Russia sees in credit crisis end of U.S. domination

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Angela Merkel and Dmitry Medvedev at a forum in St. Petersburg on Thursday. (Presidential Press Service, via the Associated Press)

Russia sees in credit crisis end of U.S. domination
By Andrew E. Kramer

Published: October 2, 2008

MOSCOW: The Russian president said in a speech Thursday that the financial crisis in the United States should be taken as a sign that America's global economic leadership is drawing to a close, reiterating an argument that leaders here have been making for some time, though investors in recent weeks have been fleeing Russia and depositing money in U.S. Treasury bills.

Perhaps inevitably for a country long lectured to by the United States, Russia is using the occasion of the U.S. financial crisis to do some lecturing of its own.

President Dmitri Medvedev said Thursday that the U.S. crisis showed that "the times when one economy and one country dominated are gone for good." Speaking of the United States, Medvedev said the world no longer needed a "megaregulator."

Russia has argued that the freewheeling Anglo-American style of capitalism is to blame for the crisis, a position echoed by Germany and other Continental European nations. Medvedev even called it financial "egoism."

A drumbeat of similar pronouncements has been heard in Russia in recent days. Prime Minister Vladimir Putin made a major speech Wednesday on U.S. financial "irresponsibility," blaming the plunge of more than 50 percent in the Russian stock market on the global economic slowdown and U.S. financial turmoil, rather than on any troubles endemic to Russia.

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"The saddest thing is that we can see an inability to take appropriate decisions," Putin said in his speech after the U.S. House of Representatives rejected the Bush administration's bailout plan. In contrast, the Russian bailout was decided by decree.

"This is not the irresponsibility of some people but the irresponsibility of the system, which, as it is known, claimed to be the leader," Putin said.

Medvedev spoke Thursday at St. Petersburg State University during the eighth annual Petersburger Dialog, a forum devoted to developing relations with Germany and where he met with Chancellor Angela Merkel.

Members of Merkel's government have also been critical of U.S. regulators.

Germany will "always support a multilateral approach" to market regulation, Merkel said, adding that officials from the European members of the Group of 8 industrialized nations would meet to discuss new market regulations, Bloomberg News reported.

But in contrast with other European countries Russia's own financial system has been in steep decline over the past weeks, and regulators suspended stock trading three times. As in other emerging markets during periods of turmoil, investors have had a tendency to pull money out of Russia and to deposit it in U.S. Treasury bills.

Since the second week in August, when the war in Georgia and political tension with the West heightened concerns about stability in Russia, $52 billion in net private capital has left Russia, according to an investor note from Goldman Sachs.

Russia has promised a total of about $150 billion for loans to banks, tax cuts and other measures. The moves seek to stimulate the economy, restore liquidity to the banking sector and return confidence in the stock market.

Still, the global credit crisis could trim about 1 percent from Russian growth next year, according to Finance Minister Alexei Kudrin.

http://www.iht.com/articles/2008/10/...ope/russia.php

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Russian President says era of US global economic dominance over
10/2/2008 12:12 PM ET

(RTTNews) - Russian President Dmitry Medvedev has said that the era of US global economic dominance is over.

His statement during an address to a Russian-German development forum in St. Petersburg came in the presence of visiting German Chancellor Angela Merkel Thursday.

Medvedev called for building a "more just" financial system in the world based on the principles of "multi-polarity, supremacy of the law and taking account of mutual interests."

"The time of domination by one economy and one currency has been consigned to the past once and for all," he added.

Wednesday, Russian Prime Minister Vladimir Putin lashed out at US economic "irresponsibility" for the continuing global financial crisis. White House rejected the remarks, calling them "unfair" finger-pointing.

Earlier in the day, Medvedev held talks with Merkel, whose visit is seen as an attempt to ease tensions between Moscow and the West over the recent war in Georgia.

by RTT Staff Writer

http://www.rttnews.com/Content/Gener...e=B1&Id=729728

[American Patriot]

And they will see us mooning them next month.

LOL

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From Times Online
October 1, 2008
Vladimir Putin lashes US for economic failures


(Reuters/RIA Novosti/Kremlin/Alexei Druzhinin)
When he's not hunting tigers, Vladimir Putin looks after the Russian economy

Philippe Naughton

The Russian Prime Minister Vladimir Putin lashed out at the United States today for what he said was its inability to deal with the financial crisis affecting the global economy.

