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4. Intelligent Governance in Action: G20

The 21st Century Council gathering in Mexico City in May 2012 pro­posed a hybrid approach for the G-20 to provide global public goods.

First, summit agreements make sense on financial regulation, cross-border capital flows, and international bailouts bolstered by strong and independent “surveil­lance” of G-20 economies on practices that contribute to imbalances. Our recommendations here included the establishment of “two-track sherpas” (permanent and annual) to carry out and ensure the continuity of policies from summit to summit, organized through the “troika” of the immediate past, present, and future G-20 chairs, and the expansion of the Organization for Economic Cooperation and Development (OECD) to include the G-20 emerging economies. Among the tasks of the G-20 OECD would be to measure trade flows in a new way that takes into account contemporary global scattering of production (as in iPad manufacture, see Chapter 4) and its impact on trade and employment. Coordinated global policy on reducing imbalances must be based on an objective commonly shared analysis of the facts or it will lead to unnecessary tensions and conflict.

Second, a web of national and subnational networks should be fostered to provide global public goods – such as low-carbon growth to combat climate change – from below through “coalitions of the willing” work­ing together to build up to a threshold of global change.

As proposed at the May 2012 G-20 meeting in Mexico, where President Calderón focused on “green growth,” arrangements like the Clean Development Mechanism under the Kyoto Treaty could be bolstered. It is essentially a global “commodities exchange for carbon permits” that enables trading among national and subnational jurisdictions that already have or are planning a cap and trade system – such as California, Australia, Quebec, some European states and Chinese provinces. Ultimately, the resulting liquidity created by this exchange would encourage other jurisdictions to join.

A further idea we discussed was to link the R-20, or “regional 20,” with the G-20 goals on climate change. The R-20 was founded by Arnold Schwarzenegger when he was California governor and its members range from the Gujarat State in India to the Gyeonggi Provincial Government in South Korea to Puglia in Italy. The idea is that, even if progress on climate change and clean energy is stymied at the level of global governance or the nation-state, the subnationals can still move ahead to build a critical mass from below.

Aside from advising the G-20, the 21st Century Council has taken on projects where it can have a direct impact through its personal networks of relationships. One example is following up Zheng Bijian’s argument for “building a community of interests” between the US and China, the core of the global economy, by encour­aging direct foreign investment of China’s surpluses into infrastructure and jobs in the United States —  thus elegantly squaring the circle of trade and employment and staunching the rise of protectionist sentiments by showing that globalization can put people to work in the US as well as China.

When Xi Jinping visited California in February 2012, Governor Jerry Brown, speaking as one princeling to another (Brown’s father was also governor; Xi’s father was a top member of the Politburo), proposed that China might be able to help finance the state’s planned $90 billion bullet train system as well as invest in “plug and play” zones* in the more impoverished, high-job­less areas of California such as the Central Valley and Riverside County.9

There is a certain elegant symmetry in this latter endeavor as well. When Brown visited Guangdong province in the early 1980s,10 just after his first terms in the statehouse, he was hosted by Xi Jinping ’s father, Xi Zhongxun, who at that time was governor of Guangdong. Xi senior, an intimate of Deng Xiaoping, was the mastermind behind China’s new experi­ment at the time with the “special economic zone” in Shenzhen. He was seeking investment from the United States!

Through its network of contacts in California on the Think Long Committee and ties in China to the top offi ­cials of the China Investment Corporation and Zheng Bijian, the 21st Century Council was able to facilitate the advance of these projects.

This project is but one example of how a “global civil society” group like the 21st Century Council, along with business and government at all levels, can contrib­ute to resolving the divergence/convergence and global/ local contradictions of today’s power shift.

Applying the “devolve, involve, and decision- division” paradigm of intelligent governance can help build the “primary legitimacy” the G-20 will need to address the new global challenges.

The alternative is a power vacuum, drift, and then the risk of destructive conflict. There is no higher priority for global governance than doing all one can to make sure the present is more like 1950 than 1910.