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In a 'rebalanced' world economy, a diminished US role?

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The recession has become a catalyst for the world to focus on imbalances and the ongoing shift in economic power, but these aren't the kinds of issues that can be resolved at a single summit. Still, important signs have emerged in recent weeks:

• US Treasury Secretary Timothy Geithner has been working hard on the pivotal US-China relationship – both to nudge changes by Beijing and to reassure China, a major creditor, that the US will get its own house in order. After a US-China economic dialogue two months ago, Mr. Geithner summed up the outcome: "China will rebalance toward domestic demand-led growth," he said. "President Obama has committed to lowering federal deficits to sustainable levels once recovery is firmly established." For both nations, such achievements will be a tall order.

• At a Pittsburgh summit of the Group of 20 nations last month, a wider pool of leaders rallied around the idea of working together on "global rebalancing." The process lacks an enforcement mechanism, but the group asked the International Monetary Fund (IMF) to assess how individual nations do.

• At the G-20 meeting, the world's economic old guard agreed that major emerging nations should get formal seats at the table when big policy issues arise. In effect they said goodbye to the old Group of Eight and made the enlarged G-20 pool the primary forum for big-country discussions in the future.

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