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1462. Playing Hard to Get
- Author:
- Minxin Pei
- Publication Date:
- 12-2012
- Content Type:
- Journal Article
- Journal:
- Georgetown Journal of International Affairs
- Institution:
- Georgetown Journal of International Affairs
- Abstract:
- Political divisions within Europe and domestic considerations within China have prevented China from providing substantial financial aid to Europe during its ongoing debt crisis, and are likely to prohibit it from doing so in the foreseeable future.
- Political Geography:
- United States, China, and Europe
1463. Business and Knowledge Opportunities for Africa's Rise
- Author:
- Uzoechi Nwagbara
- Publication Date:
- 12-2012
- Content Type:
- Journal Article
- Journal:
- Georgetown Journal of International Affairs
- Institution:
- Georgetown Journal of International Affairs
- Abstract:
- Fareed Zakaria's insightful and fascinating book, The Post-American World (2008) deals with the gradual demise of America's power and global dominance and the consequent rise of marginal or regional powers, which include Africa. Zakaria's hypothesis about the ''post- American world'' resides principally in America's weakening domestic and international prowess associated with her fighting prolonged wars in recent time, dwindling manufacturing scale, weakening domestic economy and the rise of Asian Tigers as well as China. This postulation also deals with the gradual manifestation of periphery countries' potential or ability to lead the global economy with their natural endowments, rapid wave of industrialisation in regional economies and the impact of globalization, which has significantly shifted global power loci, by taking jobs away from the United States through foreign direct investment (FDI). More than all of this, Zakaria's '' post-American world'' thesis has brought to the fore an unprecedented way of re-thinking development of Africa's resources (human capital) given the pressures of this phenomenon in determining growth in the contemporary global power equation.
- Political Geography:
- Africa, China, America, and Asia
1464. Monetary Policy and Banking Supervision: Coordination instead of separation
- Author:
- Daniel Gros and Thorsten Beck
- Publication Date:
- 12-2012
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies
- Abstract:
- The June 2012 European Council decided that the legal basis for the 'Single Supervisory Mechanism' should be Article 127(6) of the Treaty, and that the SSM should 'involve' the ECB. This implies only that supervision should be concentrated within the ECB. In the policy discussion it is, however, generally taken for granted that there should be 'Chinese walls' between the supervisory and monetary policy arms of the ECB. The current legislative proposal is explicit on this account.
- Topic:
- Economics, International Trade and Finance, Monetary Policy, and Governance
- Political Geography:
- China and Europe
1465. US Tire Tariffs: Saving Few Jobs at High Cost
- Author:
- Gary Clyde Hufbauer and Sean Lowry
- Publication Date:
- 04-2012
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- In his 2012 State of the Union address, President Obama claimed that "over a thousand Americans are working today because we stopped a surge in Chinese tires." The tire tariff case, decided by the president in September 2009, exemplifies his efforts to get China to "play by the rules" and serves as a plank in his larger platform of insourcing jobs to America.
- Topic:
- Economics, Industrial Policy, International Trade and Finance, and Governance
- Political Geography:
- United States, China, and America
1466. Projecting China's Current Account Surplus
- Author:
- William R. Cline
- Publication Date:
- 04-2012
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- For several years China has run persistent current account surpluses that have been widely seen as the most serious single source of global imbalances on the surplus side, and mirrored by persistent systemically large US current account deficits on the other side. In recent years, however, both imbalances have shown moderation (figure 1). China's surpluses have posed questions of international policy rules, because they have reflected in part an unwillingness to allow the exchange rate to appreciate sufficiently to act as an effective equilibrating mechanism. Exchange rate intervention resulted in a massive buildup of international reserves, which rose from $615 billion at the end of 2004 to $3.2 trillion at the end of 2011 (IMF 2012a).
