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China key driver for global economic recovery

(People's Daily Online)

15:49, June 14, 2012

The seventh meeting of the Group of 20 (G20) heads of state will be held in Los Cabos, Mexico from June 18 to June 19. This is the first G20 summit to be held in an emerging market country, and it has attracted world attention. People’s Daily thus interviewed some experts and scholars on the international economic situation and the role of the summit in global economic governance.

Global economy still faces many uncertainties

Qu Xing, director of the China Institute of International Studies, said that the three economic pillars of the Western world have serious structural problems, which are as follows:

With a national debt-to-GDP ratio of over 100 percent, the United States is considering a third round of “quantitative easing” to export its crisis, which is bound to affect the global economy.

The contradiction between a common currency and the financial sovereignty of eurozone nations is hard to eliminate, and the eurozone is deeply divided on the issue of fiscal austerity versus further economic stimulus. Furthermore, the upcoming elections in many E.U. countries in the next two years will affect continuity in economic policies, and many established measures may not be implemented effectively.

Japan’s public debt-to-GDP ratio has surpassed 200 percent, and last year’s triple disaster — earthquake, tsunami, and nuclear meltdown, caused enormous damage to the already weak Japanese economy, making its recovery time even longer.

G20 is gradually increasing its influence on global governance

The G20 summit mechanism has effectively prevented the international financial crisis erupted in 2008 from dragging the world into the abyss of the worldwide economic depression and promoted the process of reform of the international financial system. It is the highest platform for the economic powers to discuss about the world's economic problems. It also established the principles to promote the economic development and create job opportunities and changed the unfair rights to speak and vote on global economic governance.

Zhang Haibing, executive director of the Institute for World Economic Studies under the Shanghai Institutes for International Studies, said that the G20 has developed into a core mechanism of coordinating global economic affairs from a temporary crisis coping mechanism. The international community's attention to G20 has reflected significant achievements on crisis response, policy coordination and global economic governance of the group. At present, the position and influence of G20 on global economic governance are steadily rising.

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