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G20 Rome and Glasgow Climate Change Summits Reflect the Need for China-US Reconciliation and Global Economic Cooperation

October 29, 2021 

Italian police officers patrol in front of the Rome convention center where the G20 meetings will take place starting on October 31, 2021

Will Xi and Putin’s absence make a difference to the G20 and climate change summits?

Topics for discussion at the G20 in Rome include ending coal use, Covid-19 vaccine distribution, a global minimum corporate tax and rising energy prices An EU official doesn’t think the absence of Chinese President Xi Jinping will adversely affect the potential for deals

Finbarr Bermingham in Romeand Robert Delaney in Washington

SCMP, Published: 10:30pm, 29 Oct, 2021

It is a four-day burst of high-stakes diplomacy in which the world’s most powerful leaders will haggle over crucial climate targets, global tax rates, clogged supply chains and vaccinating the planet.

But the build-up has been marked by the palace intrigue over who will attend and what the absence of key figures means for the complex issues at play.

Skipping this weekend’s G20 leaders’ meeting in Rome and the subsequent UN Climate Change Conference (COP26) in Glasgow are Chinese leader Xi Jinping, Russian President Vladimir Putin, Japanese Prime Minister Fumio Kishida and Mexican President Andres Manuel Lopez Obrador.

Xi’s absence comes at a time of heightened tension between China and the United States, along with other G20 members, including Australia and to a lesser extent Britain, Canada and the European Union.

World leaders pledge to cut greenhouse emissions at virtual Earth Day summit

An EU official, speaking under the condition of anonymity, did not expect Xi’s absence to negatively affect the prospects of deals on everything from ending coal use and vaccine distribution to global minimum corporate tax and rising energy prices.

Both China and Russia have “very good negotiating teams here who are quite focused on what they need to achieve for their leaders”, the official said. “They are very active and making lots of comments and proposals, and certainly very much engaged in the process.”

Beijing has dispatched Foreign Minister Wang Yi instead, as was the case during emergency G20 talks on Afghanistan earlier this month.

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Wang was expected be greeted in Rome on Friday by a counter-summit organised by the Inter-Parliamentary Alliance on China (IPAC), a transnational group of legislators demanding that the rest of the G20 adopt a tougher approach towards Beijing.

The group delivered a replica of the Pillar of Shame to the Chinese embassy in Rome on Wednesday. The statue pays tribute to the victims of the bloody Tiananmen Square crackdown and Hong Kong University recently ordered its removal from campus.

Hong Kong, Uygur and Tibetan exiles planned to join lawmakers from Europe, Japan and Australia in an all-day shadow event on the eve of the G20. But Taiwanese Foreign Minister Joseph Wu, who was invited, will address the IPAC event by video link instead.

Wu has been on a whistle-stop tour of Europe – including a last-minute visit to Brussels, during which EU sources said he would not meet with top diplomat Josep Borrell but would meet other foreign service staff.

His presence would have led to the uncomfortable situation of the foreign ministers of the People’s Republic of China and the Republic of China being in the same European city at the same time.

Taiwan Foreign Minister Joseph Wu is greeted by Czech lawmaker Milos Vystrcil in Prague on Wednesday. Photo: AP

But while the sideshow might prove a minor distraction, Wang will be under real pressure to deliver in the negotiating room.

Most Western participants – Australia excluded – are bringing forward their peak emissions and carbon neutrality targets, but China is expected to stick to its original goals of peak emissions by 2030 and carbon neutrality by 2060, said Shi Yinhong, an international relations expert at Renmin University and an adviser to China’s State Council.

“So China will be under great pressure on this issue, no matter who attends,” Shi said.

In a letter published by Italy’s National Associated Press Agency, China’s ambassador to Italy, Li Junhua, wrote that “China expects that the G20 Rome summit will adhere to true multilateralism, promote the spirit of partnership and send a positive signal on improving global governance”.

However, there were some dissenting voices in Rome when Xi bailed on the emergency meeting on Afghanistan a few weeks earlier, “a real true and unique opportunity to show this political will of using multilateralism as a main framework of global security crisis management”, said Teresa Coratella, programme manager at the Rome office of the European Council on Foreign Relations.

Analysts poured cold water, however, on the idea that no Xi would mean no deal on climate.

China is driven by self-interest in the area, said experts on a recent webinar on COP26 and China, and could also be spurred on by competition with rivals.

“The issue of reputation and legitimacy, I think that’s a real battle that’s on the minds of the senior Chinese leaders. They are making a case that their more top down approach to governance is, at minimum, as legitimate as Western democracies,” said Alex Wang, a law professor focused on the intersection of climate issues and US-China rivalry at UCLA, adding that this pressure means they “don’t want to wreck the COP”.

“And frankly, coming from the US, where democracy is not in the healthiest shape, American democracy needs a little bit of a jolt to show that it can really live up to its promise, so again this competition is not the worst thing in the world.”

