A regional solution to global imbalances: We need a Beijing Accord
We have recently heard much about currency wars. China stands accused of undervaluing its exchange rate to gain unfair advantages for its export industry, causing other countries to also intervene in the foreign exchange markets or impose caps on capital inflows. In a piece for the East Asia Forum (“A regional solution to global imbalances: We need a Beijing Accord”), I make a call for a Beijing Accord. Instead of hoping for an agreement among the G20 countries or some kind of new Plaza Accord, it would be more effective to try to forge consensus on exchange rate policy among East Asian countries, which could be then presented to the G20. China, I argue, should invite its East Asian neighbours to Beijing before the G20 summit in Seoul and discuss a cooperative stance on exchange rate policy to help correct the imbalances that apparently exist between the East Asian region and the US as well as Europe.
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