The G-20 Summit

The G-20 Summit that is occurring in South Korea, while many may not know much about it, is very big and important news. In the G-20 a select group of countries that have large influences on the world economy get together to discuss the future of the global economy. In a way, it is almost like the United Nations only that it involves 20 countries and focuses on economics. The big issue surrounding the summit is without a doubt the trade/currency war, which is threatening the entire global economy, much like the one that occurred right before the Great Depression. According to an Article on the Associated Press, the summit is not in a very promising situation. China is under fire from other nations of the G-20 because of the Chinese government intervening in their currency, the yuan, with the purpose of keeping it devalued compared to other world currencies. Having a weaker currency relocates jobs from countries with stronger currencies to those who have weaker ones, such as China. With unemployment in the United States at 9.6%, Americans need the jobs that are being taken by China. The summit does not seem to be going smoothly, as “leaders of 20 major economies on Friday refused to back a U.S. push to make China boost its currency value,” showing that for the U.S. to leave the summit successful, compromises must be made.

In the meantime, with China refusing to allow the Free Market to determine the value of its currency, the United States had to take action. By pumping $600 billion dollars into the economy, the United States hopes to devalue its currency, which in effect would be the same as if China revalued theirs. Ironically, China greatly disapproves of this, claiming how the United States is artificially changing their economy to benefit themselves; although it was China’s intervention to keep its currency low that pushed the U.S. to do the same. This action of the United States also “undermines” its position to stop “competitive devaluation” in the eyes of other nations, displaying a weakening influence of the United States. Overall, it is clear to see just how complicated the economic issues involved are, and how difficult it will be to find an effective common ground between the 20 countries involved.




http://www.google.com/hostednews/ap/article/ALeqM5gtjTj_CqBCJ-Ta9d_OpDh-ATPNmg?docId=08eb0319cd654699bc1fd95a727d3862