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441. China Bashing 2004

Author:
Gary Clyde Hufbauer and Yee Wong
Publication Date:
09-2004
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
On April 26, 2004, Senator John Kerry released his six-point trade pro - gram, “Trade Enforcement: Asleep at the Wheel,” and conspicuously targeted China for violating worker rights, dumping, and supporting “illegal currency manipulation” (Kerry 2004). Five days earlier, senior Bush administration officials met with Chinese Vice Premier Wu Yi to settle a few trade disputes (e.g., WiFi) but did not resolve the most contentious ones (exchange rates, semiconductors, and labor rights).
Topic:
Development, Globalization, and International Trade and Finance
Political Geography:
China and Asia

442. Toward a Free Trade Area of the Asia Pacific

Author:
C. Fred Bergsten
Publication Date:
11-2004
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
The APEC Business Advisory Council (ABAC) has proposed that the APEC Leaders at Santiago on November 20-21 “agree to further examine the feasibility and potential scope and features of a Free Trade Area of the Asia Pacific (FTAAP).” President Ricardo Lagos of Chile, the host of the APEC summit, has endorsed the concept. I believe that APEC should actively pursue the FTAAP idea. It offers the best prospects of any available strategy for catalyzing a successful outcome of the Doha Round and thus revitalizing the World Trade Organization (WTO). By forging a new transpacific initiative, it can counter the very real risk of disintegration of the Asia-Pacific region that is evident in the progress of Asia-only cooperation on one side of the ocean and a Free Trade Area of the Americas on the other side. It is the best possible device to reenergize APEC's progress toward its own signature trade liberalization goals and thus those of APEC as an institution. It offers a unique win-win-win opportunity that should be seized, beginning at Santiago and then at Pusan a year from now.
Topic:
Economics, International Trade and Finance, Politics, and World Trade Organization
Political Geography:
America and Asia

443. Adjusting China's Exchange Rate Policies

Author:
Morris Goldstein
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
During the past year, there has been considerable debate about, and much international criticism of, China's exchange rate and its currency regime. Yes, criticism of China in the United States would likely be more muted if the ongoing recovery were not so “jobless,” if employment in the US manufacturing sector had not (mainly for other reasons) declined so much in the three-year run-up to this presidential elect ion year, if so much attention were not focused on the very large bilateral US trade deficit with China instead of China's economically—more meaningful overall balance-of-payments position, and if the United States had not done such a poor job of improving its saving-investment imbalance—particularly in the public sector.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, China, and Asia

444. Economic Prospects for Kaliningrad: Between EU Enlargement and Russia's Integration into the World Economy

Author:
Evgeny Vinokurov
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The Kaliningrad oblast of Russia is currently an important focal point of discussions between the European Union and Russia. Although small in terms of geography and population, Kaliningrad has grown in importance due to the EU enlargement process. Since the break–up of the Soviet Union, the oblast has become an exclave of Russia, and it is now set to also become an enclave within the EU. This paper examines the state of Kaliningrad's economy and trade. The economic crisis that took place in Russia in the 1990s had severe consequences for Kaliningrad, as old patterns of production and trade were disrupted. Since 1999, however, the regional economy has grown with impressive speed. Kaliningrad's Special Economic Zone (SEZ) status has played a crucial role in determining its new patterns of production and trade specialisation. The paper argues that the SEZ regime has made the region's economic growth faster but also vulnerable.
Topic:
Economics and International Trade and Finance
Political Geography:
Russia, Europe, and Asia

445. Is China "Exporting Deflation"?

Author:
Steven B. Kamin, Mario Marazzi, and John W. Schindler
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
In the past few years, observers increasingly have pointed to China as a source of downward pressure on global prices. This paper evaluates the theoretical and empirical evidence bearing on the question of whether China's buoyant export growth has led to significant changes in the inflation performance of its trading partners. This evidence suggests that the impact of Chinese exports on global prices has been, while non-negligible, fairly modest. On a priori grounds, our theoretical analysis suggests that China's economy is still too small relative to the world economy to have much effect on global inflation: a back-of-the-envelope calculation puts that effect at about 1/3 percentage point in recent years. In terms of the empirical evidence, we identify a statistically significant effect of U.S. imports from China on U.S. import prices, but given the size of this effect and the relatively low share of imports in U.S. GDP, the ultimate impact on the U.S. consumer prices has likely been quite small. Moreover, imports from China had little apparent effect on U.S. producer prices. Finally, using a multi-country database of trade transactions, we estimate that since 1993, Chinese exports lowered annual import inflation in a large set of economies by 1/4 percentage point or less on average, similar to the prediction of our theoretical model.
Topic:
Economics and International Trade and Finance
Political Geography:
China and Asia

