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International businesses, including U.S. businesses, are increasingly recognizing the opportunities Hong Kong offers as a base for providing financial and professional services to mainland China.
While tensions exist in the relationship between China and Europe, enhanced bilateral cooperation would be beneficial to both sides and valuable for promoting global stability and development.
With global trade talks stalled and lower demand from major economies that were hit hard by the global economic crisis, three regions—Eastern Europe, Latin America, and East Asia—are managing to increase trade within their borders and building a broader free trade system.
Deficit countries are neglecting the needed—and more difficult—reforms at home and fueling protectionist sentiment abroad with their focus on external trade imbalances and their calls for major surplus economies to increase demand.
Beijing's efforts to control inflation and prevent overheating have been largely successful. With growth likely moderating to 7–8 percent in the years ahead, officials are now turning their attention to domestic rebalancing.
As the financial crisis forces Europe to decrease its trade deficit, major world economies must step in and help the United States absorb the burden of rebalancing global trade in order to prevent the rise of American protectionism.
China’s current economic policies, which borrow from future household income to stimulate present growth, follow the development model that gave Japan extraordinary short term growth but led ultimately to a period of significant economic decline.
Rising coastal production costs and declining transport costs are reshaping China's economic landscape in ways that may resolve the controversial role that Beijing is accused of playing in shaping global trade imbalances.
The only way to sustainably increase Chinese domestic consumption is to bolster the share of national income belonging to households by transitioning away from the Asian development model that led to Japan’s economic decline.
While the U.S. trade deficit will still increase over the next year, growing anger in the United States over trade imbalances is likely to result in new protectionist policies.
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