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The G20's role irreplaceable

By Jin Canrong and Liu Shiqiang (China Daily)
Updated: 2010-11-08 08:08

Mechanism is becoming increasingly important for the advancement of international relations and world economy

In the post-crisis period full of complexity and uncertainty, the Group of 20 (G20) can undoubtedly serve as a key to understanding the transition and development of the world economic pattern.

Since the outbreak of the global financial crisis, there have been four successful meetings of the G20 heads of government, in which leaders not only positively coordinated stimulus measures and policies in dealing with the crisis, but also reached a comprehensive consensus on issues including sustained economic growth in the future and reform of the international financial system. The G20 has become a major platform for global macroeconomic policy coordination.

The upcoming G20 Seoul Summit in the Republic of Korea (ROK), the first ever in a non-G8 nation, is of great significance to the rebalance of the decision-making power in the world economy, and is also an important opportunity for the promotion of Sino-ROK ties.

As it is becoming the world's macroeconomic coordination mechanism, the G20 is of great significance for the advancement of international relations and the world economy. The outbreak of the global financial crisis indicated that the current West-led international system has limitations and is unable to reflect the demands of emerging economies.

The development of the G20 would help balance the over-centralized world economic power structure.

The evolution of the G20 has benefited from three major driving forces: The first being the international financial crisis. In the face of the financial turmoil, the response of both the United States-led G8 and the United Nations was barely satisfactory. Thanks to its policy-making efficiency and more balanced representation, the G20 quickly emerged as the leading forum to cope with the crisis.

The second factor is the changing world economic pattern.

During the past two decades, emerging economies, with those of BRIC (Brazil, Russia, India and China) at the forefront, have become important forces in helping the world weather the crisis, which in turn highlighted the status of the G20.

The third driving force comes from major powers, especially the US. In view of the inherent drawbacks of other international governance mechanisms, the G20 became Washington's preference when seeking international cooperation.

The growing openness and flexibility of the G20 could have a complex influence on the international relations.

However, the international community has not yet reached a consensus on whether the G20 mechanism will become permanent. There is still a long way to go for a genuine reordering of the global order. In this sense, the Seoul Summit is an important window to observe the participants' efforts to institutionalize the G20.

Furthermore, the future prospects of the G20 depend on it resolving three problems. The

first is whether it can balance the influence between the developed world and emerging economies. The US, Japan and the EU will endure long-term feeble growth, with gradually weakening superiority over a long period. The relatively fast economic growth of the emerging economies will continue to reduce the gap between them and developed countries. Whether the West-dominated world economic structure can realize a smooth transformation will be a major test for the future development of the G20.

The second problem is whether it can properly manage its relationship with the UN. For the present, economic issues remain the focus of the G20, while the UN still focuses on political and security affairs, with both global mechanisms coexisting and complementing the other. But any progress will inevitably mean that the G20 will cover more issues, such as global climate change and sea-route security, and this might cause difficulties between the two.

The third problem is whether it can properly handle its relationship with non-G20 countries. Among more than 200 states and regions that engage in global economic activities, the G20 member countries only account for 10 percent. So, the G20 needs to properly handle its relationship with other countries, listen to their claims and respect their interest demands.

China has been keeping a positive attitude on the evolution of the G20, partly because the G20's growing status has raised China's voice and influence in international economic affairs and it provides another important platform for Beijing to participate in the formulation of global economic rules. In the future, while strengthening efforts to institutionalize the G20, China can promote progressive adjustment of the international economic order.

The summit will also be a chance for China and the ROK to restore ties and promote cooperation after the Cheonan incident.

The G20 Seoul Summit provides an important platform for China and the ROK to conduct cooperation on bilateral, regional and global levels. Leaders from both states can take advantage of the multilateral arena to exchange views on problems of common concern, enhance mutual understanding and build up political mutual trust.

Sino-ROK cooperation will also favor the raising of Asia's voices and influence in the G20. Meanwhile, their support in the institutionalization of the G20 and contribution to global economic recovery and sustained growth are of vital importance. So, both states should seize the opportunity, conform to the trend of the times and jointly promote Sino-ROK strategic partnership to a new and higher level.

The authors are researchers at the School of International Studies, Renmin University of China.