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China and the G20:
From a Think Tank Perspective
By Wang Wen, Executive Dean, Chongyang Institute for Financial Studies, Renmin University of China
An abridged version of this article appeared as "China: The Key to G20 Success" in G20 Turkey: The 2015 Antalya Summit,
edited by John Kirton and Madeline Koch, with guest editor Güven Sak
Published by Newsdesk Media Group and the G20 Research Group, 2015
For a downloadable electronic version, click here.
The G20 has become the most important global governance institution. When the 2008 global financial crisis affected so many countries, leaders from 20 major economies around the world met in Washington DC to discuss how to respond. Through coordinated cooperation, the G20 not only contributed to solving the crisis, but also matured into an institution for global economic and financial governance. At G20 summits, leaders from developed countries and developing countries freely exchange their ideas on the most critical issues in the global economy. The G20 is increasingly significant in building a platform for coordinating different countries' economic policy so that the global goal for economic growth can be realised.
In recent years, as the biggest developing country and a powerful emerging economy, China has started to play a leading role in the G20. That China will host the 2016 G20 summit may mean the country would have more ambition and capability in constructing international institutions. China has made great efforts to promote the G20 in many aspects, and it would even do more in leading the G20. One important contribution that supports China's more active performance is its think tanks. As their work on G20 studies and global governance proves to be valuable for China, the world may take more notice of the importance of Chinese think tanks in the future.
Since 2008, China has been taking part in many areas of the G20's work, such as reform of international financial institutions (IFIs), financial supervision and development. Its contribution falls into in three areas.
First, China has effectively adjusted its policies at home and abroad to promote the recovery of the global economy, which was the G20's most important goal at the start. After the crisis, China rapidly took various measures to deal with it. China came up with a large-scale economic stimulus package and, along with other G20 members, provided $1.1 trillion at the 2009 London Summit. China added $50 billion to the International Monetary Fund (IMF) to boost the recovery and international financial stability. China's strong support helped the world economy gradually improve. As the world's second largest economy, its stable and continuous economic growth in itself is a significant contribution to global economic health and balance.
China's contribution also involves infrastructure. As infrastructure investment is important for bringing development and economic growth to most countries, China has taken substantial action to solve global infrastructure investment problems and promoted the G20's agenda on this issue. It combined its national strategy with the global need on infrastructure investment. It advocated establishing the New Development Bank (NDB) with its BRICS colleagues of Brazil, Russia, India and South Africa, with an authorised $100 billion in capital. It established the Asian Infrastructure Investment Bank (AIIB) to create a new institution to promote infrastructure investment. Although its establishment raised some suspicions, the AIIB nonetheless has the potential to contribute significantly to the global economy, especially for developing countries.
China's policies have been adjusted to better meet the G20's common goals. On the eve of the 2014 G20 Brisbane Summit, China with the United States released the Sino-US Joint Statement on Climate Change. China committed to make its carbon dioxide emissions peak by 2030 and to increase the use of non-fossil fuels to account for 20% of its total energy consumption. Given that China is developing rapidly, this commitment demonstrates China's determination to respect its global responsibility while maintaining economic development.
Second, as a critical power in making the G20 work effectively and efficiently, China is involved in IFI reform, especially the IMF. China's resolve to reshape global financial governance and change the imbalance in power established as a result of World War II has gained support from many emerging economies and developing countries. Several decades later, countries that were once weak have now surpassed some countries to become more important in the global economy. The United States has refused to ratify the reforms, thanks to domestic politics. But China persists. China and other emerging economies understand the importance to increase their voice and vote at the IMF. Consequently, IMF reform is always a hot topic at G20 summits, especially since China raised it on the eve of the London Summit. In addition, given the NDB and the AIIB, both supported by China, it is possible that a new regime can offer alternative choices. China has gained valuable experience in using the G20 to accelerate the pace of IFI reform.
Third, China has tried to provide creative and practical ideas to the G20. Zhou Xiaochuan, Governor of the People's Bank of China, came up with the concept of a "super-sovereign currency", which was discussed at the London Summit. A super-sovereign currency offered a new landscape for the international monetary system, removing barriers caused by nation-state sovereignty and creating a new kind of world currency for international reserves and trade settlement. Disconnected from sovereignty, the world currency would keep currency values stable. Zhou included concrete and detailed suggestions on how to create the currency and its corresponding system. Although the idea was criticised for being idealistic, it was a positive example of China's ability to provide ideas to the world and indicated its readiness to participate in global governance in addition to participating in G20 summits.
