Fran O'Sullivan: Global leadership needed for prosperity

Five takeaways from the two-day G20 summit from Theresa May’s modesty to Jack Ma’s chutzpah.
US President Barak Obama and Chinese President Xi Jinping ratified the Paris accord on climate change. Photo / AP
US President Barak Obama and Chinese President Xi Jinping ratified the Paris accord on climate change. Photo / AP

Xi Jinping leads the call to end protectionism

As G20 host, Xi was naturally in the box seat at the high-powered economic summit.

US President Barack Obama could hardly lead the charge given the two candidates fighting for election to president don't have the bottle to even support the Trans-Pacific Partnership (TPP). The US previously argued TPP would enhance US economic supremacy and "contain" China's ambitions.

Now Xi is driving the call for a more open economy, yet another sign of how badly "the West" has dropped the ball in the post-Global Financial Crisis era.

"Eight years ago ... the G20 pulled the world's economy away from a cliff to the track of stability and recovery. Eight years later, the world economy is again at a critical moment," Xi said after the summit.

Xi's clear-sightedness will be welcomed by International Money Fund chief Christine Lagarde, who has been chivvying leaders of the G20 nations to tread cautiously.

The global economic outlook for 2016-17 has worsened thanks to Brexit.

Although world output is still projected to increase by 3.1 per cent this year, there are risks.

Xi is obviously on the money.

But global leadership - not simply from the host nation - is needed to sustain prosperity.

Theresa May and honey traps

We probably won't ever find out whether British Prime Minister Theresa May did undress under her bed clothes at her sumptuous hotel in Hangzhou. The charming city on the West Lake has major importance in China: Mao used to holiday there.

The Telegraph reported May and her entourage had been advised: "If you feel uncomfortable about people seeing you naked, you should change under your bedclothes."

Theresa May speaks at a press conference held at the end of the G-20 summit in Hangzhou. Photo / AP
Theresa May speaks at a press conference held at the end of the G-20 summit in Hangzhou. Photo / AP

Security chiefs had told her party that hotel rooms used during the summit were likely to be bugged.

There was the usual stuff about "not falling foul of honey traps" and "issuing the official party with temporary mobile phones" to avoid hackers. Precautions which our own foreign ministry now insists on when John Key and other leading politicians go to China.

Although it is doubtful such advice percolated down to Max Key who earlier this year posted a photograph on social media of him taking a bath in his upper-level hotel room overlooking Shanghai.

That digression aside, May used the summit to herald a golden era for post-Brexit Britain and announced free trade talks with Australia.

'If we can't have free trade let's at least have fair trade,' Obama

The US President suffered a slight indignity when officials mucked up his red carpet welcome in Hangzhou.

Obama and Xi jointly ratified the Paris accord on climate change. But on the vexed issue over the global overcapacity of steel, the conversation was more pointed.

China is closing some steel factories. But, as we have seen with the NZ Steel claim that its operations have been affected by dumping, the issue is fraught. Previously Xi offered to cut production.

The G20 leaders have called for a steel forum to be set up at the Organisation for Economic Co-operation and Development (OECD) to study excess production capacity.

The summit communique notes: "We recognise that excess capacity in steel and other industries is a global issue which requires collective responses."

Jack Ma's warning: When trade stops war can follow

Alibaba's founder has made this warning before, including when he hosted Key at a Beijing luncheon this year.

He told CNN: "We should keep on going along the path of globalisation ... globalisation is good ... when trade stops, war comes."

Ma is sanguine about the anti-globalisation fervour gripping the world, particularly in the United States. He forecasts that will fall away after the presidential elections.

"Every time there's an election, people start to criticise China. They criticise this, they criticise that," Ma said. "How can you stop global trade? How can you build a wall to stop the trade?"

The Alibaba founder used the G20 event to promote his idea for an electronic world trade platform, or e-WTP, to help SMEs gain customers.

Angela Merkel's last stand?

The German Chancellor acknowledged her decision to let a million refugees into Germany is costing her party at the polls.

At the weekend, Merkel's Christian Democrats finished third in the northeastern state of Mecklenburg-Vorpommern. Merkel has taken personal responsibility for the loss.

She insists that if Germany can integrate the refugees, her government can cool opposition. But those tensions do not bode well for next year, when Germany hosts the G20 summit in Hamburg.

- NZ Herald

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW
Head of Business for NZME

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

Read more by Fran O'Sullivan

© Copyright 2016, NZME. Publishing Limited

Assembled by: (static) on production apcf05 at 30 Sep 2016 22:08:32 Processing Time: 858ms