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Prospects for the BRICS and G20 Summits through China's Contribution
By Professor John Kirton
People's Daily Online, March 22, 2013
This year offers an attractive opportunity for Chinese leadership in global governance, for the benefit of both China and the broader world. The opportunity arises at the forthcoming summits of two new, informal, restricted membership international institutions of leading powers in which China has a central place. The first is the BRICS of Brazil, Russia, India, China and South Africa, whose fifth summit takes place in Durban, South Africa, on March 26-27th. The second is the Group of Twenty (G20) whose eighth summit takes place in St. Petersburg, Russia, on September 5-6.
In both bodies China is a founding member with a fully equal institutional place, a rank as the second most powerful member and an influence that few can match and none can ignore. Indeed, neither body would exist today if China had not seen them from the start as useful clubs for shaping a new world order to protect itself and the global community in the intensely interconnected, complex, uncertain, twenty-first century world.
The BRICS and the Durban Summit
In the BRICS China is the primus inter pares power. It wields more relative capability in gross domestic product (GDP), population, territory and foreign exchange reserves than any other member and does so to a substantial or overwhelming degree. It alone can ensure the success of the prospective new BRICS development bank. This was an initiative from India at the last BRICS summit it hosted in Delhi in March 2012, and is the one that will be the centrepiece achievement of the Durban Summit and determine the success or failure of that summit as a whole. China alone has the financial capacity in its foreign exchange reserves or elsewhere to determine if the BRICS bank will be launched with sufficient capital to make a major difference in a world dominated by the established, western-controlled, now underfunded World Bank in Washington and many regional development banks around the world. China can thus lead the BRICS development bank and the BRICS as a whole away from being a closed, inward-looking club designed to benefit only its members, into an outward-looking one oriented to assisting developing countries, which have long been China's colleagues in the Group of 77 and other forums.
China's privileged material position similarly positions it for leadership on the other key issues the Durban Summit will address. These include moving toward new regimes for currency swaps and financial safety nets, stock exchange integration and currency clearing in the international trade among the BRICS countries themselves. It also embraces cooperation among BRICS countries on customs clearing, to facilitate trade and counter the exchange of drugs and other harmful things.
China is similarly central to the broader array of social issues the Durban Summit will address. Among them is developing the institutional capacity of the BRICS to address health issues of key concern for citizens inside and outside the club. This agenda embraces fostering regimes on intellectual property tilted more toward protecting poor people and patients than pharmaceutical firms with established property rights, preventing and controlling chronic non-communicable diseases, and putting health first as a driver of development.
China further has a critical role in guiding the BRICS approach to the pressing security issues of the day. In the field of new soft security, China is central is having the BRICS cooperate to enhance cyber-security and combat cyber-espionage, and to put in place a more broadly shared regime to govern the internet and information and communications technology in the twenty-first century world. In the field of traditional hard security, if China can continue to cooperate with India to lessen tensions over their longstanding border dispute and similarly reassure a Russia wary of intrusions into its thinly populated, poor regions near China, it would be a big boost for further BRICS cooperation across the board. Generating a consensus among BRICS countries on questions of international intervention in countries such as Libya in 2011 and Syria now could pave the way to a global solution that would save many innocent lives. And China along with Russia is essential in determining whether India and Brazil secure the enhanced status in the United Nations Security Council that they badly want.
Most broadly, China will face great expectations from its BRICS colleagues and the broader world to play a major leadership role. Both will remember the skill with which China hosted the third BRICS summit, at Sanya in 2011. It was at that summit that President Jacob Zuma of South Africa, the BRICS newest member and host of the Durban Summit, arrived at a BRICS summit for the first time. And Durban will be the first major outing on the world stage for China's new leadership, especially as President Xi Jinping will be the freshest face among the BRICS leaders there. With this fresh face could come fresh approaches that could well determine the future of the BRICS institution and the outcome of the key global issues that it will confront. As the other new arrival at a BRICS summit is Russian president Vladimir Putin, China's neighbour and the host of the G20's St. Petersburg Summit six month after the BRICS's Durban one, the bonds forged between the two could set the stage for a new burst of cooperation in global summitry writ large.