US President Joe Biden and first lady Jill Biden are escorted to their helicopter before leaving Washington for Italy on Thursday. Photo: AFP

US President Joe Biden will use the occasion to continue his “massive effort” to repair the damage from the unexpected announcement of Washington’s military alliance with Britain and Australia known as Aukus, which frayed US-France ties.

Said Heather Conley, director of the Europe, Russia and Eurasia programme at the Centre for Strategic and International Studies (CSIS): “Hopefully there will be an elevation of French participation in the Indo-Pacific, something that because of how the Aukus announcement unfolded did really not allow us to give France an important role in the Indo-Pacific.”

French President Emmanuel Macron and Biden are set to meet on the sidelines of the event.

The Biden administration’s courting of the G20 both as a whole, and with individual members, strengthens the US position even if Xi were to attend in person, said Daniel Russel, who served as assistant secretary of state for East Asian and Pacific affairs under president Barack Obama.

Russel, now vice-president of the Asia Society Policy Institute in New York, cited several key engagements – including the special G20 meeting on Afghanistan earlier this month – that will help Biden carry his agenda through in Rome.

That meeting resulted in what the White House called a “collective commitment to provide humanitarian assistance directly to the Afghan people” without lifting economic sanctions on the Taliban government or unfreezing and handing back billions of dollars of Afghan international assets.

China and Russia had called for the two latter measures against the wishes of Washington.

In addition, US Treasury Secretary Janet Yellen and Sri Mulyani Indrawati, her counterpart in Indonesia, which will host next year’s G20 summit, issued a statement this week calling for a forum on global coordination to fight the next pandemic and for a new financing facility to keep up with emerging public health threats.

The plane carrying South Korean leader Moon Jae-in arrives in Rome on Wednesday. Photo: EPA-EFE

Acknowledging “a lack of readiness at the country level and a lack of coordination among us” the two said the forum should allow health and finance ministers to more easily “begin the work of facilitating global cooperation and coordinating prevention, detection, information sharing and, if needed, response”.

“If Biden is making common cause with leaders in one of the world’s non-aligned emerging economies on Covid, that’s really an accomplishment,” Russel said, adding that the administration is seen as being more proactive compared to China and Russia.

While Biden has yet to get his climate change initiatives through Congress, his stated goals – including a 50 to 52 per cent reduction in US greenhouse gas emissions from 2005 levels by 2030 – have a more near-term effect than what Beijing and Moscow are offering.

Despite these strengths, Biden still faces obstacles, with the shadow of predecessor Donald Trump looming over these events.

Russel described Trump’s behaviour at last year’s G20 as “operation piss off the world”, adding that the fact Trump retains influence over the Republican Party makes other leaders wary about committing too much to Washington’s agenda.

During a recent panel discussion hosted by the Atlantic Council, a policy planning adviser in the Trump-era State Department said Trump used international forums to “tout some of the economic successes domestically” and the US economic model compared with others.

Before Covid-19 pounded the US economy, said Amanda Rothschild, the Trump administration oversaw economic growth and employment rates that usually outpaced expectations.

“Today, Americans are hurting at the gas pump and in the grocery store, so perhaps President Biden doesn’t have as much leeway to do that,” Rothschild said, adding that economic development is also an important G20 agenda item.

“Today, Americans are hurting at the gas pump and in the grocery store, so perhaps President Biden doesn’t have as much leeway” to trumpet his economic stewardship, Rothschild said, adding that economic development is also an important G20 agenda item.

Activists demonstrate in Glasgow on Thursday in preparation for the start of the UN Climate Change Conference (COP26). Photo: Reuters

Even if Biden’s reputation for bringing polarised parties together to support his agenda will work for him in Rome despite domestic difficulties in recent months, as Russel suggested would be the case, the “true multilateralism” that Ambassador Li spoke of will be difficult to realise.

Speaking on the CSIS panel, Stephen Morrison, a senior vice-president at the think tank, said Biden’s challenge would be to prove that his proposals have more to do with economic health, pandemic relief and environmental sustainability than Washington’s competition with China.

“We’re dealing with a drift into a cold war confrontation with China, and that puts a puts a twist in the perceptions of what the US motivations are in all of these spheres,” he said.

Finbarr Bermingham reports on Europe-China relations for the Post. He joined the newspaper in 2018, initially on the Political Economy desk reporting primarily on global trade, economics and geopolitics. After a decade on the trade beat in London and Hong Kong, he took up the role of Europe Correspondent, moving to Brussels to report from the heart of the EU. Having helmed the US-China Trade War Update, a weekly podcast, since 2019, he is the current host of the China Geopolitics Podcast.

Robert Delaney is the Post’s North America bureau chief. He spent 11 years in China as a language student and correspondent for Dow Jones Newswires and Bloomberg, and continued covering the country as a correspondent and an academic after leaving. His debut novel, The Wounded Muse, draws on actual events that played out in Beijing while he lived there.

