Category Archives: China

Why I’ll be watching Japan in 2013

Every country is unique but some are more unique than others. Japan, though quite obviously not located in the geographic western hemisphere, is part of “the west” as a group of rich democracies with advanced economies. Its inclusion is not because it has any historic link to the west, unlike other eastern hemisphere economic success… Continue Reading

Chinese investment – too much of a good thing?

A key feature of macroeconomic analysis is the relationship between a country’s savings and investment rates. Savings represent income that is not consumed. Investment means spending on assets that will last for some period of time, such as factories, houses, cars and infrastructure. Savings are resources – you cannot invest if you don’t set aside… Continue Reading

China’s solar power sector in deep trouble

Last year a group of MFin students did a consulting project for a specialist energy investment firm, comparing the investment prospects for solar and wind power in China and India. They were very negative about the outlook for China, on the back of excess capacity and some quality problems with wind turbines. The client was… Continue Reading

China’s balance of payments: current and capital accounts now pulling in different directions

Every country’s economic relations with the rest of the world are summarised in the balance of payments. This is divided into the current account, which records the flows of trade and income, and the capital account, which records the flows of financial assets and liabilities. Usually countries have a deficit on one and a surplus… Continue Reading

Financial repression: China versus India

Financial repression is a term used by economists which means the government taking ordinary people’s savings to achieve some goal, typically to pay for the government itself, by exploiting imperfections in the financial system. It is an indirect form of a much more widespread process, that of governments (or the elites which control them) commanding… Continue Reading

Internationalisation of the RMB: what does that mean?

A phrase that pops up regularly in Chinese financial and economic commentary is the internationalisation of the RMB (renminbi – the people’s currency). What does this actually mean? Internationalisation is not an official or recognised economics term but China uses it to convey what economists would term a move to currency “full convertibility”. What does… Continue Reading

Dragon ladies

The myth of the scheming woman is one that pops up in many cultures. In the UK, for example, we talk of Lady Macbeth when we want to describe a devious woman who is held responsible for a hapless mere man’s crimes and downfall. This entertaining article in Foreign Affairs gives the Chinese example of the… Continue Reading

The Chinese (banks) are coming

Last week, amid all the fuss about the French and Greek elections, the Federal Reserve Board approved the acquisition by the world’s largest bank by value, ICBC (Industrial and Commercial Bank of China), of a majority stake in the Bank of East Asia’s US banking business. ICBC, together with its parent organisations CIC (China Investment Corporation) and… Continue Reading

Some new book recommendations (1): Why Nations Fail

Daron Acemoglu and James Robinson: “Why Nations Fail“ There have been many fascinating books in the last couple of decades on the big question of why some countries are rich and others poor, and the persistence of inequality over decades, even centuries. Jared Diamond’s “Guns, Germs and Steel” and David Landes’ “The Wealth and Poverty… Continue Reading