G-20 delivers “platitudes” as Obama hits at China

Chemical companies, Consumer demand, Currencies, Economic growth, Financial Events, Oil markets

G-20.jpgThe blog has a simple measure for the effectiveness of international meetings. It counts the number of words in the communiqué.

The logic behind this is that when people are really focused, they get down to business. When they waffle, then you know nothing will happen.

The history of the recent G-20 meetings seems to support this analysis:

April 2009 688 words, focused on stimulus measures
September 2009 9292 words, full of self-congratulation
June 2010 10713 words, 27 pages, complete waste of time

Sadly, the Seoul meeting goes overboard on words, to try and disguise its lack of content. We have a Leaders Declaration of 1503 words, plus a Summit Document of 6579 words in 17 pages, 3 Annexes, a Supporting Document, and a Key Outcomes document that, ironically, doesn’t download.

The problem goes back to the first G-20 meeting in April 2009, when the blog highlighted the lack of a Plan B, as a “contingency plan in case the global economy does not begin to recover“. As a result, the G-20 leaders now have no shared view of what to do, even though Point 7 of the new Declaration highlights this as the key issue:

“Risks remain. Some of us are experiencing strong growth, while others face high levels of unemployment and sluggish recovery. Uneven growth and widening imbalances are fuelling the temptation to diverge from global solutions into uncoordinated actions. However, uncoordinated policy actions will only lead to worse outcomes for all.”

As the Wall Street Journal comments, all we then get is “platitudes“.

Perhaps the most significant moment came after the meeting finished, when President Obama told a news conference that China’s currency was “undervalued. And China spends enormous amounts of money intervening in the market to keep it undervalued.” If this isn’t a green light to the new Congress to start talking about trade sanctions, then its hard to know what is.


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