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looking beyond borders

foreign policy and global economy

Archive for the tag “debt”

The Demise Of Dollar Diplomacy?

Pundits have been saying last rites for the dollar’s global dominance since the 1960s – that is, for more than half a century now. But the pundits may finally be right, because the greenback’s dominance has been sustained by geopolitical alliances that are now fraying badly.

Read Here – Project Syndicate

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Yes, Nations Can Spend Their Way Out of Recessions. Sometimes.

The case for government spending during economic slowdowns has been hotly debated for decades. John Maynard Keynes went as far as to suggest that during a recession governments should pay people to do meaningless tasks — such as digging holes in the ground and then filling them up.

Read Here – BloombergView

An Economic Fallout Is Coming From All The Asian Military Standoffs

The stakes are high for the U.S. as tensions in Asia ramp up. The country has $1.3 trillion of two-way trade with the region, based on annualised data in the first six months of this year. That’s 52.5 percent of America’s total foreign trade. But that is only part of U.S. linkage with Asian economies. Fixed-asset investments generating those trade flows have also to be taken into account as they directly affect employment and income levels in about one-third of American aggregate demand.

Read Here – CNBC

How One City’s Borrowing Practice Highlights China’s Daunting Financial Risks

China’s finance ministry was technically correct when it reacted to a sovereign debt rating downgrade in May by saying the debts of local government financing vehicles (LGFVs) and state-owned enterprises would not swell the government’s contingent liabilities.

Read Here – South China Morning Post

Pakistan Can’t Afford China’s ‘Friendship’

Pakistani and Chinese officials boast that CPEC will help address Pakistan’s electricity generation problem, bolster its road and rail networks, and shore up the economy through the construction of special economic zones. But these benefits are highly unlikely to materialise. The project is more inclined to leave Pakistan burdened with unserviceable debt while further exposing the fissures in its internal security.

Read Here – Foreign Policy

Has Asia Learned From The 1997 Crisis?

Reform is always easier when a crisis leaves policy makers no other options. But without further change, Asia will continue to rely too much on debt instead of productivity gains for growth. In poorer nations, improvements in household welfare will lag. As in the years before 1997, economic irregularities could build up to the point where the region faces another crisis. Will the next Kim Dae-jungs be there when you need them?

Read Here – Bloomberg View

America Owes China $1 trillion. That’s A Problem For Beijing, And Trump Knows It

Indeed, the US-China relationship is a classic example of the old saw: if you owe the bank a thousand dollars, you have a problem; if you owe the bank a trillion dollars, the bank has a problem. Trump holds the important cards and it is simply a case of whether he wants to play them.

Read Here – The Guardian

Cambodia, Sri Lanka And The China Debt Trap

The influx of Chinese economic assistance into Sri Lanka and Cambodia has raised questions regarding the intentions behind these massive loans. While China may still be considered a developing economy, its current strategy of providing soft power loans and aid to its regional neighbours is reminiscent of the tributary system that the country employed back in its empire days.

Read Here – East Asia Forum

Markets Are Going To Roil Next Year

The sheer range of known unknowns for 2017 — the outlook for China’s economy, the effect of populism on European politics, the scattergun policy-making of president-elect Donald Trump — makes a low level of uncertainty unlikely to persist.

Read Here – BloombergView

China’s Debt Bomb

It’s a bomb! A mountain! A horror movie and a treadmill to hell! To doomsayers, China’s $25 trillion pile of public and private debt is a threat to the global economy. Or maybe it’s just a manageable byproduct of the boom that created the world’s second-biggest economy.

Read Here – Bloomberg

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