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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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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.

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...

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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...

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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...

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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.

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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...

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

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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...

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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...

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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...

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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...

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

President Muhammadu Buhari’s romance with Niger Republic has become an affront to the national interest of Nigeria. When he was sworn-in as an elected president in 2015 he went to Mamadou Issoufou’s presidential palace in Niamey, Niger Republic, to celebrate.

They gave him the reception of a conquering Fulani warlord: a white horse and sword.
I found that curious. How can a Nigerian leader celebrate his electoral victory in a foreign country and not Daura, his supposed hometown in Nigeria?

Answer has since been provided through Buhari’s policy actions in the past 5+ years. We have since learnt that Buhari is a first-generation Nigerian whose father, Ardo Adamu Buhari, a duck seller, had migrated from Niger, settled in Nigeria and married a Nigerian woman, Zulaihat.

The borders defined by the European colonial masters mean nothing to typical Northerners. When you hear that Nigerian borders are porous, what it really means is that there is no intention in the minds of Northern Nigerians and their elite to create an effective barrier between..

them and their kith and kin in the neighbouring countries of Niger, Chad and Northern Cameroun. Meanwhile, the Southern borders are strictly monitored (within the limits permitted by the selfish interests of corrupt Customs and Immigration officials).

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.