446. Output and Price Fluctuations in China's Reform Years: What Role did Money Play?

Author:
Guanghua Wan and Yin Zhang
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The Chinese economy underwent cyclical fluctuations in growth and inflation in the reform period. Contrasting views exist on the role of money in such fluctuations. This paper assesses these views employing structural VEC models based on the exchange equation. It is found that in the long run money accommodates, rather than causes, changes in output and prices. In the short run, price fluctuations are mostly attributable to shocks that have permanent effects on prices and money but not on real output. These shocks also account for a large proportion of fluctuations in money, and strongly influence the movements of output.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
China and Asia

447. What Accounts for China's Trade Balance Dynamics?

Author:
Guanghua Wan and Yin Zhang
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper proposes a structural VAR model which extends the frameworks of Hoffmaister and Roldós (2001) and Prasad (1999). The model is then used to analyse the sources of China's trade balance fluctuations in the period of 1985–2000. Efforts are made to distinguish the forces which underlie the long-run trend in trade balance from those with transitory impacts. The effects of four types of shock are examined—the foreign supply shock, the domestic supply shock, the relative demand shock, and the nominal shock. Among other findings, two emerge as important. First, the movements in China's trade are largely the result of real shocks. Second, the Renminbi is undervalued, yet changes in the exchange rate bear little on the trade balance. Therefore, monetary measures would not suffice to redress China's trade 'imbalance'.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
China and Asia

448. A Development-focused Allocation of the Special Drawing Rights

Author:
Ernest Aryeetey
Publication Date:
03-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Efforts to realize the issue of development-focused Special Drawing Rights (SDR) by the International Monetary Fund (IMF) have been on-going for many years. Recently, however, the campaign first gained a new momentum immediately after the Asian financial crises with the new liquidity problems of developing nations following the collapse of private capital markets. Currently the search for financing options towards the achievement of the Millennium Development Goals drives the interest in development-focused SDRs. Extending the uses to which SDR can be put is derived from the growing demands on the international financial system to respond to the development finance needs of poor nations. Apart from the need to provide emergency funds in times of crises and the whole area of crisis prevention, increasingly the facilitation of development in poor countries and assistance to make the best policy decisions is considered crucial.
Topic:
Development, Economics, International Political Economy, and International Trade and Finance
Political Geography:
Asia

449. The Decline of the Communists

Author:
Leon Aron
Publication Date:
10-2004
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Overlooked in the victory of the pro-Kremlin party, United Russia, in the Duma election last December and President Vladimir Putin's overwhelming victory in the presidential election three months later was a milestone in Russia's post-Soviet political history: the precipitous decline of the Communist Party of the Russian Federation (KPRF). The single largest faction in the Duma between 1995 and 2003, the KPRF was reduced to 12 percent of the party-list vote in the Duma poll while the Communist candidate for the presidency, who received 40 percent in the 1996 election and 24 percent in 2000, ended up with 14 percent.
Topic:
Economics, International Organization, and International Trade and Finance
Political Geography:
Russia, Europe, and Asia

450. Privatizing Pensions

Author:
Leon Aron
Publication Date:
07-2004
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Perhaps more than any other structural market reform unfolding today in Russia, pension privatization epitomizes both the enormous progress achieved over the past decade and the equally huge obstacles still ahead on the road to "civilized" liberal capitalism. The reform highlights and tests the quality of key institutions and instruments central to such a system: transparency and liquidity of banks and mutual funds, probity and competence of state regulatory agencies, and stability of equity and bond markets.
Topic:
Economics, International Organization, and International Trade and Finance
Political Geography:
Russia, Europe, and Asia