1/8
Bloomberg: "German exports aren’t the problem; a dearth of imports and spending are. The next German government should therefore prioritize boosting domestic demand and raising public and private investment."

@chrismbryant via @opinionbloomberg.com/opinion/articl… 2/8
A "dearth of imports" is always the problem. In a closed economy, trying to grow by subsidizing domestic production at the cost of domestic demand won't work because supply cannot grow faster than demand. Goods and services are produced in order to be consumed or invested.

1/4
According to Reuters, "more than three months after groundbreaking ceremony for the Funan Techo Canal that will link the Mekong River to the Gulf of Thailand, the site of the ceremony on the bank of the Mekong laid abandoned."
reuters.com/world/asia-pac… 2/4
The article continues: "Beijing is drastically downsizing its overseas investments as its domestic economic struggles, even in countries it considers strategic partners, such as Cambodia."

1/7
ING's chief economist worries that "the consequences of deglobalisation will show up in the slow erosion of long-term productivity and economic wellbeing. It will leave us all poorer in the long-run."

I don't think this kind of muddled thinking is helpful.

ft.com/content/46ed4b… 2/7
The alternatives we face aren't between "globalization" and "deglobalization". There are many different forms of globalization, and what we should be discussing is not whether or not we want "globalization, but rather the form of globalization that maximizes global welfare.

1/7
SCMP: "China will lower its tax rebates for exports of solar and lithium battery products, seeking to ease international concerns about overcapacity in its new-energy sector, which has led to rising trade tensions."

via @scmpnewssc.mp/4az3j?utm_sour… 2/7
"It is possible that Beijing might want to contain the risks of excessive capacity before the US takes action, by discouraging firms from unrestrained expansions."

But while lowering tax rebates for certain sectors may indeed reduce exports from those...

1/10
Bloomberg: "Critics say such an approach is more akin to spinning a roulette wheel at a casino than a sound investment strategy, and excessive speculation has regularly magnified volatility and led to frequent boom-bust cycles."

via @businessbloomberg.com/news/articles/… 2/10
The speculative nature of China's stock market is often blamed on the immaturity of its large "unsophisticated" retail base, but that gets the causality backwards. It is highly speculative for structural reasons, and investors are just responding to that structure.

1/6
October's economic data was positive for Chinese growth in the short term, but much less so either for longer-term growth or for rebalancing. The best news was that growth in retail sales (a proxy for consumption) was well above expectations.

scmp.com/economy/econom… 2/6
SCMP: "Retail sales increased by 4.8 per cent year on year last month, compared with the 3.2 per cent growth in September, marking the highest level since February. The reading beat expectations of 3.9 percent growth."

1/9
I usually agree with Martin Wolf, but here I think he is conflating two very different things. The problem with the US role in the global trading system is not that a given unit of manufacturing, over time, employs...
via @ftft.com/content/aee57e… 2/9
progressively fewer workers. It is that, over time, the share of manufacturing in US GDP and that of other advanced deficit economies is declining much faster than the manufacturing share in advanced surplus economies.

1/4
Yicai: "The debt resolution plan mainly involves debt replacement, not debt reduction, meaning the responsibility for resolving the liabilities still lies with local governments, said Wang Lei, director at S&P."

I think this is a good thing.

yicaiglobal.com/news/financial… 2/4
Resolving bad debt just means recognizing and allocating the losses. The sooner local governments are forced to resolve their bad debts by writing them down against existing assets, the lower the associated financial distress costs that will accrue to the overall economy.

1/5
Yicai: As results of efforts to stimulate the economy, "two key gauges of China’s money supply picked up last month as M2 grew quicker and M1 slowed its pace of shrinking for the first time in the past six months."

yicaiglobal.com/news/china-imp… 2/5
Will monetary easing stimulate economic growth? It depends on what we mean by growth. If we mean further supply-side expansion, then yes, it might, although the amount of supply-side expansion generated by monetary expansion is constantly decreasing.

1/7
Yicai: "China’s local government debts are mainly a result of capital expenditure, which supported the construction of a large number of transportation, water conservancy, and energy projects. These assets generate sustainable income, and they...

yicaiglobal.com/news/china-can… 2/7
not only provide strong support for high-quality economic development but are also important sources of debt repayment funds."

This is (or at least it used to be) the most common explanation of why rising debt at the local-government level was not a problem.

1/10
"“The US trade deficit is a sign of strength of America because it can only prosper with the dollar,” said former WTO chief Pascal Lamy."