In remarks unlikely to go down well in Washington, Mr Putin was especially critical of Congress's rejection of a $700 billion bank bailout – a rejection that hit Russian financial markets particularly hard.

“Everything that is happening in the economic and financial sphere has started in the United States. This is a real crisis that all of us are facing," the former president told a government meeting in Moscow.

“And what is really sad is that we see an inability to take appropriate decisions. This is no longer irresponsibility on the part of some individuals, but irresponsibility of the whole system, which as you know had pretensions to (global) leadership."

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Highly leveraged Russian companies have been hit hard by the credit crunch, which has made it virtually impossible to secure borrowing abroad.

The main Russian stock indices are more than 50 per cent down from their May peaks, far outstripping losses on more mature Western markets, and trading has been repeatedly suspended over the past two weeks.

Analysts say foreign investor confidence has been hit by Russia's actions during the recent conflict in Georgia, as well as the Government's attitude towards Western energy companies trying to operate in Russia and other former Soviet states.

Mr Putin said today that Russia would allocate 175 billion roubles (£3.85 billion) of budget funds in 2009 to support the domestic financial market.

http://www.reuters.com/articlePrint?...49092V20081001

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'Time of dominance of one economy, one currency is over'

Moscow (PTI): Apparently referring to the US, Russian President Dmitry Medvedev onb Thursday said the time of dominance of "one economy and one currency" is over and called for collective steps to cope with the current financial crisis caused by "financial egoism".

"The problems caused by the global financial crisis have demonstrated that the time of dominance by one economy and one currency has irreversibly become a matter of past," Medvedev said addressing the Russian-German 'St. Petersburg Dialogue' in Russia's former imperial capital.

With German Chancellor Angela Merkel sitting by his side, Medvedev declared that a today not a single nation could alone play the role of a "mega regulator" of the global financial system.

"For resolving the current financial crisis, which to a great extent is the product of financial egoism (of the US), there is a need for collective measures," Medvedev said. Prime Minister Vladimir Putin, battling to insulate the former Communist nation's nascent economy from the global financial crisis, had yesterday blamed the US for showing "irresponsibility".

"We see an inability to take appropriate decisions. This isn't the irresponsibility of particular individuals, it is the irresponsibility of a system that as we know had claims to leadership," Putin said in his televised remarks at the Cabinet meeting yesterday.

Putin, who as the country's chief financial and economic executive has taken several steps to ease the credit crunch by releasing 1.5 trillion roubles and earmarking another 500 million roubles to buy securities to prop bourses, said that Russia could no longer remain unaffected by the "infection" originating from the US.

http://www.hindu.com/thehindu/holnus...0810030380.htm

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October 3, 2008
Russia Says U.S. Financial Hegemony Is History

By ANDREW E. KRAMER
MOSCOW — Perhaps inevitably for a country often lectured by the United States about its own economy, Russia is using the occasion of the American financial crisis to do some lecturing of its own.

President Dmitri A. Medvedev has blamed the crisis on what he called financial “egoism” and said it should be taken as a sign that America’s global economic leadership is drawing to a close. Along with some European leaders, Mr. Medvedev has called for greater multilateralism in financial regulation, echoing a Russian position on international relations generally.

“The times when one economy and one country dominated are gone for good,” he said Thursday at St. Petersburg State University during the eighth annual Petersburger Dialog, a forum devoted to developing relations with Germany. After the economic woes of the American banking collapses, he said, the world does not want America as a “megaregulator.”

German Chancellor Angela Merkel, who was in Russia for the forum, said Germany too would “always support a multilateral approach” to market regulation.

Along with the Germans and others, Russian leaders argue that poorly regulated U.S. markets caused the current crisis. While it is hardly a new sentiment, in Russia there is a gloating quality, as the American
crisis deepens.

There has been a drumbeat sorts of pronouncements in recent days on this theme. Prime Minister Vladimir V. Putin made a speech on what he called American financial “irresponsibility” on Wednesday, blaming Russia’s stock plunge of more than 50 percent on non-Russian causes.

Of the financial crisis, he said: “This is not the irresponsibility of some people but the irresponsibility of the system, which as it is known, claimed to be the leader.”

