The annual meetings of the world’s most powerful leaders are among the most widely covered global events in the media, with the messages conveyed by the Group of 20 (G20) making an immediate impact on markets and investment sentiments. As such, we might suggest that the G20 summits are something of an elaborate high-level exercise in investor relations.
This year’s summit in Osaka was seen by many publications as the most important summit since the global financial crisis, as politicians tried to deal with geopolitical tensions which have cast a long-term shadow over the global economy.
Although the summit’s agenda featured a wide variety of topics ranging from health to women’s empowerment, most publications focused on trade. More specifically, commentators have identified the US-China trade war as the main focus of this year’s summit, noting that in the months leading up to the event, the economic conflict between the world’s two largest economies had intensified.
The overall media assessment of the Osaka summit was that it didn’t manage to resolve the trade tensions outright, but nevertheless, there was some important progress, especially with Trump and Xi agreeing to restart trade talks. Almost all outlets noted that the G20 leaders appeared to be content with their meeting, issuing a joint communiqué carrying a rather positive sentiment. Journalists juxtaposed it to last June’s G7 summit in Canada, which ended in disarray without an agreed statement.
Analysing the media conversation around G20 in the top-tier English-language publications, we found that the US-China trade conflict dominated both business and daily outlets:
The media has tried to satisfy investors’ hunger for any signs of a thaw in U.S.-China relations, as the economic clash has had a considerable impact on stock, currency and commodity markets for months.
The US has been specifically aiming at China’s high-tech industry to create economic hurdles on the government’s “Made in China 2025” initiative, designed to boost the country’s manufacturing power. On the other hand, China has been specifically targeting major US agricultural exports coming from states with many Trump supporters.
Last year, Trump fired the opening salvos by slapping 25% tariffs on $50 billion worth of Chinese goods, including televisions, aircraft parts and medical devices. The president wanted to punish Beijing for allegedly exercising unfair trade practices, including stealing intellectual property and making foreign companies hand over technology operations to Chinese counterparts in exchange for market access.
Trump also strived to reduce the massive trade deficit with China, which stood at about $375 billion in 2017. In response, China said the US is starting “the largest trade war in economic history to date” and introduced 25% tariffs on $34 billion worth of US goods, including agricultural products, cars and marine products.
For more on the US-China trade war, read our analyses: “US-China Trade War: Corporate Communications in the Battlefields” and “US-China Trade War 2: Thought Leaders on the Battleground“.
Many G20 headlines focused just on the trade war: for instance, BBC’s G20 summit: All eyes on Trump-Xi trade war showdown, the New York Times’ 5 Takeaways From the G20 Summit: Easing Off Trump’s China Trade War, for Now and Wall Street Journal’s “Trump, Xi to Meet on Trade at G-20“.
Thus, Trump and his Chinese counterpart Xi Jinping played the two main roles in the media discussion around G20:
With “trade war” headlines all around English-language news, there have been suggestions that the media has overinflated the risks of the conflict through its quest for ‘pain stories’ which are often anecdotal but have the power to transform public opinion.
On the other end of the battlefield, China issued strict rules limiting the trade war coverage and open commentary and banning attacks on Trump because it is afraid that negative reporting could cause instability in its financial markets. A memo to journalists at a state-run news outlet said that the media has to “stabilise the economy, growth, employment, stabilize foreign trade, investment, finance, stabilize the stock market, the foreign exchange market, the housing market, and basically stabilize the peoples’ thinking, hearts and expectations”.
The monotony of “trade war” G20 headlines was released by Vladimir Putin, who said that liberalism was obsolete in a Financial Times interview published at the start of the G20 summit. This gave rise to numerous analyses of the current state of liberalism as a political force: some English-language publications claimed that Putin doesn’t have the faintest idea what liberalism actually is, while others said that although he is wrong, liberalism still needs to be renewed.
Nearly all outlets quoted the response of the president of the European Council, Donald Tusk, who said: “Whoever claims that liberal democracy is obsolete also claims that freedoms are obsolete, that the rule of law is obsolete and that human rights are obsolete.”
Commentators welcomed the G20 pledge to renew talks between the US and China: Trump said he’ll halt $300 billion of new tariffs on goods and lift some restrictions on Huawei, while China said it will start buying some US agricultural equipment. The market reaction to the agreement was more than positive: the S&P 500 index of US stocks has closed at a record high, with the technology sector performing the best.
But there were market watchers more cautious in their optimism. Some said the economic risks were now lower but the relief was likely to be temporary. Predicting the global economy would slow further, others underlined the challenges of shifting from a ceasefire to a durable trade peace.
Analysts noted that the G20 leaders avoided criticism of Trump-style protectionism in their communiqué, but pledged “to realise a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open”. The agreement to take action on the World Trade Organization dispute resolution mechanism, whose existence is in danger because the US is refusing to appoint appellate judges, was seen as a good first step in this direction.
The ‘global economy‘ topic was discussed with a more positive sentiment mainly due to the leaders’ shared determination to foster economic growth. This determination was exemplified on the spot by EU’s free trade agreement with Mercosur, the grouping of South American countries, and Russia’s deal with Saudi Arabia to extend their limits on oil output.
