| Summary/Abstract |
The principal challenge facing the world economy is the risk of recurrent financial crises. Global macroeconomic imbalances create the conditions for boom-and-bust cycles that are extremely costly for the countries that experience them, and that can affect other nations and the entire world economy as well. The G20 recognizes the importance of these trends, and has committed itself to cooperative measures to reduce imbalances. However, progress has been limited and halting. There are major political obstacles to global macroeconomic policy cooperation, both within countries and among countries. China's attempts to rebalance its economy are crucial to broader international financial stability. Its G20 presidency gives China the opportunity to demonstrate that it is willing and able to advance its cooperation with economic partners, and to help lead the rest of the world in this direction.
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