International Law

Misc. China Stuff from Newsweek

By Stan

Newsweek is chock full of China-y goodness this week. To wit:

1. Why Beijing is in a Risky Place

This is a doom and gloom article that says China’s economy is not even close to being decoupled from the U.S. (and presumably the rest of the West), that the shock to exports/manufacturing sector will be horrendous, and that stability might be threatened here as a result. Some very scary quotes from Stephen Roach, Michael Pettis and others. Some good discussion of the China stimulus package as well, including the issues of new vs. old spending, prioritization, and federalism. This is tough stuff - do not read this unless you’ve had a couple of beers first.

2. A Path Out of the Woods

This is from Fareed Zakaria and is focused on the U.S.-China bilateral relationship.  The article is rather fluffy, meaning not a lot of substance. Zakaria buys into the "China needs to prop up the U.S. by buying T-bills" argument that has been challenged quite well recently. Michael Pettis’ post on the topic is highly recommended (he also criticizes Zakaria’s position). Other than that, telling us all how important the bilateral relationship is, and how important China is globally, well . . . he couldn’t have found something a little less obvious to write about?

3. Too Large to Grow So Fast

This starts off as a "China will experience a hard landing" type of article, which is rather vanilla, but I would urge you to push through that to get to the good stuff. This turns into a well-balanced piece on why China’s growth must slow down, why that is not necessarily a bad thing, a few things to be afraid of, and where the economy is heading. Best article so far in this list, and interestingly enough, also written by an outside (Morgan Stanley) author.

4. He Called the Bust

Gotta call bullshit on this one. So Newsweek looked around at all the forecasters out there and found one who predicted a big slowdown in China, along with a global economic meltdown. Here’s a guy who cites the U.S. housing bubble and the weird bond market — look, everyone who wasn’t being paid to stick their head in the sand was aware of all this. He’s getting a pat on the back for that? I was hearing the same stuff on talk radio in D.C. in 2004. He also rightly mentions that the Asian Financial Crisis and the inadequate social safety net here in China have contributed to the huge savings glut here. Yes, but I reiterate: why does this qualify this guy for guru status? I understand that Newsweek is a weekly publication, but I think their editorial dept. can manage to be a little more timely than this.

OK, so check out #3, which is the only really worthwhile article here. If you want to be depressed, you can also check out #1, but I would suggest reading Michael Pettis at the same time for a reality check.

Full post as published by China Hearsay on November 24, 2008 (boomark / email).