Dealing with Chinese mercantilism

ARVIND SUBRAMANIAN of the Peterson Institute draws lessons from history of Chinese mercantilism of the early 1800s to state that dealing with Beijing effectively required a greater sensitivity to its history that meant greater use of carrots rather than sticks and a multilateral rules-based approach rather than a unilateral approach related to specific outcomes. In an op-ed in Business Standard, "Chinese Mercantilism: The Long View", he calls for a long view on China that relied on nudging Beijing away from the path of mercantilism rather than a confrontational approach in spite of a range of unhelpful Chinese actions across a gamut of political and economic issues, stating that a dominant China may no longer be amenable to force

Armistice in the currency war

STEPHEN GRENVILLE, former deputy governor of the Reserve Bank of Australia suggests a middle path in the ongoing currency hostilities, away from export dependence. In an economic briefing for the Australian Financial Review, "A road map for global 'currency peace'", he states that Asian countries could encourage more foreign direct investment while simultaneously discouraging short-term pro-cyclical foreign capital inflows with foreign exchange reserves used to cope with the volatility of capital flows.