Chinese economy and foreign trade imbalances

Chinese economy and foreign trade imbalances The paper analyses current global imbalances in international trade that are characterized on one side by huge US current account deficit, on the other side by growing economies of South East Asia that are accumulating foreign exchange reserves and consequently investing them back to the US dollar denominated assets. This way they basically facilitate further growth of US indebtedness. The question is how much longer are these imbalances sustainable and how much longer will be foreign investors willing to lend the money to the US. The thesis consists of introduction; followed by explanation of circumstances that allowed these imbalances to reach such a large scale. Second chapter addresses to the brief description of US economy, impact of growing budget deficit on current account deficit and new trends in financing these deficits. In the third chapter, the economy in China is thoroughly analyzed, its monetary policy, development of foreign trade and its share on widening of current trade imbalances. Powered by TCPDF (www.tcpdf.org