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421. China: Bogus Boom?

Author:
John H. Makin
Publication Date:
08-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
China's economic statistics have become the envy of the world. On July 15, China reported a 7.9 percent growth rate for the second quarter of 2009 compared to the same period a year earlier. Meanwhile, China's stock markets are on fire, and its property markets are heating up fast as well. Shanghai's two stock markets are up 75 percent and 95 percent respectively so far this year. The more widely traded Hong Kong Index is up 27 percent, a stellar performance compared to largely flat stock markets in the United States, Europe, and Japan. In even stronger contrast, Russia, which is one of China's emerging-market peers, has seen its economy drop by 10.1 percent during the first half of this year, while its stock market has struggled as well.
Topic:
Economics, Emerging Markets, and International Political Economy
Political Geography:
Russia, United States, Japan, China, Europe, and Hong Kong

422. Can China Keep Growing?

Author:
John H. Makin
Publication Date:
05-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Governor Zhou Xiaochuan's comment is an open acknowledgement that the “adverse feedback loop,” in which financial-sector problems hurt the real economy, which in turn intensifies negative conditions in finance, has hit China hard. China's real growth rate, which peaked at 13 percent in 2007 and is heavily dependent on exports, plunged to 6.1 percent on a year-over-year basis in the first quarter of 2009. Nominal growth, a measure of the current money value of goods and services, fell even more sharply, from 21.4 percent in 2007 to 3.6 percent in the first quarter of this year. The fact that the nominal growth rate is 2.5 percent below the real growth rate suggests that, at least as far as output is concerned, deflation has taken hold at a 2.5 percent rate in China.
Topic:
Economics, Emerging Markets, and International Political Economy
Political Geography:
China

423. China and the United States

Author:
John H. Makin
Publication Date:
12-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
A new truth of geopolitics has emerged during 2009. It is that the complex and rapidly evolving Sino-American relationship has become the most important bilateral relationship either country has. To this observation, made recently by William C. McCahill Jr. in the November 13 special issue of The China Report, must be added another claim: the course of the Sino-American relationship in both the economic and the political spheres will play a growing role in determining the levels of global economic and geopolitical stability. Trips like President Barack Obama's three-day visit to Shanghai and Beijing November 15–17 will probably be made with increasing frequency in coming years.
Topic:
International Relations, Foreign Policy, Diplomacy, International Political Economy, International Trade and Finance, and Bilateral Relations
Political Geography:
United States, China, America, Shanghai, and Beijing

424. Inflation Scare: Crazy but Real

Author:
John H. Makin
Publication Date:
07-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The recent steps by the Federal Reserve to preempt deflation have—ironically and unexpectedly— prompted a surge in inflation fears both inside the United States and abroad, especially in China. Specifically, the Fed's measures to go beyond the stimulus inherent in a zero percent federal funds rate by purchasing Treasury and mortgage securities has conjured visions—especially in the eyes of major buyers of Treasury securities, China foremost— of massive money printing to underwrite trillions of dollars of additional government borrowing at low interest rates. As markets have shown, if that were the Fed's intention—which it decidedly is not—the effort would fail because excessive money printing—creating a money supply larger than the quantity of money demanded— would push up interest rates as inflation expectations rose.
Topic:
Economics, International Political Economy, International Trade and Finance, and Monetary Policy
Political Geography:
United States and China

425. Three Lessons from the Financial Crisis

Author:
John H. Makin
Publication Date:
09-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
More than two years have passed since the U.S. housing bubble burst. That event ushered in a financial crisis that was not only intense but also stunning. So stunning in fact, that in August of last year, just a month before the collapse of Lehman Brothers, the global economy was close to a crisis worthy of comparison with the Great Depression, yet neither the markets nor the Federal Reserve had much of an inkling of what was to come. The Standard and Poor's (S) 500 Index had come down to about 1,300 from its October 2007 high of 1,576. Positive growth had just been reported for the U.S. economy during the second quarter of 2008 at an annual rate of 2.8 percent (later revised down to 1.5 percent). Almost one percentage point of that growth came from U.S. consumption, and government spending also contributed. The wave of relief after the Bear Stearns scare in March 2008 had provided a nice boost to the economy and to markets. That boost was further enhanced by the substantial contribution to growth from net exports (2.9 percentage points) thanks to what was, then, continuing strength in the global economy, especially in China, which had reported blistering 10.1 percent year-over-year growth in the second quarter of 2008. These and other positive components more than offset a drag from inventories and residential investment. In short, the real economy had not shown much evidence of damage emanating from the chaos that was churning in the financial sector.
Topic:
Economics, International Political Economy, International Trade and Finance, Markets, Monetary Policy, and Financial Crisis
Political Geography:
United States and China

