The B20 recipe for global economic redress features China’s footprints B20为世界经济复苏开出了一剂印有中国特色的处方
Early September 2016, the Heads of State and government of 19 major developed and developing countries, as well as the heads of the EU Institutions, got together in Hangzhou, Eastern China with the critical task to build an“innovative, invigorated, interconnected and inclusive global economy”. Not an easy mission at a time when the world economy, trapped in low-growth, is undergoing painful adjustments, questioning the benefits of free trade and globalization, and desperately seeking new drivers of growth and stability, in a context of destabilizing demographic challenges and the threat of terrorism.
The G20 Summit, chaired this year by China, showed its ambition to become the premier forum for international cooperation in light of a perceived declining relevance of other traditional international organizations.
A key element for this purpose is the connection with the business world. The G20 leaders were assisted throughout the year by the business community, or B20. The B20 held several meetings over the past eight months to discuss and formulate specific and actionable policy recommendations to be endorsed by the governments. Over 600 companies and organizations, including ChinaEU, sent their representatives to the B20 Summit, held in Hangzhou on September 3-4, at the eve of the G20 Summit.
The very elite of China’s entrepreneurship was present: Jack Ma, Executive Chairman of e-commerce company Alibaba and Chair of the B20’s SME development taskforce, Robin Li, CEO of tech giant Baidu and Chair of the B20’s employment taskforce, Frank Ning, Chairman of Sinochem Group and Chair of the B20’s trade and investment taskforce, Ren Hongbin, Chairman of China National Machinery Industry Corporation and Chair of the B20’s infrastructure taskforce, Miao Jianmin, President of China Life Insurance and Chair of the B20’s financing growth taskforce, Yang Yuanqing, CEO of Lenovo. A selection of G20 leaders were present in the discussions together with the business community, including President of South Africa Jacob Zuma, Canadian Prime Minister Justin Trudeau and Australian Prime Minister Malcolm Turnbull, as well as the heads of nine major international organizations, including IMF Managing Director Christine Lagarde.
Chinese President Xi Jinping opened the floor of the B20 meeting with an important reminder that the business community must act to move forward and deliver tangible progress. “Action speaks louder than words” he warned. And he went on giving concrete examples of how China itself has made concrete steps to adjust its own economic development model toward a new normal, to further integrate itself in the world economy, to promote a greener and more sustainable economy. A case in point being China’s commitment to cut domestic steel capacity and coal production, while investing in high-tech production.
The message of Xi Jinping to the international business community was one of confidence. Confidence over the Chinese economy, whose uncertain future has become target of finger-pointing and subject of major concern worldwide: “We have the confidence and the ability to maintain medium-to-high growth rates, making significant contribution to global growth. China is resolved to carry out reforms through the end. China’s opening up will not stop or reverse course and the country will continue to be fully engaged in international cooperation, expand access to foreign investment, promote fair and open competition, create sound business environment”. It was also a message of confidence in the capacity of G20 to play a major role in resolving the ills of the world economy, shifting its focus from crisis management to long-term governance, through a coordinated effort aimed at “seeking common ground while shoveling differences”.
In Hangzhou, the B20 made 20 policy recommendations to the G20 leaders. Of these 20 recommendations, in particular two initiatives stand out and both of them are fruit of the vision of charismatic Chinese business leaders. The first and boldest one is the proposal of launching an electronic platform for world trade, or eWTP, aimed at integrating small and medium sized enterprises (SMEs) in the global economy through multi-channeled financing and improvement of the regulatory environment.
Speaking in favor for trade at a banquet at the B20 Summit, Jack Ma – who is himself from Hangzhou, further elaborated on the rationale behind the eWTP proposal that he aired at the beginning of this year at the Bo’ao Forum. “2000 years ago China built a wall because we were worried about the others. Somebody here today says that we should build another wall to prevent trade. I am not happy about that. Globalization is not a threat to the economy or to jobs. Globalization means prosperity, it means jobs, if only we can improve it.” Today’s trade rules are designed for big companies, who represent only 20% of overall businesses and yet manage 90% of global trade. While contributing to more than 50% of global GDP and an even higher percentage of employment, he explained“SMEs face challenges such as poor access to global markets, complex regulations and certifications designed for big companies, and a lack of access to financing.” eWTP proposes to tackle these inefficiencies and improve the global trade environment for the small and medium businesses, incubating new rules for e-trade.
Jack Ma’s position is apparently shared by the political leadership of his country, who positioned itself at the G20 as a driver and defender of free, open and inclusive trade, balancing against the growing anti-globalization sentiments, which threat to undermine the most important drivers of growth: trade and investment. With this goal, China proposed the launch of the Global Infrastructure Connectivity Alliance, building on the One Belt One Road initiative and aimed at interconnecting it with other national, regional and transnational infrastructure projects.
China has also shown leadership in shifting the attention of the G20 political leaders to the importance of digital and 5G as growth engines, along the line advocated by ChinaEU in the B20. President Xi Jinping drew the attention of his counterparts on the “need to build an innovative world economy to generate new drivers of growth: innovation is key to unleash the growth potential. The new round of scientific revolution with internet at its core is gathering momentum, bringing revolutionary changes to our way of work and way of life.”
This was the first time that innovation, the new industrial revolution and the digital economy were discussed in a G20 Summit, leading to the formulation of a G20 Blueprint on Innovative Growth and to the decision to add a new B20 taskforce on digitalization starting from next year G20, to be chaired by Germany.
ChinaEU will further invest efforts in the B20 in favour of its members because it sees eWTP as one of the most ambitious yet actionable measures to boost internet penetration in the broad public and justify further investment by telecom operators in faster and even more reliable global connectivity, including 5G. One of the key roles of ChinaEU will be to extend the scope of eWTP from global business application to a more holistic concept, encompassing regulatory reforms. ChinaEU is particularly well placed to provide an added value in this debate, building on its expertise in European Union regulations and their review in the framework of the EU Digital Single Market. For ChinaEU the EU experience shows that co- and self-regulation are the best way to achieve an effective consumer protection in web, and increasing consumer trust in e-commerce. In particular, experience shows that detailed Government regulation – the way initially chosen by the EU and most of its member states – leads to litigation and uncertainty, at the expense of legal certainty and consumer trust.
ChinaEU will also provide its support to further develop the second bold initiative promoted at B20 by Baidu’s leader Robin Li. Named G20 SMART, the initiative consists of a series of actions to encourage entrepreneurship and innovation, through for example the creation of a joint fund to develop advanced technologies or visa-free policies for managers of small and medium businesses to travel within the G20 countries.
ChinaEU and the other B20 participants left the B20 summit with feeling of “mission accomplished”. However, now the work is starting on the practical follow up. The B20 will continue feeding in proposals to the G20, but in parallel, business must take its responsibilities. On the other hand, ChinaEU looks forward to governments and international organizations integrating the G20 recommendations and make their business regulations more simple, more business oriented and friendly. This is the only way to ensure that investment and innovation would continue and grow.
Full speech of President Xi Jinping available here:
Full B20 taskforces policy recommendations available here:
Xinhua News Agency:
China Radio International: