Gordon Brown is to set out proposals at the G20 this week aimed at boosting Chinese consumer demand and ending the global economy's reliance on the American shopper.
The plan is one of the centrepieces of Brown's four-day economic and diplomatic blitz in the US at the UN general assembly in New York and the G20 in Pittsburgh.
Economists have long warned of the dangers of imbalances in the global economy – specifically huge trade surpluses and currency reserves built up by exporters such as China, and big deficits in the US and other economies.
Brown, Barack Obama and the IMF have been looking jointly at ways in which new global systems can be put in place to encourage the Chinese to stop accumulating large reserves, built up to inoculate themselves from volatile capital flows.
"The 15-year period when the world economy can rely on the American consumer to drag the world out of recession is over," said one British official. "We need a new motor for growth."
Brown's aides are hoping the world stage can still provide the right personal backdrop for a desperately needed triumph at the Labour conference next week.
Brown is this year's chairman of the G20, although the G20 meeting in Pittsburgh on Thursday and Friday is being chaired by Obama.
Brown's officials have been looking at an insurance pool for the G20 largest economies that would reduce incentives for build-ups of reserves. Under one model the insurance pool would function like a reserve fund, offering participants a short-term credit line they could call upon during a crisis.
Brown's ideas have been developed with Obama and the IMF, and it is hoped the insurance scheme would be a way of encouraging China to reduce its trade surplus and revalue its currency.
Obama said this weekend: "We can't go back to the era where the Chinese or the Germans are selling everything to us, we're taking out a bunch of credit card debt or home equity loans, but we're not selling anything to them."
He said making sure there was a more balanced economy in future was a key aim of the G20 meeting, just as much as co-ordinating strategies to exit from the current round of fiscal stimulus.
G20 officials have also been discussing an annual G20-led peer review process by which they would hold each other accountable for implementing economic policies that led to more balanced growth.
But Brown's officials argue that if no insurance funds are available, countries have every incentive to build up current account trade surpluses so as to create large currency reserves, leading them to lock up their wealth in unproductive low-return liquid government bonds. China owns $2.1tn (£1.3tn) in foreign currency reserves, much of which is believed to be in US dollars.
Even though China is due to grow by 8% this year, the crisis last year saw as many as 20 million migrant workers sent back to the countryside as urban factories closed. Brown believes the Chinese have had a political lesson in the past year on the inter-connectedness of the world economy and the effectiveness of international co-ordination. In an attempt to make the proposal more palatable, the Chinese would be given a greater say on the IMF board.
UK officials argue that the events of October 2008 to March 2009 brought it home to the world that allowing imbalances to build up can be dangerous and painful to correct. The Chinese, it is argued, have learned that it can be dangerous to be so dependent on external demand from US consumers, since contraction in the US forces the rapid closure of Chinese export-oriented factories. The Chinese president, Hu Jintao, who will be at the G20, will also be under pressure to offer to do more on climate change.
Similarly Germany has been shocked by the speed with which the recession has hit countries with surpluses as well as those with deficits.
The insurance idea has been around for many years, but this is the first time it has been taken so far.
Brown said: "We are looking at how we can put in place for the future the mechanism or path that can lead us to either making decisions about better ways of creating growth that is sustainable in the future, a better early warning system for the world economy about potential crises, a better way of resolving difficulties or imbalances around the world, and this is the framework that we are talking about."
Copyright Speakers Corner 2017