China Cautious Toward G-20 Summit

Publication: China Brief Volume: 8 Issue: 21

According to Chinese Foreign Ministry Spokesperson Qin Gang, Chinese President Hu Jintao will attend the G20 Economic Summit to be held in Washington DC on November 15. At a press conference on November 4, Spokesperson Qin announced that President Hu has accepted President George W. Bush’s invitation to attend the economic summit with 19 other leaders to address the international financial crisis. The invitation to China for a seat at the table demonstrates the critical role it is expected to play in possibly reshaping the international financial charter. The agenda will likely include a progress evaluation of the international response in stemming global financial risks and more importantly to reach an agreement on a principled approach to reforming the international financial order (Ming Pao, November 5).

According to data released on October 27, 2008, by the National Bureau of Statistics (NBS), a Chinese government agency, the share in value of China’s economy in the global economy has risen significantly from 1.8 percent in 1979 to 6 percent in 2007 (Ming Pao, October 28). The same report stated that China’s annual average GDP growth rate was 9.8 percent from 1979 to 2007, which is much higher than the world’s growth rate of 3 percent in the same period (Ming Pao, October 28). The report indicated that differences between China and the world’s developed economy in terms of GDP have been reduced in this period. In 2007 China’s GDP reached almost $3.3 trillion, which is equivalent to 23.7 percent of the GDP of the United States, 74.9 percent of Japan, and 99.5 percent of Germany, with China in fourth place (Ming Pao, October 28).

Gao Hengzhi, a researcher in the International of World Economics and Politics at the Chinese Academy of Social Sciences, the premier government think tank in China, said that President Hu’s decision to personally attend the meeting demonstrates China’s willingness to examine possibilities on how it can cooperate in finding a solution to the international financial crisis. However, on more technical issues like diverting funds for an international bailout plan, China will exercise much more caution (Ming Pao, November 5).

In an interview with a council member of the National Development and Reform Commission (NDRC), a macroeconomic management agency under the State Council, the council member stated that while China needs to be vigilant to the emerging internal problems, it needs to also remain confident, outward looking and pay closer attention to external changes. The council member added that China must vigorously examine how its investment policy can be adjusted to stimulate domestic demand and strengthen next year’s economic growth (Nanfang Daily, November 4).

Gao said that from a long-term perspective, the G-20 countries should be promoting "financial multi-polarity." However, there are major obstacles to this idea because there is still a wide disparity between the United States and other countries’ level of economic development. Therefore, Gao believes that the G-20 summit will only be the beginning of the type of multilateral cooperation that is needed to restore balance in the international financial order (Ming Pao, November 5).

After attending the G20 economic summit, President Hu will travel to Peru to attend the 16th Summit of the Asia Pacific Economic Cooperation (APEC) and make a whirlwind trip across Latin America that will include stops in Costa Rica, Cuba, and Peru before making a final trip to Europe to visit Greece before heading back to China.