China’s efforts to extend its dominance as the world’s top exporter are facing stiff challenges, as the policies it has used to support exports bring new economic problems and escalate tensions with a growing list of trade partners.
Key elements of the strategy – including a cheap currency, regulated interest rates and low energy prices – are stoking discontent in fellow developing countries, not just Western capitals. That could crimp China’s drive to seek gains from emerging markets as growth in the rich world falters. At the same time, many economists argue, China’s export-friendly policies are fuelling inflationary pressures at home, placing a burden on the rest of the economy.
(Source: The Wall Street Journal Online)