In contrast to the Europeans who have also criticized lax U.S.
regulation, however, Russia’s own financial system has been in such chaos that regulators suspend trading on the stock market three times last month. The global credit crisis could trim about 1 percent from Russian growth next year, according to finance minister Aleksei L. Kudrin.

As in other emerging markets, investors are pulling money out of Russia and depositing it in United States treasury securities because they are considered the safest place to park money. By the time Mr.
Medvedev spoke on Thursday, investors had pulled about $52 billion in net private capital out of Russia since the second week of August, when the war in Georgia and political tension with the West heightened concern about political risk here.

The criticism of American finance coincided with a rise in Russian military bluster that has been viewed by some in the West as a resurgence of the Kremlin’s cold war mentality. On Thursday Russian generals announced plans for the largest air force exercise since the collapse of the Soviet Union, called Stability 2008, to be held next week. Strategic bombers with fighter plane escorts will fly in the Pacific Ocean and fire cruise missiles at targets in Russia. Also Thursday, the deputy commander of Russia’s navy said the country would build eight new nuclear submarines before 2015.

http://www.nytimes.com/2008/10/03/wo...gewanted=print

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Friday, October 03, 2008 Updated at 03 October 2008 0:20 Moscow Time

Putin Blames U.S. For Financial Woes

02 October 2008 Prime Minister Vladimir Putin said Wednesday that U.S. "irresponsibility" led to the global financial crisis and discredited its claims to world leadership, as his finance minister moved to link domestic woes to the broader downturn.

"We see an inability to take appropriate decisions," Putin said at a Cabinet meeting. "This isn't the irresponsibility of particular individuals, it is the irresponsibility of a system that, as we know, had claims to leadership."

Troubles in the U.S. financial sector have spilled over into Russian markets, hitting banking shares and stocks more broadly, and making it virtually impossible for highly leveraged companies to secure funds abroad to refinance debts.

Finance Minister Alexei Kudrin said the credit squeeze might shave one percentage point off Russian growth next year, meaning that the economy might expand by as little as 5.7 percent.

His comments came as VTB Bank Europe said Russian manufacturing shrank for a second month in September, the first back-to-back contraction since November 1998.

Russia's problems were accelerated by its war in Georgia, a slump in commodity prices and capital flight, which BNP Paribas has estimated at $57 billion in the period from Aug. 8 to Sept. 19.

"Everything that is happening in economics and finance started in the United States," Putin said.

As a result, the United States has a "responsibility" to approve Treasury Secretary Henry Paulson's $700 billion bailout plan, Kudrin said. President George W. Bush and Senate leaders Tuesday vowed to revive the plan to buy distressed assets from banks after Congress rejected it a day earlier.

"I think Paulson's plan is necessary," Kudrin said. "It's the responsibility of the United States to other countries," he added, echoing a statement made late Tuesday by European Central Bank president Jean-Claude Trichet.

The role of the United States on the global financial arena will change, and the use of dollars will "gradually" decline, Kudrin added.

The government has said it may spend up to 500 billion rubles ($19.5 billion) buying shares, including 250 billion rubles this year, if markets do not stabilize. The move is part of an support package worth a total of $180 billion.

Kudrin said the government has not started buying shares and hopes that it will not need to do so. He also said the Dow Jones Industrial Average would continue to fall for six months and have an inevitable impact on Russian markets, RIA-Novosti reported.

Putin pledged $50 billion to a previously announced $100 billion of funds for the banking industry Monday and said the Central Bank would provide loans without collateral to banks.

The ruble, which fell against the dollar for a fifth straight day, may strengthen against the dollar-euro basket if the U.S. Senate endorses a modified version of the $700 billion bailout package, said Elisabeth Gruie, an emerging-markets strategist in London at BNP.

But Kudrin said the ruble was unlikely to strengthen from current levels because speculative inflows would abate as oil prices fall, Interfax reported.

http://www.moscowtimes.ru/articles/detail.php?ID=371377

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Moscow Says U.S. Leadership Era Is Ending
By ANDREW E. KRAMER
Published: October 2, 2008

MOSCOW — Perhaps inevitably for a country often lectured by the United States about its own economy, Russia is using the occasion of the American financial crisis to do some lecturing of its own.

