The Real Summit has been Between China and the US

Posturing and theatrics aside, the most discussed issues of the G-20 summit – tax havens, financial regulation, or the IMF’s voting powers – are of marginal importance at best. The crying need of the hour is to ensure that the current financial crisis does not worsen: a difficult task given that governments so far have tended to exacerbate, rather than solve, recessions. This means governments must endeavor to “do no harm” as author McRae argues. And the key way to prevent harm is to tackle burgeoning protectionism. Already, a number of policies favoring domestic workers or products have been enacted. If allowed to get out of hand, protectionism will threaten globalization. Yet the hope is that globalization can be protected given that it’s a G20 rather than a G7 summit. This is the first recession in which China, India and other major emerging countries are fully integrated into the global economy, so they have a stake in solving the crisis. Indeed, part of summit’s success will hinge on the evolving relationship between the old and the new powers. But the relationship between the US and China will dictate whether global growth will reignite next year and continue into the next generation. – YaleGlobal