“New normal” has become a buzzword in China since the second half of 2014. At the APEC CEO Summit on November 10, 2014, President Xi characterized China’s “new normal” as slower growth, economic restructuring and innovation-driven growth.
The steep drop in global oil prices has created ripple effects in the economies of Latin America, largely due to oil-for-loan schemes made with China. Fernando Menédez argues that even if China were to forgive their mounting debts, or more likely, when they default, these countries will still be in worse shape resulting from their failed economic policies.
Over the past two decades, China’s growth paradigm characterized by investment and driven by exports has run out of steam. A major feature of China’s current economy is overcapacity, especially in the real estate sector. An increase in domestic consumption and infrastructure investment will help continue growth, but the biggest challenge facing China in 2015 is the high corporate debt ratio.
The infrastructure needs of Asia are vast, and as China’s development showed in the last 30 years, infrastructure is essential for job creation, improvement of living standards, and economic growth. As an alternative to private financial investment, which mostly flows into mature markets, the AIIB seeks to create trans-national partnerships to aid infrastructure development.
Stephen Harner discusses Mr. Kiyoyuki Seguchi’s recent article, which criticizes the “mistaken pessimism” of China’s economy by foreigners. Harner stresses that there is little thoughtful analysis on China, much reporting relying on sensationalism, and conscious negative bias to appeal readers in the U.S. and Europe.
There is no guarantee the U.S. remains in the dominant position on the world stage. In fact according to The International Monetary Fund, as reported by The Daily Mail — we no longer are, at least economically.
China’s Central Bank is assessing changes in its international monetary policy in the following areas: RMB internationalization, becoming less dependent on U.S. Federal Reserve monetary adjustments, and containing the arbitrage of foreign speculative investment. With a major focus on the dispossession “outstanding funds for foreign investment,” the RMB is expected to experience moderate depreciation or fluctuation.
Chinese companies and banks are building and funding many infrastructure projects across Latin America. Analysts have said some of these projects are being built for geopolitical reasons, but the main reason is to secure supplies of natural resources for the burgeoning Chinese economy.
The end of the U.S. Federal Reserve’s Quantitative Easing (QE) monetary policy will affect U.S. growth predictions over the next two years, and may weaken the U.S. dollar. However, as Xiao Lian contends, this might not have an obvious impact on China, yet could result in new development opportunities – as well as new risks.
While many of China’s largest brands – Haier, Huawei and Xiaomi – have not yet become household names, Joel Backaler describes how China’s domestic market is changing and the companies that are focusing on developing their brand internationally.
The initiatives and enormous investments turned the APEC meeting in Beijing from a “talk shop” to one of action. Han Liqun stresses that all APEC member economies should be fully confident in building an open and liberal economic and trade environment in the Asia-Pacific.
China is the leading advocate for progress in the form of a “feasibility study” on an inclusive new regional trade agreement, the FTAAP. Concerned that this will detract from U.S. regional interests, the FTAAP ironically has provided impetus for the completion of the U.S.-led TPP proposal.
He Weiwen dislodges the notion that the FTAAP is inherently in opposition to the TPP by discussing APEC plans to phase out regional free trade agreements in favor of creating a singular FTAAP; this more inclusive agreement which would serve as the “greatest common denominator” for standards and investment treaties in the Asian Pacific.
China’s “One Belt, One Road” strategy is Xi’s new scheme to effectively interconnect the trade routes between China and the rest of the world. The United States need not consider it a hegemonic challenge, but rather work to collaborate in the region’s common development.
China has introduced a new housing credit policy, designed to increase demand for real estate, and to get China’s economy back onto a fast track for growth, writes Yi Xianrong.