From the Italian newspaper “Il Foglio” an article, where I discuss, from two different points of views, the China-USA International roles, and tariffs war. The increasing Chinese productivity is in Trump’s sight.
Michele Geraci was a guest speaker at GAAF 2017, yesterday in Shanghai. In his speech, he shared following three viewpoints: First, RMB will never be international currency. Second, Interest rate in China needs to be brought up to the same level of GDP growth rate in order to create stable economy. Third, There will be more difficulties for China trade with the U.S. but it will be easier for China outbound investment to the U.S.
In 2017, one of the biggest issues that the world will be facing is trade war, especially between China-US. President Xi and Trump have different views. Xi strongly encourages free trade between countries while Trump stresses the importance of fair trade. Michele Geraci has an even different view from both of them. He thinks that opening up trade and lowering trade barriers, in general, would benefit both countries involved, on average, but the problem is that these benefits are not always redistributed fairly within the country.
Michele Geraci talked about global challenges and opportunities under Trump’s era at the opening ceremony of the 2017 CRRC Advanced International Talent Development Programme, at the University of Nottingham, China. Geraci also discussed Trieste port as an example of terminal for the Maritime Silk Road. Trieste port, located at Italy, is a key location for the 21st Maritime Silk Road. It has a big competitive advantage with Central Europe and it has direct links to Germany and, from there, direct links to Scandinavia.
The president of Italy is currently in china for an official state visit. This state visit comes at an interesting time for both China and Italy: the two countries are engaging more than before into a commercial dialogue of mutual respect and common interests, trade between the two counties shows good sign of improvement and Italian trade deficit appears to narrow slightly and capital investments made in the past couple of years have all helped improve the image that the Italian Business community has of China.
A Foreign Ministry spokesman said on Feb 14th that China hopes that “relevant sides” will look on the RMB rate issue “in a right manner”. Devaluation RMB to boost exports has mostly been a thing of the past, during the early days of WTO membership. In general China’s exports have shown little elasticity to price. I also believe that RMB exchange rate should continue to be managed by the Central Bank and Trump is probably beginning to take a more real politik with China: the less is said, the better.