In making the Durban Summit, President Xi has had a strong start. He has just publicly proclaimed a broad, bold vision of the BRICS as a key forum to generate strong, sustainable and balanced growth, to strengthen global economic governance and to foster democracy in international relations as a whole. He views the BRICS as an important force to promote world peace as well as partnership and development with Africa, including through the BRICS Leaders–Africa Dialogue Forum that the Durban Summit will pioneer. To back his proclamations, he is putting in place the high-level diplomatic ground work with his first trip abroad taking him to Russia, Tanzania and the Republic of Congo as part of his visit to the BRICS summit itself.
The G20 and the St. Petersburg Summit
In the bigger G20 summit, China also has a decisive role and a historic global leadership opportunity as a result. This is true whether China chooses to exercise its power and potential through well-timed support for others' initiatives, quiet bridge building between coalitions, direct protection of its own specific interests or broader initiatives for the good of all. As described in my book G20 Governance for a Globalized World, China has effectively performed all such roles at G20 summits in the recent past. On the G20's development agenda it has built bridges between the advanced members of the G20 and the developing ones inside and beyond the club. China has protected its own interests by ensuring that the G20 action against tax havens favoured by the French could proceed, but in a way that preserved the position of Macau and Hong Kong.
In the immediate response to the 2008 global financial crisis, China joined its G20 partners in providing the massive discretionary fiscal stimulus that together arrested and reversed the plunge in the global economy in record time. Through central bank governor Zhou Xiaochuan China suggested a major increase in the allocation of special drawing rights at the International Monetary Fund (IMF), which was thus a key component of the success of the G20's second summit, held in London on April 1-2, 2009. China subsequently provided its fair share of the overall $1.1 trillion new package of financial support to restore global growth. It made this investment for the greater global good before it received its reward in the form of the enhanced voice and vote at the IMF that it and its rapidly growing BRICS partners sought. Most recently, China, with its world leading foreign exchange reserves, has provided substantial support to the new firewall fund that the IMF has created to help the embattled Europeans cope with the lack of confidence caused by their distressed debt. Through many leadership roles, China has effectively induced the members of the G20 to reform the voice and vote at the IMF to give all rising powers the greater place that they now deserve.
For the forthcoming St. Petersburg Summit in September, China and its G20 partners face formidable challenges. They range from overcoming fiscal drag from political paralysis in the United States through the continuing debt problems in recession-ridden Europe, to even larger ones in a long stagnant Japan. These challenges are compounded by the recent sharp economic growth slow downs in Brazil and India. In this context China's recent return to robust growth makes it the leading locomotive to pull the global economy as a whole toward strong, sustainable and balanced growth. It also enables China to contribute effectively to most of the standard items on the G20 summit agenda that the Russians have continued at St. Petersburg: the Framework for Strong, Sustainable and Balanced Growth; jobs and employment; international financial architectural reform; strengthening financial regulation; energy sustainability; development for all; enhancing multilateral trade; and fighting corruption.
China's opportunities for leadership are even greater in regard to the new two priorities that the Russian host has added: financing for investment as well as government borrowing and public debt sustainability. In regard to the first, finding new sources of finance for investment, China's skill in giving birth to a new BRICS development bank at the BRICS Durban Summit will be a big down payment in making Vladimir Putin's and the broader G20's St. Petersburg Summit a success.
Conclusion
To fully seize such opportunities for global leadership through BRICS and G20 summitry, China will need more than merely mobilizing its formidable material power and the skill and experience in G20 diplomacy it has acquired from the past. It will also need to enrich at home and abroad all three growth-generating components that the Russians have wisely identified as the St. Petersburg Summit's theme: quality jobs and investment, effective regulation, and trust and transparency. In doing so it will do much to assist and assist its still formidable partners in the United States and Europe that is standing by their side in addressing the great challenges that they face at home and in the now intensely interconnected world as a whole.
Biographical Note:
Professor John Kirton is the co-founder and co-director of the BRICS Research Group and the founder and co-director of the G20 Research Group at the University of Toronto in Canada. He is the author of G20 Governance for a Globalized World, recently published by Ashgate and available at http://www.ashgate.com/isbn/9781409428299.
Source: People's Daily Online