G20: Will China make this the G1?
Alone among the big economies, China is still in the
ascendancy. It may well hold the swing vote at the G20
Thursday, 2 April 2009
It is possible to overstate the importance of seating
plans, but it is no accident that Hu Jintao was placed to
the right of Gordon Brown at last night's Downing Street
dinner: China may well hold the swing vote in today's
negotiations at the G20.
Almost alone among the big economies, China is still
emphatically in the ascendancy. It might have all the same
anxieties about the collapse of world trade as the others,
but it can rightly claim the economic high ground in a way
that France and Germany can only dream of.
More importantly, it holds the key to many of the competing
aspirations of other leaders. President Sarkozy has already
identified the Middle Kingdom as the biggest obstacle to a
crackdown on tax havens and international financial
regulation – fearing Hu is overly protective of the
offshore financial role played by Hong Kong and Macau. If
President Obama is to push ahead with fiscal stimulus he
needs to keep persuading China to lend it money by buying
US Treasury bills. And if Gordon Brown is to achieve his
stated goal of rebalancing world trade, he needs to
encourage China to become a nation of importers as well as
a nation of exporters.
All this comes as China finally shakes off its timidity on
the world stage. Since the Olympics, Beijing has shown new
confidence in international affairs – even talking about
replacing the US dollar with a new global reserve currency.
Yesterday's bilateral meeting between President Obama and
President Hu was privately dubbed the G2 – in recognition
of its primacy over the G20. Today it may feel like the G1.