G20 committed to tackling structural imbalances in global economy

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Liu Zongyi

The tenth meeting of the G20 heads of government was held over the weekend in Turkey's southwestern city of Antalya. Themed around "Collective Action for Inclusive and Robust Growth," the summit embraced the priorities of "inclusiveness, implementation and investment" and discussed the global economic landscape, inclusive growth, anti-corruption and other topics.

Global economic growth has fallen to the lowest level since 2009, thanks to a pervasive slump across emerging economies that have been serving as the world's economic engines including China. Since China's stocks fluctuated in August, many hold that the financial crisis has started to sprawl from the developed world to emerging economies.

Furthermore, the economic slowdown permeating all new emerging countries has led some Western economists to believe that the US is the sole engine of the world economy. However, US officials admitted that Washington cannot sustain the global economic development independently.

The present economic plight is related to the structural imbalance within major economies, a lack of coordination in economic and financial policies against a globalized background, and the alienation of the global economic governance framework with the economic pattern. To reverse this tide, major economies not only need to adjust and reform their economic structures, but also have to reform the international economic system.

Nonetheless, some countries are still vigorously maximizing their own national interests by using their advantage in the international monetary and financial institutions. They have also adopted quantitative easing and interest rate increases, causing capital churning in emerging economies and jeopardizing global economic security.

The core purpose of the G20 leaders' summit this year is to achieve inclusive growth, which is not limited to creating more jobs and promoting medium- and small-sized enterprises to join the global value chain that Turkey has been underlining. Inclusiveness means, first of all, world economies should assume a win-win scenario. The progress of the developing world constitutes the basis for the global common development, so their development agenda should become one of the most important parts of the calendar of future G20 summits.

As important trading powers in the world, the G20 member states are capable of making breakthroughs of the Doha Round talks and promoting the establishment of a free, open and benefit-sharing global market. Now some regions are seeing exclusive investment and trade arrangements.

The reform of the international financial and monetary system has been high on the agenda of G20 summits, but it has failed to strike any substantial progress due to Washington's objections. The dollar-dominated institution has landed most developing countries in an extremely passive position. The rise of emerging economies will change this scenario.

Chinese President Xi Jinping's presence at the summit demonstrates that China attaches significant importance to cooperation with the G20 member states and that Beijing adopts a positive attitude toward collaborating with the rest of the world to promote the world economic growth, deepen its governance and beef up its reform and transformation. Despite the economic slowdown, China has managed to contribute more than 30 percent to global economic growth. China's economic reform will shore up the confidence of the world economy and make a contribution to the success of the Antalya meeting.

As before, leaders of BRICS held an informal meeting before this year's G20 summit. Closer cooperation among the BRICS countries in finance, trade, energy, and food security not only helps reverse the economic downward trend in emerging economies, but also ratchets up international economic reforms.

(The author is an assistant research fellow of the Shanghai Institutes for International Studies and a visiting fellow of the Chongyang Institute for Financial Studies, Renmin University of China) 


Friday, Nov 20, 2015 12:41 pm


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