G20 Comes Off Life Support Due To Biden-Xi Meeting

The G20 Leaders’ Summit, which concluded in the Indonesian island of Bali on Wednesday, was expected to be a nothing burger. Protracted tensions between America and China over the past five years had minimized the areas where the two countries could advance global cooperation, so went the conventional wisdom.

All bets were off with the Russian invasion of Ukraine, with China and America on opposing sides of the conflict. By popular verdict, the G20 was on life support and many analysts predicted that the Leaders’ Summit would aggravate global tensions rather than attempt to resolve them. However, something unexpected happened on the way to the summit—in the form of a three-plus hour meeting between Presidents Joe Biden and Xi Jinping, which delivered little by way of substance, but went a considerable way in restoring lines of communication.

The fact that U.S. Secretary of State Antony Blinken will head to Beijing in short order for follow-up discussions demonstrates that, despite the dire reality of the Russian invasion, there appears to be a modest diplomatic pathway to manage the important U.S.-China relationship. This has considerable spin-off benefits for global cooperation because, at a minimum, the U.S. and China can still appear at global forums like the G20 to showcase their commitment to talk about pressing global concerns. The decoupling of global cooperation due to the Russian invasion—with a more assertive and unified G7 compared with a weak and disunited G20—demonstrated that the international community was incapable of bridging differences to resolve global public good issues like a spike in food and fuel prices, increased debt distress in low-income countries, and rising natural disasters due to a warming climate.

To be sure, there are sharp differences between China and the rest of the G20 in resolving these intractable issues, debt restructuring being a notable example. The evidence shows that China has been dragging its feet in fully participating in the G20’s Common Framework for Debt Treatment, which would unlock resources for many African nations.

Are the skeptics right in suggesting that rescuing the G20 through greater U.S.-China engagement will be a futile exercise? In my view, such thinking overlooks the simple fact that the G20 is not just about China and America/G7 but also includes emerging market powers like Indonesia (this year’s host), India (the host next year), Brazil (G20 host in 2024), and South Africa (G20 host in 2025). What these countries have in common is that they did not join in the G7 chorus of protest and sanctions against the Russian invasion, pursuing a delicate middle ground of calling for an immediate cessation of hostilities.

Next year’s G20 host, India, which has been on diplomatic overdrive since the invasion and has even been mentioned as a possible mediator in the conflict, is likely to seize the momentum. India, like America, is equally wary of China’s geopolitical ambitions and is participating in several American-led regional security initiatives which are implicitly targeted at China. Prime Minister Modi is anxious to shine on the global stage, nothwithstanding his ruling party’s track record in poor economic management and in feeding sectarian tensions. With investment bank Morgan Stanley recently proclaiming that this is “India’s moment,” the Modi government is likely to use the G20 platform to display the country’s diplomatic clout and attractiveness as an investment destination. This will allow the world’s most important economic platform to move out of intensive care.