Remarks by Minister Li Kexin at "Model G20 Initiative" Inaugural Event
American University's School of International Service
2016/10/07

Mr. Goldgeier,

Ambassador Nahon,

Secretary General Gurria,

Ladies and gentlemen,

It’s a great honor to be invited to speak at the launching ceremony of “Model G20 Initiative”. At the outset, I’d like to extend congratulations to this important event. As an innovative program designed to advance the understanding of the G20 among students,the Model G20 Initiative will be an effective platform for young people from both the United States and other countries to improve their wisdom and thoughts on international economic institutions and cooperation.

Before I talk about the G20 summit itself in Hangzhou in early September, let’s remind ourselves of what kind of background China was in when it took the stewardship of G20? Not so much optimistic. A gloomy world economy. Suspicion on G20. And a slow-down Chinese economy.

Following 2015, that marked the lowest global growth since financial crisis, 2016 is undergoing sluggish recovery and frequent risks. Global growth is projected to slow by all major international economic organizations, including IMF, WB and OECD. A more subdued outlook for advanced economies following the June U.K. vote in favor of leaving the European Union (Brexit) and weaker-than-expected growth in the United States have put further downward pressure on global economic and financial forecast. Slower growth of emerging and developing economies is another negative factor. With economic situation intertwined with geopolitics, global economy may be beset by a lack of momentum and demand for a long time. OECD urged all governments to confront ‘backlash’ against globalization. In all, the increased interaction in the globalized world requires all countries to drive global growth collectively.

Since its inauguration in 2008, G20 summit has done a lot to help to steer the world economy towards stability and recovery. That’s why G20 has become a premier forum for international economic cooperation. At the same time, G20 members began to find it more and more difficult to reach policy consensus and to take joint actions. People began to think that G20 Summit is nothing but a talk shop, as well as some other Gs.

China’s economy was undergoing sharp slowing down and suffering a lot from volatile financial markets. Would China’s economy be OK? Was China able to act as the main engine of the world? Many people were skeptical.

With those questions in minds, people expect G20 to play the key role and to extend deliverables. The international community holds high expectations towards the G20 Hangzhou Summit.

This brings to my second point: What Hangzhou Summit achieved? How we make it happened?

Hosting a Summit is not an easy job. Actually people in Beijing started the preparation well before the Summit. The logistics is complicated. But the core issues are difficult to handle. How can we garner the consensus among 20 members? It’s a matter of negotiation, a matter of compromise, and it’s a matter of democracy. After a number of consultations, we decided the theme of the Summit as "Towards an Innovative, Invigorated, Interconnected and Inclusive World Economy". That was well received by G20 members and others.

In Hangzhou, we issued G20 Leaders' Communiqué and 28 specific outcome documents. The Communiqué stresses that "closer partnership and joint action by G20 members will boost confidence in global economic growth".

Specifically, the summit has charted the course for world economic growth. G20 members focused on the agenda of innovative growth and jointly formulated the G20 Blueprint on Innovative Growth. They are committed to tackling the weak growth by taking innovation as a key element to identify new growth engines for the world. To achieve innovation-driven growth, they formulated three action plans for innovation, new industrial revolution and the digital economy, which will facilitate innovation-driven growth and unleash the potential of digital economy. One of the encouraging result is Enhanced Structural Reform Agenda, stress the essential role of structural reforms in boosting productivity and potential output. To improve mid-long term growth potential of the world economy, the G20 members are putting in place an integrated strategy for growth with short, medium and long-term measures. These results are first in the history of the G20 and expected to restore the vigor of global economic growth.

In the area of trade and investment, the Summit has drafted two documents with historic significance. One is the G20 Strategy for Global Trade Growth, under which the G20 will lead by example to lower trade costs, harness trade and investment policy coherence, boost trade in services, enhance trade finance, promote e-commerce development, and address trade and development. The other is the G20 Guiding Principles for Global Investment Policymaking, which will help foster an open, transparent and conducive global policy environment for investment.

