World Knowledge Forum

[WKF 2015] The G2 War: Fight for Economic Hegemony│Eswar Prasad (Cornell University, Professor)



The dice has been cast. China has risen to become the second biggest economy in the world and is now competing with the United States to become the next global super power. Internationalization of renminbi is another tool to challenge the U.S. dominance in global economy. The U.S. is enjoying seigniorage effect as the holder of reserve currency, Dollar. But this year China is faced with a lot of economic obstacles. China’s economy, which posted high performance for a long time, has been slowing down. In turn, Chinese stocks have been plunging, thereby sharply increasing the volatility of the global stock market. Although the Chinese government has been stepping in to stabilize the market, the anxieties about the Chinese economy are fostering the fear of possible meltdown of the Chinese stock market. The devaluation of renminbi last August is also spreading worries about the fundamentals of Chinese economy because people suspect that the Chinese economy is in such a condition where it needs to devalue the renminbi in order to artificially boost exports. As such, suspicions are growing over whether China can achieve 7% growth rate which is the official target rate for this year as real economy slumped significantly. Some pessimists argue that China’s growth will further slow down if necessary reforms are not introduced in a timely manner. If the Chinese economy stumbles, it will have enormous negative impacts on the global economy as a whole. Countries like Korea, whose economy is heavily intertwined with China, will surely be hardest hit. In this session, experts will talk about the outlook of the Chinese economy and its impact on global economy. - Can China achieve the 7 percent economic growth target for this year made by President Xi Jinping? - Huge catastrophic issues such as possible bubble burst of housing and stock markets, and growing inequality are becoming more intense. What is the biggest threat to Chinese economy? - How probable is hard landing of Chinese economy? Are there any ways to avoid hard-landing? - How will hegemonic competition between the U.S. and China affect the global economy? - What is the status of economic reforms in China? What are the major reform priorities for the government? ★ Youtube → ★ Facebook → ★ instagram →