More work needed to make G-20 summit a success

Leaders pose for a family picture during the G20 Summit in Hangzhou, Zhejiang province, China on Sept 4, 2016.
Leaders pose for a family picture during the G20 Summit in Hangzhou, Zhejiang province, China on Sept 4, 2016.PHOTO: REUTERS

BEIJING - Argentine President Mauricio Macri describes the Group of Twenty (G20) leaders' summit as "impressive and huge" while United Nations chief Ban Ki-moon "really appreciates" China's move to place bigger focus on the developing states.

International Monetary Fund chief Christine Lagarde has praised Chinese President Xi Jinping's remarks that actions matter more than words as "inspirational" while Organisation for Economic Co-operation and Development (OECD) chief Angel Gurria applauds China "for placing innovation at the heart of their G20 presidency".

Since the close of the two-day G20 summit on Monday in the beautiful Chinese city of Hangzhou, Chinese media have been busy publishing reports - with many quoting global leaders and experts - to echo the government's depiction of the event as a success.

They also cite a list of 29 outcomes as proof of China's ability to stage a productive global event, reform global financial institutions like the G20, and shape the global agenda.

A front-page story on Thursday (Sept 8) by the People's Daily, the Communist Party's mouthpiece, was headlined "A confident great power striding forth into the world".

The Global Times tabloid wrote in an editorial on Tuesday (Sept 6) that China knows it should contribute more to the world and that "the Hangzhou G20 summit proves that China has such capabilities and doing so suits our interests".

But was the G20 summit in Hangzhou really a success that has raised China's global standing?

WHAT WENT RIGHT AND WRONG?

On the surface, there are some supporting factors, such as a joint announcement on the eve of the summit by China and the United States that both have ratified the Paris Agreement on cutting global-warming emissions.

Besides putting the pressure on other countries to follow suit, the move set the right tone for the G20 summit by sending a message that both powers can work together on global issues and act on their pledges, despite the sideshow over US President Barack Obama's lack of a red-carpet welcome in Hangzhou due to logistical disagreements.

Others cite how the 29 outcomes contained proposals aimed at not just minimising short-term risks but also in finding new growth drivers and in advancing structural reforms in the G20 to make it fairer to developing economies.

These included a blueprint on innovative growth, which is a framework document on the G20's long-term work in innovation, and the potential of the new industrial revolution and the digital economy.

Another sign of success is the several firsts at the summit, such as drafting an action plan for implementing the UN's 2030 Agenda for Sustainable Development and another on industrialisation of African countries and least developed countries.

Singapore Prime Minister Lee Hsien Loong said China as G-20 host had set the right focus by talking about innovative and inclusive growth, and the digital economy - challenges faced by all countries.

"You are comparing notes with other countries. We can learn from each other's experiences in managing the difficulties for our people," he told Singapore media on Monday.

But there are also critics of China's G20 presidency and how its proclamation of the summit as a success might be baseless or too early.

G20 expert Mark Melatos of the University of Sydney said he found the summit to be disappointing on economic issues.

"This year's summit faced significant headwinds from the start; a US president coming to the end of his final term, divisions in Europe over Brexit and between European countries (and some global institutions) over how to deal with government debt, growing anti-globalisation sentiment in the developed world," he told The Straits Times.

Prof Melatos said the G20 needed to come out with "a very strong statement" recognising the asymmetric costs of global integration and have a plan for studying, better understanding and, eventually, dealing with these impacts.

"In my view the final communique from the G20 summit didn't do enough of this," he added.

"For example, the G20 could have taken the opportunity to announce a major cost-benefit analysis of globalisation. That would have sent a signal that global leaders understand the depths of peoples' concerns and are serious about addressing them."

Canada-based G20 expert Barry Carin told The Straits Times that some of the initiatives launched under China's G20 presidency such as a research centre on fugitive repatriation and asset recovery are "relatively insignificant".

Dr Carin, from the Ontario-based Centre for International Governance Innovation think-tank that focuses on international governance, said China should have attempted more ambitious ideas like setting up a Sovereign Debt Forum to address gaps in tracking debt and managing sovereign debt crises in a transparent and systematic manner.

Professor John Kirton, co-director of the G-20 Research Group at the University of Toronto, gave the G20 summit a mixed report card.

He called it an event of "significant success", with the 29 outcomes and also the leaders' articulation on a core set of common values.

"They showed that China's G20 leadership had reached a new stage, with the bigger, bolder, better initiatives from summit host President Xi Jinping, followed by his fellow leaders in a fulsome way," he wrote in a commentary on Thursday.

