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The global problem and China solution
   2016-09-05 10:31:02    CRIENGLISH.com      Web Editor: Liang Tao

By Xu Qinduo

The global trade has not been growing since the beginning of last year. International investment faces the hindrance of a rising sentiment of protectionism. Economic recovery is sluggish.

There's high expectation for the Hangzhou Summit of G20. What's the China solution?

Rising protectionism amid uncertainty

The UK has voted to leave the European Union, but what remains unclear is when and how they're going to negotiate the exit. What's even unclearer is how the Brexit will affect the state of Britain, that of EU, and the world at large. The London fog is coming back.

People digging deeper in Brexit see the doubts and even anger at loss of jobs and competition as a result of economic integration with the EU. At a larger scale, globalization is being questioned for the fact that there're people left behind benefiting little from international trade and investment.

That sentiment doesn't stop in Britain. Donald Trump, the Republic presidential candidate in the United States, prides himself on berating free trade deals and building a wall to ward off the migrants from Mexico. He threatens to impose punishing tariffs on imported products and re-negotiate a regional free trade deal of North America.

In Australia, two protectionist parties have recently gained seats in the Senate. The Prime Minister Malcolm Turnbull, wrapped in economic nationalism, asserted "we decide who invests in Australia," in his response to concerns over Australia's rejection of two Chinese companies' investment bid.

Seeking China solution: innovation & free trade

Among the items high on the agenda of G20 are creating new drivers through innovation and promoting the facilitation and liberalization of trade and investment.
After Chinese President Xi Jinping, Jack Ma of the e-commerce giant Alibaba Group has become probably the second most sought-after VIP to talk to at the G20 summit. World leaders either have either listened to what Ma has to say or explored business opportunities.

Indonesian President Joko Widodo has invited Jack Ma to be an economic advisor during his trip to Alibaba. But before his proposal, Canadian Prime Minister Justin Turdeau had clinched a deal with Ma to sell Canadian products to Chinese consumers through Alibaba.

The huge interest in Alibaba shows world leaders do see eye to eye on the Chinese proposal that innovation is the way forward to create new growth momentum.

Along with innovation, keeping market open is equally important, according to the Chinese plan. President Xi Jinping has urged his colleagues in the opening speech to honor their commitments of not introducing new protectionist measures. He urges the major economies to better coordinate their investment policies and take credible actions to bolster trade growth.

Trade and investment are the Key elements of globalization. Expressing her concern of the anti-globalization sentiment, Christine Lagarde, the Managing Director of the International Monetary Fund, warns that "inaction risks reversing global economic integration, and therefore stalling an engine that, for decades, has created and spread wealth around the globe. This risk is, in my view, too large to take."

Role of G20: not a talk shop

For whatever reasons, previous G20 summits in recent years have failed to yield as much as expected. As a result, many economists have pinned high hopes on China's presidency of G20 summit, given the solid track record of China in its effectiveness and efficiency to carry out action plans.

President Xi has in his speech challenged the 20 largest economies to shoulder a true global leadership. He said "the G20 carries high expectation of the international community and shoulders a heavy responsibility. We must ensure that the G20 fully plays its role of keeping the world economy on the track of prosperity and stability."
Xi Jinping suggested that the G20 transform itself from a mechanism of crisis response to one of long-term governance. When major challenges merge, the G20 has the duty to play a leading role to present a strategic vision and set the direction.

More bluntly, Xi Jinping said "we should make the G20 an action team instead of a talk shop". He is clearly aware of the drawbacks facing the G20: too much talk but with little matching action.

Maybe, Hangzhou is the new starting point for the group to assume a role of global economic governance with strategic vision and effective actions.

Xu Qinduo is a Beijing-based senior political analyst who provides commentary and analysis on international issues to both Chinese and foreign media, such as Russia Today, BBC, Sky News Australia, NPR, Global Times, La Presse, ABC, The National, and Channel News Asia in both the English and Chinese languages.

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