China: U.S. Should Offer Economic Concessions
RENEE MONTAGNE, host:
This is Morning Edition from NPR News. I'm Renee Montagne.
ARI SHAPIRO, host:
And I'm Ari Shapiro. Leaders from around the world hope to ease the international economic turmoil when they meet in Washington this weekend for the Group of 20 summit. They represent rich nations and developing ones, and none is immune from the financial crisis. From the point of view of China and other emerging economies, this crisis began in the U.S. And now they expect the U.S. to help them out. NPR's Anthony Kuhn has this report from Beijing.
ANTHONY KUHN: The U.S. should be a responsible financial power, reads one headline on the website of the Global Times, a conservative tabloid. The U.S. should learn something about financial oversight from China, reads another. These viewpoints are on the nationalistic end of the spectrum, but many Chinese do feel that rich nations bear a certain responsibility for the crisis. College literature professor Shu Minh(ph) is out buying books.
Professor SHU MINH (Chinese College Literature Professor): (Chinese spoken)
KUHN: Both China and the U.S. have benefited from economic relations with each other, he says. But right now, America's financial crisis is causing problems for China, and the U.S. government should step in and help China out. Developed nations, though, are still looking to China to help out. British Prime Minister Gordon Brown recently suggested that China should use some of its nearly $2 trillion in foreign exchange reserves to help resolve the crisis. Foreign Ministry spokesman Qin Gang restated the official position this week that China is not riding to anyone's rescue.
Mr. QIN GANG (Chinese Foreign Ministry Spokesman): (Chinese spoken)
KUHN: As a major country and a major economy with a population of 1.3 billion people, the biggest contribution China can make to the world is to maintain the healthy, sustained, and stable growth of its own economy. Beijing showed its commitment to keeping its own domestic demands strong with a roughly $580 billion financial stimulus package this week.
Independent economist Andy Xie estimates that the package could add an extra two percent to China's economic growth this year. But China has also signaled a willingness to take on more responsibility in the global financial system. John Kirton is director of the G-20 Research Group at the University of Toronto.
Dr. JOHN KIRTON: (Director, G-20 Research Group, University of Toronto): I think it's quite likely that, if not at this meeting, probably at the next one or two, that China will certainly signal that it is willing to provide more money in capital to the International Monetary Fund and Bank in return for a larger share of the vote.
KUHN: China has recently issued general appeals for more regulation of global financial markets. There is some talk of creating a new regulatory body, but the U.S. has said that's unlikely to happen at this week's meeting. John Kirton notes that the International Monetary Fund already has a mandate to monitor national economies for signs of trouble. But he says that doesn't mean that the IMF could have averted the current crisis.
Dr. KIRTON: For some time it's been saying that the United States has excessive current account imbalances, excessive levels of government deficits, that a lot of its stuff is unsustainable. But the Americans, being so relatively big, and at the end of the day feeling that they're in control of the IMF, don't tend to take the advice.
KUHN: Analysts on both sides of the Pacific agree that the U.S.-China financial relationship was part of that unsustainable arrangement, and it'll have to change. After all, China's trade surplus with the U.S. and its purchases of U.S. government and corporate debt helped fuel U.S. borrowing and spending that led to the crisis. The G-20 leaders are bound to consider this as they reflect on the routes of the crisis. But for now, stabilizing financial markets will be the more urgent task. Anthony Kuhn, NPR News, Beijing.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.