Will the G7 Become the G2?

Discussion in 'China' started by Koji, Oct 4, 2009.

  1. Koji

    Koji New Member

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    Will the G7 Become the G2? - Economy * Europe * News * Story - CNBC.com

    [​IMG]

    The Group of Seven rich nations hopes to decide its future as an institution on Saturday, with
    the United States pushing for the creation of a smaller core group that would include China, a G7 official said.


    The official, speaking on condition of anonymity, said Washington wanted to see the G7 supplanted in global economic policymaking by a Group of Four that would bring the United States, Europe and Japan together with China.

    The official was speaking ahead of a meeting of G7 finance ministers and central bankers in Istanbul later on Saturday.

    A U.S. Treasury spokeswoman declined to comment. British finance minister Alistair Darling said, "These proposals have been around for a long time ... You shouldn't read too much into these proposals."

    He added, "It is not our position that the G7 is going to be wound up."

    Other officials also suggested the G7 would continue to exist, but with a diminished role.

    "We will talk about how the G7 will work on, how its role will be in future ... for example the frequency of G7 meetings," said German deputy finance minister Joerg Asmussen.

    "In the German view, the G7 should be something like a preparatory body" for meetings of the larger Group of 20 nations, which includes big developing economies such as China and India, he added.

    Policymaking

    For more than a decade, the G7 dominated international policymaking. But the financial crisis has undermined its power, as economies such as China have become key to managing the global recovery.

    Any formal move to supplant the G7, which comprises Britain, Canada, France, Germany, Italy, Japan and the United States, would likely be diplomatically complex and controversial.

    Its top finance officials have traditionally met several times a year, seeking to guide foreign exchange rates and other markets through communiques released after their meetings.

    But the group's role has appeared in doubt since early this year, when the G20 became the main forum for debating the financial crisis. The G20 has agreed in principle to tighten financial regulation and try to reduce trade imbalances that destabilise the global economy.

    "The G7 is not quite dead, but it is losing its relevance," the IMF's managing director, Dominique Strauss-Kahn, was quoted as saying by Emerging Markets magazine on Saturday. "It's on its way to extinction."

    Tensions over foreign exchange rates are underlining the difficulty that the G7 is having in staying at the centre of global policymaking.

    Persuading China to appreciate its tightly controlled yuan currency is widely seen as crucial to correcting trade imbalances, but China is not a member of the G7.

    Japan has sounded keen to preserve the G7 as an important body. On Friday, Bank of Japan Governor Masaaki Shirakawa said the G7 remained a more convenient forum to discuss foreign
    exchange rates than the G20, because G7 members all had major financial markets.

    But some other countries appear unconvinced. Canadian Finance Minister Jim Flaherty said that because discussion of global imbalances would inevitably include the yuan and the impact of the weak U.S. dollar on other economies, global currency discussions needed to extend beyond the G7.
     
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  3. Koji

    Koji New Member

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    It'd most likely be a representative of the EU, which already has finance officers independent of any country within the EU.
     
  4. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    what do the nations gain by these titles??seems like a ploy to keep the dollar from being replaced by a more international currency??
     
  5. dragon

    dragon New Member

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    G7 is already substituted by G20.

    G2 will not come out in the future.
     
  6. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    serious question about G2 who will be #1 and #2?? if USA is #1 it means China will always remain #2 and never challenge for the #1 spot and alleviate the biggest fear for USA.
     
  7. Rage

    Rage DFI TEAM Stars and Ambassadors

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    Interesting....


    However from the article:

    "British finance minister Alistair Darling said, "These proposals have been around for a long time ... You shouldn't read too much into these proposals."


    He added, "It is not our position that the G7 is going to be wound up."

    Other officials also suggested the G7 would continue to exist, but with a diminished role."


    ""In the German view, the G7 should be something like a preparatory body" for meetings of the larger Group of 20 nations, which includes big developing economies such as China and India, he added."


