Policy Center for the New South The IMF World Economic Outlook released on Tuesday (April 16th) brought a projection of China's economic growth of 4.6% and 4.1% for, respectively, this year and next. In 2023, after the economic reopening with the end of the “Covid zero” policy, the rate was 5.2%, above the official target of 5% (Figure 1). This year, the official target has been set up at 5% again. Notwithstanding the challenges approached here, the macroeconomic performance in the first quarter of 2024 has been in sync with such target (He et al, 2024). Six challenges can be identified for C ..read more

Prior to her second visit to China in nine months last week, Janet Yellen, United States Secretary of the Treasury, sent a message demanding the country not to flood the world with cheap exports of clean energy, as this would “distort global markets and harm workers abroad”. According to a senior U.S. Treasury official, China's excess industrial capacity and the government support that has fueled it were subject of discussion during her meeting with Chinese Premier Li Qiang. Current levels of ample idle capacity and consumer restraint in China are part of the challenges faced for higher econom ..read more

Eduardo Andrade and Otaviano Canuto Policy Center for the New South Population aging is a strong trend in place. Some negative consequences of aging are on the horizon: greater fiscal imbalances and the risk of economic stagnation. In this policy paper, we start by summarizing some general features of migration flows and then we delineate how the demographic transition will unfold differently across countries and continents. We then discuss the two primary costs of aging to high-income countries, and their potential influence on immigration policy. We also present the case of Japan, a nation t ..read more

Tiago C. Peixoto, Otaviano Canuto, and Luke Jordan Policy Center for the New South, PP-02/24 Artificial intelligence (AI) represents a breakthrough in how machines process information, recognize patterns, and make decisions, often matching or exceeding human capabilities in learning, reasoning, perception, and problem-solving. Unlike traditional computing, which requires explicit instructions for each operation, AI systems can sift through vast datasets, learn from outcomes, and deliver decisions or forecasts with exceptional precision. This opens up possibilities for AI to handle sophisticate ..read more

POLICY CENTER FOR THE NEW SOUTH Otaviano Canuto and Amshika Amar Introduction When countries face external financial shocks, they must rely on financial buffers to counter such shocks. The global financial safety net is the set of institutions and arrangements that give economies layers of defense against such shocks.  From any individual country standpoint, there are three layers or lines of defense in their external financial financial safety nets (Iancu et al, 2021). The first is the countries’ own international reserves. A second line of defense comes from pooling resources ..read more

Policy Center for the New South Artificial intelligence (AI) is the name given to the broad spectrum of technologies by which machines can perceive, interpret, learn, and act by imitating human cognitive abilities. Automation was created to better fulfill repetitive tasks, increasing productivity. AI, with its impressive rate of evolution, can produce new content: texts, images, new computational codes, possibly medical diagnoses, interpretations of data, and so on. It is no coincidence that an AI-based technological revolution is predicted. I like the way Jesús Fernández-Villaverde of the Uni ..read more

The annual World Economic Forum took place in Davos, Switzerland, from January 15-19. Every year for 54 years, a global business elite has traveled there, whether to interact with customers and suppliers, with intellectual leaders on broad topics or, in an informal environment, with the representatives of governments and multilateral authorities who attend. Nothing is deliberated, of course, but over time the forum has established a reputation as a stage from which announcements are made and better cross-knowledge of the opinions of key people on hot topics can be obtained. I personally had th ..read more

Policy Center for the New South The global economic environment has changed as the U.S.—and to a less confrontational degree, the European Union—have clearly established a context of technological rivalry with China. Hindering China’s progress in the sophistication of semiconductor production has become a centerpiece of current U.S. foreign policy. While the U.S. is clearly winning the semiconductor war, the picture is different when it comes to clean-energy technology. Both technology wars overlap with access to and refinement of critical raw materials (CRM), which are key upstream components ..read more

Policy Center for the New South If we want to understand . Here, I'll try to highlight the relevant aspects, to use them as a benchmark to shine a light on the costs of increasing fragmentation of the trading system. So, what was hyper-globalization or, as Professor Richard Baldwin from the Geneva Institute calls it, Globalization 2.0? In the nineteen-eighties and nineties, particularly the nineties, we saw the consequences of what one may call a tectonic shift under the global economy. This was the combination of three things: First, a cluster of technological innovations, not only in informa ..read more

Policy Center for the New South At the August 22-24 BRICS summit in Johannesburg, the leaders of Brazil, Russia, India, China and South Africa said they wanted to use more of their national currencies for cross-border payments, which are currently dominated by the U.S. dollar and other global convertible currencies. Like China and the other BRICS, several other countries have also sought to develop alternative external payment mechanisms. Currencies across national borders fulfil three functions. First, they serve as units of account, a measure of value, for trade invoices and financial asset ..read more