Forget bretton woods II: The role for U.S.-china-japan trilateralism

Washington Quarterly

Volumn 32, Issue 2, 2009, Pages 7-25

  Funabashi, Yoichi ^a  

^a TWQ's ^*  (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 70849088015     PISSN: 0163660X     EISSN: 15309177     Source Type: Journal    
DOI: 10.1080/01636600902772620     Document Type: Article

References (77)

1. "Euro Zone Recession Seen Worsening, Rates to Fall," The Guardian, December 11, 2008.
2. "Fact Box: Fiscal Stimulus Plans to Tackle the Crisis," Reuters, November 23, 2008.
3. "Japan's Recession Worse Than Thought: Official Data," Agence France-Presse, December 9, 2008.
4. Andrew Jacobs and David Barboza, "Unexpected Drop in China's Imports and Exports," International Herald Tribune, December 11, 2008, http://www.iht.com/articles/2008/12/11/business/11yuan.php.
5. "Senior Figures Call for New Bretton Woods Ahead of Bank/Fund Meetings," European Network on Debt and Development, October 9, 2008, http://www.eurodad.org/debt/article.aspx?id_120&item_2988.
6. "'Seránecesario un nuevo Bretton Woods,"' Pagina 12, October 8, 2008, http://www.pagina12.com.ar/diario/economia/2-112978-2008-10-08.html.
7. John B. Judis, "Debt Man Walking," The New Republic, December 3, 2008.
8. Sheila A. Smith, "Japan's New Economic Challenge," Expert Brief (New York: Council on Foreign Relations, November 25, 2008), http://www.cfr.org/publication/17854/japans_new_economic_challenge.html.
9. Willy Lam, "Beijing's Stimulus Plan: Preemptive Crisis Management," China Brief 8, Issue 22 (November 24, 2008), http://www.jamestown.org/uploads/media/cb_008_22.pdf.
10. Niall Ferguson, "Team 'Chimerica,"' The Washington Post, November 17, 2008, http://www.washingtonpost.com/wp-dyn/content/article/2008/11/16/AR2008111601736.html.
11. Fred Bergsten, Charles Freeman, Nicholas R. Lardy, and Derek J. Mitchell, China's Rise: Challenges and Opportunities (Washington, D.C.: Peterson Institute for International Economics, 2008).
12. Harold James, "The Making of a Mess; Who Broke Global Finance, and Who Should Pay for It?" Foreign Affairs (January/February 2009), http://www.foreignaffairs.org/20090101faessay88111/harold-james/the-making-of-a-mess.html.
13. Author's private conversation with a Chinese diplomat, December 22, 2008.
14. Wang Xu, "China Can be First to 'Recover' From Crisis," China Daily, January 12, 2009.
15. "China Foreign Exchange Reserves at $1.905 Trillion," Associated Press, October 14, 2008.
16. Department of the Treasury/Federal Reserve Board, "Major Foreign Holders of Treasury Securities," December 15, 2008, http://www.treas.gov/tic/mfh.txt.
17. William Pesek, "China, U.S. 'Sugar Daddy,' Eludes Clinton, Obama," Bloomberg, April 4, 2008.
18. Yoichi Funabashi, Managing the Dollar: From the Plaza to the Louvre (Washington, D.C.: Institute for International Economics, 1989), pp. 243-244.
19. Marc André Pigeoon, "Working Paper No. 303: 'It' Happened, but Not Again: A Minskian Analysis of Japan's Lost Decade" (Boston, MA: Jerome Levy Economics Institute, June 2000), p. 5.
20. R. Taggart Murphy, The Weight of the Yen (New York: W.W. Norton & Co., 1996).
21. John B. Judis, "Debt Man Walking: The U.S., China, Japan and the Foundations for a New Bretton Woods," The New Republic, December 3, 2008.
22. Also see, David Smick, "America's New Rescuer: Japan," The Washington Post, February 9, 2009, http://www.washingtonpost.com/wp-dyn/content/article/2009/02/06/AR2009020602992.html.
23. Author's private conversation with U.S. administration official, December 6, 2008.
24. Keith Bradsher, "U.S. Debt is Losing its Appeal in China," International Herald Tribune, January 8, 2009.
