Carnegie Endowment for International Peace
It has become somewhat trite but nonetheless true to state that the United States and China stand at a critical inflection point in their relationship, with major implications for global growth and stability
Xi Jinping bases his actions against the prophecy of CCP decline and what he saw as a drift to the West.
For years, China has experienced blistering growth. Driven by an investment-heavy economic model, this growth has limited household income while subsidizing business.
As President Joko Widodo looks ahead to his second-term inaugural next month, huge challenges lie ahead and some contradictions remain unresolved, including latent social cleavages, the evolving role of Islam in political life, and tough economic choices.
The potential is clear for both India and Indonesia to transform their demographic booms into engines of domestic demand while positioning themselves as alternatives to China for labor-intensive manufacturing.
Tensions between the world’s superpowers are mounting in Washington and Beijing. But between these hubs of high-level politics, a new reality is emerging between China and the state of California, which have built deep and interdependent socioeconomic exchanges that reverberate across the globe.
While investment in Hong Kong may not change rapidly, continued uncertainty will erode the foundations that have made Hong Kong special in the minds of global businesses.
Taxing capital inflows is a far better way to balance trade than imposing tariffs. This would address the root causes of trade imbalances, improve the productive investment process, and shift most of the adjustment costs onto banks and speculators.
Today’s U.S. trade deficits are driven mainly by capital flow imbalances. Tariffs are less efficient and only work by distorting the real economy and rearranging bilateral imbalances.
Income inequality in the United States hampers growth and forces up debt. In advanced economies in which investment is not constrained by scarce savings, high levels of income inequality lead automatically to either more unemployment or more debt. Such inequality undermines not only the health of the economy, but eventually also the rich.