Canceled.LTroll.27
Banned
By Zachary Karabell
Sunday, March 29, 2009
A hundred years ago, London would have made sense as the spot where the world's leaders should gather, as they will this week, to grapple with a spreading economic crisis. The city was the early 20th century's nexus of finance and power, and Britain straddled the globe as the only true superpower.
But we're in the 21st century now, and the G20 heads of state should not be plotting in the shadow of Big Ben. They should be sitting across from Mao's Tomb, near the Forbidden City, in the meeting halls off Tiananmen Square in Beijing.
The first G20 meeting, last fall, appropriately took place in Washington. But holding this second conclave in Beijing would have signalled a clear recognition that the Washington-Beijing axis is the most important relationship in the world today; it is the X factor in the quest to rescue the global economy.
Can they do it?
Some look at the relationship and see only complications, worrying that if China sells off or stops buying U.S. bonds, the American economy could sink even deeper, leaving us like England at the end of War World II, a broke and broken hegemon, dependent on an upstart power.
The United States is no longer as rich as it acts. Former national security adviser Zbigniew Brzezinski has remarked that the world should focus less on the G20 and more on a "G2" of China and the United States.
In 2008, before the storm hit, China and the United States accounted for more than half of all global economic growth. This year, even in a worst-case scenario, China will probably grow 7 percent as the world economy contracts and the United States suffers through at least two more quarters of deep recession.
At the end of last year, John Lipsky, the deputy director of the International Monetary Fund, predicted that emerging economies would provide 100 percent of the world's growth in 2009. Given that China is the linchpin of the emerging world, it could well account for much of global growth now, much as the United States did in its mid-20th century heyday.
China has announced a $600 billion spending plan, which, relative to the size of its economy, surpasses Washington's. Still, these measures contrast with the tepidness of European spending efforts and dwarf the means of other nations.
America's political class, long accustomed to military and economic predominance, tends to view any reliance on a foreign power as a sign of weakness. In its annual report to Congress last week, the Pentagon said that China is seeking technology and weapons to counter the traditional advantages of U.S. forces.
Premier Wen Jiabao blamed the United States for the financial crisis in January, and just last week China's top central banker suggested replacing the dollar as the world's reserve currency with one that the IMF would issue.
China has become the world's second largest economy in a few short years. The U.S. economy is no longer self-sufficient, nor can the United States act unilaterally in matters of money. That does mean a relative decline in influence, a development Washington considers undesirable and dangerous.
Chinese officials are rightly nervous that, having invested so much -- politically and financially -- in the United States, they will be held accountable if the relationship turns sour or if U.S. economic weakness exacerbates problems within China itself. At a news conference on March 13, Wen went so far as to ask Washington for assurances that China's holdings of roughly $1 trillion in U.S. government debt will be safe.
Washington cannot halt Beijing's rise, nor can it extricate itself from this relationship. We can embrace it and shape it -- or we can reject it, and then all that debt and all that historical distrust may haunt us. We have a choice, and at least for the moment, we seem to be making the right one.
Zachary Karabell is president of River Twice Research and author of the forthcoming book, "In the Red: How China and America Became One Superpower Economy."
Sunday, March 29, 2009
A hundred years ago, London would have made sense as the spot where the world's leaders should gather, as they will this week, to grapple with a spreading economic crisis. The city was the early 20th century's nexus of finance and power, and Britain straddled the globe as the only true superpower.
But we're in the 21st century now, and the G20 heads of state should not be plotting in the shadow of Big Ben. They should be sitting across from Mao's Tomb, near the Forbidden City, in the meeting halls off Tiananmen Square in Beijing.
The first G20 meeting, last fall, appropriately took place in Washington. But holding this second conclave in Beijing would have signalled a clear recognition that the Washington-Beijing axis is the most important relationship in the world today; it is the X factor in the quest to rescue the global economy.
Can they do it?
Some look at the relationship and see only complications, worrying that if China sells off or stops buying U.S. bonds, the American economy could sink even deeper, leaving us like England at the end of War World II, a broke and broken hegemon, dependent on an upstart power.
The United States is no longer as rich as it acts. Former national security adviser Zbigniew Brzezinski has remarked that the world should focus less on the G20 and more on a "G2" of China and the United States.
In 2008, before the storm hit, China and the United States accounted for more than half of all global economic growth. This year, even in a worst-case scenario, China will probably grow 7 percent as the world economy contracts and the United States suffers through at least two more quarters of deep recession.
At the end of last year, John Lipsky, the deputy director of the International Monetary Fund, predicted that emerging economies would provide 100 percent of the world's growth in 2009. Given that China is the linchpin of the emerging world, it could well account for much of global growth now, much as the United States did in its mid-20th century heyday.
China has announced a $600 billion spending plan, which, relative to the size of its economy, surpasses Washington's. Still, these measures contrast with the tepidness of European spending efforts and dwarf the means of other nations.
America's political class, long accustomed to military and economic predominance, tends to view any reliance on a foreign power as a sign of weakness. In its annual report to Congress last week, the Pentagon said that China is seeking technology and weapons to counter the traditional advantages of U.S. forces.
Premier Wen Jiabao blamed the United States for the financial crisis in January, and just last week China's top central banker suggested replacing the dollar as the world's reserve currency with one that the IMF would issue.
China has become the world's second largest economy in a few short years. The U.S. economy is no longer self-sufficient, nor can the United States act unilaterally in matters of money. That does mean a relative decline in influence, a development Washington considers undesirable and dangerous.
Chinese officials are rightly nervous that, having invested so much -- politically and financially -- in the United States, they will be held accountable if the relationship turns sour or if U.S. economic weakness exacerbates problems within China itself. At a news conference on March 13, Wen went so far as to ask Washington for assurances that China's holdings of roughly $1 trillion in U.S. government debt will be safe.
Washington cannot halt Beijing's rise, nor can it extricate itself from this relationship. We can embrace it and shape it -- or we can reject it, and then all that debt and all that historical distrust may haunt us. We have a choice, and at least for the moment, we seem to be making the right one.
Zachary Karabell is president of River Twice Research and author of the forthcoming book, "In the Red: How China and America Became One Superpower Economy."
