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Tensions between advanced and developing economies may make consensus impossible
Evan Dyer · CBC News · Posted: Sep 08, 2023 4:00 AM EDT | Last Updated: September 8
A screen displays a CCTV state media news broadcast of Chinese President Xi Jinping addressing world leaders at the G20 meeting in Rome via video link at a shopping mall in Beijing on October 31, 2021. (Thomas Peter/Reuters)
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No one expected Vladimir Putin to show up in New Delhi for this weekend's G20 summit. He didn't go to the G20 last year in Indonesia, either. He didn't even risk showing up in South Africa for the recent BRICS summit, despite his friendly relationship with the ruling African National Congress.
That's life under an International Criminal Court arrest warrant for you.
But the decision by China's President Xi Jinping to also skip the G20, and to send Premier Li Qiang in his place, appeared to be a last-minute snub of host nation India. It's a sign that this summit isn't likely to resolve the geopolitical fissure that is increasingly dividing the world into two camps.
Whatever the intended message, Xi's no-show risks being interpreted as a sign of weakness — of a fear of being outnumbered or of being upstaged by India's Prime Minister Narendra Modi.
It could even indicate a fear of being absent from China at a time of economic malaise and rumbles of public discontent.
To the surprise of many — and thanks partly to the skilful backstage manoeuvres of host President Joko Widodo — the summit was able to produce a joint declaration that all twenty members were able to sign, including Russia.
It dealt with the elephant in the room by stating that "most members strongly condemned the war in Ukraine," while adding that "there were other views."
Prime Minister Justin Trudeau speaks with China's President Xi Jinping at the G20 Leaders' Summit in Bali, Indonesia on November 16, 2022. (Adam Scotti/PMO via Reuters)
"The absence of both leaders, Putin and Xi, confirms that the division caused by the Russian war in Ukraine now really has reached the G20," Hung Tran, a fellow at the Atlantic Council, told CBC News.
"So the G20, in my view, will be transformed from a premier forum for international economic policy coordination into a forum for two sides — the advanced countries represented by the G7 and the developing countries which the BRICS aspire to coordinate and represent.
"So, basically like a mini-UN, which is a very sad development."
The BRICS is an alliance of Brazil, Russia, India, China and South Africa. It made its appearance in the aftermath of the 2008 financial crisis, as did the G20 leaders' summit.
It was created by four large nations that felt excluded from global decision-making. South Africa joined the group in 2010.
In August, the BRICS announced it was adding six new members (more on that later). But the BRICS is as much a team of rivals as a coherent bloc, and its two largest members — India and China — can hardly be called warm friends.
U.S. Army soldiers watch Indian soldiers display their unarmed combat skills during an Indo-U.S. joint military exercise in the Indian state of Uttarakhand, close to the disputed border with China, on Nov. 29, 2022. (Manish Swarup/Associated Press)
In the past year, their armies have fought brutal clashes over a contested border in the high Himalayas. While both sides have respected an agreement to keep firearms away from the border, their troops have fought medieval melees with axes and clubs.
The dispute was further inflamed when the Chinese government last week published a national map that claimed parts of India — as well as parts of Malaysia, Brunei, Taiwan, the Philippines and even Russia.
"Making absurd claims on India's territory does not make it part of China's territory," said India's Foreign Minister Subrahmanyam Jaishankar.
"Modi has all the prerogatives of the host," said John Kirton, director of the G20 Research Group at the University of Toronto. "India is the most populous country in the world [and has] just overtaken China. It's the most rapidly-growing G20 member, growing at 6 per cent this year, while China is in economic decline."
Moments after congratulating the country's space agency engineers on a successful mission, India's Prime Minister Narendra Modi called the historic landing near the moon's south pole a "victory cry" for a developing nation. (Punit Paranjpe/AFP via Getty Images)
India is also coming into the summit riding high after a successful lunar mission. A Russian lander attempting the same feat crashed.
Hung Tran agrees that Modi holds more cards than Xi when it comes to speaking for the developing world.
"You have China supported by Russia and Iran pushing a more anti-U.S. and anti-Western polemic, and India offering more practical proposals to address the needs of the global South," he said, citing India's opposition to the EU's carbon import tax and efforts to strengthen preferential trade rules for developing countries.
