There’s a growing acknowledgment in global governance circles, that China represents a key player along with the United States – at least when it comes to the global economy.  It may not yet be a G2 but it is the key great power relationship in the global economy.  But there is more afoot here than just the emergence of the G2.

First, there was much punditry emanating from the Seoul summit concerning “Obama’s weakened position”.  Sewell Chan of the New York Times wrote a piece early in the morning following the G20 summit titled – “Summit Shows U.S. Can Still Set Agenda, if Not Get Action”.  For US media, in particular, the G20 summit showed the President’s growing limits, so they concluded,  from the President’s  Party losses in the midterm election. Aside from the questionable logic and causality it would seem that there was a fair degree of US agenda proposing yet limited summit progress.  But then if you stand back this grinding out of the collective process – as opposed to the US imposition of policy – is exactly what you would expect from a more multilateral global governance system.  It marks a fading of US hegemony for sure but the US administration has called for greater  collective responsibility and it appears to be exactly that – more evident.  But US media remains wedded, it seems, to multilateralism with an American face. They are bound to be disappointed.

And then there is the Chinese leadership.  China is in the game.  While China is not enthusiastic over developing a global imbalances framework and developing the mutual assessment process – MAP – China has entered into this global governance process.  But the slow progress in framework development does highlight China’s ambivalence over leadership.

Chen Dongxiao, the Vice President of the Shanghai Institutes of International Studies (SIIS) at the recent Shanghai Conference (October 21st-23rd) (This was a meeting that brought together experts from all the Asian G20 countries plus experts from Singapore, Vietnam and the United States.  The meeting was developed with the active partnership of SIIS, CIGI, The Munk School of Global Affairs and the Stanley Foundation)  described well China’s persistent ambivalence. On the one hand China believes the G20 is “a step forward in terms of enhancing the legitimacy and efficacy of the current global governance architecture.”

However, and on the other hand, China remains protective over its sovereignty and its insists that it control domestic economic policy. As Chen Dongxiao says:

There is a tension between China’s desire for the G20 to be an effective body and its interest to preserve China’s independence over domestic affairs.  This is the reason for China’s ambivalence, for example, over the mutual assessment mechanism that the G20 powers agreed the IMF would initiate after the after the Pittsburgh summit.  China believes the mechanism should be consultative and instructive in nature, while others believe it should have more authority to intervene in order to help coordinate policies more effectively.

The road to greater stability and the amelioration of global imbalances will be a long hard road.