China's growth vs US crisis
- By Gary Schwarz
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E-mail China Daily, October 17, 2013
Before and after last weekend's annual World Bank/IMF meeting, financial leaders from across the globe presented their views on the world economy at Harvard University. What did their views have in common? And what do they imply for China?
All the financial leaders voiced concern over the failure to lift the debt ceiling of the United States and the partial government shutdown. Pierre Moscovici, the French minister of economy and finance, said he cannot sign important agreements in Washington because the furlough prevents "non-essential" federal government employees from doing their jobs.
Joaquin Almunia, vice-president of the European Commission and European commissioner for competition, said the partial shutdown has stalled crucial US-European Union negotiations on a trade and investment agreement intended to bolster growth. But he was optimistic that the difficult negotiations would eventually be completed and an agreement reached.
A free trade zone between the US and the EU would send a message to other parts of the world, including China, to proceed with regional free trade agreements. According to Prasarn Trairatvorakul, governor of Bank of Thailand, it could provide further impetus to ASEAN to reach a free trade agreement, proposed to take effect in 2015. ASEAN member states not prepared to be part of the agreement could initially opt out and join later, he said.
Noting that the US dollar is the world's reserve currency, Trairatvorakul urged the US to act more responsibly, saying that a potential default on its payments was not just the US government's problem. He suggested that the US follow the policies that the IMF prescribed to many Asian economies, including Thailand, during the Asian financial crisis in the late 1990s.
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