China Financial Markets

There has been a lot of excited press commentary recently about China’s overtaking Japan as the world’s second largest economy.  China’s GDP should be larger than Japan’s for the first time sometime this year, which in a similar context in 1987 the Italians called “il sorpasso”.  For all the excited search for the deeper meaning [...]

I apologize for waiting two weeks since my last post, but my schedule has been crazier than usual what with the SED meeting and a number of conferences and visitors to Beijing.  What’s more, next week I will go to New York and environs for a week, followed by a week in Italy.  It always [...]

Since this is a very long post, it may make sense first to provide a quick summary of what I am going to argue.  As I have discussed often in earlier posts, pessimists are starting to worry about excessive debt levels in China, about which they are very right to worry, and many are predicting [...]

After such a long entry last week I thought I would spare my readers and do something much briefer.  A few days ago I read a good article (“Stuck on Neutral”) about Japan in the August 18 issue of the Economist.  You can find the article on the Economist website if you are a premium [...]

How fast does consumption need to grow in China in order for a meaningful rebalancing to take place?  Probably a lot more than you think.  This is arithmetically the case because China is starting from such a low base. At roughly $1.2 trillion in 2008, total Chinese private consumption is only a little more than [...]

As Beijing slowly unlocks from its 60th anniversary celebrations – the streets are still relatively empty but more and more people are going out, although my local Starbucks still hasn’t reopened, forcing me to go elsewhere for my hardcore caffeine fix – a lot is still going on in the rest of the world. Both [...]

The Shanghai stock market was up 4.5% in very nervous trading today but down 16.3% since its recent peak at 3478 on August 4, and still trading at more than 30 times earnings.  All this turmoil is triggering all sorts of worried comments about the sustainability of the fiscal stimulus package and whether it has [...]

In my last entry I tried to set out the necessary shifts over the next few years as the world, and especially China and the US, works out its imbalances.  These shifts will take place, I am pretty sure, but they can do so under a “good” scenario and a “bad” scenario. So what does [...]

By coincidence I had two OpEd pieces that came out last week, one in the WSJ and the other in the Financial Times.  The latter came about because about a month ago Martin Wolf asked me to write a piece based on my June 20 entry.  The former came about on the previous Friday when [...]

One of the reasons why trade-related discussions can seem so off-the-mark, I think, is because the conditions governing international trade are much more complex than we often realize. The determinants of the international balance of trade basically include anything that affects domestic consumption and domestic production, which pretty much means nearly everything in economics. Among [...]