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POLITICAL ECONOMY
China's Xi warns against 'empty talk' as G20 summit opens
By Ben Dooley
Hangzhou, China (AFP) Sept 4, 2016


Russia, Saudi agree cooperation on oil price but not freeze
Hangzhou, China (AFP) Sept 5, 2016 - The world's two biggest oil producers Saudi Arabia and Russia said Monday they had agreed to "act together" to try to stabilise oil prices, but failed to make headway on a production freeze.

The two nations "noted the particular importance of constructive dialogue and close cooperation between the largest oil-producing countries."

This should have "the goal of supporting the stability of the oil market and ensuring a stable level of investment in the long term," the energy ministers from both countries said.

Their comments came in a joint statement after a meeting at the G20 summit in China.

"To this end the ministers agreed to act together or in cooperation with other oil producers," the statement said, adding they had agreed to set up a "joint monitoring group" to offer recommendations aimed at preventing price fluctuations.

Russia's Energy Minister Alexander Novak described the announcement as marking a "new era" in cooperation between Russia and Saudi Arabia and insisted it would have a "critical significance" for oil markets, news agency Interfax reported.

But there were no details on any agreement to freeze oil output, just weeks before Moscow and OPEC meet in Algeria to discuss the crisis.

The globe's major oil producers have been unable to strike a deal on freezing output, due mainly to a dispute between fierce regional rivals Saudi Arabia and Iran over Tehran's desire to raise production levels after the lifting of sanctions.

Novak said Moscow and Riyadh were discussing "concrete parameters" to halt price fluctuations but repeated that Iran should be allowed to return its output to pre-sanction levels.

But Saudi Energy Minister Khaled al-Falih told Al-Arabiya television channel there was "currently no need to freeze production" after meeting Novak.

"A freeze is one of the preferred options but it is not needed for the moment," he said.

Russian President Vladimir Putin met Saudi Deputy Crown Prince Mohammed bin Salman on the sidelines of the G20 on Sunday and said they would work to address a global glut and overproduction that has hammered prices for the past two years.

In an interview ahead of the meeting Putin -- whose economy slumped into recession on the back of oil price falls -- said that a freeze was "the right decision" and called for "compromise".

The oil market has been plagued by a stubborn supply glut that saw prices plunge to near 13-year lows below $30 at the start of 2016. While it has recovered recently, it is still well off highs above $100 seen in mid-2014.

Leaders of the world's biggest powers met Sunday to try to revive the sluggish world economy, with their host Chinese President Xi Jinping urging them to avoid "empty talk".

Xi welcomed each president and prime minister to the Group of 20 summit with a handshake and had an extended clasp with Barack Obama, with both men smiling despite protocol stumbles around the US leader's visit.

In a circular conference hall in Hangzhou -- the scenic eastern city left deserted by a vast security operation -- Xi told them the G20 "should work with real action, with no empty talk".

China is hoping a successful meeting will portray it as an assured and powerful nation ready to assume a role on the international stage that befits its status as the world's second-largest economy.

Authorities shut thousands of factories to try to clear the skies of smog, and encouraged residents to leave town on free holidays, as well as detaining dozens of dissidents to prevent any hint of unrest.

The G20 brings together representatives of 85 percent of the world's GDP and two-thirds of its population.

But experts expect the gathering to be short on substance, with no acute crisis pushing leaders to defy rising populist sentiment and to take difficult steps such as liberalising trade.

Xi said the global economy "still faces multiple risks and challenges including a lack of growth momentum and consumption, turbulent financial markets, receding global trade and investment".

"We hope the Hangzhou summit will come up with a prescription for the world economy and lead it back to the road of strong, balanced, comprehensive and sustainable growth."

- No deal on Syria -

The summit was preceded by a flurry of diplomatic activity on issues ranging from climate change and the war in Syria to international trade.

The US and China on Saturday ratified the Paris climate accord, a crucial step towards bringing into force the pact against global warming.

UN chief Ban Ki-moon, who personally received the ratification documents from Xi and Obama, applauded them Sunday for "making this historic step" and urged other G20 leaders to follow suit.

There had been hopes for another breakthrough, on the long war in Syria, after the US said it was close to a deal with Russia on stemming the violence.

But negotiations between Secretary of State John Kerry and his counterpart Sergei Lavrov yielded only an agreement to convene again on Monday, with Russia accused of "walking back" on key issues.

Moscow and Washington support opposite sides in the conflict, which erupted in March 2011 after President Bashar al-Assad unleashed a brutal crackdown against a pro-democracy revolt.

Successive rounds of international negotiations have failed to end a conflict that has left more than 290,000 people dead and forced millions to flee, a key contributor to migrant flows into Europe.

EU President Donald Tusk said Europe was "close to limits" on its ability to accept new waves of refugees and urged the broader international community to shoulder its share of the burden.

The issue has become a political hot potato for European leaders as Islamist terror attacks and rising anti-globalisation sentiment fuel public resentment of immigration.

