Editorial | China and US have a duty to work together with world on brink
- The relationship between the world’s two biggest economies is at its worst in decades, and they should put their enmity aside to fight the coronavirus pandemic
Until now, there was little cooperation between the leading economies, unlike their responses during the global financial crisis more than a decade ago. Many countries have so far acted unilaterally in executing their own monetary policies and health measures, sometimes even against one another.
Belatedly, the United States and European Union have pledged billions to fight the spread of the virus and to support their economies. But, as shown in the panic responses of equities and even the much more stable government bond markets, widespread alarm persisted over whether policymakers were doing enough.
Key Western central banks are lowering rates, with the US Federal Reserve taking them close to zero. But there is only so much monetary policy can do when supply and demand are hit badly. As demand plummets, governments need to put in their own stimulus plans and strengthen social safety provisions. The White House, for example, is considering handing US$1,000 to every American.