Another G20 summit coming up, another potentially missed opportunity to talk about the really crucial talking points such as China. In the attempt of rich countries ‘to put the world to rights in a trendily broad and inclusive way’ on the way to the up and coming International Monetary Fund summit in Istanbul, talks might once again fall on the wayside with such topics as bankers’ overbloated bonuses.
Will the heads of the richest countries fail once more to discuss the two most important nations on earth, US and China, and their brewing trade wars over tariffs on Chinese car tires and American chickens? A trade row between these two countries will bring about far reaching global consequences.
China, the world’s largest exporter and third-largest economy, is the only one among the leading economies of the world ‘whose currency is not freely convertible, with a price mainly set in the markets.’ While China has ‘gradually revalued the renminbi against the dollar by about 15 per cent,’ it has since halted the process.
It has also been long overdue to discuss ‘the one big global macroeconomic issue that really matters. With Chinese convertibility, a lot of other Asian countries that have pegged their currencies to the dollar to remain competitive in and with China would also be stirred to change their approach.’
This issue is vital because the big and encompassing backdrop against which today’s economic crisis hangs is the unbalanced nature of the global economy, and the issue of ‘the renminbi has become too sensational to ignore.’
Via TimesOnline
