As the world’s economic forces prepare to gather for the G20 in Seoul, the debate is not focusing on what real issues, says Arthur Kroeber in The Guardian. Lack of trust and failing economic systems are key for both China and the US.
“Appreciation would definitely be good for China, but the exchange rate is one tool among many in improving the structure and quality of China’s economy, and in my opinion it is not the most important one,” said Arthur Kroeber, managing director of Beijing-based consultancy Dragonomics.
He argued that China and the US were moving in the right direction; the problem is that they face challenges and do not trust each other.
“In the US you have a growth model that’s been in place for 30 years and that emphasises consumer spending and debt. China has had a growth model emphasising heavy investment and exports. Both those models are running out of steam,” he said.