This paper considers interactions between China's domestic and external imbalancesand their global implications. We present scenarios detailing how a rebalancing of China's growth pattern from investment-driven growth towards more consumption-driven growth may occur in practice. Using input-output tables for 2012, we illustrate the knife-edged nature of Chinese rebalancing, the linkages between expenditure-side and production-side rebalancing, and how an internal rebalancing could exacerbate external imbalances. A policy implication for China is that for rebalancing to be fast, consumption must be exceptionally resilient and the effi ciency of investment must increase sharply. If rebalancing is too slow, the capital-to-output ratio will rise to potentially unsustainable levels and consumption will fail to attain levels of contemporary upper middle-income economies by 2030. Global input-output tables (1995Global input-output tables ( -2011 suggest that the patterns of Chinese rebalancing considered in our scenarios may generate substantial headwinds for exports to China by its trading partners.
The Discussion Paper series is intended to make the results of the current economic research within the Reserve Bank available to other economists. Its aim is to present preliminary results of research so as to encourage discussion and comment. Views expressed in this paper are those of the authors and not necessarily those of the Reserve Bank. Use of any results from this paper should clearly attribute the work to the authors and not to the Reserve Bank of Australia. The contents of this publication shall not be reproduced, sold or distributed without the prior consent of the Reserve Bank of Australia.
Emissions trading schemes (ETSs) have emerged as stable components of a fragmented climate governance landscape. Yet the proliferation of ETSs raises critical questions concerning their design, the development of conflicting norms, and how such schemes might link. This Article engages with these concerns by advancing a linkage framework based on a series of core convergence criteria which are considered necessary to assess the compatibility of candidate partner schemes. For the EU, the search for a candidate linkage partner has seemed a Sisyphean undertaking, but it is suggested that South Korea offers the prospect of stable climate settings. The critical design features of South Korea’s Emissions Trading Scheme (KETS) are evaluated before applying core convergence criteria to evaluate compatibility. This Article identifies a degree of alignment between the design features of the EU’s flagship Emissions Trading Scheme (EU ETS) and the KETS, but also uncovers divergences where detailed negotiation will prove necessary.
European Union emissions trading scheme, Korea emissions trading scheme, linkage, climate governance
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