Announcements

02/05/2016
Highlights of this Month’s Edition: • Bilateral trade: At $365.7 billion, U.S. goods deficit with China hits new record; U.S. services exports expanded to a record high in Q3 2015 driven by high Chinese travel to the United States. • Bilateral policy issues: U.S. firms rate Chinese interpretation of law as top concern and report lower profitability and future growth in China’s economy in American Chamber of Commerce survey. • Quarterly review of China’s economy: GDP growth slows to 6.9 percent on manufacturing deceleration; Beijing pursues new “supply-side” reforms; stock market volatility continues; the $500 billion surge in Chinese capital outflows places the Chinese government on the horns of a dilemma. • Sector focus – Real estate: The slowdown in China’s real estate sector remains a drag on GDP growth; government attempts to boost the sector have failed to halt the market’s decline.
02/04/2016
Today, the U.S.-China Economic and Security Review Commission released a report prepared for the Commission by Eswar Prasad, Tolani Senior Professor of Trade Policy at Cornell University, New Century Chair in International Trade and Economics at Brookings, and Research Associate at the National Bureau of Economic Research. The report, entitled China’s Efforts to Expand the International Use of the Renminbi, examines the Chinese government’s actions to promote the use of its currency, the renminbi (RMB), in the global monetary system as a payment currency for cross-border trade and financial transactions, a vehicle currency for foreign trade and international capital transactions, and a reserve currency.
02/04/2016
The report examines the Chinese government’s actions to promote the use of its currency, the renminbi (RMB), in the global monetary system as a payment currency for cross-border trade and financial transactions, a vehicle currency for foreign trade and international capital transactions, and a reserve currency. The report analyzes the potential effects of the rising prominence of the RMB on the financial clout of the United States and the U.S. dollar’s role in denominating international trade transactions and settling cross-border financial transactions.
01/28/2016
On January 16, 2016, Taiwan held its presidential and parliamentary elections. Focusing on economic and local issues in the campaign, the Democratic Progressive Party (DPP) presidential candidate Tsai Ing-wen and her running mate Chen Chien-jen won the election with over 56 percent of the vote, while the traditionally pro-independence DPP captured an outright majority in the Legislative Yuan (LY) for the first time in Taiwan’s history, winning 68 of 113 seats. With the DPP’s victories in the presidential and LY elections, the party can pursue its economic and cross-Strait goals. This issue brief analyzes the results of Taiwan’s elections and discusses the implications of the elections for cross-Strait relations and the United States.
01/15/2016
After the stock market turmoil last August, Chinese regulators were hoping for a peaceful start to the year, preparing to wind down the ban on sales for big shareholders and launching a new mechanism (a circuit breaker) designed to prevent dramatic falls on par with those seen last year. The plan backfired. China’s Shanghai and Shenzhen stock markets crashed on January 4, the first day of trading, followed by another crash on January 7; in both cases, the circuit breaker halted trading. The combined rout erased more than $1 trillion of value. The government’s attempts to stem the meltdown only worsened the situation, confusing investors and raising fresh doubts over the ability of the Chinese government to manage a slowdown in the economy. They also exposed the contradiction inherent in the Chinese Communist Party (CCP) leadership trying to introduce market-oriented policies for the broader economy while maintaining control over the composition and behavior of the Chinese stock markets—an approach that leads to greater volatility and moral hazard.

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