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In spite of nominal changes in the value of China’s currency and domestic interest rates and wages, China’s economy remains unbalanced, as real interest rates continue to outpace real wages and any real appreciation of the renminbi.
Persistent imbalances in China's economy are likely to pose a serious threat to the country's growth unless Beijing significantly revalues its currency, raises real interest rates, and continues to increase wages.
If China is able to rebalance its economy by increasing consumption and thus reducing its trade surplus, the United States would benefit from the decline in its trade deficit with China.
Although an increase in China's domestic consumption as a share of its GDP will cause its current account surplus to decline as it buys fewer U.S. government bonds, this will not necessarily be a bad thing for the U.S. economy.
The costs of the dollar's status as the international reserve currency now outweigh the benefits, and the United States should take the lead in moving to multi-currency reserves.
If China is to avoid accumulating unsustainable levels of debt, it must reform its banking system by lowering interest rates, improving corporate governance, ensuring a more predictable regulatory framework, and providing higher quality information to investors.
While climate change presents common threats to the security, economy, and environment of the European Union and United States, Brussels and Washington have taken significantly different approaches to capping greenhouse gas emissions.
Rebalancing China's growth from investment to consumption is necessary if China is to sustain long-term economic growth. Recent attempts to move in this direction have been insufficient; true rebalancing will require a more fundamental revision of the growth model.
Ineffectual loan quotas have led Chinese banks to devise new, riskier lending mechanisms. This trend will continue as long as China maintains its loose monetary and credit policies.
India is often described as an emerging economy, yet adequate linkages are rarely made between the domestic and foreign drivers of its growth and how those drivers shape Indian foreign policy.
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