China's Belt and Road initiative – a vast array of promised Chinese investments in transport, energy and communications across Eurasia and Africa – is emerging as one of the key foreign policy priorities of Xi Jinping's presidency.
President Xi Jinping and then President of Sri Lanka Mahinda
Growth is certainly slower and its structure is changing, but is the outlook for China's economy quite as awful as global share markets seem to think?
Now the world's biggest economy (using the IMF's purchasing power parity measure), China matters vastly more for world markets than it did a
There's a rule in economics called Goodhart's law: when a measure becomes a target, it ceases to be a useful measure. If a government chases a particular economic variable, then it becomes influenced by policy, and so loses its meaningfulness as an input. 'Information value' is lost in the
Over the last few weeks, global financial markets have once again demonstrated their predilection for over-reacting to ephemeral news. For their part, the media are always happy to pad out the 24-hour news cycle with a breaking crisis. If it's transient, so much the better: you can report a fresh
I started my job at the Federal Reserve three weeks before Lehman Brothers declared bankruptcy.
I wish I had kept a diary of my initial months at the Fed, so I could recall clearly what we thought was happening each day. I do remember there was a discrete point where suddenly everything felt like
Arianto Patunru and Sjamsu Rahardja's recent insightful Lowy Institute Analysis, Trade Protectionism in Indonesia: Bad Times and Bad Policy, invokes 'Sadli's Law', named for early New Order technocrat Mohammad Sadli.
Perhaps Indonesianists' most well-loved aphorism, it holds that 'bad times may
Indonesia's President Jokowi will welcome Turkish President Recep Tayyip Erdogan in Jakarta today, making it his third meeting with an international leader this week. Jokowi hosted British Prime Minister David Cameron on Monday and visited Singapore's Prime Minister Lee Hsien Loong on Tuesday in a
Ken Ward is to be congratulated for a straight forward and sober analysis of the Australia-Indonesia relationship. In his own matter of fact style, Ken takes us through a complex relationship and provides unique understanding and insight.
His core point is that the Australia-Indonesia
Four days ago, French President François Hollande declared his in-principle commitment to the creation of a 'euro government, with the addition of a specific budget and a parliament to ensure democratic control.'
This is more an opening gambit in a debate about the terms of putative
Just about everyone agrees that the Greek problem has been kicked down the road again, and probably not even very far.
The fantasy nature of the 'agreekment' is clear. Let's put to one side, for instance, a structural reform program which demands that Sunday be mandated as a work-day. This might
This month saw a super summit of two organisations that are significant for both Russia and China. The 7th BRICS summit and 15th Shanghai Cooperation Organisation (SCO) summit, both held in Ufa, Russia, included the typical member-state declarations confirming cooperation on major issues such as
In a week in which international news focused on the Greek debt crisis and the possibility of a Grexit, scant attention has been paid to the arrival from Turkey of thousands of smuggled Syrian, Afghan and other migrants by boat to several Greek Islands. Yet the two are connected, and both are likely
Rather than focus on the blow-by-blow developments of the umpteenth meeting in the Greek crisis, here are some higher level issues that often get lost in the summitry din:
At the moment, the parties are negotiating over a disbursement of €7.2 billion. This is the last €7.2 billion to be
There has been little news of the much criticised proposed dam at Don Sahong in the far south of Laos since the beginning of the year, when the Mekong River Commission (MRC) arranged for a series of public meetings to be held in member countries to discuss the dam.
From the start, these meetings
'What's in a name?' Shakespeare's Juliet asks. Quite a lot, as things turned out for her. And so it is for the just-published proceedings of the ANU Indonesian Update, titled The Yudhoyono Presidency: Indonesia's Decade of Stability and Stagnation. A 'mini' version of the Update was held at the
Thomas Piketty's Capital in the Twenty-first Century put inequality centre-stage in the economic debate. But the topic has been around for a long while. Brookings has recently republished Arthur Okun's 40 year-old Equality and Efficiency: The Big Trade-off, The launch was an opportunity to bring
Despite gloomy talk about slowing economic growth, Asia has continued to grow strongly, and the IMF has forecast this will continue this year and next.
Asia is still by far the most dynamic region in the world, accounting for 40% of world GDP but nearly two-thirds of global growth. Look, too,
Infrastructure is now a standard item on the G20 agenda. Serious infrastructure shortages are ubiquitous. With global economic growth slow, ample construction capacity and interest rates at historic lows, there seems to be an opportunity to address the infrastructure gap. But many governments see
With Greece once again teetering on the brink of default, a recent paper from the Centre for International Governance Innovation explores one episode in the amazing saga of how this tiny country came to threaten the viability of the euro, and left a damaging legacy for procedures and governance at
The China-Pakistan Economic Corridor (CPEC) is nothing short of a 'fate changer', said Pakistani Federal Minister Ahsan Iqbal, the man behind the historic project. The excitement appears to be mutual, as China has shown equal enthusiasm for the project throughout a two-day visit by Chinese President
In what appeared to be a case of spectacularly bad timing, the Bank of England held a conference in September 2007 on 'sources of macroeconomic stability'.
You see, from the early 1980s the business cycle in developed economies had become much less volatile. A term had been coined for this
There has been much fretting about China's growth over the past five years. One special focus for hand-wringing has been the Chinese financial system and its non-banking component – the shadow banking system – in particular.
