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

1/9

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.

2/9

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...

3/9

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.

4/9

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...

5/9

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.

1/11

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

2/11

through "a period of turbulent change", in Beijing’s words, and great structural adjustments, but usually when that happens, what matters in the long run is not how stable a system seems but rather how successfully political, economic and social institutions adjust to...

3/11

the new conditions. In the past these adjustments have almost always been messy, chaotic, and disheartening to most, but ultimately they were necessary even if we were unable to judge them so at the time.

I would argue that the world today is undergoing both a reversal...

4/11

and rejection of the current model of globalization and an urgent need for most countries in the world, including China, to initiate a major rebalancing of the way income and wealth (and ultimately political power) is distributed, but there are few if any historical...

5/11

precedents in which this level of restructuring and rebalancing have been neat or orderly.

Beijing's response, which is to do whatever it takes to maintain stability, may look good in the short term, as this strategy always does, but if it prevents the necessary...

1/16

It is a little frustrating to see the response many analysts had to the GDP growth data Chinese released today. These numbers aren’t especially good, and they certainly shouldn’t have been surprising. Back in April and May, when most

2/16

were projecting negative or barely positive GDP growth for China in 2020 (the OECD, for example, expected China’s GDP to contract by 3.7%), I insisted that GDP growth for 2020 would be positive, and probably between 2% and 3%.

Today, it was reported as 2.3%. How did...

3/16

I know? Because I knew that while most of the healthy sources of Chinese growth would contract (except for exports, which would expand given Beijing’s intense supply-side response to the impact of Covid-19), Beijing was going to respond to a significant...

4/16

worsening of the healthy parts of its economy by unleashing enough of the unhealthy, non-productive growth it has long tried to constrain – basically real estate and infrastructure investment – in order to achieve as much economic activity as it...

5/16

needed for domestic political ends.

And that’s exactly what happened. While GDP grew by 6.5% in the fourth quarter, even with substantial tailwinds its retail sales measure – a proxy for consumption – was only up 4.6%, and it was down 3.9% overall in 2020.

1/9

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

2/9

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...

3/9

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...

4/9

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...

5/9

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...

1/10

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...

2/10

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...

3/10

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.

4/10

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...

5/10

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.

The Great Northern Forests of Canada, Russia and Scandinavia are doomed to destruction due to the most severe expected temperature increases from global warming anywhere on Earth which will turn them to savannah within decades with severe consequences for all life on Earth.

*An extensive review of studies published in the journal Science found that the boreal forest can't migrate north fast enough to outpace the impacts of a changing climate.*

"This forest will convert to a type of savannah."

'consequences..will be

'feedback loops created by permafrost melt and wildfire destruction represent just a few of the worrisome effects of climate change in the boreal. Boreal forest ecosystems are particularly at risk to the rising temperatures of climate change'.

'Worrisome'!https://t.co/zZNKrRnqoZ

'Boreal forests aren’t just important for the climate. They are also home to over 20,000 species and of these more than 300 species listed in the IUCN Red List.. from woodland caribou in North America, and Blakiston’s fish owl in Russia, to Siberian

'When you add up both the absorption and emission, Canada's forests haven't been a net carbon sink since 2001. Due largely to forest fires and insect infestations, the trees have actually added to..greenhouse gas emissions for each of the past 15

A Thread
Joseph Hope, Editor-in-Chief of the New York Times:
Narendra Modi's sole aim is to make India a better Country.If he is not stopped, in the future India will become the most Powerful Nation in the World.. It will surprise the United States, the United Kingdom & Russia

Narendra Modi is moving towards a specific goal.. No one knows what he wants to do..

Behind the Smiling face, a dangerous Patriot.. He uses all the Countries of the world for the benefit of his Nation India..

Destroyed US ties with Pakistan and Afghanistan..

Narendra Modi has created an alliance with Vietnam, shattered China’s Superpower dream and made use of the 3 Countries.The longrunning dispute over oil extraction overseas between Vietnam and China has benefited India.. With India's support,Vietnam began producing Oil

In China's Southern Seas..
It supplies all of its Oil to India.. The United States has different support for this. He made Pakistan a poor Country.He brought the Port of Iran under his control.

He has set up an Indian Military base on the border with Afghanistan,very close to the area that divides Pakistan. In order to increase Indian trade, he has also built a route through Iran (leaving Pakistan) to Afghanistan..
Narendra Modi’s desires are going one by one.

#NEIOH

1. Beloved Ones!

We Have Important Matters To Discuss With You!  If You Believe This Is A Joke, You Should Leave Now. We Do Not Joke When It Comes To This Planet. AKATU Will Lighten Things To Cheer You. What We Share Now Will Inform You.

Portugal is famous for its mild climate and sunny beaches, but each year hundreds of people freeze to death and millions struggle to survive frigid winter weather.

Here's a quick thread based on my @POLITICOEurope story on Portuguese energy poverty

When I lived in Lisbon my friends and I joked that although the Portuguese were famous for melancholia, uncharacteristic (and unrealistic) optimism defined their approach to thermal insulation: homes seemed to be built as if the weather was expected to be perfect year-round.

While the weather is, indeed, really great for most of the year, it can also be really awful sometimes. In the Summer temperatures can shoot up to truly unbearable levels for weeks on end, and in the Winter the icy humidity can easily make you feel like you're freezing 24/7.

This reality is a huge problem precisely because so many Portuguese people live in homes that don't have the capacity to shelter them from the heat when temperatures rise and the cold when they drop. And that means that every year that means people die because of the weather.

This issue can be traced back to the rural exodus that took place during the second half of the XX century, when millions fled the interior to seek better futures either outside the country — immigrating to France, Germany and Luxembourg — or in cities like Lisbon and Porto.

NEW:
BBC has seen the official internal management data for the new post Brexit freight border - roll on roll off lorry outbound flows to EU now at 98% of last February - though was 73% in January... officials say “back to normal”...

That is reference to lorry flow rates - which is what Cabinet Office key committees most concerned about post Brexit in terms of knock on social impact for supplies of everything. Government now confident its “reasonable worst case scenario” of 7k lorries in kent won’t happen...

That is not same as saying trade has normalised - drawing on multiple sources - ferry manifests, Kent checks, french official data - the level of empty lorries on the short straits is around 50%, and was normally around 30%... ...

traffic here was 67% normal in Jan - 82% in feb

Combining those and you get to around 2000 fewer laden export trucks a day in January, still notable fall now. Officials say much was displaced into last year by stockpilers. On other hand French transport sources suggest the higher value Tunnel export empties more like 50-60%

Officials have been tracking the commodity codes on the ferry manifests and have distinguished between freight flows hit so far in 2021 by general COVID downturn - eg clothing and apparel, and post Brexit transition - agriculture, food and groupage