The Issue Of Rebalancing The Global Economy Is Facing Serious Challenges.

< p > the decline in demand has led to a sharp decline in the deficit of the developed countries, but now this situation is giving way to economic recovery. Global leaders need to find new ways to correct the long-standing excess surplus in Germany and China, and to lift the export restrictions of deficit countries such as the US. < /p >
< p > < strong > rebalance driven by < a href= > http://www.91se91.com/news/index_c.asp > demand < /a > /strong > /p >
< p > however, the reason for the imbalance between 2008 and 2013 is not the amendment of exchange rate and foreign exchange reserve, but rather the adjustment of domestic demand. Take the a href= "http://www.91se91.com/news/index_c.asp" > current account /a > deficit correction as an example. If it is not for the sharp fall of imports, these amendments will not occur. In Spain, imports fell 10% from their peak in 2007, while in Greece, imports fell by 40%. < /p >
< p > not only in the euro area. Since the financial crisis, there has been a clear correlation between changes in domestic spending and changes in current account conditions. < /p >
P generally speaking, countries experiencing recession have narrowed their deficits (or expanded their earnings), while those with faster growth have the opposite. It is not possible to see that there is a broad correlation between the trend of exchange rate and the change of trade balance. < /p >
< p > in view of this situation, we must be cautious. The imbalance may be triggered by the "exchange rate project", but it is obvious that it has only been resolved through recession. This means that now we are not solving an imbalance, but we may be faced with two kinds of imbalance, one is exchange rate imbalance, the other is domestic demand imbalance. < /p >
It is unwise to declare hastily that we have overcome the era of imbalance. Unless there is evidence that the competitiveness of a single country is well matched with domestic demand, we are also beginning to see that foreign exchange accumulation has slowed down or stopped (indicating that currency valuation is more reasonable). P < /p >
< p > < strong > continue to push forward the reform agenda < /strong > /p >
< p > future, the choice of the 3 < a href= "http://www.91se91.com/news/index_c.asp" > the global policy < /a > is very important. < /p >
< p > first, if the United States lifted its ban on crude oil exports, the United States would benefit from it. Because of the exploitation of shale reserves, the United States may achieve an energy surplus. The effect is that global oil prices will fall, which will help to correct another global imbalance, the Middle East surplus. At the same time, it will be more beneficial to the United States than to centralization of energy supply in the United States, further reduce prices, thereby actually subsidize the energy intensive industries in the United States, and lift the ban on crude oil exports. < /p >
< p > secondly, the reform announced by the Communist Party of China in the third Plenary Session of the 18th CPC Central Committee will help to ensure that the price of elements, including currencies, is more determined by the market. This should ultimately ensure that China no longer needs to intervene in the foreign exchange market and accumulate foreign exchange reserves. Yi Gang, vice president of the people's Bank of China, has said that the expansion of foreign exchange reserves is no longer in China's interest. China needs to ensure that these measures are implemented. < /p >
< p > Third, Germany's current account surplus is now the largest in the world. A recent paper by the German Central Bank (Bundesbank) concluded that the current account imbalance is more durable under the fixed exchange rate regime, but this is not an excuse for slowing down the reform. Despite the recovery of the eurozone, Germany still needs to expand its domestic demand to match its external competitiveness, just as the periphery countries have been forced to cut domestic demand. < /p >
P imbalance makes the world more fragile. The huge imbalance has increased the risk of "sudden stop" of financing. In recent years, we have seen such sudden stops in the euro area and emerging markets. < /p >