The 11th G20 Summit was held in Hangzhou, China in September 2016, at a time when the world economy faced a critical choice, and as China entered a crucial stage of its push to realize national rejuvenation. The G20 summit – the highest level and most influential multilateral summit that China has held since the founding of the PRC – was praised internationally for its ambitious, far-sighted, and innovative theme. It was seen by many as a groundbreaking, direction-setting, and landmark meeting, one which came close to the G20 Pittsburgh Summit in terms of achievements. Embodying the broad vision of China’s leaders, the G20 Hangzhou Summit has become a hallmark of China’s major-country diplomacy, starting an important new chapter in the reform of the global economic governance system.
I. China’s principles: setting the direction of world economic development
Based on the realization that principles determine direction, China incorporated President Xi Jinping’s principles of innovative, coordinated, green, open, and shared development into the theme and topics of G20 Hangzhou Summit. Drawing on its own experience in reform, China urged all parties involved to work to reinvigorate world development principally through innovation and structural reform. These calls helped to enhance the international influence of the principles of innovative, coordinated, green, open, and shared development, endowing China’s reform and opening up with global significance whilst pointing the way forward for the development of the world economy.
The theme of the summit, “fostering an innovative, invigorated, interconnected, and inclusive world economy,” not only took its roots in China’s reform and opening up drive, but also reflected an intention to accommodate and guide key trends in the world economy and international economic cooperation. It can thus be seen as an international version of China’s principles of development. The G20 Leaders’ Communiqué Hangzhou Summit – the most important document to be endorsed at the summit – was drafted and presided over by China. Drawing on the essence of China’s principles of development, the Communiqué led to the Hangzhou Consensus, the cornerstones of which are vision, integration, openness, and inclusiveness. This demonstrates that China’s principles of development have become internationally recognized.
In his speech at the opening ceremony of the B20 Hangzhou Summit, President Xi summarized China’s thirty-eight years of reform and opening up as a process of blazing a new trail, delivering tangible outcomes, and achieving common prosperity, with China embracing the world and the world embracing China. Xi promised that China would deepen reform in an all-round way to create better prospects for development, pursue a strategy of innovation-driven development to create stronger growth drivers, promote green development to achieve better economic performance, promote equity and the sharing of development outcomes to deliver more benefits to the people, and open up wider to achieve broader mutual benefit. Xi’s speech not only demonstrated China’s confidence in and commitment to the path of reform and opening up, but also laid out a blueprint for China’s future development, thus boosting international confidence in China’s development and economy. The speech sent out a message to the international community that China will make a greater contribution to the world as its reform and development stride to new successes. A China committed to ongoing reform and opening up is increasingly becoming the key promoter of world development.
Thanks to China’s initiative, the G20 Hangzhou Summit took innovation as its core thread. The summit called for all-dimensional, multi-tiered, and wide-ranging innovation covering development principles, institutional structures, and business models on the basis of scientific and technological innovation, so as to fundamentally tackle weak growth in the world economy. Through the G20 Blueprint on Innovative Growth and the G20 2016 Innovation Action Plan, the Summit identified priority areas for structural reform, and endorsed guiding principles and indicators for these efforts. Moreover, the G20 Leaders’ Communiqué Hangzhou Summit elevated structural policy as one of three major policy tools alongside monetary policy and fiscal policy. Integrating principles, institutions, and actions, China’s initiatives at the summit represented a successful attempt to apply China’s principles of development to the resolution of international problems. This will help foster impetus for a new round of world economic growth and establish a new model for cooperation among G20 members.
The picturesque scenery of the West Lake in Hangzhou. PHOTO BY XINHUA REPORTER XU YU
II. China’s proposals: providing a boost for global economic growth
Though it has been eight years since the outbreak of the international financial crisis, the world economy is still struggling to mount a clear recovery. As old troubles go unresolved, new challenges are already emerging. Weak growth, fluctuations in global financial and commodities markets, and sluggish global trade and investment are only symptoms of larger problems. To remedy the root causes hindering world economic growth, we urgently need to address underlying issues such as growth models, drivers, and governance structures; pay attention to marginalized countries and vulnerable groups in economic globalization; and properly deal with regional hot-spot issues and global challenges. By integrating short-term and long-term considerations, China produced a comprehensive prescription to address both the symptoms and root causes of the world’s developmental problems. Receiving the endorsement of the parties concerned, these proposals will do a great deal to promote global economic growth.