Financial growth in China has certainly been rapid since 2007, a
The 2008 global financial crisis provided a rare test-bed for macroeconomics — an opportunity to sort out some old controversies. One issue dominated the debate during the recovery phase: with national budgets and official debt pushed up by the crisis, should budget austerity be imposed as a
Should Australia join the Chinese-sponsored Asian Infrastructure Investment Bank (AIIB)? As often happens in international affairs, the answer is not found in the technical pros and cons of the proposal, but in the politics.
America seems to have strongly encouraged its close Asian friends (Japan
15 years ago, Beijing made an important strategic decision about its sprawling aviation manufacturing monopoly, AVIC.
Dissatisfied with AVIC's slothfulness, and keen to promote competition, the state's planners split the company in half, creating two firms. Unimaginatively named AVIC-1 and AVIC-2
This week the IMF Executive Board will consider a proposal to provide Ukraine with a US$17.5 billion Extended Fund Facility. The IMF Managing Director explains that this program 'can succeed'. But it has to be said that the chances are low, given current geopolitical circumstances and Kiev's recent
The new Indian Government brought down its first full-year budget last weekend. It has been keenly anticipated. Business Standard claimed: 'The market is expecting the Union Budget to be path-breaking, similar to the one in 1991, which led to the liberalisation of the Indian economy.'
Chunyun, the annual spring festival holiday in China, is often described as the world's largest human migration. Over one billion trips are made in a 10-day period. The family reunion over the lunar new year is the local equivalent of Christmas and Thanksgiving combined, and for the many families
It seems my colleague Stephen Grenville is somewhat sceptical of quantitative easing (QE). He says 'QE might have been an admirable second-best policy, but it was still "beggar-thy-neighbour".'
I agree that QE (where the Federal Reserve purchased long term government bonds along with securities
2015 has been heralded as the year when Papua New Guinea (PNG) will enjoy the highest GDP growth rate in the world, on the back of its first full year of liquefied natural gas production.
Confidence in the anticipated revenue from the ExxonMobil-led project has encouraged the O'Neill Government
A recent report by PwC, The World in 2050, suggests that Australia could slip from 19th largest economy in the world in 2014 to 28th in 2050.
The report comes from the UK and contains economic growth projections to 2050 for the 32 largest economies. Not surprisingly, the main interest in the
The press is making much of the academic qualifications of Greece's new finance minister, Yanis Varoufakis. His specialisation is economic game theory, which in this case might be described as 'the art of bargaining'. Good bargaining skills are, indeed, important. But there are also some basic
The 2008 financial crisis left no doubt that ill-considered debt can cause major damage not just to an individual country, but to the global economy.
You might think that by now, six years later, balance sheet repair would have taken debt below pre-crisis levels. However, debt burdens are
I am embarrassed to say that I made a mistake in the analysis below (I should have realised the results were too clear to be true!). In fact, the relative price of investment goods follows the pattern in the graph below.
This mistake was discovered by Guonan Ma and staff at the RBA, who tried to
The Wall Street Journal:
China's economic growth slowed to 7.4% in 2014, downshifting to a level not seen in a quarter century and firmly marking the end of a high-growth heyday that buoyed global demand for everything from iron ore to designer handbags. The slipping momentum in China, which
The fall in the world oil price has created the opportunity to eliminate petroleum subsidies in a number of Southeast Asian countries. These subsidies have been the long-standing bane of economic reformers everywhere, but until now reducing them involved the deeply unpopular task of raising petrol
The Black Swan, by Nassim Nicholas Taleb, is a parable for unanticipated risk: the possibility of 'unknown unknown' events that no-one sees coming.
In a new essay, The Calm Before the Storm, Taleb further posits that perceptions of risk are distorted by 'fragile stability.' Some countries (eg.
Forecasts of China's growth always attract interest, even when they are a year old. Larry Summers and Lant Prichett are getting another good run with the paper they published last year (see my earlier post), which analyses emerging-economy growth in general, but of China and India in particular
With the passing of the presidential baton from Susilo Bambang Yudhoyono to Joko Widodo just a month away, Indonesia is at a political crossroad, with the first clear break from the politicians who were part of the Soeharto years. Monday's Indonesia mini-update at the Lowy Institute, a half-day
Justin Yifu Lin insists China can grow at 7-8% for another 20 years. A contrarian with a remarkable personal background, the former World Bank chief economist's views influence his country's top leaders and their sense of destiny. What he says matters. How, and how fast, China grows will be highly
Given that emerging economies continue to grow two or three times faster than advanced economies, the persistent gloom about their prospects is puzzling. The latest example comes from The Economist, which argues that convergence, the process by which poorer countries catch up to rich countries
The Financial Times ran a front page piece last Monday claiming that China has ordered a ban on state-owned companies using Western management consulting companies. It is alleged by senior Chinese sources that 'foreigners use their consulting companies to find out everything they want about our
Last month marked the first anniversary of the 2008 power-sharing accord that resulted in the creation of a new unity government in Zimbabwe. Joel Negin and Jolyon Ford assess what Australia can do to assist the country’s re-emergence.
In this Policy Brief, International Security Program Director Rory Medcalf and his Indian co-author Amandeep Gill argue that an innovative partnership between Australia and India would help erode the entrenched blocs that impede progress on nuclear disarmament
In this piece for the East-West Center, Washington, International Security Program Director Rory Medcalf argues that Australia and India are hesitating at the brink of real partnership in their strategic relations. It will take sustained political will on both sides over the next few years to bring
After years of economic underperformance, the Indian economic model has been transformed, and with it, India's growth performance. So much so that the last two years have brought both a widespread rethink on India’s prospects and a wave of foreign portfolio investment.