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The Long term strategy of Sino-US economic relations

Todays Date: November 21, 2018

Recent Chinese President Hu Jintao go to America have a state visit, signed 11 cooperation agreements between the Government, over 70 commercial contracts worth 45 billion U.S. dollars in purchasing large orders, however, orders can not bring long -term smooth relations between China and US.

There are series international problems including two values, trade friction, and other aspects of the RMB. Obama’s economic statecraft is to restore fiscal balance, promote employment, exports rose to double the strategic policy, a large number of dollars issued in the United States with global access to the wealth of financial productivity.

Trade protectionism in China, there are also small and medium enterprises in the stormy transition process, called on the government to give more support, and U.S. financial institutions to double revenue in China at every turn, China’s financial institutions operating outside lost, fueling resentment in China emotions. More importantly, the Chinese state-owned enterprises led to large-scale enterprises in the international mergers and acquisitions, especially by the siege in the United States, 2005, CNOOC bid for Unocal oil company, high prices have failed, has been revealed both in the economic system, enterprises structure and security can not match, the two sides trust each other fundamentally difficult.

ChinaChina’s domestic economic situation is not like the macro data suggest that wonderful, stressful, corporate restructuring, investment in excess, so that all parties struggling to cope with inflationary pressures. But outsiders, macroeconomic data show that the Chinese have the ability to enhance the exchange rate, this is the macro-economic data can not reflect the true cost of the harm.

RMB internationalization is the focus of Sino-US dispute can not be avoided, China can not resist the upward pressure on exchange rates, the next few years, the RMB appreciation will slow but firm. In 2008 the global financial crisis, all the currency of credit, the financial derivatives, capital and money markets to discuss a long-term focus. States to rescue the economy by the amount of money paid the day, by 2010, although the real economy is still in a difficult recovery period, the global commodity markets, equity investment market, from Hong Kong to Beijing, London’s real estate market, bull market exudes excitement hormone taste.

In 2010, in Hong Kong during the Asian financial crisis, playing with toys giant hedge funds, Soros international comeback, he patiently set up camp in Hong Kong, waiting for the most important emerging market of China’s big opportunity there. The opportunity to not only come from the expanding economies of scale in China, but also from the process of internationalization of the RMB. As US-led global currency, the current financial models in China has become increasingly close to the U.S. in the form, which is the next important area of cooperation the two sides, but also an important domestic wealth bleeding mouth. Production efficiency of Chinese financial enterprises can not be compared with the United States, China’s bond market, the most active of the most competitive strength is foreign, especially U.S. capital.

Mercantilism and the United States there is money, the Chinese, there are also mercantilism, plus the growing emphasis on the role of Keynesian government investment, which makes it difficult to reach a real compromise on both sides, and to become preoccupied with short-term interest for the focus of the negotiators.

Short-term order is not everything, grasp the global U.S. dollar is the currency pricing analgesics, is the catalyst that is to show the best mirror of human nature of greed. The United States needs to give up pride and greed, and China needs to give up the unrelatic illusion of state-owned buoy.

orders a regular basis to Boeing, the American people can be donated pandas, you can exchange for a moment of quiet, but can not be long-term health of the foreign trade environment. U.S. unwilling to recognize China’s market economy status itself (china trade), the resources occupied by state-owned enterprises in China is rapidly expanding, all of these facts shows that the two sides trust each other basically no solution, but only through intensive short-term negotiations, access to short-term peace.

Quantitative easing financial crisis, the U.S. monetary policy on the exchange rate of the accused, China’s inflation pressures have created another set of sharp contradictions structure.

For China and even the world, the irresponsible one dollar is the source of inflation. In fact, China imported inflation highlighted the proliferation of sometimes a euphemism for the U.S. dollar, but the financial crisis, the United States effective measure is to the United States without conveying to the world, in order to resolve the debt burden of the United States.

needs more than just regular orders, but to give China a long-term U.S. export base. ChinaChinese Minister of Commerce Chen Deming said last December, the Commerce Department announced a number of amendments to the export facilitation measures, is seeking public comment. This is in response to the U.S. Department of Commerce export control reform, Obama’s taken the first step, the reform and adjustment of the 164 control procedures export destination countries, but excluded from the list as the third largest export base of the United States adheres to the crux of the trade imbalance between the U.S. high-tech export controls on China too stringent (global trade), China hopes that the imported high-tech products. From: wholesale electronics

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