The G20 will likely receive more Chinese wisdom over the next few years, since China will host the G20 summit in 2016. It is an opportunity to hear various voices from China.
Chinese think tanks cannot be overlooked in the short history of China's G20 involvement. Many prominent Chinese think tanks have been engaged in research on the G20. However, a new type of Chinese think tank has begun to play an irreplaceable role in the deeper relationship that China is constructing with the G20. The Chongyang Institute for Financial Studies at Renmin University of China (RDCY) is one such think tank that has focused on G20 studies for some time. RDCY's work and its efforts to inform the Chinese government's decisions on the G20 illustrate how these new think tanks can influence China's policies.
RDCY has achieved impressive success in leading G20 studies and organising G20-related conferences in China. It has been selected as the leading think tank for T20 2016 by the Chinese authorities. Its success is due to three factors: having a strategic view on the G20, producing first-rate studies on the G20 and constructing a network of G20 think tanks. These three pillars guarantee RDCY's search for a unique path to increase its influence in shaping China's G20 policies.
RDCY's strategic view on the G20 is reflected in many ways. The G20 is one of its primary research areas since the institute was established in January 2013, although at that time, G20 studies were less popular in China than today. However, given the post-crisis situation and the Chinese domestic economy, RDCY recognised that as an influential global governance institution the G20 could be a potential platform for China to get involved in international affairs and reshape world order. The G20 could provide valuable opportunities for China to participate in making international rules and executing soft power. Therefore, Chen Yulu, President of Renmin University of China and Dean of RDCY, suggested internally that China should host the G20 summit in 2016. Afterwards, the first G20 Think Tank Summit organised by RDCY in August 2013 explored the post-crisis global governance system and analysed the major challenges facing all G20 countries. The conference issued the first global G20 think tank statement. The second G20 Think Tank Summit in September 2014 met with even greater success. RDCY invited Jimmy Carter, former President of the United States, to deliver the keynote speech. The conference linked China and the G20 closer, making China's voice clearer while letting China know what kind of G20 the world expected. Thanks to RDCY's strategy, this work built a good foundation at the level of think tanks for China to hold the G20.
RDCY continues to produce high-quality research on the G20. The institute is farsighted in proposing significant suggestions on the agenda and developing a systemic early-stage preparation path for the G20. RDCY has published a biweekly electronic newsletter on the G20 for some time. It collects and analyses the newest reports about the G20 from global think tanks. In addition, RDCY has in place a fixed and experienced team focusing on G20 studies, unlike most other Chinese think tanks. The G20 biweekly and RDCY's research reports are sent to various government departments that provide direct assistance for decision makers to know about the G20 and develop official plans.
On 2 April 2015, RDCY published a well-received special edition of the G20 biweekly that collected G20 thematic proposals for the 2016 G20 summit from 43 think tank experts globally. RDCY also organises symposiums and seminars, inviting many domestic scholars and related officials to attend. These activities offer many primary materials for think tank research. Indeed, RDCY's G20 studies remain grounded in practical research. They rely on various ways to generate its own thinking and analysis, the value of which could gradually become more apparent.
Perhaps the most impressive work done by RDCY is its long-term work to construct a network of think tanks in G20 members. In fact, this is a difficult but meaningful task for China's G20 presidency. RDCY has played a leading role in connecting different scholars and related officials from all G20 members, especially from think tanks. It will extend the G20 think tank cooperation network globally. In addition, at the third annual G20 Think Tank Summit in July 2015, about 500 individuals attended the opening ceremony, which included representatives from top think tanks around the world as well as top officials. The attendance of officials from the Ministry of Foreign Affairs at the conference meant it was officially recognised. In particular, one important advantage of the conference is that it bridges officials and academics, filling a gap for China in its G20 preparations. The G20 think tank network led by China has improved in this context.