    "But the group's role has appeared in doubt since early this year, when the G20 became the main forum for debating the financial crisis. The G20 has agreed in principle to tighten financial regulation and try to reduce trade imbalances that destabilise the global economy."


    "Japan has sounded keen to preserve the G7 as an important body. On Friday, Bank of Japan Governor Masaaki Shirakawa said the G7 remained a more convenient forum to discuss foreign exchange rates than the G20, because G7 members all had major financial markets."


    The solution is not difficult - a greater aggrandizement and expansion of the G7, not a diminution, to incorporate all of the fast-growing or established economies: China, Brazil, India, South Korea; the major geopolitical and military powers in the region: Russia, S Africa, Australia, Saudi Arabia, Mexico and perhaps even Iran.


    The solution to problems of a global nature lies in the collective, not in the individual or the minority core, as the EU clearly demonstrates.
     
  8. Koji

    Koji New Member

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    But when the entire world reacts to the after shocks of US-China trade, it is perhaps wiser to cut the riff-raff and have a more direct relationship b/w the two countries.
     
  9. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    that will only happen on USA's terms , China is only one US trading partner, but USA for China is everything, so USA will have the leverage and set the rules.
     
  10. Koji

    Koji New Member

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    Nope. You are wrong.

    Unit:US$100,000,000
    Rank Country (Region) Jan.- Oct. Increase ±% Share ±% Change in Share ±%
    Total Value 21,886.7 24.4 100.0 0.0
    1 E.U. 3,593.7 25.0 16.4 0.1
    2 U.S.A. 2,813.2 13.6 12.9 -1.2
    3 Japan 2,258.6 17.7 10.3 -0.6
    4 ASEAN 1,990.7 21.6 9.1 -0.2
    5 Hong Kong 1,724.4 8.7 7.9 -1.1
    6 ROK 1,623.3 25.4 7.4 0.0
    7 Taiwan 1,147.9 13.8 5.2 -0.5
    8 Australia 510.0 45.7 2.3 0.3
    9 Russia 479.6 21.8 2.2 0.0
    10 India 455.2 49.5 2.1


    Sorry for the mess, but check this link:

    Ministry of Commerce of the People's Republic of China
     
  11. dragon

    dragon New Member

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    1) China would not join the G2. The USA wants to let China get into troubles as it is facing now,the USA has the evil mind.

    2) China is a developing country ,so no need to take the responsibilities of developed countries.and it has no ability to take the duties of developed countries.
    Otherwise ,the so-called responsibilities and duties would impair China.

    So, there's no G2.

    3) USA is not so strong as you have thought.
     
  12. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    ok but this will probably more damaging for China then offering any gain.
     
  13. Rage

    Rage DFI TEAM Stars and Ambassadors

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    "Riff raff"?? Your subtle connotations have not gone unnoticed.


    1- China's largest trading partner remains the EU at $ 1,660.2 billion [2008- Jan-May]; $ 3,593.7 billion [2008: Jan-Oct]. Infact, the percentage increase in year-on-year trade vis-a-vis the EU and US is 27.9% vs. 13.3%. To put this in further perspective, Sino-Indian bilateral trade has witnessed a periodic year-on-year increase of 70.3%.

    2- More than half of China's exports are currently capitalized by foreign countries. Most of this capitalization comes from neighbouring companies in Japan and South Korea. These are not just "riff raff" you can discard.

    3- China has several trading partners in Africa, of whose resources it exploits just at the U.S. and India do, and who in absoloute terms, both individually and collectively, account for more than a marginal fraction of China's international trade. To put this in perspective, Angola, China's largest trading partner in the African continent, has a bilateral trade amounting to $25.3 billion dollars in 2008. To put this is further perspective, that amounts to a little more than 1/16th of the two-way China-US bilateral trade at $403.1 billion [2008]. That is from a single African, turd-world country.

    4- China is Europe's fastest-growing export market, with exports amounting to €78.4 billion in 2008. Again, that is not "riff-raff" you can either 'cut' or that has a 'negligible' impact on the "afterschocks" of "Sino-US trade", whatever that means.

