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Joschka Fischer was never one to mince words when he was Germany's foreign minister in the late '90s and early noughts. So it is not overly surprising that he has painted a picture in a new post of a world with only two powers -- the United States and China -- and an ineffective and divided Europe on the sidelines.
More controversial, however, is his view that China will not only grow into the world's most important market over the coming years, but will determine what the world produces and consumes -- and that that will be green.
Fischer, who was leader of Germany's Green Party, reckons that due to its sheer size and needed GDP growth, China will have to pursue a green economy. Without that, he writes in his Project Syndicate post, China will quickly reach limits to growth with disastrous ecological and, as a result, political consequences.
This will have serious consequences on the the way the West lives.
Consider the transition from the traditional automobile to electric transport. Despite European illusions to the contrary, this will be decided in China, not in the West. All that will be decided by the West’s globally dominant automobile industry is whether it will adapt and have a chance to survive or go the way of other old Western industries: to the developing world.
Mike Dicks, chief economist and blogger at Barclays Wealth, has identified what he sees as the three biggest problems facing the global economy, and conveniently found that they are linked with three separate regions.
First, there is the risk that U.S., t consumers won't increase spending. Dicks notes that the increase in U.S. consumption has been "extremely moderate" and far less than after previous recessions. His firm has lowered is U.S. GDP forecast for 2011 to 2.7 percent from a bit over 3 percent.
Senior officials from the United States and China are due to meet in Beijing for Strategic and Economic Dialogue, an annual meeting to discuss broad economic, foreign policy and security concerns. The meeting comes on the heels of a tension filled year of relations between the two global powers.
Many U.S. lawmakers who believe that Beijing deliberately undervalues its currency for an unfair trade advantage are now looking for progress on that issue at the talks.
from Global Investing:
It may end up sounding like a famous ball-point pen maker, but an argument is being made that Goldman Sach's famous marketing device, the BRICs, should really be the BICs. Does Russia really deserve to be a BRIC, asks Anders Åslund, senior fellow at the Peterson Institute for International Economics, in an article for Foreign Policy.
Åslund, who is also co-author with Andrew Kuchins of "The Russian Balance Sheet", reckons the Russia of Putin and Medvedev is just not worthy of inclusion alongside Brazil, India and China in the list of blue-chip economic powerhouses. He writes:
Judging from the draft communique of the G8 leaders meeting in L'Aquila, no one is in a particular hurry to talk about ending the domination of the dollar in world currency reserves. Our correspondents at the Italian summit report that the debate being pushed by China and others is likely to be played down.
But the genie is out of the bottle. Beforehand, Beijing floated the idea of alternative to the dollar. Russia and Brazil weighed in with some thoughts. The United Nations also acknowledged earlier this year the desire of some countries for a "more efficient reserve system" in a series of proposals for global financial reform.