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

albert keidel
The financial crisis reversed this pattern of exports outpacing imports.
Figure 5 shows that after 2008, imports grew faster. They averaged
roughly 25 percent a year while export expansion was only roughly
at 20 percent. As a consequence, the trade surplus has shrunk, but not
enough to satisfy domestic political forces in the United States. Overall,
then, reducing the trade deficit with accelerated import growth is one of
China’s better options for avoiding protectionist criticism by the United
States, Europe and their G20 colleagues. Unfortunately, avoiding such
criticism is made more difficult by the continued influence of assertions
that China’s exchange rate is misaligned and that its domestic economy
is imbalanced and that these are major causes of the U.S. trade deficit
and global “imbalances” in general.
A closer examination of the exchange-rate and “domestic imbalances”
complaints shows them to be questionable at best. The exchange-rateas-culprit
argument relies completely on the assertion that price is the
deciding variable in fluctuations of trade demand and supply, and that
real (i.e., price-corrected) effective Chinese exchange rates have moved
or failed to move over time in directions that would have prevented
China’s large trade surpluses from appearing in 2005-08. However the
literature on this subject makes it clear that these real effective exchange
rate calculations can’t be used for short periods of time, by which is meant
several decades. For such periods, exchange rates don’t move with prices
in both countries but rather follow a “random walk.“ Instead of price,
the literature identifies other factors, such as demand swings and capital
flows as having a stronger influence on exchange rates 2 .
The assertion that China’s domestic economy is out of balance
relies on a negative interpretation of China’s low share of household
consumption expenditure in GDP. In 2010, official statistics report that
it dropped to 34 percent of GDP while fixed capital investment rose to
an all-time high of 46 percent of GDP. The important point, however,
is that China’s sustained high rate of investment in recent years has
enabled not only GDP but also household consumption expenditure to
sustain growth rates. Personal household consumption has maintained
real growth in the high single digits since the early 2000s.
2 For a review of the literature and other analyses of the China exchange rate
controversy, see Albert Keidel, “China’s Exchange Rate Controversy: A Balanced
Analysis,” Eurasian Geography and Economics, 52, N o 3, July 2011, pp. 347-374.
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