China and Its Role in G20
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China and Its Role in G20 Internship Paper Adhya Moona Supervisor Dr. Priyadarshi Dash July 2018 China and Its Role in G20 Abstract This paper attempts to understand the role of the Peoples Republic of China in the international forum of G20. This can be seen as an extremely popular topic within the realm of international relations mainly because China has the military and economic might, and a nation that the world and scholars believe is capable of challenging the hegemony of the United States of America. This paper has raised several rhetorical questions and calls out for further research in trying to understand China’s current position in the economic global governance. Furthermore, it is important to address the question of the institutionalisation of the G20 and what all steps can be taken to increase its efficiency and legitimacy. International affairs are at its peak of being contingent in nature especially after the change of the regime in the United States; this has changed the global ball game in various aspects. Whilst discussing the strategies pursued by China during the Hangzhou Summit in 2016, this paper has also shed some light on certain challenges that the nation came across while hosting this summit. This paper has also covered China as a part of BRICS and what relationship it shares with its allies along with the countries in the African continent. Furthermore, the paper attempts to understand the importance of the Chinese Yuan, but due to the ongoing trade war between US and China, this subject needs in-depth research and empirical observation. 2 China and Its Role in G20 Introduction Twenty-first century is not about countries selfishly aiming for their individual economic growth and development but rather a time has come where in nation-states are coming together to attain a consentient goal of achieving “sustainable development”. The term “sustainable development” is quite self-explanatory where it aims to reach the highest levels of growth and development by using the non-renewable resources judiciously and efficiently using the renewable ones. However, in order to achieve such a goal, it requires the joint and sincere efforts of both the developed countries and developing countries essentially the Global North and the Global South. Globalisation has led to the multilateral institutions being more accommodative of the current issues. In the international arena, the G20 also known as the “Group of Twenty” is an indispensable international forum which provides a platform to both the developed and the developing countries to voice their opinions, discuss their concerns and reach unanimous resolutions on matters of global concern and various issues. Whilst the essence of G20 lies in its agenda of promoting economic and financial stability throughout the world, a pattern has been noticed where the past few G20 summits have expanded upon the nature and kind of international issues that are being addressed in the forum. The scope of these issues is vast and wide ranging, they include discussions on women empowerment, corruption, global terrorism, climate change and alike. It is quite interesting to note that China is one of the fastest growing nations in all spheres be it military, economic or technology. This makes worthwhile to study the impact of this growing superpower on the unipolar world order and the challenges it poses to the unipolar world dominated by the United States and the Western European Countries. China is concurrently participating actively in the initiatives led by BRICS and the Asian Infrastructure Investment Bank.1 Moreover, what is more enthralling is that the Trump administration has been actively pursuing the economic policy of “protectionism” and imposition of trade tariffs, which is contrary to the “western liberal values” the States had always had faith in, especially during Obama administration. Simultaneously, the world witnessed the rise of China in the late 1970s onwards, when they adopted the policies of liberalisation and opened up their economy to the world market. Furthermore, Chinese president Xi Jinping had claimed to be the “defender of free trade”. The roles have been reversed and tables have turned. All of these events have made international relations more contingent than ever. China along with the other emerging powers like India, Brazil and South Africa confine them to the Western-led liberal order, and are not looking to subvert the current international order. They are just seeking to reform the world order by demanding greater voice or seat in a forum like the G20. And as per the concept of balance of power within the realm of international relations theory, it is extremely important to research and find out if there are any other developing nation states that serve as a counterbalance to China’s unprecedented growth and attainment of power. Another aspect that is yet to be explored by the scholars of international relations and alike is the impact of nationalism on the performance and agenda-setting of individual countries. Ideally any member country of the G20 should not pursue or advance their national 1 Jorgensen and Strube (2014). 3 self-interests at an international forum like the G20. Furthermore, it is important to understand that what led to the legitimization of China’s role in economic governance. According to Ren (2017), China was praised worldwide for the active role it played in AIIB (Asian Infrastructure Investment Bank) by providing funds to the developing countries to foster their infrastructural development.2 Against this backdrop, this paper essentially focuses on the significance of China’s role in the G20 and highlights the issues and outcomes that were discussed in the Hangzhou Summit of 2016. Literature Review In writing this paper, the various primary and secondary sources of literature include academic journals, books and newspapers. Most notably, the widely-cited articles of Chin and He on China’s strategies and their implications are captured. Gregory (2016) mentioned about China pursuing a very ecologically sustainable plan including schemes like green bonds.3 Huang (2018) mentioned that China wanted to be a fervent participant of the global economic and financial coordination based on a liberal trade order, where China wanted to build a positive external image of it.4 Whilst Alex He spoke more about the “institutionalisation” of G20 as a forum, where he strongly held the view that a permanent secretariat could be a way of legitimizing the body, whereas another scholar Zhu asserted that the informal and flexible character of the body gives it an advantage to actually reach a consensus between the developed economies and the emerging markets.5 So from a broader perspective, G20 as an international body is often questioned on lines of its legitimacy. But when we look at China, a budding leading power, they are trying to make the most of this international platform to assert its global leadership in the economic sphere and eventually in other related military and political spheres too. China, despite being a socialistic economy, is a strong champion of an open world economy, which had also been displayed in the Hangzhou Summit in 2016, where their main aim was to bolster free trade practices that would benefit all the countries. Furthermore, since China had already established a strong economic and financial standing post the Global Financial crisis in 2008 and through AIIB and the Belt and Road Initiative (BRI), they got a lot of support not just from the BRICS nations but from the countries worldwide, which makes it much easier for them to take on a leadership role. Whilst still trying to understand and assess China’s role in global economic leadership, scholars and economists need to further research on the factors that impact the country’s economic standing like the ongoing U.S-China trade war and the value and importance of its currency, Yuan (RMB). G20 as an International Forum Before trying to understand and analyse China’s role in the G20, it imperative to get a fundamental understanding of the structure of G20 and the manner in which it functions. Furthermore, there is an ongoing debate on the institutionalisation of this international forum as it is not a formal organisation. The Group of Twenty comprises of those nations that account for 85 per cent of world GDP and two-thirds of its population.6 The G20 summits are held annually and are attended by the Heads of the member states. As a separate pillar, the Central Bank Heads and the Finance Ministers of the member countries also meet every year. It is important to know that what led to the establishment of this grouping. In aftermath of the Asian financial crisis of 1997, a meeting by the G7 was held in 1999 wherein they agreed 2 Ren (2017). 3 Chin and Dobson (2016). 4 Huang (2018). 5 He (2014). 6 Mustafa (2017). 4 that another forum had to be created which would be more representative than the G7 including the developing countries and emerging markets, and together this flamboyant body would be able to take a call on the international financial issues posing challenge to the twenty-first century.7 Conventionally, the United States assumed the role of a leader within the G20, as they had introduced open markets and free trade practices. However, due to Trump’s policy of protectionism and taking a stance of isolationism, the G20 has become a different ball game all together. This has led to Uncle Sam take a backseat and made G20 a symposium being driven by an emerging market like China. The forum like G20 is extremely important and highly relevant to this century considering the fact that it represents the perspectives of both global south and north and covers a wide range of issues ranging from social, economic and environmental.