China Braces for G20 Summit

The final countdown to the 2016 summit has begun after months of painstaking preparation by Chinese officials, who oversaw a massive renovation of the host city and the implementation of new security measures and local regulations to ensure the meetings go flawlessly. Although China seeks to use the international forum to lead the discussion on global economic governance, non-economic topics such as geopolitical issues are expected to overshadow Beijing’s preferred agenda. At AFP, Ben Dooley writes that the Chinese government is putting its best foot forward for the summit despite the various challenges it face both domestically and internationally.

When China signed up to host this week’s G20 summit two years ago, it seemed like an ideal venue to showcase its financial accomplishments and assume the mantle of international leadership.

Since then it has struggled to steer its giant economy through a slowdown, the free-wheeling stock market went into convulsions, and concerns over chronic industrial overcapacity and massive government lending have deepened.

Beijing’s aggressive stance in the South China Sea, where it has created artificial islands in disputed territory, has also created alarm and joins a list of awkward issues authorities are keen to leave off the agenda in the summit city of Hangzhou.

[…] “The whole exercise will be about giving China a lot of face,” said Jean-Pierre Cabestan of Hong Kong Baptist University. Xi “wants to show that China will be at the centre of global governance, which the G20 is supposed to be”.

To that end, Beijing is eager to promote its work on , its new infrastructure bank which poses a potent challenge to the World Bank, and a massive spending plan to build a new Silk Road. [Source]

Criticisms and jokes about the G20 have been targeted by official directives penalizing negative reporting and the spread of irreverent comments about to the meetings. Yaqiu Wang at CPJ reports:

Authorities ordered journalists not to “hype stories about G20 disturbing local residents’ lives,” one journalist for a local newspaper in Hangzhou told CPJ. Another journalist for a national news website shared with CPJ a directive she received in a WeChat group on August 29, ordering the media to increase and monitoring. […]

[…] None of these measures have stopped citizens from complaining on social media about the inconveniences brought by the summit. It is unclear the extent to which people have to have a sip of the drink they carry when being checked by security personnel, but jokes making fun of the heightened security level in Hangzhou and beyond have been widely spread on social media. A popular one reads, “A delivery guy encountered a patrolling officer on his way to deliver the food you ordered. The officer ordered him to have a sip of your soup, then the delivery guy brought the food to you.” Another reads, “A police officer ordered me to have a sip of each bottle in the case of wine in my car trunk. After I had the sips and started my car, the police then accused me of drunk driving.”

Apparently, authorities have no tolerance for such humor at this crucial moment for demonstrating China’s cultural and economic achievements on a global stage. The government on its official WeChat account has deemed the aforementioned jokes and many others “rumors” and stated, “The public security organ…hopes everyone does not readily believe or share information that obviously runs counter to common sense, or parodies and spoofs. The public security organ will pursue legal actions against those who create and spread rumors in accordance with the law.” [Source]

See more on the satirized security measures from John Sudworth at the BBC, who encountered obstruction while trying to interview locals about their views on the summit.

Activists and human rights organizations in the U.S. and Canada have called on their respective leaders and other G20 governments to address Beijing’s human rights abuses at the summit. Amnesty International’s Joshua Rosenzweig urged G20 countries to create a more inclusive model of growth that is attuned to the human rights of all those affected by global economic activity. Sophie Richardson, the China Director of , suggests that Western governments need to use a more assertive approach to dealing with China’s human rights misconducts:

For those countries who wish to effect positive change on human rights in China, Beijing’s desire for cooperation on issues ranging from counter-terrorism to anti-corruption and its integration into global economic and governance systems provide opportunities. If governments, the E.U., the United Nations, and others are as serious about trying to improve the human rights situation in China as they claim to be, and are not just happy with a strong political or trade relationship, they should rethink their approach and consider the following entry points:

Beijing’s desire for international cooperation with its anti-corruption campaign: This signature campaign of Xi’s is made possible by systemic human rights violations. While some of those affected have engaged in massive corruption, the campaign is also a political one, aimed at Xi’s opponents in the Party. Beijing is increasingly pressuring governments around the world to hand over alleged fugitives. Yet a system of fair trials, particularly for those the government has determined to be guilty, is not on the horizon. Other governments should publicly decline all anti-corruption-related cooperation with China until it shows that it can provide due process consistent with international human rights standards.

[…] Beijing’s need for the rest of the world: For all the hostility directed toward “the West,” senior Chinese officials still urgently need and want regular access to the outside world. They need access to markets governed by robust institutions, they need access to free-thinking institutions of higher learning, they need second passports should blame for some domestic infraction come their way, and they need international banks in which to stash ill-gotten gains. There are numerous possibilities of more fine-grained approaches here. […][Source]

At China File, Gregory Chin and Carla Freeman joined a group of China experts to discuss what we can expect from China at the G20 summit, with a look at China’s domestic economic goals and the country’s development activities in the global south:

Locked into the path it has already been pursuing for the past year in the G20 presidency, China continues to advance an agenda for the and development that has some fairly ambitious elements, especially in the areas of green finance and green bonds as tools in efforts to reverse climate change. It also seeks to broaden the role of Special Drawing Rights (SDRs) as a multilateral asset option for non-official and official investors—an item also on the BRICS agenda. (Outside watchers thought China’s efforts to push for a greater role for the SDR, after the 2008-09 financial crisis, was dead. Not quite.)

