The 2013 NPC and CPPCC Annual Sessions have ended with the formal selection of China’s new leaders. Not surprisingly there were few surprises. My quick take is that the leadership is saying all the right things, but they have been saying these things for quite a while – nearly two years in the case of …
Read More…Category: Asian development model
Revisiting predictions
In 2006 I started making a number of predictions based on what I thought was the necessary and logical development of China’s growth model. Some of these predictions seemed fairly outlandish, especially to China analysts – Chinese and foreign – who had very little knowledge of economic history or other developing countries, but many of …
Read More…Some predictions for the rest of the decade
Markets have been crazy this month, but rather than try to wade through all the news, much of which doesn’t seem to have much informational content, I thought I would duck out altogether and instead make a list of things I expect will happen over the next several years. We are so caught up in …
Read More…Chinese consumption and the Japanese “sorpasso”
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 …
Read More…China: where’s the inflation?
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 …
Read More…Who will pay for China’s bad loans?
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 …
Read More…Stuck in neutral – what Japan’s rebalancing can teach us
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 …
Read More…The difficult arithmetic of Chinese consumption
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 …
Read More…The IMF warns about surplus countries and global imbalances
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 …
Read More…Yet another discussion on the Asian savings glut hypothesis, and why it matters
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 …
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