When finance ministers of the Group of 20 (G20) were holding a meeting in Washington, D.C. in November 2008, George W. Bush, then U.S. President, showed up unexpectedly to join the talks on how to deal with the global financial crisis ignited by the subprime mortgage crisis in the United States.

The member countries agreed that the crisis had become global and international cooperation was required to bring it under control. A month later, initiated by Britain and the United States, the ministerial meeting was upgraded and the first G20 leaders' summit was convened in Washington, D.C.

Ten years have passed since the first G20 Summit. Although the world economy has recovered to some extent, it is still far from shaking off the impacts of the global financial crisis.

"Old growth drivers are yet to be replaced by new ones and various risks are rapidly building up. The new round of technological revolution and industrial transformation is triggering profound changes, the wealth gap keeps widening, and social contradictions are growing. The world economy is facing another historical choice," Chinese President Xi Jinping said at the 13th G20 Summit in Buenos Aires, capital of Argentina, on November 30.

Xi proposed that the member countries should enhance cooperation and coordination to steer the world economy into the right direction. He pledged that China would continue to make its own contribution.

Chinese President Xi Jinping attends the 13th G20 Summit in Buenos Aires on November 30 (XINHUA)

Victory amid difficulties

After difficult negotiations, the two-day summit, themed Building Consensus for Fair and Sustainable Development, wrapped up with a joint statement that recognized the importance of multilateralism. Although the statement skipped any reference to the dangers of trade protectionism, many international relations and trade experts still regard it as a victory for the summit, given the complicated international situation and the evident divergence among the G20 members.

In November, the Asia-Pacific Economic Cooperation Economic Leaders' Meeting ended without a communiqué, a first in the regional forum's history. So the G20 joint statement was a good and symbolic gesture, Xu Feibiao, an associate researcher with the China Institutes of Contemporary International Relations (CICIR), told Beijing Review. "Moreover, the document also contains agreement on reforming the World Trade Organization (WTO) to improve its functioning," Xu added.

The global economic scenario has been unstable with trade tensions between the two giant economies, China and the United States, escalating for months. Disagreements on trade and other issues, and a naval confrontation between Russia and Ukraine in November, have added to the disharmony in the G20. Some countries are also facing a dismal situation at home. France recently faced its worst riots in over a decade, triggered by protests against high taxes and the rising cost of living.

"Against such unfavorable backgrounds, the difficulties to reach a joint statement also mounted. So the document can be viewed as a victory," Han Liqun, an associate researcher with the CICIR, told Beijing Review. "Like a flag fluttering in the wind, it symbolized that the G20 members would still like to sit down together to negotiate and discuss for a better future."

Han said the summit provided a platform for communication through bilateral or multilateral meetings during the two days. "President Xi had a dinner meeting with U.S. President Donald Trump and they agreed to avoid an escalation of trade restrictive measures. The truce in the trade war between the two countries played a role in the signing of the joint statement," he added.

Xu found another silver lining. "Although different countries have different goals regarding WTO reform, the agreement heralded that the curtain has been lifted," he said.

The WTO faces multiple problems, according to Xu. Amid the rapid development of the new economy as well as new business models in the information age, some of its rules have become outdated and ill-suited to e-commerce, data flow and other contemporary international economic and trade issues. The long dispute settlement process has added to the inefficiency.

Among the divergences in the G20, the five BRICS countries of Brazil, Russia, India, China and South Africa struck a note of solidarity. They declared the common stand of developing and emerging economies to strengthen unity and cooperation and safeguard common interests. After an informal meeting on the sidelines of the summit, the five issued a communiqué, agreeing to support the rules-based multilateral trading system represented by the WTO and to ensure transparent, non-discriminatory, open and inclusive international trade.

The G20 members also reached some agreement on tackling the downward pressure the world economy has been facing since the second quarter of this year, Xu pointed out. The Organization for Economic Cooperation and Development has cut its 2019 and 2020 global growth forecast to 3.5 percent, compared with this year's 3.7 percent. The financial market remains volatile, weakening consumption and investors' will.

"The G20 Summit called on countries to use fiscal policies more flexibly to promote structural reforms and policy coordination. The members agreed to continue to strengthen coordination for global financial system construction and macroeconomic policies to prevent risks to the world economy," Xu said. "The summit also asked the International Monetary Fund and the World Bank to strengthen debt monitoring and capacity building for low-income countries, and the Financial Stability Board to explore crypto assets risk regulations."

Brazilian President Michel Temer, Russian President Vladimir Putin, South African President Cyril Ramaphosa, Chinese President Xi Jinping and Indian Prime Minister Narendra Modi (left to right) attend an informal meeting of BRICS on the sidelines of the G20 Summit in Buenos Aires, Argentina, on November 30 (XINHUA)

China's role

Although the G20 reached a joint statement and achieved other results, their divergences were obvious, indicating that global economic governance faced an increasingly serious deficit. The situation was different from 10 years ago, when all countries were under the shadow of the global financial crisis. Today there is a clear division in the economic development of different countries. Among the developed economies, the United States has emerged as the leader while Europe's growth remains sluggish. Among the developing economies, India is experiencing high-speed growth while countries such as Turkey face a crisis. The differences in economic performances have made policy coordination difficult.

Xi proposed a four-point solution. He called on the G20 to stay committed to openness and cooperation and uphold the multilateral trading system. The members were urged to forge a strong partnership and step up macro policy coordination. He also asked them to stay committed to innovation and create new momentum for growth. Finally, he suggested win-win cooperation to promote inclusive global development.

"Over the past decade, we have braced difficulties together, navigated the global economy out of recession and brought it back to the track of recovery and growth. Ten years later, let us work with the same courage and strategic vision and ensure that the global economy grows on the right track," Xi said at the summit.

Xi's proposal was targeted to resolve the deep-rooted problems of the global economy, said Han. For example, the world economy lacks incentives. Win-win cooperation and inclusive development that would see everyone sharing the development pie is an answer.

Together with most other countries except the United States, China has been shouldering its responsibility in environmental governance. It has clearly stated that it will continue to follow the spirit of the Paris Agreement to address climate change.

China has been the growth engine and stabilizer of the world economy, Xu said. The Chinese economy remains the single largest contributor to world GDP growth, contributing 30 percent. It has lowered global production costs with high-quality but cheap industrial products and is also the largest market in the world.

Besides, China has continued to open up wider. The first China International Import Expo (CIIE) in Shanghai in November indicated that China will continue to deepen market-oriented reform, protect intellectual property rights, encourage fair competition and expand imports. The CIIE will be held annually to further open up China's market.

In the last decade, China's role in the G20 has changed with time. From 2008 to 2010, China contributed to halting the spread of the global financial crisis. Then with its rapid development, China has had a bigger say in the organization and put forward its own approaches in global economic governance. The solidarity of the G20 was damaged in the past two years. So China needs to do more to build consensus among the members, Han said.

Copyedited by Sudeshna Sarkar

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