She expressed fears that China’s slowdown could cause a ripple effect and drag down US growth.
As an old saying goes, seeing is believing.
The deterioration in Chinese manufacturing data to a 6-1/2 year low, the Volkswagen emissions brouhaha and Glencore’s indebtedness dealt serious blows to emerging markets as September drew to its close.
“When people worry, I’m happy”. Since it started with the global market decline, I submit that the answer will have to come from aboard. With domestic demand still weak-real consumption has grown at an anaemic 1.4% pace over the past 7.5 years-the U.S. needs export growth more than ever. This is by no means achieved by good luck. The implementation of China-Fiji visa exemption agreement provides more facilitation for bilateral personnel exchanges. The stimulus was meant to be the cutting edge of an ambitious drive to make domestic consumption instead of export production the center of gravity of the economy.
In the final analysis, the most likely policy response will involve a heavy commitment of liquidity and lower interest rates among the world’s major central bankers. Today, with 7 percent growth rate and over $10 trillion GDP, China grows out an additional Pennsylvania, or Switzerland, every year. China will exempt the debt of the outstanding intergovernmental interest-free loans due by the end of 2015 owed by the relevant LDCs, landlocked developing countries and small island developing countries. To stimulate the powerhouse Chinese economy, as markets crashed and its exports performance disappointed, the yuan was weakened heavily by the government. Any ship, whatever its size, may occasionally experience unstable sailing. Xinhua is wiring a series of in-depth stories on China-U.S. relations and the historic visit.
China set its 2015 economic growth target at “around 7 percent”, the lowest in more than a decade.
USA economic growth was revised upwards showing an annualised growth rate of 3.9%.
“If China’s scared, suddenly the rest of the world is scared as well”, says Eric Lascelles, chief economist for RBC Global Asset Management. Diminishing returns will kick in and the richer the country is, the slower the growth will be.
From the flurry of informed discussions in recent weeks, there are indications that China is in more trouble than its officials were willing to admit, and its travails are affecting the economies of its trading partners, including a few of its neighbors, and the global financial markets and economic growth in other countries. However, if we think it over carefully, such judgments are totally groundless.
“Fears over a global slowdown, and China, are a bit overdone”, added Scott Wren, senior global equity strategist, Wells Fargo Investment Institution, which expects the world’s second-largest economy to grow 6.8 percent this year.
Li said facing a sluggish world economy and mounting downward pressure at home, China has adopted effective range-based, targeted and discretionary macro-regulation to ensure that China’s economy continues to move in a positive direction despite a few ups and downs.
Bergsten’s estimate is justifiable by the fact that with more and more Western powers applying for membership in the AIIB, the United States has gradually changed its opposing attitudes toward the AIIB, emphasizing that the AIIB could cooperate with existing multi-lateral development institutions like the World Bank, adopt the same governing and operating standards and constitute complimentary relations. With the shift to the new normal, the consensus from skeptics is that there will be less opportunities under this new phase.
At a more fundamental level, the Communist Party is trying to reform itself. Although industrialisation is a weak point in Africa’s economic transformation, it will be the engine for future development. China has made historic progress in raising social productivity and overall national strength.
As wages rise, Chinese manufacturers are increasingly moving their operations overseas to neighbouring Vietnam and Cambodia with the aim of selling to Chinese markets.
That did not happen, but the European economic recovery has been anaemic at best. The government is expected to take the lead in both. And it has started to reshape the worldwide financial architecture with new institutions such as the Asian Infrastructure Investment Bank, the New Development Bank, and the Silk Road Fund. China will establish a 10-year, (FJ $2.17865 b) China-UN peace and development fund to support the UN’s work.
China will stick firmly to the path of peaceful development.
As President Xi reiterated during his visit to the United States, China-U.S. economic and trade relations are essentially mutually beneficial, which is confirmed by the increasing interdependence of the two big growing economies.
“This rally doesn’t look convincing, making us suspect that the fall in U.S. equities and commodities might not be over”.