First of all, there is the distracting protocol drama that invariably gets involved in high-octane diplomacy like this. G20, even in a more relaxed atmosphere like Brisbane, where it was held two years ago, is the most stressful of events. When the leaders of the world’s key nations convene, the slightest issue can be cause for misinterpretation, and offence. Putting all of this in a highly formal, controlled environment like China serves to exacerbate things. It is unsurprising therefore that the reported failure of the Chinese to supply a red carpet to President Obama when he got off his plane on arriving was immediately interpreted as a snub.
Snub or not, this event and the subsequent arguments it gave rise to were indicative of the very tense status of relations between the two powers at the moment. Never has their relationship seemed so sharply divided between positives and negatives. So both were able to declare just before the summit the major news that they were ratifying the Paris agreement on combating climate change. But both were also unable to avoid the issue of competing visions of how to manage issues in the South and East China Sea. On this matter, the G20 neither was able, nor expected, to offer any great breakthrough.
On the matter of substance, however, the G20 in the concluding communique, did make one thing crystal clear. This was prefigured by Chinese president Xi Jinping’s remarks at the start of the summit. For all the political and diplomatic differences, all the attendees had at the front of their minds the increasing battle to balance public expectations of rising prosperity with the real difficulty of producing good levels of growth. To complicate matters, from Brexit in the UK to the fractious fight for the presidency between Trump and Clinton in the US, anger at globalisation and its side effects has been growing. What has therefore largely been presented as a cure for problems is now seen by many, rightly or wrongly, as a cause of them.
That China was hosting the G20 is appropriate because ironically, despite its different political model to most of the other attendees and its adherence, at least officially, to socialism, it has been painted as one of the key causes of imbalances coming from globalisation. In 2008, during the global financial crisis, the complaint was that its low currency and unfair trading practices had been behind some of the distortions in the global economy. This complaint has not gone away, with anger over Chinese steel exports glutting the international market and destroying jobs and economies, to claims around Chinese refusing to allow reciprocal access to its domestic market despite being given good quality access to the outside world. President Obama probably captured this sentiment best when he said that the issue boiled down to the difference between free trade and fair trade. The current template of globalisation supports the former. But many doubt if it does much about the latter, and they hang a lot of the blame for that, rightly or wrongly, on China.
China’s response, as far as it can be gleaned from what happened in Hangzhou, is that it does recognise, even within its own domestic situation, real problems arising from unequal growth and the lack of equity this has led to. Lacking free elections, China won’t experience anything like the drubbing the political elite got in the UK over Brexit this June any time soon. But China understands it is not immune from the underlying anger at the way globalisation has proceeded. `Inclusive’ was a buzz word during the summit, and saturates the Communique. And while its prime meaning is about more equal and balanced growth, it also suggests China is starting to recognise the need for a new, better quality economic relationship with the outside world so that at least there is common cause in addressing this problem.
To achieve better quality, more inclusive investment and trade relations by outside economies into China, to partner China in doing better at creating sustainable growth domestically, there is a clear demand by Chinese leaders that something needs to be given back – knowledge, expertise and innovation. China clearly wants partnerships to crack its innovation challenges in return for access to its domestic market. That is the deal on offer. This is why strong support for a global innovation strategy featured in the G20 communique.
So despite its multilateral attendance and format, and the highly generic sound of most of the language issuing from it, the G20 this year clearly mapped out the interests of its host. The question is just how much the other G20 nations view buying into China's ideas about inclusiveness and innovation as beneficial. That will matter much more than arguments about red carpets and clashes between protocol officers.
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