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World economy needs China-Japan cooperation
http://china.org.cn/opinion/2016-03/02/content_37916929_2.htm
By Chen Yan
China.org.cn, March 2, 2016
Entering 2016, the sluggish real economy quickly dragged the oil price down below $30. The decline of world stock markets is a harbinger of a financial crisis that will further suppress the real economy, perhaps meaning the next world crisis will appear earlier than the expected 2018.
East Asia is the locomotive of the world economy, led by China and Japan. Whether it involves delaying the financial crisis or reducing its impact, the two countries should work together to find solutions.
World economy uncomfortable with globalization
The typical characteristic of the world economy in and after 2016 can be summed up in one word: decline. According to the IMF, in 2016, Japan's GDP growth rate will stay at the 2015 figure of 0.8 percent; China will see a further reduction from 6.8 percent to 6.3 percent; the U.S. economic growth rate will increase from 2.6 percent to 2.8 percent.
Meanwhile, in Europe, Germany will see a minimal rise (1.6 percent from 1.5 percent); France will go up from 1.2 to 1.5 percent; UK will jump from 2.5 to 3 percent. Resource-rich countries like Russia and Brazil will still struggle in minus territory. For emerging economies such as India, the situation is not good either.
After the end of Cold War in 1990, globalization has been the trend. Based on a 30-year cycle for the world economy, something significant will occur around 2020; affected by the 10-year cycle of the regional economy (the 1998 financial crisis in Southeast Asia; the 2008 Lehman Brothers crisis in the U.S.), however, crisis could come earlier than expected. The global integration guided by the Internet will also telescope those events into 2017 or even 2016.
An obvious feature of globalization is that a local crisis will affect the entire world. Overcapacity is not only a problem in China, but has immediate impact on big resource exporters like Russia, Brazil and Australia. Some Japanese media used to badmouth China; however, the country mostly affected by a declining China is undoubtedly Japan.
Seeking to isolating China through the establishment of Trans-Pacific Partnership Agreement (TPP) or opposing the China led Asian Infrastructure Investment Bank (AIIB) is not the way forward
Chinese and Japanese economies face similar problem
The leading newspaper Nihon Keizai Shimbun (Nikkei) has repeatedly reported that the Japanese economy is under the strong influence of what it terms "lost decades," related to an aging population, decline in technological innovation, obsession with cultural uniqueness and various other factors.
Prime Minister Shinzo Abe vowed to revive the Japanese economy after taking office. However, after three years, neither business investment nor domestic consumption has increased. In 2016, the Yen-Dollar exchange rate stands at ¥116 to $1 from the previous ¥123; Japan's stock market Nikkei Average has seen a drop from 8,450 to 6,017 points. Some Japanese predict that in the following months, Yen to Dollar exchange rate will be ¥110 to $1 while the Nikkei will keep on falling to 5,000.
The Chinese economy faces similar difficulties. Although the Yuan to Dollar exchange rate doesn't yet have much impact on exports, depreciation of renminbi will seriously injure China's foreign trade if it continues. Because of the newly introduced circuit breaker mechanism, China's stock market lost public trust, which will bring more downward pressure on the renminbi.
As irreplaceable locomotives of the world economy, China and Japan should make full use of their advantages and work together to find practical ways for injecting it with new energy.
China and Japan are at different developmental stages, so there is little competition between them in the economic area. However, in the past decades, due to problems in regard to territorial claims, history and diplomacy, the bilateral relationship has deteriorated.
At the beginning of this year, Japanese media reported that their government intended to send warships of its Naval Self-Defense Force to waters near the Diaoyu Islands in March; and that Shinzo Abe was also seeking to send warships to patrol in the South China Sea.
Although there is a range of disputes over politics and diplomacy, the upcoming China-Japan high-level economic dialogue is expected for the both sides to look for increased cooperative opportunities in economic fields. The bilateral economic cooperation between China and Japan will ease their political and diplomatic conflicts to some extent, and play important role of lessening the effects of global market turmoil after 2016.
Chen Yan is CEO of ribenchan.com and also a specialist studying Japanese enterprises.
The article was written in Chinese and translated by Lin Liyao.