But their motives differ. India wants to be less dollar-dependent but has no ambitions of making the rupee the new global currency. China likely wants to substitute its own renminbi for the greenback. Russia mostly just wants to weaken western sanctions.
WATCH | More signs of a slowing Chinese economy:
Duration2:03
New economic numbers out of China point to a slowdown in manufacturing for the fifth month in a row. Meanwhile, one of the country's biggest homebuilders is on the brink of collapse. It’s the latest in a string of negative economic news about the world’s second-largest economy.
"There was a huge effort to internationalize the renminbi, about six, seven years ago, that didn't really go anywhere," said Paul Samson, who for many years co-chaired the principal G20 working group on the global economy.
"The uptake has been low because it's not a free-floating currency. If you're going to rely on something for trade, you want liquidity, you want more certainty. The renminbi is not delivering that."
Samson said the efforts to diversify will continue.
"You've seen payments even made to the IMF in currencies other than the U.S. dollar. So it's happening, but it's a marginal change," he said. "It's going to take a big thing to replace the U.S. dollar. It's posturing for the time being."
Still, opposition to the dollar's dominance may be the only thing the BRICS countries really agree on.
The expansion increases the BRICS presence at the G20 from five nations to seven.
"I do see it as a play that is timed to show the power of the BRICS coming in right now," said Samson. "China really, really wanted this. I think Russia was ready to embrace it. South Africa wanted a good outcome as host. I think India and Brazil were more skeptical but they didn't stop it."
Xi Jinping, surrounded by leaders from Brazil, South Africa, India and Russia, takes part in a joint photo session at the BRICS summit in Johannesburg, South Africa on August 23, 2023. (Gianluigi Guercia via REUTERS)
The new members are an eclectic bunch that hardly fit the original BRICS image. Only Argentina and Ethiopia can claim to be democracies, and Ethiopia has a simmering civil war.
The absences are notable. Countries like Mexico, Indonesia or Nigeria would seem to be more obvious choices for a group meant to represent the world's biggest emerging economies. They were either not invited or declined to join (there are rumours that Russia vetoed Indonesia because of its support for Ukraine).
"Not a single one of the new members is a big emerging power," said Kirton. "Argentina is rapidly going bankrupt and is fully dependent for its finances on the International Monetary Fund, and not at all on the BRICS's own tiny New Development Bank."
"At the time in China, there was quite a bit of excitement," he told CBC News. "They originally saw it as the beginning of the creation of a multipolar world."
Even before its expansion, the BRICS represented 40 per cent of the world's population, while the G7 nations have less than 10 per cent. "But it pretty quickly became clear that the Western states were able to coordinate themselves in the G20 much better than the developing states," said Duggan.
"Since the leadership of Xi Jinping, there's been an effort to strengthen the BRICS with more money put into bodies like the New Development Bank, and an attempt to use the BRICS as a grouping within forums like the G20. But none of these have been really successful. So they still see an importance for the BRICS, but it's definitely waned in terms of their ambitions."
"You're looking at countries that have direct conflicts, [such as] Egypt and Ethiopia over the use of Nile waters," he said. "You're looking at countries like Saudi Arabia and the United Arab Emirates that have had tensions with Iran for decades.
"I'm not sure how much these countries will add. They will certainly add a lot of problems in terms of coherence at organizations like the G20 and WTO. They'll all come with very different positions."
The presence of Iran is also uncomfortable for democratic members like India and Brazil that are not seeking conflict with the West.
India's Prime Minister Narendra Modi welcomes Russia's President Vladimir Putin ahead of their meeting at Hyderabad House in New Delhi, India on Dec. 6, 2021. (Adnan Abidi/Reuters)
"India in particular is taking kind of a step away from Russia and from China and moving slightly more towards the Western position," said Duggan.
India is not about to jump feet-first into the Western camp, said the experts, but practical concerns are causing it to lean that way. Its military has long been a major buyer of Russian arms and equipment, but Russia's own desperate need for weapons in Ukraine has forced India to turn to western suppliers such as the U.S. and France.
India is also seeking to benefit from the "friend-shoring" trend of Western companies looking to diversify away from manufacturing in China.
