Category Archives: China

Wolf Richter: One Part Of Japan’s Abenomics Salvation Is Already A Fail

Japan’s attack in the Currency War was supposed to make it more competitive in international trade – but that, it failed to do. In fact, the opposite occurred.

Extreme Energy, Extreme Implications: Interview with Michael Klare

If oil and gas is a profoundly dynamic phenomenon, then so too must be environmental risk and conflicts over natural resources—and we are not getting the full picture from the mainstream media, according to Michael T. Klare, professor of peace and world security studies at Hampshire College, TomDispatch blogger, and author of Rising Powers, Shrinking Planet: The New Geopolitics of Energy (Metropolitan Books, 2008). As risk multiply, conventional sources evaporate and we are left with “extreme” energy, renewables may be the only way to avoid war and disaster.

Snowden Shows South China Morning Post Details of NSA Hacking in China

If such a thing is possible, the intelligence community’s unhappiness with Edward Snowden has ratcheted up another notch. It was bad enough that he revealed yesterday that the NSA had been hacking targets in mainland China and Hong Kong.

China to Build Panama Canal Bypass Through Nicaragua

Yves here. Reader From Mexico often chides readers in comments who like try to depict Argentina and other Latin American states as failures, when the ones who have distanced themselves from American/neoliberal policies have made solid social and economic progress.

This piece highlights a tangible indicator of the wane of US influence in the Americas.

Wolf Richter: When Flight Safety Gets Outsourced To China

Aircraft maintenance was a highly paid blue-collar job that required education, training, manual skills, and brains. It was one of the perfect American middle-class jobs with generous healthcare, retirement, and vacation benefits; and free flights! They were working for icons like Delta, American Airlines, Continental, TWA, or Pan Am. Icons indeed!

The Inflation Dog Didn’t Bark, But What About the Others?

By Eric Yeldan, Professor of Economics and Dean at the Faculty of Economics and Administrative Sciences Yasar University. Cross posted from Triple Crisis

The IMF released the April edition of its World Economic Outlook (WEO). One of the key analytical chapters (Chapter 3) of the Report is titled “The Dog that Didn’t Bark: Has Inflation Been Muzzled, or Was It Just Sleeping?” Its main argument (or rather sort of a mystery that needs to be resolved, in the words of its authors) is that over the course of the previous crisis episodes we used to witness severe increases in unemployment along with a simultaneous fall in inflation. Yet, during the current great recession there has been very little movement in inflation, while unemployment rates soared almost everywhere; —hence the metaphor: inflation (the dog…) does not respond (… bark). And the alleged mystery is but why?

The WEO suggests two candidates for explaining the mystery. Perhaps instead of looking for dogs, they should stop ignoring the elephant in the room.

Vice Chairman of Chinese Accounting Association Warns Chinese Local Debt Could Create Bigger Crisis than US Housing Implosion

On the one hand, Bloomberg today tells us retail demand for stocks is as hot as ever. On the other, we have someone well-placed in China telling the world that its local debt is a train wreck waiting to happen, a classic Minksy Ponzi unit, but the timing of the unraveling is uncertain.

Gold Crash Signals End but End of What?

Whither gold?

Bill Greider on Why Paul Krugman Was So Wrong

A good piece in the Nation by Bill Greider, which focuses on Krugman’s long standing support of free trade, and how, contrary to his predictions, the results were not positive for ordinary American workers.

BRICs Cook the Climate (Part Two)

By Patrick Bond, a political economist with longstanding research interests and NGO work in urban communities and with global justice movements in several countries. He teaches political economy and eco-social policy, directs the Centre for Civil Society and is involved in research on economic justice, geopolitics, climate, energy and water. Cross posted from Triple Crisis

A secondary objective of the Copenhagen deal – aside from avoiding emissions cuts the world so desperately requires – was to maintain a modicum of confidence in carbon markets. Especially after the 2008 financial meltdown and rapid decline of European Union Emissions Trading Scheme, BASIC leaders felt renewed desperation to prop up the ‘Clean Development Mechanism’ (CDM), the Third World’s version of carbon trading

Wolf Richter: A CEO Explains Why He Sold A German Soul To The Chinese

Yves here. I find this story of a Chinese acquisition gone pear shaped interesting for several reasons. Since academic research consistently finds that the majority of acquisitions are losers for the buyers, it’s not a surprise that the deal did not work out. But this one looks to be a particularly extreme fail. Having worked a bit on international deals, and for companies operating in foreign markets, cross border transactions have an even lower success rate than domestic ones. The big reason is the one mentioned here, which is marked cultural incompatibility between the seller and buyer. Here the Chinese did less badly than they could have (they could have tried forcing Chinese practices on the German operation, which would have destroyed the value of the asset). But the logic of the transaction was unclear. Was it technology transfer? Consolidation? It appears both might have been goals, and neither happened very much.

The Dangers of a Chinese Financial Crisis

Yves here. Even the China bulls are coming to see the financial system as a risk factor.

China’s Exploding Debt

By C.P. Chandrasekhar, Professor of Economics, School of Social Sciences, Jawaharlal Nehru University, New Delhi, India. Cross posted from Triple Crisis

If the international media are to be believed the world, still struggling with recession, is faced with a potential new threat emanating from China. Underlying that threat is a rapid rise in credit provided by a “shadow banking” sector to developers in an increasingly fragile property market.

China Decides that South China Sea Oil is a National Asset

By John Daly, a non-resident scholar at the Central Asia-Caucasus Institute at Johns Hopkins University’s Paul H. Nitze School of Advanced International Studies and chief analyst at OilPrice. Cross posted from OilPrice

While the Western press is fixated on both recent North Korean nuclear tests and Beijing’s recent skirmishes with Japan over the Senkaku (“Diaoyu” in Chinese) islands, other maritime issues have developed further south, where China is involved in sovereignty disputes over the Spratly islands’ 750 islands, islets, atolls, cays and outcroppings with the Philippines, Taiwan, Vietnam, Malaysia and Brunei.

Pettis: China and the History of US Growth Models

Yves here. This is an important piece, in that it bucks conventional wisdom about growth and economic development in several ways.