Will Xi and Putin’s absence make a difference to the G20 and climate change summits? | South China Morning Post (scmp.com)

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China and the US expected to strike conciliatory chord at G20 summit amid need for global economic cooperation

Chinese Vice-Premier Liu He and US Treasury Secretary Janet Yellen exchanged views about further cooperation under G20 framework in virtual meet This weekend’s leaders meeting could see historic agreement on a long-awaited global minimum corporate tax

Orange Wang + FOLLOW

SCMP, Published: 10:15pm, 28 Oct, 2021

G20 leaders will gather in Rome on October 30-31 in the first in-person meeting of leaders from the world’s biggest economies since the Covid-19 pandemic started. Photo: Reuters

With all eyes on the G20 leaders summit this weekend, China and the United States are expected to strike a conciliatory chord at the multilateral gathering, which could see an agreement on a long-awaited global minimum corporate tax.

During a virtual conference between Chinese Vice-Premier Liu He and US Treasury Secretary Janet Yellen earlier this week, the two sides exchanged views about further cooperation under the G20 framework, Shu Yuting, a spokeswoman for the Chinese commerce ministry, said on Thursday.

“The two sides exchanged views on the macroeconomic situation and related policies in China and the US, including the growth situation, inflation pressures, financial stability, supply chains and other issues,” said Shu. “Both sides believe that the world economic recovery is at a crucial stage, and it is very important for China and the US to strengthen macro policy communication and coordination.”

The video talk between the top economic officials of the world’s two-largest economies on Tuesday was viewed by many observers as another constructive step towards efforts to settle ongoing trade issues ahead of the G20 summit and expected virtual meeting between Chinese President Xi Jinping and US President Joe Biden before the end of this year.

A screen displays international leaders as they take part virtually in an extraordinary G20 leaders meeting on Afghanistan, in Rome, Italy, October 12, 2021. Photo: Reuters

“The G20 summit is coming, the two countries need to sync up with each other on financial areas, including the global minimum corporate tax, which China has also agreed to,” said Wang Huiyao, president of the Beijing-based Centre for China and Globalisation.

G20 leaders will gather in Rome on October 30-31 in the first in-person meeting of leaders from the world’s biggest economies since the Covid-19 pandemic started, although the heads of China and Russia will not attend in person.

Global heads of government are expected to endorse an historic overhaul of international corporate taxes although analysts have warned that any new rules would take a long time to implement.

Prior to the summit, G20 finance and health ministers will gather in Rome on Friday, after G20 finance chiefs and central bank governors on October 13 backed a global minimum corporate tax rate of 15 per cent and other new rules to address tax avoidance by global tech giants.

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“China will continue to uphold the spirit of multilateralism and an open and cooperative attitude, to promote establishing a more fair, stable and sustainable international tax system, and advance the steady recovery of the world economy,” Chinese finance minister Liu Kun said at the meeting on October 13.

Economists said that the impact on the Chinese economy of the new global corporate tax rules would likely be limited, as the country’s corporate income tax rates mostly stand at 25 per cent, higher than the proposed 15 per cent.

COP26 Glasgow, the UN Climate Change Conference: last chance to save the planet?

However, the new rules would likely force leading multinational companies registered in “tax havens” to restructure their global supply chains, which could impact Hong Kong as the city’s effective corporate income tax rate is lower than 15 per cent, said Li Chengjian and Li Ruolin, analysts at China’s Development Research Center of the State Council, an advisory body that is affiliated with the central government.

“However, based on its advantages in location, environment and supporting facilities, [Hong Kong] is also likely to benefit from the adjustment of investment by multinationals,” said the two analysts in a September research note.

Meanwhile, Mofcom’s Shu shed more light on the talks between Liu and Yellen in her press conference. She said that the two sides also discussed financial stability and bilateral coordination on financial market regulation, alluding to the Evergrande debt crisis and Chinese companies listed on US exchanges.

“The two sides have agreed to continue communication at all levels on next steps, and to advance pragmatic cooperation and resolve specific problems from the perspective of benefiting both the two countries and the world,” added Shu. “We have always maintained an open attitude towards dialogue and communication between Chinese and US commerce ministers.”

Despite the positive note struck by Shu, there was a recent escalation in China-US trade tensions after the US Federal Communication Commission (FCC) revoked the license of China Telecom on Tuesday.

Commenting on this topic, Shu said the US move had “generalised the concept of national security, abused state power, maliciously suppressed Chinese enterprises in the absence of a factual basis, violated market principles and undermined the atmosphere of bilateral cooperation”.

“The Chinese economic and trade team has made solemn representations to the US side in this regard,” added Shu.

Orange Wang covers the Chinese macroeconomy, and has many years of experience with China's monetary and fiscal policy moves. He also covered global market and financial news for a long time, with a particular focus on new technologies and their influences on economic growth and society. Before joining the South China Morning Post, Orange worked as a Shanghai Correspondent for ET Net, a Hong Kong financial news agency.

China and the US expected to strike conciliatory chord at G20 summit amid need for global economic cooperation | South China Morning Post (scmp.com)

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