1. Improving global economic and financial governance
In his keynote speech at the opening ceremony of the B20 Hangzhou Summit, President Xi Jinping outlined a model of global economic governance that is based on equality, driven by cooperation, and that embraces openness and aims towards sharing. In his speech, Xi also identified priority areas and tasks for cooperation, drawing up roadmap for the improvement of global economic governance. Since taking over the G20 presidency, China has sought to better exert the leading role of the G20 in improving economic and financial governance. It has achieved progress in coordinating the macroeconomic policies of G20 members, secured the inclusion of the RMB in the IMF’s Special Drawing Rights (SDR) currency basket, urged the IMF to implement its long-delayed reform plan, and restarted the G20 International Financial Architecture Working Group. At the G20 Hangzhou Summit, all members agreed to implement financial reform measures, closely monitor and address potential risks and vulnerabilities in the financial system, and deepen cooperation in financial inclusion and green finance, so as to safeguard the stability of international financial markets. They agreed to deepen international tax cooperation and combat tax evasion, so as to promote global investment and economic growth. And they agreed to endorse action plans on energy accessibility, renewable energy, and energy efficiency, so as to make global energy governance more effective.
2. Revitalizing trade and investment
Trade and investment constitute the two major engines of world economic growth. The growth of international trade has gradually lost steam in recent years, and in the past four years has even fallen below the pace of world economic growth, making negotiations on multilateral trade even more difficult. International investment is fragmented by more than 3,200 bilateral agreements, which hinders cross-border investment cooperation. In a bid to turn things around, the G20 Hangzhou Summit placed trade and investment in a prominent position, developed an institutional framework for the G20 Trade and Investment Working Group, and endorsed the G20 Strategy for Global Trade Growth. G20 members agreed to strengthen the multilateral trading system and extend commitments to standstill and rollback of protectionist measures till the end of 2018. In addition, the summit endorsed the G20 Guiding Principles for Global Investment Policymaking – the first worldwide framework document concerning multilateral investment policymaking. This document fills the blanks in international investment governance, representing a historic breakthrough.
3. Promoting the full implementation of the outcomes of the summit
In his opening address, Xi Jinping stressed that a thousand promises pale in comparison to a single action, and that the G20 should strive to be an action force rather than a talk shop. These comments drew a positive response from other members. The summit identified a set of indicators to assess the progress and effectiveness of structural reforms, and formulated a series of pragmatic action plans for development, trade and investment, employment, finance, and energy, so as to ensure the final implementation of various consensuses and outcomes of the summit. This proved just how effective the summit could be. To secure a perfect end to the summit, China convened the Fifth G20 Sherpa Meeting in Wuhan in late October, during which it facilitated consensus on the implementation of the outcomes of the Hangzhou Summit and the follow-up initiatives.
III. China’s unique character: facilitating mutually beneficial cooperation
1. Emphasizing the importance of development
As the world’s largest developing country, China paid close attention to development issues throughout the entire course of the G20 Hangzhou Summit. Thanks to China’s meticulous planning and efforts, the Hangzhou Summit attracted the participation of more developing countries, boasted more distinctive developmental features, and secured more prominent development outcomes than any summit in the history of the G20. The summit also brought about many firsts. In 2016, the G20 has put the issue of development at the center of the global macro policy framework for the very first time. The first action plan for implementing the 2030 Agenda for Sustainable Development has been formulated, and for the first time, cooperation is being carried out to support African countries and the least developed countries (LDCs) in their industrialization. In addition, the summit invited Laos, current chair of ASEAN, Chad, current chair of the African Union, Senegal, current chair of the New Partnership for Africa’s Development, Thailand, current chair of the G77, as well as Egypt and Kazakhstan as guest countries, making the representation of developing countries at this summit greater than ever before. This sent out a message to the international community that the G20 works for the interest of not just its 20 members, but the whole world. Owing to China’s efforts, the G20 issued, for the first time, a presidency statement on climate change, in which all parties made a commitment to joining the Paris Agreement on climate change as soon as their national procedures allow and to working for an early entry into force of the Agreement. The statement was then distributed to all participants in the UN General Assembly, marking the first time that a G20 document had entered the United Nations. These efforts highlight China’s contribution to and leading role in international cooperation on climate change.
