The relations between China and global governance can be defined and explained in the following aspects: history of China’s presence in global governance institutions, China’s current relations with global governance institutions, China’s role in leading institutions of global governance (such as UN Security Council and G20) and China’s future contribution to global governance.

 

  Continue to Deepen Existing Relations with Current Global Governance System

 

China is part of existing global governance system and indeed its most important member. Take China’s relations with the International Monetary Fund (IMF) as an example:

First, China is a founding state of the IMF in 1944 and 1945, just as China is a founding member of the United Nations.

 

Second, China has participated in the 2010 plan of G20 concerning reform of the IMF and other financial institutions. The reform plan has been basically implemented. It is important to note that China had already become the 2nd largest economy in the world when the plan was proposed. But according to the reform plan China is still the 3rd largest shareholder in the IMF ranking after Japan.

 

Third, China subscribed to Special Data Dissemination System (SDDS) of the IMF after joining General Data Dissemination System (GDDS) in 2002. Such a decision, which demonstrates increasing transparency and international comparability in China’s economic data, was announced by President Xi Jinping of China in the G20 Brisbane Summit in 2014. Ms. Christine Lagarde, Managing Director of the IMF issued a statement to say: “I welcome China's intention to subscribe to the SDDS, which will greatly enhance the availability of timely and comprehensive economic and financial data. I appreciate China’s commitment to improve the dissemination of statistics, and note the progress that has been made in recent years. China’s intention to graduate from the GDDS to the SDDS is the next significant step in this process.” In June 2015, China’s macroeconomic data standard was officially adjusted to SDDS.

Fourth, China formally joined the Special Drawing Rights (SDRs) established in 1969 by the IMF. Such an act laid new foundation for Chinese currency to be on par with international reserve currencies such as US dollars and Euros, and forebodes a new international currency order coming earlier than expected.

 

China has joined all existing international (economic, financial) organizations (international institutions) in forms, but in terms of content, China needs to deepen its relations with the existing international system. One important part of China’s diplomacy is to join the current international system over the past 4 decades since late 1970s. China’s incumbent leader reiterated on many international occasions that China’s opening-up policy will only be continued and further deepened instead of being reversed. China is committed to integrating itself into existing international system and strives to play a greater role.

 

    Reformist in the Existing Global Governance System

 

China has been playing its role as a staunch reformist in the current global governance ever since the 2009 Pittsburgh Summit, to the 2010 Seoul Summit, and up to 2016 Hangzhou Summit when China takes over the rotating chairmanship.

 

However, China advocates that global governance should be strengthened through reform and reconstruction, rather than maintaining the old global governances system and world economic order. China’s participation in global governance reform involves two aspects, or in other words, two stages from 2010 up till now:

 

First, realizing that it is easier said than done to reform the old global governance, China believes that it must play a strong and core role in the global governance system. Such a view is reflected in CPC’s 18th National Congress Report, the speech delivered by President Xi Jinping at the UN 70th Anniversary in September 2015, and demonstrated by the fact that the Political Bureau of the CPC Central Committee holds its 27th collective study on the subject of what is global governance, why global governance is needed and how to carry out global governance. China’s global governance policy has become an important component of its overall diplomacy and the global governance diplomacy is in full swing.

 

Second, discovering that the reform of global governance system is fraught with difficulty, China, just like other countries chose another path of reform by establishing some new international financial institution i.e. Asian Infrastructure Investment Bank (AIIB) to constructively supplement the existing system represented by the World Bank. The establishment of AIIB is promoting the World Bank to reform, and has strengthened China’s status as a major reformist in global governance system, as European countries give a nod to the reform by joining AIIB. The process of bidding for AIIB membership actually becomes “voting” for global governance reform in the sense that those who joined stand for a “yes” vote.

 

Looking forward, there is no retreat for China as a reformist in global governance. China has to uphold its role as a reformist, deal with the complex politics between old and new international organizations so as to make substantive progress in the way ahead.

 

     Coordinator in the Global Governance Process

 

People may not be fully aware of the extreme importance of G20 to global governance. 

 

In a financial perspective, it obviously would be an unnecessary burden for G20 to involve too many so called “non-economic”(financial) elements. G20, as a framework that gathers established powers represented by the U.S., the E.U. and G7 and emerging powers such as China, Brazil and India, is a special arrangement which represents all the major political powers in the world. It is a rare opportunity towards new global governance system and world order. G20 is a product of two financial crises (it was founded in response to the so-called “Asian financial crisis” in 1999 and upgraded to Summit of political leaders in 2008 to cope with the “global financial crisis” with the U.S. and Europe as the epicenter). We should thank those financial crises for providing such a relatively ideal framework for future global governance and world order despite this or that sort of deficiency in G20’s international legitimacy, as it does not involve quite a number of the UN member states.

The framework is ideal for no other reason than that it is a concert of powers in the 21st century. When the tendency of the “international power transition”and “multi-polarity” in world politics continues to develop amidst twists and turns, the increasingly interdependent world urgently needs a concert of powers. But the old coordinating institutions from P5s of the UN Security Council to G7 all fail to meet the requirements of global governance in the 21st century. G20 and “P5s plus Germany” (the framework to deal with Iran nuclear issue) would be a concert of powers which seems comparatively ideal for the future.

 

The European concerts from early 19th century to 20th century (a European version of concert of powers) are considered the origin of the contemporary global governance. In a similar way, the concert of powers in the 21st century is a foundation for global governance in the present age. In the Asia-Pacific region where concert of powers is in a sea of troubles, a new concert of powers for the sake of regional governance is even more necessary. As the more governance there is at regional level, the more solid ground global governance would gain.

 

The key to global governance transition is no other than making G20 one of the important ways to coordinate powers. In such a sense, China’s chairmanship in 2016 Summit is related to the future of global governance. China has decided to discuss in Hangzhou Summit not only immediate concerns of G20 such as increasing urgently needed infrastructure investment to boost the global economic growth, but also to promote reform of global governance through “transition of G20”.

 

     Provider of New-generation Global Governance Plan

 

Global governance evolves from one generation to the next just like other forms of life. The origin of global governance is the above-mentioned European Concerts that were born in early 19th century but collapsed before WWI. Following the WWII, international arrangement was made to prevent the world from falling into a war of global scale, which led to the creation of the UN and international financial organizations (Bretton Woods System). However, the Cold War (from the 1940s to the 1980s) made it impossible for the post-WWII international governance (predecessor of global governance) to play a full role. Calls for global governance emerged in the wake of the Cold War, and people started to discuss and negotiate the reform of the UN and international financial institutions. However, as stated above, that reform has since made limited progress. The increasingly globalized world in the 21st century faces more global problems, therefore global governance is needed more than ever. But who is going to provide and implement a new global governance plan?

 

Ever since the fixed exchange rate system of the Bretton Woods System “collapsed” in early 1970s, people all over the world have been exploring and designing post Bretton Woods System. A series of ideas, plans and initiatives have been proposed about new international currency system and international (global) financial governance (arrangement). 

 

China must surmount the current global governance to take a step further after successfully launching a new type of international financial organizations such as AIIB. It should encourage some important scholars and their think tanks to boldly explore theories and practice about next generation of global governance so as to make China’s contribution to a more orderly, inclusive, free, democratic and legitimate world order.

 

 

    (The author is a professor of the School of International Studies of Renmin University of China and a specially invited professor as “Qianjiang Scholar” of the Zhejiang Normal University. )