At the Washington summit meeting, China holds the cards

It is not clear how much the leaders of developed and developing countries from around the world, gathered to discuss a fast-moving financial crisis with a soon-to-depart president of the United States, can hope to accomplish.

By Mark Landler and Stephen Castle
International Herald Tribune

But the summit meeting in Washington this weekend may clarify one thing: how fundamentally the crisis is reshaping the economic map, rendering obsolete the old club of Western powers that fashioned the financial pillars of the post-World War II era at a conference in Bretton Woods, New Hampshire, in 1944.

While President Nicolas Sarkozy of France proposed the meeting and President George W. Bush agreed to be host of an expanded conference of G-20 nations, the most sought-after country at the gathering some are calling Bretton Woods II is likely to be China.

With nearly $2 trillion in foreign exchange reserves and an economy that is still growing – even if more slowly than it was before the crisis erupted – China is one of the few participants with the financial power to aid countries in distress, either directly or by contributing to the coffers of the International Monetary Fund.

“We will actively participate in rescue activities for this international financial crisis,” Yi Gang, deputy governor of the Chinese central bank, told a news conference Friday in Beijing, according to Reuters. It was one of the clearest indications yet that China stood ready to help the IMF aid countries hit by the global credit crisis.

Read the rest:
http://www.iht.com/articles/2008/11/14/business/summit.php

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