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Trade recovery depends on the reform of the international financial system

By Harry Boyd,2015-07-25 03:29
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Trade recovery depends on the reform of the international financial system

    Trade recovery depends on the reform of the

    international financial system

    In recent years, global trade has been depressed.Several international institutions are lowered its 2015 global trade growth.The Dutch bureau economic policy analysis, trade, according to the monitoring data in the first quarter of this year global trade volumes fell 1.5%, the second quarter than in the first quarter fell 0.5%, further in the first half of this year's global trade since 2009's worst record.

    The international financial crisis is the primary sources of global trade continues to weaken.Influenced by the international financial crisis, countries all over the world are widespread unemployment rate high, poor financial situation and overcapacity problem.These problems restrict the consumption and investment demand, the motivation to support global trade development.In response to domestic economic pressure, many countries and regions tend to take a more conservative trade policies, trade protectionism, trade frictions increase, further affect the normal development of global trade.At the same time, the more intense competition for international market, interest in the multilateral trading system, also bring great negative impact on global trade. Trade protectionism in the direct embodiment of national monetary policy.World especially focus on the United States, the federal reserve's

    every move will affect other countries policy choices.The fed at the end of last year out of quantitative easing, pushing interest rates expected to heat up.Is affected by this, the dollar against major currencies in the world and the emerging market economies, currency exchange rates to rise are showing strong momentum, capital quickly return the United States, the liquidity problems in many countries.Emerging market economies, the corresponding local currency supply exceeds demand, the situation of foreign currency is in short supply, even from the developed countries "quantitative easing" flood area becomes a desert.This devaluation expectations have been intensified, leading to a larger capital outflows, for economic growth in emerging market economies, the financial system and the processing of manufacturing and import and export.In response to the massive capital outflows, some emerging market economies have to take some measures to raise interest rates, but this is obviously and domestic economic growth goal conflict, on the policy choice in helplessness and embarrassment. At the same time, the plunge in commodity prices further shrinking global trade, some resources export-oriented countries economic malaise.Since this year, as one of the world oil benchmark brent crude oil prices fell below $45 for many times, a new low nearly six years;Iron ore, copper, aluminum and other commodity prices also fell to a new low in recent years.As a result, Russia's economy into recession for the first

    time since the international financial crisis, this year in Brazil may be the biggest economic recession in 25 years.The recession led to Brazil, Turkey, Malaysia, Russia, Nigeria, South Africa, Chile and other currencies depreciated.

    Visible, as the two basic elements of economic globalization, international trade and financial terms, influence each other, inseparable.This international financial crisis to bring trade slump, fully exposed the disadvantages of the current international financial system.Dollars issued flood caused global excess liquidity, asset bubble is more and more big, the virtual economy from real economy

    development, eventually led to the U.S. debt crisis and set off the international financial crisis.While the policy measures taken in response to domestic economic crisis, and objectively on the economic development of emerging market economies and trade growth have a negative impact.The macroeconomic policy lack of institutional constraints are the important roots which the frequent outbreak of international financial crisis.Therefore, in order to promote the development of global trade, in addition to firmly maintain the multilateral trading system, actively promote the doha round negotiations breakthrough, improve global economic governance, and accelerate the reform of the international financial system is fundamental.

    Developed countries and developing countries equal participation, decision making, is the trend of global economic governance and direction.The group of 20 (G20) as the product of response to the crisis has demonstrated its governance crisis results, all previous summit to prove the power of the equal dialogue.Countries should on the G20 this platform, promote the construction of a unified, open, pratt &whitney global big market, avoid the fragmentation tendency in the process of regional economic integration.

    RMB internationalization is the important aspect of improving the international financial system, not only conforms to national interests, and reduce the dollar against other currencies excessively affected by the real options.According to global interbank financial

    telecommunication association (SWIFT) data, in August of this year, the renminbi beyond the yen for the first time, to become the world's fourth largest payment currency, market share to 2.79%.And compared to China in the global trade share accounted for about 12%, cross-border yuan payments has much room to grow.The international monetary fund (IMF) has announced that the renminbi into Special Drawing Rights (SDRS) basket, formally went into effect on October 1, 2016.When the renminbi will become the dollar, euro, sterling and the yen after the fifth world currency.This is the internationalisation of the renminbi at important step of the way.RMB internationalization is not only beneficial to the

stable development of international trade, also helps to build a more

diversified international monetary system, to promote sustainable global

economic growth is of great positive significance.

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