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Innovative Implementation for Impact:
Prospects and Proposals for China’s G20 Priorities in 2016

Professor John Kirton
Non-resident Senior Fellow, Chongyang Institute for Financial Studies
Co-director, G20 Research Group, University of Toronto
December 11, 2015

Paper prepared for presentation at the session on “What are China’s Priorities for 2016 G20 Presidency?” of the “T20 Kickoff Meeting: G20 and Global Governance,” Chongyang Institute for Financial Studies, Renmin University of China, Beijing, China, December 14-15, 2015. Version of December 11, 2015.

Abstract

The Chinese G20 presidency at its start has set an unusually ambitious set of priorities for the 2016 summit it will host in Hangzhou on September 14-15, 2016. They are centred on the four “Is” of “Building an innovative, invigorated, interconnected and inclusive world economy.” First outlined by President Xi Jinping at the closing lunch at the Antalya Summit on November 16, 2015, those four Is have been added to the agenda that Antalya agreed would continue in 2016 and will be adjusted by the crises that arise in the nine months before the Hangzhou Summit takes place. At Antalya, and especially in the first official public statement of China’s priorities on December 1, 2015, President Xi identified the importance of implementation, in order to improve the effectiveness and influence of the G20. The premium placed on implementation pervades all the priorities and policy subjects on the agenda set by the Chinese presidency. It is also central to the new priorities a changing world will likely present by the time the Hangzhou Summit arrives. What the summit needs to produce its ultimate priority of implementation are practical, evidence-based proposals for comprehensively and consistently improving G20 accountability mechanisms. This is both to move toward the desired full implementation of all past G20 summit promises, and to improve them at and after Hangzhou to increase the impact they will have in solving the central global problems that only the G20 can. The need is for a configuration of improved accountability mechanisms from four sources: the governmental G20 itself, its affiliated international organizations, its formal and volunteer engagements groups and their communities, and independent analytically oriented actors with no advocacy stake in the assessments they produce.

Introduction

As China begins its year as the G20’s 2016 host, the world is wondering what China’s priorities will be in practice and whether they will be produced at and after the Hangzhou Summit on September 4-5, 2016. It is thus important and timely to assess in turn China’s currently proclaimed priorities, the prospective priorities that will emerge in the coming nine months and, above all, how they will and can be implemented and improved now and in the years beyond.

Proclaimed Priorities

At present, China has proclaimed its priorities on two occasions, doing so with considerable consistency and some creative change.

The Antalya Lunch Outline

The first occasion was when President Xi outlined his 2016 priorities to his G20 colleagues at the concluding lunch of the Antalya Summit on November 16, 2015. He identified his four priorities of growth, governance, investment and development, as follows: innovating current growth patterns and propellers; improving global economic and financial governance; boosting international trade and investment; and promoting inclusive and interconnected development. He elaborated on the first two.

The first priority of innovative economic growth responds to the highly fragile and poor growth of the global economy as it recovers from the great financial crisis of 2008-09. The performance and policies of the major economies have increasingly diverged and all badly need new sources of growth.

The second priority of global economic and financial governance is driven by the poor progress of the international institutional reform of the past several years, and by the need for concerted international economic cooperation and the increased representation and voice of emerging market and developing countries to strengthen the risk resistance of the global economy. This built on the move by the International Monetary Fund (IMF) to include China’s renminbi in its currency basket of Special Drawing Rights. The G20 itself needed to move from being a mechanism of crisis response to one of long-term governance, with a consolidated status as a primary forum for global economic governance. To this end President Xi pledged an open, transparent, inclusive preparatory process, enhancing communication and coordination with all members to maintain, build and develop the group.

