Illustration: Peter C.Espina/GT
The 11th G20 Summit is one of the most significant in the 17-year history of this multilateral economic forum. The current juncture is critical for the course of the world economy. The ongoing stabilization process has already yielded positive results but the recovery achieved is still particularly fragile. According to the most recent projections made by the International Monetary Fund (IMF) in July, the global economy is expected to only expand by 3.1 percent this year and 3.4 percent in 2017. These forecasts represent a 0.1 percentage point reduction for both years in comparison to the IMF's April analysis.
Additionally, the organization of the G20 Summit in a Chinese city, Hangzhou, for the first time is itself an important development. China is the world major growth engine and certainly deserves the opportunity to host this leading event. In spite of some malicious Western media criticism about overspending, Hangzhou is ready to undertake this responsibility and the largest part of its residents are happy with this international initiative.
All countries, including China's partners at the G20 level, acknowledge its contribution to global growth as well as its catalytic role for a stable international economic output. There is no better example outlining this reality than their concern on the impact of the relative slowdown of the Chinese economy. Since mid-2015, Western politicians and analysts have paid particular attention to developments in China attempting to foresee potential consequences for the country and also the world economy. Their pessimism does not only reflect their will to criticize China but also mirrors the importance they attribute to its policies as a leading international actor.
The Chinese administration is well-aware of the situation in all fronts. It has therefore proposed an ambitious agenda for the Hangzhou G20 Summit. It is not a coincidence that IMF Managing Director Christine Lagarde has praised Beijing, saying the preparation work "thoughtful" and applauding its idea of adding "inclusiveness" to "strong, sustainable and balanced" as important characterizations of healthy growth. Specifically, the objective of the Chinese administration is to create all necessary preconditions that will guarantee steady growth and therefore prosperity for the next generation.
Investments in technology, innovation and the protection of the environment are vital parameters toward this direction. Also, structural liberalization reforms have to complement the strategy of quantitative easing. Zhou Shijian from the Tsinghua Center for US-China Relations believes, for instance, that monetary stimulus alone cannot solve economic problems and elaborates on the cases of the US, the eurozone and Japan.
The efforts of Beijing to change its growth model have not been concluded yet but are placed in the framework of economic goals described above. On the same wavelength, the US and the eurozone need to take supportive measures. The Brookings Institution encourages the former to proceed with more infrastructure investments, the immigration reform, and new trade and investment agreement and the latter to reconsider its austerity recipe.
Traditionally, G20 gatherings tend to focus on responses to crises. Hangzhou offers a good chance to change the pattern and concentrate on development. In order to do so, multilateral cooperation needs to further increase with China and the US setting the tone. In spite of progress made, especially after the outbreak of the 2008-09 financial crisis, the process is highly difficult.
That is because China insists on a change in global governance architecture that will take its impressive growth over the last decades into account. From its part, the US is hesitant in accepting changes in the traditional order either rejecting Chinese proposals or delaying the validation of decisions enhancing Beijing's power in international financial bodies.
The 11th G20 Summit will see the leaders of the strongest global economies gathering to exchange views on the ambitious agenda set by the Chinese government. The informal nature of the meeting can be beneficiary as no single decision needs to be made in Hangzhou. Fruitful discussions will be held paving the way for action in the future.
If there is a lesson learned from recent history, it is that existing differences should not be an obstacle for parallel collaboration achieving common goals.
The author is a lecturer at the European Institute in Nice, France. firstname.lastname@example.org