UNITY: Leaders pose at the G20 Summit in Los Cabos, Mexico, on June 18 (LI TAO)
Though it was not officially included in the agenda, the euro-zone crisis was the hottest topic during the two-day Group of 20 (G20) Summit in Los Cabos, Mexico. China's plan to contribute to the recapitalization of the International Monetary Fund (IMF) along with other emerging countries and the outcome of the Greek general election may have brought more hope for the issue, but it will take time to see how the crisis unfolds.
On the first day of the summit on June 18, China announced it would contribute $43 billion to the IMF as part of the IMF's recapitalization plan. The plan is expected to ensure that the IMF is sufficiently capitalized to address the risks and challenges currently facing the world economy, including the European sovereign debt crisis. Along with China, 12 other countries including Russia, India and Brazil announced their pledges to IMF recapitalization, which will boost emergency funding for the institution to $456 billion.
When addressing the summit, Chinese President Hu Jintao said European sovereign debt is an issue of general concern. "We should continue to support in a constructive and cooperative way the efforts of European countries to resolve their debt issues and bring their economies back on the track of steady growth as soon as possible," Hu said.
All in the same boat
"The European debt issue was not on the official agenda of the G20 Summit this year, but it was one of the issues that concerned the summit most, as one of the most glaring problems affecting the global economic situation," said Jia Xiudong, a senior research fellow with the China Institute of International Studies.
Currently, the global economy is universally faced with a downside risk. Many of the G20 members are in economic stagnation. The prolonged euro-zone debt crisis, slowdowns in major developed nations and emerging economies, and high unemployment in parts of the world are all posing threats to the fragile recovery.
"If the euro-zone crisis cannot be addressed properly, it will certainly spill over to other countries and further drag down the global economy," said Jia.
"The world economy has come to a critical juncture and the improvement of global economic governance is an arduous task. We should build on the achievements we have made and strive for new progress," said President Hu in his speech at the summit.
China has been doing its part in addressing the current crisis. Along with its recent move of contributing to the IMF, Hu also said G20 members should be firmly committed to promoting steady recovery of the world economy.
"We should, in a spirit of unity and win-win cooperation, seriously study and jointly explore ways to address the systemic risks in the world economy, and strengthen the hard-won momentum of economic recovery," Hu said.
Hu visited Denmark, which holds the rotating presidency of the EU in the first half of 2012, on his way to the G20 Summit to show China's support for Europe's efforts to tackle the ongoing crisis. While in Los Cabos, he held meetings with several other world leaders, including U.S. President Barack Obama, French President Francois Hollande and German Chancellor Angela Merkel.
During their talks, Merkel briefed Hu on the latest development of the European economic and financial situation and Europe's responses. Hu said China supports the continent's efforts to promote integration and maintain the stability of the euro.
A united, stable and prosperous Europe serves the interests of the world, including China, Hu said, while reaffirming Beijing's confidence that Europe has the wisdom and ability to overcome difficulties and safeguard economic stability and growth.
China has offered assistance to Europe since the start of the euro-zone debt crisis, and it will continue to back the EU's efforts to achieve economic recovery and stable growth, Hu said.
"China is making its contribution, but the fundamental resolution for the euro-zone crisis relies on Europe itself," said Jia.