The United States and China are on a collision course as this week's gathering of leaders of the 20 most important economic powers threatens to devolve into a meaningless charade amid pressure against a US scheme to cure financial ills by printing ever-more money.
From China to Germany, Brazil to France, the world's financial wizards are up in arms about the decision of the US Federal Reserve to buy up US$600 billion in Treasury bonds in a move that may make the US the "odd country" out in the Group of 20 (G-20), when they meet in Seoul on Thursday and Friday.
Lawrence Summers, US President Barack Obama's top economic adviser, danced around the issue on Tuesday in a teleconference with the Asia Society's Korea Center in which he said, enigmatically, "You are going to see continuing discussion at the G-20," but he acknowledged "the imbalances will not be fixed".
The Chinese, the US public enemy number one on currency issues due to its to refusal to cooperate on drastically revaluing the yuan, were not quite so outspoken, but if anything more forbidding in their staunch defense of their own policies. Why, asked Vice Foreign Minister Cui Tiankai, does the US hold China responsible for its own failure to hold down its budget, and why does the US persist in demanding that China increase the value of the yuan while simultaneously devaluing the dollar?
