A popular Chinese expression advises to “huddle together to keep warm” to better utilize body heat to warm each other during a chilly winter, but more widely implying that human beings should unite to confront common challenges. This is the heart of the founding of the Group of 20 (G20).
The 1997 Asian financial crisis stunned the world just as the globalization trend was hitting full stride. The Group of Eight (G8), comprised of major developed economies, found itself powerless in the face of such a devastating crisis. In this context, on September 5, 1999, the G20 was formally established at the G8 Finance Ministers’ Meeting in Berlin, Germany, in a bid to provide a platform aimed at international coordination of economic and financial policies, to prevent financial crises like the one that struck Asia with stable international financial and monetary system.
Along with the G8 members, the G20 incorporated 12 other major economies in the world, including both developed and developing countries. Collectively, the G20 economies account for two thirds of the world population, 85 percent of global GDP, and 80 percent of global trade. Thanks to its considerable coverage and representation, the G20 provides a new path and hope for promoting dialogue and cooperation between developed and emerging countries and bolstering international financial stability and sustainable economic growth.
Since the First G20 Leaders’ Summit was held following the 2008 global financial crisis, the world has endured a series of difficulties including the U.S. subprime mortgage crisis, the Eurozone debt crisis, and the recession of emerging economies while China shifts from rapid to steady growth. In the process, the key topics of the G20 summits changed accordingly, from collaborating to tackle the 2008 financial crisis at the 2008 Washington Summit and the 2009 London and Pittsburgh summits to responding the European sovereign debt crisis at the 2010 Toronto Summit. Later, the G20 gradually transformed from a platform for crisis response to a mechanism of long-term governance, and its focus expanded from finance and macroeconomics to broader areas including trade, investment, development, and structural reform. The G20 is meant to usher the endangered world economy into a safety zone and prevent it from continuous waning. However, the situation remains concerning given the lingering aftermath of the global financial crisis, the rise of trade protectionism, surging uneasiness about globalization, and dilemmas surrounding global economic governance.
The 2016 G20 Summit is arriving in Hangzhou amidst all of these issues. Despite the severe challenges that China has faced since the 2008 global financial crisis, the fundamentals of its economy remains sound, and the tremendous economic achievements the country has made since its reform and opening up began in 1978 are not to be forgotten. More importantly, the Chinese government, with firm determination and unique wisdom, is pushing its economy towards healthy, steady development through supply-side structural reform. In 2015, China contributed more than 25 percent of global economic growth. As Chinese President Xi Jinping ever said, China’s “annual incremental GDP is equivalent to the total GDP of a medium-sized developed country.”
China’s economic performance has given the world some confidence. Through hosting the G20 Summit in Hangzhou, China is like a giant gathering every individual country that emits different amounts of heat, who huddle together to keep warm in the chilly economic winter. Members of the G20 include developed and developing countries, as well as emerging economies. China is urging G20 members to focus on Africa’s concerns and support its industrialization process. Chinese Foreign Minister Wang Yi recently announced that China will alert developed countries at the G20 Summit of the urgent needs of African people. Themed “Towards an Innovative, Invigorated, Interconnected and Inclusive World Economy,” this year’s G20 Summit will have four priorities: “trailblazing a new path for growth,” “more effective and efficient global economic and financial governance,” “robust international trade and investment” and “inclusive and interconnected development.” Moreover, China will unveil a constructive plan to urge all parties involved to reach a consensus on issues such as promoting sustainable development of the world economy. The Hangzhou Summit is expected to achieve at least two major breakthroughs: Raising development to the top of the global macroeconomic policy agenda for the first time and reserving more seats for developing countries than all previous summits.
Accordingly, the international community has high expectations for the upcoming G20 Summit in Hangzhou. Paul Edgar Philippe Martin, former Canadian Prime Minister who is considered “father of the G20,” believes that the G20 Summit’s arrival in China will mark the rebirth not only of the G20 itself, but also the global cooperation. Dennis J. Snower, President of the Kiel Institute for the World Economy, points out that the theme proposed by China this year will ignite discussion of a wide range of topics including not only traditional economic issues, but also issues of society, the environment and inclusive development, which are all essential issues to solve the problems the world faces with today.
An article published on the U.S. Council on Foreign Relations website notes that as the host country of this year’s G20 Summit, China is expected to play three roles: bridge builder to merge the divergent interests of developed and developing economies, facilitator to advance implementation of past policy commitments, and catalyst for innovation-based global economic growth.
Former Mexican President Ernesto Zedillo hopes that China will help to promote international cooperation in the three key realms: formulating integrated macroeconomic policies, accelerating multilateral trade negotiations, and controlling greenhouse gas emissions. Gustavo Girado, coordinator of the Asia Pacific Observatory at Argentina’s National University of Matanza, expects that China will serve as a protector of emerging economies’ interests. Evidently, all parties hope China will serve as a torchbearer, leading the world out of the lengthy winter of global economic recession.
“Huddling for warmth” means that cooperation benefits all involved. China will spare no efforts to inspire all parties to collaborate in an open, inclusive manner, to kindle enough warmth to dispel the chills of the global economic winter.
The author is Deputy Editor-in-Chief of China Pictorial. And this article is exclusive to China-India Dialogue. Feel free to share this article. To reprint this article, please contact us for permission.