Divisions are even wider than they were last year in Bali, where the members clashed on the Ukraine war but at least agreed on the Black Sea Grain Initiative to keep food exports flowing from Ukrainian ports.
That deal has since come apart — and tensions in Asia have risen too. Last month, the leaders of the U.S., Japan and South Korea came together at Camp David to announce a new security pact and issue a joint statement condemning China's "dangerous and aggressive behavior supporting unlawful maritime claims."
From left, South Korea's President Yoon Suk Yeol, President Joe Biden and Japan's Prime Minister Fumio Kishida arrive for a joint news conference on Friday, Aug. 18, 2023 at Camp David, the presidential retreat near Thurmont, Md. (Andrew Harnik/AP)
At the ASEAN summit on Wednesday, China's Premier Li Qiang called on Southeast Asia, Japan and South Korea to reject "undue external influence" — a not very veiled reference to the U.S.
"The key is for all of us to face up to problems, eliminate misunderstandings and manage our differences," he said. "It's very important at present to oppose taking sides, bloc confrontations and a new cold war."
But the mood in Asia has clearly tilted against China.
"There is really no substitute for the G20 at that leaders' level that brings everybody together," said Hung Tran. "And that's why the G20 came into being, because it fills a void."
Samson said it's especially valuable for a middle power like Canada that relies heavily on trade and the international rules upon which trade depends.
"Canada hopes the G20 momentum continues," he said. "If the G20 didn't exist, you'd need to create it.
"So it's absolutely in the Canadian interest to keep the G20 going as well as possible, but it is simply a very difficult environment right now."
Fuk Zijin
Xi's no-show at the G20 is another sign of deepening divisions around the world
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Tensions between advanced and developing economies may make consensus impossible
Evan Dyer · CBC News · Posted: Sep 08, 2023 4:00 AM EDT | Last Updated: September 8
A screen displays a CCTV state media news broadcast of Chinese President Xi Jinping addressing world leaders at the G20 meeting in Rome via video link at a shopping mall in Beijing on October 31, 2021. (Thomas Peter/Reuters)
1291
comments
No one expected Vladimir Putin to show up in New Delhi for this weekend's G20 summit. He didn't go to the G20 last year in Indonesia, either. He didn't even risk showing up in South Africa for the recent BRICS summit, despite his friendly relationship with the ruling African National Congress.
That's life under an International Criminal Court arrest warrant for you.
But the decision by China's President Xi Jinping to also skip the G20, and to send Premier Li Qiang in his place, appeared to be a last-minute snub of host nation India. It's a sign that this summit isn't likely to resolve the geopolitical fissure that is increasingly dividing the world into two camps.
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Whatever the intended message, Xi's no-show risks being interpreted as a sign of weakness — of a fear of being outnumbered or of being upstaged by India's Prime Minister Narendra Modi.
It could even indicate a fear of being absent from China at a time of economic malaise and rumbles of public discontent.
Bali's surprise consensus
Last year's G20 summit in Bali, Indonesia took place in an atmosphere of high tension over the invasion in Ukraine. Putin stayed away but Xi did not.To the surprise of many — and thanks partly to the skilful backstage manoeuvres of host President Joko Widodo — the summit was able to produce a joint declaration that all twenty members were able to sign, including Russia.
It dealt with the elephant in the room by stating that "most members strongly condemned the war in Ukraine," while adding that "there were other views."
Prime Minister Justin Trudeau speaks with China's President Xi Jinping at the G20 Leaders' Summit in Bali, Indonesia on November 16, 2022. (Adam Scotti/PMO via Reuters)
"The absence of both leaders, Putin and Xi, confirms that the division caused by the Russian war in Ukraine now really has reached the G20," Hung Tran, a fellow at the Atlantic Council, told CBC News.
"So the G20, in my view, will be transformed from a premier forum for international economic policy coordination into a forum for two sides — the advanced countries represented by the G7 and the developing countries which the BRICS aspire to coordinate and represent.
"So, basically like a mini-UN, which is a very sad development."
The BRICS is an alliance of Brazil, Russia, India, China and South Africa. It made its appearance in the aftermath of the 2008 financial crisis, as did the G20 leaders' summit.
It was created by four large nations that felt excluded from global decision-making. South Africa joined the group in 2010.
