Nov 24, 2014

China - APEC and ASEAN may produce more concrete results than G20

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Soon after the Asia-Pacific Economic Cooperation (APEC) summit concluded in Beijing earlier this month, the two-day G20 Summit also ended in Brisbane, Australia.

Compared with the APEC's meeting orchestrated by the host China with a strong position, with leaders jointly announcing Beijing guidelines to formally launch the agenda of the Free Trade Area of the Asia Pacific (FTAAP), the G20 leaders agreed with a Brisbane action plan of 800 new measures to boost the global economy, but the outside world mostly believes the G20 goals are actually "mission impossible."

The G20 declaration looks splendid. The leaders of the world's leading economies expressed hope for the global economy to grow additional 2.1% within five years, equivalent to increasing the global economic scale by additional US$2 trillion within five years. But the World Economic Forum has pointed out a crisis of insufficient global leadership to resolve the world's social and economic problems. The British prime minister, David Cameron, published an article in which he noted that global trade talks have stalled while the Ebola outrebak in West Africa, conflict in the Middle East and Russia's illegal intervention in Ukraine are all contributing to a dangerous backdrop of instability and uncertainty. He believes red warning lights are once again flashing on the dashboard of the global economy. Britain's central bank also lowered its next year economic growth forecast from 3% to 2.9%.

The outside world is pessimistic about the economic goals stated at the G20 Summit. Its concrete measures include the establishment of a global infrastructure center to coordinate and match different conditions in each nation in a bid to push for balanced global economic growth. These measures are either too vague or face heavy obstacles. They are far less concrete than China's announcement at the APEC forum that it would use US$50 billion to set up the Asian Infrastructure Investment Bank (AIIB) and invest US$40 billion in setting up a Silk Road fund for its new international trade initiatives.

Similarly, the Doha Development Agenda (DDA) orchestrated by the World Trade Organization, aiming to promote global trade liberalization, has not proceeded smoothly as each country has concerns over its own interests. The DDA also advocated a plan to crack down on tax evasion by multinational companies — a move that would surely ease global income imbalance and help fuel the finances of each country, but which is far more easily said than done.

Moreover, the G20 Summit reiterated its pledge to resolve the challenges from abnormal weather patterns arising from global climate change, the first time the energy issue has been placed on the agenda by demanding the energy ministers of each country hold meetings to discuss possible resolutions. However, just as with promoting trade liberalization, each country has different concerns over its own interests, making consensus all but impossible.

On the surface, the agenda of the world's leading economies from the G7 to G20 has embraced included all kinds of key issues, but its members are — by definition — chiefly rich and developed countries, at a stage of development and with concerns an interests quite different from developing countries. The results produced by every G20 summit therefore are difficult to compare with those of the APEC summit and even other regional economic organizations such as the ASEAN (Association of Southeast Asian Nations) Plus Three Summit, which are setting the tone and the pace for the direction of development in the most populaous part of the world.

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