The U.S. current account trade deficit narrowed in the April-June period, pushed lower by an increase in American exports and cheaper oil imports. The Commerce Department said Tuesday that the deficit in the current account decreased 12.1 percent to $117.4 billion in the second quarter.
To quell rapidly climbing prices, China has raised interest rates for the third time since October. But signs are growing that it may not be able to keep the problem under control. And despite the economic threat from inflation, China isn't likely to let its currency rise.
The grandstanding is understandable for politicians facing voters battered by the Great Recession. But China's growth is fueling the strong results that companies continue to deliver. And China's global trade surplus has actually been shrinking.
China's decision to hike interest rates to contain inflation is a missed opportunity to move the country toward a more domestic-oriented economy. A higher yuan would slow exports, but it would be a bigger overall benefit to China's economy.
The seemingly symbiotic relationship between the China and America -- dubbed Chimerica -- is now clearly chimerical. What was once billed as the ideal partnership is quickly turning into a competition for global influence. Investors, beware.
Investors take note: Despite the calls for order, national policymakers are dealing with an increasingly haphazard scenario loaded with counterproductive results and unintended consequences. The result could be a slide toward protectionism.
A China expert explains that overtaking Japan doesn't alter the underlying economic issues China must resolve, but it does cement changes that have been rapidly making China a far more important player on the global stage.
China's global trade surplus ballooned to $28.7 billion in July, a sign that promises to adjust its currency haven't yet begun to bite. That could spell increasing friction with Washington.
It's almost an article of faith in some economic circles Indian and Chinese households will increasingly support not only their own economies, but those of the rest of the world as well. A closer examination brings that faith into question.
Want to know what Beijing really believes about China's red-hot economy, its real estate market or the state of the global recovery? Look at whether it allows China's currency to rise against the dollar.