Skip to next paragraph Related
After Financial Crisis, Uncertainty and Lectures From Abroad

(October 3, 2008)

Times Topics: Russia | Dmitri A. Medvedev

President Dmitri A. Medvedev has blamed what he called financial “egoism” for the crisis and said it should be taken as a sign that America’s global economic leadership was drawing to a close. Along with some European leaders, Mr. Medvedev has called for greater multilateralism in financial regulation, echoing a Russian position on international relations generally.

“The times when one economy and one country dominated are gone for good,” he said Thursday at St. Petersburg State University during the eighth annual Petersburger Dialog, a forum devoted to developing relations with Germany. After the American banking collapses, he said, the world does not want America as a “megaregulator.”

Chancellor Angela Merkel of Germany, in Russia for the forum, said Germany, too, would “always support a multilateral approach” to market regulation.

Along with the Germans and others, Russian leaders contend that poorly regulated American markets caused the current crisis. While it is hardly a new sentiment, in Russia there is a gloating quality, as the American crisis deepens.

There has been a drumbeat of pronouncements in recent days on this theme. Prime Minister Vladimir V. Putin made a speech about what he called American financial “irresponsibility” on Wednesday, blaming non-Russian causes for Russia’s stock plunge of more than 50 percent.

Of the financial crisis, he said, “This is not the irresponsibility of some people but the irresponsibility of the system, which as it is known, claimed to be the leader.”

In contrast to the Europeans who have also criticized lax American regulation, however, Russians are facing a financial system that has been in such chaos that regulators suspended trading on the stock market three times last month. The global credit crisis could trim about 1 percent from Russian growth next year, said the finance minister, Aleksei L. Kudrin.

As in other emerging markets, investors are pulling money out of Russia and depositing it in United States Treasury securities because they are considered the safest place to park money. By the time Mr. Medvedev spoke on Thursday, investors had pulled about $52 billion in net private capital out of Russia since the second week of August, when the war in Georgia and political tension with the West heightened concern about political risk here.

The criticism of American finance coincided with a rise in Russian military bluster that has been viewed by some in the West as a resurgence of the Kremlin’s cold-war mentality. On Thursday, Russian generals announced plans for the largest air force exercise since the collapse of the Soviet Union, called Stability 2008, to be held next week. Also on Thursday, the deputy commander of Russia’s navy said the country would build eight new nuclear submarines before 2015.

http://www.nytimes.com/2008/10/03/wo...em&oref=slogin

[American Patriot]

LOL

Russia is grasping at straws.

I wouldn't BET AGAINST the US for any amount of money.

[Toad]

You can take a stumble without taking a fall. I think Russia forgets this.

[Malsua]

This is private sector failings anyway. This is not the US gov't defaulting or something.

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These threats are not directed to America but to Europe, the Middle East, Asia, Central and South America.

Here are a few paragraphs from the link below outlining their strategy:
http://www.financialsense.com/stormwatch/g.../2008/0919.html

“If the United States went bankrupt the following sequence would occur: The U.S. government would lose its credibility, the country’s currency would fail and imports could not be maintained – especially oil imports. There would be shortages. But the sequence doesn’t end with shortages. It doesn’t end with mere economic loss. When the financial structure collapses, the national security structure collapses. Then nothing will restrain the military power of Russia and China.”

“A few days ago Russia’s representative to NATO, Dimitry Rogozin, made a striking statement. He warned that the Europeans risk war if Georgia joins the alliance. “We will terminate all contact with NATO because we cannot cooperate with an organization which supports an aggressor against us. If NATO makes another mistake in its relations with the East, we will be unable to continue our relations. Our people will not understand. For us, it is a ‘red line.’” He then characterized Mikhail Saakashvili as a war criminal and “puppet of the United States.” Rogozin warned that Europe should stay out of the “somebody else’s war, which is a war against Russia.”

What did Rogozin mean by this? If the Europeans know what is good for them, they will leave the Americans to fend for themselves. In other words – Europe must break with the United States. The real conflict is between Russia and America. Europe need not get involved. The Kremlin’s position was clarified recently by Prime Minister Putin. He said that George Bush was a good man, but that George Bush was no longer in charge of the U.S. government. Evil advisors have taken over in Washington, and these must be dealt with.”

