China Warns G20 Must End Monetarism’s Reign over World Financial and Economic System, Before Blowout
Aug. 23, 2016 (EIRNS)—Chinese news agency Xinhua published today a number of stories explicitly posing the urgency of "reforming" the international financial and economic system at the Sept. 4-5 Group of 20 summit, in the face of such crises as "a possible collapse of the euro zone," the which, Xinhua notes "is expected to cast a shadow over the economy worldwide."
Xinhua’s wires referenced the International Monetary Fund’s recent report projecting long-term stagnation in the developed countries under the current system, but then cited former Federal Reserve chairman Alan Greenspan’s statement in an interview with Bloomberg Radio aired this weekend, that he expects the Euro zone "will break down," as a way of pointing to imminent greater dangers.
"Such a tragedy could come true as a result of the failure of developed economies to overcome the widening gap between the rich and the poor at home, reduce debt burdens and renew vigor and vitality for development after the 2008 global financial crisis,"
Xinhua wrote. These failures have
"led to scepticism and criticism of the U.S.-advocated neo-liberalism, revealing a lack of both ideas and measures in them to drive forward the global economy."
Xinhua identified monetarism as the ill to be replaced by growth, writing that the
"over-reliance on monetary policy, especially in some developed countries, has led to macroeconomic and financial instability elsewhere. The use of fiscal policies is also constrained in some countries due to high debt levels.... While fiscal and monetary policies will address fluctuations in the short term, a longer-term strategy is needed to elevate the current malaise permeating the world economy. Reforms, structural adjustments in particular, must be incorporated into current policy frameworks to create fertile surroundings for growth,"
Xinhua wrote in its story headlined "G20 Summit in China A Launchpad for Global Economy."
All G20 nations—note that China is mobilizing nations, not "markets," as the solution—deserve to and must play a bigger role in managing the world economy.
China will use the [G20] conference to spur dialogue among developed and developing countries around the potential to foster growth through reforms and innovation... Innovation, characterized by technology and new products and business models, will create new consumption opportunities and trends..."
In another wire, Xinhua wrote that experts expect the needed new economic order
"to lead to a fair sharing of benefits from the global development, including the transfer of new technologies to developing countries, and to provide channels for production capacity and investment to flow where they are badly needed."
The G20 summit will be only the beginning. "The journey will be fraught with obstacles. To successfully address low growth, nations must put their faith in cooperation, implementation and, sometimes, painful reforms. Although, perhaps, a bitter pill to swallow, the results will speak for themselves,"
the Chinese wire service urged.