RDCY pays close attention to maintaining good relationships with the leading think tanks in G20 members. It has laid an excellent foundation in constructing the network. Now, with China a member of G20's troika of incoming, current and past chairs, it engages in frequent communications with think tanks in Australia and Turkey, and, looking toward the future, Germany. In November 2014, RDCY became the first Chinese think tank to organise the G20's pre-summit conference in Australia, with the G20 Research Group and Griffith University. The conference drew attention from government, media and the public, widely enlarging RDCY's influence. Its success led to good communication between Australia and China, and along the way, RDCY gained much useful information from Australia on G20 preparation and organisation. Connections with top think tanks in the key countries are just like the hubs in the network, playing critical roles.
To sum up, RDCY is a very active new type of think tank in China. Its strategic view, solid research and developing G20 studies network may influence China's important decisions on the G20. RDCY could potentially play a greater role in China's G20 preparation process.
The important role that Chinese think tanks are playing in the 2016 G20 summit affairs deserves to get noticed by the world. Chinese think tanks should also make themselves and what they have done more well known. The 18th Conference Report of the Communist Party of China put forward the construction of a new type of think tank with Chinese characteristics. This decision has promoted the rapid development of Chinese think tanks. The domestic relatively free rights to speak and to improved financial conditions promote the prosperity of Chinese think tanks. The best time for Chinese think tanks is coming. The 2014 Global Go To Think Tank Index published by the University of Pennsylvania calculated that China already has 429 think tanks, second only to the United States with 1,830. Today's think tanks in China still have much room to develop as the country continues to face challenges that need their support.
However, although the opportunities are abundant, Chinese think tanks face three major challenges. If these remain unsolved, they may obstruct the think tanks' further development.
The first challenge is that an effective communication and collaboration system between think tanks and government does not yet exist. Government does not take full advantage of the ability of think tanks to tackle issues that it is unable or should not do, such as evaluating policy results and conducting public diplomacy. Without communication with government, think tanks are unaware of government needs and have difficulty advising government on policy making. If this situation does not improve, Chinese think tanks will lack motivation over the long term. After all, influencing government decisions is the final goal of most think tanks.
The professionalisation of Chinese think tanks is inadequate. There are few real experts dedicated to research in think tanks and most 'think tank experts' are found in universities. Sometimes the research produced by think tanks is too academic to fit well with policy making. Because the difference between think tanks and pure research institutes is not clear, an increasing number of institutes call themselves think tanks although their work is no different than before. Moreover, the functions of think tanks are always underestimated and limited to research only, whereas a professional think tank should include media communications and even public relations as well as research. Thus accelerating the professionalisation of Chinese think tanks requires an articulation of their role and functions. Meanwhile, the whole think tank industry in China is not institutionalised, so there are no professional standards or evaluation system. All these factors create a major challenge.
With China's increasing involvement in international affairs, another weakness is the low level of internationalisation of Chinese think tanks. Only a few think tanks include internationalisation in their development strategy, and not many participate in international conferences. Even when they sent representatives to attend, few valuable views were offered to the rest of the world. For example, on Climate Finance Day on 22 May 2015 at UNESCO headquarters in Paris, more than 250 enterprises and 1,300 representatives from different countries attended with only one Chinese think tank representative. Chinese think tanks may lose many important opportunities and occasions to express China's points, because of their lack of internationalisation. They should thus improve their ability to participate in international affairs.
In conclusion, this article consists of three parts. The first two parts focus on the overall picture of to the G20 and the efforts of Chinese think tanks in the process. The final part discusses the current situation of Chinese think tanks. China is trying to reshape or influence world order, and the G20 is gaining importance for China. As China will host the 2016 G20 summit, it needs the firm support of think tanks to achieve success. The new type of think tank, such as RDCY, has been doing related work. China's think tanks will certainly make a difference to the 2016 summit, regardless of its preparations or the results it generates. Chinese think tanks have high expectations, but the opportunities and challenges facing them should also be examined. Their limited relationship with government, low professionalisation and low internationalisation are major challenges. If Chinese think tanks want to play a more critical role, there is quite a long road ahead.
Wang Wen is Executive Dean of the Chongyang Institute for Financial Studies, which was founded in 2013 at the Renmin University of China. He is also Standing Director of World Socialism Research at the Chinese Academy of Social Sciences, and a Visiting Professor at the Liberal Arts School at the Capital University of Economics and Business in Beijing. He previously worked as Chief Op-ed Editor and editorial writer at Global Times. His latest book, Phantom of Powers, was published in 2013.
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