The semi-annual G20 summit meeting, attended by heads of state and government of 20 developed and developing nations, ended in Seoul November 12, with an official declaration pledging, among other things, to "support and stabilize the global economy" and "lay the foundation for reform" in order to avert future world economic upheavals.
The G20—or Group of 20—was born out of the G7, an informal forum set up by the world's seven leading industrial powers in the mid-1970s. With the breakout of the financial storm that swept the world in 2008, it became an important mechanism for coordinating the financial response to the economic crisis. Time has proved the G20 to be much more effective than its predecessor, since it comprises representatives of the developing world and emerging economies. By having a relatively inclusive membership, the G20 enables the world to formulate strategies to combat financial problems and look for more balanced ways to develop the world economy.
The positions of member countries at the recent summit showed that many nations are more concerned with their own economic recovery now that the worst of the global economic crisis is apparently over. Some nations—due to their different roles in the world division of labor, varying development stages and differing economic models—were naturally at odds with one another. Needless to say, the United States' plan to buy back $600 billion in Treasury bills led to a major controversy. This unilateral move is widely expected to further devalue the dollar, the world's major reserve currency, increase inflationary pressure and threaten the global recovery.
The differences and controversies at the Seoul summit show, however, that the G20—far from being ineffective—is more important than ever to world economic stability and equity. Through the G20, developing and developed countries may try to iron out their differences, address the common concerns of the majority of nations, share responsibilities and hardships, and find solutions to the lingering economic crisis.
To help achieve these goals, China also offered its own recipe for overhauling the world economy. It advocated freer trade, stricter financial controls and narrowing the wealth gap among nations. These proposals largely reflect the interests of the developing world. They are also the basis for a new economic order appropriate to the world's changing economic and political environment. This could well be the ultimate mission of the G20. Just as the world outgrew the G7, the economic order of the latter half of the 20th century can no longer support the economic and social requirements of the world today. Replacing the old order with a new one is therefore in the interest of the world community. It will not only help global economies recover from the current crisis but will help them embark on a new path of sustained and shared growth.