The December 1, 2015, Statement

The second occasion came on December 1, 2015, in the 17-page statement released on the official G20 website the day China assumed the chair. The preface signed by President Xi begins with a bold call to seize the opportunities offered by “technological breakthroughs and a new industrial revolution.” The G20, playing a “key role in leading and advancing international economic cooperation” should build an “innovative, invigorated, interconnected and inclusive global economy,” by embracing “the vision of a global community of shared future.” As G20 host, China would thus work with other parties to “implement the outcomes of the Antalya Summit and all previous summits.” Innovation would thus join implementation as the key priorities for Xi Jinping as host.

The subjects identified in the December 1 document’s introductory treatment of key themes repeated three of the four items from President Xi’s Antalya lunch (with growth, governance and development repeated and trade and investment dropped). It then added the new priority of implementation and influence — “to fully implement the commitments at the Antalya and the previous summits, to improve the effectiveness of the G20 in decision-making and implementation, and to further extend its influence.”

Noting that “a close and effective partnership has been established, and has come to be cherished by all G20 members as their common asset,” the introduction ambitiously noted the need now for “greater courage, deeper cooperation, better coordinated policies and stronger actions.” He thus identified the overarching summit theme as “building an innovative, invigorated, interconnected and inclusive world economy.” These four Is replaced the three the 2015 Turkish presidency used, with inclusiveness being the only common one.

Innovation was first and foremost. It consisted of “new growth engines” from “innovation-driven development” and “across-the-board innovation in science and technology, in development concepts, and in institutions and mechanisms, as well as in business models.” This was by far the most novel and potentially transformational priority of the four and the one by which the success of the Hangzhou Summit would ultimately be importantly judged.

Invigorating the global economy came second. It contained the more familiar components of structural reforms, international economic cooperation, global economic governance and endogenous sources of high-quality growth.

Interconnectivity came third. It began in familiar Chinese fashion with the link between growth and development and the need for openness and cooperation. It but newly added “all-dimensional connectivity.”

Inclusive growth came fourth. It was focused as before for China on development — on the need to close the gap, share benefits, and reduce inequalities and imbalances.

What stood out as new was innovation in all its components and all-dimensional connectivity.

Prospective Priorities

From this foundation, prospective priorities will emerge in the nine months leading up to the Hangzhou Summit.

The Antalya Agreed Agenda for 2016

Their first source will be the well-established G20 multi-year agenda, centred on the issues promised by President Xi and his colleagues at Antalya in their concluding communiqué that they would return to in 2016. The most prominent were sustainable development and tax, with two references each in the communiqué. They were followed, with one reference each, by macroeconomic policy, labour, aging and the mobility of the labour force, investment, corruption, energy, infrastructure, terrorist finance, international financial architecture and health.

The issue of corruption was consistent with the major, continuing anti-corruption campaign that President Xi had mounted at home. At Antalya he called for zero tolerance, international cooperation, and increased G20 collaboration in hunting fugitives and recovering stolen assets.

Terrorist finance reflected the ongoing threat from ISIL and China’s continuous struggle against deadly violence from terrorist acts in its far western region of Xinjiang.

Aging responded to the need for new social policy for the rapidly aging societies of Germany, China and recession-ridden Asian partners Japan and Russia, to generate new demographic sources of strong, sustainable, balanced and inclusive growth.

Health addressed global health risks in general, the growing danger of antimicrobial resistance, weak health systems, and ongoing epidemics such as Ebola, given that health crises kill many people and harm economic growth and stability.

The Arising Crises in 2016

In the coming nine months, the Hangzhou agenda will be shaped by the global crises that might arise, as they have importantly for most G20 summits past (Kirton 2013). These shocks could take the form of a financial crisis coming from Russia or Brazil, rather than the United States or Europe and Greece as in recent years. They could arise from geopolitical conflicts, as over chemical weapons use in Syria in 2013 and terrorism and refugees in 2015. Health could appear, as it did in 2014 and 2015 should another Ebola-like epidemic arise. And climate change could create crises from extreme weather events and thus take more agenda space (Kirton and Kokotsis 2015).