“America’s financial collapse threatens to uncork the totalitarian genie from its bottle. I believe it is too late to stop the worst from happening. The sequence has begun. The Kremlin knew that a financial crash was about to take place. They’ve been waiting on it. They are prepared to exploit it. And the Americans are completely oblivious. They are utterly unprepared.”

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Putin: US image damaged forever over economy woes

MOSCOW
The wide-ranging financial crisis has irreparably damaged the image of the U.S. as the leader of the free world and the global economy, Russian Prime Minister Vladimir Putin said Thursday.

Putin's remarks during a meeting with Russia's Communist Party were the latest Russian attack singling out the U.S. as the chief culprit in the global financial turmoil.

"Trust in the United States as the leader of the free world and the free economy, and confidence in Wall Street as the center of that trust, has been damaged, I believe, forever," Putin said. "There will be no return to the previous situation."

Putin and President Dmitry Medvedev have repeatedly accused the U.S. of responsibility for the crisis and called for changes in the world financial system.

http://www.businessweek.com/ap/finan.../D93N04D80.htm

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Medvedev Says U.S. Threatens Security

09 October 2008By Oleg Shchedrov / ReutersEVIAN,

France -- President Dmitry Medvedev said Wednesday that the United States' self-styled role as the world's dominant power was undermining international security.

"A desire by the United States to consolidate its global domination led to it missing a historical chance ... to build a truly democratic world order," Medvedev said of U.S. actions since the Sept. 11 attacks in 2001.

Addressing an international conference in the French resort town of Evian, Medvedev also said Russia's war with Georgia in August showed that the security mechanism in Europe, which he said was based around NATO and the United States, needed a major overhaul.

The Kremlin leader proposed a new security pact that would ban the use of force or the threat of its use and would make clear that no single country, including Russia, would have a monopoly on providing security for the continent.

In an unusually emotional speech, Medvedev said Washington passed up a historic chance for a new partnership after the Sept. 11 attacks on U.S. cities, when Moscow offered to join Washington in fighting terrorism.

The U.S.-led invasion of Iraq and Washington's plans to station elements of a missile-defense shield in Eastern Europe -- a project fiercely opposed by Moscow -- scotched that partnership, Medvedev said.

"After toppling the Taliban regime in Afghanistan, the United States started a series of unilateral actions," he said. "As a result, a trend appeared in international relations toward creating dividing lines. This was in fact the revival of a policy popular in the past and known as containment."

Medvedev said many Western policymakers were still viewing Russia through an outdated mindset formed during the Cold War. "It is a shame that part of the U.S. administration has contracted this," Medvedev said.

Russia's diplomatic relations with the United States have deteriorated recently and reached their lowest point since the Cold War after Moscow's intervention in Georgia, a U.S. ally.

Russia launched a massive counterstrike to crush an attempt by Georgian forces to retake the separatist South Ossetia region. Its troops then pushed deep inside Georgia, a response Western states said was disproportionate.

Under a deal brokered by French President Nicolas Sarkozy, Russia agreed to pull out its troops by Friday from "security zones" it set up outside South Ossetia and Abkhazia, another rebel, pro-Russian breakaway region of Georgia.

In sharp contrast to his comments about the United States, Medvedev praised the EU for its handling of the Georgia crisis. Sarkozy acted as a mediator on behalf of the 27-member bloc, of which France currently holds the rotating presidency.

"I want to stress the constructive role of the European Union in finding a peaceful option for overcoming the Caucasus crisis," he said. "When other forces in the world were reluctant or incapable of doing this, it was in the European Union that we found a ... responsible and pragmatic partner."

"I believe this is a testimony to the maturity of Russia-EU relations, which have passed their test with dignity," Medvedev said.

http://www.moscowtimes.ru/articles/detail.php?ID=371544

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Russia sees anti-US platform in G20 summit

Friday, 14 November, 2008 text

Russia goes to a crisis summit on Saturday mindful of its own economic fragility yet ready to push hard to overhaul rules of world finance it says were written by and for the United States, experts said.

While western leaders have spoken recently of a need for a real re-think of the system, Russia has for years advocated what then-president Vladimir Putin termed in June 2007 "a new architecture of international economic relations".

RELATED: What is G20?

