The G20 meet today in Seoul - at the top of the agenda will be no doubt about global imbalances. A multilateral approach is need to prevent countries retreating into competitive devaluations.
As a result, the USA has a huge current account deficit while others, like oil exporters and China have large surpluses. There will be pressure on China to revalue its currency. This would make China's exports more expensive in the market and Chinese consumers would import more goods and services. This will support growth in the USA and Europe.
However, we must achieve this end, not by threatening China, but through agreement. Punitive protectionist measures against China will only force them to retaliate.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment