Supervisor(s): Chinese Academy of Social Sciences Sponsor(s): Institute of World Economics and Politics Chinese Academy of Social Sciences CN：11-3799/F
International Economic Review is supervised by Chinese Academy of Social Sciences, and sponsored by Institute of World Economics and Politics, Chinese Academy of Social Sciences. It is the only publication dedicated to publish academic reviews on the international economy in China. It aims to review the international economic and political activities based on China’s position from an academic perspective. Its scope covers international economic and political activities and development, particularly those with an emphasis on the international economic activities related to China. The journal is included in CSSCI.
Recent developments in Europe mainly focus on political, economic, social and security issues including non-traditional security issues, such as election, refugee and terrorism, economic recovery mixed with potential crisis, and the slow progress of the Brexit. Although the outcomes of general elections seem to be largely predictable, which is expected to benefit economic recovery, underlying problems remain and there are still great uncertainties. Changes in Europe may profoundly influence the power structure of international politics a well as the landscape of world economy and global governance. In terms of power structure, the EU’s capacity and influence as one pole shrinks. The US-Europe relationship would become more pragmatic, the Russia-Europe relations have some room FOR improvement, and the Sino-Europe relations have promising prospects. In terms of global governance, major countries still need to deepen cooperation in the field of international currency, trade, development and security to jointly tackle various challenges. Sharing wide range of common interests with Europe, China needs to get prepared for the opportunities and challenges brought by European transformation to deepen mutual trust and match the “Belt and Road” initiative with Europe’ development strategy so that they can seek to achieve inclusive development that benefits both sides.
Infrastructure connectivity is the focus of the Belt and Road Initiative and also the key to the sustainable development of Asia and the whole world. It requires large-scale capital mobilization, in which China has accumulated rich experience that it can share with other countries. China’s main experience shows that it is important to coordinate the roles of government and market, build a guiding mechanism for development finance, and promote the ability of relevant government agencies and market entities in financing from the capital market in the medium and long term. The establishment of AIIB is an attempt to share China’s experience. The AIIB should actively work with other multilateral development banks and unilateral development banking institutions to mobilize capital and push forward development of Asia’s bond market To that end, it is necessary for top executives of the AIIB to have macro forward-looking knowledge, professional capacity, overall planning and innovative ability to tap market possibilities.
US President Donald Trump signed into law the
Tax Cuts and Jobs Act (TCJA) on Decembe22, 2017. The reform has been regarded as a tax reduction reform. What are the difference between Trump’s tax reform and Reagan’s tax reduction reform in the 1980s? The Reagan reform helped meet the target of economic growth, full employment and low inflation and the practices of broadening tax base, cutting tax rates and simplifying tax systems had guided the global tax reform at that time. Reagan’s tax reform is more oriented to domestic considerations. The Trump administration claimed that the reform targeted the domestic economy, but th slogan of “America First” obviously refers to international competition. The Trump administration’s overall tax reduction is steep and must not be neglected. Both the Reagan administration and the Trump administration pay special attention to coordination of reforms China should comprehensively deepen its reforms and properly implement tax reform and reduce tax rates across-the-board to promote the formation of a new international tax order that benefits China.
US President Donald Trump signed the
Tax Cuts and Jobs Act into a law on December 22, 2017. Chinese academia was impressed by the US government’s determination in pushing through what the president called the largest tax cut in the history of the United States, and responded to the tax reform very positively. However, generally speaking, Chinese scholars’ knowledge of the US tax reform is rather sketchy and imprecise. This paper aimed to depict a more detailed and accurate picture of the US tax reform and explain the underlying causes for the reform measures. Because the 70, 000-page US tax code is extremely complicated, this paper has to be focused on the corporate tax reform, which contains three main elements. The first is a sweeping cut of corporate income tax from 35% to 21%, which is what Chinese economists are concerned most about. Unfortunately, many Chinese economists have taken the tax cuts as an equivalent to the US’ tax reform. The second is the switch from a worldwide taxation system to a territorial one, which is a key component of the tax reform. The third is to create some new types of taxes, in response to the new situation under the territorial system. Among them are global intangible low-taxed income (GILTI) tax, foreign-derived intangible income (FDII), and base erosion and anti-abuse tax (BEAT). This paper explained in details how those taxes are collected and what are their functions as well as their impacts on the US economy. Based on a better understanding of the functions of the US’ new taxation system, this paper concludes that although the tax cuts will boost US’ economic growth, its growth-boosting effect will be limited due to the fact that the US economy currently is growing at full capacity and the US’ public debt will increase materially as a result of the tax cuts. The impact of the tax reform on US international balance of payments is not clear-cut, and hence the US dollar can either rise or fall in the future. Although China should pay close attention to the impact of the US’ tax cuts both in the short and long run, it should avoid over-exaggerating the impact of the tax reform on both the US economy and the Chinese economy. China should implement its macroeconomic policies in accordance with domestic and international situation and carry out institutional reforms, including reform of its tax system, based on its own agenda.
During the first year of the Donald Trump administration, the Sino-US economic and trade relations had been maintained relatively stable. However, the policy has been adjusted toward putting more emphasis on strategic competition with China in the area of trade and economy. As a result, bilateral economic and trade relations have become more strained. The new round of hawkish reorientation of the US economic and trade relationship toward Chin has been largely completed by the end of 2017. The number of China-US trade dispute initiated by the US also reached a new high in history last year. Based on observations from various perspectives, the article argues that the Sino-US economic and trade relations ma face a more difficult and complex situation.
The tax reform of the Donald Trump administration is one of the most important tax reforms of the U.S. government since 1986. The core objective of the tax reform is to reduce corporate income tax and improve the international competitiveness of the U.S. companies. The U.S. tax reform aims to promote re-industrialization, ease political pressure and consolidate the foundation for sustainable economic recovery. It is implemented by carrying reform to simplify the tax system, lower corporate tax burden, and ensure household income. The corporate income tax rate is reduced from 35% to 21%, which is the largest policy dividend for large U.S. multinationals. The U.S. tax reform has a positive effect on economic growth. However, its overall impact on fiscal deficit and public debt is negative. In the future, the Trump administration will face significant pressures from fiscal budget and public debt ceiling. The tax cut, together with the Fed’s interest rate hikes and balance sheet contraction, will produce new spillover effect on the world economy. It may have a significant and complicated impact on China’s direct investment, capital flow, exchange rate stability, foreign exchange reserve security, financial stability and international competitiveness. It may be the optimal policy for China to rethink the intrinsic root causes of the relatively high tax burdens of its enterprises, review its tax revenue system that is supported by corporate taxes, build a modern fiscal system, and comprehensively deepen economic and financial system reforms to use market-oriented reforms to mitigate external shocks.