2. Deepening mutually beneficial cooperation
During the G20 Hangzhou Summit, President Xi held 33 bilateral meetings with leaders of other countries, strengthening China’s relations with major countries, and promoting cooperation with neighboring countries and developing countries. These meetings yielded prominent outcomes. During the meeting between President Xi Jinping and US President Barack Obama, the two sides agreed to continue working together to establish a new type of major-country relationship between China and the US, and to work together to identify the direction of this relationship, enhance mutual trust, expand cooperation, and manage differences. A total of 35 cooperation outcomes were achieved in this meeting. President Xi Jinping also met with Russian President Vladimir Putin. This was the third time the two have met in 2016. By exchanging opinions on deepening the comprehensive strategic collaborative partnership between China and Russia, they agreed that the two countries would expand cooperation in trade, investment, and energy, and promote coordination between the Belt and Road Initiative and the Eurasian Economic Union. During the informal meeting of BRICS leaders, President Xi urged BRICS countries to boost confidence and strengthen collaboration and cooperation with one another, a proposal that received an enthusiastic response from other BRICS countries. Moreover, in meetings with leaders of neighboring countries including Kazakhstan, India, Indonesia, and South Korea, President Xi and the relevant parties reached consensus on enhancing mutual trust, managing differences, expanding cooperation, and maintaining peace and stability in the region.
IV. China’s unique style: a show of self-confidence
In its preparations for the G20 Hangzhou Summit, China followed the principles of openness, transparency, and inclusiveness. On the day China took over the presidency of G20, President Xi Jinping wrote to all members, guest countries, and leaders of relevant international organizations to outline China’s ideas for the Hangzhou Summit. China also held broad dialogue with the United Nations, the African Union, the G77, LDCs, as well as landlocked countries and small island states to brief them on the preparations for the summit. We heard the views and proposals of various parties, pooling wisdom and creating synergy. Dialogues covered almost all members of the United Nations. Taking advantage of platforms such as the Boao Forum for Asia, the World Economic Forum, the APEC Senior Officials’ Meeting, and the OECD Ministerial Conference, China convened nearly 70 meetings including sherpa meetings, finance minister meetings, ministerial meetings, and working group meetings. In addition, we held the B20 Summit, L20 Summit, T20 Summit, Y20 Summit, W20 Summit, and C20 Summit, in a bid to achieve a broad international consensus. The high level of professionalism that China demonstrated in organizing these activities was hailed as “fresh air” for the G20.
The choice of Hangzhou, an innovative and vibrant city with a fascinating history, as the host city of the 2016 G20 Summit allowed China to showcase its unique blend of ancient history and modern innovation, as well as its achievements with regard to harmony between people and nature and the coordinated development of economy and society. The city left a strong impression on the participants. President Xi Jinping presided over various meetings and activities, and responded to the speeches of each leader with specific remarks, seeking to find common ground whilst putting aside differences. Demonstrating his superb diplomatic skills, he coordinated overall efforts, and properly handled various unexpected scenarios and sensitive issues, ensuring that the summit stayed on the right course. President Xi won widespread praise for his composed, confident, easy-going, friendly, and inclusive demeanor and extraordinary leadership. The G20 Hangzhou Summit not only demonstrated China’s confidence in its path, theories, system, and culture, but also allowed participants to draw on this confidence to gather the momentum needed to create a better world.
The G20 Hangzhou Summit marked a significant juncture in the development of the G20, it marked an important opportunity for the transformation and upgrading of the world economy, and it marked the beginning of a new phase of deep interaction between China and the world.
China hopes to work with other parties to launch a new journey in the development of the G20. Together, we will promote the transformation of the G20 from a crisis response mechanism focusing on short-term policies to a mechanism for long-term governance that shapes medium to long-term policies, thus maximizing its role as the premier forum for international economic governance.
China hopes to work with all parties to transform our economies in an innovative and sustainable manner, to build an open world economy, and to ensure that economic growth serves the needs of everyone, thus ushering in a new era of global growth and sustainable development.
Launching a new phase of its distinctive major-country diplomacy, China will provide more of its own principles and proposals, and work to enhance both its say in international discourse and its global influence, so as to do more to realize the Chinese dream of national rejuvenation and promote peace and development for all humankind.
Wang Yi is Foreign Minister of the People’s Republic of China.
(Originally appeared in Qiushi Journal, Chinese edition, No.21, 2016)