July 2007 the U.S. subprime mortgage crisis began, to September 2008 turned into a financial crisis, U.S. financial crisis soon led to the global financial tsunami and the world economic recession, no country is immune, or immune.

Two years later, the tide receded, only to find the coastline has been washed to pieces.

G20 financial crisis due to health, but also to solve the crisis because of the establishment and consolidation of their international status.

The first G20 summit in November 2008 held in Washington in haste, because the U.S. government faces change, the meeting preparation and coordination that is less comprehensive, more like a test. Although the specific results of the summit is limited, but symbolically important. In addition to the Washington summit to reach a consensus on global rescue, but more important is equality in developing countries and developed countries for the first time to discuss international economic affairs.

April 2009 the London summit, G20 and further highlight the role of the meeting in the rescue, financial market regulators, financial institutions, the issue of reform has made a number of concrete results. Pittsburgh summit in September in the reform of governance structures of international financial institutions made a major breakthrough, the IMF and the World OK two institutions share developing economies Zhuanyi a 5% and 3% of the representation of developing countries and voice has been consolidated.

Pittsburgh issued after the summit, “leaders of the statement,” declared, G20 will be the “main platform for international economic cooperation”, G20 summit will also form a mechanism. G8 in international economic affairs since then retreat to second place, the major concern to international security, diplomacy and other issues.

Currency Reform

The outbreak and spread of financial crisis, it is the current dollar-dominated international monetary system, the inherent flaw makes the crisis intensified. To weather the crisis, the Fed adopted a “quantitative easing” monetary policy, through the purchase of government bonds in the market to expand the money market liquidity. But on the dollar as the main reserve currency of other countries, spam dollar means reserve assets shrink. Seeking to reform the global monetary system, so the voices become increasingly strong.

However, this financial crisis is still not sufficient to change the impact of dollar hegemony. JP Morgan currency strategist Jeffery Levi said in an interview: “On the one hand, yet can not find a single currency or multi-currency and U.S. dollar combined to contend; the other hand, , the current financial crisis on the impact of other economic bodies, and no less than the impact on the United States, small, relative to other currencies, in particular the euro, the dollar to still be at Xiangdui strong. ”

Before the G20 summit in London, the Chinese central bank governor Zhou Xiaochuan think we should create a sovereign state with separated, and can keep the currency long-term stability of the international reserve currency.

China and the U.S. financial crisis has sounded the alarm, the two countries over the past 10 years to promote the economic growth mode and the world will be unsustainable. Obama’s State of the Union earlier this year announced to 5 years doubled to U.S. exports. Meanwhile, China also began to reflect on the current export-dependent development.

Brookings Institution Senior Fellow Eswar Prasad to the newspaper that the Chinese government is facing a double challenge: “One is that economic growth will rely more on domestic consumption, so that people gain from economic growth more affordable; second is to create more job opportunities, maintain social stability. ”

So whether China will replace U.S. leadership? Heritage Foundation research fellow Delikexi Seth that depends on China’s policy options. In particular, he suggested that after China’s accession to WTO global factor price changes. China’s weakness lies in energy and other natural resources is highly dependent, and labor supply can not keep up the pace of economic development. Thus, China is in urgent need to reduce energy consumption, a more efficient labor market.

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Category: World Affairs
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