20 18 how do countries' economies go?

Now it's 20 18, and it's time to look back and look forward to the future. As the most important economy in the world, a series of policies of the United States undoubtedly set the tone for the global economy in the coming year.

In the past year, Trump's policy suggestions based on "America first"-raising trade tariffs, curbing illegal immigrants, increasing federal incentives, and reducing taxes for businesses and wealthy American citizens ... promoted the US economic growth and the recovery of global trade and commodity prices in a short period of time.

Faced with the expectation of the Fed's interest rate hike, the new tax measures promoted by Trump, and the increasing confidence of enterprises and consumers, the US economy will continue to move towards a state of comprehensive consumption, commercial investment and foreign trade. According to the plan of the United States Senate, enterprises will get rid of the tax burden in 20 19; However, some companies may have completed their investment expenditure on 20 18. This means that the profits of enterprises decrease under high tax rate, and 20 19 begins to gain more profits under lower interest rate. Therefore, it is expected that the investment of enterprises in equipment and software will continue to grow in 20 18 years, and the tax reform will help these confidence indicators to maintain a high level.

At the same time, the tax plan has brought higher expectations for the economic growth of the United States in 20 18 years, and the new debt in the next decade will exceed 1 trillion dollars, both of which will stimulate inflation expectations. Over time, higher interest rates will curb the growth impact of the new legislation, which means a strong trend of the US dollar. Therefore, the trade balance next year may not be optimistic.

More importantly, the impact of Trump's trade protection policy. His attempt to "rebuild the American economy by striving for free trade" stems from his dissatisfaction with the existing free trade agreements, which has potential knock-on effects in the financial and commodity markets. For example, the renegotiation of the North American Free Trade Agreement (NAFTA) has been postponed, which will have a direct impact on the economies of Canada and Mexico.

Asia may also be affected. Trump called for withdrawal from TPP, threatened to label China as a currency manipulator, and imposed punitive tariffs on China's imports. The United States is China's largest trading partner, and any interruption of trade policy between the two largest economies in the world will bring serious economic consequences to the region and the world.

In view of this, based on the recovery of commodity exports, the mitigation of geopolitical risks and the uncertainty of domestic policies of major economies, the economic growth of Europe and Central Asia in 20 18 may rise to 2.7% compared with 20 17. As for Russia, after two years of economic recession, the economic growth in 20 18 is expected to increase by 0. 1% compared with last year to 1.4%. However, rising oil prices and loose macroeconomic policies have supported economic activities. It is estimated that Kazakhstan will increase by 2.6% in 20 18. Among the commodity-importing economies, Turkey's tourism industry is recovering, and its corporate balance sheet is improving. With the support of loose fiscal policy, it is estimated that the growth rate in 20 18 will be 3.9%.

For China, 20 18 is expected to be 0.2 percentage points higher than 20 17. In fact, under the expectation of the Fed's interest rate hike, China will face more pressure of capital outflow, which is not uncommon in the past.

Looking back, when the Federal Reserve raised interest rates in February, 20 15, China's foreign exchange reserves had a record sharp drop of $107.9 billion, and decreased by $99.4 billion in February, 20 16. But at that time, China's export growth was still weak, and the economy of the United States, China's largest export market, did not really improve. Combined with internal and external factors, the Bank of China allowed the RMB to depreciate against the US dollar in order to maintain the stability of a basket of currencies, which was in line with market rules.

The decrease of China's foreign exchange reserves slowed down in the spring and summer of 20 17, partly because the Federal Reserve kept the policy interest rate of the US dollar unchanged, and more importantly, the China administration made great efforts to maintain a healthy financial system-deleveraging.

As far as this year is concerned, China actually has huge foreign exchange reserves, which is rich in the ability to resist the pressure of RMB depreciation. In addition, the RMB is not freely convertible under the capital account, and the loss of foreign exchange reserves and exchange rate depreciation will also be effectively controlled.