[…] China also has set high expectations for outcomes at Hangzhou for its Southern friends. It issued special invitations to Hangzhou to African representatives—Chad (African Union chair), Senegal, Egypt, as well as the chair of the New Partnership for Africa’s Development—along with, from Asia, Kazakhstan, Laos (as ASEAN chair), Thailand (G77 chair), and also Singapore. Beijing oriented the G20 Development Working Group toward how the G20 can provide guidance and leadership to the U.N. Sustainable Development Goals2030. Its goal in Hangzhou is to hammer out a “G20 Action Plan” for the U.N. 2030 SDG agenda. In addition, to leveraging the substantial international commitments it has already made in infrastructure financing, including in the A.I.I.B. and the New Silk Road Fund (and especially at the bilateral level), China is directing attention back to the World Bank. It hopes everyone at Hangzhou will sign onto a “global infrastructure connectivity alliance” initiative, with the World Bank as the Secretariat for the new “GICA.” [Source]

South China Morning Post’s Jane Cai looks at some of the challenges that China faces going into the G20:

“China’s excess capacity will definitely be a topic, if not in the formal sessions, then in the side meetings, such as a Xi-Obama meeting,” Dollar said, referring to US President .

China’s steel exports have been a major source of trade rows with the United States and European Union, who say they exacerbate a worldwide overcapacity problem and lead to job losses at their steel mills.

[…] Another risk to the Chinese economy, Dollar said, was that it was keeping zombie SOEs afloat with lending. It was doing so to smooth an industrial downturn, but risks were building up as a result, he said.

Pinning its hopes on the private sector to drive , China is set to promote affordable finance to low-income groups and small and medium-sized enterprises (SMEs) at the summit and encourage private sector participation in infrastructure investment projects at home and overseas.

[…] Apart from talks on the global economy, the meeting will be mostly dominated by discussion of mounting security risks and political uncertainties, economists say. They include the consequences of Britain’s vote to leave the EU, widespread terrorist attacks and the ongoing conflict in Syria. [Source]

Making progress on climate change and the Trans Pacific Partnership Agreement will be key objectives for U.S. President Obama at the upcoming summit as he seeks to secure his policy pivot towards Asia before leaving office.

From there, it is on to Hangzhou, China, for a Group of 20 summit meeting, where Mr. Obama hopes to announce that he and President Xi Jinping have both agreed to put the Paris climate accord into effect. That legal step could galvanize its worldwide enforcement since their two countries account for 40 percent of global emissions. Administration officials said the two sides were still working out the final details.

[…] Mr. Obama also plans to make an ardent case for the Trans-Pacific Partnership, a 12-nation trading pact that does not include China. Officials said he would emphasize the deal’s benefits on his final stop in Laos, where he will attend a gathering of Southeast Asian countries, several of which have signed on to the agreement.

[…] “T.P.P. is, in many ways, seen as a litmus test for whether or not the U.S. has staying power in this region,” Benjamin J. Rhodes, the deputy national security adviser, said to reporters on Monday. “What the countries of the Asia-Pacific region want to know, particularly the Asian countries, is whether or not we can be counted on.” [Source]

China announced on Saturday that the Standing Committee of the National People’s Congress had voted to ratify the Paris Agreement. President Obama is also expected to address the issue of corporate tax avoidance at the G20. The summit will also see the first official visit to China of new British Prime Minister Theresa May, an occasion likely to be overshadowed by her decision to delay a flagship Chinese investment in British nuclear power.

At China-US Focus, China’s Vice Minister of Foreign Affairs Fu Ying outlined several key aspects of the China-U.S. relations to watch for at the meetings:

1. Can China and the U.S. send clear signals that they will help world economic growth?

[…] The world’s economic recovery has not yet stabilized, and emerging markets have also come across serious challenges. Differences emerged among countries on how to boost growth. Some think that those who can take measures to stimulate aggregate demand should do so. Others emphasized fiscal discipline and supply side reform as the way forward. The Western developed countries are also pursuing different monetary policies. New developments call for new consensus, and the major economies meeting in Hangzhou are expected to find consensus on how to use fiscal and monetary policies, as well as structural reforms, to promote “strong, sustained and balanced growth.”

Understanding between the U.S. and China, which are the two largest economies in the world, will be at the forefront in setting the tone for the multilateral consensus needed to rebalance the global economy.

[…] 2.Will China and the U.S. be able to signal that they will lead efforts to reform global governance?

[…] At the G-20 Hangzhou summit, the international financial architecture, particularly the reform and development of the international monetary system, will be important subjects to be reviewed by the leaders. It is expected that the summit will achieve important outcomes regarding how to build more resilient national financial architecture, open and prudent financial systems, macro-prudential policy tools and frameworks, and inclusive finance. Information coming from China and the U.S. shows that the two sides are already engaged in thorough consultations.

China and the U.S. need to go beyond their differences and nurture the habit for cooperation, as they are increasingly aware that although they cannot solve all global problems, without their collaboration, none will be successfully solved. [Source]