426. Postcrisis Risks

Author:
John H. Makin
Publication Date:
11-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The only thing scarier than the slide of the dollar, which has dropped by 15 percent since March, would be an attempt by the Federal Reserve to stop it. Such an attempt would show that we have learned nothing from the Bank of Japan's disastrous premature exit from a zero-interest policy in August 2000. Closer to home, it would resemble the Fed's premature move to mop up “excess” reserves by doubling reserve requirements in three steps between August 1936 and May 1937, which was followed by the third-worst recession of the twentieth century, from May 1937 to June 1938.
Topic:
Economics, International Political Economy, International Trade and Finance, Monetary Policy, and Financial Crisis
Political Geography:
United States and Japan

427. From Fragility to Resilience: Concepts and Dilemmas of Statebuilding in Fragile States (Executive Summary)

Publication Date:
04-2008
Content Type:
Policy Brief
Institution:
Center on International Cooperation
Abstract:
Policy-makers are increasingly concerned by what appears to be a growing body of 'weak,' 'fragile', or 'failing' states. This is understandable, as few issues are so central to contemporary international politics – to questions of development, management of the global commons, or human and collective security – as that of well-organized cooperation between effective states. States retain the central responsibility for assuring the safety and security of their citizens, protecting property rights, and providing public goods to enable a functioning market. Many states do more, taking on critical welfare functions for their populations.
Topic:
Conflict Resolution, Conflict Prevention, Development, and International Political Economy

428. Partnership or Power Play? How Europe should bring development into its trade deals with African, Caribbean, and Pacific countries

Publication Date:
04-2008
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
Europe is negotiating new trade deals with African, Caribbean, and Pacific (ACP) countries. A true partnership in trade could radically transform the lives of one-third of all people living in poverty, providing farmers and small businesses with sustainable incomes and workers with decent jobs. But Europe is choosing power politics over partnership. The deals currently on the table will strip ACP countries of important policy tools they need in order to develop. They will fracture regional integration, exacerbate poverty and make it harder for countries to break away from commodity dependence. Despite massive pressure, many ACP countries are holding out for a fair deal. Europe needs to rethink, and agree to change course. Ultimately, it is in its own interests to do so.
Topic:
International Political Economy and Treaties and Agreements
Political Geography:
Africa, Europe, Australia/Pacific, and Caribbean

429. Credibility crunch - Food, poverty, and climate change: an agenda for rich-country leaders

Publication Date:
06-2008
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
The year 2008 is halfway to the deadline for reaching the Millennium Development Goals. Despite some progress, they will not be achieved if current trends continue. Aid promises are predicted to be missed by $30bn, at a potential cost of 5 million lives. Starting with the G8 meeting in Japan, rich countries must use a series of high-profile summits in 2008 to make sure the Goals are met, and to tackle both climate change and the current food crisis. Economic woes must not be used as excuses: rich countries' credibility is on the line.
Topic:
Agriculture, Climate Change, International Political Economy, International Trade and Finance, and Poverty
Political Geography:
Japan

430. Ethnic Coalitions of Convenience and Commitment: Political Parties and Party Systems in Kenya

Author:
Sebastian Elischer
Publication Date:
02-2008
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
This paper analyzes the role of ethnicity in shaping the character of Kenya's political parties and its party system since 1992. Drawing on a constructivist conception of ethnicity, it uses a framework of comparison derived from Donald Horowitz and distinguishes between three party types: the mono-ethnic party, the multi-ethnic alliance type and the multi-ethnic integrative type. It shows that although Kenyan parties have increasingly incorporated diverse communities, they have consistently failed to bridge the country's dominant ethnic cleavages. Consequently, all of Kenya's significant parties represent ethnic coalitions of convenience and commitment and, thus, ethnic parties. The paper further states that the country's post-2007 political environment is a by-product of the omnipresence of this party type.
Topic:
Democratization, Ethnic Conflict, and International Political Economy
Political Geography:
Kenya and Africa