    5- China still accounts for less than 10% of all global trade, a fact you've evidently missed in jumping to the conjecture of the 'impact' of "US-China trade" on the global economy. Compared to the >$2 trillion of accumulated U.S. investments worldwide, China accounts for little less than 2% of all U.S. foreign direct investment.

    6- All of China's other large trading partners, except HongKong, have witnessed a higher year-on-year percentage growth than bilateral trade with the United States. These include: Japan and Australia, whose incremental growth rates of shares vis-a-vis China have actually witnessed progressive increases. Again these are not just riff-raff you can discard.


    The only "riff-raff" however you need to cut lies somewhere in that upper tuft.
     
  14. Martian

    Martian Respected Member Senior Member

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    In theory, the idea of a smaller group makes sense. It would be easier to reach a consensus and to coordinate a response.

    However, in reality, a smaller group will be more easily dominated by the United States. At the present time, the size of the US economy and influence in international organizations are overwhelming.

    I would be surprised if China agrees to join a smaller group. The US plan is to co-opt China and shift more international burdens onto her shoulders (i.e. demands for more currency appreciation, provide troops for international peacekeeping, contribute billions of dollars for foreign aid (despite the fact that China is still a poor country; see GDP per capita), etc.)
     
  15. Vladimir79

    Vladimir79 Defence Professionals Defence Professionals

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    Obama already said G-20 would supplant all other international economic forums.
     
  16. roma

    roma NRI in Europe Senior Member

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    suspect info

    there has gotta be some BIG mistake in that CANADA is not there ??it's a much biger economy than australia's .
     
  17. badguy2000

    badguy2000 Respected Member Senior Member

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    G20 is just a myth. it has tooooo many memebers and are short of efficiency. it will just become a talking shop eventually .
    guy,have you seen a organization with 20 equal memebers can be run effectively?

    History has proved again and again that a efficient and influencial elite club should have two necesary factors:
    1, its members are powerful enough,so the club can have means to execute its resolutions;
    2. the NO. of memebers should be limited,so consensus can be agreeed as soon as possible.

    UNSC has only 5 P-memeber,that is why UN can survive until now. If UN had 10 P-memberfs, the permanant seat of UNSC would be as cheap as toilet papers . Majors powers would have to abandon UN and create another more efficient multilateral club to take the place of UN

    IMHO. in Future, G20 will just become a talking shop. a new organization that take the place of G7 indeed will appear. but that won't be G20......it may be G4( USA, EU, CHina and Japan). the other members of G20,including Russia, India, Brazil,will just become the second class members of G20.
     
  18. badguy2000

    badguy2000 Respected Member Senior Member

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    well, CHina is not only the banker of USA,also the conditional supportor of many international issues such as N.Korea and Iran.

    without the financial support from CHina, Yankees would have no money to buy their underwears.

    without the conditional political support from CHina, Yankees would find that it would be harder to deal with many international issues such as N.kroea.Iran.Sudan.....:icon_salut:
     
  19. badguy2000

    badguy2000 Respected Member Senior Member

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    Canana has a stupid Premier who is very indifferent to CCP and Canada has no iron ore as many as Australia.
     
  20. no smoking

    no smoking Senior Member Senior Member

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    I Can't agree with you more! As the biggest developing country, we realy has neither responsibility, nor ability to take care the trouble caused by develped countries.

    Of course, we should participate in the international coorperation. But we should do the contribution that we can do. Nor more, nor less. If we realy need to create a new organization, india and russia should definitely be included.

    India-one of fastest growing economies, which is believed to takeover china in future.
    Russia-once supoerpower; the one with riches natural resources and good technology.
     
  21. badguy2000

    badguy2000 Respected Member Senior Member

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    "G2" is one yankee's conspiracy that coat in a one between China and other developing countries . "G2" also a Yankee's trick that shifts Yankee's responsiblity to CHina.

    China should be wary of "G2"
     

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