Jonathan Holslag On world order and disorder

Unravelling Harmony

In the best classic liberalist tradition, the Chinese government nurtured a sense of economic harmony between Europe and China. This paper shows that a mutually beneficial partnership has not emerged. Departing from a detailed six-digit commodity export dataset, it demonstrates that the division of labour has blurred. Furthermore, Europe’s growing deficits on the current account balance were not offset by inflows on the financial account. All these are symptomatic for the twin distortions that have developed in China and Europe, twin distortions that now require difficult twin adjustments. In: Journal of World Trade, 46, 3.(read)