The G20 Finance Ministerial Meeting at Chengdu
Alissa Wang, Researcher, G7 and G20 Research Groups
July 25, 2016
On July 23-24, 2016, G20 finance ministers and central bank governors met in Chengdu, China amidst a context of increasing global uncertainty created by the recent Brexit vote and worries of U.S. trade protectionism brought on by its presidential elections' campaign. Against this backdrop China took a strong leadership role, repositioning itself as the "stability anchor" for the global economy as Premier Li Keqiang said prior to the meeting.
To address the economic challenges posed by recent developments and to restore confidence in the global economy, G20 finance ministers and central bank governors pledged to pursue inclusive growth while preserving an open trading system. The communiqué voiced the G20 members' determination to use all policy tools to support inclusive, strong and sustainable growth. It highlighted the essential role of structural reforms, beyond monetary and fiscal policies. Participants endorsed the Framework Working Group's recently completed Enhanced Structural Reform Agenda, and restated the need to pay attention to country-specific circumstances. On trade, they reiterated their support for an open trading system with attention to inclusive economic growth. Significantly, the communiqué mentioned the negative impact on trade of excess capacity in the steel industry. In reference to the recent complaints about China's steel overproduction, the communiqué stated that effective steps will be taken "to address the challenges so as to enhance market function and encourage adjustment." The issue will also be taken to the Steel Committee of the Organisation for Economic Co-operation and Development, raising the potential of forming a global forum for discussion and cooperation.
On infrastructure, the communiqué built on the declaration from the finance ministers and central bank governors meeting held in Shanghai on February 27, 2016. It launched the Global Infrastructure Connectivity Alliance for cooperation in infrastructure projects and reiterated support for increasing quota shares for developing countries and emerging markets. The February communiqué also welcomed China's increasing role in the Paris Club for sovereign debt issues, and raised the potential for membership.
In light of recent terrorist attacks, the Chengdu participants condemned terrorism in all its forms and voiced support for implementing the Financial Action Task Force (FATF) standards. They set a monitoring timeline for the FATF to review progress by March 2017. On climate change, they focused on green finance. Participants adopted the Green Finance Synthesis Report and the voluntary actions submitted by the Green Finance Study Group, which was created by China earlier in its presidency. They encouraged the full and timely implementation of the Paris Agreement as well as the implementation of the G20's 2009 commitment to rationalize and phase out inefficient fossil fuel subsidies.
The Chengdu meeting thus marked an important shift from the previous finance ministers and central bank governors' meetings during China's 2016 presidency. Whereas the February Shanghai meeting highlighted China's slowing economic growth and its other economic problems, causing it to be perceived as a possible source of vulnerability for global economic stability, the Chengdu meeting in July saw China establish itself as a source of stability and a robust leader in a context of heightened global uncertainty created by crises elsewhere in the economic field and beyond.
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Alissa Wang is a research assistant at the G7 and G8 Research Group, the G20 Research Group, the BRICS Research Group and the Global Health Diplomacy Program, based at the Munk School of Global Affairs in Trinity College at the University of Toronto. She is pursuing an undergraduate degree with a specialist in international relations, a major in global health and a minor in political science. She is an editor for the reports produced by the G20 Research Group summit studies team, an analyst for the G7 Research Group summit studies team, and works on compliance research. Alissa is interested in Chinese history and politics as well as China's role in global governance. She was a member of the field team at the G7 Elmau Summit in Germany in 2015 and the G7 Ise Shima Summit in Japan in 2016.
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