By Jia Jinjing    Source: the Philippine Star    Published: 2018-12-07

From November 30 to December 1, the 13th summit of the Group of 20 (G20) was held in Buenos Aires, capital of Argentina. The event took place at a crucial moment for the G20 nations to steer the world economy and improve global governance. In his speech at the first session of the summit, Chinese President Xi Jinping noted that “over the past decade, we have braced difficulties together, navigated the global economy out of recession and brought it back to the track of recovery and growth. Ten years later, let us work with the same courage and strategic vision and ensure that the global economy grows on the right track.”

Today, the world economy is maintaining growth amid increasing risk and challenges. With a volatile international capital market and falling commodity prices in recent days, mounting uncertainties and instabilities are threatening the global economy. G20 members are now facing a situation similar to a decade ago when the global financial crisis broke out. They have to devise solutions to a number of urgent issues to maintain the stable growth of the world economy, find new drivers for sustainable development and deal with the spread of conflicts in multiple areas.

By the time this historic crossroads arrived, the G20 had evolved from an ad hoc meeting thrown together during the crisis in 2008 into a multi-layered global governance platform with 10 years of practice under its belt. The international landscape, however, has also become more  complicated  than it was 10 years  ago.  It is necessary to clarify fundamental questions regarding what the G20 can do, what it should do and where it will go in the future.

Does the global governance system still serve its primary purpose? Cooperation is the core of global governance. In response to the stock market crash of the 1970s, a mechanism for international coordination of economic policy was established by world major economies. Founded in 1999 with the aim to promote international financial stability, the G20 has been upgraded from a platform for meetings of finance ministers and central bank governors to one at leaders’ level since 2008. Over the past decade, it has evolved from a mechanism of crisis response to a platform for global economic governance, expanding its agenda from financial issues to topics on sustainable development, digital economics and the new round of industrial revolution. An increasingly wide range of issues to address has motivated G20 nations to continue working together even after hardships are overcome. “Partnership is the most valuable asset of the G20,” declared President Xi in his speech. “We G20 members should work together to surmount whatever difficulty that lies ahead.”

What is the historic choice the world economy faces? Today, economic globalization has encountered many severe challenges. The new round of technological revolution and industrial transformation are triggering profound changes as the wealth gap continues widening and social contradictions grow. Deficit in peace, development and governance poses a daunting challenge to the international community. At the same time, protectionism and unilateralism are rising in some countries. These countries blame external factors for domestic economic issues and adopt policies against the trend of globalization, resulting in trade friction and downgrading of the world’s multilateral trading system. In this context, the global economy is now facing a historic choice between integration and isolation. Upholding an open world economy has become an even more urgent task for the G20 than ever. In this regard, China believes that G20 members should remain committed to openness and cooperation and upholding the multilateral trading system.

What is the right direction for development of world economy? The trend toward openness and integration among countries remains unchanged despite ups and downs in the global economy. There is no turning back. The ever-expanding industrial chain, value chain and supply chain around the globe have already caused the markets of different countries to become intertwined. The improvement of human well-being and the growth of wealth are increasingly dependent on the flow of production factors around the world. Working together for win-win cooperation is the only strategy to chart a healthy course for the future. A ship will never reach its destination if it always retreats from storms. China believes that in pursuing economic globalization, countries should make it more open and inclusive, more balanced, more equitable and beneficial to all, which aligns with human development history.

The First China International Import Expo was successfully held this past November. It represents concrete action China has taken to further open up its market to the world and foster free, open, inclusive and orderly international economic environment. The world economy is  now  sailing a course interlaced with channels, while China is firmly committed to maintaining the right direction of global economic governance. Just as President Xi has put it, “Going forward, win-win cooperation is the only choice for us, whether in good times or bad.”

The author is Director of the Macro Research Department at Chongyang Institute for Financial Studies, Renmin University of China.