"The Global Economy is Seriously Out of Whack"
Posted by jeckert on 06/22/2010
If China were a child, it wouldn't share and it wouldn't follow directions. Since entering into the WTO, China has helped to throw the global economy into a tailspin of hyper-consumerism in the United States as it pumps cheap, shoddy exports across the world at record speeds. China has reaped every benefit of integration into the world economy, and given very little back. Yet, just days before the G20, when the increasingly heated issue of their manipulation of currency would most likely manifest itself in a futile game of politico-economic tug-of-war, China has announced plans to make their exchange rate more flexible. Carter Dougherty of BNet points out the problem of China's lopsided economic relationship with the rest of the globe in a piece evaluating the effects of the Central Bank's latest decision:
"But China still views the global system as something it takes from, rather than a framework for which it bears some responsibility. In the words of Robert Zoellick, a former deputy secretary of state and now president of the World Bank, China is not a “stakeholder” in the international system. In fact, it’s a free rider on the world economy."In an attempt to assuage the Obama administration, which is currently answering to the impatient demands of Sen. Schumer and others (see a Geithner grill session here), China has made an announcement that, in all likelihood, will not make much of a difference for American manufacturers and workers. According to Dougherty:
"The administration pushes China, insisted all the while that Congress is nipping at its heels. And China gives just enough to let the administration make a credible argument that they are making progress. The only problem is: this time, the Chinese gave the Obama administration squat."We'll be following China's currency situation closely as the G20 approaches and Congress continues to turn up the heat on the Administration. Read more here.
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