China: Size Matters

By Steven Barnett (Version in  中文 and  Español) Mongolia’s economy grew nearly 12 percent last year, the United States around 2 percent. So Mongolia grew around 6 times faster than the United States, yet of course the United States contributed more to GDP growth—over 150 times more. Why, because size matters. Let’s apply this logic to China. A bigger […]

Japan Cuts Solar, Raises Wind Tariff

Japan slashed the rate that solar power earns on the grid by 11%, down to 32 Yen (31 cents) per kilowatt-hour. Beginning in the new fiscal year in April, projects that come online will receive that lower rate for 20 years. Japan instituted the most generous feed-in-tariff in the world after the Fukushima meltdown, in an effort […]

Abenomics at the Brookings Institution

Joshua K. Hausman and Johannes F. Wieland presented a paper today on Abenomics at the Brookings Panel on Economic Activity. They focus specifically on the monetary policy portion of Abenomics: the Bank of Japan’s new commitment to 2% inflation, open-ended asset purchases, and a doubling of the monetary base. Abenomics is frequently covered on this blog and […]

China Declares War on Pollution

On March 5, China’s Premier Li Keqiang declared war on pollution, outlining significant steps the Chinese government will take to improve air quality. China has suffered from truly epic smog over the last two winters, choking its cities’ inhabitants and cutting off visibility. The pollutants in the air have surpassed hazardous levels, at times jumping […]

What Do Bank Share Prices Tell Us About Chinese Growth?

Tom Holland had an interesting piece in the South China Morning Post three weeks ago in which he discusses the low valuations of Chinese banks. About a decade ago, if I remember correctly, Chinese banks were trading between three and four times book. Those valuations have dropped considerably since then: On Monday, the weighted average price-book value ratio for […]

Will Reforms Speed Growth in China?

Although still vague on the specifics, China’s Third Plenum November partially clarified the nature of the reforms that Beijing is proposing for China over the coming year. Of course very little was said in any of the related releases about the difficulties, of which the most important are likely to be political, in implementing these reforms, nor […]

How Is Abenomics Doing?

In my previous post, I noted how the monetary policy portion of Abenomics (the “first arrow”) appears to be working. Japan has grown more rapidly than the United States and the Eurozone. This success appears to be the result of its new found enthusiasm for monetary policy. And it is not just any kind of monetary […]

Christine Lagarde: Postcards From Asia

By Christine Lagarde—Managing Director, IMF: Cambodia: Moving Beyond the Frontier Cambodia is the first leg of my Asia trip. This is a country that has already grown by leaps and bounds, and now stands at the frontier of becoming an emerging market economy in the heart of the most dynamic hub of the global economy. […]

China: The Politics of Adjustment

The past two years have seen a surprising amount of turmoil at the highest levels of the Chinese political establishment. We have seen political alliances re-shuffled, powerful business and political leaders arrested, factional disputes magnified, and an explosion of rumors of more to come. After twenty years of what seemed, on the surface at least, […]