Category Archives: China

Will the Coronavirus Lead to Global Recession?

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February 27, 2020 —  At the start of the year, the economic mood was tending toward the optimistic.  True, growth had slowed a bit in 2019. US GDP grew 2.3 % in 2019, down from 2.9 % in 2018.  World growth was weak in 2019 as well: 2.9% according to IMF estimates, down from 3.6 % the year before.  Still, there had been no recession.  And forecasts as recently as January called for world growth to rebound in 2020.

Global recession?

Now, just since January, there is new reason for pessimism.  Recessions are exceedingly difficult to forecast and the wise economist avoids trying.  But the odds of a global recession have risen dramatically.  The reason is the coronavirus that originated in Wuhan, technically named COVID-19. read more

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Weaponization of the Dollar May Backfire Yet

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October 26, 2019 —  This is a good time to gauge the rankings of the dollar and its rivals as major international currencies.  The Bank for International Settlements came out in September with its triennial survey of turnover in the world’s foreign exchange markets.  The IMF’s statistics on central bank holdings of foreign exchange reserves have gotten much more reliable lately, because China has joined in on reporting its holdings to the IMF (as Eswar Prasad explains).  And SWIFT offers every month its numbers on use of major currencies in international payments. read more

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RMB reaches 7.0; US names China a manipulator

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August 12, 2019 –The US-China trade war heated up in the first week of August.  On August 1, Donald Trump abruptly announced plans to impose a 10 % tariff on the remaining $300 billion of imports from China that he had not already hit with earlier tariffs.   The Chinese authorities then allowed their currency, the renminbi (RMB), to fall in value below the highly visible line of 7.0 RMB/$.  The US Administration promptly reacted on August 5 by naming China a “currency manipulator” — the first time any country had been given that designation in 25 years.   Pundits declared a currency war, while investors responded by immediately sending stock markets down. read more

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