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Adjustment of Global Imbalances and Its Impact on China's Economy
Author(s) -
Shi Jianhuai
Publication year - 2006
Publication title -
china and world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.815
H-Index - 28
eISSN - 1749-124X
pISSN - 1671-2234
DOI - 10.1111/j.1749-124x.2006.00023.x
Subject(s) - renminbi , china , restructuring , economics , global imbalances , chinese economy , balance (ability) , balance of trade , international economics , current account , macroeconomics , exchange rate , finance , political science , medicine , law , physical medicine and rehabilitation
The present paper discusses ways of adjusting the imbalances of the global economy and its impact on China's economy. The analysis in the paper shows that the cut of US fiscal deficits and the appreciation of the currencies of East Asia, including China's RMB, are necessary for a smooth adjustment of the global imbalances. The adjustments will have a positive impact on China's economy and will help China realize its external balance. The increase in public spending on the service sector along with the appreciation of RMB will help China realize the internal balance too. The adjustment of the global imbalances will create opportunities and an external pushing force for China in its industrial restructuring and shift in the model of economic growth. (Edited by Xinyu Fan)