25. At the same time, Brad Setser of the Council on Foreign Relations has pointed out that while a decline in China's Treasury purchases may indeed be in the cards for 2009, this may be less a deliberate policy move than an inevitable fall from recent unsustainable monthly highs as China's reserve growth slows. See, Brad Setser, "China Hasn't (Yet) Lost its Appetite for U.S. Treasuries," Council on Foreign Relations Follow the Money Web Blog, January 8, 2009, http://blogs.cfr.org/setser/2009/01/08/china-actually-hasnt-lost-its-appetite-for-us-treasuries/.
26. "'Go East': China Inc. Recruiting in Gloomy London, New York," Agence France-Presse, November 5, 2008.
27. "Japan's Foreign Exchange Reserve Back to $1 tln line," Xinhua, December 5, 2008.
28. International Monetary Fund, "World Economic Outlook Database," October 2008, http://www.imf.org/external/pubs/ft/weo/2008/02/index.htm.
29. Smith, "Japan's New Economic Challenge."
30. Martin Fackler, "Bank of Japan Cuts Key Interest Rate and Lowers Growth Forecast to Zero," New York Times, November 1, 2008, http://www.nytimes.com/2008/11/01/business/worldbusiness/01japan.html.
31. Taro Aso, "Restoring Financial Stability," Wall Street Journal, November 14, 2008, http://online.wsj.com/article/SB122660683367025399.html.
32. Hiroko Tabuchi, "Japan Unveils New Economic Stimulus Measures," Wall Street Journal, December 15, 2008, http://online.wsj.com/article/SB122908384180101567.html.
33. Aso, "Restoring Financial Stability."
34. While the three countries had habitually met on the margins of ASEAN Plus Three leaders' meetings in the past, this December 2008 summit represented the first ever free-standing summit arranged between the leaders of China, Japan, and South Korea, outside of the ASEAN Plus Three framework.
35. "Joint Statement on the International Finance and Economy," Ministry of Foreign Affairs of the People's Republic of China, December 15, 2008.
36. Charles Kindleberger, Manias, Panics, and Crashes: A History of Financial Crises (New York: Basic Books: 1978).
37. James O' Connor, "What to Expect From the G-20 Summit," New Atlanticist: Policy and Analysis Web Blog, November 14, 2008, http://www.acus.org/new_atlanticist/what-expect-g20-summit.
38. Based on statements from Deputy Minister Dmitry Pankin of Russia. See, Eugene Nikitenko, "G20 Summit and Ways of Overcoming the Crisis," Voice of Russia, November 19, 2008, http://www.ruvr.ru/main.php?lng_eng&q_35289&cid_87&p_19.11.2008.
39. Author's private conversation with a U.S. administrative official, December 6, 2008.
40. David Stanway, "China Currency Deprecation a 'Political Signal' before Paulson visit-JP Morgan," Forbes, December 3, 2008.
41. Lawrence H. Summers, "America Overdrawn," Foreign Affairs (July/August 2004).
42. Ambrose Evans-Pritchard, "China Threatens 'Nuclear Option' of Dollar Sales," Telegraph, August 10, 2007.
43. Nie Peng, "China Makes New Moves to Boost Exports," China Daily, November 13, 2008.
44. Anthony Faiola and Glenn Kessler, "Trade Barriers Toughen With Global Slump," The Washington Post, December 22, 2008.
45. Daniel Dombey, "Paulson Calls on Beijing to Bolster Value of Renminbi," Financial Times, December 3, 2008.
46. C. Fred Bergsten, "China and The Collapse of Doha," Foreign Affairs (August 27, 2008), http://www.foreignaffairs.org/20080827faupdate87576/c-fred-bergsten/china-and-the-collapse-of-doha.html.
47. Andrew Hay, "Update 2: IMF Sees Risk of Prolonged Global Crisis, Unrest," Reuters, December 15, 2008.
48. Wang Zhenghua, "China Faces Uphill Task on Job Creation in 2006," China Daily, February 20, 2006.
49. Jason Subler, "China Urban-Rural Income Gap Continues to Widen," Reuters, January 24, 2008.
50. "Japan_World's No. 2 Economy_in Recession," CNN Money, November 17, 2008.
51. "Chapter 2: Population," Statistical Handbook of Japan 2008 (Tokyo: Statistics Bureau, 2008).
52. Fred Hu, "Keep China on the Capitalist Road," Wall Street Journal, December 11, 2008, http://online.wsj.com/article/SB122893994548595473.html.
