ECONOMY OF CHINA AND GLOBAL FINANCIAL RELATIONS

PETROVIĆ Pero (PhD, Professorial Fellow, Institute of International Politics and Economics, Belgrade), pera@diplomacy.bg.ac.rs
Dzeletović Milenko (PhD, University Edukons, Belgrade), milenkodz@telekom.rs

In the second decade of this century, the current international financial order is changing. China is becoming more generous lender of last resort for a large number of financially impoverished countries around the world by offering them generous support in yuan (the official name is renminbi) due to geopolitical reasons. China and Russia in the field of economic development strongly complement each other: the scope of cooperation is very broad, and there is a great potential for the establishment of the second worldwide currency, which would suppress the dollar as the dominant currency in global commodity and financial transactions. The financial crisis is shattered by the policy of rapid additional printing of money. Fight for increasing the competitiveness of its own state, at the expense of others, continues in the era of the deepest financial crisis in the world. Currency war is being undertaken by the “export rival” states which, explicitly or implicitly, devaluate the value of its currency to profit in foreign trade, i.e. increase exports. The devaluation of the renminbi causes confusion in the financial markets, raising the value of the US dollar, with a simultaneous sharp decline in the value of currencies in Asia, as well as shares of companies that export goods to China, with the new knockdown of oil and gold prices. Cheap oil destroys the current global financial system. The global currency war could encourage geopolitical tensions and affect the economic growth of others.

Keywords: economic crisis, influence, changes, structure, functioning, currency war