G20 Summit: Why it is so important to China and the world?

There have been three landmark gatherings in China since the Reforming and Opening-up strategy in the year 1979: the 2008 Beijing Olympic Games, the 2010 Shanghai Expo, and  the 2016 G20 Summit which was held a couple of days ago in the famous tourist city of Hangzhou.

According to the John L. Thornton China Center of the Brookings Institution, the G20 Summit was more successful than the other two events, because it is not just a sports and cultural event. At this point, China has become the host in redefining the global political and economic order and governance.

The strong impetus in the economic downturn

Even after the economic crisis, global economic growth continues to weaken, which seriously impacts the world´s future development. Forecasts of slower growth for emerging countries in the coming years make the situation look even less optimistic. China, as a rising economy with a rocket-speed growth rate in the last decades, has already seen its double-digit growth rate dropping to around 6% in 2016.  The G20 summit 2016 in Hangzhou was, therefore, a strong political sign of the Chinese government, to demonstrate its willingness and determination in tackling the economic depression. By redefining the world´s order as a developing country, China claimed the needs of a more innovative way of development. As analysis from Aberdeen Asset Management points out that the slowdown of Chinese growth rate is greatly determined by its current economic transformation from simple production to innovation-driven manufacturing.

The key mechanism to stable long-term governance

Brexit, austerity measures in the USA and the QE policy of the Central Banks of Europe and Japan: the world has witnessed separate directions for the future economic development in the post-crisis era. In defense of a more coordinated approach, at Hangzhou China has proposed a 4 Is principle . An innovative, invigorated, interconnected and inclusive global economic order, insisted China, is the healthiest way of development. The G20 countries need to unite, establish long-term governance mechanisms and prepare for the next possible growth opportunities. According to Mr. Dennis Snower, president of the Kiel Institute for the World Economy, this concept coincides greatly with Germany, the presidency of the G20 summit for 2017.

 

Richard Hoffmann

Richard Hoffmann is a partner at ECOVIS Beijing China. Richard obtained an honors degree in law and worked in Germany, the United States, and China for various prestigious law firms prior to joining ECOVIS. In addition to being a member of the board of ECOVIS International, he is Supervisor for the China business of a respected German company and shares his extensive knowledge to students by teaching commercial law in China at SRH Hochschule Heidelberg. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV stations. Contact: richard.hoffmann@ecovis-beijing.com

Ecovis Beijing

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