The G20 and China

The decision to hold the 2016 summit in China creates both opportunities and challenges in relation to the prospect of a new phase of Asian global leadership

chin_dobson_100On the last day of the G20 summit held in Brisbane last November, Australian Prime Minister Tony Abbott announced that an ‘overwhelming number of G20 members’ had supported the choice of China as the host of its 2016 summit.  This is a significant decision because, until recently, China has treated the G20 process as a transitional coordination mechanism, rather than a permanent grouping.

While some observers, both at home and overseas, have called on China to play a bigger role in global governance, commensurate with its position as a contemporary great power, especially in the wake of the 2008-9 global financial crisis, others have continued to question its capability to exercise global leadership.

However, China’s new leader is different from his immediate predecessors, both in terms of ambition and his willingness to act on those ambitions.  President Xi Jinping has established what most agree is a commanding presence, not only domestically with the anti-corruption campaign, but also internationally.  By pressing ahead with Chinese financial diplomacy and supporting the launch of a host of new China-led international arrangements, such as the BRICS bank and the Asian Infrastructure Investment Bank, Xi is building a more prominent role for China in the world and making its presence felt in international society.

In thinking forward to 2016, the Chinese President and his senior strategists decided that the time was ripe for China to host the G20 summit.  Beijing certainly welcomes the decision.  We suggest in this post that it provides a great opportunity for China to reach out to its Asian neighbours, and others, and to build a set of shared positions on the agenda, priorities and key deliverables in the follow-up after the upcoming G20 summit in 2015 in Turkey.  In effect, it now inherits the mantle – and the challenge – of Asian leadership in the world.

During the last decade, prominent Asian opinion-shapers have called for Asia to play a bigger role in shaping the global agenda.  Others have called on Asian nations to coordinate more and better between themselves, and in the global arena, especially on issues relating to global financial stability and the maintenance of an open world trading system.  These are bedrock issues of the G20 agenda.  While some have hoped for the emergence of more formal regional caucusing in Asia, others remain sceptical about the possibility for collective action within the region, including China’s actual commitment to multilateralism.  As a consequence, the reality is that, so far, there has been little coordination between East Asian members of the G20, except, perhaps, during the year when Korea held the presidency.

At first blush, there is little to suggest that major changes lay ahead for 2016.  Losing the role of host was a blow to Tokyo, but more awkward was losing to a regional rival.  Sino-Japanese tensions have been growing across a number of issues for the past decade, and, particularly since 2010, over the fate of some small rocky islands in the East China Sea.  They have only abated very recently with the first face-to-face meeting between President Xi and Prime Minister Abe at the APEC summit in Beijing in November 2014.

Regarding global summitry, the two countries have differing preferences on the central mechanisms for global governance, with Tokyo displaying a bias for the more exclusive club of the G7/8, and Beijing backing the more unwieldy G20.  Japan’s preferences have, at times, led to inconsistent, compromised and contradictory behaviour within the G20 process. It has sought to behave as a responsible member of the G20, but has not wanted the larger club to succeed at the expense of the G7/8.  Tokyo’s ambiguity undermines the coherence of its approach to global governance within the G20, while its support for the G7 seems to constrain its commitment to greater regional cooperation.

Notwithstanding this ambivalence, Japan continues to be an influential force within the region, and globally, and it is in China’s interests, as well as Japan’s, to stabilise their relationship going forward.  The recent return of Japanese, Chinese and South Korean finance and central bank officials to their trilateral meetings in September 2014 – after a two-year hiatus – is indicative of awareness at a deeper level, on all sides, of the need for the largest economies in East Asia to cooperate and coordinate.  Senior foreign ministry officials from the three countries then followed up with efforts to smooth over geopolitical tensions, revive trilateral cooperation and rebuild trust.  In November 2014, at the ASEAN+3 leaders meeting, South Korean President Park Geun-hye took the next step in smoothing relations, saying that she hoped that the meeting between the foreign ministers of the three countries ‘in the not-too-distant future’ (and now scheduled for March 2015 in Seoul) would ‘lead to a meeting with the leaders of the three nations’.  Although the three sides acknowledge that ‘high hurdles’ remain, their spokespeople also suggest that there are reasons for optimism.

It is important for China to further the tide of constructive energy, and work closely with its regional neighbours, and those beyond Asia, to grasp the opportunity presented by hosting the G20, to present fresh ideas and approaches that revitalise this forum, and thereby to address issues of shared regional interest, and global need, such as securing financial stability, supporting sustainable growth and development across the world, coordinating infrastructure modernisation, financing environmental protection, and managing energy supply and consumption.

For a longer version of this comment, see Global Policy.