Related to China-US economic cooperation, the sustainability of economic growth, and economic contradictions in 2011 will focus on intellectual property protection and economic rebalancing
Yiping Huang | text
President Hu Jintao visited the United States this week, is a major event in Sino-US relations. In 2010, President Hu Jintao and meet with the president three times, eight and two telephone communications, fully proved that bilateral relations have become increasingly close. Although the United States did not formally adopt the important condition. This is both for climate change or the International Monetary Fund (IMF) reforms, are true.
However, a series of objective factors determine the cooperation between China and the U.S. will not be smooth, while the second decade of the 21st century may be an important test of the bilateral economic relationship period.
calculated at purchasing power parity, China's economy may overtake the United States during this period. This may also make the economic cooperation between the two sides become more sensitive and vulnerable, not to mention China and the U.S., there are many potential conflicts and risks, including geopolitical, economic imbalances and trade disputes. Therefore, how to reduce the risk of conflict, protection of bilateral economic cooperation and growth, is a test of the wisdom of the two governments, the result of the global economic outlook is essential.
the rise of China has brought a new game
China's economic success over the past 30 years to maintain high growth, at least in part, due to long-term steady Sino-US relations, which for the Chinese economy to expand overseas export markets and attract foreign direct investment is essential.
1949 years after the formation of a very serious Sino-US hostility. The early 50s of last century and even in the Korean Peninsula directly between the two countries play against. Early 70s, the rapid improvement of Sino-US relations. At that time the two sides in the political system did not narrow the differences, so completely out of improved relations between the two countries established a strategic alliance to jointly curb the Soviet Union, an international strategic needs.
However, they may even Mao Zedong and Nixon did not expect that is stable for promoting China-US relations from the 20th century began in the late 70s the economic reform has played a very important role. Early stages of reform, many Chinese in Hong Kong, China Taiwan and South Korea's entrepreneurs to China to build factories, mostly for the production of export products. Later, attracted a growing number of Japanese, European and U.S. investors. These foreign investors came to China not only brought capital but also brings management and technology, greatly contributed to export growth. Even today, foreign-invested enterprises still account for more than half of China's total exports. And all these, and then closely related to Sino-US relations and friendly.
80 end of the decade, Soviet Union and drastic changes in the Soviet Union collapsed, the old strategic balance was broken. After Deng Xiaoping's southern tour, China has firmly embarked on the road of reform and opening up. As China's economy becomes more powerful, the United States began to voice some concerns, from the 90's to the beginning of this century, However, the overall point of view, between the two countries still maintain relatively good economic cooperation.
However, this pattern of subtle changes occurring now in 2010, even at market exchange rates, China has surpassed Japan as the world's second largest economy. China's GDP is about one-third of the U.S. economy, but China's economic growth has been far more than the United States. As China's economy to catch up and increase the likelihood the United States, some Americans worry about becoming greater. Some experts pointed out that in the 20th century, Germany and the Soviet Union, the rise of great powers, a direct result of a strategic confrontation or even war. They think that the rise of China is unlikely that this situation occurs, but can not be completely ruled out that prospect.
Every family has its cupboard
can say that this concern the global financial crisis has become more prominent. The end of 2008, the global financial market turmoil. 2009 global economy began to bottom out. 2010, the economy continues to recover, but also experienced some repeatedly, including concerns about the second bottom and so on. In early 2011, the Chinese economy and the problems facing the U.S. economy has been very different. Strong U.S. economic recovery is not enough, both countries have changed the world to judge America's future economic trends, also affected the mentality of the Americans themselves.
2011, the U.S. economy, the biggest risks? China's inflation pressures have increased significantly, particularly awash with liquidity, negative real interest rates, rising wages and high commodity prices, inflation and this year indicate that the situation is not optimistic about the asset bubble, unless the government take strict time constraints measures. Obviously, China, policy-makers urgently need to guard against the risk of inflation and bubbles.
the same time, many Chinese economists and government officials point the finger directly to the Fed's quantitative easing policy. The Fed started from November 2010 up to 6000 billion U.S. dollars to implement quantitative easing monetary policy in the world, was widely criticized.
problem is that Fed policy to increase the mobility of it is denominated and the reserve currency, directly driving up the prices of many commodities, while capital flows to emerging market economies increased rapidly, but also directly led to a new inflationary pressures. For China, the inflow of funds could lead to increase in three situations: inflation increase, currency appreciation or strengthening of capital controls.
the United States, the economic recovery continues, but the decision makers, the problem of unemployment is a huge constraint. Excluding the low-skilled workers, the employment situation of the United States has already begun to improve.