In August, the BRICS announced it was adding six new members (more on that later). But the BRICS is as much a team of rivals as a coherent bloc, and its two largest members — India and China — can hardly be called warm friends.
U.S. Army soldiers watch Indian soldiers display their unarmed combat skills during an Indo-U.S. joint military exercise in the Indian state of Uttarakhand, close to the disputed border with China, on Nov. 29, 2022. (Manish Swarup/Associated Press)
In the past year, their armies have fought brutal clashes over a contested border in the high Himalayas. While both sides have respected an agreement to keep firearms away from the border, their troops have fought medieval melees with axes and clubs.
The dispute was further inflamed when the Chinese government last week published a national map that claimed parts of India — as well as parts of Malaysia, Brunei, Taiwan, the Philippines and even Russia.
"Making absurd claims on India's territory does not make it part of China's territory," said India's Foreign Minister Subrahmanyam Jaishankar.
Modi holds the cards
Xi's no-show may be driven by a reluctance to compete directly with India's Modi to be the voice of the developing world."Modi has all the prerogatives of the host," said John Kirton, director of the G20 Research Group at the University of Toronto. "India is the most populous country in the world [and has] just overtaken China. It's the most rapidly-growing G20 member, growing at 6 per cent this year, while China is in economic decline."
Moments after congratulating the country's space agency engineers on a successful mission, India's Prime Minister Narendra Modi called the historic landing near the moon's south pole a "victory cry" for a developing nation. (Punit Paranjpe/AFP via Getty Images)
India is also coming into the summit riding high after a successful lunar mission. A Russian lander attempting the same feat crashed.
Hung Tran agrees that Modi holds more cards than Xi when it comes to speaking for the developing world.
"You have China supported by Russia and Iran pushing a more anti-U.S. and anti-Western polemic, and India offering more practical proposals to address the needs of the global South," he said, citing India's opposition to the EU's carbon import tax and efforts to strengthen preferential trade rules for developing countries.
Down with the dollar
One goal that China, India and Russia share is breaking the dominance of the U.S. dollar in the international payments system.But their motives differ. India wants to be less dollar-dependent but has no ambitions of making the rupee the new global currency. China likely wants to substitute its own renminbi for the greenback. Russia mostly just wants to weaken western sanctions.
WATCH | More signs of a slowing Chinese economy:
More signs of a slowing Chinese economy
9 days agoDuration2:03
New economic numbers out of China point to a slowdown in manufacturing for the fifth month in a row. Meanwhile, one of the country's biggest homebuilders is on the brink of collapse. It’s the latest in a string of negative economic news about the world’s second-largest economy.
"There was a huge effort to internationalize the renminbi, about six, seven years ago, that didn't really go anywhere," said Paul Samson, who for many years co-chaired the principal G20 working group on the global economy.
"The uptake has been low because it's not a free-floating currency. If you're going to rely on something for trade, you want liquidity, you want more certainty. The renminbi is not delivering that."
Samson said the efforts to diversify will continue.
"You've seen payments even made to the IMF in currencies other than the U.S. dollar. So it's happening, but it's a marginal change," he said. "It's going to take a big thing to replace the U.S. dollar. It's posturing for the time being."
Still, opposition to the dollar's dominance may be the only thing the BRICS countries really agree on.
New faces at the table
In South Africa last month, the BRICS coalition announced that it was taking on six new members: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE.The expansion increases the BRICS presence at the G20 from five nations to seven.
"I do see it as a play that is timed to show the power of the BRICS coming in right now," said Samson. "China really, really wanted this. I think Russia was ready to embrace it. South Africa wanted a good outcome as host. I think India and Brazil were more skeptical but they didn't stop it."
Xi Jinping, surrounded by leaders from Brazil, South Africa, India and Russia, takes part in a joint photo session at the BRICS summit in Johannesburg, South Africa on August 23, 2023. (Gianluigi Guercia via REUTERS)
The new members are an eclectic bunch that hardly fit the original BRICS image. Only Argentina and Ethiopia can claim to be democracies, and Ethiopia has a simmering civil war.
The absences are notable. Countries like Mexico, Indonesia or Nigeria would seem to be more obvious choices for a group meant to represent the world's biggest emerging economies. They were either not invited or declined to join (there are rumours that Russia vetoed Indonesia because of its support for Ukraine).
