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8 September 2016

As detailed in the 7000-word communiqué and 29 major initiatives, the G20 meeting had some notable success, but it failed to be the historic event the world needs, John Kirton writes.

On 4 and 5 September, 2016, in Hangzhou, China, G20 leaders produced a summit of significant success. They set out 29 major initiatives, action plans and similarly named major agreements across a broad range of issues, with several breaking new ground. They strengthened G20 solidarity by articulating a core set of common values, one shared by the global community. They successfully managed the geopolitical tensions between China and its Asian neighbours over territorial and other disputes, partly through a bilateral meeting between China’s Xi Jinping and Japan’s Shinzo Abe. They showed that China’s G20 leadership had reached a new stage with bigger, bolder, better initiatives from summit host Xi, which his fellow leaders followed in a fulsome way. Yet relative to Xi’s ultimate ambitions and the clear and present global dangers and demands, the leaders stopped short of making Hangzhou a summit of strong success, let alone the historic one that the global community needs at this time.

The concluding 7000-word communiqué opened by stating clearly that the G20 was now the centre of global governance across all financial, economic, social and sustainable development and political-security demands. This joint statement from the G20 leaders went on to state that geopolitical developments such as “increased refugee flows as well as terrorism and conflicts also complicate the global economic outlook.”

In their first section on ‘Strengthening Policy Coordination’ the leaders presented their ‘Hangzhou Consensus’ with a far-reaching vision. They promised to transform their economies “in a more innovative and sustainable manner and better reflect shared interests of both present and coming generations.”

More on this: China’s G20 moment: What to expect from a first-time host

They began with the principle of intergenerational equity, at the centre of ecological sustainability since the Brundtland Commission report many decades before. They affirmed the core principles of innovation and openness, recognising they needed more public support and inclusiveness to make economic growth serve the needs of everyone — “in particular women, youth and disadvantaged groups.” They pledged to strengthen economic and macroeconomic policy coordination, a major change from the 2009 Pittsburgh Summit when China only reluctantly accepted the G20’s new framework for strong, sustainable and balanced growth.

In their second section on ‘Breaking a New Path for Growth’ came the signature ‘G20 Blueprint on Innovative Growth’ to be enriched by a “G20 taskforce supported by the [Organisation for Economic Co-operation and Development]” showing again that the G20 accepted as its de facto secretariat this international organisation, which was once the preserve of rich countries. This was backed by considerable promising detail about the much-heralded theme of innovation.

In the third section, ‘More Effective and Efficient Global Economic and Financial Governance,’ the leaders advanced familiar issues, including significantly stronger actions on tax justice and especially corruption. Indeed, at the leaders’ table German Chancellor Angela Merkel and Indian Prime Minister Narendra Modi said, with considerable accuracy, that nothing erodes public confidence in our governance more than tax evasion and corruption. The fourth section on robust international trade and investment made incremental advances on the familiar agenda focused on the World Trade Organization but recognised the Business 20’s initiative of an Electronic World Trade Platform and sidestepped the irritant of excess steel capacity by creating a capital global forum to deal with it.

The fifth section on ‘Inclusive and Interconnected Development’ accepted G20 responsibility for implementing the new 2030 Agenda for Sustainable Development, welcomed the Hangzhou Comprehensive Accountability Report G20 Development Commitments, and launched the G20 initiative on the industrialization in Africa and least developed countries (LDCs).

The sixth and final section on ‘Further Significant Global Challenges Affecting the World Economy’ addressed the blow from Brexit, noted the need to bring the Paris Agreement on Climate Change into formal force, and then highlighted the issues of migration, terrorism and antimicrobial resistance. It ended with a ringing affirmation of accountability: “Once we agree we will deliver.”

Much good was thus done but much was also left out. On the eve of the summit US president Barack Obama and Xi Jinping took a major step forward, announcing that their countries would ratify the Paris Agreement, so that the countries that have ratified it now account for 39 per cent of global emissions. Other countries had also promised to do so, but no other G20 countries, including Japan, followed China’s G20 lead. Moreover, the G20 leaders did not commit to ending the fossil fuel subsidies that they had agreed in 2009 they would do by now. There was no reference to the need to kill killer coal despite Xi’s focus on brave domestic actions in his opening address, and in the context of Japan building new coal-fired plants.

The G20’s health agenda was reduced to a single issue instead of the much broader attention given in the two previous summits and despite the current attack on Chinese, American and other G20 citizens by the Zika virus. Angela Merkel intends to deal with a broader health agenda at the next G20 Summit, which she will host in Hamburg next year. Despite the leaders’ brave concluding words on keeping their G20 commitments, there were few serious accountability mechanisms added that could convincingly ensure higher compliance and thus the effectiveness and legitimacy of the G20 as the centre of global governance for an intensely globalised world.

Xi Jinping admirably began the summit saying to the world’s business leaders that “green mountains and clear water are as good as gold and silver.” But the G20’s concluding communiqué left little grounds to expect that such a vision would be globally realised anytime soon, if at all.

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Kirton, John. 2016. "A Summit Of Significant Success - Policy Forum". Policy Forum.