BEIJING -- The coming crash of the Chinese economy has reemerged as a popular view in the global media. The reason for such a prediction this time is the persistent deceleration of China's growth after 2010. The growth rate dropped from 10.6 percent in 2010 to 7.3 percent in 2014 and further down to 6.9 percent in 2015, which is the lowest record in 25 years. It is the first time that China has experienced such an extended period of deceleration after the transition to a market economy in 1979.
SHANGHAI -- "Markets with Chinese characteristics" are as volatile and hard to control as markets with American characteristics. Markets invariably take on a life of their own; they cannot be easily ordered around. To the extent that markets can be controlled, it is through setting the rules of the game in a transparent way. The policy approach China adopts will strongly influence economic performance and prospects worldwide.
In this more risky, but also more uncertain world, leaders need to take action in an environment of "shifting sands" as each of these risks could have significant impact on any individual, business or country independently, but combination of risks could create cascading effects that are difficult to anticipate and to navigate.
What is now happening is that people are selling off Chinese assets and investing instead in (primarily) American assets -- including stocks but especially real estate. As momentum in these flows builds up, China faces the prospect of full-on meltdowns in its stock and real estate markets, just as occurred here in the U.S. in the late 1920s and post-2008 -- only worse.
The only cure for the world's malaise is an increase in aggregate demand. Far-reaching redistribution of income would help, as would deep reform of our financial system -- not just to prevent it from imposing harm on the rest of us, but also to get banks and other financial institutions to do what they are supposed to do: match long-term savings to long-term investment needs.
BEIJING -- The last round of scientific, technological and industrial revolution has lost its momentum. China is expected to illustrate to the world that global economic growth needs to be based in innovation to identify new engines and driving forces such as new technology, "Internet plus," new products and new sources of energy.
MOSCOW - The situation in Russia is not just bad, but downright ugly. The main reason for the poor state of the Russian economy is the lack of an effective system for protecting property rights. The gradual dismantling of state institutions led first to a decline in investments, then to a sharp drop beginning in 2013, and finally to massive capital flight, with economic growth slowing to a halt by mid-2014.
The Obama administration surely negotiated the TPP in good faith, and the accord would likely add to global and U.S. economic growth. This is not a pernicious accord, the fruits of a secret cabal as some have feared. Nor is globalization an evil to be fought tooth and nail. The sad truth, however, is that while the administration promised a 21st-century agreement, we have yet another late 20th-century agreement.