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An article worth thinking about: “As changes to the world structure accelerate, China’s rule is in sharp contrast with the turmoil in the West,” says Beijing.

I agree, but I draw a different conclusion. The world is certainly currently

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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

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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...

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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...

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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...

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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...

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Good article. But while growing international criticism and rising trade tensions may have had some impact, as the article suggests, I don’t think they really explain the great reversal in BRI lending of the past few years.

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As I have been writing since 2011, China’s development lending was always likely to follow the pattern of other countries when they first “went out” (e.g. the US in the 1920s, USSR in the 1950s, Japan in the late 1970s). Because of little historical...

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knowledge and no previous experience, an early rapid rise in development lending would be driven mainly by underestimating risk and an overestimation of their own business "success" in making loans, and would of course be further supported by geopolitical ambitions.

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This combination would inevitably lead to bad lending decisions, followed just as inevitably by debt restructuring, loan losses, and a contraction in development lending. In the 1920s, for example, the US set off quite explicitly and aggressively to displace England in...

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Latin America, and American businesses and banks assumed they “understood” Latin America much better than the English did, in spite of the vast English experience there, but their early displacement of British lending only resulted in the huge loan losses of the 1930s.

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This is a really tough problem to resolve, especially if the massive increase in inflows from the trade and financial accounts are sustained, as I expect they will be well into 2021.

Clearly the PBoC would like to see the RMB gradually...

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strengthen. This would keep financial markets stable and promote rebalancing, but the RMB has already strengthened a lot, and this puts unwanted pressure on exporters and “international circulation”.

Although PBoC reserves have been flat, other state-controlled Chinese...

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banks have bought large amounts of dollars, but this is expensive. If these banks have half a trillion dollars of exposure, for example, they are losing at least $15-17 billion annually on negative carry, plus another $20-30 billion just this year from the rise of the RMB.

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Beijing seems also to be trying other measures to slow the rise. The regulators are relaxing capital controls on outflows. In mid October the PBoC cut to zero the reserve requirement ratio for banks doing FX forward trading. This requirement was created in 2018 to reduce...

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downward pressure on the RMB. In late October it suspended the counter-cyclical factor in RMB fixing, which was introduced in 2017 also to reduce downward currency pressure. But in both cases while the RMB dropped a few pips on the news, it quickly resumed its upward climb.

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While debt-to-GDP ratios already have a limited but very misunderstood use, it seems economists are finding bright new ways of misunderstanding them. Now we say that when nominal interest rates are lower than nominal growth rates, the

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downward pressure on the debt-to-GDP ratio makes rising government debt and larger government deficits more sustainable and more easily justified.

This is totally confused. When the nominal interest rate is lower than the nominal GDP growth rate, it only means that net...

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borrowers are getting a disproportionate share of growth relative to net lenders. This in and of itself changes the comparability of the debt-to-GDP ratio, so the fact that the ratio may decline tells us nothing about its sustainability which, I'm glad to say, isn't...

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a mistake Olivier Blanchard makes in this article.

At least three things matter. First, whether or not rising debt is sustainable depends almost wholly on underlying conditions in the real economy, and only trivially on the arithmetical relationship between...

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the interest rate and the growth rate. Second, this approach simply assumes away financial distress costs, in which case debt capacity is infinite anyway and the interest rate becomes irrelevant. And third, it assumes that the nominal debt level matters independently...

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China is aging so rapidly that it urgently needs to address the problem of a rapidly declining work force in a slowly declining population. To give an idea of relative population changes among the three most populous countries, today

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are 4.3 Chinese for every American and 4.7 Chinese of working age (ages 15-64), while there is just over 1 Chinese for every Indian and 1.1 Chinese of working age.

By the end of the century, however, there are expected to be 2.5 Chinese for every American and...

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just 2.4 Chinese of working age, while there will be 1.4 Indians for every Chinese and 1.5 Indians of working age. Over the rest of this century, in other words, while China’s population declines quite rapidly relative to that of the two other most populous countries, it...

