Three takeaways from the Hangzhou G20 Summit
For Saudi Arabia, the only Arab member of the G20, as well as the rest of the attendees, there are at least three major takeaways
With summer quickly coming to an end, the global diplomatic pace is set to predictably quicken, with the most important event on the calendar being the G20 summit—the gathering of the 20 most economically important global players--held this year September 4-5, in Hangzhou, China. As is usually the case with such conclaves, the specifics of what is being discussed matter far less than the underlying narratives at play here. For Saudi Arabia, the only Arab member of the G20, as well as the rest of the attendees, there are at least three major takeaways.
Number 1: This is China’s Coming Out Party
With America preoccupied by the most divisive presidential campaign in memory (whoever the victor is will be the least popular newly elected president in the history of modern polling), and with Europe unable to manage anything resembling acceptable rates of growth, all eyes will be on China.
Despite fears of a hard landing, Chinese President Xi Jinping’s regime has so far managed to steer China through rough waters relatively skilfully, with Chinese growth in the first two quarters of 2016 settling at a highly respectable 6.7% of GDP, numbers any European country would kill for. To put China’s extraordinary recent economic rise into its proper context, of all the goods and services produced by the People’s Republic in its history, over half have been produced from 2008 onwards.
Given, the trend rate of growth in the Eurozone is an anaemic 1%--with America chugging along at a more respectable 2%--there is simply no getting around the fact that China, along with its rival India, remain the only two large countries on the planet capable of being the new global economic motor of future growth. China will symbolically use the Hangzhou summit to make the geostrategic point that the long 500-year era of western dominance is definitively over. China’s rise is the reason President Obama of the United States, Prime Minister Modi of India, and President Putin of Russia will all be at the meeting. Simply put, China is too important to ignore.
Number 2: Economics, and not politics, will dominate the G20 gathering
Fully making the most of the host’s prerogative, Xi Jinping will keep the focus of this G20 meeting firmly on economics rather than politics. There are two basic reasons for this. First, with even mighty China slowing, some of the Emerging Markets failing to live up to their promise (Turkey, Brazil, South Africa), Europe a basket case, and America becalmed, there is a pressing macroeconomic need to identify future drivers of global growth—beyond China and India—and try to get the flailing rest to right their paths.
Second, China is certainly trying the change the subject, as its aggressive forays into the South China and East China Seas over the past few years have alarmed local countries such as Japan, the Philippines, and Vietnam, as well as the far-away ordering power, the United States.
Following the recent ruling in The Hague that China’s over-sized claims to nine-tenth’s of the South China Sea are without legal merit—and China’s disgruntled response ignoring the ruling—the last thing Beijing wants is to debate this issue on its home turf, where staunch allies Japan and the US could outnumber and humiliate their hosts. As such, politics will be soft-peddled as much as possible in favour of discussing the world’s economic woes.
Number 3: Never expect much from these international gatherings
Practically, these G20 meetings have assumed greater importance with the relative decline of earlier G8 gatherings, then a club of the previously dominant Western economies. Following on from the Lehman crisis, when it became apparent to all but the most clueless that a club composed of the US, Japan, and the major European powers simply no longer represented global economic reality, the larger but more representative G20 has largely filled its place, as it broadly accurately represents economic power realities in our multipolar world.
That is the step forward for the G20, but sadly there is a major structural step backwards, impeding its effectiveness. It is almost impossible to get a group of 20 people, let alone nations, to agree to anything: We could not get 20 random people from off the street to agree on a common ice cream flavour, let alone anything of importance. So it goes for the G20. At the height of the post-Lehman economic crisis the G20 was highly useful as globally the right people were in the room to make dramatic macroeconomic decisions. In more usual, more normal times, this very cumbersome organisation is largely just a talking shop.
So my advice to the Saudi diplomats attending the Hangzhou conference is simple. Look for my three takeaways and gauge the broader global narratives they represent. But don’t expect much to practically come out of your very long trip.
Dr. John C. Hulsman is the President and Co-Founder of John C. Hulsman Enterprises (www.john-hulsman.com), a successful global political risk consulting firm. An eminent foreign policy expert, John is the senior columnist for City AM, the newspaper of the city of London. Hulsman is a Life Member of the Council on Foreign Relations. The author of all or part of 11 books, Hulsman has given 1500 interviews, written over 510 articles, prepared over 1280 briefings, and delivered more than 470 speeches on foreign policy around the world.