The U.S. and China have both agreed to participate in an international process that will evaluate the risks that major economic powers pose to global development. The New York Times reports that China is the primary target in the evaluation process:
The deal, completed at a meeting of finance ministers from the Group of 20 nations, was hailed by several of those ministers as a milestone in efforts to increase China’s accountability to the concerns of other nations.
The United States hopes the process will raise international pressure on China to stop increasing exports by keeping its currency artificially cheap. In return, the United States is likely to get a dose of strong international criticism for running up immense deficits to finance unaffordable levels of consumption.
But the studies, scheduled for presentation to heads of state at a November meeting in France, will include neither carrots nor sticks to encourage changes. A 2006 study of the same issues by the International Monetary Fund sank without a trace.
“The enforcement mechanism?” asked Christine Lagarde, the French finance minister, echoing the question of the day. “It will be for heads of state and government.”