THIS week, world leaders of the G20 gathered in what the Venetian traveller Marco Polo described 800 years ago as the most magnificent city in the world – Hangzhou in eastern China.

            IMPRESSED: The writer congratulates China for its insistence on commitments to action at the G20 summit in Hangzhou.   Picture: REUTERS/Aly Song

 

    The ancient city is renowned for its picturesque lake and flourishing digital economy. It sounds so inspiring that I have decided to take my kids there next month to soak up the ancient Chinese culture.

    This week's G20 meeting took place at a critical juncture for the world's economy, but to help lighten the bureaucratic mood, world leaders were treated to a welcoming show of Swan Lake on the water.

    Even International Monetary Fund chief Christine Lagarde swooned over the Chinese use of technology, precision and coordination, both in the ballet and in devising strategies to right the world economy.

    The ambience was a far cry from the atmosphere eight years ago when the G20 gathered on a cold winter's day in Washington at the height of the global financial crisis.

    As the hosts, China had important lessons to share with the world about how to manage slower economic growth, but ensure that growth is high quality.

    China has struggled most recently with industrial overcapacity, high debt levels and pollution.

    The export-driven and investment-led growth model that once propelled development has reached its limits.

    Its economy is now in transition to a service- and consumption-driven economy with an improved social security system.

    The slowed growth model is referred to as China's New Normal, and the strategies underpinning it are particularly relevant as the fragile global economy is groping for new growth drivers, while protectionism is growing and anti-globalisation is on the rise.

    To add to these woes are the continuing volatility in financial markets, fluctuations in commodity prices, sluggish trade and investment, slow productivity and employment growth, climate change, terrorism and regional conflicts.

    Global trade has slowed from 7 percent each year between 1990 and 2008, to less than 3 percent between 2009 and 2015.

    Last year marked the fourth consecutive year that the global growth rate has been below GDP growth.

   China's solution to its own and the world's lacklustre economic performance is structural reform, innovation and entrepreneurship. According to the US Council on Foreign Relations, the G20 Summit came to the right country at the right time.

   A senior fellow at Yale University, Stephen Roach, estimates China could contribute 39 percent of the world's economic growth this year.

   The G20 was the ideal forum for China to promote new growth drivers as the bloc represents over 85 percent of the world's economy, and two thirds of the global population, making it the premier forum for global economic co-operation.

   Chinese President Xi Jinping made a special call for global economic governance – an important theme of the summit – to increase the representation and voice of emerging markets and developing countries, to ensure all have equal rights and opportunities and equal rules to follow in international co-operation.

   The Hangzhou summit, for the first time, put the issue of development front and centre in the global macro policy framework.

    It was also the first time co-operation was in place to support Africa and the least developed countries industrialise.

    Holding true to its pledges and commitments made at the December Forum on China-Africa Co-operation (Focac), China highlighted Africa's development priorities, and emphasised the importance of supporting industrialisation in developing countries, especially in Africa and the least developed countries.

    The result was the New Industrial Revolution Action Plan, which has identified opportunities for industry in manufacturing and related services.

    Among the issues the summit addressed were the digital divide and the need for better and more affordable broadband access, and the development of small and medium enterprises.

    Improving universal access to affordable clean energy was made a priority with the proposal that natural gas extraction should be promoted as a less emission-intensive fossil fuel.

    What was perhaps the most important development at the summit was that at a time when the G20 risked becoming less relevant, Xi called for it to become an action team instead of a talk shop.

    Specific initiatives and action plans were mapped out, to be reviewed at the next G20 summit in Germany next year.

    In his address to world leaders, Xi quoted an old Chinese saying: "Empty talks will lead the country astray, but hard work will rejuvenate the nation."

    It took China a lot of hard work to lift 700 000 of its own people out of poverty in less than four decades, which is something all countries can learn from. Now it is striving to ensure development is sustainable and those remaining on the margins reap the benefits of the country's growth.

    We may not always agree with China, but its experience in poverty alleviation and economic stimulus provides imperative lessons for us all.

    (From Cape Times on Friday, September 09,2016)