The second week of my recent China trip was spent in the hot, green and rapidly developing southern province of Guangxi. * My trips to China are usually to the Tier 1 cities: Beijing, Shanghai, Shenzhen and more rarely to Guangzhou. In these places you see the full achievement of the country’s remarkable economic development.… Continue Reading
Category Archives: China
Some modestly good news in the energy world
The BP Statistical Review of World Energy was published last week. It contains two pieces of particularly encouraging information. First. in 2015 coal demand fell sharply. Second, carbon emissions from energy rose at the slowest rate for 25 years (other than the immediate aftermath of the financial crisis). The report is summarised by BP’s group chief… Continue Reading
在剑桥端午节 (Dragon Boat Festival in Cambridge)
The Dragon Boat Festival is one of the traditional Chinese holidays. As there are now many Chinese people around the world, it’s celebrated in many places outside China, including Cambridge. A feature of the festival is dragon boat racing. These are rowing boats with a dragon’s head and tail, where the rowers are urged on… Continue Reading
Why Hinkley Point C is in trouble
The world’s most expensive power station project, a new nuclear reactor at Hinkley Point C in the UK, still hasn’t reached financial close, despite backing from the UK, French and Chinese governments. It might be best for the UK if it never does. The full story is told in my new book The Fall and… Continue Reading
What exactly is “the” exchange rate?
Exchange rates are ratios of the price of one currency to another. We should be careful about saying “the” exchange rate without being clear as to which particular ratio we mean and why. * Exchange rates often dominate the financial news. In 2016 the Chinese exchange rate has been frequently mentioned as a source of concern.… Continue Reading
Markets versus economics
The turbulent financial markets in early 2016 can be seen as a battle between two groups of ideas – the economists see little reason for sudden concern but the markets are worried about hidden risks * Global stock markets performed worse in the first few weeks of 2016 than in living memory. Since markets are supposed… Continue Reading
The IMF includes the RMB in the SDR basket
On 30 November 2015 the IMF voted to include the RMB (the Chinese “people’s currency” denominated in yuan) in the basket of currencies it uses to calculate the value of the Special Drawing Rights, from October 2016. This is largely symbolic but should encourage further international financial reform in China. * What does it actually… Continue Reading
Global foreign reserves are now falling
The foreign exchange reserves held by governments, having risen for over a decade, have recently fallen. This is mainly because they are being used, as intended, to protect against turbulence in financial markets that would otherwise hurt the developing economies. * Foreign reserves are assets held by governments as a safety net against abrupt changes… Continue Reading
Is a market determined exchange rate always a good thing?
For years there has been pressure on China to allow its exchange rate to be determined by market forces rather than by the central bank. Now that seems closer to happening but it might mean a fall in the RMB, which is not what most of China’s critics wanted. * For years, China held down… Continue Reading
The Chinese stock market mess may have a long term benefit
The Chinese stock market rise and fall is relatively unimportant for the Chinese and global economies but it has harmed the government’s reputation and may set back reform. But it if helps to kill the idea that the market can be controlled it will have some long term benefit. * There is an old joke… Continue Reading
Greece repays IMF using the IMF’s own “currency”
Greece this week repaid €750m to the International Monetary Fund (IMF) which it funded by drawing on its SDR account at the IMF. This legitimate but unusual move caught many commentators by surprise and drew attention to the little known SDR. * The SDR – Special Drawing Right – is something of a curiosity in… Continue Reading
Still debating the causes of the world financial crisis
Major world historical events such as the financial crisis that swept much of the world in 2007-09 typically have multiple causes. In 2014 there was an outpouring of new books about the causes of the First World War which started a century before. Historians continue to disagree about why the nations of Europe went to… Continue Reading
Letter from Mumbai
I recently visited Mumbai for the first time in over ten years. A lot had changed and India may be poised to take over from China as the fastest growing major economy. * Mumbai is the commercial, financial and film-making capital of India. I visited the city several times from 2003-2005 to set up a… Continue Reading
Western capitalism is no longer working well for most people
Since the collapse of communism, capitalism in its various different flavours is the only realistic option for countries wanting high living standards. But the US/UK variant is failing to deliver mass prosperity, which threatens to undermine it and generate a potentially ugly backlash. * The US, Sweden and Japan are all capitalist societies, meaning that… Continue Reading
Interview in China Daily on the possible Chinese investment in new British nuclear plant
UK nuclear plant may be a game changer China Daily is an English language newspaper, available in many hotels in China and published abroad. It’s often seen as a window (sometimes a rather opaque one) into Chinese government thinking, as it comments on policy, often in a fairly critical way. I was interviewed in Beijing… Continue Reading