In Hangzhou, China began the push for G20 to overcome protectionism and fuel global growth prospects. That is vital to reverse stagnation in advanced economies and slowdown in emerging nations.
On September 4-5, the leaders of the G20 economies met in Hangzhou. The summit had great symbolic importance that was easily understood in emerging economies but largely ignored in advanced economies.
Although economic gravity has been in emerging Asia for decades and the emerging world has fuelled global growth prospects for nearly a decade, this was the first time that the G20 truly met in the territory of the future.
Nevertheless, international media, which remains headquartered in rich economies, focused on the sensational, whether it was a misreported snub of President Obama, speculative rumours about diplomatic jostling, inflated hopes associated with bilateral meetings, or British Prime Minister Theresa May’s red suit.
In reality, the G20 summit was set to achieve two main objectives.
Overcoming Protectionism in the Short-Term
The G20 final communiqué focussed on struggle against tax evasion; accelerated efforts to push international trade and investment; fiscal stimulus and innovation to boost economic growth; and strengthening support for refugees. Indeed, Hangzhou sought to reverse the eclipse of global economic integration.
In the past half-decade, advanced economies have sustained a semblance of stability, by relying on historically ultra-low interest rates and massive injections of quantitative easing. The QE measures exceed $12 trillion, $10 trillion in negative-yielding global bonds, and there have also been 660 interest rate cuts since the collapse of Lehman Brothers in 2008.
About the Author
Dr. Dan Steinbock is Guest Fellow of Shanghai Institutes for International Studies (SIIS). This commentary is based on his SIIS project on “China and the multipolar world economy.” For more about SIIS and Dr. Steinbock, see http://en.siis.org.cn/ and http://www.differencegroup.net respectively.