The role of the Chinese economy in the world economy: A U.S. perspective

- Greater economic freedom in China raised economic growth in the past three decades.
- This higher economic growth removed more than 700 million people from poverty.
- There is a need for continued reform in China to boost economic freedom and growth.
- Monetary reform in China is a key element of overall economic reform.
- The United States benefits from economic reform and should support Chinese reform.

In this paper I first review the amazing progress that free market economic reforms have brought to the Chinese people after years of central control and suppression of markets. Thanks to greater economic freedom, economic growth increased sharply and hundreds of millions of people have been removed from poverty. By all accounts, however, economic freedom in China has a long way to go. The U.S. perspective should be that these market reforms continue. These further reforms toward economic freedom and economic growth in China will be beneficial to the United States. Such reforms would include a greater transparency about the monetary policy strategies, more openness of the capital accounts and less exchange rate and stock market intervention. Such economic reforms should be welcomed and encouraged by the United States and other countries.