This was a very prescient piece in the Guardian by Economics Editor Larry Elliott giving his take on the G20 summit, specifically in relation to China.
China is fast becoming a major power in the world, even a super power, if such nomenclature means anything these days. While we in Europe, closely watched by the United States, endeavour to get our economy, both turbulent and sluggish at the same time, back on track, the west as a whole seems to be missing an international development of gigantic proportions.
Ten years ago, in December 2001, Chinawas admitted to the World Trade Organisation, indicating its status as a fully fledged market economy. The country had indeed come a long way since the end of the Cultural Revolution in the early 1970s. Its journey from an idiosyncratic version of communism to a leading world economic power took a mere thirty years – just one generation.
Perhaps it’s this short time frame that makes us in the west place so little emphasis on China. Maybe it’s also because we don’t want to admit that the world is changing and other super powers are emerging, powers the west once thought it either ruled or controlled in some form or another. Not only does China now have a seat on the G20, it is also strong enough to be called on to contribute to the eurozone bailout.
It is now very clear that the global economy has three main pillars, China being one along with the United States and the European Union. Larry Elliott puts it very well in his comments on the G20 summit: ..”the focus of events was the unfolding crisis in the eurozone, but it was hard to escape the sense that power had shifted from west to east over the past 10 years. It was not just that Nicolas Sarkozy and Angela Merkel were holding out the begging bowl, pleading with China to dip into its foreign currency reserves to provide capital for Europe’s bailout fund. Nor was it that China’s leaders felt entirely comfortable lecturing Europe on the need to get its act together when it was not so long ago that it was the other way round….Rather it was the mixture of bemusement and derision with which China viewed (the G20) events…”
It is imperative that the west and Europe in particular heeds China’s growing status as a leading power. China’s population is 1.3 billion and its GDP $5.9 trillion, clearly a country which cannot and should not be ignored.
The current government cannot continue to blame poor economic performance on the Eurozone sovereign debt crisis.
That was the central argument in a great article in today’s Guardian by Larry Elliott. You can read it by following the link here.
There are two things that strike me about the assertion that Britain’s economic fortunes are being so disastrously affected by problems on the continent. Firstly, it is a very convenient excuse. It’s not the first time I’ve said that the Conservative led coalition are leading the charge on these cuts because of their ideology, not through a considered view of what would be best for the British economy. The fact that things are so close to the brink in Europe provides a very convenient distraction from quite how damaging the policies of Osborne and Cameron are.
Secondly, if that is what they genuinely believe, I don’t think it’s entirely unreasonable to expect them to do something about it. Sadly, they seem rather incapable. It’s very illuminating to see today at the crisis summit, Sarkozy reportedly lambasted Cameron for trying to “tell us what to do”, allegedly saying that he was “sick” of Mr Cameron’s criticism. On a day where Cameron’s own party are forcing a vote in the Commons on whether or not we should have a referendum on the UK’s membership of the European Union, he can’t be all that surprised to find himself rebuffed by his fellow European heads of government.
David Cameron is right to say that the Eurozone crisis matters to Britain, as they remain our largest trading partner. But the difficulties in Europe are no excuse for the lacklustre recovery the UK has been experiencing in the last two years.
I also wanted to briefly mention William Hague’s comments on the House of Commons vote today. In a quite extraordinary statement Hague said that the government couldn’t support the motion because ‘it wasn’t in either governing parties’ manifesto’. The bare faced hypocrisy of that statement would be amusing if weren’t so infuriating. I’m glad the Conservatives aren’t supporting the motion, but it would have nice if they could have used that kind of thinking when proposing changes to the NHS or raising top-up fees.
Anyway, the UK economy remains in dire straits and unemployment continues to rise. A major step towards averting an even worse crisis in the Eurozone may or may not be taken this week. What is certain is that the Tory led coalition is either unwilling or unable to do anything about either problem.