China needs to lead in new multi-stakeholder world

By Frank-Jürgen Richter

Global Times, August 8, 2017

The public seems only to notice the G when the media announces the world’s wealthiest nations are meeting once more in some town or another. The 2017 annual G20 – including the US, China, Argentina, Australia, India, Germany and so on – recently met in Hamburg, Germany. Previously the heads-of-states and their many ministers had met in Hangzhou, China; Serik, Turkey; Brisbane, Australia – and originally in 2008 in Washington, DC, though their finance ministers had met annually following the 1998 Asian financial crash.

These headline-grabbing meetings of heads-of-state are important because the leaders are accompanied by a phalanx of advisors who also conduct planned and informal meetings that keep the world’s economies synchronized. These policymakers are in the same towns at the same time.

These meetings attract protesters, raising costs for local organizers, who must pay for police or army protection, but in general the host cities benefit strongly in their hospitality sectors, as they host top leaders, assistants and security guards. Generally over 10,000 delegates attend.

There are those who argue that the G8 and especially the G20 have become obsolete as they offer too many competing visions of the proper role of governments. The arguments were first mooted by US political scientists Ian Bremner and David Gordon in 2011, who noted that there are too many local management issues that are not aligned to a single world order that was originally sought by the G20 and G8 decades ago. Indeed, today, one may agree that as populist movements have become more demanding, governments acquiesce to their demands and one finds global powers emasculated by local issues. This is quite evident in the US and to an extent throughout Europe as its member states oscillate between policies. The strong economies seem to be more inclined to “multi-multilateralism” as coined by American political scientist Francis Fukuyama, wherein nations adopt multi-diverse and sometimes contradictory stances.

Surely Asia is becoming the globe’s leading economic force – but its nations are not fully aligned, nor are they all at the same level of economic development. However China is strongly asserting a form of leadership via its Belt and Road initiative, and formal meetings like ASEAN, or the Shanghai Cooperation Organization. Economic and social development is a slow process aided sometimes by cross-border meetings – such as the “16+1” platform of Central and Eastern European countries plus China that discuss economic cooperation in infrastructure, high-tech and green initiatives. Populists demand instant solutions that might be granted in part by a government, but leaders do not engage in the much more difficult issues like arguing that better education costs money. The results of such policy changes take a long time to come to fruition. It is not easy to convince the mass of people to hope for a better future when in fact many in government wish to be contrarian and extend government debt via the financial markets. But we all know borrowing money we cannot pay back is the way to ruin.

The 2017 Edelman Trust Barometer states the general population’s trust in all four key institutions – business, government, NGOs, and media – has declined broadly, a phenomenon not seen since Edelman began tracking trust among this segment in 2012. Perhaps it is time that business leaders took over. Many CEOs guiding their multinational firms understand the nuances of different cultures, but even their skill does not fit them well for diplomatic life. US President Donald Trump provides an example – liking the idea of being a president but not liking constant pressure in the public eye: national leaders have no privacy. Again, in the US, the appointment of a new president requires about 4,000 administrative posts to be changed, of which over 1,200 are senior leaders requiring Senate approval after the president’s nomination. But many US vacancies in these positions threaten to impede essential government functions. With a lack of trade commissioners multi-billion-dollar mergers may stall, tax and budget policy may go unwritten, securities fraud may go unpoliced, labor complaints may go unaddressed, and the crucial midlevel relationships that bind the US to foreign allies may deteriorate.

Chinese government officials have said they are not, as a nation, inclined to geographic expansion. History has illustrated this, and their future does not include this. However, China is globally the second most powerful economy and the first, the US, is apparently uninterested in its own national economic well-being as it is entering the government summer recess with nothing tabled to address its own $1.1 trillion budget that it needs by September 29. If this is not agreed, the US government has to partially shut down and global financial markets will shudder. That unwelcome externality will threaten China slightly.

In 1951 American writer Isaac Asimov’s Foundation was published. In this science fiction narrative he proposed that psychohistory – a combination of history, sociology and mathematical statistics – could make general predictions about the behavior of large groups of people. That concept was a wild prediction of the future power of computers – but even today, big data analysis in combination with deep artificial intelligence is not close to Asimov’s utopian view. Without science fiction as a reality we need regular meetings between leaders to speak openly about the state of each nation and their hopes for their futures. By expressing views openly, clashes of civilizations may be avoided by multistakeholder discussions. We need to return to the G20 or something akin to that group and avoid the nemesis of G-Zero.

This is not an easy issue to solve. Rather than enlarge the G20 I think we must grant China a stronger voice: Chinese President Xi Jinping has already expressed his desire to champion globalization which will play a key role in further developing and guiding the G20, and China’s Belt and Road initiative will support this aim.

The author is founder and chairman of Horasis, a global visions community.