The Trump Administration has presented three major reasons to justify the initiation of a China-US trade war： China＇s large trade surplus against the US, China＇s failure to comply with World Trade Organization （WT...The Trump Administration has presented three major reasons to justify the initiation of a China-US trade war： China＇s large trade surplus against the US, China＇s failure to comply with World Trade Organization （WTO） commitments and China＇s unreasonable acquisition of US technology and theft of intellectual property rights. The fundamental cause of the US trade deficit is its persistent saving deficiency. China has complied with WTO commitments, although there remains significant room for improvement. The case against China for the so-called unfair acquisition of foreign technologies and cyber-enabled intellectual property rights theft is weak at best, although China needs to redouble its effort in protecting intellectual property rights. President Trump＇s trade war will not drive China to abandon its resolve to catch up to the advanced economies. China is ready to fight a war of attrition. Unfortunately, both sides - as well as the rest of the world- will incur heavy losses in the process.展开更多
Since the global financial crisis broke out in 2008, China＇s nonfinancial corporate debt has been rising steadily and rapidly, posing serious threat to China ＂s financial stability. China ＂s rising corporate debt i...Since the global financial crisis broke out in 2008, China＇s nonfinancial corporate debt has been rising steadily and rapidly, posing serious threat to China ＂s financial stability. China ＂s rising corporate debt is mainly attributable to three factors： worsening capital efficiency, worsening corporate profitability and high funding costs. Based on a dynamic recursive model developed in the paper, we simulate the trajectories of China＇s corporate debt-to- GDP ratio, and find that if China fails to reverse the current trends in capital efficiency, corporate profitability and financing costs, China ＂s nonfinancial corporate debt-to-GDP ratio will continue to rise without converging to a limit. Against most economists ＇ intuition, given the current trends of changes in parameters, higher economic growth will not help China to escape the corporate debt trap. On the contrary, it will make China ＂s corporate debt problem even worse. To avert a corporate debt crisis, China needs to speed up the structural reform and change the growth paradigm so as to enhance capital efficiency and firms＇ profitability, while reducing firms ＇financing costs.展开更多
Ronald McKinnon is one of the most respected foreign economists in China and his view on exchange rate policy is well known and very influential in China. His and Gunther Schnabl＇s paper China＇s Exchange Rate and Fi...Ronald McKinnon is one of the most respected foreign economists in China and his view on exchange rate policy is well known and very influential in China. His and Gunther Schnabl＇s paper China＇s Exchange Rate and Financial Repression： The Conflicted Emergence of the Renminbi as an International Currency is one of the most serious and comprehensive studies of China＇s exchange rate policy and capital account policy in recent years.展开更多
文摘The Trump Administration has presented three major reasons to justify the initiation of a China-US trade war： China＇s large trade surplus against the US, China＇s failure to comply with World Trade Organization （WTO） commitments and China＇s unreasonable acquisition of US technology and theft of intellectual property rights. The fundamental cause of the US trade deficit is its persistent saving deficiency. China has complied with WTO commitments, although there remains significant room for improvement. The case against China for the so-called unfair acquisition of foreign technologies and cyber-enabled intellectual property rights theft is weak at best, although China needs to redouble its effort in protecting intellectual property rights. President Trump＇s trade war will not drive China to abandon its resolve to catch up to the advanced economies. China is ready to fight a war of attrition. Unfortunately, both sides - as well as the rest of the world- will incur heavy losses in the process.
文摘Since the global financial crisis broke out in 2008, China＇s nonfinancial corporate debt has been rising steadily and rapidly, posing serious threat to China ＂s financial stability. China ＂s rising corporate debt is mainly attributable to three factors： worsening capital efficiency, worsening corporate profitability and high funding costs. Based on a dynamic recursive model developed in the paper, we simulate the trajectories of China＇s corporate debt-to- GDP ratio, and find that if China fails to reverse the current trends in capital efficiency, corporate profitability and financing costs, China ＂s nonfinancial corporate debt-to-GDP ratio will continue to rise without converging to a limit. Against most economists ＇ intuition, given the current trends of changes in parameters, higher economic growth will not help China to escape the corporate debt trap. On the contrary, it will make China ＂s corporate debt problem even worse. To avert a corporate debt crisis, China needs to speed up the structural reform and change the growth paradigm so as to enhance capital efficiency and firms＇ profitability, while reducing firms ＇financing costs.
文摘Ronald McKinnon is one of the most respected foreign economists in China and his view on exchange rate policy is well known and very influential in China. His and Gunther Schnabl＇s paper China＇s Exchange Rate and Financial Repression： The Conflicted Emergence of the Renminbi as an International Currency is one of the most serious and comprehensive studies of China＇s exchange rate policy and capital account policy in recent years.
