The Group of 20 (G-20) held its eleventh summit in Hangzhou in China on September 4 last, which was marked by diplomatic faux pas, highfalutin communiques and a pious declaration. Except the first two, the grand finale was redolent of the past, almost a re-run of an old movie. The diplomatic omission of protocol shown to the American President could be a deliberate snub for his flexing of muscles in the South China Sea over the disputed islands. The communiques before and during the summit could be intended to display a sense of urgency and importance that the Chinese attached to the annual gathering of world leaders. As regards the florid Declaration at the end of the summit,it was at best a variation of the norm practised in the last ten summits verging more on optimistic rhetoric than on substance.
As the leaders of G-20 met in Hangzhou they were pressed by China to take urgent action to stimulate international trade and investment. A report released recently by the Global Trade Alert (GTA) showed that the G-20 countries excluding China have restricted rather than liberalise trade in investment-related goods while new foreign direct investment (FDI) in new productive activity slowed. China put promoting trade as an investment at the top of the draft agenda prepared by it with the help of `Sherpas' (technocrats) from other countries before the summit. Chinese President Xi Jinping urged the G-20 leaders to work with all seriousness to kick-start the world economic suffering from near atrophy. In addition to exhortation he offered concrete proposals for future development to resuscitate the global economy and strengthen flaccid global co-operation on various burning issues. As he presented his key-note speech in the opening session of summit he said that time was running out for the G-20 to be a `group of action' rather than just a talking shop and a social gathering of the high and mighty. He called on the G-20 leaders to drive global economic growth by fully honouring their commitments made in the past and implementing the same without further delay. In the key-note speech Xi Jinping reminded the other members of group that `all of us share one and the same goal that is to make Hanghou summit deliver fruitful outcomes. What we see here in Hangzhou showcases what has been achieved in great course of reform and opening up China has embarked upon.' It became clear to the world leaders that selection of Hangzhou was not for its scenic beauty or civic amenities. The Chinese President wanted to demonstrate to his guests what determined pursuit of an open policy and structural reform could deliver within a short time. He wanted to present Hangzhou as a case study of what reform for opening up economies could achieve for a country and by extension, for the global economy. While delivering the key-note speech he declared, `China has reached a new historical starting point. It is a new starting point for China to deepen reform across the board and foster new drivers of economic and social development. It is a new starting point for China to adapt its economy to a new normal and transform its growth model. It is a new starting point for China to further integrate itself into the world and open itself wider to the world'. He recognised that China's development has benefited from the international community and that his country was ready to provide more public goods to the outside world. He declared in the key-note speech, `we will continue to be fully involved in economic globalisation and support the multi-lateral trading regime. We will expand access for foreign investment, facilitate such investment to promote fair and open competition and create a sound business environment'. He sought to remove misgivings among members of G-20 regarding its monetary policy, saying `while carrying out market-based reform of Renminbi (RMB) exchange rate in an orderly basis and phasing in the opening of domestic capital market, we will continue efforts to make RMB an international currency and further internationalise China's financial sector'. Such a frank, bold and wide ranging declaration of intent has not been seen in the almost shop-soiled rhetorics used by G-20 leaders in the past. China left no doubt about its determination to lead from the front, to set an example. If nothing else, this historic key-note address by the Chinese President as host of the G-20 summit in Hangzhou will remain a landmark.
The Chinese President made no bones about his conviction that as the world economic situation has changed, it was necessary for global economic governance to change and become relevant to the changing times. He emphasised again and again, citing his country's example, that global economic governance should embrace openness. He drove home the point that global economic governance should be driven by co-operation, as global challenges require global responses and co-operation. He concluded by urging that `Since the G-20 has convened ten summits, it has come to a juncture of development. One of the goals of China's G-20 presidency is to enable the G-20 to transform from a crisis response mechanism focusing on short-term policies to one of long term governance that shapes medium to long term policies and solidify its role as the premier forum for international economic governance'.
In spite of the stirring exhortation by the Chinese President the G-20 leaders, bound by compulsions of national interests, failed to rise to the occasion. Facing populist ire at home, leaders at the G-20 summit belonging to the developed countries tried to walk a fine line; acknowledge anti-globalisation anger while arguing that ever more liberal trade is the cure for sluggish economic recovery. Leaders from the G-20 economies, therefore, sought to put a gentler face on global trade, touting its benefits in lifting millions out of poverty, while acknowledging that too many had been left behind it was a sqeamish tone that ran counter to the almost evangelical call by the Chinese President for opening up trade and investment. Germany's Angela Merkel best illustrated the delicate approach adopted by the leaders of G-7,calling for the system to be made fair but also speaking out against the temptation to look inwards with `protectionist measures that put the brakes on growth'. French President, Francois Hollande was more equivocal on the issue and said, `France is for globalisation but on condition that it is regulated.'
The report of GTA mentioned at the beginning of the column, has pointed out that little, if any, progress is likely in the wake of the G-20 summit. The GTA can speak with confidence on the issue because it has monitored changes in trade and investment policies at the G-20 since its heads of governments met in November, 2008. The mixed reactions to the Chinese President's key-note speech by the leaders of the developed countries point to that direction. The well-meaning declaration at the end of the summit reflecting most of the views of the host is an eye wash and misleading too because it does not mean what it says, if the past is anything to go by. With China urging free access to global market, particularly in the developed economies, and the leaders of the latter wringing their hands while uttering platitudes about global cooperation, the make-over of the G-20 from a talking shop to a group of no-nonsense business appears a far cry.
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