"Not a single one of the new members is a big emerging power," said Kirton. "Argentina is rapidly going bankrupt and is fully dependent for its finances on the International Monetary Fund, and not at all on the BRICS's own tiny New Development Bank."
China hoped for more
Niall Duggan of University College in Cork, Ireland has closely studied the BRICS since their formation in 2009."At the time in China, there was quite a bit of excitement," he told CBC News. "They originally saw it as the beginning of the creation of a multipolar world."
Even before its expansion, the BRICS represented 40 per cent of the world's population, while the G7 nations have less than 10 per cent. "But it pretty quickly became clear that the Western states were able to coordinate themselves in the G20 much better than the developing states," said Duggan.
"Since the leadership of Xi Jinping, there's been an effort to strengthen the BRICS with more money put into bodies like the New Development Bank, and an attempt to use the BRICS as a grouping within forums like the G20. But none of these have been really successful. So they still see an importance for the BRICS, but it's definitely waned in terms of their ambitions."
Frenemies and enemies
The expansion is unlikely to change that, said Duggan."You're looking at countries that have direct conflicts, [such as] Egypt and Ethiopia over the use of Nile waters," he said. "You're looking at countries like Saudi Arabia and the United Arab Emirates that have had tensions with Iran for decades.
"I'm not sure how much these countries will add. They will certainly add a lot of problems in terms of coherence at organizations like the G20 and WTO. They'll all come with very different positions."
The presence of Iran is also uncomfortable for democratic members like India and Brazil that are not seeking conflict with the West.
India's Prime Minister Narendra Modi welcomes Russia's President Vladimir Putin ahead of their meeting at Hyderabad House in New Delhi, India on Dec. 6, 2021. (Adnan Abidi/Reuters)
"India in particular is taking kind of a step away from Russia and from China and moving slightly more towards the Western position," said Duggan.
India is not about to jump feet-first into the Western camp, said the experts, but practical concerns are causing it to lean that way. Its military has long been a major buyer of Russian arms and equipment, but Russia's own desperate need for weapons in Ukraine has forced India to turn to western suppliers such as the U.S. and France.
India is also seeking to benefit from the "friend-shoring" trend of Western companies looking to diversify away from manufacturing in China.
Joint statement unlikely
Experts consulted by CBC were pessimistic about the prospect of a joint statement at the end of this G20 summit. None of the ministerial meetings that precede the G20 leaders' summit have been able to produce such a joint declaration.Divisions are even wider than they were last year in Bali, where the members clashed on the Ukraine war but at least agreed on the Black Sea Grain Initiative to keep food exports flowing from Ukrainian ports.
That deal has since come apart — and tensions in Asia have risen too. Last month, the leaders of the U.S., Japan and South Korea came together at Camp David to announce a new security pact and issue a joint statement condemning China's "dangerous and aggressive behavior supporting unlawful maritime claims."
From left, South Korea's President Yoon Suk Yeol, President Joe Biden and Japan's Prime Minister Fumio Kishida arrive for a joint news conference on Friday, Aug. 18, 2023 at Camp David, the presidential retreat near Thurmont, Md. (Andrew Harnik/AP)
At the ASEAN summit on Wednesday, China's Premier Li Qiang called on Southeast Asia, Japan and South Korea to reject "undue external influence" — a not very veiled reference to the U.S.
"The key is for all of us to face up to problems, eliminate misunderstandings and manage our differences," he said. "It's very important at present to oppose taking sides, bloc confrontations and a new cold war."
But the mood in Asia has clearly tilted against China.
Canada wants the G20 to continue
There would be serious implications if the G20 ceased to function as a forum where big nations can sort out their differences."There is really no substitute for the G20 at that leaders' level that brings everybody together," said Hung Tran. "And that's why the G20 came into being, because it fills a void."
Samson said it's especially valuable for a middle power like Canada that relies heavily on trade and the international rules upon which trade depends.
"Canada hopes the G20 momentum continues," he said. "If the G20 didn't exist, you'd need to create it.
"So it's absolutely in the Canadian interest to keep the G20 going as well as possible, but it is simply a very difficult environment right now."
Fuk Zijin
