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PacNet #31A – The G-2: No Good for China and for World Governance

Since the onset of the financial crisis there have been suggestions to form a G-2 consisting of the United States and China. This proposal is based on the facts that China is the largest creditor of the U.S., the U.S. is China’s biggest export destination, and the strong interdependence of their two economies provides a foundation for joint action that can shape the global economy. This thinking is tempting when the G8 is seen to reflect an outdated balance of power and the G20 is considered too diluted to respond to global challenges.