The G7 rich nations hoped to decide its future as an institution yesterday, with the US pushing for the creation of a smaller core group that would include China, a G7 official said.
The official, speaking on condition of anonymity, said Washington wanted to see the G7 supplanted in global economic policymaking by a Group of Four that would bring the US, the euro zone and Japan together with China.
The official was speaking ahead of a meeting of G7 finance ministers and central bankers in Istanbul later yesterday. The G7 is gathering on the sidelines of the semiannual meetings of the IMF and World Bank.
PHOTO: AFP
For more than a decade, the G7 dominated international policymaking. But the financial crisis has undermined its power, as big developing economies such as China have become key to managing the global recovery.
Any formal move to supplant the G7, which comprises Britain, Canada, France, Germany, Italy, Japan and the US, would likely be diplomatically complex and controversial.
But the group’s role has appeared in doubt since a larger group of nations, the G20, earlier this year became the main forum for debating the financial crisis. The G20 has agreed in principle to tighten financial regulation and try to reduce trade imbalances that destabilize the global economy.
“The G7 is not quite dead, but it is losing its relevance,” IMF managing director Dominique Strauss-Kahn was quoted as saying by Emerging Markets magazine yesterday. “It’s on its way to extinction.”
Finance chiefs from the G7 gathered yesterday for talks on the economic crisis as doubts swirled about the health of the global economy.
“No way can we say that the crisis over” because of rising unemployment and a weak financial sector, Strauss-Kahn said in a BBC World debate ahead of the talks.
French Finance Minister Christine Lagarde, who will also be taking part in the G7 talks along with her colleagues from Britain, Canada, Germany, Italy, Japan and the US, said: “I have my eyes riveted on the unemployment rate.”
Russian Finance Minister Alexei Kudrin was also to attend the meeting. The talks were to be the first for new Japanese Minister of Finance Hirohisa Fuji, seen as an experienced bureaucrat lacking in international experience.
The meeting in Turkey’s biggest city came after the US — the world’s biggest economy — this week reported higher than expected unemployment figures and a setback in the recovery of its battered manufacturing sector.
US President Barack Obama on Friday said the job losses were “a sobering reminder that progress comes in fits and starts.”
“We’re going to need to grind out this recovery step by step,” he added.
The IMF has said that a tentative global economic recovery has begun and the G7 talks will discuss “the next steps and implementation” of a roadmap agreed at the G20 summit last week for recovery, a US Treasury official said earlier.
The Fund said yesterday that Europe must move to clean up its banks after testing their financial stability. “It’s time to clean the banks,” said Marek Belka, head of the IMF’s European department.
“We need a more resolute approach to addressing the balance sheet risks faced by banks and to take action for recapitalisation or restructure viable institutions and dissolve others as necessary,” he said.
Bank tests were “very helpful” but there should now be action, he added.
European finance ministers have meanwhile put pressure on the US to support a weak dollar, with Lagarde saying on Friday: “Everyone needs a strong dollar.”
The dollar was trading at 1.4572 to the euro in New York late on Friday.
The current state of the dollar has led some experts to conclude that Washington is allowing the currency to lose value as a way of boosting US exports by making them cheaper — a tactic that would weaken European exports.
TECH BOOST: New TSMC wafer fabs in Arizona are to dramatically improve US advanced chip production, a report by market research firm TrendForce said With Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) pouring large funds into Arizona, the US is expected to see an improvement in its status to become the second-largest maker of advanced semiconductors in 2027, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report last week. TrendForce estimates the US would account for a 21 percent share in the global advanced integrated circuit (IC) production market by 2027, sharply up from the current 9 percent, as TSMC is investing US$65 billion to build three wafer fabs in Arizona, the report said. TrendForce defined the advanced chipmaking processes as the 7-nanometer process or more
China’s Huawei Technologies Co (華為) plans to start mass-producing its most advanced artificial intelligence (AI) chip in the first quarter of next year, even as it struggles to make enough chips due to US restrictions, two people familiar with the matter said. The telecoms conglomerate has sent samples of the Ascend 910C — its newest chip, meant to rival those made by US chipmaker Nvidia Corp — to some technology firms and started taking orders, the sources told Reuters. The 910C is being made by top Chinese contract chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯) on its N+2 process, but a lack
NVIDIA PLATFORM: Hon Hai’s Mexican facility is to begin production early next year and a Taiwan site is to enter production next month, Nvidia wrote on its blog Hon Hai Precision Industry Co (鴻海精密), the world’s biggest electronics manufacturer, yesterday said it is expanding production capacity of artificial intelligence (AI) servers based on Nvidia Corp’s Blackwell chips in Taiwan, the US and Mexico to cope with rising demand. Hon Hai’s new AI-enabled factories are to use Nvidia’s Omnivores platform to create 3D digital twins to plan and simulate automated production lines at a factory in Hsinchu, the company said in a statement. Nvidia’s Omnivores platform is for developing industrial AI simulation applications and helps bring facilities online faster. Hon Hai’s Mexican facility is to begin production early next year and the
Who would not want a social media audience that grows without new content? During the three years she paused production of her short do-it-yourself (DIY) farmer’s lifestyle videos, Chinese vlogger Li Ziqi (李子柒), 34, has seen her YouTube subscribers increase to 20.2 million from about 14 million. While YouTube is banned in China, her fan base there — although not the size of YouTube’s MrBeast, who has 330 million subscribers — is close to 100 million across the country’s social media platforms Douyin (抖音), Sina Weibo (新浪微博) and Xiaohongshu (小紅書). When Li finally released new videos last week — ending what has
RSS