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  • One Step Closer to Trade Sanctions Against China

    Tick, tick, tick — the sound of a Congressional trade bomb. By its own, not very exacting standards, Congress has patiently waited for change in Chinese currency policy. The single most likely time for that was the G-20 finance minister’s over the weekend in South Korea. But nothing meaningful from … More

    Europe Faces Reality

    The European economic model is dead. Don’t believe us? – Ask The Washington Post. Yesterday’s front-page story reported that the loans being made to stave off the debt crisis come with conditions which, if enforced, would require “European governments [to] rewrite a post-World War II social contract that has been … More

    Will Greece & Co. Poison US-China Trade?

    Uh oh. Just when it seemed Sino-American shouting over the undervalued yuan was quieting down, surprise guests are threatening to incite a riot. The problems in Greece, Portugal, and perhaps elsewhere in southern Europe are a threat to the euro. A damaged euro may mean the widely-anticipated change in Chinese … More

    President Obama’s Budget Is Killing Jobs

    The Obama Administration, the Democratic Congress, and their friends in organized labor are quick to blame unemployment on the trade deficit. Facts don’t support that assessment. The historical record shows a *positive* correlation between aggregate trade deficits and job creation – a trade deficit signifies *more* jobs. That’s because trade … More

    US-China Trade: Only A Temporary Reprieve

    Today’s papers give the impression of a collective exhale on U.S.-China relations. Chinese President Hu Jintao is coming to Washington for a global nuclear security summit and that means a trade war over exchange rates has been averted. However, a better term than “averted” is “postponed.” It is probably true … More

    What Won’t Work With China, And What Might

    The New York Times, Washington Post, and others today ran front-page stories on economic and political disagreements the U.S. has with China. The headlines mostly distract from the real issue. China is nowhere close to a global military power but it is becoming a global economic power. It is therefore … More

    China Stops Buying Treasuries: Who Cares?

    The headlines should read: World Didn’t End! Sub-head: We didn’t know what we were talking about. The data for official Chinese purchases of Treasury bonds in 2009 were published yesterday. Verdict: the PRC bought practically nothing. In 2008, official Chinese purchases of US Treasury bonds were equal in size to … More

    “China Rising?” The Post Gets It Mostly Right

    Something odd happened today at the Washington Post.  The editors at the Post wrote a solid editorial on China and, a page later, the esteemed George Will got caught in the web of China myths. The main point of the Post editorial is spot on: the Obama administration largely misplayed … More

    China No Help In Recession

    China announced last Friday that its economy grew 8.7% last year. Among other things, this will prompt a chorus of claims that China is leading the world out of recession. Wrong. The typical way of thinking about this is to take China’s and every other country’s GDP growth, add it … More

    China and Google: Old (Business) News

    There may be valuable political conclusions to be drawn from the current tiff between Google and the Chinese government, but there certainly isn’t anything new on the economics or business side. Perhaps the main reason the PRC wants foreign technology and know-how is to drive foreign (and some domestic) companies … More