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China’s economy does not need to grow at 7.5 percent a year. What matters is that Chinese households continue to improve their lives at the rate to which they are accustomed.
If China is to rebalance its economy, the policies that subsidized Chinese exports must be reversed. As this happens, manufacturing in the rest of the world will surge.
Brazil, Russia, India, China, and South Africa are setting up a development bank. That is good news, as it increases their stake in a rules-based liberal world order.
Moscow has overcome its shock over the Cypriot bailout, even finding the deal useful domestically. But the crisis has profoundly changed Russian attitudes toward Europe.
Beijing is facing a financial dilemma: it must reduce investment and slow the growth of debt, but if it does so it will face stiff opposition from vested interests.
The decision to endorse a bailout deal that included a levy on bank deposits was legally dubious, morally unjustifiable, managerially inept, and economically foolish.
By embracing the proposed Transatlantic Trade and Investment Partnership, political leaders can send a strong message of support for open markets and liberal capitalism.
Growth will not return to Europe until Europeans heed the lessons of past financial crises and permanently resolve their debt problems.
The old transatlantic partnership, centered on security, is in decline. But an emerging new partnership, built around a transatlantic marketplace, offers the prospect for Europe and the United States to build a strong pillar of liberal world order.
The euro crisis cannot be resolved if only low-savings countries adjust, because their low savings rates may themselves have been caused partly by high savings abroad.
While the idea of creating a Transatlantic Free Trade Area has ignited the imagination of strategic thinkers in Europe and America, the project may still fail over mundane details.
This year may mark the beginning of China’s most difficult period since the beginning of the reforms in 1978.
Without a huge increase in German spending, there is no way to eliminate years of unemployment, in which case Madrid must quickly decide whether the pain will be paid by German households or by Spanish households.
Europeans are so concerned with the crises in peripheral economies that it will come as a surprise that we may be at the beginning of a developing crisis in China.
Right now, the euro looks more likely to survive than it has for a number of months. Yet the price to pay may be the return of inflation to Germany, and to the rest of Europe.
Just as there is no big bazooka for the financial crisis, there will be no big bang to mark the genesis of real European political integration.
Merkel is still convinced that austerity and reforms are the way forward to save the euro and make Europe more competitive.
What we are observing on the world scene is not so much the decline of the West as the rise—and a very uneven one—of some of the rest.
No matter which party wins on Sunday, Greece’s next government needs to achieve a giant leap in political culture if it is to make the Greek economy more competitive, the state more efficient, and civil society more vibrant.
Every week leading experts answer a new question from Judy Dempsey on the international challenges shaping Europe’s role in the world.
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