In fact the idea that the US can "only prosper" with the dollar is near-total nonsense.

via @economicsbloomberg.com/news/articles/… 2/10
The article goes on to explain his logic: "Owning the world’s dominant currency has helped hold down US borrowing costs and allowed the US government to take on debt that’s much bigger than its annual economic output without having to pay a premier to creditors."

1/7
Caixin: "“A growing consensus is emerging around strengthening demand-side management, with macroeconomic policies shifting from an investment-led focus to a balanced approach that gives equal priority to consumption and investment, with greater...

caixinglobal.com/2024-11-12/chi… 2/7
emphasis on consumption,” said an expert close to the PBOC."

This would be good for China if it were to happen, but we've been talking about this for years now, and there has been an almost astonishing lack of followthrough.

1/7
"How will Trump victory affect China’s shift away from US dollar assets?", the SCMP asks.

That sounds like an important question under a more aggressive Trump administration, but it is just as meaningless as it always has been.

via @scmpnewssc.mp/qle7d?utm_sour… 2/7
Unfortunately, there will be little change. I say "unfortunately" because if foreigners purchased fewer dollar assets with the their excess savings, it would better for the US economy (although not better for Wall Street, which would hate to see a less dominant dollar).

1/10
This Bloomberg article illustrates the problem China and the world face: "Steel exports from China hit the highest level since 2015, risking further frictions with trade partners as Chinese mills boost overseas shipments amid weak domestic demand."
bloomberg.com/news/articles/… 2/10
Both sides are in a very difficult position. China has shown itself completely unable to boost the domestic consumption share of GDP, even as it continues to maintain economic activity the only way it knows how – by boosting domestic production.

1/8
I agree. This is a very good little essay by Angus Deaton on his "second thoughts" on mainstream economics, including his reassessment of what he used to think about free trade.

https://twitter.com/DiegoCastaneda/status/1855806279328968710

2/8
Among other things he says in his essay: "I am much more skeptical of the benefits of free trade to American workers and am even skeptical of the claim, which I and others have made in the past, that globalization was...

1/11
A new paper by the NBER on the McKinley tariffs of the late 1890s claims that the US economy did not benefit from the tariffs, mainly because they "may have reduced labor productivity in manufacturing."

bloomberg.com/opinion/articl… 2/11
Tyler Cowen (along with a number of other economists and journalists) argues that this paper is evidence that if the US were to impose tariffs today (or other trade intervention policies, presumably), they too would hurt the economy.

1/10
This very interesting WSJ article discusses the potential impact of import tariffs on US manufacturers, but like many similar analyses, it tries to asses this impact on an industry-by-industry basis.

via @WSJwsj.com/business/trump… 2/10
This kind of incremental approach misses the point. In every country, changes in the external balance must accommodate or reflect changes in the internal balance. You cannot look at the impact of price effects on each industry in isolation, and then add them together.

1/4
October inflation data are out. The weak stimulus measures of recent weeks led some of us to wonder if perhaps Beijing had been seeing signs of a stronger-than-expected pickup in consumption in October, but so far this doesn't seem to be the case.

english.news.cn/20241109/25a8e… 2/4
Yesterday's trade date were terrible, showing a 12.7% surge in exports matched by a very disappointing 2.3% decline in imports. It is pretty clear that Chinese demand for tradable goods simply cannot keep pace with supply.

1/8
China's October trade numbers seemed almost designed to strengthen trade hawks in the incoming Trump administration. Exports were up a massive 12.7% year on year, the highest increase since COVID times.

globaltimes.cn/page/202411/13… 2/8
The surge in exports would have set off an equivalent surge in imports if export revenues had been distributed in a balanced way within the Chinese economy, but with such a low share going to households, imports actually declined 2.3% year on year.

1/8
SCMP: "Chinese localities are redoubling their efforts to meet annual targets for economic growth in the final quarter of the year, calling on officials to accelerate investment, enhance consumption, and increase...

via @scmpnewssc.mp/frov4?utm_sour… 2/8
foreign trade as the window of opportunity begins to narrow."

It's almost as if they believe the slowdown in growth this year had been caused by official forgetfulness rather than by structural problems.

1/8
SCMP: "Chinese President Xi Jinping has called on provincial leaders to be patient about the pace of economic reforms, cautioned them against trying to solve problems hastily, and urged them to break down the fences of...

via @scmpnewssc.mp/fvvpi?utm_sour… 2/8
vested interests in each province in favour of a national market and to avoid “selective law enforcement”."

This is something I've discussed with my students for years.