It’s Hard To Be Optimistic about the American Economy

Published in Huanqiu
(China) on 2 December 2016
by Huo Jianguo (link to originallink to original)
Translated from by Yuzhi Yang. Edited by Emily Heilker.

 

 

The American GDP growth rate for the third quarter was 3.2 percent, the fastest it has been since the third quarter of 2014. Most observers believe this is a sign the American economy is improving. Some Western economists have said that the American economy has been on a growth trajectory since before the election, and if Donald Trump’s fiscal policies were enacted, American economic growth would accelerate.

I’m far less optimistic about the American economy, and the global economy at large, for next year and the year after. The American economic revival is currently at its best. However, this economy’s deeper problems — such as “the real vs. the virtual economy,” the financial industry’s “self-circulation,” etc. — are not easily resolved, causing a lack of revival in productivity for the manufacturing industry. Meanwhile, the service industry is overinflated but has no reinvested profit. The financial industry’s frequent crises have forced the American government to over-tolerate its actions, thereby hijacking American macroeconomic policies. 

In the short term, President-elect Donald Trump has straightforward ideas for reviving the American economy: cutting taxes, building infrastructure, encouraging American businesses to return to America, etc. These measures are easy to visualize but hard to put into place. The dollar index has already surpassed 100. If the interest rate were raised within the year, the dollar would continue to be strong, and it is possible there would be a rapid increase in the American trade deficit. If tax cuts were enacted, mid to long-term economic development would benefit; however, the financial deficit in the short term would increase, and it would not be impossible for America to enter into a defensive phase of twin deficits. If an investment were made in infrastructure, then the source of funding would be another difficulty. The problem is, whenever America encounters problems in its internal development, it would look for enemies internationally to divert the conflict.

It is possible that China-U.S. relations would face intense pressure in the future and that Chinese investment in America would encounter new obstacles, especially closer security inspections of investment by Chinese state-owned enterprises. In theory, Chinese investment in the American economy supports American growth, so even if the federal government lacked enthusiasm, state governments would be motivated. Nevertheless, America could become picky about problems with the Chinese regime, including subsidies, fair competition, policies for businesses, bank lending and neutral competition policies for state-owned enterprises. For the ongoing BIT* discussions between China and the U.S., the Obama administration would have no signing power. Furthermore, if Trump were to take over, they would require new price quotes, and China could even be forced to expand its opening up, especially in the service industry.

In the current state, the global economy faces new risks, and the China-U.S. relationship is filled with uncertainty. As a result, our choice of attitude and response is key.

Author is a senior researcher at the Center For China And Globalization and the former dean of the International Trade Economy Cooperation Academe at the Ministry of Commerce.

*Editor’s Note: BIT usually refers to a Bilateral Investment Treaty.


今年第三季度美国GDP年化增长率为3.2%,增速为2014年第三季度以来最快,外界普遍认为,这是美国经济持续向好的表现。有西方经济学家表示,大选前,美国经济就处于持续增长的轨道上,特朗普的财政提案如果实行,将把经济增速调至更高档位。

  我对明后年美国经济和世界经济的走势的看法,远没有那么乐观,美国现在的温和复苏已经算是最佳状态,其深层次矛盾难以缓解,如经济“脱实入虚”,金融业“自我循环”问题日趋严重,制造业劳动生产率长期难有起色,服务业过度膨胀且利润又无法回流。金融业频繁发出危机信号,迫使政府在宏观政策上对其迁就,以此绑架政府宏观政策。

暂时来看,当选总统特朗普恢复美国经济的想法好像很简单,实行减税政策,搞基础设施建设,鼓励美国产业回流。这些措施想得容易但做起来都很难。美元指数近期已超过100,如果年内加息,美元将继续维持强势,不排除美国的贸易逆差会迅速上升。如果实施减税政策,经济发展中长期肯定会受益,但短期内财政赤字压力势必上升,不排除美国将再次进入双赤字的被动发展局面。如果加强基础设施建设投入,资金的来源又是一个难以筹措的问题。问题是,一旦美国国内发展遇到新的压力,势必会在国际上再次寻找对手转移矛盾。

  因此,中美经贸关系今后可能会受到高压,中国对美投资也会遇到一些新的矛盾。特别是针对中国国有企业的投资行为会进行严格的安全审查程序,按道理说,中国的投资对美国经济发展有支撑作用,美国联邦政府即使不积极,州政府仍然会很积极。唯一的问题是,美国很可能会转向挑剔中国的制度性问题,例如突出中国的补贴、公平竞争、产业政策,银行信贷以及国企的中性竞争政策问题。正在进行的中美BIT谈判,奥巴马政府已无法履行签字程序,如果转到特朗普这一届,肯定会重新要价,或者迫使中国扩大开放,尤其是服务业开放。

  从目前情况分析判断,世界经济将会面临新风险,中美经贸关系充满不确定,关键在于我们以何种态度、反应精准应对。(作者是中国与全球化智库【CCG】特邀高级研究员,商务部国际贸易经济合作研究院原院长)
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