BOFIT Viikkokatsaus / BOFIT Weekly
The 9-page communiqué from the G20 summit (September 4–5) in Hangzhou referred in vague terms to supporting economic growth in a challenging global environment. Themes of cooperation expressed in the “Hanzhou Consensus” included opposing protectionism and reviving international trade. The G20 members committed to refraining from deliberately weakening of their currencies to improve their price competitiveness.
The summit naturally put heavy emphasis on international cooperation and the institutions that facilitate it. G20 praised China’s cooperation with the Paris Club of creditors in restructuring public debt. It was hoped that China would join the Paris Club in light of the large debt receivables by China from many developing countries. The touchy issue of China’s steel production overcapacity was moved to a working group backed by the OECD.
Only hours before the summit, China and the US, which together account for 38 % of global greenhouse emissions, announced they have ratified the Paris agreement on climate change. The move put pressure on other G20 members that have yet to ratify the agreement. The climate agreement, finalised last December, requires ratification of at least 55 countries that collectively account for 55 % of global greenhouse emissions to enter into force. With the addition of China and the US, 26 countries have now ratified the agreement. The Paris agreement calls for holding the average global temperature to less than 2 degrees Celsius above pre-industrial times and requires signatory countries to publish their emissions targets and data. In spite of some pressure, the G20 summit participants failed to agree on a timetable for phasing out subsidies on fossil fuels.