Reassuring multilateralism through G20 partnership

Ministry of Foreign Affairs| 2017-06-29 15:05:16|Editor: Lu Hui
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Wang Xiaolong

G20 Special Envoy of Ministry of Foreign Affairs,

People’s Republic of China

In 2017, the world economy has shown signs of retaining growth momentum yet challenges still remain. These challenges, including low productivity, the surprising return of populism, protectionism, have put multilateralism and the G20 partnership in global economic governance under question. To secure the prosperity of world economy, we must restore people’s faith in G20 cooperation and multilateralism at large. One of the pillars for this year’s G20 Hamburg summit is “assuming responsibility”. It could have different meanings, but one key mission for G20 leaders would be to assume responsibility to reassure multilateralism through promoting partnership.

One opportunity, One challenge

In April, the International Monetary Fund rose its forecast for world economic growth to 3.5% in 2017 and 3.6% in 2018, compared with a growth of 3.1% in 2016, showing signs of retaining growth momentum. Yet impediments such as low-productivity and income inequality still stop us from promoting mid-to-long term growth potential and achieving strong, sustainable, balanced and inclusive growth. Moving forward, one opportunity and one challenge should be highlighted by the G20. If handled well, a new round of prosperity could be initiated.

First, to seize the opportunities of innovative growth, particularly the new round of scientific and industrial revolution. For quite some time, we have been witnessing a trend of declining productivity in both developed and developing countries. If this trend continues, the world economic growth in future will be inadequate that will not only make us fail to deliver the goal to lift the G20’s GDP by at least an additional two per cent by 2018 but also has serious economic and social implications. However, this new round of scientific and industrial revolution offers us the chance to reverse the trend by increasing productivity through innovative growth and thus to inject a new impetus to world economic growth for the next few decades. To achieve this, we must enhance our cooperation and coordination to set the right policy frameworks and create an enabling environment.

Second, to address the challenges posed by building open global economy. In the past few decades, the speed-up of globalization, together with the establishment of an open, rule-based multilateral trading system, have facilitated trade, investment, flow of people among countries, contributing to the prosperity of world economy. However, more recently, this trend seems to reverse. In some countries, globalization was wrongly blamed for the loss of jobs and hence brought back populism which responds with protectionism against globalization and open world economy. One lesson we learned from history is that protectionism and populism usually end up with tragedy, reminding us of the Great Depression and World War II. Moreover, if our hands are tied with practicing protectionism against each other, we can hardly cooperate effectively to catch up with the scientific and industrial revolution and achieve mutually beneficial growth.

Both the two issues cannot be addressed by individual countries alone. In an increasingly inter-connected and interdependent world, the interests of different countries are intertwined. One’s loss can hardly be others’ gain. As a result, members of the international community need to cooperate and coordinate to accommodate each other. To successfully seize opportunities and address challenges, the G20 must act in close cooperation and coordination to set the right policy framework and create an enabling environment. In this case, multilateralism and the G20 partnership hold the key to the future of world economy.

Reassuring Multilateralism through the G20 Partnership

Drawing lessons from the catastrophe of last century, we have transitioned from the Rule of Jungle under an anarchic international system to an system under multilateralism in which all countries, whether big or small, strong or weak, rich or poor, are equally entitled with the rights to express their concerns and to be respected by others. Multilateralism is the foundation of the Post-war international system. Under this system, we have built an open, transparent, inclusive and nondiscriminatory multilateral trading system which facilitated economic globalization, and together with technological advancement, contributing to an open and prosperous world economy.

Yet the rising influences of trade protectionism, populism are currently jeopardizing the role of multilateralism. In this case, people are also wondering what role the G20 could play and what guidance could be expected from it to lead the world economy forward. The current system is indeed not perfect in many ways, but it is irreversible and in the right direction. What needs to be done is for us to make it more open, inclusive, balanced and beneficial to all. The G20, as a unique multilateral mechanism consisting of the largest developed and emerging economies in the world and the premier forum for international economic cooperation, is therefore well placed to reaffirm the role of multilateralism through its partnership.

Just as Chinese President Xi Jinping put it last year, partnership is the most valuable asset of the G20, and the solution for all countries as they rise up together to meet global challenges. Back in 2008 on the first summit in Washington, D.C., the G20 leaders expressed their determination on partnership, cooperation and multilateralism to overcome challenges and restore stability and prosperity to the world economy. Over the past 9 years, this continued partnership of going through thick and thin together has been proven critical in addressing major challenges and has laid the foundation for the G20 as a major practitioner of multilateralism in global economic governance. If we take a closer look at what this G20 partnership has achieved during those years, we probably would see progress made in a wide range of fields, including financial regulation, international financial architecture, macroeconomic policy coordination, global development, energy, anticorruption, etc.

Getting back to the opportunity and challenge we are facing. People have high expectations for the upcoming Hamburg summit to send clear and positive message on achieving innovative growth and enhancing an open world economy. To do that, our leaders need to recommit themselves to multilateralism through a strengthened G20 partnership. For now, we should remain optimistic towards future and trust the wisdom of our leaders when they meet in Hamburg.

(Source: Ministry of Foreign Affairs)

 

KEY WORDS: G20
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