How serious are China’s economic problems, and how big an impact will they have on the United States and world economies? Beijing and Washington, separately and jointly, will determine the answers.
First, both countries are essential to global growth, and both must carry out structural reforms to move their economies onto a growth-conducive footing for the long term.
One byproduct of China’s recent stock market volatility has been the emergence of a veritable army of “perma-bears” who believe the Chinese economy is essentially falling off a cliff. Growth in China is slowing and will continue to do so in years to come.… Seguir leyendo »
There is a time for weighing evidence and a time for acting. And if there’s one thing I’ve learned throughout my work in finance, government and conservation, it is to act before problems become too big to manage.
For too many years, we failed to rein in the excesses building up in the nation’s financial markets. When the credit bubble burst in 2008, the damage was devastating. Millions suffered. Many still do.
We’re making the same mistake today with climate change. We’re staring down a climate bubble that poses enormous risks to both our environment and economy. The warning signs are clear and growing more urgent as the risks go unchecked.… Seguir leyendo »
Next month, President Xi Jinping and Prime Minister Li Keqiang will use an important meeting — the so-called Third Plenum of the Communist Party’s 18th National Congress — to unveil China’s priorities for reforming economic policy for the next decade.
Yet because it will probably decide only general policies, leaving the specifics for later, some cynics have already begun to dismiss the reforms as too little, too timid and too late. They note that a decade ago, a previous generation of leaders failed to reduce the influence of state-owned enterprises and to complete the economic reforms of the 1990s.
But I believe the prospects for restructuring China’s economy — bolstering the role of the market, expanding opportunities for small and medium-size businesses, allocating capital more efficiently and improving the balance between consumption and investment — are better than at any point since the 1990s.… Seguir leyendo »
China is experiencing its most severe economic downturn in decades, and revitalizing its economic model is critical to future prosperity — not only in China, but around the world.
Central to that effort is the transformation of China’s cities. By adopting a new approach to urbanization, its leaders can assure more balanced investment, address a major source of debt, achieve a consumption windfall and clean up the country’s environment. Otherwise, China’s economic and environmental problems will worsen, with vast implications for the rest of the world.
China’s success has been built on two pillars: investment and exports. But after decades of growth, this model is delivering diminishing returns.… Seguir leyendo »