Timothy Geithner, the US treasury secretary, made headlines Wednesday after he warned of the potential for a currency war – or, to be more precise, a “competitive non-appreciation” – if China did not allow the renminbi to appreciate more freely.
What was less noticed in his address was some equally tough talk for Europe, where he seems to see a danger of continent-wide austerity measures stifling the nascent global economic rebound. Read more
There was a common reaction that Chinese premiere Wen Jiabao and his entourage inspired as they swept through Brussels this week: Impressive. That word was uttered repeatedly by European business leaders, policymakers and diplomats on the sidelines of an EU-China Summit. At times, it seemed the Chinese were in motion while the natives stood still, watching with awe and envy as someone else’s national ascent played out.
Things were very different a decade ago, when an Asian banking crisis was raging. Now, in the midst of its own crisis, Europe is the one short of cash, humbly thanking Mr Wen for his promise to buy government bonds issued by Greece and other debt-plagued governments. That gesture has made it particularly awkward for European leaders to press demands that Beijing revalue its currency. Read more