The Economic Outlook and the Role of Central Banks in the Current Context of Commodities Crisis
Interview with Otaviano Canuto, Senior Fellow at the Policy Center for the New South December 14, 2022
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EUA e China travam guerra por procuração nos semicondutores
Semicondutores estão no centro da atual rivalidade entre Estados Unidos e China. Dificultar a progressão da China na sofisticação da produção de semicondutores tornou-se peça central da política dos EUA em relação ao país. O caso dos semicondutores se encaixa como uma luva no que observamos nessa coluna como reversão da globalização nos segmentos de alta tecnologia considerados sensíveis desde um ponto de vista de segurança nacional. Com custos, ainda que considerados justificáveis por autoridades governamentais.
Whither China’s Economic Growth
Chinese economic figures released since August’s beginning have shown a slowdown in its growth. New Omicron coronavirus outbreaks in the context of the Covid-zero policy, the housing slump and heat waves have been decelerating the economy’s pace. China’s current growth slowdown is an additional step in the trajectory of gradually declining rates that has accompanied the “great rebalancing” since the beginning of the 2010s. One major difference now is the perception of exhaustion of waves of overinvestment in real estate and infrastructure as a lever, as compared to three previous moments since the beginning of the last decade.
Por que o crescimento chinês vem desacelerando
Números da economia chinesa divulgados desde o início do mês mostram uma desaceleração em seu crescimento. Novos surtos de Covid-19 no contexto da política de Covid zero, a queda do setor imobiliário e ondas de calor vêm segurando o ritmo da recuperação econômica do país. Há uma percepção de esgotamento da alavanca de superinvestimentos imobiliários e na infraestrutura. As autoridades chinesas estão optando por salvaguardar sua economia das vulnerabilidades financeiras, mesmo que ao preço de um crescimento do PIB abaixo das metas oficiais.
Dollar dominance will remain
The heavy financial sanctions on Russia after the invasion of Ukraine sparked speculations that the weaponization of access to reserves in dollars, euros, pounds, and yen would spark a division in the international monetary order. There has been a reduction in the degree of "dollar dominance” with the dollar's share of central bank reserves falling since the beginning of the century. The relative dominance of the dollar appears to be declining but at a very gradual pace.
A dominância do dólar vai continuar
As pesadas sanções financeiras sobre a Rússia depois da invasão da Ucrânia suscitaram especulações de que o uso armado do acesso a reservas em dólares, euros, libras e ienes iria suscitar uma divisão na ordem monetária internacional. A dominância relativa do dólar parece declinante, mas em ritmo muito gradual.
China’s renminbi needs convertibility to internationalize
Commercial transactions and reserves of central banks and other global public investors could strengthen the position of the Renminbi as an alternative currency to the dollar, euro, yen and pound sterling. However, the qualitative leap towards the internationalization of the Chinese currency as a full reserve currency will only happen when confidence in its convertibility is sufficient to convince unofficial (private) investors to hold much more reserves denominated in it.
Moeda chinesa precisa de conversibilidade para internacionalizar, escreve Otaviano Canuto
Enquanto transações comerciais e reservas de bancos centrais e outros investidores públicos globais poderão reforçar a posição do Renminbi como moeda alternativa ao dólar, euro, yen e libra esterlina, o salto qualitativo para a internacionalização da moeda chinesa como moeda reserva só ocorrerá quando a confiança em sua conversibilidade for suficiente para convencer investidores não-oficiais (privados) a guardar reservas nela denominadas.
Globalization and technological learning
Cross-border technological diffusion has contributed to rising domestic productivity levels in advanced and emerging economies and facilitated a partial reshaping of the global innovation landscape. However, there are local requisites to escalate the ladder of innovation capabilities.
China’s economic rebalancing
China’s growth trajectory in the second decade of the century has been one of a rebalancing toward a new growth pattern, one in which domestic consumption is to rise relative to investments and exports, while a drive toward consolidating local insertion up the ladder of value added in global value chains also takes place. Services should also keep rising relative to manufacturing. Declining GDP growth rates from two digits in previous decades to 6% in 2019 - and likely lower ahead – would be the counterpart to rising wages and domestic mass-consumption, and to the transition toward higher weights of services and high tech. We point out two major challenges in the rebalancing. First, the transition toward a less investment- and export-dependent growth model has been taking place from a starting point of exceptionally low consumption-to-GDP ratios. Besides high profit-to-wages ratios, low levels of public social protection and spending lead to high household savings. An additional challenge comes from the lack of progress in rebalancing between private- and state-owned enterprises, something that is taking a toll on productivity.
Climbing a High Ladder – Development in the Global Economy
This book approaches the opportunities and challenges faced by developing countries to raise their per capita income levels during the recent phase of globalization. After dealing with the post-global financial crisis economic landscape in advanced economies, it deals with the windows of opportunity opened by trade and financial globalization for developing countries to climb the income ladder. Domestic preconditions for a developing country to benefit from those windows are then pointed out. China, Brazil, and Sub-Saharan Africa are presented as case studies. The book ends with an assessment of the impact of the coronavirus crisis on the global economy.
Public financing of green innovation: Matchmaking of offers and demand for financing + Economic and Political Impacts of COVID-19 on BRICS Countries
Public financing of green innovation: Matchmaking of offers and demand for financing - Relevant recent literature states that direct and pervasive public financing has been instrumental in the development of innovative technological trajectories. The reasoning builds on: (i) the presence of finance from public sources across the entire innovation chain; (ii) the concept of ‘mission-oriented’ policies that have created new technological and industrial landscapes; and (iii) the entrepreneurial and lead investor role of public actors, willing and able to take on extreme risks, independent of the business cycle. On the other hand, public financing depends largely on the availability of funds. The available capital (human or otherwise) for different jurisdictions is different, which may motivate a case for heterogeneity of policies regarding innovation funding. ------------------- Economic and Political Impacts of COVID-19 on BRICS Countries The event, organized by GEBRICS/USP and the Department of International and Comparative Law (DIN) of the Faculty of Law, University of São Paulo, aims to bring together professors, researches, specialists and diplomatic representatives from all BRICS countries
China retorna ao caminho do reequilíbrio, por Otaviano Canuto
a economia global pós covid-19 reforçará a necessidade da China de acelerar o que ela própria chamou de “reequilíbrio” e, com a recuperação depois do mergulho profundo durante a pandemia, o foco se voltará para um retorno mais acelerado ao que estava ocorrendo anteriormente.
China on the way back to rebalancing
China’s bounce back from the deep COVID dive is at full. Focus will increasingly turn back to its economic rebalancing previously on the way.
Shapes of post-coronavirus economic recovery
Data recently released on the first-quarter global domestic product (GDP) performance of major economies have showed how significant the impact of COVID-19 has been on economic activity and jobs, with large contractions across the board. The ongoing global recession is poised to be worse than the “great recession” after the 2008-09 global financial crisis, especially from the standpoint of emerging market and developing economies. The depth and speed of the GDP decline will rival that of the Great Depression of the 1930s. But how swiftly will national economies recover once the pandemic has passed? And when will that happen? That will depend on how successful the containment of coronavirus and exit strategies will be, as well as on how cost-effective will be the policies designed to deal with the negative economic effects of coronavirus.