China and U.S. Economies: Why Trump Must Go to Beijing May 14-15
April 19, 2017 (EIRNS)—China’s accelerating economic growth continues to drive the world economy—again accounting for one-third of the expansion in the global economy—while the United States continues to drag it down.
Analyses of China’s "unexpected" first-quarter 6.9% GDP growth, from PricewaterhouseCoopers (PWC) to Bloomberg to the U.S. National Bureau of Economic Research (NBER), agree on the primary driver of China’s economic expansion acceleration. It is extraordinary investments in new infrastructure projects, both domestically and in other nations—in other words, the Belt and Road Initiative, or "New Silk Road."
But beyond GDP growth acceleration:
The Belt and Road Initiative, projected as equal to 20 Marshall Plans, is truly proving to be a grand investment and trade plan which is to the mutual, "win-win" benefit of the 60 or more nations which are participating it. The great projects of infrastructure involved are growing in value at nearly 50% a year, according to a February study by PWC. And a new NBER study today estimates, based on physical economic factors like illumination at night seen from space, that China’s economy is actually growing faster than its government reports.
The Belt and Road Forum for International Cooperation in Beijing May 14-15 is intended as a path to productivity, productive employment and scientific and technological advancement for nations all over the world. Some 28 heads of state have announced attendance; even nations which have had security or strategic tensions with China, such as India, are sending high-level delegations and planning development corridors with the help of Chinese investment.
But the U.S. economy continues to stagnate and faces a potential new general crisis this year. U.S industrial production fell further in March and is 3.5% lower than in November 2014, and actually only approximately 3% higher than in July of 2000! Following that, the Federal Reserve on April 18 estimated an annual growth rate of just 0.5% in the first quarter, even lower than 2016’s 1.8% growth. Labor productivity has not grown for six years. Bank credit has stopped expanding; commercial and industrial lending is at zero growth. And corporate debt has grown so fast in the past ten years, against flat or declining profits, that an International Monetary Fund report today said 20% of all non-financial companies will default if interest rates rise substantially.
There is only one chance to revive economic progress in America: President Trump must go to the Belt and Road Forum, and make it a partnership for peace and economic progress.