 nations to put their thinking caps on to solve problems of the world economy, as these nations have the capital and the tools needed for the job. They account for two thirds of the world's population and more importantly these 20 countries are responsible for more than 80 percent of global economic output. The G20 nations need to collectively take action and make the focus of this year's summit a reality. The focus of this year's summit is"sustained global growth". China itself is undergoing tremendous reforms and shifting its gears and strategies to further open-up its economy for sustainable economic growth and that is the reason why it is taking massive initiatives to link the economies of the world through infrastructure projects which are already showing great promise as these reforms and Chinese initiatives will uplift millions of people from poverty through trade. Everyone knows that individual fiscal and monetary endeavors taken by the G20 countries have triggered the recovery process but for the long-term and sustained economic growth these efforts need to be channeled together through a long-term strategy, initiatives and policies which will be viable to address the difficulties of not only today but also of the future.
Innovation in today's world is not merely a buzz word as the world is experiencing rapid advances in technology and once these technologies and innovations are being implemented by countries new markets and avenues of economic growth are opening up, China itself has laid tremendous stress on innovation within its own economic plans and it is because of China's proposals that"innovation"will be high on this year's list of points to be discussed at the G20 summit.
China's portfolio and position within the current global situation puts it in a great advantageous position to play an effective role as this year's host nation, as China will effectively utilize the forum to start dialogues amid developed and developing countries to work together and to take collective action for the long term solutions of solving the problems of the world economy which is for the greater good. China being a peaceful country has the same stance ingrained in its policies and the summit can prove to be an engine for propagating the same values to the participating nations making giving China a significant global leadership status.
The world has high expectations for this year's summit, but it should be noted that without consensus, cooperation and the political will to pool in resources and efforts to tackle the global economic issues, nothing much can be achieved. The world needs to whole heartedly embrace China's "Belt & Road" initiative and should emulate the Chinese policies of creating win-win situations in trade.
Though China is globally hailed as a country fast becoming a major mover and shaker for the better but certain countries still look towards China with skepticism and cause hindrances in its plans for creating a better world by expanding trade. China and its "Belt & Road" initiative is a very significant plan for the global economic salvation. This is the reason why President Xi has been welcomed with open arms around the world as China is among the few countries which is not only laden with cash for investments, but also has tremendous room within its own borders for investment and growth. With the world's leaders converging at Hangzhou for the 2016 G20 summit it is a perfect opportunity for China to not only play the role of the gracious host but also to bring others into the ambit of its "Belt and Road" initiative which will most certainly be in tune with this year's summit which is"sustained global growth."
Shafei Moiz Hali has a master's degree from George Mason University, Virginia, USA in the field of International Commerce and Public Policy. Mr. Hali has been working as an Assistant Professor at the National Defence University (NDU), Islamabad, Pakistan with the department of Government and Public Policy Since 2009. Currently he is pursuing his PhD from the College of Public Administration at the Huazhong University of Science and Technology (HUST), China.
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