中美经济周期非同步下与国际金融格局

CMF3rdInternational Seminar on Macroeconomics T h e N o n - s y n c h r o n i z a t i o n o f C h i n e s ea n d U . S . B u s i n e s s C y c l e s a n dI n t e r n a t i o n a l F i n a n c i a l L a n d s c a p e R e p o r t e r : P r o f . K a i L i uO c t 2 8 , 2 0 2 3 Organizers:National Academy of Development and Strategy, RUCSchool of Economics,RenminUniversity of ChinaChina Cheng Xin International Credit Rating Co. Ltd. CCXIUndertaker:Institute of Economics,RenminUniversity of China Content I.Non-synchronization of Chinese and U.S. Business CyclesII.Impacts onInternational Financial Markets and ChineseMacroeconomyIII.Suggestions and Outlooks Content I.Non-synchronization of Chinese and U.S. Business Cycles II.Impacts on International Financial Markets and ChineseMacroeconomyIII.Suggestions and Outlooks •Over the past few years, particularly since the onset of the pandemic, China and theUnited States have been confronted withdifferentmacroeconomic conditions, and havetakendifferentpolicies. •Currently, the world’s largest two economies are in significantlydistinctphases of theirbusiness cycles. Labor Market •From the onset of the COVID-19 pandemicin 2020 until mid-2021, unemployment in theU.S.wassignificantly higher than in China.Unemployment in Chinaremainedrelativelystable. •However, while theU.S.job market remainsstrong, China's unemployment raterebounds slightly from the second half of2021. Labor Market •Since the end of 2021,U.S. unemploymentrate has been consistentlybelow its naturalrate level, indicating a hot labor market. •In contrast, China's labor market is facingsignificantchallenges; especially, theunemployment rate for individuals aged 19-24 has surged to 20 percent. Inflation •From2020,U.S.inflation rose sharply, peaking inmid-2022, and then started to fall, whileinflationary pressures continued to remain highconsistently. •In contrast, inflation inChinahas consistentlyremainedlow andfaceddeflationary pressures,sharply declining from the second half of 2022onwards. GDP Growth •The GDP growth rate of U.S is above itspotential growth rate since 2022.•TheGDP growth rate ofChinaisbelowitspotential growthrate since 2022. Asset Prices •Since late 2021, there has been a clear uptrendinU.S.house prices and a correspondingdowntrend in Chinese house prices. •The divergence in stock market indices is alsoclear. Since late 2022, the US stock market hasrebounded strongly overall, while the Chinesestock market has consistently underperformed. Monetary Policy •Since 2022, there has been an opposite general toneof monetary policy prevailing in China and the UnitedStates. •The Federal Reserve has largely adopted a tightmonetary policy due to high inflation and excessdemand. •In contrast, China has employed loose monetary policyto stimulate its economy. •The contrast in monetary policy betweenU.S.and China is evident in the table provided. TheFederal Reserve strives toincreaseinterest rates to control economic overheating. Meanwhile,the People's Bank of China persists inreducinginterest rates to boost the economy. Historical Trends in China-U.S.BusinessCycles •The synchronization of global business cycleshasintensified in recent decades, with aggregate output’sgrowth and declineshowing increasingly similar patternsacross countries and regions. •This trend is the result of the gradual deepening of globaltrade linkages, increased global financial integration, andgreater coordination of macroeconomic policies amongeconomiesaround the world. Historical Trends in China-U.S.Business Cycles •While international economic cycles are increasinglysynchronized on a global scale, this is not always the casebetween China and the United States. •In fact, it could be argued that in many instances, theeconomic tendencies of the two economies have been nearlythe opposite. •Only around the 2008globalfinancialcrisis (GFC)and theCOVID-19 outbreak have the economic cycles of China andU.S been largely synchronized. Historical Trends in China-U.S.Business Cycles •In terms ofCoincident Economic Index and growth rates of industrial outputa similar pattern is shown: It was solely during theGFC and the COVID-19 pandemic that the U.S. and China were economically synchronized. Historical Trends in China-U.S.Business Cycles •For a long period before the start of COVID-19, thegrowth rates of consumption and M2in the two countries followed differenttrends and rarely coincided. W h y d o b u s i n e s s c y c l e s o f C h i n a a n d U . S . d i v e r g e ? •Three reasons: pChina's internal structures (different from U.S.) pExternal environments (asymmetric between China and U.S.) pStrict capital control of China China's internal structures •In comparison to U.S.,China's rigorous and prolonged responses to theCOVID-19pandemic have saved a lot of lives, at the price of more negativeand persistent impacts on China’s economy. •As a large and developing economy, China is currentlyencounterin