@Nihonjin1051 , @Shotgunner51 , @Abacin , @Tiqiu , @Kiss_of_the_Dragon , @xunzi , @bbccdd1470 , @Dungeness, et al.
http://china.org.cn/opinion/2016-03/02/content_37916929_2.htm
By Chen Yan
China.org.cn, March 2, 2016
Entering 2016, the sluggish real economy quickly dragged the oil price down below $30. The decline of world stock markets is a harbinger of a financial crisis that will further suppress the real economy, perhaps meaning the next world crisis will appear earlier than the expected 2018.
East Asia is the locomotive of the world economy, led by China and Japan. Whether it involves delaying the financial crisis or reducing its impact, the two countries should work together to find solutions.
World economy uncomfortable with globalization
The typical characteristic of the world economy in and after 2016 can be summed up in one word: decline. According to the IMF, in 2016, Japan's GDP growth rate will stay at the 2015 figure of 0.8 percent; China will see a further reduction from 6.8 percent to 6.3 percent; the U.S. economic growth rate will increase from 2.6 percent to 2.8 percent.
Meanwhile, in Europe, Germany will see a minimal rise (1.6 percent from 1.5 percent); France will go up from 1.2 to 1.5 percent; UK will jump from 2.5 to 3 percent. Resource-rich countries like Russia and Brazil will still struggle in minus territory. For emerging economies such as India, the situation is not good either.
After the end of Cold War in 1990, globalization has been the trend. Based on a 30-year cycle for the world economy, something significant will occur around 2020; affected by the 10-year cycle of the regional economy (the 1998 financial crisis in Southeast Asia; the 2008 Lehman Brothers crisis in the U.S.), however, crisis could come earlier than expected. The global integration guided by the Internet will also telescope those events into 2017 or even 2016.
An obvious feature of globalization is that a local crisis will affect the entire world. Overcapacity is not only a problem in China, but has immediate impact on big resource exporters like Russia, Brazil and Australia. Some Japanese media used to badmouth China; however, the country mostly affected by a declining China is undoubtedly Japan.
Seeking to isolating China through the establishment of Trans-Pacific Partnership Agreement (TPP) or opposing the China led Asian Infrastructure Investment Bank (AIIB) is not the way forward
Chinese and Japanese economies face similar problem
The leading newspaper Nihon Keizai Shimbun (Nikkei) has repeatedly reported that the Japanese economy is under the strong influence of what it terms "lost decades," related to an aging population, decline in technological innovation, obsession with cultural uniqueness and various other factors.
Prime Minister Shinzo Abe vowed to revive the Japanese economy after taking office. However, after three years, neither business investment nor domestic consumption has increased. In 2016, the Yen-Dollar exchange rate stands at ¥116 to $1 from the previous ¥123; Japan's stock market Nikkei Average has seen a drop from 8,450 to 6,017 points. Some Japanese predict that in the following months, Yen to Dollar exchange rate will be ¥110 to $1 while the Nikkei will keep on falling to 5,000.
The Chinese economy faces similar difficulties. Although the Yuan to Dollar exchange rate doesn't yet have much impact on exports, depreciation of renminbi will seriously injure China's foreign trade if it continues. Because of the newly introduced circuit breaker mechanism, China's stock market lost public trust, which will bring more downward pressure on the renminbi.
As irreplaceable locomotives of the world economy, China and Japan should make full use of their advantages and work together to find practical ways for injecting it with new energy.
China and Japan are at different developmental stages, so there is little competition between them in the economic area. However, in the past decades, due to problems in regard to territorial claims, history and diplomacy, the bilateral relationship has deteriorated.
At the beginning of this year, Japanese media reported that their government intended to send warships of its Naval Self-Defense Force to waters near the Diaoyu Islands in March; and that Shinzo Abe was also seeking to send warships to patrol in the South China Sea.
Although there is a range of disputes over politics and diplomacy, the upcoming China-Japan high-level economic dialogue is expected for the both sides to look for increased cooperative opportunities in economic fields. The bilateral economic cooperation between China and Japan will ease their political and diplomatic conflicts to some extent, and play important role of lessening the effects of global market turmoil after 2016.
Chen Yan is CEO of ribenchan.com and also a specialist studying Japanese enterprises.
The article was written in Chinese and translated by Lin Liyao.
@Nihonjin1051 , @Shotgunner51 , @Abacin , @Tiqiu , @Kiss_of_the_Dragon , @xunzi , @bbccdd1470 , @Dungeness, et al.
