The United States and the PRC : Macroeconomic Imbalances and Economic Diplomacy
AbstractThis paper explores the ways in which macroeconomic imbalances have driven policy discussions between the United States (US) and Peopleâ€™s Republic of China (PRC) in the last decade. The PRCâ€™s current account surplus, its growing foreign exchange reserves, and its shifting policies on exchange rate adjustment have become a central preoccupation of US trade policy. The paper considers the evolving political economy of the US policy stance and of the PRCâ€™s response; it assesses the opportunity costs of an approach that has sometimes focused on the exchange rate to the exclusion of other issues; and it explores the ramifications for economic governance in the short- and medium-run. The paper finds that there has been ample mutual misunderstanding between the US and the PRC in their economic arguments; that the momentous debates have the potential to severely impair the institutions of global economic governance; and that there is likely to be an important race between economic and demographic forces that will naturally redress the imbalances and the political imperatives for each country to stand tough and fight.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number 23208.
Date of creation: Dec 2011
Date of revision:
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The United States and the PRC; Macroeconomic Imbalances; Economic Diplomacy; bilateral relations;
Other versions of this item:
- Philip Levy, 2011. "The United States and the PRC : Macroeconomic Imbalances and Economic Diplomacy," Governance Working Papers 23208, East Asian Bureau of Economic Research.
- Levy, Philip, 2011. "The United States and the PRC: Macroeconomic Imbalances and Economic Diplomacy," ADBI Working Papers 328, Asian Development Bank Institute.
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
- F51 - International Economics - - International Relations and International Political Economy - - - International Conflicts; Negotiations; Sanctions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-14 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Exchange Rates and Global Rebalancing,"
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"Causes of and Remedies for the Peopleâ€™s Republic of Chinaâ€™s External Imbalances : The Role of Factor Market Distortion,"
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- Yiping Huang & Kunyu Tao, 2011. "Causes of and Remedies for the Peopleâ€™s Republic of Chinaâ€™s External Imbalances : The Role of Factor Market Distortion," Finance Working Papers 23257, East Asian Bureau of Economic Research.
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