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China to enjoy Evian with the big boys
By Francesco Sisci

BEIJING - May the United Nations rest in peace, may the new world order commence its work. With the announcement that China will join the next Group of Eight meeting in Evian, France, next month, the summit of the world's largest economies has completely emptied the UN Security Council. In fact the G8 will have together the five permanent members of the Security Council, plus four of the largest global economies that have no veto power at the UN, namely Japan, Germany, Italy and Canada.

It is true, China won't be an official member of the group, and other countries have been invited along to the meeting - India, Brazil, Mexico and South Africa. These latter four lack the economic clout of China, and its political reach. In fact China, which now boasts one of the largest gross domestic products (GDPs) in the world, would strengthen the G8 if it were to join. And this is clear to all participants, but the same is not true for the other four unofficial participants.

Furthermore, the G8 meeting will muster the heads of state of each country, rather than diplomats, thus it could well be conducive to concrete authoritative decisions.

This is the end of the era in which the UN aimed to represent all nations with special status given to the victors of World War II. In time the permanent members lost much of their original clout they had won in the war as some of its losers had breached the economic gap with some of the victors, and overcome, in case of Japan and Germany, almost all of them.

The Americans, initiators of the UN, have in the past years undermined its function. Twice the United States has gone to war bypassing the UN, in Kosovo in 1999 and in Iraq in 2003. Therefore, a principle is established: the US will use the UN when it suits it, but it will not accept being restrained by it.

China joining the G8 would recognize this principle, and Beijing, with pragmatic realism, has accepted the fact that if it wants to be heard it must join the G8, forfeiting the old claim of speaking for the Third World or being the representative of Asia. At the G8 China would count less than Japan, and this is an important twist, as it could be a major step toward the complete reconciliation of the two large Asian economies. In recent months many in China have spoken in favor of a major political effort to mend fences with Japan and let bygones be bygones. China needs a peaceful and prosperous East Asian environment to boost its growth, and this can't be achieved without Japan. Japan, on the other hand, can regain its pristine economic confidence only by reconciling herself with being not the only economic and political actor in Asia - by playing at least on the same stage as China. As we had anticipated, the issue of North Korea has encouraged Sino-Japanese cooperation.

Inviting China to the G8 summit was a necessity. China in the past two years represents the lion's share of global economic growth in a time of widespread recession. This year the topics on the agenda will be the war in Iraq, where everybody will listen to what the United States has to say, and severe acute respiratory syndrome (SARS), with its global economic impact, and here everybody will want to hear from China.

With the spread of the disease in the countryside it is already clear that SARS will be a long-term problem, with a huge impact on China's economy. SARS creates new fears of Chinese products among US consumers, and this in turn could help boost US inflation, as for instance cheap shoes from Guangzhou will be shunned for more expensive footwear from elsewhere.

China, moreover, will need all the help it can garner to recover its economy and exercise some damage control. Economic crises can easily turn into social crises, as China needs some 5 percent growth to absorb all the hands made redundant every year in the countryside. This help and trust can only be gained at the G8.

This also leaves large and proud India out in the cold and underscores the reality that most of the world's countries are but spectators at somebody's else play. How to address this concern without pretending to forget the reality that money talks is the challenge of the new world order that will be born in the new G8 delivery room.

This is the new game in a town full of tricks and snares. Bye-bye United Nations.

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May 10, 2003

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