- Topic:
- Economics, Emerging Markets, Foreign Exchange, and International Trade and Finance
- Political Geography:
- United States, China, and Israel
1467. The Renminbi Bloc Is Here: Asia Down, Rest of the World to Go?
- Author:
- Arvind Subramanian and Martin Kessler
- Publication Date:
- 10-2012
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- A country's rise to economic dominance tends to be accompanied by its currency becoming a reference point, with other currencies tracking it implicitly or explicitly. For a sample comprising emerging market economies, we show that in the last two years, the renminbi has increasingly become a reference currency which we define as one which exhibits a high degree of co-movement (CMC) with other currencies. In East Asia, there is already a renminbi bloc, because the renminbi has become the dominant reference currency, eclipsing the dollar, which is a historic development. In this region, 7 currencies out of 10 co-move more closely with the renminbi than with the dollar, with the average value of the CMC relative to the renminbi being 40 percent greater than that for the dollar. We find that co-movements with a reference currency, especially for the renminbi, are associated with trade integration. We draw some lessons for the prospects for the renminbi bloc to move beyond Asia based on a comparison of the renminbi's situation today and that of the Japanese yen in the early 1990s. If trade were the sole driver, a more global renminbi bloc could emerge by the mid-2030s but complementary reforms of the financial and external sector could considerably expedite the process.
- Topic:
- Development, Economics, Emerging Markets, Foreign Exchange, and Monetary Policy
- Political Geography:
- China and Asia
1468. Choice and Coercion in East Asian Exchange Rate Regimes
- Author:
- C. Randall Henning
- Publication Date:
- 09-2012
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This paper examines the exchange rate regimes of East Asian countries since the initial shift by China to a controlled appreciation in July 2005, testing econometrically the weights of key currencies in the implicit baskets that appear to be targeted by East Asian monetary authorities. It finds, first, that Malaysia, Thailand, Singapore and the Philippines have formed a loose but effective “renminbi bloc” with China, and that South Korea has participated tentatively since the global financial crisis. Second, the emergence of the renminbi bloc in terms of the exchange rate has been facilitated by the continued dominance of the US dollar as a trade, investment, and reserve currency. Third, exchange rate stabilization is explained by the economic strategies of these countries, which rely heavily on export development and financial repression, and the economic rise of China. Fourth, analysts should specify the exchange rate preferences of these emerging market countries carefully before drawing inferences about Chinese influence within the region.
- Topic:
- Development, Emerging Markets, Foreign Exchange, and International Trade and Finance
- Political Geography:
- China, Malaysia, Asia, South Korea, Philippines, Singapore, and Thailand
1469. Capital Account Policies and the Real Exchange Rate
- Author:
- Olivier Jeanne
- Publication Date:
- 09-2012
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This paper presents a simple model of how a small open economy can undervalue its real exchange rate using its capital account policies. The paper presents several properties of such policies, and proposes a rule of thumb to assess their welfare cost. The model is applied to an analysis of Chinese capital account policies.
- Topic:
- Development, Economics, Emerging Markets, and Monetary Policy
- Political Geography:
- China
1470. Networks, Trust, and Trade: The Microeconomics of China–North Korea Integration
- Author:
- Stephan Haggard and Marcus Noland
- Publication Date:
- 05-2012
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- A central hope of engagement with North Korea is that increased cross-border exchange will encourage the strengthening of institutions, and eventually, a moderation of the country's foreign policy. An unprecedented survey of Chinese enterprises operating in North Korea reveals that trade is largely dominated by state entities on the North Korean side, although the authors cannot rule out de facto privatization of exchange. Little trust is evident beyond the relationships among Chinese and North Korean state-owned enterprises. Formal networks and dispute settlement mechanisms are weak and do not appear to have consequences for relational contracting. Rather, firms rely on personal ties for identifying counterparties and resolving disputes. The weakness of formal institutions implies that the growth in exchange does not conform with the expectations of the engagement model and may prove self-limiting. The results also cast doubt that integration between China and North Korea, at least as it is currently proceeding, will foster reform and opening.
- Topic:
- Foreign Policy, Economics, International Trade and Finance, and Bilateral Relations
- Political Geography:
- China, Israel, and North Korea