In the area of development, the summit has formulated the G20 Action Plan for the Implementation of the 2030 Agenda for Sustainable Development. This is a significant step, as it is ever the first time to give priority to development in global macro policy framework, the first time to draft an action plan for the implementation of the UN 2030 Agenda for Sustainable Development after it was adopted last September in New York, and the first time to take collective actions to aid the industrialization of Africa and least developed countries, which means the G20 not only belongs to its members, but also the whole world, especially developing countries and their people.

The Summit has also come up with several action plans in employment, finance, energy and held discussions on global issues including climate change, refugees, anti-terrorism and anti-corruption. You may notice that President Xi Jinping and President Obama together in Hangzhou handed over China’s and US’s instruments of joining the Paris Agreement to the UN Secretary-General Ban Ki-moon. That’s a good example for China and US playing a leading role in climate change.

In brief, the G20 Hangzhou Summit have made major breakthroughs. It is not perfect. There’s always room for improvement. But it does send positive signals to the world and live up to the world's expectation.

Here I feel obliged to mention a few words about China’s economy. There are two generic queries on China’s economy. One, will China’s economic growth further down, or there’s a hard-landing? Two, is China reserving its opening-up?

In the first half of this year, the Chinese economy increased by 6.7 percent, ranking top among the world's major economies with a contribution rate of around 25 percent to world economic growth. As the second largest economy in the world, one percentage growth rate today equals 2.6 percentage 10 years ago. It is a simple math. The numbers are important. We can still achieve two digit growth rate by fiscal and monetary policies. But it’s not our choice. The key perspective to look at Chinese economy is that, we are undergoing a large-scale structural reform, pro-innovation, pro-energy saving, pro-balance, and pro-fairness. This reform is designed to change the growth pattern in China, and is designed to overcome the middle income trap.

There’s no doubt that China will expand the scope of opening up. China’s door will open even wider to the world. Why? Because that’s the key to success in the past 40 years in China,in which China-US trade volume grew from almost zero to 558 billion US dollars.

So, by hosting G20 summit, we reaffirm our strong commitment to keep China’s economy growing in a more stable and healthy way, and keep opening-up as a long-term strategy.

The third point I want to make is how to keep G20 effective, what’s next after G20 Hangzhou Summit?

The vitality of any international mechanism mainly relies on implementation. G20 members should make every effort to turn the blueprints at Hangzhou Summit into reality. I believe Germany as the next host country will play a key role to continue the momentum.

As a long run, we hope G20 can have its effectiveness in the world economy. The G20 Summit came to life when financial crisis broke out, and it is our hope to turn G20 from a crisis response mechanism into one of long-term governance. This requires political will from all, especially the major players in G20. Since China and US have become so much engaged with and be stakeholders to each other, I should be candid to say that US is not as devoted to G20 as it was in 2008 and 2009. China appeals all relevant parties to take G20 as a heavy-duty vehicle and given good care and maintenance, rather than a band-aid mechanism. Only in this way, G20 will be ready and be able to play a crucial role when world economy really faces challenges.

That also requires joint efforts in all aspects, including governments, international organizations, enterprises and think tanks. The engagement of universities and academia mark an important progress of G20 Summit. Contributions of wisdom and practice from academic fields will be much beneficial to the effective implementation of G20 plans.

Thus I’m so delighted and encouraged to see Model G20 Initiative come to life in American University. According to the design of School of International Service, this Initiative will be the first US-based standalone experiential learning program on the G20 to prepare future leaders to build a strong, sustainable, balanced and inclusive global economy for all. I believe all the participants will benefit substantially from the Initiative. In real life, again, it’s not an easy job. But I bet you will have a lot of fun in the Initiative.

Good luck for “the Model G20”, and I’d like to thank again School of International Service for inviting me to attend this wonderful event.

 

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