Economix: One Company's Struggles in China

Individual Global Investor submits:Trade figures out of the United States and Canada today confirm that the global recovery is slowly moving forward. Looking at the trade of physical goods is one of the best measures of economic momentum. In my look at these figures last month, the story was of robust German trade in November.

While lawmakers in Washington and Beijing negotiate agreements over commercial and trade issues such as cybersecurity and intellectual property rights, state and local governments and businesses have been embracing trade with China.

BEIJING (Reuters) - China on Wednesday accused the United States of sowing discord between China and its neighbors after the Pentagon said Beijing is using espionage to fuel its military modernization, branding Washington the "real hacking empire".

My colleague, Charles Engel, has a new paper entitled The Real Exchange Rate, Real Interest Rates, and the Risk Premium, in which he tries to identify what characteristics an exchange rate model must possess in order to explain two stylized facts. ...The well-known interest parity puzzle in foreign exchange markets finds ... the high interest rate country tends to have the higher expected return in the short run.

More Americans say China is the world's leading economic power than say the United States is. We say: Buck up, Americans!

Two economists debate the importance of the China-United States exchange rate and what the two countries should do about it.

The big trade news of the day is that United Steelworkers union (USW) has filed a petition with the US government alleging that the Chinese government unfairly favors, through subsidies and other trade measures, its domestic manufacturers of "green" goods like solar panels and wind turbines.  The petition was filed under a section of US trade law - Section 301 of the Trade Act of 1974 - that was once a strong protectionist weapon but has basically gone dormant since the advent of the World Trade Organization.