G20 nations to revive recovery via pro-growth strategies, innovation

BEIJING - Less than one month before the kickoff of a Group of 20 (G20) summit, G20 countries are envisioning global economic recovery through pro-growth strategies and innovation.

Since China took over the G20 presidency on Dec 1, 2015, the country has hosted a series of high-level meetings to set the stage for the summit, which is scheduled for Sept 4-5 in Hangzhou, the capital city of east China's Zhejiang province.

Pro-growth strategies

Over the past few months, several meetings of finance ministers and central bank governors have focused on concrete economic and financial problems, laying the foundation for a consensus to be reached at the leaders' summit.

Prior to the Hangzhou summit, three meetings of finance ministers and central bank governors and four meetings of finance and central bank deputies have been held to give advice and suggestions to promote global economic growth.

On July 23-24, G20 finance ministers and central bank governors met in Chengdu, in southwest China's Sichuan province, and issued a statement on the global economic situation, saying they would use "all policy tools" at their disposal to boost confidence in the global economy and promote growth.

"The global economic environment is challenging and downside risks persist," the officials said, citing fluctuating commodity prices, low inflation in many economies and market volatility, as well as conflicts around the globe and the resulting refugee crisis and terrorism, and Brexit.

"In light of recent developments, we reiterate our determination to use all policy tools -- monetary, fiscal and structural -- individually and collectively to achieve our goal of strong, sustainable, balanced and inclusive growth," they said.

The top-level design of structural reform is one of the important fruits yielded at the finance ministers and central bank governors' meetings.

Through China's push, the G20 has pledged to actively adopt measures to promote investment in infrastructure and expand global demand, laying the foundation for mid- and long-term economic growth.

G20 countries have approved the Global Infrastructure Connectivity Alliance initiative and encouraged private investment in infrastructure.

Besides, China has for the first time put forward a fair, inclusive and ordered new international tax system on the G20 platform.

The finance ministers and central bank governors' meetings have set up an inclusive framework for the Base Erosion and Profit Shifting project -- to fight tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations -- as well as governance entities for the implementation of the project.

The meetings also encouraged involved countries and international organizations to help developing countries enhance capacity building in taxation.

After becoming G20 president, China also restarted the International Financial Architecture Working Group to promote international economic governance reform under the theme of pushing emerging markets to play a bigger role in the global financial system.

Innovation

China is working with fellow members to draw a G20 blueprint for innovation-driven growth that highlights the concept of inclusive innovation and a concrete action plan for building a new industrial revolution and the digital economy, which may help shore up people's confidence in global economy.

The consensus on innovation has been a hard-won achievement under the Chinese presidency, especially given the severe market volatility in the first quarter of 2016, said Professor Zhu Jiejin of Fudan University.

"It is not easy for China to stay focused on a long-term agenda when some are calling for short-term stimulus packages," Zhu said.

Swiss Finance Minister Ueli Maurer underlined China's emphasis on fostering innovation and other structural reforms, which, he said, were important to raise productivity and ensure the quality and sustainability of growth.

"In this respect, the G20 Blueprint on Innovative Growth represents an ambitious agenda toward a new paradigm for growth based on knowledge and on new and cleaner technologies," he told Xinhua. "Many countries have, since the global financial crisis of 2008/09, relied too heavily on monetary and fiscal easing."