What does China want from Canada? And should Canadians, contrary to their welcoming prime minister, be worried about China’s interest in this land, particularly its urban real estate? No Canadian region is more impacted by Mainland Chinese capital than Metro Vancouver, a relatively small city of 2.5 million.
The new central bank network created since 2008 is of a piece with the new networks for stress testing and regulating the world’s systemically important banks. The international economy they regulate is not one made up of a jigsaw puzzle of national economies, each with its gross national product and national trade flows. Instead they oversee, regulate and act on the interlocking, transnational matrix of bank balance sheets. This system was put in place without fanfare. It was essential to containing the crisis, and so far it has operated effectively. But to make this technical financial network into the foundation for a new global order is a gamble.
What Trump has achieved, Berlusconi pioneered. Like Trump, Berlusconi is a businessman who made his first fortune in real estate. When he entered politics in 1994, he was an outsider, albeit one who, also like Trump, had long been close to plenty of insiders.
With China set to announce its third-quarter gross domestic product report on Monday, skepticism over its economic data is arising anew. Recall that Bill Gross has described China as “the mystery meat of emerging-market countries.” Premier Li Keqiang, before taking that post, said he didn’t rely on official statistics. He preferred things like rail freight and electricity use to gauge activity. So is China about to puff up its economic report card once more? Quite the contrary, according to one of the world’s foremost emerging market investors, Mark Mobius.
Past Chinese presidents have left the finer points of the economy to their premiers. Not Xi Jinping. Since taking over the ruling Communist Party in November 2012, Xi has given himself direct control over both short-term financial policies and broader economic planning. He exercises this power through two secretive “leading groups,” one a reform panel of his own creation and the other a financial committee recently led by premiers.
Once a British outpost on the far side of the New World, later a countercultural mecca known for its pot-infused vibe, Vancouver, Canada, is entering a new phase, transformed by immigration from across the Pacific. Greater Vancouver’s population of approximately 2.5 million is now 16% of Chinese origin; the city proper is 28% ethnically Chinese. Some locals have dubbed it “Hongcouver.”
The problem is that China’s recent slowdown from 10 percent annual growth to about 7 percent is only the beginning. The recent drops in housing and stock prices are harbingers of a further economic moderation. That is inevitable, since no country can grow at a breakneck pace forever. And with the slowing of China, Brazil and Russia have been slowing as well — the heyday of the BRICs (Brazil, Russia, India and China) is over. But the really worrying question is: What if other nations can’t pick up the slack when China slows? What if China is the last country to follow the tried-and-true path of industrialization?
Forget about all the shoes, toys and other exports. China may soon have another thing to offer the world: a recession. That is the prediction from Ruchir Sharma, head of emerging markets at Morgan Stanley Investment Management, who says a continuation of China’s slowdown in the next years may drag global economic growth below 2 percent, a threshold he views as equivalent to a world recession. It would be the first global slump over the past 50 years without the U.S. contracting.