In this piece for Mint, Niranjan Rajadhyaksha, Executive Director, Artha Global, discusses how the world should respond to China’s growing exports to avoid the economic challenges the world faced in the 1930s to rising protectionism. The world should heed John Maynard Keynes’ advice on mutual trade gap adjustments.
Excerpts below:
“The sheer scale of its production facilities helps drive down costs. In other words, it is a matter of productivity rather than trade policy. Though China’s trade surplus is nowhere near the peak it reached in 2007, it has been assiduously climbing since 2018.”
” In a recent paper on the Bretton Woods monetary system, which eventually unravelled in 1973, Paola Subacchi and David Vines have identified four themes that the world’s leading economies need to cooperate on in our times: a satisfactory level of global aggregate demand that can avoid the twin pitfalls of unemployment and high inflation; workable processes for the adjustment of current account balances; financing the development needs of less developed economies; and an open international trading system. Subacchi and Vines say that these are the same points that Keynes thought were necessary in 1944 for a new world economic order.”
You can read the full article here.
Image sourced from Mint.
