Hu Shuli, the editor of Caijing, China's premier business and finance magazine, has some advice for "the next U.S. president." Hu, who has been variously described as "feisty," "crusading" and "the most dangerous woman in China," believes that "bilateral ties" will "strengthen in light of the global financial crisis."
We believe the next U.S. president, after grasping the common interests of our two countries for the coming years, should work with China as a strategic partner for resolving the most serious financial crisis since 1929. He should invite China to participate on equal footing in designing a future multilateral system for global finance. He should put an end to the ambivalence about a rising China. Working hand-in-hand with China, he should break the 40-year-old mold of Sino-American relations.
But just a few days before Hu's call for greater partnership, the New York Times published its own editorial calling for China to do its part for the global economy. Which, boiled down, basically means encouraging Chinese citizens to consume more of the rest of the world's goods. The New York Times made zero reference to the concept of China taking part in the design of a new regulatory framework for global finance. Instead, the entire thrust of the editorial was: It's in China's interest to boost domestic demand, so it should do so, because "by raising Chinese imports and reducing its dependence on exports, it would also help the rest of the world."
China's leaders have long talked about boosting domestic demand, though they have made only stumbling efforts in that direction, possibly because it's a lot easier to talk about than to actually achieve. Despite having the fourth biggest economy in the world, China is still by many measures a very poor nation. But the rhetorical stylings of Caijing's editor and the New York Times' anonymous editorialist offer some insight into emerging East-West dynamics. As the West surveys economic wreckage largely of its own making, it looks to China and says, hey, help us out by being good little consumers. Meanwhile China says, hey yourself, maybe you should let us be a little more involved in how the global economy is run so you won't screw it up so badly.
In the Financial Times, Philip Stephens captures the contradictions:
Viewed from Washington, London or Paris, financial crises used to be things that happened to someone else -- to Latin America, to Asia, to Russia.
The shock waves would sometimes lap at western shores, usually in the form of demands that the rich nations rescue their own imprudent banks. But these crises drew a line between north and south, between the industrialised and developing world. Emerging nations got into a mess; the west told them sternly what they must do to get out of it.
The instructions came in the form of the aptly-named Washington consensus: the painful prescriptions, including market liberalisation and fiscal consolidation, imposed as the price of financial support from the International Monetary Fund.
This time the crisis started on Wall Street, triggered by the steep decline in U.S. house prices. The emerging nations have been the victims rather than the culprit.
So whose consensus will the world kowtow to now? No matter who gets elected the next president of the United States (Chinese polling, incidentally, is overwhelmingly pro-Obama), it seems likely that Washington's mandates will have lost a fair bet of luster.