The Importance of Implementation

Amidst these Antalya-authorised additions and adjustments for possible crises, a de facto fifth I priority of implementation will endure, for it is a task that starts now. As the conclusion of the December 1 statement proclaimed: “The G20 Summit in 2016 will continue to implement these commitments, by turning consensus into actions and strengthening accountability and assessment, in order to maintain the G20’s credibility and effectiveness and make greater contribution to world economic growth.”

The December 1 statement made a robust number of 19 direct references to implementation and accountability (see Appendix A). Those references appeared in all components of the statement, starting in the preface signed by President Xi, continuing in the sections on “The Theme of the Summit” and “The Key Agenda Items,” and concluding with the section on “An Action-Oriented G20.” They arose in virtually all sections of the agenda, as follows: growth, international financial architecture, financial reform, tax, anti-corruption, trade and investment, development, food and nutrition, climate finance, and industrialization in Africa. Some had “implementation” in the titles of the sections themselves. This was a much bigger, broader ambition than that of the Antalya Summit, which, despite having implementation as one of its three thematic Is, focused its actual accountability work only on the specific issue of economic growth and the Brisbane Action Plan from 2014 (Kirton and Kulik 2015).

These Hangzhou passages focused on a broad range of issues, not just a few key ones of particular importance to China and the G20, such as the undelivered 2010 commitment on IMF voice and vote reform. Moreover, President Xi ambitiously promised implementation of commitments not only from the 2015 summit in Antalya, but also of those made by all G20 summits since their start in 2008. The statement, in highlighting development, went well beyond a concern with implementing the G20’s own commitments on this subject to declare its solemn responsibility for implementing those of the United Nations 2030 Agenda for Sustainable Development, approved in September 2015 by the leaders of the world as a whole.

Above all, the December 1 statement promised to introduce and approve accountability mechanisms to improve implementation. Specifically it pledged to “strengthen the evaluation and monitoring on implementation” and, most generally, do so by “strengthening accountability and assessment.”

In only two instances, however, did it specify how this improved accountability was to be accomplished. In both instances these were by using existing components within the G20 institutional structure. These were to use the “3-year-accountability report mechanism” and the “Trade Ministers’ meeting and several Trade and Investment Working Group Meetings.” Yet the scale and scope of China’s accountability ambitions clearly point to a need for much more. It is thus important to design and deliver a set of augmented accountability mechanisms to assist President Xi and his colleagues in achieving the important priority of implementation that they have correctly put at centre stage of their summit in 2016.

Proposals for Producing China’s Priorities

This set of augmented accountability mechanisms should combine the contributions of four communities.

The first is the governmental G20 itself, based on its existing kaleidoscope of partial processes but with these rendered comprehensive, common in their framework and method, systematic in their analysis and more transparent in their reporting and results.

The second is the G20’s affiliated international organizations. These could be rendered more systematic, with more organizations involved for newer commitments (such as UN Women for those on women in the workplace), and with a single organization with the greatest analytical competence assigned the lead in each case.

The third is the G20’s formal and volunteer engagement groups and their communities. Here the B20 has led with the ICC Scorecard it has regularly produced.

The fourth is independent analytic actors with no advocacy stake in the assessments they produce. Here the G20 Research Group has led from the start. But given the growing number of annual and accumulated G20 commitments and the importance of implementation and accountability for the Chinese presidency, it could now be the time for the analytically committed, non-advocacy Think 20 to assume the responsibility for a larger effort.

References

Kirton, John (2013), G20 Governance for a Globalized World (Farnham: Ashgate).

Kirton, John and Ella Kokotsis (2015), The Global Governance of Climate Change: G7, G20 and UN Leadership (Farnham: Ashgate).

Kirton, John and Julia Kulik (2015), Advancing Accountability for Achievement: Improving Implementation of the G20’s Growth Agenda,” Monitor 16 (March).

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Appendix A: Implementation/Accountability References in “G20 Summit 2016, China”

Direct reference to “implement/implementation” and “accountability” in G20 Summit 2016, China, December 1, 2015. Direct quotations are below. Numbers added. Unit of analysis is the sentence.

