1/10

The latest IMF report on China was released yesterday and provides a lot of good information and intelligent insight on the Chinese economy. The IMF’s measure of China’s adjusted fiscal deficit (including estimated off-budget

2/10

spending) is projected to rise to 18.2% of GDP in 2020 from 12.6% in 2019. The authors correctly note the worrying surge in debt and warn that Beijing must continue to try to contain financial stability risks, but I notice that they are projecting average GDP...
3/10

growth of just over 6% between 2012 and 2025, including a downward revision of their 2021 forecast from 8.2% to 7.9% (which I still think is a little high).

As I’ve long argued, it will be impossible for China both to control the surge in debt and to achieve growth...
4/10

targets above the real underlying growth rate of the economy, which I suspect is 2-3% at best. I know the IMF is constrained in what it is able to say about the Chinese economy if it wants to remain part of the advisory process, but I do think that after 10 years...
5/10

of watching this game we should be a lot more explicit about the relationship between unreasonably high GDP growth targets and high credit growth. There really is no point in advising Beijing to get financial risks under control while at the same time approving...
6/10

GDP growth targets that cannot but result in out-of-control increase in debt. The former requires the latter: if China grows by an average of 6% over the next five years, total social financing will rise from roughly 280% of GDP today to at least 320-40% of GDP.
7/10

The IMF also recommends that China do more to rebalance domestic demand towards consumption, which Beijing has been saying it would do since at least 2007. To do so it proposes expanding unemployment benefits, increasing transfers to low income households, enhancing...
8/10

public healthcare and otherwise strengthening the social safety net. This all makes sense, of course, but it is only half the story. Transfers involve not just “transfers to” but also “transfers from”. If Beijing permits these transfers to be funded by local government...
9/10

borrowing, as they always have been, it cannot resolve the underlying problem. Higher consumption only comes at the expense, in that case, of more local-government debt, and the whole point of rebalancing is to get Chinese growth to depend less on debt. I understand...
10/10

that this is an intensely political problem and very hard to resolve, which is perhaps why the IMF is staying clear of it, but the key to rebalancing demand, just as the key to resolving debt, is how to allocate the costs. The benefits are obvious.

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MISREPRESENTED CONTEXT

1. I am indeed disgusted with attempts to misrepresent and take out of context what I wrote on my blog yesterday.


2. Those who did that highlighted only one part of paragraph 12 which read: “Muslims have a right to be angry and to kill millions of French people for the massacres of the past.”

3. They stopped there and implied that I am promoting the massacre of the French.

4.If they had read d posting in its entirety & especially the subsequent sentence which read: “But by & large the Muslims hv not applied the “eye for an eye” law. Muslims don’t. The French shouldn’t. Instead the French should teach their people to respect other people’s feelings

5. Because of the spin and out of context presentation by those that picked up my posting, reports were made against me and I am accused of promoting violence etc… on Facebook and Twitter.

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I'm going to do two history threads on Ethiopia, one on its ancient history, one on its modern story (1800 to today). 🇪🇹

I'll begin with the ancient history ... and it goes way back. Because modern humans - and before that, the ancestors of humans - almost certainly originated in Ethiopia. 🇪🇹 (sub-thread):


The first likely historical reference to Ethiopia is ancient Egyptian records of trade expeditions to the "Land of Punt" in search of gold, ebony, ivory, incense, and wild animals, starting in c 2500 BC 🇪🇹


Ethiopians themselves believe that the Queen of Sheba, who visited Israel's King Solomon in the Bible (c 950 BC), came from Ethiopia (not Yemen, as others believe). Here she is meeting Solomon in a stain-glassed window in Addis Ababa's Holy Trinity Church. 🇪🇹


References to the Queen of Sheba are everywhere in Ethiopia. The national airline's frequent flier miles are even called "ShebaMiles". 🇪🇹