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Made in China G20 and its geoeconomic significance

By       Message Pepe Escobar       (Page 1 of 4 pages)     Permalink    (# of views)   4 comments

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Reprinted from RT


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What has just taken place in Hangzhou, China, is of immense geoeconomic importance. Beijing from the start treated the G20 very seriously; this was designed as China's party, not the declining West's. And much less Washington's.

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Outlining the agenda for the discussions, President Xi Jinping went straight to the point also geopolitically, as he set the tone: "The outdated Cold War mentality should be discarded. We urgently need to develop an inclusive, comprehensive, cooperative and sustainable new security concept."

Compare it with Xi's so-called "four prescriptions"-- "innovative, invigorated, interconnected and inclusive"-- necessary to re-boost the world economy.

Acting like the de facto World Statesman-in-Chief, Xi then proceeded at the summit opening to introduce a quite ambitious package -- the result of excruciating planning for months in the run-up to Hangzhou.

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The package is designed to propel the global economy back to growth and at the same time install more made in China-friendly rules for global economic architecture and governance.

The target could not be more ambitious: to smash mounting anti-trade and anti-globalization sentiment, especially across the West (from Brexit to Trump), simultaneously pleasing his select audience -- arguably the most significant gathering of world leaders in China's history -- yet at the same time, in the long run, aiming at prevailing over US-led Western dominance for good.

That's a predictable but still remarkable turnaround for China, which benefited like any other nation from globalization -- with growth over the past three decades mostly propelled by foreign direct investment and a deluge of exports.

Yet now geoeconomics has reached an extremely worrying zone of turbulence. Since the end of the Cold War in 1989 -- and of "history" itself, according to academic simpletons -- it's never been so dire. Greed led globalization to be "defeated" by inequality. In a nutshell, low inflation -- due to global competition -- led to the proverbial "expansionary" monetary policies, which inflated housing, education and health care, squeezing the middle class and allowing unlimited wealth flowing to a 1 percent minority of asset owners.

Yet even in de-acceleration, China was responsible for more than 25 percent of global economic growth in 2015. It remains the key global turbine -- while at the same time carrying the self-attributed burden of being the representative of the Global South in global economic governance.

China's outbound investment surged 62 percent to a record US$100 billion in the first seven months of 2016, according to China's Ministry of Commerce. But there's a problem, which economists have dubbed "asymmetric investment environment": China remains more closed than other BRICS members to foreign investment, especially in service sectors.

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BRICS Building

The BRICS-dedicated meeting on the sidelines of the G20 was not spectacular per se. But that's where Xi detailed China's G20 agenda and set the tone for their 8th annual summit in Goa next month. According to a report by the BRICS Economic Think Tank at Tsinghua University in Beijing, China must improve these multilateral connections to "have a bigger say and push the West to step back on international rule making."

It's a long shot -- but it's already in progress. Zhu Jiejin, from Fudan University in Shanghai, sums it all up; "BRICS is a test of China's new philosophy in international relations -- although the fruit will take a long time to ripen."

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Pepe Escobar is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia (more...)
 

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