Sieren′s China: Learning from mistakes | Asia| An in-depth look at news from across the continent | DW | 07.09.2015
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Sieren's China: Learning from mistakes

Japan accuses China of slowing down the global economy. However, under the circumstances, the other G20 members are satisfied with China, says DW's Frank Sieren.

Despite the roller-coaster ride that China's stock market has been on during the past few weeks and the cooling down of the Chinese economy since the beginning of the year, the finance ministers and central bankers of the G20's member states remain confident that a global crisis will not be triggered.

At the G20 summit last weekend, Turkey's Deputy Prime Minister Cevdet Yilmaz pointed out that the world community believed China's economy would continue to grow: "There is a general opinion that growth will continue with a rate of around 7 percent," he said. "This is something that will appease concerns to a certain extent."

The unusual openness of the governor of China's central bank Zhou Xiaochuan and his delegation also provided a good basis for discussion at the two-day summit and earned China respect and trust, instead of criticism. Canadian Finance Minister Joe Oliver praised China for its "constructive role". He thought that it was normal that a downturn in the world's second economy should have an impact on the growth of the global economy, but wanted to confront problems instead of seeking a scapegoat.

Criticism from Japan

Actually, only Japanese Finance Minister Taro Aso was of a different opinion. He was certain that Beijing was putting the stability of the world economy at risk with its policies. However, his stance did not win any sympathy with the other G20 members. In the German delegation, there was talk of his presentation having caused "considerable irritation". The EU delegation spoke of an "embarrassing" presentation and said that his arguments had been reminiscent of the "distant days of the war." Aso's accusations that China had not taken enough precautions and that the explanations of the Chinese representatives were "not constructive" ended up backfiring on Japan.


Frank Sieren

German Finance Minister Wolfgang Schäuble was not able to find fault with the Chinese currency watchdogs. On the contrary, he thought that China's currency, the yuan, had good chances of soon obtaining reserve-currency status. The island nation of Japan is not only in a recession, but also has no proposals for solving its ongoing economic depression. Aso can thus be likened to someone living in a glass house who is himself throwing stones. Chinese central banker Zhou did not try to maintain that China had done everything correctly. There was a sense that others should mind their own business.

Diplomatic final statement

Zhou spoke of mistakes and bad investments, as well as suggestions for improving the situation in future. He was so clever that in its final declaration the G20 did not directly mention China in connection with the current uncertainty on the financial markets. "We welcome the strengthening economic activity in some economies, but global growth falls short of our expectations," the finance ministers and central banks wrote diplomatically.

The ball is now in the court of the US, which emerging economies have called on to put an end to the ongoing speculation about raising interest rates so as to curb uncertainty on the global financial markets.

This is also an approach: A forward attack like the Chinese just demonstrated in Ankara got them out of the firing line because people looked to the future rather than the past. However, it did not quite work. There was another place in the statement where China was not explicitly mentioned but was definitely meant: "We will refrain from competitive devaluations, and resist all forms of protectionism." If it comes to the crunch though, Beijing will ignore this advice.

Our correspondent Frank Sieren is one of Germany's leading China experts. He has lived in Beijing for 20 years.

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