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An international agreement to limit current account surpluses would be a productive step toward global economic rebalancing, but in order to decrease its trade deficit, the United States must also enact domestic reform.
President Obama's upcoming trip to four Asian democracies will signal U.S. commitment to the region at a time when China's growing assertiveness has its neighbors worried.
If China is forced to substantially revalue its currency, it is likely to enact policies for maintaining its export competitiveness that could hurt Western economies.
China’s trade surplus is best understood as part of a regional export surplus, and a revaluation of the yuan will likely not only leave the balance of trade largely the same but might actually hurt economies in the West.
With economic activity surpassing pre-crisis levels in developing countries but still lagging in many high-income economies, differences in macroeconomic policy stances are creating tensions that could threaten growth in increasingly important emerging markets.
Assertive Chinese and job-hungry Americans are gearing up for a trade war across the Pacific. Fortunately, cooler heads will likely prevail.
The Chinese central bank's decision to raise interest rates is a positive step toward economic rebalancing, but it needs to be followed up by larger rate hikes if China is to increase domestic consumption.
Chinese policymakers looking to learn from Japan's policy missteps should recognize that Japan's lost decade grew out of its failure to implement early and gradual economic adjustment policies, not its decision to reevaluate the yen.
In order to sustain economic growth during its transition toward a more balanced economy and help keep U.S. demand for Chinese exports high, Beijing should invest in the U.S. transportation infrastructure.
If China is pressured to reevaluate its currency too quickly, it will have to rely on overinvestment to head off rising unemployment, which would exacerbate the fundamental imbalances already present in the Chinese economy.
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