The upcoming Washington G20 summit, according to experts and officials, may offer Russia precisely the chance it has been awaiting not merely to join the global economy but to begin setting its agenda.

Moscow wants "to finally break the stronghold of the US ... and to create this sort of broader platform which gives a greater voice to Russia," China and India, said Chris Weafer, chief analyst at Uralsib investment bank in Moscow.

Russia could even take the lead at the summit among the world's emerging economies because of its greater foreign policy assertiveness, while China and India "tend to be much more quiet and 'behind-the-scenes'," Weafer said.

"This is the best opportunity that Russia has had in decades," he added.

Russian leaders have taken a hard line on the financial crisis, accusing the United States of being directly responsible for the problems of the world economy and calling for root-and-branch reforms of global financial markets.

"The US is definitely 99 per cent responsible," Finance Minister Alexei Kudrin said in a recent interview with Russia Today, an English-language state satellite channel aimed at beefing up Russia's image in the world.

Russia and China sit on the boards of directors of the International Monetary Fund "but their voices there are so insignificant that they can easily be overturned by the votes of three small countries", he added.

news.sbs.com.au

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Asia plans to ‘lead the world’ by 2015 with EU-like bloc of nations

By Stephen C. Webster
Saturday, October 24th, 2009 -- 11:27 am



The 10-member Association of Southeast Asian Nations (ASEAN) wants an economy that will "lead the world" by 2015. To these ends, the group has commissioned a study on the feasibility of wrapping some of the world's most populated nations into a "freed trade zone" bloc not dissimilar to the European Union, according to published reports.

The Asian leaders, who are meeting in Thailand, said the association would tie together the ASEAN nations and regional partners "China, Japan, South Korea, India, Australia and New Zealand," the BBC reported.

The British news agency quoted Japanese Prime Minister Yukio Hatoyama as saying, "It would be meaningful for us to have the aspiration that East Asia is going to lead the world." Wire service AFP added that the proposal for an East Asian community had come from Hatoyama.

"Right now we have bilateral free trade agreements with all six countries completely. Now we should explore a feasibility study both in the East Asia Free Trade Area and with (India, Australia and New Zealand)," he said.

Asia's quick rebound from the global recession compared with the United States and other Western economies has prompted calls for the region to increase integration.

However, the BBC noted that a proposal to include the United States in such an economic community was a point of contention at the ASEAN meeting.

"Some Congressional leaders are reportedly urging the Obama Administration to pursue a free-trade agreement with ASEAN, but this is likely to prove contentious," economic blogger Marc Chandler added.

U.S. leaders plan to appoint an ambassador to the ASEAN and stage a summit with leaders in November, he also noted.

Chinese Premier Wen Jiabao, presenting a six-point proposal to ASEAN leaders, suggested first that "the China-ASEAN Free Trade Area should be brought into play through publicizing laws and regulations on the free-trade area and the professional training of human resources for it, and by assisting enterprises to make good use of its preferential policies," China Daily reported.

Wen also added that "he hoped the Chiang Mai Initiative Multilateralization (CMIM), a 120-billion-U.S.-dollar regional reserve pool aimed at providing emergency liquidity for countries in financial crisis, could be launched by the end of this year," China View news reported.

China said it is planning a conference on forming the new Free Trade Area and developing guidelines for business within it. "By 2010, tariffs on almost all goods traded between ASEAN and China would be eliminated," Xinhua reported.

Bilateral trade between ASEAN nations and China has grown from $60 billion to $192 billion per year in just the last six years, Xinhua added.

With AFP.

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How China Ends West’s Domination

January 16, 2012
By Zhang Yunling

China's rise will see the end of Western domination. But contrary to the suggestion of some alarmist commentators, this doesn't mean the Western world is finished.

• What West Doesn’t Get About China
• Can China’s Consumers Save West?
• West’s Diplomacy Trumps China Fear
• The Arctic Sea—a New Wild West?
• Time for West to Wise Up on Iran

Since China’s reform and opening up policies began in the late 1970s, the country’s average annual economic growth rate has hovered near 10 percent. Currently, China’s gross domestic product is second only to the United States; it's the world’s largest exporter and importer and the largest holder of foreign exchange reserves. And along with China’s remarkable economic rise has come a significant increase in China’s role in both regional and global development and governance.

