Treasury Secretary Timothy Geithner said he welcomes the Chinese joining some of the most influential international economic institutions — an elite geo-economic playing field that has been dominated by the United States since the end of World War II. Photo: AP
Treasury Secretary Timothy Geithner said he welcomes the Chinese joining some of the most influential international economic institutions — an elite geo-economic playing field that has been dominated by the United States since the end of World War II. The move represents a bowing to political reality by the Americans, and perhaps a bit of strategic thinking: Inviting the Chinese into the international framework gives the Beijing government an incentive not to try to tear it down.
“The global economy has changed fundamentally since the visionary individuals at Bretton Woods designed the architecture for the 20th-century economy,” Geithner said. “Today, we are working with China and other partners to ensure their full engagement and representation in the design of the key multilateral agreements and groupings— such as the G-20, the Financial Stability Board and the international financial institutions — that will chart a course of more balanced and sustainable global growth into the future.”
But in a briefing with reporters, the American representatives couldn’t even bring themselves to comment on the most sensitive issue of all: the fate of the U.S. dollar as the reserve currency of the world. The U.S. receives enormous benefits because its dollar is the default currency of the global economy, mainly in lower borrowing costs, which is one reason that America can run such enormous deficits in the first place. In recent months, the Chinese have publicly questioned why the U.S. currency is allowed to have such dominance.
One reporter wanted to know whether they had repeated their skepticism to American officials face to face this week.
“They talked about their desire to reform the international monetary system, and I’ll just leave it at that,” Loevinger said.
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