Coordination to Confront the Crisis

The fall of the great economies and the wave of layoffs show aggravation of the crisis, which requires international coordination. To the contraction of the European and American economies is added the forecast of a considerable contraction of the Chinese economy. Until just a short time ago the Asian giant was considered as the motor that would be able to counteract the recessive tendencies of the western economies. However, in the last trimester of the past year the Chinese economy grew 6.8%, that is to say, 70% the pace of the preceding year. Additionally, Chinese imports have been falling since the middle of the year and in December they fell 21%, which equals lower than the sales of their commercial partners. Western countries as well as South Korea and Japan are feeling this break in demand.

The brilliant secretary of treasury of the United States, Timothy Geithner, accused China of manipulating the yuan and promised to increase pressure on the oriental country to revalue their money in order to reduce its exporting pressure and to lower the price of imported goods. Until now the Chinese government has resisted this demand and it continues waiting until it is necessary to improve its export capacity in order to sustain its economy.

The tendencies of the economy show that the focus of the national programs followed until now by the great economies is not sufficient and that some type of agreement is necessary for a coordinated action. Until now, the government of the United States has not tackled this possibility, perhaps evaluating that it has the capacity to confront the crisis itself. However, not even in the post war period of World War II, when it was in the pinnacle of its power and was facing not a crisis but rather a period of expansion, was it able to put order in the world economic system in a unilateral manner. International coordination is, therefore, beneficial even for the great actors.