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G-20 Balances Chinese, Western Concerns

by Saibal Dasgupta

   BEIJING --

   After strenuous efforts during backroom negotiations running into
   months, China has managed to get the Group of 20 nations to pledge an
   end of protectionism in global trade and investments, which has been
   severely hurting its economy. But it will be a long time before China
   will reap any benefit, because the G20 gave its members until 2018 to
   implement the pledge.

   "We extend our commitments to standstill and rollback of protectionist
   measures till the end of 2018, reaffirm our determination to deliver on
   it and support the work of the WTO (World Trade Organization), UNCTAD
   (United Nations Conference on Trade and Development) and OECD
   (Organization for Economic Cooperation and Development) in monitoring
   protectionism," the G20 said in a joint communique after a two-day
   meeting between leaders of 20 wealthier nations.

   Even this success came at a price, after Chinese negotiators agreed to
   address complaints China encourages unfair competition by subsidizing
   steel production. Western countries have been complaining that
   subsidized steel from China was hitting the global industry and
   resulting in job losses. The United States responded by imposing a 500
   percent duty on Chinese steel.

   The G20 gave legitimacy to the complaint with the joint statement
   saying, "We also recognize that subsidies and other types of support
   from government or government-sponsored institutions can cause market
   distortions and contribute to global excess capacity and therefore
   require attention."

   Property rights protection

   The joint communique came at the end of a two-day meeting of heads of
   states from 20 wealthier countries at the Chinese lake city of
   Hangzhou. Those attending the meeting included U.S. President Barack
   Obama, Russian leader Vladimir Putin, British Prime Minister Theresa
   May, Indian Prime Minister Narendra Modi and South African leader Jacob
   Zuma.

   China has also been demanding the G20 adopt a motion on innovative
   growth and sharing of technologies to bring about global development in
   an equitable manner. Once again, Beijing won superficial success
   because Western negotiators made sure their concern over intellectual
   property rights was voiced. Developed countries have been fretting
   about IPR theft by Chinese companies, who obtain the results of
   expensive research without paying for them.

   The G20 agreed to take forward the agenda of innovative growth while
   saying, "In furtherance of the above, we emphasize the importance of
   open trade and investment regimes to facilitate innovation through
   Intellectual Property Right protection, and improving public
   communication in science and technology."

   China's President Xi Jinping speaks during the opening ceremony of the
   G20 Summit in Hangzhou in eastern China's Zhejiang province, Sept. 4,
   2016.

   Policy reform

   G20 members, who constitute the world's 20 wealthier nations, agreed to
   seek long term policy solutions for global economic weaknesses instead
   of relying on short term measures like fiscal spending and monetary
   easing.

   "We are confident that, through joint efforts, we are able to steer the
   world economy back to a robust, sustainable, balanced and inclusive
   growth track," Chinese President Xi Jinping said at a news conference
   at the end of the deliberations. "Facts have told us that the old road
   of simply relying on fiscal and monetary policies is a dead end," he
   said.

   The Chinese leader said the G20 agreed to continue reform of the
   International Monetary Fund and the World Bank to give more voice to
   developing countries and emerging markets. Reforming these
   institutions, which are perceived to be dominated by Western countries,
   has been a major demand from Beijing.

   The G20 members agreed to promote trade multilateralism and work
   against protectionism, and developed a guideline for global investment,
   the first framework rule for cross-border investment.

   "We will work harder to build an open world economy, reject
   protectionism, promote global trade and investment, including through
   further strengthening the multilateral trading system and ensure
   broad-based opportunities through and public support for expanded
   growth in a globalized economy," the G20 governments said.

   The world leaders also agreed to bring more transparency in energy
   markets "to better reflect the changing realities of the world's energy
   landscape, and shaping an affordable, reliable, sustainable and low
   greenhouse gas (GHG) emissions energy future while utilizing energy
   sources and technologies."