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May 25, 2020

G-20 in China: “Hangzhou Consensus”

Ever since 2007, when the signs of the impending crisis were felt, but also against the backdrop of a face-off between U.S. unilateralism, assiduously promoted after September 11, 2001, and the multilateralism pursued by the other great powers, the process of forming a new, ampler global governance body started. Gradually, international meetings led to the forming of the Group of 20 states, formalised in 2008 in Washington, which joins other existing global management bodies, ranging from the UN and the G-8 – back then still in existence, subsequently reverting to G-7 following the suspension of Russia’s membership – to the OECD or the IMF etc. Recently dubbed a veritable “global economic government,” G-20 took on its domain of competence against the backdrop of the onset of the financial-economic crisis of 2008, its representativeness being well balanced globally and from the standpoint of economic development level, hence making it capable of initiating and even finalising crisis absorption and economic relaunch initiatives. But not just that. At G-20 summits, the presence of the leaders of the world’s great states and their countless bilateral or multilateral meetings created the opportunity for initiatives in the political domain too, initiatives that really left a mark on recent world history. The agreement reached in 2013 to convince Damascus to give up its chemical weapons of mass destruction was, for instance, among such decisions of great impact, also representing the start of a still-ongoing cooperation between the U.S. and Russia to find a solution to the civil war in Syria.

The latest G-20 summit took place on September 4-5, in Hangzhou, Southern China, China’s President Xi Jinping being the host of this summit of the 20 heads of state. The final communique of the “global economic government” refers to the set of problems that G-20 sought to solve through initiatives, long-term plans or programmes for economic-financial domains of planetary scope or for distinct regions/continents.

The reading of this communique outlines the fact that the current leaders are aware that we are going through a period “of continued shifts and profound transformations in the configuration of the global economic landscape and dynamics for growth. With these transformations come challenges and uncertainties as well as opportunities.” Likewise, that decisions adopted through consensus will have a major impact on the efficiency of the responses to the current threats and will also contribute “to shaping the world economy of the future.” The leaders present in China defined the current state of today’s world as being one in which the global economic recovery is progressing, when the sources of growth are multiplying but in which the post-crisis recovery processes are nevertheless taking place slowly, with the risks of financial market volatility, price fluctuations, global trade slowdown, low productivity and insufficient employment growth standing out. This is the context in which the leaders present in China over the weekend decided, “as a premier forum for international economic cooperation,” to adopt a scenario of comprehensive and integrated global economic growth and a package of measures – the so-called Hangzhou Consensus – based on the vision of accelerating economic growth, integrating specific policies, promoting market openness and rejecting protectionism to the benefit of all members of the international community.

Reading the final communique of the summit (45 points, some of them very rich in details on the planned measures) may seem boring and bureaucratic to the untrained eye, which prompted many commentators to liken the summit to one focused on not very attractive topics for the public opinion, such as tax policy, trade or finances. Moreover, there were observers who were not late in asking what could such summits achieve in an era that is tumultuous, in which the role of the public opinion and the experiments of direct democracy alike (see the Brexit referendum) have become increasingly prominent and contagious. Such positions have their justification, taking into account even the contradictions between participant members over various files. It’s just that, even with things being so, one cannot neglect the fact that the refusal of protectionism, which is increasingly strongly felt – thus threatening global economic growth –, the defining of the “G-20 Blueprint on Innovative Growth” as its own agenda of policies and measures in the domains of innovation, new industrial revolutions and digital economy, are positions and conceptual approaches of interest, whose implementation or application with the resources and under the supervision of nation states is of the utmost importance for the future of the world.

Not to mention that the positions expressed and the measures planned when it comes to the new industrial revolution or the fight against terrorism, by depriving the latter of financing through an international cooperation group, or the measures against global warming or those meant to promote innovation as an essential economic growth engine and the drafting of a plan of measures and policies in this domain are basically novelties in the international cooperation domain.

Analyses published immediately after the G-20 summit have showed that industry, tax policy, trade, innovation and the new digital revolution, the growth of the digital economy represent the main results of the “Huangzhou Consensus.”

An analysis published at the end of the summit by China’s press agency Xinhua, pointed out that to fight against “rising protectionism and dismantle anti-trade measures as economic isolationism is not a solution to sluggish growth” and that “in order to build an inclusive, rule-based and open world economy, protectionism must be prevented from eroding the foundation for a faster and healthier economic recovery.” The interests of China, whose strong economy needs large international trade openness in order to maintain the growth rhythm it has registered so far, have to be deciphered in these statements. A special mention on the Brexit issue, included in the final communique, warns of the global impact of United Kingdom’s exit from the EU: “The outcome of the referendum on the UK’s membership of the EU adds to the uncertainty in the global economy. 9 Members of the G20 are well positioned to proactively address the potential economic and financial consequences stemming from the referendum. In the future, we hope to see the UK as a close partner of the EU.” This position, expressed consensually, confirms the fact that the Brexit file is only yet to be concluded, but carefully monitored at global level.

Apart from the public image of consensus, the summit as a whole also brought out controversies and contradictions, an expression of the international system’s well-known highly fluid situation. The fact that the U.S. and Russia failed to reach a hoped-for accord over a new ceasefire process in Syria expresses the differences in tackling the issue of post-civil war transition in this country, while the Sino-American spat over, for instance, the deployment of an American missile defence system in the Republic of Korea (North Korea launched three ballistic missiles in the Sea of Japan right on the final day of the summit) or other bilateral frictions did not dent the summit’s positive balance sheet. G-20 will meet again in Argentina in 2017 and in Germany in 2018.

It’s obviously of great importance that in times of great international geopolitical fluidity, in which conflict hotspots tend to spill over or enhance their contagion, and terrorism ceaselessly strikes in the most various parts of the globe, such summits take place and consensually foreshadow a future for humanity.


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