The communiqué issued after the 11th G-20 summit in Hangzhou, China, on September 4-5 was more declaratory than prescriptive, with The Economist even calling it “anodyne”, while the host, Chinese President Xi Jinping, in his closing statement, expectedly declared it a “tremendous success”. And while the criticism may be harsh, it is undeniable that most countries at the conference worked at two levels: shaping common positions on the global economy and financial revamp, but also advancing their own strategic interests.
China wanted the summit’s focus to remain on economic issues and not veer to Chinese actions in the South and East China Seas or its predatory trade practices. The communiqué begins by noting that the global economy was recovering though still “weaker than desirable”. It outlines future action under four categories: vision, integration, openness and inclusiveness. The third addresses rising concern that in the West anti-globalisation and protectionism is swelling. Republican presidential candidate Donald Trump’s rise in the United States and his rhetoric against free trade and immigration are fuelling anxiety that his presidency may even entail rewriting the global rules on commerce, trade and investment. Much of what he says may be just electioneering, but a victory in the November election may convince him to not abandon his iconoclastic verbiage.
The political theatre in Hangzhou was likewise a dual stage performance.
On one hand the 20 nations discussed structural reforms and ways to restore the health of the global economy. On the other there was grappling between the established and emerging powers, or even two rising powers — India and China. In a section “Further Significant Global Challenges Affecting the World Economy”, the “black swans” that could derail today’s tenuous recovery are noted. Besides the rise of leaders antithetical to the post-World War II global economic order, the factors are: Brexit, climate change; displacement of populations generating refugees in West Asia and Europe; and terrorism. The leaders addressed them in bilateral and plenary meetings. These are also reflected in the summit’s final communiqué. The leaders also had agendas determined by their national interests, alliance compulsions or simply a desire to defend or challenge the global power sharing.
For instance, for US President Barack Obama, now into the last few weeks of his presidency, climate change is a legacy issue. He also needs to send a strong signal to China about muscle-flexing in the East and South China Seas. Europe on the other hand came saddled with Britain’s Brexit gambit and the politically disruptive combination of Syrian refugees and Islamic terror. European Commission chairman Jean-Claude Juncker insisted that China “must” allow the monitoring of its steel production to curb Chinese “overcapacity”.
India’s Prime Minister Narendra Modi, arriving via Vietnam, set the stage for some straight talking with China. He argued, both in bilateral meetings and at the plenary, that terrorism affects economic growth and, without naming China’s close ally Pakistan, bemoaned the export of terror from India’s neighbourhood. Good bilateral relations, he averred, requires each side to be sensitive to the other’s aspirations and concerns. This was possible, Mr Modi reasoned, if China did not politicise the listing of terrorists or treat Gilgit-Baltistan as Pakistani real estate that it could sell, lease or pledge. He also expected China not to obfuscate the Indian case for joining the Nuclear Suppliers Group. He finally questioned the legality of the $46 billion China-Pakistan Economic Corridor (CPEC). The Chinese media concurred that “hard-won” sound relations needed safeguarding.
Interestingly, Sino-Russian convergence on strategic and security issues was also on full display. Russian President Vladimir Putin endorsed the Chinese position on the South China Sea, rejecting The Hague tribunal’s ruling. He added that as a rule interference by non-regional powers only complicates any dispute resolution. China and Russia also made common cause in opposing the deployment of the US’ Terminal High Altitude Area Defence Missiles (THAAD) in South Korea. Both countries have historical baggage while dealing with Japan, giving them an additional reason for convergence.
India dodged the climate change commitment temporarily as the final communiqué only calls on all parties to sign the Paris agreement by the end of the year, without setting a deadline. However, the ratification of the Paris Agreement by the US and China on G-20’s sidelines takes it closer to implementation as their combined emissions are 39 per cent of the world’s total. The Paris Agreement will come into effect when at least 55 nations with at least 55 per cent of global greenhouse emissions ratify it. These two nations also agreed to curb hydro-fluorocarbons which deplete the ozone layer. Foot-dragging by India, traditionally for obtaining financing and technology, is no longer an option as the agreement will come into effect as soon as some large emitters like the EU and Australia ratify it.
The communiqué does, however, introduce many futuristic ideas that are needed for sustainable development. One is the existing Green Climate Fund (GCF), which needs resourcing to help developing countries adapt and mitigate. It has been calculated in a study by the Asia Investor Group on climate change that Asia alone needs $7 trillion to limit global warming to two degrees Celsius. Then there are suggested pro-innovation strategies that would usher a New Industrial Revolution as well as digital economy initiatives. These are visionary concepts that can be translated into reality only if strategic dissonance between the big powers can be tamed. Otherwise, like as the just-concluded G-20 summit host Xi Jinping said, there will be a mismatch between words and action.