U.S., China, and the Unraveling of Global Imbalances

Minqi Li

Working Papers from Political Economy Research Institute, University of Massachusetts at Amherst

Abstract: Since 2003, world economic growth has accelerated and there has been strong improvement in corporate profitability. The U.S. current account deficits and China’s dramatic economic rise have been the two pillars underpinning the current global economic expansion. The coming years are likely to see the unraveling of the external and internal imbalances of the U.S. economy and the Chinese economy has been characterized by excessive dependence on investment and exports. Whether global economic expansion can be sustained to a large extent depends on whether the Chinese economy can be successfully restructured to be led by domestic consumption and to effectively address the question of long-term ecological sustainability.

Keywords: Neoliberalism; Global Economy; US Current Account Deficit; Chinese Economy; Peak Oil (search for similar items in EconPapers)
JEL-codes: E01 F01 O51 O53 Q40 (search for similar items in EconPapers)
Date: 2007
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