Ex-China official accuses G20 of being ‘at a standstill’ as global emergencies converge in a severe systemic crisis

In the lead-up to virtual leaders’ summit next week, former China finance vice-minister says G20 must take a stronger lead during pandemic and recession
A Biden presidency may allow better communication between the US and China despite their divergence on trade, geopolitics and ideology

US-China relations

Echo Xie

Published: 6:39pm, 12 Nov 2020

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A former top Chinese finance official called on the Group of 20 (G20) to take a stronger role rather than staying “at a standstill” as the world faces a severe systemic crisis.

Zhu Guangyao, former finance vice-minister, said the world was currently facing a systemic crisis caused by the coronavirus pandemic and it was a global health crisis, a deep global economic recession and a serious crisis of global governance.

“G20 is basically at a standstill,” Zhu said at a forum organised by the Beijing-based think tank, the Centre for China and Globalisation (CCG), on Thursday.

“All of these [crises] overlap with each other to form a serious systemic crisis not experienced by human society since World War II,” he said.

Zhu Guangyao, then China's finance vice-minister, speaks in 2016 at a press conference at the G20 Media Centre in Hanghzou, capital city of east China's Zhejiang province. Photo: Simon Song

It is not common for senior Chinese officials – including those who have retired – to criticise the international community, but Zhu said it had failed to address the crisis, unlike the situation in 2008 when major countries worked together to overcome the global financial crisis through the G20 mechanism.

Zhu made those remarks in the lead-up to the virtual meeting of the G20 Leaders’ Summit to be held next week. Chinese President Xi Jinping will attend the summit at the invitation of the King of Saudi Arabia.

In 2008, the G20 leaders set out a framework for preventing future financial crises and securing sustainable and balanced global growth.

At the forum, Zhu recalled the moment he was called at 3am one morning in October 2008 by a US deputy finance minister who urgently sought for China and the US to coordinate on the establishment of the G20 mechanism.

“Maintaining close coordination between China and the United States is not only in the interests of these two countries, but also in the interests of the world,” Zhu said. “It’s time to return to a multilateral framework and strengthen the G20 mechanism.”

He outlined three areas in which G20 nations could work together to form a policy consensus, including on the macroeconomy, digital economy and trade policy.

Timothy Stratford, former assistant US trade representative for China affairs, said there were fundamental challenges between the US and China but he would like the channels of communication to expand under a Biden presidency.

The two countries had been following divergent paths on economic policies, on some geopolitical goals and also on ideologies, he said.

“Our situation [is like] a game of football, but one team is playing American-style football and the other team is playing the [soccer] World Cup. They are both on the same field, but they have a very different idea about how the game should be played,” Stratford said.

But the US and China should work out ground rules to interact, and with so many areas that the countries had to work together, “a complete decoupling is not going to happen”, he said.

“So we’ve got to figure out how can we protect each other from damage and harm because of the differences in our system, but still cooperate where it’s absolutely necessary, and also try to cooperate where it’s really beneficial for both sides,” he said. “Under a Biden presidency … we can seriously recognise the differences that we have.

“We need to develop principles and standards … and this will create a more predictable environment for our business cooperation.”

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