alexa certify

The US Should Partner with China in Driving World Economy

Japan is an important trade partner for the U.S. in Asia. However, it is important to note that its economy has reported less than 1% annual growth last year. Yet it is a bit surprising that the United States is still offering support packages for the country. Even though its finance ministry has made it clear that, it has no measures in place to stimulate the economy. Experts point out that this is the price that the U.S. has to pay for its military presence in the country, and its attempts to limit Chinese dominance (economic, military and political) in Asia and elsewhere.

Germany Mirrors Japan

The European Union is another important trading partner. Germany, the leading economy in this zone, has been going through a recession, and could actually stagnate in a few months. Yet, like Japan, Germany has no measures in place to rejuvenate the economy. The reason? It is assured of a ready export market courtesy of its relationship with the United States. Germany’s standpoint could be worse than Japan’s because it is a huge influence over Europe. Its unwillingness to act means that it is stifling growth in the entire EU.

Despite the never-ending political wrangles between China and Japan, China is the second biggest market (after the U.S.) for Japanese exports. China accounts for close to $90 billion dollars in the first eight months of the year. What is noteworthy is that while Japan has trade surpluses with the U.S. it has deficits with China.

Germany’s Austerity Is Bad for Europe and the Rest of the World

While Germany’s failure to implement measures that could boost economic growth locally could have little or no consequence on its own economy, it is utterly destructive to other countries in the Eurozone. France is a case in point. In 2018, France had a 29.2 billion Euro deficit with China. Other members of the EU – except Germany, have found the Chinese trade policies unfavorable of course.

The Way Forward

While the United States and China engage in confrontational politics, they are also the two countries that ultimately have to absorb the bulk of the world’s exports. Rather than become dumping grounds for countries that see no motivation in stimulating their own economies, they should come up with a solution. The two superpowers should consider getting into a trade pact that would allow for more constructive engagement rather than the current political grandstanding. In Europe, especially, the United States should take measures to remove the stifling influence of Germany and it could do this by limiting the country’s export quota. Unable to find a market for its massive exports to the U.S. Germany will have to re-think its fiscal austerity.

Comments Rating 0 (0 reviews)

Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!

You might also like

Leave a Reply


Subscribe to Our Newsletters

Have the best of Finance Brokerage News delivered directly to your mailbox. Subscribe now to receive the latest market news.