The summit meeting of the 20 leading industrialized and emerging economies (G20), taking place in September in the Chinese city of Hangzhou, is receiving a great deal of attention and raises high expectations worldwide.
The international financial crisis has dragged on for almost eight years, and yet the world economy is recovering more slowly than expected. New challenges are arising before old problems can be solved.
There are growing geopolitical risks, global trade is steadily declining and the opponents of globalization are attracting attention in the name of protectionism and isolationism. The Brexit comes as a huge shock to Europe and the world, creating an additional burden on an already fragile global economy.
Faced with these challenges, each country is searching for suitable alternatives. Still, political coordination among the major economies remains inadequate, the side effects of fiscal and monetary policy are leaving a negative impression, and new growth factors are not yet taking effect. As a result, the world economy has lost a significant amount of momentum. The greatest challenge with which individual countries are confronted is how to restart global growth. It will also be the decisive issue at the upcoming G20 summit.
China is largely on the same wavelength as Germany in terms of its concepts for addressing the crisis and overcoming difficulties.
As the first regulatory mechanism for the international economy, the member states of the G20 represent two-thirds of the world's population, 60 percent of worldwide land mass, 80 percent of global trade and 85 percent of gross domestic product (GDP).
With a view to the various interests of the individual regions and populations of both developing and developed countries, this body pursues the principle of unanimous consultation. In doing so, and in promoting the development of the global economy, collaboration and cooperation, it performs a task that is becoming more important every day.
Since China assumed the rotating chairmanship of the G20 at the end of last year, it has already made great efforts to make the summit meeting a success and achieve palpable results. China has already hosted four Sherpa Meetings, three meetings of finance ministers and of the heads and deputy heads of central banks, and dozens of meetings involving all kinds of task forces. A broad dialogue was sought with various representatives of industry and trade, youth and women's groups and the working world, and every effort was made to promote a spirit of consensus among the important economies, and to impart a new momentum to the world economy by bundling all forces.
Four topics were defined for the conference: methods of innovative growth, optimization of the global economic and financial order, promotion of international trade and investment, and impulses for large-scale, interconnected development. This is the first time that issues relating to development in the context of worldwide macroeconomic policy will play such a prominent role at a G20 summit.
China is largely on the same wavelength as Germany in terms of its concepts for addressing the crisis and overcoming difficulties. Both countries advocate strengthening economic growth by means of general political measures, such as structural reforms, innovation and investment. Both sides stress the role of the real economy and hold the view that a lasting recovery of the world economy cannot be based solely on fiscal policy stimuli and quantitative easing. When it comes to innovative growth, both countries view steps like the revolution in new industries and the digitized economy as the key to triggering innovation from a technical, systemic and economic standpoint, and to developing a blueprint for innovative growth in the world economy.
In China, innovation has already assumed a central role in the government's development strategy. By 2020, investments in research and development will amount to 2.5 percent of GDP, and science and technology will contribute to 60 percent of economic development. In 2015, the list of 2,500 companies with the strongest investments in research and development included more than 300 Chinese companies. Chinese firms are gradually shedding their image as equipment manufacturers and increasingly developing their own brands. Especially the IT sector, which through economic, technical and trade-related innovation, has developed into a key factor and beacon of economic growth in China in recent years.
The volume of payments processed through China Mobile this year amounts to $180 million (€160 million) and is expected to increase by 20 percent annually until 2018. Payment processors like AliPay have already gained a foothold in Germany. Even before Amazon considered the idea of delivering goods via unmanned aircrafts, the Chinese firm SF Express carried out tests in this direction. WeChat is currently China's largest platform for spontaneously exchanging messages, and it was a step ahead of Facebook, WhatsApp and Snapchat in developing many new functions that have become popular worldwide.
If we turn our attention to Germany, this country presents itself as the world's fourth-largest economic power, a country that assumes a strong position in the production industry and a leading role in "Industry 4.0." Its achievements in preserving the stability of the economy in the eurozone are immense. The manner in which the Chinese and Germany economies complement each other to their mutual benefit in the field of classic economic and trade relationships and investments has long been a model of global economic cooperation, and in the area of innovation, China and Germany have already widely opened the door of cooperation.
During Premier Li Keqiang's visit to Germany in 2014, both sides published their "Framework for Action in German-Chinese Cooperation: Pursuing Innovation Jointly," and they made a commitment to strengthen growth through reforms and innovation, and to make both countries more competitive. Last year, the German education ministry approved a China strategy that aims to promote diverse cooperation in science, research and innovation.
The strategic connection between "Made in China 2025" and Germany's "Industrie 4.0" is undoubtedly even more promising and auspicious. It enables both side to kick off a new industrial revolution together and form new business models. As a result, even more efficient, economic, environmentally conscious and individual production methods can be implemented, in order to achieve even greater and more lasting economic growth.
When Chancellor Merkel attends the G20 summit in Hangzhou, it will be her 10th trip to China since coming into office. This makes her the European leader with the most visits to China under her belt, and it effectively expresses how close and mutually trustful relations between China and Germany are.
As the two countries to successively chair the G20 in 2016 and 2017, China and Germany will combine forces to ensure that the G20 mechanisms are implemented successfully to contribute to the sustainability of the agenda and the recovery of the global economy.
In the course of globalization of the economy, exchange and cooperation among individual countries has continued to deepen, leading to a conflict in which one is inextricably connected to the other. Under such circumstances, adversities can only be overcome if we all see ourselves as partners and help one another accordingly.
China is dependent on the world, and the world cannot get by without China. There is every indication that this summit will send a message of confidence and give new momentum to growth of the world economy.
Shi Mingde is the Ambassador of the Peoples’ Republic of China in Germany. To contact the author: [email protected]