Special Report: Hu Attends Financial Summit, APEC Meeting, Visits Four Nations

Related: Statement from G-20 Summit

    by Li Bo

    BEIJING, Nov. 16 (Xinhua) -- Ever since a credit crunch that started with the U.S. subprime mortgage crisis spread to other parts of the world, there have been mounting calls for reforming the current international financial system from all over the world.

    As Henry C.K. Liu, a Chinese American commentator on economics, put it in an open letter to the G20 summit in Washington last week: "The winter of 2008-2009 will prove to be the winter of global economic discontent..."

    The letter, published by Asia Times on Nov. 8, blasted neo-liberal economists who "fooled themselves into thinking that false prosperity built on debt could be sustainable with monetary indulgence."

    It advocates a new international financial architecture based on an updated 21st century version of the Keynes Plan originally proposed at Bretton Woods in 1944.

    "This new international financial architecture will aim to create (1) a new global monetary regime that operates without currency hegemony, (2) global trade relationships that support rather than retard domestic development, and (3) a global economic environment that promotes incentives for each nation to promote full employment and rising wages for its labor force," said the letter signed jointly by American macroeconomist Paul Davidson and dozens of other leading world economists.

    The proposal presents a rosy blueprint, but on the ground, the world has not gathered enough dynamics to rebuild a new financial system.

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