Stanley's blog

G2 vs G20

The first leader in the current issue of The Economist refers to the “big idea” that geopolitics is now a bipolar affair, with America and China the only two that matter. “Thus in London next month the real business will not be the G20 meeting but the ‘G2’ summit between Presidents Barack Obama and Hu Jintao. This not only worries the Europeans…”

It is rare to criticize this The Economist for imprecision, but who are these “Europeans” who are worried? The G20 meeting will not succeed (beyond rhetoric) unless the US and China agree. Indeed China’s attitude at the G20 meeting is likely to be the single most significant factor.

Although there is some discussion in the US and China about the G2 and “Chimerica”, there does not appear to be any comparable activity in Europe.

The term “Chimerica.” was coined in 2007 by Niall Ferguson and Moritz Schularick to encompass the relationship between China and America in the world economy over the past decade. Chimerica has 13% of the world’s land surface, a quarter of its population, about a third of its GDP, and over half of its recent economic growth.

If we Europeans are worried about the G2 not being the ‘G3’, our Member State leaders should speak clearly with a single voice. The EU is, after all, bigger economically than both the US and China, but, is not an equivalent geopolitical power.

A significant contribution to G20 meetings is made through the many bilateral discussions on the sidelines of the main meeting. These discussions should be encouraged. Europe’s interest is for both the G2 and G20 meetings to succeed.

Bob Zoellick was right to call upon China to behave as a “responsible stakeholder”, but the corollary is that China be treated as an equal and be given a fair voice in the IMF and other international bodies.

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Comments

  1. Lovely term! I’ll use it!

    Greetings from Tokyo!

    [WORDPRESS HASHCASH] The poster sent us ‘1055386704 which is not a hashcash value.

  2. The best thing that has happened from this summit is to tighten up the regulations around trading. I am a banker in London and I trade for prop. From my experience all that is needed (as well as getting borrowing and lending moving again) we need to get better regulation.

    If you want to hear the opinion from a banker on the other side of the fence, Ive setup a blog to voice my opinions about the london g20 protests – please take a visit to hear what I have to say:

    http://g20-london-riots.blogspot.com/

    Pay no attention to the nasty comments left on there though!

    [WORDPRESS HASHCASH] The poster sent us ‘1055386704 which is not a hashcash value.

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