Excluding real estate, investment in other sectors has increased significantly. Some experts say that these are signs that the U.S. economy is in fact not particularly bad, the question is how the U.S. low-skilled workers find jobs? If you consider the number of workers in the job market over the past year due to bad not find work, the real unemployment rate may far exceed 10%.
bigger problem is, the United States rely on to support future long-term economic growth? The U.S. government has announced a series of policies to revive the economy, including investment in education, research, and double exports. These are easier said than done.
do not see the future direction of the U.S. economy, many investors become more pessimistic. This is probably why many U.S. officials have repeatedly come out recently emphasized in the next few years the U.S. will remain the world's most powerful economy, the dollar will remain the most powerful reserve currency. These officials have repeatedly sworn, perhaps they see the risk in the economy.
Therefore, we can do now is to accept the result, but also between China and the U.S. should strengthen exchanges and cooperation, control risk and maximize opportunities for economic development. The exchanges and cooperation should include economic, political, cultural and defense fields, after all, once the world's two largest economies of conflict between, on the world is a disaster.
an important prerequisite to achieve cooperation, that China needs to overcome the psychological over-confidence. During the past reforms, the Chinese have been relatively modest, they admit the system has many problems, so an open mind to learn United States and other mature economies. However, in the global financial crisis, This makes some people, especially officials, had a strong sense of pride, or even over-confident. This is very undesirable, we have good economic performance during the crisis, mainly because of capital controls and government resources to support the use of unconventional economic, and these are not sustainable, and have negative consequences. Overconfidence is not only impede the sustainable development of their own, and may unnecessarily affect Sino-US relations.
long-term economic issues between the U.S. and many, such as climate change and energy conservation, the international monetary system and IMF reform. In these important issues, there are differences between China and the U.S. position, requiring consultation. To 2011, the main contradiction is about two things: First, rebalancing, and second, protection of intellectual property.
re-balance the economy, has become a crisis of global consensus, disagreement is how to do it. Many U.S. politicians and officials to focus attention on the RMB exchange rate, which is actually not objective enough, however, increased exchange rate flexibility is conducive to China's increasing economic efficiency and reduce risk. We need to do is exchange rate flexibility, while increasing, try to convince the U.S. to address the imbalances of the best approach is to implement a series of reforms, in particular, a comprehensive reform of factor markets, including interest rate and exchange rate reforms. This requires sufficient time for the United States to China to reform and make adjustments. In any case, the role of the exchange rate over-exaggerated but not conducive to problem solving, and even affect the bilateral relations.
China can persuade the United States to lift some restrictions on exports of high-tech products, these products are small in number, but far-reaching. To do this, of course, first of all need to let U.S. sure that these products will not be used in military fields. China in the Agreement on Government Procurement will also help the United States and other countries recognize China's market economy status. China also imports a number of measures can be taken, such as many consumers now buy from overseas, LV bags, Rolex watches and even iPad, which is obviously a relationship of China's tax policy. These expenses have not been calculated to which China's imports.
2011, the intellectual property dispute may become more prominent. Many people are friendly to China the United States observed over the past few decades, the business community to support the United States has been an important force in China-US cooperation. However, it is among the last year or two has changed, and the reason is China's independent innovation policy gaps and inadequate protection of intellectual property.
real strengthening of intellectual property protection, the actual line with China's own economic interests. Invention and innovation of domestic enterprises are now more and more, can not be protected if the intellectual property, innovation will be affected, Therefore, the protection of intellectual property rights, not only conducive to improving Sino-US economic cooperation is also necessary for long-term development of China's economy, is a best of both worlds thing.
National Development Research Institute of Peking University professor, chief financial economist at New Media
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