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also switches from having a much better dependency ratio than either to having a worse one than either, with far more of its dependents being the elderly rather than children. In effect its working age population will drop by half relative to those of the other two.

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This is going to be a very tough problem to resolve, although to the extent China succeeds, it will be very useful as an example for other countries. I am not sure they are going about it the right way, however. Making seniors make better use of smart technology sounds...

First Minister @NicolaSturgeon: "Good afternoon, and thanks for joining us today. I've got quite a lot to cover in my opening remarks today so please bear with me, but it's all by way of important and, I hope, useful update to you."

NS: "First of all, to today's statistics. The total number of positive cases reported yesterday was 2,649."

NS: "That is 11.3% of the total number of tests carried out, and the total number of confirmed cases is now 143,715."

NS: "660 of the new cases are in Greater Glasgow and Clyde, 389 in Lanarkshire, 357 in Lothian and 302 in Tayside. The remaining cases are across 9 other health board areas."

NS: "I can also confirm that 1,467 people are currently in hospital. That is an increase of 83 from yesterday."

Charles Walker, Vice Chair of the 1922 Tory backbench committee in the Commons tells TWTW that he thinks the government knew it intended to “cancel” Christmas on Wednesday or Thursday but waited for Parliament to rise to do it. Says many of his colleagues find this “egregious.”

When put to Walker that Matt Hancock said this morning that wasn’t the case, it was the briefing on Friday which prompted the decision, Walker says: “Hmm yeah...well I’d have to disagree with the SoS on that.” So he’s either saying Hancock isn’t being truthful or is misinformed.

Walker: “Surely at some stage a senior government minister has say I’ve offered my resignation to the Prime Minister and the Prime Minister has to say- very early I’ve had to accept this.”

Reminder- Charles Walker is Vice Chair of the Tory backbench committee.

Walker heavily implies it’s Matt Hancock he wants to see resign: “I’m not asking for the government to collapse. I’m asking for a Secretary of State to take some responsibility.”

The Charles Walker interview is extraordinary in what he is inferring. A senior Conservative MP is essentially accusing his govt and ministers of deceit about what they knew about the new strain and when and by implication the timing of the new lockdown.

At least six people providing security for Roger Stone participated in the Capitol attack, our new Visual Investigation shows. Here's how the guards (all Oath Keepers) went from guarding Trump's longtime confidant to standing inside the Capitol on Jan. 6:

Mr. Stone, a convicted felon who was pardoned by Mr. Trump, has a long history as a self-proclaimed “dirty trickster” political operative. On Jan. 5 and 6, Oath Keepers provided security for him, something he himself confirmed.

We combed through hundreds of videos and photos and drew on research from @CTExposers to visually identify Mr. Stone's guards on Jan. 5 and 6. — from that group, these six entered the Capitol during the insurrection.

Here's how. On Jan. 5, Mr. Stone made two public appearances in D.C. in support of Mr. Trump’s baseless claims of election fraud. In the afternoon, he spoke in front of the Supreme Court. Five of the six Oath Keepers we’re tracking can be seen in this video.

The Oath Keepers are a far-right, anti-government militia — and there's plenty of footage to visually identify them around Mr. Stone on Jan. 5 and 6. Here's another video from that same event in front of the Supreme Court.

CAPITOL RIOT QUESTIONS FOR SPEAKER PELOSI: There is no group in America more interested in the safety and security of the Capitol than members of Congress. To that end, members have asked @SpeakerPelosi to answer these basic questions:

1/ What was your role in authorizing or denying National Guard support before and after Jan. 6?

2/ Reps. Rodney Davis, R-Ill., Jim Jordan, R-Ohio, and James Comer R-Ky., on Feb. 15 asked you five pointed questions about your role in Jan. 6 and your preservation and compliance with document requests. Will you answer them?

3/ After the 2011 shooting of now-former Rep. Gabby Giffords, D-Ariz., what changed with regard to security?

4/ After the shooting of Republican House Whip Steve Scalise, R-La., were any changes made to security?