Tag Archives: China

Is China’s Bubble the Next Financial Crisis?


By Mark Whitehouse – The Chinese credit boom has rapidly turned the country into one of the developing world’s most indebted, according to a new report (pdf) from London’s Centre for Economic Policy Research.

Such credit-fueled growth can’t be sustained for long without causing major distortions and setting the country up for a fall.

The stimulus is already running into diminishing returns. Over the five years through 2013, government and private debt grew by about 3 yuan for each added yuan of economic activity, a level of credit intensity that the U.S. exceeded only in the years leading up to the 2008 crisis. more> http://tinyurl.com/k5985du

Why The U.S. Remains The World’s Unchallenged Superpower


By Jonathan Adelman – The United States is the world leader and likely to remain there for decades. It has the greatest soft power in the world by far. The United States still receives far more immigrants each year (1 million) than any other country in the world. The United States leads the world in high technology (Silicon Valley), finance and business (Wall Street), the movies (Hollywood) and higher education (17 of the top 20 universities in the world in Shanghai’s Jaotong University survey). The United States has a First World trade profile (massive exports of consumer and technology goods and imports of natural resources).

Right now, there is no one on the horizon that will overtake or even seriously challenge the United States, however ailing, for at least the next decade or two. more> http://tinyurl.com/lnlzv3v

China’s Smog Can’t Compete With London’s Pea Soup


By Stephen Mihm – Like so much having to do with China’s economy, this environmental degradation seems unprecedented. It isn’t.

One of the defining features of industrial revolutions past and present is the shift to fossil fuels such as coal, particularly in urban centers. Much like contemporary China, England became an economic powerhouse by relying on cheap coal to power its factories as well as to heat and illuminate the cities that would become crucibles of industrial capitalism: Manchester, Birmingham and above all, London.

Some creatures even adapted to the changed environment. The peppered moth, for example, which was white with gray flecks, evolved via a process that scientists dubbed “industrial melanism.” By the 1890s, almost 98 percent of the moths had switched colors. more> http://tinyurl.com/o4upumt

London to become center for trading in Chinese yuan


CBC News – London is now ahead of any other financial center in the race to become an important hub for yuan trading, after the Chinese central bank granted London-based institutional investors a quota of 80 billion yuan ($12.7 billion) to invest in Chinese stocks.

Osborne said China’s state-owned banks will be allowed to expand their operations in Britain by setting up wholesale branches.

Britain and China signed an agreement in June to have their central banks swap 200 billion yuan for £20 billion ($32 billion), giving U.K. financial institutions more access to large amounts of yuan than had been available in the past outside of China. more> http://tinyurl.com/mv3gt9m

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JPMorgan China probe sends chill through investment banks


By Lawrence White and Michael Flaherty – A U.S. banking regulator’s probe into JPMorgan’s hiring practices in China will have rival banks scrambling to review their own records, lawyers say, in a market where ties to political and business leaders can be key to winning big deals.

“If JPMorgan put the person down in their books as a legitimate hire, and then it turns out that the person is there just to get certain connections, then anything you pay can be considered a bribe,” said the China-based lawyer, who was not authorized to speak publicly about the issue. more> http://tinyurl.com/mb582ox

Germany poised to overtake U.S. as world’s No.2 exporter this year


By ReutersEurope’s biggest economy, currently the world’s third-biggest exporter after China and the United States, has seen its share of world trade fall to 7.5 percent by last year, from a post-German unification peak of 11 percent in 1991-92, according to DIHK Chambers of Commerce.

German exports, from BMW cars to washing machines to heavy machinery for manufacturing and agriculture, totalled 1.1 trillion euros last year. more> http://tinyurl.com/n4cona8

How Friedrich Hayek Helped Me To Understand China’s Economic Tragedy


BOOK REVIEW

The Road to Serfdom, Author: Friedrich Hayek.

By Yang Jisheng – Reading The Road to Serfdom gave me a new perspective on economics, politics, the state and society. Hayek helped me understand China’s tragedy; my research into the disasters China suffered helped me understand Hayek.

Whether or not Beijing will admit it, China is beholden to Hayek’s thinking in relinquishing the highly centralized planning of its economy in favor of competitive markets and private enterprise. This choice is making China prosperous and has elevated it to the world’s second largest economy. more> http://tinyurl.com/kkz2kyf

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