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● US-China Economic Convergence

Inflection Points in U.S. and China Policies and Global Economic Outlook

U.S. and China, a Shift in Predictability

The U.S. economy is becoming increasingly unstable, unlike its previously predictable state.

On the other hand, the Chinese economy is transitioning towards a predictable direction based on policy transparency and planning.

Unlike the rapidly changing policies of the U.S. since the Trump era, China is disclosing its future plans with specific figures in official settings such as the Two Sessions.

These changes are significantly impacting the global economic outlook, fiscal policies, and monetary policies.

Detailed Contents of the Two Sessions and Fiscal·Monetary Policies

At the Two Sessions in March, various measures were presented to achieve a growth rate of 5% and an inflation target of 2%.

The Chinese government is issuing a total of RMB 11.86 trillion in government bonds and special-purpose bonds, including a fiscal deficit ratio of 4%, to stimulate the economy.

A complex fiscal policy strategy is being employed, including a RMB 12 trillion plan to address local government debt and the issuance of ultra-long-term special government bonds.

Additionally, various incentives, such as 15% discount subsidies, are being offered to boost consumption, with a focus on high-tech and infrastructure investment.

Technology Industry and Consumption Activation Strategies

Within China, technology companies like Huawei are strengthening the competitiveness of their domestic products, driving consumption activation.

As state subsidy systems and policy support for IT devices such as smartphones continue, the consumer market is gradually recovering.

With the policy announcements of the Two Sessions, practical benefits are returning to consumers, which is expected to have a positive impact on the overall economy.

Meanwhile, structural issues in the U.S., such as weakening manufacturing competitiveness and the collapse of the middle class, are increasing the uncertainty of fiscal and monetary policies.

Global Manufacturing Competition and the Direction of Hegemonic Rivalry

China is taking the lead in reshaping the global supply chain through policies like Made in China 2025, showing moves to check the U.S.

In the high value-added manufacturing competition once led by the U.S., China has already narrowed the gap through technology and infrastructure investment.

The U.S. is facing difficulties in strengthening future competitiveness due to internal 'missing middle' issues and changes in policy ideology.

The impact of the hegemonic rivalry between the two economic powers on the future global economic outlook and the response strategies of small and medium-sized countries like Korea are emerging as important tasks.

Future Prospects and Implications for Us

Policy changes in the U.S. and China foreshadow a shift in the long-term economic structure as well as short-term changes.

The contrasting strategies and competitive structure of the two countries are expected to act as important variables in terms of the global economic outlook, fiscal policies, and monetary policies.

In particular, technology and manufacturing competitiveness, and the expansion of infrastructure investment hold great significance for the economic recovery and competitiveness of countries including Korea.

This year and next year, the policy shifts of the two giant economies and the reactions of capital markets, and the reshaping of the global supply chain will become notable issues.

< Summary >
The U.S. economy is becoming unstable amidst unpredictable policy changes, while the Chinese economy is increasing predictability with specific fiscal and monetary policies through the Two Sessions.

Various measures such as a growth rate target of 5% and an inflation target of 2% were announced at the Two Sessions, and economic stimulus was initiated through fiscal deficit ratios and government bond issuance.

Policies for technological industry and consumption activation, and high-tech support are noticeable, and the global manufacturing competition and hegemonic rivalry structure are being reorganized.

The contrasting strategies and long-term economic prospects of the U.S. and China provide important implications for the development of response strategies for each country, including Korea.

Main SEO keywords: Global economic outlook, U.S. economy, Chinese economy, fiscal policy, Two Sessions.

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