Brasil e China no Reordenamento das Relações ... - Funag

albert keidel
pace. Demand patterns behind this record confirm that China’s growth has
not been export-led. Instead of export fluctuations, domestic patterns of
investment demand and counter-inflationary financial tightening explain
the fluctuations in China’s output leading up to the crisis. If anything,
external demand contributed to the overheating of China’s economy
before the crisis and brought unwelcome upward pressure on China’s
currency, the RenMinBi (RMB) 1 .
China’s difficult reforms in the 1990s, domestic and international,
made successes of the 2000s possible. Domestically in the 1990s, China
had eliminated grain distribution coupons and subsidies, reformed its
tax system, started the lay-off of 50 million state enterprise workers,
privatized its urban housing stock, established a new urban social safety
net, sold off virtually all small and medium-sized state enterprises,
recapitalized the banking system, passed a central bank law and a
corporate governance law, and made each individual infrastructure
project an independent accounting unit. Internationally, China had begun
welcoming foreign direct investment on a large scale, unified its exchange
rate system, satisfied IMF requirements for currency convertibility on the
current account, and concluded the essential bilateral agreement with the
United States for accession to the World Trade Organization. The stage
had been set for a decade of rapid expansion.
It is important to emphasize a critical ingredient in China’s success
in the 2000s. China in this pre-crisis period made good use of its tight
control over the financial system to fund a nationwide urban infrastructure
program, including a limited-access highway system, electric power grids,
nationwide broadband information networks, and capacity expansion for
subways, light rail, ports and airports, all of which lubricated the for-profit
incentive system established in the previous decade.
Pre-crisis growth was basically domestic-driven. By 2002, domestic
fixed asset investment and stocking-up of domestic inventories – not
1 The name of China’s currency is “Renminbi” (which means “the people’s money”). Its common
abbreviation is RMB. But the RMB’s unit of denomination is the “yuan.” In most countries the
unit of denomination of the currency is similar to its name – for example, the dollar is the unit of
denomination for the currency named the U.S. dollar and also for the currency named the Hong
Kong dollar. The real is the unit of denomination for the currency the Brazilian real. In China,
however, the unit is different from the name of the currency. Yuan comes from “round” or “coin.”
The Chinese character for “yuan” (元) is China’s simplified character for the character ( )
used for the unit of denomination of the currencies of both Japan and South Korea, where it is
pronounced “yen” and “won,” respectively and where the character has been simplified differently.
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