53. Hugo Restall, "The Lessons From 30 Years of Chinese Reform," Wall Street Journal, December 16, 2008, http://online.wsj.com/article/SB122939170030209305.html.
54. Pranab Bardhan, "Globalization Hits Road Bumps in India," YaleGlobal, October 3, 2008.
55. "Wharton Faculty Debate the Impact of the Financial Crisis," Knowledge @ Wharton, September 17, 2008, http://knowledge.wharton.upenn.edu/article.cfm?articleid_2053.
56. Author's private conversation with a former U.S. government official in Washington, D.C., December 3, 2008.
57. Michael Green, Japan's Reluctant Realism (New York: Palgrave, 2001), p. 265.
58. Michel Camdessus, "Global Financial Reform: The Evolving Agenda" (speech, Council on Foreign Relations, New York, June 4, 1999), http://www.imf.org/external/np/speeches/1999/060499.HTM.
59. Office of the Press Secretary, The White House, "Declaration of the Summit on Financial Markets and the World Economy," November 15, 2008.
60. Gabor Steingart, "The Shrinking Influence of the U.S. Federal Reserve," Spiegel Online, June 26, 2008.
61. Chinese domestic demand has slumped to around 35 percent of its GDP, the lowest of any major economy in the world.
62. See Henry M. Pauslon, Jr., "A Strategic Economic Engagement," Foreign Affairs (September/October 2008)
63. and John Lee, "China's Unbalanced Economy Providing Silver Lining for Australia," The Age, May 30, 2008.
64. On the other hand in Japan, private consumption accounts for some 55 percent of GDP but has stagnated. The growth rate was only 0.3 percent in the third quarter of 2008.
65. See Yasuhiko Seki, "Crisis Sends Japan into First Recession in 7 years," Reuters, November 17, 2008.
66. "OECD Economic Outlook No. 84-China" (Organization for Economic Cooperation and Development, November 25, 2008), http://www.oecd.org/dataoecd/52/10/36761580.pdf.
67. Jianwu He and Louis Kuijs, "Rebalancing China's Economy_Modeling a Policy Package," World Bank China Research Paper No. 7 (Washington D.C.: World Bank, September 2007).
68. See Laurence Zuckerman, "Taiwan Central Banker Defends Hoard," International Herald Tribune, June 8, 1992, http://www.iht.com/articles/1992/06/08/taip_0.php?page_1.
69. Richard A. Werner, Princes of the Yen: Japan's Central Bankers and the Transformation of the Economy (Armonk, NY: M.E. Sharpe, Inc., 2003), p. 170.
70. "Economic Survey of Japan 2008: Chapter 5: Enhancing the Productivity of the Service Sector in Japan" (Organization for Economic Cooperation and Development, April 7, 2008), http://www.oecd.org/document/19/0,3343,en_2649_34833_40375123_1_1_1_1,00.html.
71. Author's private conversation with a high-ranking Japanese Ministry of Finance official, January 8, 2009.
72. Energy Policies of IEA Countries_Japan_2008 Review (International Energy Agency, 2008).
73. Carl W. Baker, U.S., Japan, and China Conference on Trilateral Security Cooperation (Honolulu, HI: Pacific Forum CSIS, June 2008), http://www.csis.org/media/csis/pubs/issuesinsights_v08n06.pdf.
74. C. Fred Bergsten, "The U.S. Trade Deficit and China," testimony before the Senate Committee on Finance on the U.S.-China economic relations revisited, March 29, 2008, http://www.iie.com/publications/papers/paper.cfm?ResearchID_611.
75. C. Fred Bergsten, "Currency Misalignments and the US Economy," Testimony before the Subcommittee on Trade, Ways and Means Committee, Commerce, Trade and Consumer Protection, Energy, and Commerce Committee, and Domestic and International Monetary Policy, Trade and Technology, Financial Services Committee of the House of Representatives, May 9, 2007, http://www.iie.com/publications/papers/paper.cfm?ResearchID_735.
76. Peter Bernstein, "The World Needs Another Plaza Accord," Financial Times, November 17, 2008, http://www.ft.com/cms/s/1/222ca758-3803-11d9-991f-00000e2511c8.html.
77. Yoichi Funabashi, "Keeping Up With Asia," Foreign Affairs (September/October 2008).