Call to action: China’s Xi Jinping seeks to rally G20 leaders around global growth cause
Chinese president presses structural reform as part of policy mix but other group members may be in no economic mood to sign up, analyst says
President Xi Jinping launched the Group of 20 summit on Sunday with a call to take concrete action to boost economic growth and not allow the event to devolve into a talk shop.
After greeting each leader of the world’s top 20 economies, including US President Barack Obama, German Chancellor Angela Merkel and British Prime Minister Theresa May, Xi led the group to a massive roundtable for China’s first talks as G20 host.
Xi’s goal is to unite the G20 members in the cause of global growth, leaving tough geopolitical issues to bilateral talks.
“Eight years ago … the G20 pulled the world’s economy away from a cliff to the track of stability and recovery. Eight years later, the world economy is again at a critical moment,” Xi said.
He said the international community had high hopes that the summit would deliver a prescription for robust and sustainable growth, amid threats from rising protectionism and leverage.
To that end, Xi proposed better policy coordination on monetary, fiscal and structural reform, and freer global trade and investment.
But Alan Wheatley, associate fellow for international economics at Chatham House, said it might be too optimistic to expect the meeting to result in a plan like the one that emerged from the urgency of the 2009 summit.
Xi’s push for the G20 to accept “structural reform” as a new economic policy component came at a bad time as many countries were reluctant to absorb more “short-term costs” when growth was already weak.
“The time to implement structural reform is when the global economy is doing strongly, and that is not the case now,” Wheatley said.
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China is also under pressure on various economic and trade fronts, with European businesses complaining loudly about China’s worsening business environment, and Britain and Australia wary of Chinese steel imports. There is also dissatisfaction at home about the slow pace of reform, especially among bloated state-owned enterprises.
Kerry Brown, professor of Chinese studies at King’s College, London, said Xi was making a “reasonable play” to keep the focus of G20 talks on likely areas of agreement, and not giving others the chance to expand on differences in front of a huge audience.
“Xi has simply set out an agenda that suits his purposes at the G20 – which is the host’s prerogative,” Brown said.
For China, now the world’s second-biggest economy, this is also a chance to gain influence to match its size. Chris Southworth, secretary general of the International Chamber of Commerce UK, said that with US leadership waning, China was the only country that could spearhead efforts against anti-globalisation.
Beijing has made several moves to take the international lead. It has backed the issuance of bonds denominated in Special Drawing Rights in its home market; the China-led Asian Infrastructure Investment Bank is broadening membership; and it has persuaded other G20 members to voice support for free trade, international governance reform and non-competitive devaluation of currencies.
He Maochun, director of Tsinghua University’s Research Centre for Economic Diplomacy Studies, said Xi’s global proposals also served China’s agenda.
“If the global economy heads in a good direction, it’s a blessing for the Chinese economy, too,” He said.
“If the global economy is open, inclusive, innovative, and cooperative, China’s exports will increase and more jobs will be created. If external demand falls, it will drag on exports.”
Tristram Sainsbury, from Australia’s Lowy Institute for International Policy, said the value of the summit was in how well it delivered real plans instead of rhetoric.
“Let’s wait and see what the leaders will deliver in terms of action,” he said.
Additional reporting by Sidney Leng and Xie Yu
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