By LINGLING WEI,VALENTINA POP and MARK MAGNIER, Wall Street Journal
HANGZHOU, China—China rallied the Group of 20 around a call to use new levers to revive global growth, but the group’s nine-page statement was short on concrete steps and on signs that Beijing would lead by example.
Chinese President Xi Jinping said leaders would put guidelines on global investment in place and explore structural overhauls, acknowledging the need for measures beyond low interest rates to prop up the global economy amid growing resentment of globalization’s effects.
Leaders from U.S. President Barack Obama and British Prime Minister Theresa May to Mr. Xi highlighted in news conferences and meetings the need to improve the lives of ordinary citizens to garner support for increasingly unpopular trade deals. “There must be more growth and growth must be more inclusive,” the International Monetary Fund’sChristine Lagarde said at the meeting’s conclusion.
The appearance of a Beijing-backed consensus hid the drubbing China took over its steel exports, which have flooded global markets and become a symbol of trade imbalances that have fed resentment across continents.
The gathering offered Mr. Xi his best opportunity yet to exercise leadership on global economic affairs, an ambition on display throughout China’s G-20 presidency this year, which culminated in the two-day summit that ended Monday evening. Mr. Obama, soon to leave office, sees his major trade initiatives floundering and Europe is divided by Britain’s decision to leave the European Union.
In opening the summit, Mr. Xi urged leaders from major economies to be an “action team” rather than a “talk shop.” Ahead of a spectacular gala performance Sunday night, he pointed to the logo the host country designed for the summit—a stylized bridge consisting of 20 lines in light green—as Beijing’s way of promoting international cooperation.
“The Group of 20 is like a bridge, bringing together people from all over the world,” Mr. Xi said.
The pomp and pageantry in Hangzhou was splashed across Chinese state media for the length of the summit and looked likely to bolster Mr. Xi’s image domestically as a great statesman.
For foreign delegates, the event reinforced a sense of China’s power, including its capacity to nearly empty a city of nine million people. Vacation offers and encouragement for residents to leave turned Hangzhou into a ghost town of empty streets for the meeting.
Behind closed doors and in news conferences, China faced pressure from its guests. According to one European official, tensions over the communiqué adopted by G-20 leaders revolved around steel from China, which produces half the world’s supply. “If you’re looking for blood, steel overcapacity was the issue,” the official said.
In the end, the G-20 endorsed setting up a global body monitoring steel overproduction—a result the official said was Europe’s main achievement at the summit.
“If any country can have an impact on overcapacity, it’s China,” said Tristram Sainsbury,project director at the G20 Studies Centre of Australia’s Lowy Institute for International Policy. “Fundamentally they can solve this problem without any other country being involved.”
China has begun to close some steel factories, with more expected next year. In the days before the summit, China started dismantling one of its largest blast furnaces. Mr. Xi offered no new cuts at the meeting, repeating China’s pledge to cut 100 million to 150 million tons of steel, or around one-third of its excess, over the next five years.
As several leaders took the floor to speak about steel on Monday, China sought to minimize references to the issue and to cast it as a global one, the European official said. The final communiqué, like others at earlier G-20 gatherings, didn’t single out China, saying, “We recognize that excess capacity in steel and other industries is a global issue which requires collective responses.”
The leaders said they would resist protectionist strategies and avoid competitive devaluations of their currencies.
The G-20 meeting also generated notable political activity, mostly out of the public eye.
In Hangzhou, Mr. Obama and Russian President Vladimir Putin met for the first time in nearly a year, though Mr. Obama said they “haven’t yet closed the gaps” on a deal to reduce violence in Syria. Japanese Prime Minister Shinzo Abe called for stability in regional waters that his country and others contest with China. Mr. Xi discussed North Korea with South Korean President Park Geun-hye.
While China called for more global economic cooperation, easier market access and painful structural overhauls to put the global economy on a stronger long-term footing, at home it has made slow progress on closing down smokestack factories and liberalizing its own market.
Going into the G-20 summit, many Western officials said they were looking for evidence China would back up its promises of better access for foreign businesses after stepping up protection of Chinese companies and industries through tighter cybersecurity and other rules.
Skeptics of China’s intentions to make good on its pledges pointed to the lack of bilateral trade pacts between China and the U.S. and Europe.
“China is a status quo actor in international economics,” said Derek Scissors, a scholar at the American Enterprise Institute in Washington, who specializes in the Chinese economy.
China itself has been a huge beneficiary of reduced barriers and liberalization since it joined the World Trade Organization in 2001. As its demand for quality foreign goods rises and Chinese companies increasingly venture abroad, officials realize that the stakes are high for China, too, amid rising global protectionism.
“If China can pursue her own market reforms and opening, then China would have the credibility and real stature to lead the world,” said Fred Hu, chairman of Primavera Capital Group, a private-equity firm.
Ding Xuedong, chairman of China Investment Corp., the country’s giant sovereign-wealth fund, said he has noticed a rising tide against globalization. “We’ll need to improve communication with other countries and enhance transparency,” he said. Write to Lingling Wei at email@example.com, Valentina Pop at firstname.lastname@example.org Mark Magnier at email@example.com. Source: Wall Street Journal