With the economies of the United States, the European Union and Japan reeling from weak growth and burdensome debt levels, China has emerged as a key driver of global economic growth, contributing, along with other major emerging economies, nearly two thirds of new global economic output. As Daniel Burstein has argued, a power shift toward Asia is under way, and “China lies at the heart of this Asia shift." According to many projections, China will surpass the United States as the largest economy in the world by 2030. China has benefited greatly from integrating into the world market and participating in the existing international economic system, because this has helped the country reform its old planning system and rapidly assimilate into the global economy. This process is set to continue in the future because China has no reason to reverse a course that has had such positive results. As a newly emerging power, China will naturally become a more important player in helping to shape regional and global development and governance.

To sustain growth in the future, however, China will have to restructure its economy from an investment- and export-led model to one based on innovation and domestic-led demand. It will also have to adopt policies that ensure social safety nets and equitable distribution of wealth. China also needs to establish a new, sustainable economic foundation by implementing a green development strategy and establishing a good governance system that redefines the role of government and enhances the role of the market.

With its economy moving into a new phase through steady technological innovation and an explosion of domestic demand, China will surely play a bigger role as a major market and capital resource for regional and global economic growth.

Clearly, though, the global economy is facing many serious challenges. According to a survey released in November by the World Economic Forum, the “confidence deficit” continues worldwide, with international experts remaining pessimistic about the state of the global economy and global governance over the next year. An immediate concern is whether the U.S. economy will continue to move out of the shadow of the financial crisis.

Currently, it's marked by low growth, high unemployment and mounting trade and budget deficits. The European Union, meanwhile, is suffering from the contagion effects of its sovereign debt and euro crisis. There are widespread fears that a default by one or more EU member states could well push the EU economy back into recession and plunge global financial markets into uncertainty. The declining demand from these developed markets has a profound impact on emerging economies since most of them depend on developed markets.

In order for the United States to stimulate its vulnerable economy, the administration of President Barack Obama needs to adopt more effective measures — especially ones aimed at stabilizing the dollar and combating trade protectionism. As for the European Union, it's critical to restore market confidence through fiscal consolidation, structural reforms and more effective economic governance. Bolstering the financial sector and strengthening governance of the euro zone is vital for the survival and reinforcement of the common currency. The good news is that EU member states agreed to a treaty that would submit member states to greater budget oversight, agreed to increase the size of the European Financial Stability Facility and decided to provide more assistance to debt-crisis economies. Having said this, fundamental reform of the European Union’s fiscal system is still urgently needed.

The current crisis also shows the weakness of the international system and global governance. The International Monetary Fund needs reform if it is to better represent the interests and concerns of the emerging economies and enable them to play a greater role in global governance. New and effective regulations for governing international financial markets need to be formulated and implemented. In this respect, the Group of 20 nations can play a major role. By bringing major developed and developing economies together in a larger forum with a more important role in global crisis management and macroeconomic co-ordination, the G-20 can make world economic growth more sustainable and balanced. The ongoing agenda for economic restructuring and support for the global multilateral system are critical to the process of restoring confidence.

China’s economy is highly integrated into the global market, so the country should participate actively in initiatives to reform the international system.

While a stable and evolutionary reform process is important to China, the desired outcome should see structural changes that produce a new, more effective international system. Some have worried that China may “operate both within and outside the existing international system, seeking to transform that system while at the same time, in effect, sponsoring a new China-centric international system." The fact is, though, that a China-centric system would neither be acceptable to other nations nor in China’s own interest.

China’s leadership believes that the current trade imbalance between China and the United States is largely rooted in irresponsible U.S. fiscal and monetary policies, so the United States should focus on adopting more responsible and credible policies. To be sure, China itself should also make efforts to restructure its export-led growth model and generate stronger internal demand in order to reduce its dependence on external markets and trade surpluses to drive economic growth. The economies of China and the United States are highly interconnected and complementary, which requires them to co-ordinate and co-operate closely as they seek to rebalance and restructure their relationship. A trade war wouldn't only hurt both countries, but also the regional and global economies.

[American Patriot]

In order for the United States to stimulate its vulnerable economy, the administration of President Barack Obama needs to adopt more effective measures — especially ones aimed at stabilizing the dollar and combating trade protectionism.

Right.... from a Socialist? I don't foresee that ever happening.