President Hu Jintao, at the invitation of ROK President Lee Myung-bak, attended the fifth G20 Summit in Seoul, the Republic of Korea from November 11 to 12, 2010. Ma Zhaoxu, spokesman of the Chinese delegation, introduced President Hu’s participation in the summit.
I. Overall comment on the summit
The world economy is recovering slowly but uncertainty remains. The G20 is shifting from a crisis response to a long-term economic governance mechanism. It is against such two special backgrounds that the Seoul Summit is held. Through consultations and cooperation among all the participants, the Summit achieved positive results.
First, all members promised to strengthen the G20’s role, carefully handle the emerging risks and challenges in the international financial and economic sectors and boost the strong, sustained and balanced growth of world economy. The solemn promises of G20 leaders in the Seoul Declaration sent a positive signal to the international market and boosted confidence in economic recovery.
Second, G20 leaders pledged to continue to reform the international financial institutions and transfer at least 6% of quota shares of the International Monetary Fund (IMF) to emerging markets and developing countries as well as the undervalued countries. It is thanks to their political determination and impetus that the reform of international financial institutions can achieve historic progress within such a short period of time. It verified the reality of rising economic power of emerging markets and developing countries.
Third, G20 leaders for the first time made development issues one of items on their agenda and passed the Seoul Development Consensus and the Multi-Year Action Plan. All parties agreed to make development issues a long-term theme of G20 Summit, which marks a new level of G20’s recognition of and input in the development issues. It will help gather consensus, narrow down South-North development gap and alleviate world economic imbalances fundamentally.
Fourth, G20 leaders formulated a series of new measures and steps on strengthening international financial supervision and opposing trade protectionism based on the achievements of previous summits, which will help promote the healthy and stable development of world economy in the long run.
As a key issue of the G20 Summit, world economic imbalances were discussed intensively. When preparing for the Seoul Summit, relevant countries proposed to give top priority to solving the current account imbalances and develop a quantitative index. Many G20 members, including China, do not agree on the proposal. World economic imbalances, as a reality for many years, have complicated and profound structural causes, including the unbalanced South-North development, unbalanced international division of labor and unbalanced monetary system. Current account imbalance is a manifestation of world economic imbalances instead of the cause. To correct the imbalance we must tackle the root causes rather than the symptoms. In the spirit of seeking common ground while putting aside differences, G20 members well handled the issue when preparing for the Summit.
During the Summit, some countries believe the G20 should develop a package of “reference guide” to judge the external imbalances of an economy and set up a deadline to complete formulating the package. Since it requires numerous special and technical preparations, many members, including China, proposed that experts should make full discussions first and report their mature suggestions, if any, to the meeting of Finance Ministers and Central Bank Governors of G20. Participants in the Summit accepted the proposal and agreed the G20 task force of “strong, sustained and balanced growth framework” should be responsible for drafting the guide with the technical support of the IMF and other international organizations. Finance Ministers and Central Bank Governors will discuss the progress next year. This decision takes into account concerns of all members and does not prejudge the results. It is a correct action of G20 members to seek mutual benefit and win-win outcomes.
II. President Hu’s participation in the summit
China participated in the preparations for the G20 Summit in a positive and constructive attitude. President Hu made important remarks on the world economy and the strong, sustained and balanced growth framework, the development issues and the reform of international financial institutions during the Summit.
President Hu stressed that G20 should carry forward the spirit of helping each other, stick to the mutually beneficial and win-win partnerships and make continuous efforts to boost the strong, sustained and balanced growth of world economy in the attitude of being responsible for the history and the future and from the perspective of safeguarding the interest of entire mankind.
President Hu said that all G20 members shoulder the responsibility of boosting development. We should build a more equitable and more balanced new global partnership for development, carefully control the spillover effects of G20’s macroeconomic policies on developing countries and form a new development concept of promoting growth through development and resisting risks through cooperation.
President Hu noted that the reform of international financial institutions is a long and dynamic process and the quota shares and voting rights reform is only the starting point. We should continue to follow the fair and merit-based principle of selecting the management of international financial institutions, push the International Monetary Fund to strengthen monitoring and early alarming of capital flow, balance the relations between financial supervision and financial innovation, government intervention and market regulation, solve the systemic and fundamental problems of international financial system and at the same time improve the international monetary system.