More liberal-minded publications highlighted the divides over climate change – 19 of the 20 countries reaffirmed their commitment to the Paris agreement, with the notable exception of the USA. All leaders except Trump decided not to cross French president Emmanuel Macron’s “red line” on the climate crisis and added a new reference to their “irreversible” obligations under the Paris accord, while also pledging to curb plastic waste pollution of the world’s oceans by 2050.
Another addition to the Paris agreement was also the explanation that the US “reiterates its decision to withdraw from the Paris Agreement because it disadvantages American workers and taxpayers”. Many media outlets presented this as the largest divide among the G20 after the trade war.
Companies in politics
The G20 summits don’t feature corporate spokespeople. Unlike events such as the World Economic Forum in Davos, where CEOs of prominent companies discuss global economic challenges alongside political figures, the G20 summits are all about the heads of the 20 most advanced economies, which comprise 85% of the world’s GDP and two-thirds of the population.
But inevitably, the names of large corporations come up in many talks during the summit, and we can get a good grasp of the media conversation around G20 by finding the most often mentioned companies.
In this year’s G20 discussion, Huawei, one of the largest smartphone manufacturers in the world, was the most often mentioned company due to the heavy focus on the US and China. The Chinese technology corporation has been in the frontlines of the trade conflict since the US restricted its firms from doing business with it without a government license.
But one of the top-trending pieces of news from the G20 was that Trump said American firms are allowed to tradе with Huawei again, reversing the ban: “US companies can sell their equipment to Huawei. We’re talking about equipment where there’s no great national security problem with it.” As a result, shares in US companies which do business with the firm, including Intel, Qualcomm, Broadcom and Micron, went up.
Some analysts suggested that 5G infrastructure equipment may still not be part of the new agreement with the Chinese giant. Huawei figures prominently in the 5G conversation – the Financial Times reported that the firm’s research and development budget has hit $14 billion, fuelling fears in the US administration that Chinese companies will spearhead standard-setting in next-generation technologies.
Huawei’s chief executive Ken Hu said that his organisation had signed memorandums of understanding for 5G equipment with 45 operators in Asia, Europe and North America. There has been some negative coverage, however, particularly when Germany became the latest country wanting to bar its operators from using network equipment from Huawei due to security concerns.
In the meantime, Facebook was discussed in relation to three main issues: taxation in the tech industry, broadcasting of terrorism and extremism, and Libra, the social media giant’s cryptocurrency project.
Daily outlets focused on the G20’s formal statement urging social media platforms to do better when it comes to the broadcasting of terrorism and extremism online. The call was led by Australian Prime Minister Scott Morrison, who told reporters that Facebook and its rivals should “get this right”. The move was a response to the Christchurch massacre in March, which was broadcast online, with social media platforms criticised for being too slow to take action.
The Christchurch incident contributed to the ongoing series of crises which made the social media giant fall to the bottom of Reputation Institute’s U.S. RepTrak. The only company with a lower ranking was the Trump Organisation, while the company above Facebook was Philip Morris, a symbol of the vilified tobacco industry. Compared to the benchmarks of other behemoths like Netflix, LinkedIn, Microsoft, Google, Facebook was the only tech business in the weak range.
Business publications focused on G-20 finance ministers agreeing to compile rules on digital taxes for companies such as Facebook, Google and Amazon by 2020, introducing higher levels of taxation and preventing countries like Ireland from offering low corporate taxes.
Although Facebook’s cryptocurrency project Libra wasn’t on the summit’s agenda, a G20 regulatory group said that the social media giant’s intentions to enter the payments market could lead regulators to take a closer look at crypto-assets. Libra and its potential regulatory hurdles became a focus of the media discussion around another recent event – the Cannes Lions International Festival of Creativity.
Apple, the world’s most valuable publicly traded organisation, was mentioned as arguably the big winner coming out of the G20 summit because its shares rallied after the news that Trump and Xi will restart trade talks. Apple has been perceived to be most at risk from the trade tensions – nearly all of its manufacturing and assembly are done in China, whose market accounts for around 20% of its revenues. It also operates its services like the App Store and Apple Music in that country.
CEO Tim Cook had personally warned Trump that trade pressure on China could harm the sector, and reportedly got assurances from the president that iPhones assembled in China would not be subject to tariffs. The New York Times called Cook “the tech industry’s top diplomat” for his active role in navigating the trade war narrative.
The financial sector also had a reason to cheer – Wall Street wrapped up its best June in decades as G20 convened, with banks stocks jumping 2%, including the stocks of JPMorgan Chase & Co, Bank of America and Citigroup.
Those banks were also mentioned in the G20 media discussion for offering some thought leadership – for instance, Abhishek Deshpande, JPMorgan Chase & Co.’s head of oil research and strategy, said that oil prices might crash if Trump and Xi don’t manage to resolve their trade dispute.
As the media is likely to continue with its analyses of the Osaka summit in the next few weeks or so, reports on the next G20 meeting in Riyadh have already started piling up, with the discussion circling around the choice of Saudi Arabia as a venue in light of the murder of Saudi Arabian journalist Jamal Khashoggi.