US, Europe should take responsibility for global recovery

By Zhong Sheng (People's Daily)

08:33, August 10, 2011

When the world economy is at risk of a double-dip recession due to the debt crises in the United States and Europe, certain Western journalists and scholars have again started to praise China in an exaggerated way, expecting China to solve the crises. This is not a new trick. 

In recent years whenever the world economy was faced with difficulties, the Westerners would either criticize China for "exporting crises" or praise China and ask the country to take responsibility. Either way, their purpose is to shirk their own responsibility. 

In fact, what is near the cliff’s edge is the politics in Washington rather than the global economy. The recently concluded debt ceiling debate in Washington is like a slapstick comedy, and the debt crisis plaguing the United States is not financial but political in nature. The prolonged European sovereign debt crisis was largely caused by conflict among European countries in terms of collective decision-making and internal political disagreements in these countries. 

Standard & Poor's has downgraded the U.S. credit rating partly because it was pessimistic about U.S. politics. The rating agency said on Aug. 5 that given the deep gulf between the two parties over fiscal policies, it was "pessimistic about the capacity of Congress and the administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon." 

The comedy has not ended. As the political cycles of the countries, including the United States, begin to enter into the stage of general election and their political outlook is becoming increasingly uncertain, the populism and conservatism will likely be on the rise there. The growing public concern over Western countries' political determination has also seriously affected global investors' confidence in the world economic recovery and intensified market fluctuations. 

Facts have shown that there must be a way to turn recession into recovery, the key of which lies in that various countries should have the awareness of a big picture and firm political determination. Although many issues can be resolved, they have been postponed again and again with the best time to address the issues passed. Although many approaches are feasible, they cannot be adopted because of the restraints of the politics of voting. Therefore, the dilemma currently faced by the West is not only the challenges on its economic policies but also the tests of its political system. 

People should not forget that emerging market economies, including China, have shown their gradually growing strengths during the financial tsunami of 2008. At that critical junction, China firmly and resolutely launched a plan for stimulating its domestic economy and played a crucial role for the recovery of the global economy. 

Meanwhile, China also offered a helping hand and practically promoted international cooperation. Facing the ever-changing global economic situation, China has repeated again and again that international communities should strengthen their cooperation to guarantee a strong and sustainable recovery momentum for the global economy, effectively promote the structural reform of global economic management and gradually establish a fair and sound new international economic order. 

We must see that if developed countries of Europe and America selfishly do whatever they want and do not want to shoulder their responsibilities, they will severely hinder the stable development of the world's economy. And even if China and other emerging market economies could maintain a relatively rapid domestic economic development, they could not guarantee a stable road for the global economy's recovery. 

Facing the challenges of a global economy, members of international society have strengthened their coordination, and the Group of 20 has changed from a mechanism for effectively coping with the international financial crisis to a major platform for promoting international economic cooperation.

It could be said that the current situation is quite different from the situation of 2008. As long as Western countries do not wantonly shirk their responsibilities, show resolute decision-making and courage, and strengthen the cooperation with developing countries, it could be expected that the global economy will walk on a road of stable recovery. 

The confidence comes from accurate judgment of the situation and also from strong political decision-making.

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