China expects further co-op, opening-up, reform at G20

Leaders of the Group of 20 (G20) economies gathered in the northwestern Russian city of St. Petersburg Thursday to discuss the world's current economic and financial situation.

In the face of a sluggish recovery in developed countries and fluctuations in emerging economies, the leaders will aim for further cooperation on the economic front.

Differences among members on political and security issues have strained the spirit of cooperation ahead of the summit.

However, the world still needs cohesion at the summit, which is expected to focus on the common interests of ensuring the global economy's stead recovery, rather than their political differences.

China, the world's second largest economy, hopes the summit will push forward cooperation, opening-up, reforms and further development.

ECONOMIC COOPERATION

Since the first G20 summit in 2009, leaders of the world's major economies have shown unprecedented courage and vision in promoting development, which has gradually established the summit as the top forum for global economic cooperation.

Prior to the summit, Chinese President Xi Jinping described the G20 as a "major forum for international economic cooperation" that would push the international community to strengthen coordination on macro economic policy.

Nevertheless, the summit has been distracted by a number of political factors, especially Washington's PRISM spying program and the Syrian crisis.

Although G20 members account for some 90 percent of the global economy, the group should not act as the UN and be involved in political and security disputes, but cooperate for "growth and employment" to cure the ailing global economy.

Chinese leaders have made clear that China's best contribution to the global economy is to ensure its own economic development and enhance economic competitiveness through structural reform.

Thanks to the dividend of reform, China's economic development will become steadier in the future.

In an ever-interconnecting world, it is indispensable for countries to coordinate their economic policy, which is the main aim of the G20.

The recent financial turbulence in emerging markets was partly caused by the U.S. Federal Reserve's move to taper down quantitative easing. As this kind of policy change has obvious spillovers, G20 members should communicate with each other effectively to guide the market.

OPENING UP AGAINST PROTECTIONISM

Over the past year, China has been frequently affected by protectionist moves in such fields as iron and steel, photovoltaic products and telecommunications.

Some countries still have an ingrained mindset to impose trade barriers and protectionism.

According to a report released earlier this week by the European Commission, about 150 new trade restrictions have been introduced by European Union (EU) countries in the past year, whereas only 18 existing measures have been dismantled. A total of almost 800 new measures have been identified since October 2008.

Global efforts to combat rising trade protectionism needed to be reinforced to help shield the fragile economic recovery, the report said.

In order to safeguard a free, open and non-discriminatory multilateral trade system and realize mutually beneficial development, Chinese leaders have urged all countries to oppose protectionism.

China's call is not only a response to its own concerns, but also a commitment to global competition and cooperation.

EU Trade Commissioner Karel De Gucht shares the same feelings on trade protectionism, an important point on the G20 summit's agenda.

"The G20 agreed a long time ago to avoid protectionist tendencies because we all know these only hurt the global recovery in the long run," De Gucht said.

IMPROVE ECONOMIC GOVERNANCE

Urging and pushing the International Monetary Fund's (IMF) quota reform was once an important achievement of the G20 summit.

"It should continue to increase the representation and voice of emerging markets and developing countries," Xi said in a recent written interview with media from Turkmenistan, Russia, Kazakhstan, Uzbekistan and Kyrgyzstan.

"In particular, it should speedily implement the quota and governance reform plans for the IMF, complete on time the IMF's quota formula adjustment and the next round of general quotas review by January 2014, and review the basket of currencies for special drawing rights as scheduled for 2015," Xi said.

The initial results of the IMF's reform have found developing countries' enhanced say not only brings new thinking for development, but also gives them a voice within the IMF.

In a report prepared for this summit, the IMF said emerging economies should introduce intervention measures when the market runs into disorderly fluctuations.

Besides the governance reform, advanced countries' domestic structural reforms also have been an agenda item of the G20 summit for years.

This round of disturbances in emerging markets was triggered by the looming taper of quantitative easing monetary policy of the Federal Reserve but deep structural problems in emerging markets were the root cause. Thus only reform can ultimately consolidate and enhance their sustainable growth.

Among the emerging markets, China undoubtedly leads in structural adjustments.

In addition to the need for emerging markets to vigorously push reform, developed countries' sovereign debt and financial sustainability are also a key global economic risk. This is also a crucial priority of reform for the G20.

Also, G20's operating mechanism needs to be adjusted.

Xi has noted: "Right now, the G20 is in a transition from a crisis-management mechanism to one that is dedicated to long-term economic governance."

MAKE MORE CONTRIBUTIONS

Development has been a priority of the G20 summits. Leading up to the St.Peterburg summit, Russia has called for discussions on issues such as infrastructure, long-term investment and financing and human resources development.

"...the G20 should strive to be a development partner for developing countries. It should fully harness its own advantage and demonstrate greater political commitment to pushing for solutions to global development issues. It should forge more effective global partnerships on development, and mobilize more economic resources to tackle a greater number of development challenges," Xi said.

In this regard, China has been making contributions, with its "heart" and "ability". By the end of 2012, the number of China's infrastructure assistance projects in developing countries has exceeded 1,100.

Most of China's aid is aimed at long-term productivity, which is very important for these countries' poverty reduction and growth.

China believes the deep problem for the global economy is an imbalance in development, and the basic cure for the world economy is to narrow the South-North development gap to achieve balanced development.