Newspaper article The Evening Standard (London, England)

Tidal Wave of Money to the East Will Hit Recovery, Cameron Warns China

Newspaper article The Evening Standard (London, England)

Tidal Wave of Money to the East Will Hit Recovery, Cameron Warns China

Article excerpt

Byline: Joe Murphy Poitical Editor

DAVID CAMERON today warned of a "dangerous tidal wave of money" from west to east that could drown the global recovery from recession.

The Prime Minister ended his China tour with a double-edged warning to his hosts to open their markets or risk their burgeoning economic might becoming a liability to world prosperity.

As he left for the G20 summit in South Korea, where he pledged to champion free trade, Mr Cameron displayed concern at the low level of the yuan currency, which Beijing is suspected of holding down to boost exports and hold back imports.

Mr Cameron said the world economy would only grow strongly again if everybody embraced open markets. "The truth is that some countries with current account surpluses have been saving too much while others like mine with deficits have been saving too little," he said.

"And the result has been a dangerous tidal wave of money going from one side of the globe to the other."

The Premier urged a "more balanced pattern" of trade. Arguing that no economy could afford to insulate itself, he pointed out that the world downturn had led to a 12 per cent fall in Chinese exports and the loss of some 20 million export sector jobs in China. Speaking in Beijing, Mr Cameron lauded the surging Chinese economy, saying the country had regained its place as the biggest global economic power. It was now time for China to show leadership on trade.

He offered to champion Chinese access to European markets and combat protectionist policies elsewhere, but said in return that China must be "open to Europe".

The Prime Minister set out a strongly pro-free trade British agenda for the G20 which opens tomorrow. "Countries will increasingly be tempted to try to maximise their own growth and their own employment, at the expense of others," he warned.

"Globalisation -- the force that has been so powerful in driving development and bringing huge numbers into the world economy could go into reverse. If we follow that path we will all lose out."

In his address to students at Peking University, Mr Cameron risked irritating the Beijing leadership by hailing the political freedoms of British democracy as an example to follow. …

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