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Sub-anchor: Top priorities in Hangzhou


09-01-2016 17:27 BJT

Full coverage: G20 Hangzhou Summit

I'm joined now by my colleague Yang Zhao, who has more information about the upcoming meetings. Yang Zhao, how about we start with the top priorities in Hangzhou?

At every summit, the host country establishes the agenda based on its assessment of the global economy. So this time around, you can see what’s topping the to-do list in the eyes of the Chinese government, and what their proposals are. So, let's take this one step at a time. The most important thing here is to find a new growth driver. If you look at the G20's history, you will find that the G20 summit was created as a response to the 2008 financial crisis. World leaders needed to stop the crisis and get the economy back on track as fast as possible. But this is the first time focus will be on mid- to long-term plans. The crisis may be over but recovery is too slow. Fiscal stimulus and easy monetary policies are no longer as viable as they were before. G20 members hope the economy can be driven by innovation, such as the new industrial revolution and the digital economy. And these are also China’s top domestic priorities.

Another topic is reform. Emerging economies should have a bigger say in multilateral organizations like the International Monetary Fund and the World Bank. Given that these reforms have yet to be fully implemented, this topic will still be discussed. Last month, G20 trader ministers set a goal of cutting global trade costs by 15 percent. Ministers also want to reduce protectionism, which has grown significantly since the crisis. According to the WTO, G20 markets imposed 145 new trade-restrictive measures in just seven months -- the most since 2009.

China is the world's largest developing country, and it is duty-bound to bring economic benefits to others. More developing countries than ever will come to Hangzhou at China’s invitation. China also wants the G20's greater backing for the “Belt and Road” development strategy, and the Asian Infrastructure Investment Bank or AIIB, which China believes can better connect capital to global markets.

Rachael:Yang Zhao, Tell us more about the outcomes of previous summits.
As I said, the summit was initially set up as a crisis-response system. We have seen many monetary stimulus measures. For example, in 2009, leaders agreed on a 1.1 trillion US dollar fund for the IMF to avert the threat of a global depression. The IMF's resources were also hiked by 456 billion US dollars following the 2012 summit. Outcomes also include control and stabilization measures. In 2010, it was decided that advanced G20 economies would cut at least half of their fiscal deficits and stabilize or reduce debt levels.

Reform is a popular topic at G20 meetings. In 2010, guidelines were developed for governance reforms at the IMF and the World Bank. In 2011, leaders agreed to promote trade by considering additional trade negotiations beyond the Doha Round mandate. There have also been some big moments at G20 meetings. In 2009, the major outcome was that leaders designated the G20 as the premier forum for international economic cooperation, and agreed to act together to support the global recovery.

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