On my first trip to China in more than three years, I awoke to an uncharacteristically brilliant blue Beijing sky. The forsythia and cherry trees were in full bloom, and the city was sparkling.
That, for me, proved to be a metaphor for at least part of my weeklong visit this spring. On many levels, China is back. Offices were filled with workers putting in their typically long days. Executives mostly radiated optimism about their businesses. A robust pipeline of exciting start-ups suggested China will continue to be a leader in innovation. And the energy and drive that excited me on my many past visits were abundant.… Seguir leyendo »
The “plum rain” that envelops Shanghai every summer — a confusing mix of drizzle, fog and smog — is a handy metaphor for the murkiness that currently enshrouds China’s economy.
A drumbeat of negative views about China’s economic prospects dominates the country’s image. The financial weekly Barron’s recently proclaimed in a cover story that “it looks like the Great China Growth Story may be falling apart.” On Friday, China is expected to announce new, subpar growth figures.
But consider a less prominent fact: a Bloomberg survey of economic forecasters yielded an average projected growth rate for China of 8.2 percent for 2012.… Seguir leyendo »
With each passing day, the noose around the neck of the euro zone grows tighter, with no indication that European leaders share any coherent vision for avoiding the hangman.
Instead of tackling structural problems, much of the endless chatter about the common currency centers on financial engineering: rescue funds, backstopping banks, printing money and the like.
At the heart of the European quandary is the conundrum that ideas that are economically sensible are not politically feasible, while ideas that are politically possible make little economic sense.
Topping the “must do” list is the need to fix the disastrous design flaw in which the 17 members agreed to a common monetary policy without coordinating their budgets and regulations.… Seguir leyendo »
Hardly a day goes by without news of yet another economic problem facing China. A frothy real estate market. Quickly rising wages. A weakening manufacturing sector. Tightening lending standards. The list can seem endless and frightening.
But after a recent visit to China, I remain staunchly optimistic that it will continue to be the world’s greatest machine for economic expansion. While developed countries bump along with little growth, China’s gross domestic product is expected to increase by 9.2 percent in 2011 and an equally astonishing 8.5 percent next year.
The country pulses with energy and success, a caldron of economic ambition larded with understandable self-confidence.… Seguir leyendo »
Here’s the critical takeaway from last week’s European rescue plan: Nothing in it addresses the endemic economic weaknesses that nearly propelled the euro zone into a meltdown.
However successful the package may prove in quelling turbulent markets (a questionable assumption, particularly after Greece’s decision to submit its latest rescue plan to a referendum), the members of the common currency still face the more daunting challenge of how to restructure their Rube Goldberg contraption so that such turmoil doesn’t recur.
The initial misstep by European leaders, of course, was lashing their nations to a common currency without integrating other critical policies, such as government borrowing and regulation.… Seguir leyendo »
The superbly crafted rescue plan that the Treasury announced Sunday represents not an end to the perils of Fannie Mae and Freddie Mac but merely the beginning of a new chapter. Conservatorship of the government-sponsored enterprises does not resolve the long-term questions, and the hardest part of the job lies ahead.
While the Treasury plan left open the possibility of continued private ownership of the GSEs, similar to how bankrupt companies are reorganized, that's not a viable option. As Treasury Secretary Henry Paulson said, Fannie and Freddie's unique status as, in effect, partnerships between the federal government and the private sector simply doesn't work.… Seguir leyendo »