Three recent important initiatives from the administration of US President Joe Biden illustrate US initiatives Re-link With the world and support for an inclusive global pluralism. The big question now, as the United States once again seeks to play an international leadership role, is whether such cooperation can succeed – and how China will respond to the American proposals, given Bilateral tensions escalate.
The first major initiative was US Treasury Secretary Janet Yellen’s call for $ 650 billion for new SDRs (Special Drawing Rights, IMF reserve assets) – something that President Donald Trump’s administration has banned.
File details plan, Which was previously approved G20 finance ministers and central bank governors And the International Monetary and Financial Committee, It still needs to be worked out. And it won’t just include a new record $ 650 billion SDR issue for countries in proportion to their IMF stakes. It also calls on countries that do not need these SDRs to voluntarily reallocate them to countries in need. For example, the United States proposed lending some of them to the International Monetary Fund to reduce poverty and growth to enhance the Fund’s ability to lend on concessional terms.
That’s a big deal in at least two ways. A new $ 650 billion allocation would double the existing SDR stock, boost global liquidity and free up resources for much-needed investment. It could lead to significant support from developed economies to developing countries.
While any SDR reallocation will be voluntary, countries can go beyond the piecemeal approach to develop more Coordinated mechanism. For example, the United States proposal could extend to routinely providing contributions from donor governments to institutions such as multilateral development banks to finance concessional loans to developing economies. In addition, the plan may include a new construction Special purpose vehicle To attract private sector resources.
China supports the proposed new SDR allocation, but it remains to be seen whether it will agree with the United States and other advanced economies on implementation details and reallocate some of their SDRs in a coordinated, multilateral manner. It would also be interesting to see what role the Asian Infrastructure Investment Bank might play in leading China in such a scheme.
The second major US proposal would allow countries to tax the largest and most profitable multinational corporations (and many of them American) based on their sales in each country, regardless of physical presence, and would set a global minimum corporate tax rate of 21 percent. . Financial Times mentioned On April 8, the US Treasury Department floated the idea with 135 participating countries in the Organization for Economic Cooperation and Development / G20 discussions On the so-called base erosion and profit shifting.
The proposed regulations will be binding on large companies in all sectors, depending on their level of revenue and profit margins. Reaching a global agreement will be difficult, but it will allow Biden to do so Raising corporate tax rates To pay for planned infrastructure investments without undermining internationally and ending the race to the bottom that has characterized corporate taxation for decades. The OECD Framework provides another opportunity for multilateral cooperation between the United States and China on one of the most important and sensitive global economic policy issues.
Finally, Biden Invited 40 world leaders at the Virtual Climate Summit on April 22-23, which will be broadcast live to the public. Among the attendees were leaders of 17 major greenhouse gas emissions (GHG) emissions, as well as leaders of other countries that “demonstrate strong climate leadership” and innovative approaches or are particularly vulnerable to climate change. A small number of businessmen and civil society leaders will also participate.
Biden administration Supported Targets for achieving net global net greenhouse gas emissions by 2050 and limiting global warming near 1.5 ° C compared to pre-industrial levels, while emphasizing the need for more ambitious emissions reduction targets by 2030 than countries pledged under 2015 Paris Climate Agreement. Most advanced economies, now including the United States, are preparing strategies aimed at meeting global climate goals, although Biden’s ambitious plans would face stiff Republican opposition.
But the world will not achieve net-zero emissions, or close to it, by 2050 without China and the emerging economies as a whole immediately embarking on similar paths. It currently accounts for nearly two-thirds of global carbon dioxide emissions from fuel combustion, and China alone is responsible Almost 30 percent. Last year, Chinese President Xi Jinping pledged that China would become carbon neutral before 2060, but he did not outline a concrete strategy to achieve this goal. Most analysts agree that the country’s current policies and plans (especially in relation to Charcoal production And the Expanding the network of oil and gas pipelinesNot aligned with this goal.
Biden invited Shi to the next summit. US Presidential Special Envoy for Climate John Kerry, Who has the He said He is “optimistic [but] I’m not sure “of China’s recent cooperation in tackling climate change He visited China In an effort to garner the country’s support for the successful April summit. Both countries issued A. Joint statement Although his accent is positive, he lacks detailed commitments.
Rich countries accept that most emerging economies, already hit hard by the epidemic, need significant capital inflows to help finance their green transitions. So much of the climate debate now focuses on how to leverage the balance sheets of multilateral development banks to attract large sums of private capital as well as public flows.
But even though China’s per capita income (in purchasing power parity terms) is still approx The third At most levels of the advanced economy, the United States wants the Chinese to announce a specific plan to cut emissions in the near future and co-finance the green transition in emerging economies. To be sure, insufficiently ambitious Chinese plans – and most importantly measures – will be used as ammunition by domestic opponents of Biden’s climate policies.
The Biden administration wants a comprehensive approach that makes support for democracy and human rights around the world compatible with bilateral and multilateral cooperation with adversaries on each of the common challenges. Despite very strained relations with Russia, for example, President Vladimir Putin will participate in the April 22-23 summit. Effective collaboration with rivals ahead of the November COP26 UN climate summit in Glasgow will be a major test of how multilateralism can succeed, supplemented by bilateral efforts, despite rivalries between great powers and fiercely competing ideologies.