This refers to the editorial “Heat from cooling China”(October 21). It is surprising what the world has come to in two decades. China’s modest rate hike of 25 basis points has sent shockwaves through global markets. The previously lowly-placed countries like India, Brazil and China are reaching for the top while those at the apex — the US, Europe, Japan — seem to be on the wane. The British built an empire with their armed might and expansionist policy. In doing so, they acquired humungous debts and parted with their colonies. Similarly, the US took on costly wars that even its $14-trillion economy is not able to afford. Japan, which imported everything conceivable and ruled world trade, is in dire straits since other developing countries now buy raw materials and produce far cheaper goods. Europe is realising the perils of being an open-ended welfare state.
The western economies found no fault with exchange rates and the resultant cheap imports till their economic bubble burst. And today the US talks about outsourcing bans, visa restrictions and an upward revision of the yuan. To be fair, China has allowed a moderate yuan appreciation and intends to reasonably cap the current account surplus to gross domestic product ratio at four per cent for the next three years.
Faith in a truly global economy took the developing economies forward and this is going to come to the rescue of the countries facing a downturn now. The era of sovereign and slave economies is over. The laws of progress are the same for everyone.
R Narayanan, Ghaziabad
