G20 summit underway: all eyes on developing countries
Beijing (AsiaNews/Agencies) - The leaders of the 20 most industrialized countries (85% of the global economy) are meeting today in Washington to discuss how to confront the global financial crisis, after the working dinner yesterday evening (in the photo). There is great expectation over the positions of developing countries, especially China and India.
Everyone is hoping that agreements will be reached for long-term reforms to prevent future crises and coordinate measures of support and stimulus for economies. At yesterday's dinner, contrasting positions emerged, with Europe calling for drastic changes in the "rules of the game in the financial world" (as French president Nicolas Sarkozy said), while the United States and other countries prefer less radical reforms. Although everyone agrees on the urgency, U.S. President George W. Bush, in welcoming the group, stipulated that the problem "will not be solved overnight, but with continued cooperation and determination it will be solved." It may be that the absence of newly elected president Barack Obama is causing doubts that he will honor any commitments made by Bush.
With 2 trillion dollars in foreign currency reserves and an economy that is still expanding rapidly, everyone is waiting to see what China will do. Yi Gang, deputy governor of the central bank of China, has announced that Beijing wants to try different avenues, including "participating in activities on the platform of the International Monetary Fund," but that in any case the country wants to act in a "responsible and prudent" manner, without giving in to "panic selling." Mu Hong, deputy director of the national reform and development commission, confirmed that China could contribute to addressing the question within the limits of what it can afford as a developing country.
Tang Ming, an economics expert, recalls that Beijing has already intervened to support the world economy, for example with its recent purchase of some of the 700 billion dollars in new U.S. government bonds.
Beijing reiterates that it must think above all of its domestic problems, and that its economic growth is in itself helpful for the world financial system. China also insists that developing countries must be given more influence, and their needs must be given more consideration. Meanwhile, it is trying to stimulate domestic consumption (just a few days ago it announced investments of 4 trillion yuan for public works projects) and to expand its economic ties with other developing countries. In this perspective, it looks favorably on the G20 summit, where it is able to have greater influence. In preparation for the summit, the finance ministers of China, India, Brazil, and Russia met in São Paulo Brazil last week.