As such, more efforts need to be made to facilitate market communication and effectively guide market expectations, while gradually improving the yuan’s daily fixing rate mechanism. As China’s foreign exchange reserves have shrunk by 25 percent this year, it’s also of vital importance that the monetary authority comes up with solutions to reduce the consumption of foreign exchange reserves, seek steady measures in the opening-up of its capital accounts and reduce market intervention to achieve market clearing in the foreign exchange market, so as to fundamentally attest to the belief that “there’s no basis for continued depreciation of the Chinese currency.”
If that is the case, Chinese brands might lead the way in setting smart home trends, an achievement that would be a testament to the country’s emergence as an innovative powerhouse.
But is a development gap a guarantee of potential? If it is, why have countries that are less developed than China not been able to exceed China’s development over the years? My latest research has shown that only 10-20 countries, among which include ones in East Asia and Europe, have truly achieved catch-up growth since World War II. China today meets those basic common characteristics that are required of being a catch-up economy.
China needs to value its manufacturing industry more than ever and work to consolidate the country’s manufacturing foundation. Otherwise China will risk hollowing out its real economy before it grows strong enough.
It seems that only large Malaysian enterprises that have links with their Chinese counterparts stand to make gains. If this practice continues, local fervency toward Chinese investment will fade.
As IPR awareness in Chinese firms grows, the companies have a vested interest in respecting and asserting IPR. Such a tendency will likely reinforce IPR protection and enforcement in China, and will benefit both domestic and international firms.
China should adapt to the changing situation. It is time for Chinese authorities and policymakers to reduce the tax burden on businesses without increasing fiscal deficits or debt levels, and kick off a tax regime reform to make it reflect the market more. Since there is room for reducing the high level of labor taxes and turnover taxes, this could be a clue as to where a breakthrough in tax reform can be made.
With the global economy and trade still sluggish, the RCEP’s finalization in the shortest possible period of time would convey a positive signal that trade liberalization will continue. But it can’t be said it will supplant the TPP.
The legal setbacks Chinese smartphone manufacturers have experienced are partly due to their lack of patent awareness.
This is also why governments and international organizations tend to offer direct food aid instead of engaging in value-added agricultural cooperation.
The impact of a strengthening US dollar is being felt equally across the globe. The forecast that China would be the worst hit is outright nonsense.
Even if the yuan breaks the 7 mark against the dollar, there is no need to panic. The lifeline of the yuan’s exchange rate lies in China’s economic fundamentals which remain intact. As long as China works to bolster its real economy, upgrade its manufacturing industry and properly control capital outflows, its economy will stabilize with an “L-shaped” growth trajectory and the yuan will not tumble. Even if the yuan rate fluctuates, China has the capacity and resources to keep it stable. Deliberately reigning in a further fall will only backfire.
In following the market economy path, China has become the forerunner of global trade. Developing a market-based economy is at the centerpiece of China’s economic reform and the country should stick to its agenda.
China’s stock market is never short of liquidity. Enormous accumulations of private capital have made each round of the “Chinese-style” bull market much more relentless than overseas markets. The most significant strategic importance of the Shenzhen-Hong Kong Stock Connect by no means lies in promoting capital inflows into the A-share market that is already associated with big fluctuations, but in the yuan’s internationalization, especially as the Chinese currency faces challenges in its exchange rate and interest rate.
There are a number of reasons which lead us to believe that inflation will rise to 2.5 percent next year. The rebound in inflation will probably impact monetary policy, which might shift to neutral next year.
Following the 2008 global financial crisis, the world economy became massively imbalanced which has triggered waves of anti-globalization and protectionism in trade and investment that pose serious threats to global economic and trade development.
It is no surprise that many observers are concerned about where China-US trade relations will head in the wake of Donald Trump’s win in the US presidential election. His recent tweets criticizing China for manipulating its currency and unfairly taxing US products reinforce such concerns. It seems that Trump is playing for real and will get tough on China unlike previous US presidential candidates who played the “China-bashing card” while campaigning but acted pragmatically after being elected.
On November 10, 2001, the WTO approved China’s accession at its Fourth Ministerial Conference in Doha. Since then, China and the world economy have both benefited from globalization – unprecedented capital flows, rapid technology advances and wide-ranging political and cultural exchanges. However, since the 2008 global financial crisis, globalization has been plagued by doubts and challenges, made all the more apparent in 2016 with Brexit, Trump’s victory and prevailing political extremism in Europe.