This week China has offered to loosen its exchange rate, under immense pressure from other G20 countries.
There will be additional pressure at this week’s G20 meeting for China to go further, and fully let it ‘float’ – allowing the markets to fully decide the rate.
A bit confusing? Here is a bit of background of what this means (from an earlier G20 Breakdown post) and why it’s important.
The U.S. and China are in a big battle right now over exchange rates – with serious global repercussions. Some are calling for this issue to be resolved through the G-20.
China relies heavily on selling cheap exports to the U.S., while the U.S. relies as much on China buying it’s treasury bonds in order to service the U.S. debt. This relationship has created a kind of an equilibrium where neither side wants to tread too strongly on the other.
However, the U.S. is accusing China of falsely depreciating it’s currency (the renminbi) so that China can increase its exports to the U.S. (and other countries) based on the low cost of buying their products. The U.S. is losing export opportunities due to it high exchange rate relative to the renminbi.
And there are calls for action against China, despite fears of retaliation. Even the U.S. Chamber of Commerce, which has done everything over the years to back China’s entrance into the world economy (at the behest of multinational corporations), is calling for the U.S. to name China as a ‘currency manipulator’ and possibly place tariffs on China.
It is also interesting to see the U.S. crying foul about a market (theirs) being artificially flooded by cheap goods (China’s). The U.S. agricultural industry has been doing this for years with cheap subsidies of corn and other products to Latin America, especially Mexico. This has wiped out much of Mexico’s domestic corn industry, knocked farmers off their land, and been a key factor in Mexican economic migration to the U.S. The U.S. has traditionally been fine with artificial markets, as long as they are not hurt themselves.
This all points to a key problem facing global capitalism in the wake of the financial crisis – lack of demand and overproduction. In the wake of low depressed wages worldwide and high unemployment, there is a scramble to get at whatever consumer demand they can round up. Thus the focus on countries like China that still have global demand for their products, and the concern that they are doing it artificially. The countries with strong trade surpluses like China are seen to be “taking more than their fair share of world demand and are under pressure to boost their domestic markets”.
This pressure on surplus countries to create consumer demand will surely increase if the deficit warrior approach of the G20 called for by Canada, Britain, Germany and others comes into effect.
Not much time to comment as I am preparing material from the climate rally today. Lots of great work on the G20 and the rallies coming out right now, here is some of it: Great blog post by Judy Rebick: The banality of evil or how they turned Toronto into a police state An excerpt:
And why is this massive show of force necessary? According to the late great Stockwell Day it’s the “dangerous anarchists and other thugs” that they are protecting us from. I have been asking when the last time a “dangerous anarchist” attacked someone in Canada. Me, I think it was about 1895. Anarchists in Canada who are into busting stuff up usually break a couple of windows in Starbucks or MacDonald’s, sometimes throw a newspaper box or two into the street. And for this we need tens of thousands of cops and concentration camp walls to protect the good city. From this we need to shut down the entire downtown and scare Bay street workers telling them if they wear suits they’ll be targeted.
Global Bonapartism: The G20 and the Planet An article with Vijay Prashad, with excellent background on the G8 and its ascendancy to power while undermining the 3rd world – read it! There is also a fantastic interview done by Sharmeen Khan here which goes over the history of the 3rd world project for justice in detail. Here’s an exerpt:
Since the 1950s, it has been the effort of the Atlantic states to squash the march of political progress in Africa, Asia, and Latin America. Independent political action was frowned upon. The Dulles brothers felt that all this talk of “non-alignment” was simply a Trojan Horse for Bolshevism. John Foster Dulles shared bugbears with Winston Churchill. Both were obsessed with Communism, what Dulles called “godless terrorism.” One can imagine John Foster chuckling as Churchill says, “The failure to strangle Bolshevism at its birth and to bring Russia, then prostrate, by one means or another, into the general democratic system, lies heavy upon us today” (1949). If Russia finally entered the G7, and, despite its occasional bouts of independent thinking, went along with the Atlantic powers, the countries of the Third World project were less pliable. Even when they give themselves over to the broad outlines of the Atlantic project, they still do things that are unacceptable: as when Turkey and Brazil cut the deal with Iran on nuclear fuel.
Unwilling to be fully servile, the “locomotives of the South” have tried to make the most of differences among the G7 to edge their way onto the table. The weak link was France’s Nicolas Sarkozy. In 2003, the French had already invited the Plus Five countries (Brazil, China, India, Mexico and South Africa) to the Evian Summit of the G8. At the next two summits (Gleneagles, 2005, and Heilingendamm, 2007) the G7 leaders spoke timidly of trying to “institutionalize the dialogue.” The Plus Five saw this as insufficient. Shortly after his installation as France’s President in 2007, Sarkozy put the case for the Plus Five. It was his Gaullist moment, to create some daylight between the Anglo-Saxon attack on Iraq and France’s “benign” colonial history.
Today’s issue of The Spoke (number 6), from the Toronto Media Coop – includes coverage of yesterday’s ‘Queering the G20′ rally. Further excellent coverage of the rally here Fighting for Reproductive Justice at Home and Abroad: A panel discussion more great work from the Toronto Media coop, this time Maya Rolbin-Ghanie covering on a panel on abortion rights. An excerpt:
If, as the government claims, says the Ontario Coalition for Abortion Clinics (OCAC), their purpose is to save lives and make women and children’s lives better, “women must have access to a full range of reproductive choices, including abortion. The Harper government is emboldening the anti-choice minority in this country. If they are allowed to pursue the Bush-era policy of cutting funding for abortion in developing countries, they may begin to more directly attack abortion rights in Canada.” Carolyn Egan of OCAC names just a few of these choices so integral to the health of women: the right to birth control, in our own communities, our own language; the right to a decent job; employment equity; the right for First Nations women not to have their children taken away by children’s aid; the right to live freely and openly as lesbians; the right to be free from sterilization abuse.
Blue Jays baseball ticket buying process changed: now requires 6 cops
I guess now is the time I’ll be starting to do more coverage of the actions rather than just issues, though I will continue to mostly focus throughout on what the G20 is up to, decisions made, analysis, etc… For a one stop independent shop on the mobilzations (and a truckload of issue analysis as well) see – 2010.mediacoop.ca
Anyway, I was just down at the Jays stadium getting tickets for tonight’s game (I need a bit of a break!) and there were 6 police waiting right behind you as you buy tickets. 6! After my seat selection was properly vetted by the officers, I headed downtown to look around for a second time.
There may have been as many police in the Mountain Equipment Coop on King than non-police patrons. I went to buy new bike lights, given that people are being targeted and ticketed for not having them, and I needed them anyway.
As many have reported, Toronto is currently a police state, w/o question.
Have we internalized the idea that this police state is ok? Or is the violation of civil liberties creating dissent even amongst people who may not have thought much about the G20 before?
People are upset about being inconvenienced – fair enough. But the more fundamental questions are – 1) why does the Canadian government feel the need to do this? (fear of rising discontent?) 2) what right do they have to do this?
The much ballyhooed violence has started – with the fence and the police and the ‘designated protest zone’ being the first act. It much, much more violating than any broken window. It is a violence that says who is in and who is out. Who counts and who does not. Please mainstream media, report it as such.