I like this @peterfrankopan piece, framing Alaska into a BRICS+ setting. He leaves it open at the end, as to whether Trump or China/BRICS have the upper but I think there's an important supplementary. 1/4 The real reason Trump’s Alaska summit matters spectator.co.uk/article/the-re…
Global trade and commerce is fragmenting, fracturing into blocs. The BRICS+ share of world GDP at PPP is neither here nor there. On every econ metric that matters bar pop size, indust prod and inv/GDP (all China), CRINKs et al are minnows comp to US and US leaning nations 2/4
So, while we may not like the changes going on in the world order and geopol, esp on US side, there's no point crying over spilled milk. The 'community of shared interest', much loved by the CCP, is actually how the US and US leaning bloc works, not China's and CRINKs. 3/4
Yes, it may stick in throat that US power is now defined less thru alliances from post war era and more as patron and bestower of favours but most of the rest of world can align more easily with this rthu gritted teeth than with incompatible and mercantilist China 4/4
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This is all in line with last year's 3rd Plenum, and Econ Work Conf, and NPC earlier this month. Three things to note. 1/4 China unveils plan to ‘vigorously boost’ weak consumption via @ftft.com/content/399724…
1 There are a few demand oriented things, like the trade-in scheme confirmation, modest rises in pensions and other bens, intentions to stabilise stock prices, real estate, and encourage higher urban and rural incomes. Also paid leave, more childcare and oldies facities etc 2/4
2. But there are no details about spending programmes, and that's because the govt doesn't seem to be willing to commit > what it has already. And also cos much of what's proposed is increasing supply of consumer goods and services , which isn't the problem in China at all. 3/4
I enjoyed this, thanks to @ZichenWang for compiling these pro-consumption demand boost views. It's interesting, but also misses something imp. 1/7 These 11 Chinese mainstream economists all call for govt aids to Chinese households, by @ZichenWanghere open.substack.com/pub/pekingnolo…
Interesting cuz it adds weight to the 'something has to change' cry coming from several China economists for ages. That these Chinese economist openly call for same, is noteworthy and might be reflected in policies quite soon as the govt tries to rescue its 5% GDP target 2/7
It misses something because while all 11 argue for action to stir consumption, none take account of the huge political and institutional difficulties in altering the econ dev model so that consumption benefits not just in late 2024 & 25, but permanently 3/7
So much 3rd plenum parsing about, much of it questionable. Here are a few takeaways so far but we really have to await the Decisions doc details to be fair. But here goes, for the moment 1/6
The read out indicates party is as focused on security as on economy. No change there. But there’s an unusual big focus on international relations material. Suggests econ, security, geopol are indistinguishable. Message for foreign firms: you’ve been warned, know it or not 2/6
Anyone saying they found a new development models or meaningful reforms, refocus on private firms and entrepreneurial endeavour is whistling Dixie. Remember that Xi has been i/c comprehensively deepening reform for a decade, so all the current CDR focus is his and same 3/6
New Productive Forces is China’s new industrial policy on steroids. In this piece, I examine what it is, metrics, contradictions, and whether it can work to rescue the economy and win at geopolitics, 1/6 China’s Quixotic Quest to Innovate | Foreign Affairs foreignaffairs.com/china/chinas-q…
This will most likely be centre stage at July’s 3rd Plenum, and today the IMF is the latest to lay into the risks China is running by going he’ll for leather for a huge mfg production push, which will ‘externalise’ in effect China’s weaknesses at home by exporting to others. 2/6
It’s not just about bringing top dog in science and tech but an opportunity for Xi to exploit what he sees as Marxist contradictions arising from modern tech to upend the existing world order and end US leadership in the global system. 3/6
There is a lot wrong with this, hard to know wher to begin but let's give it a go 1/9
America is pulling up the drawbridge via @ftft.com/content/97024f…
In the first place, tariffs and protection didn't strat in the US. You have to go back to the sea change in Chinese industrial and trade policy in the 2000s to get to the heart of what we are reaping today 2/9
The scale of these tariffs is time. $18bn of imports, o/w $13 bn are lithium ion batts. In total that's <0.1% of GDP. This is not the game changer that the piece implies it is. Impact on US economy, CPI, trade will be minor or less, impact on China negligible 3/9
In this column, I argue there’s little point and much risk if the Yuan is allowed to drop significantly, but it could happen regardless 1/5 Risk of a renminbi devaluation is real via @FT on.ft.com/4a7RAhb
It’s not even about the $ as much as a) Chinese interest rates converging on zero, esp since real interest rates have surged as deflation risk has stalled China b) there’s every chance that their economy is going to fade again as policy support weakens and ….2/5
c) a very familiar Mundell Fleming problem. The bit of the trilemma China has eschewed is an open capital account, opting for a more or less soft pegged yuan and independent monetary policy. But things are changing 3/5