The following remarks with subsequent modification were delivered at the November 6-8 convening of the International Finance Forum, headquartered in Beijing. IFF’s mission is to facilitate high-level, multilateral dialogue and promote insights about current issued defining the international economy. The writer is a member of the IFF Academic Committee.
The economic imperatives of global powers are changing approaches to international politics.
China’s rise could reshape an icon of international relations, post-World War II -- the Transatlantic Relationship between the United States and Germany – and Europe. An economic symbiosis that addresses China’s need for technology and Germany’s search for export markets could drive a shift in shared foreign policy interests on the part of Washington and Berlin.
Recent actions by Chinese authorities to rein in stock market volatility, depreciate the RMB and generally arrest actions they view as adverse to achieving requisite GDP growth raise questions that may end up overshadowing the worry about the economy’s fundamentals.
Authorities’ actions are giving rise to questions about the credibility of those who make the decisions and the capacity of those who advocate reforms to withstand pressures to achieve 7% GDP growth at all costs.