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G20 has become more than a firefighter

(China Daily Europe) Updated: 2016-09-11 14:53

In groundbreaking meeting in China, group takes aim at world's long-term economic health, poverty and environment

The 11th G20 Summit in Hangzhou saw groundbreaking achievements, President Xi Jinping said in his concluding remarks on Sept 5. Leaders of major economies reached consensus on seeking workable solutions for global economic growth, and strengthening policy coordination. Compared with previous summits, the Hangzhou meeting undoubtedly bore more fruit.

Promoting the development of the global economy was the key topic on the G20 agendas. Previous meetings mostly have focused on how to coordinate economies to reach strong, consistent and balanced global growth.

The Hangzhou summit unveiled a blueprint for innovative growth along with an action plan to break new ground in global economic growth. This unprecedented plan will help dig out economic growth potential and return the global economy to a strong, sustainable growth track.

Innovation will provide new momentum for growth and help the economy to escape the current risks. Starting with formulating an innovative mechanism, seizing opportunities provided by the new industrial revolution and connecting various fields such as the digital economy, the Hangzhou summit mapped out an all-around action plan for a global innovative growth path.

G20 economies will set up a working group to promote innovation and share the benefits. The partnership between economies will be enforced, and less-developed counties will get more support to improve technologies and save on labor costs.

The Hangzhou summit promoted the formulation of a long-term innovative mechanism among G20 economies, whose key words were "coordination, cooperation and openness".

Development is a common subject for G20 meetings. At the Hangzhou summit, leaders vowed to eliminate world poverty. To realize strong, sustainable and balanced economic growth, the world must also aim for inclusive growth. "No country and no people should be left behind."

For this purpose, economies pledged to put the Paris agreement on climate change into effect as soon as possible. Meanwhile, G20 members vowed to help promote industrialization in countries in Africa and other less-developed regions. This will help to solve the problems with balance that have long restricted global economic development.

International investment and trade are two engines that promote the world economy.

A G20 investment guild approved at the Hangzhou summit will help build an open, transparent and friendly investment environment. Promoting investment was an important topic for the G20 members, because without it, there is no growth.

However, many problems have restricted investment. One of them is a lack of balance: The world's capital flows into financial industries, but not fundamental infrastructure construction, meaning there is a large gap.

The guild is one of the most important achievements of this year's G20 Summit. On one hand, it could balance investment by redirecting capital from overheated sectors, such as the financial industries, into to capital-starved industries, such as infrastructure construction. On the other hand, it could help fix unhealthy international investment structures, making the investment process more friendly and effective.

The G20 vowed to revive the power of the two engines of trade and investment. They formulated global incentives to promote inclusive and coordinated development of the global value chain and to support multinational trading systems. Members also reiterated their attitudes on trade protectionism.

The G20 established a working group on trade and investment, while members also reached an agreement that seeks to eliminate tariffs on a broad range of environmental goods, which primarily refers to goods used to help preserve the environment.

We believe the world economy will grow stronger under the revival of international trade and investment.

The Hangzhou summit is a milestone as it called for the G20 to change from a crisis-management mechanism to a long-term coordination mechanism, which will improve the integration of global resources, promote globalization and economic growth. This will also improve the G20's influence in international cooperation.

Members first mentioned climate change at the summit in 2008, calling it an important challenge. Since then, the G20 has consistently highlighted the promises and responsibilities of countries to solve these problems, especially in terms of the development of green energy and energy security.

In the communique after the Hangzhou summit, members promised to take action to solve climate change through consistent development, and pledged to promote the Paris agreement.

China signed the Paris agreement before the G20 Summit. As the host, and as a responsible nation, China expressed its determination in solving climate change issues together with other nations.

This piece is written by the research group of Chongyang Institute for Financial Studies at Renmin University of China. The views do not necessarily reflect those of China Daily.

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