Xinhua recently published an official report by China Renmin University that talked about risks after the rebalancing of the world economy. The report discussed three changes after the crisis: (1) The U.S. will hold onto the services market while Europe will be marginalized; (2) High end manufacturing, represented by Japan and Germany, will decrease while the low end will increase; (3) U.S. dominance of the global financial system will weaken while East Asia has an opportunity. The report also listed four Chinese risks: (1) Wrong international positioning; (2) The fight for profit; (3) Tightened liquidity; (4) Political risks – non-economic means of re-balancing. The report concluded with three recommendations: (1) Improve the Chinese financial market’s maturity; (2) Promote regional financial cooperation; (3) Improve Chinese export products structure towards the higher end.
Source: Xinhua, March 26, 2010