Preface by Xi Jinping
1. We should pool wisdom, form synergy, implement the outcomes of the Antalya Summit and all previous summits …

Theme and Key Agenda Items
2. (Para 2) In 2016, China will work together with other members to consolidate and strengthen the partnership within the G20, to fully implement the commitments at the Antalya and the previous summits, to improve the effectiveness of the G20 in decision-making and implementation.

Lifting Mid-to-Long Term Growth Potential
3. Based on members’ individual experiences. G20 could summarize some useful guiding principles of structural reform at the G20 and further strengthen the evaluation and monitoring on implementation of reform commitments.

Improving International Financial Architecture to meet Future Challenges
4. The G20 should continue to promote the reform of the Bretton Woods Institutions, by implementing the 2010 IMF quota and governance reform …

Continuing Financial Sector Reforms
5. In order to enhance the stability and resilience of global financial system, the G20 needs to continue the reforms in global financial sector, implementing standards and rules already agreed…

Improving International Tax Regime
6. While implementing the outcomes of the international tax agenda (e.g. BEPS project) and the consensus reached in other tax related arenas …

Implementing Consensus on Anti-Corruption
7. The G20 should continue to implement the Two-Year Action Plan on Anti-Corruption, particularly in terms of strengthening practical cooperation in areas such as denial of safe haven to corrupt officials, recovery of the proceeds of corruption, and repatriation of corrupt officials, which should be prioritized in G20’s future work.

Reinforcing Trade and Investment Cooperation Mechanism
8. In order to implement the above-mentioned consensus on trade ministers’ meeting and its supporting working group and take full advantage of G20 members as major global trading nations, in 2016, China will hold a Trade Ministers’ meeting and several Trade and Investment Working Group Meetings.

Inclusive and Interconnected Development
9. The UN Sustainable Development Summit has endorsed the 2030 Agenda for Sustainable Development … These are solemn commitments made by our leaders, which must be fully implemented.

10. In 2015, while continuing to progress on these issues, the G20 accorded special attention to low income and developing countries, SMEs, energy access in Africa as well as women and youth employment, demonstrating the G20’s determination in implementing the 2030 Agenda for Sustainable Development and deepening cooperation on development.

Implementing the 2030 Agenda for Sustainable Development
11. As the premier forum for international economic cooperation, the G20 members should take the lead in implementing the 2030 Agenda.

12. Base don’t he real needs of countries, especially the developing countries, in implementing the 2030 Agenda, the G20 should take its unique advantage to a package of solutions to real problems.

13. In this regard, China suggests the G20 members develop national plans for the implementation of the 2030 Agenda, based on which a G20 collective action plan could be collated to promote strong, sustainable and balanced growth.

Optimizing G20 Development Co-operation Agenda
14. Second, policy coordination should be enhanced between DWG and other G20 work streams. On the basis of the 3-year accountability report mechanism, it is important to clarify the division of labor, optimize the use of resources and better reflect the development elements in all tracks of work

Promoting Accessible, Affordable and Sustainable Energy Supply
15. The G20 should implement the principles of Energy Collaboration and strengthen cooperation on energy access…

Improving Food Security and Nutrition
16. The G20 should implement previous commitments on food security and nutrition, …

Mobilizing Climate Finance
17. As parties to the UNFCCC, G20 members should follow the principles and rules of the UNFCCC, take active measures to implement the outcomes of the COP21 on climate financing and others …

Supporting Industrialization in Africa and Other Developing countries
18. The international community should take actions to support Africa’s industrialization, and help Africa create jobs, eradicate poverty, enhance capacity building, achieve sustainable self-development, and implement the 2013 Agenda.

An Action-Oriented G20
19. The G20 Summit in 2016 will continue to implement these commitments, by turning consensus into actions and strengthening accountability and assessment, in order to maintain the G20’s credibility and effectiveness and make greater contribution to world economic growth.

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