But he added that the leaders - relative to Mr Xi's initial and ultimate ambitions and the many clear and present global demands and dangers - "stopped short of making Hangzhou a summit of strong success, let alone the historic one that the global community needs at this time".

"Despite the leaders' brave concluding words on keeping their G20 commitments, there were few convincing accountability mechanisms added to ensure higher compliance and thus the effectiveness and legitimacy of the G20 as the centre of global governance for an intensely globalised world," he added.

IMPLEMENTATION IS KEY

To be sure, China appears to recognise that what would determine the summit's true success and legacy is not the number of outcomes nor pledges, but the effectiveness in implementing them.

In his opening and closing remarks at the G20, Mr Xi urged leaders to turn the forum - which began in 1999 and was elevated into a leaders' summit in 2008 to cope with the global financial crisis that year - into an action team instead of a talkshop.

The Xinhua news agency, citing a Chinese saying on how "empty talk would lead the country astray", wrote in a commentary on Monday: "By the same token, the G20 nations should work with concrete actions but no empty talk to carry out their consensus and strengthen partnership, so as to get through the global economic hardships."

But to get support from other countries, China may have to do more on other fronts, including walking the talk.

For instance, countries might be reluctant to act on the G20 pledge of opening up their markets and reducing protectionist measures, given perceptions of China practising double standards on this front.

Mr James Zimmerman, chairman of the American Chamber of Commerce in China, told Reuters that Mr Xi has accurately warned about the need to counter the increase in protectionism around the world.

"But actions speak louder than words and the ball is in China's court to implement its own needed domestic reforms and to provide greater market access for foreign goods, services and technology," he added.

Reports in recent days quoting diplomats on how China had resisted efforts by other countries to include steel overcapacity issues in the final G20 communique may not help rally support for a global joint effort on this front.

The G20 had pledged to cut overcapacity in steel and other industries with proposals for a new global forum that would seek a new solution and report back to the G20 next year. But many executives say any taskforce requires China's buy-in.

China may also have to rein in its assertiveness in maritime disputes with neighbours as they could affect its ability to rally others to implement the so-called "Hangzhou Consensus" on facilitating global economic growth through comprehensive, open, innovative and inclusive long-term measures.

To be fair, other countries involved in other disputes and issues, such as the Syrian crisis and the future of the European Union in the wake of Brexit, are also party to the lack of global consensus on the need to take tough actions to rally and reform the global economy.

Analyst Yossi Mekelberg, a fellow at the Royal Institute of International Affairs of Chatham House, wrote on the Saudi-owned Al Arabiya news portal that Mr Xi has rightly urged his counterparts to avoid "empty talk" if they are serious about accelerating economic growth.

"Yet, without everyone's agreement that the global economic system requires a genuine structural change, which re-evaluates some of the fundamental relations between politics, society and economy, this summit, as many before it, will bring no change to most of the planet's population," he added.

But China also enjoys some advantages in ensuring that the Hangzhou summit is remembered as a success.

Its heft as the world's No. 2 economy with a relatively high growth rate of between 6 and 7 per cent gives it an edge in pushing the Hangzhou summit's agenda going forward.

Its relative political stability with Mr Xi at the helm for another six years at least, compared with other major economies entering elections in the next two years, is also a plus.

China is also increasingly complying with the pledges and commitments it agreed on at previous G20 summits, which might give it more credibility and sway in getting other states to do so now.

Studies by the G20 Research Group of the University of Toronto show China's compliance rate has risen from 50 per cent at the 2009 London summit to 80 per cent this year, though it trails Italy and the US, both with 90 per cent.

Prof Melatos said China is also well-placed to "take the lead in providing a balanced argument in favour of globalisation", given how many G20 members, such as the US and Britain, cannot address this issue in a balanced way now due to domestic politics.

"China, probably better than any other country, understands the huge benefits and potential costs that can arise from global integration," he added.

University of Michigan analyst Ang Yuen Yuen said that for China to become a global leader, it needs to offer the world a distinct set of values drawn from its own development experience, just like how the US is a global leader not only because of its political and economic might but also because its humanistic values.

Assistant Professor Ang, author of the book How China Escaped the Poverty Trap, told The Straits Times that China should champion the value of improvisation.

"Contrary to Western images of China as a monolithic, top-down regime, China has been remarkably successful at improvising bottom-up solutions to its myriad problems as a developing country. China has its creative side - this is what it needs to let the world know," she added.

China's hard work in organising the G20 summit is over, but the real work has only just begun.

kianbeng@sph.com.sg