Pictures of a drowned three-year-old Syrian boy lying on a Greek beach briefly changed the discourse last year, with Germany throwing open its borders, but a major backlash swiftly followed.

Ahead of the summit, Canadian Prime Minister Justin Trudeau warned against "rampant" protectionism and nationalism, saying that "building walls" was not the solution."

The talks are being held in the wake of Britain's vote to leave the European Union, which leaves it with the task of renegotiating access to the markets of the rest of the world, including those of the group it is leaving.

It is a huge job for the world's fifth-biggest economy, and Australian Prime Minister Malcolm Turnbull said Canberra had "got things moving towards having a free trade agreement with the UK".

But European Commission chief Jean-Claude Juncker said he opposes such talks while Britain remains part of the EU, insisting they were an "exclusive matter" for the bloc on behalf of its members and "we are sticking to it".

- Shouting match -

China craves a polished summit but there were more wrinkles Saturday when a shouting match broke out over access for reporters travelling with Obama as Air Force One arrived on the tarmac.

"This is our country!" a Chinese official, in a dark suit, shouted at a White House staffer. "This is our airport!"

Obama took the fracas in his stride on Sunday, saying that although the US insists on press access and does not "leave our values and ideals behind", the travelling White House juggernaut could be intimidating.

"I think this time... the seams are showing a little more than usual in terms of some of the negotiations and jostling that takes place behind the scenes," he told a press conference.

Five things to take away from the G20 summit
Hangzhou, China (AFP) Sept 5, 2016 - This year's most exclusive and closely-watched diplomatic party -- the G20 summit -- saw presidents and prime ministers from countries representing 85 percent of the global economy gather in the Chinese city of Hangzhou.

How did the first China-hosted G20 go? While analysts correctly foresaw little prospect of big economic breakthroughs, there were some notable moments -- and notable flops.

As heads of state bid farewell to the scenic city, which authorities emptied of residents to ensure a smooth summit, here are some of the memorable takeaways.

Globalisation

Facing populist ire at home, heads of state at the G20 tried to walk a fine line by acknowledging anti-globalisation anger while arguing that ever more liberal trade was the cure for sluggish economies.

In their communique they promised to "reject protectionism" and "promote global trade".

But they also pledged to ensure that growth "serves the needs of everyone and benefits all countries and all people". It should generate "more quality jobs" address inequalities and eradicate poverty "so that no one is left behind", they said.

During the gathering leaders repeatedly admitted that many citizens feel the global trade system has failed them.

US President Obama's parting words on the G20 meeting -- his last -- were a poignant admission that these are "turbulent times" with "volatile politics" where people don't believe leadership is capable of "making sure the international economy is working for everybody".

Syria

Heading into the meeting, diplomats were hopeful that the US and Russia would reach a deal to ease fighting in Syria, but talks failed Monday despite the efforts of Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov.

The American side accused Russia of backtracking on already agreed issues which Washington refused to revisit, but the talks seemed to have been overtaken by developments on the ground, after government troops encircled rebel-held parts of Aleppo.

Maritime disputes

While China was eager to put on a show of concord in Hangzhou, tensions over the South China Sea have risen sharply, putting the Asian giant at odds with many neighbours over its expansive claims to nearly all of the strategic and resource-rich waterway.

Beijing was eager to avoid the contentious topic, but Obama took the opportunity to chide China Saturday, telling it to abide by international law, drawing a rebuke from Xi Jinping.

Japan has longstanding territorial disputes of its own with China but Xi's tone with Japanese Prime Minister Shinzo Abe was warmer than previously.

At their first meeting in over a year Xi said the two powers should "put aside disruptions" in their relationship, and Abe described China to reporters as "an important friend of Japan's since long ago".

Brexit

New British leader Theresa May came on her first prime ministerial visit to China in hopes of shaping her country's post-EU access to world markets, but faced a Japanese warning over the fallout from Brexit while the US said London was not its priority.

In the wake of its vote to leave the European Union, Britain must renegotiate its access to world markets -- a huge task for the world's fifth biggest economy.

European Commission chief Jean-Claude Juncker said he did not like the idea of Britain holding trade talks while still part of the EU.

But Britain has already had discussions on the issue with Australia, and May said after the summit that India, Mexico, South Korea and Singapore all said they would "welcome" talks on removing barriers.

US-China diplomacy

Ceremonial niceties matter at the G20, and things got off to a bad start when Barack Obama exited from the rear of Air Force One on folding stairs, a marked contrast to other leaders who descended down a large red-carpeted staircase.

But furious speculation claiming it was a deliberate snub by China, fuelled in part by a tarmac stand-off between travel press and a Chinese agent, seems to have been misplaced, as US sources told AFP the incident came about because Washington refused to use a Chinese staircase in favour of the plane's built-in steps.

Chinese authorities imposed unusually tight security on the event, with vast swaths of the city closed to normal traffic, but Obama himself downplayed the incident, leading China's nationalist Global Times newspaper to claim in a Sunday editorial that the hype was due to Western media, "which often makes a fuss over trifling issues".


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