How China's G20 presidency affects India and the world
The decisive and coordinated actions of G20 boosted consumer and business confidence and supported the first stages of economic recovery after global financial crisis of 2008-09.
This year China holds the presidency of the G20 and the agenda of a G20 summit is generally set by the country holding the chair. China's presidency to G20 is being looked at with a lot of anticipation, as it not only is the second-largest economy but is also the largest trading partner of several countries.
It is hoped the presidency will provide China a good opportunity to exercise a strong sense of its ownership over global economic governance.
Influence
But it is unfair to expect too much from China as it faces huge domestic challenges in sustaining growth and competitive advantages in manufacturing.
China will have to use all its skills and innovative ideas to implement past commitments of G20, and push forward on unsolved issues on the core economic agenda.
China is expected to work together with other members to consolidate and strengthen the partnership within the G20, to fully implement the commitments at Antalya and the previous summits, to improve effectiveness of the G20 in decision-making and implementation, and to further extend its influence.
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| The world economy is posed with several risks including the slowdown in the Chinese economy and Brexit to name a few. (Reuters) |
The economic backdrop underpinning the Chinese G20 presidency is not much different from other G20 presidencies.
The global economy continues to face significant short and long term challenges associated with the sluggish recovery from the global financial crisis, and 2016 is likely to be characterised by disappointing growth and persistently high unemployment.
Expectations
The world economy is posed with several risks including the slowdown in the Chinese economy, slow and negative growth in emerging markets such as Brazil and Russia, debt concerns in several G20 nations and ongoing EU problems related to migration flows, Greek debt and Brexit.
Hence, economic policy makers and multilateral institutions like the G20 need to be alert to evolving economic conditions and stand ready to respond to potential events that can cause contagion.
It will be imperative for China to manage expectations about what the G20 can accomplish. The agenda of all the G20 meetings in the run up to the G20 summit in September would revolve around this year's theme of the summit which is "Towards an Innovative, Invigorated, Interconnected and Inclusive World Economy".
This ambitious theme not only continues and expands on the three I's of the 2015 Turkish presidency - inclusiveness, implementation and investment but also incorporates Chinese policy preferences and development concepts.
China has added an extra "I" called innovation. Under this framework, G20 members can discuss how to formulate a G20 blueprint for innovation-led growth and deepen international cooperation in the areas of innovation and the digital economy.
Inequalities
Many countries are suffering from a series of unfavourable factors, including anaemic global growth, high levels of unemployment and inequalities.
The potential of G20 to help India in its developmental efforts is immense.
Some of the issues which are of importance to India and which India hopes will be a part of the agenda at September 2016 summit include: how can the G20 come together to fulfil their core objectives of the G20 development agenda which include eradicating poverty and achieving strong, inclusive, sustainable and balanced growth?; how can India boost the value of its regional supply chains in the global context?; how can the G20 aid India in doing so?; how does the G20 intend to boost the Financial Action Task Force (FATF) mandate, thereby sustaining global efforts to combat money laundering and the financing of terrorism and proliferation of weapons of mass destruction?
Further, India expects the G20 to promote BRICS as a leading global platform influencing global economic issues.
India believes that it is a good opportunity for the grouping to increase its influence in the forum and lay the foundation to pose as a unified voice for more representation in the international institutions.
China being the chair of the G20 is expected to attach great importance to and take advice and suggestions from non G20 members as well.
However, in sum, it is important to remain realistic in the expectations from the G20 presidency and best to focus on what can be achieved in any single year.
(Courtesy of Mail Today.)