(WILL CHINA RULE THE NEW WORLD?)
China has demanded that a new global currency should be intruduced in place of US dollars. The Central Bank Governor Zhou Xiaochuan has said that the US dollar should be discontinued with as the global currency. It is pertinent to mention that USD has never been officially accorded status of global currency and it gradually ascended to this position. The Briton Wood Conference of 1944 held in Hamshire of USA which led to establishment of a new global financial order had earmarked gold as yardstick of monetary exchanges. It was however USA unilaterally abrigated this system in 1971 and gradually the entire globe including Europe adopted USD as global currency
‘Bretton Wood system’ of monetary management came into being after a meeting attended by 730 delegates from 44 allied Nations who gathered in Mount Washington Hotel in Bretton wood, New Hampshire on 22nd July, 1944.
This agreement led to establishment of two important financial institutions viz IMF and IBRD. This ‘duo’ played very important roles with respect to economic and financial order of the world thereafter. Although, this system sought to establish a just and equitable global financial order, it was hijacked by US and some European countries right from the outset.
The on going global economic crisis and subsequent worldwide recession has forced the world to think for a new global financial order based on more equitable and justifiable rights of nations across the world. The G-20 summit in London on 2nd April, 2009 is perhaps going to the 2nd Bretton Wood which would reshape global financial architecture.
China has emerged as one of the mightiest economic power of the world. The concept of Chimerica is being viewed in this perspective.At present China is holding US treasury bills worth of about 1 trillion dollar, equal to the total GDP of India. In a non-economic termnology, USA has begged money from China to save its ailing economic situation especially financial markets. What a great reversal of situation.This Asian dragon has in a way invaded USA, hitherto world's superpower both militarily and finanially. The growing economic power of China is also menifest in the fact that USA has accepted China's suggestion that both these countries i.e China and USA should form an another group G-2. USA has reported to have accepted China's proposal of holding a separate meeting with USA after G-20 meeting. The unconfirmed report suggests that this G-2 meeting would be held on 14 April, 2009. This acceptance has two global significance. Firstly, it has legitimised the claim of China vis-a-vis world number two economy. Secondly, it has testimonised the fact that USA is desperate enough to accept the Chinese suzerainty over its economy.
China understands its importance in the new world order. It wants a lion's share in the proposed new global financial order. It has started making its jittery felt in the world echelon so that its claim is properly heeded at in the forthcoming G-20 summit to be held in London.
China knows it very well that such demands would not be enthusiastically reciprocated by most of the nations. This is muscle flexing rather than real fight. It is an economic gesture which would pay divident to it. On the other hand India has done so far no exercise in this regard. What would be its agenda in the G-20 summit is also not clearly spelt.Unfortunately, during the summit India would be immensely busy in general elections and no minister, bureacrat or body is interested in even discussing this issue. Ironically the media has so far also not properly discussed this issue. There is no debate whatsoever on this vital issue,an issue which would determine the fate of Nations including India.
China's economy is growing with a considerably good pace.Its forex reserve is in happy situation. It has started staking claims for its share in the global order,alas we could have also thought in this way and could have mustered the courage to say what we want.It is an old Indian saying, only crying child gets milk feed.
2 comments:
Your article is very informative.But the most important thing in your article which I like most is that you give the brief history of the issue which really attract the reader.
Your article is very informative.But the most important thing in your article which I like most is that you give the brief history of the issue which really attract the reader.
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