C. Fred Bergsten on the "G-2" of China and the United States

The Annual Awards Banquet approaches! In less than a week members can hear Peterson Institute for International Economics director C. Fred Bergsten speak about the future of the world economy after the crushing losses of 2008.

Dr. Bergsten is a highly sought-after expert in his field. Recently he testified before the United States House of Representative's subcommittee on Asia, the Pacific, and the Global Environment. In his testimony, Dr. Bergsten predicts (surprising no one) that China will soon pass Japan as the world's second largest economy. Dr. Bergsten advocates the formation of an "informal G-2," a working partnership between the United States and China, finding solutions to mutual problems such as global warming and guiding the world's economy into recovery. He makes some compelling arguments for such a relationship:

• "the two together accounted for almost one half of all global growth during the four-year boom prior to the crisis;"

• "they are the two largest trading nations;"

• "they are the two largest polluters;"

• "they are on opposite ends of the world's largest trade and financial imbalance: the United States is the largest deficit and debtor country while China is the largest surplus country and holder of dollar reserves; and"

• "they are the leaders of the two groups, the high-income industrialized countries and the emerging markets/developing nations, that each now account for about one half of global output."

Together, China and the United States can exert a huge amount of power in correcting the world's economy and working to end global warming, if the friendly bilateral relationship Dr. Bergsten recommends can be achieved. It will take some compromises from both sides, but as Dr. Bergsten describes the "G-2," one can't help but be excited at the possibilities.

The text of Dr. Bersten's testimony can be found here. To hear more from Dr. Bergsten on the future of the global economy and the United States' place in it, attend our Annual Awards Banquet on Monday, Oct 5th at the Hyatt Regency Crown Center in Kansas City. For all the details and to register, see our website.