The China Syndrome


China's ascension to the world's second-largest economy, surpassing Japan, has led to predictions that it will inevitably snatch the No. 1 spot from the United States. Nomura Securities envisions China surpassing the U.S.' total GDP in little more than a decade. And economist Robert Fogel predicts that by 2050 China's economy will account for 40% of the world's GDP, with the U.S.' share shrinking to a measly 14%.

Americans indeed should worry about the prospect of slipping status, but the idée fixe about China's inevitable hegemony--like Japan's two decades ago--could prove greatly exaggerated. Countries generally do not experience hyper-growth--the starting point for many predictions--for long. Eventually costs rise, internal pressures grow and natural limitations brake and can even throw the economy into reverse.  read more »

China's Sliver of a Housing Bubble


Few finance issues have received such a wide range of opinions among financial experts than the "housing bubble" in China. This is an issue of international importance because what happens in what is now the world’s 2nd largest economy affects the rest of the world.  read more »

Tribes And Trust


Only Tribes held together by a group feeling can survive in a desert.

--Ibn Khaldun, 14th century Arab historian

Time to chuck into the dustbin the cosmopolitan notions so celebrated at global conferences: a world run by wise men of the United Nations, science-driven socialists or their ostensibly more pragmatic twins, global free marketers. We are leaving the age of abstractions and entering one dominated by deep-seated ethnic, religious and cultural loyalties, some with roots from centuries and millennia ago.  read more »

Distilling China’s Development


The economic rise of China has created two growth industries pulling in opposite directions. There’s either the school of blind praise of ‘The China Miracle’ or its opposite, apocalyptic predictions about the country’s impending implosion.  read more »

The Democrats' Middle-Class Problem


Class, the Industrial Revolution’s great political dividing line, is enjoying Information Age resurgence. It now threatens the political future of presidents, prime ministers and even Politburo chiefs.

As in the Industrial Age, new technology is displacing whole groups of people — blue- and white-collar workers — as it boosts productivity and creates opportunities for others. Inequality is on the rise — from the developing world to historically egalitarian Scandinavia and Britain.  read more »

Immigrant Entrepreneurs Can Turbocharge Cleveland’s Flagging Economy


In seeking to lure a Chinese lightbulb-maker to town, Cleveland leaders revealed both a vision and a blind spot.

Cleveland Mayor Frank Jackson and his team should be given credit for recognizing the tremendous opportunity in attracting foreign direct investment, or “FDI,” and the new jobs that it provides.  read more »

China’s Urban Challenge: Balancing Sustainable Economic Growth and Soaring Property Prices


Today, Beijing seeks to balance strong economic growth and soaring prices amidst a severe global crisis and debt turmoil in advanced economies. The challenge is colossal – to provide urban space for more than 600 million people in the coming decades.

For months, the famous hedge fund wizard, James Chanos, has been predicting a severe Chinese property slump. As he puts it, “Dubai times 1,000 – or worse,” with the “potential to be a similar watershed event for world markets as the reversal of the U.S. subprime and housing boom.”  read more »

Racing China: The Australia Housing Bubble


"The writing is on the wall for the Australian dream," according to Professor Joe Flood at the Flinders University Institute for Housing, Urban and Regional Research. That was before recent predictions that Australia's overheated housing market may be headed for even higher prices. Real estate experts have recently predicted a doubling of house prices in all five of the largest metropolitan areas over the next decade.  read more »

Shanghai: The Rise of the Global City


The opening of the World Expo heralds Shanghai’s coming of age, the rising economic might of China, and the financial power of Asia’s legendary metropolis.

But that’s only part of the story. The World Expo also reflects the rise of Shanghai as a global city and the intensity of competition among emerging Chinese mega-cities.  read more »

A Carbon Added Tax, Not Cap and Trade


Paul Krugman devoted a recent lengthy New York Times Magazine article to the promotion of a disastrous “cap and trade” regime for reducing carbon emissions. Though he doesn't outright endorse it, he strongly suggests that the Waxman-Markey bill that passed the House would be acceptable to him. Krugman then proceeds to pooh-pooh the carbon tax idea, one that I believe has far more merit.

Cap and trade would be a debacle for a slew of reasons. The most important is that it won't even reduce carbon emissions.  read more »