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  • Rare Earths: Cause for Worry, not Panic

    There are legitimate concerns over Chinese dominance in rare earth minerals but the near-frenzied nature of some of some assessments is unjustified. The long-term problems stemming from Chinese control will be resolved by the market; only the short-term problems are potentially threatening, and those remain vague. Rare earths have achieved … More

    China-Japan Tiff: A Trade Lesson for the U.S.

    China and Japan had a diplomatic disagreement this past week. Of the many facets to this dispute, at least one has implications for the U.S.: during the diplomatic standoff, Chinese shipments of rare earth minerals to Japan were interrupted. The U.S. is in a much stronger position than Japan but … More

    How to Cause Another Depression? Anyone? Anyone?

    An ugly financial bubble bursts. A misguided U.S. Congress responds by blaming foreigners and passes a trade bill that prompts widespread retaliation and exacerbates the initial popping of the bubble. That was 1930 and the Great Depression. Fast forward 80 years. An ugly financial bubble has burst and the U.S. … More

    Hurting the U.S. in Order to Hurt China

    A lot of people are unhappy with China. They’re unhappy for several reasons, but trade and investment might top the list. Some are demanding that the U.S. government take steps to punish the PRC. A few of these steps make only a bit of sense—others make no sense at all. … More

    Discovering China’s State-Led Economy, Years Late

    The front page of The New York Times yesterday featured a very long story on the state displacing the market within the Chinese economy. Hats off to the Times for getting it right, but they’re late. Very late. In fall 2002, a new Chinese government, led by current President Hu … More

    China Hiding Treasury Purchases

    China’s reported holdings of U.S. Treasury bonds fell sharply again in June and are now almost $100 billion lower than they were in July 2009. The press reports this as meaningful and important. It isn’t. You may have noticed that American interest rates are not soaring; in fact, they’re at … More

    China Passes Japan, Not As Important As It Seems

    After months of speculation, it’s finally official: the Chinese economy, as measured by GDP, is larger than the Japanese economy. In the second quarter of 2010, the Japanese economy was valued at about $1.29 trillion, the Chinese economy at $1.34 trillion. The gap will widen next year and for the … More

    The Wrong Way to Deal With India

    Do as I say, don’t do as I do. This is the message the Obama Administration and Congress are sending to fellow democracy India. While correctly pressing India to liberalize trade and investment, President Obama continues to hector India on outsourcing, and Congress has now transformed the talk into ugly … More

    Chinese Investment: Danger or Opportunity?

    Growing Chinese investment around the world is a major international economic development. In the U.S., the story is how limited Chinese investment is beyond government bonds. Limitations on Chinese investment in the U.S. are not imposed by the PRC. Other than bonds, the PRC invests primarily in natural resources, and … More

    China's Not-So-New Currency Policy

    Beijing finally made a move on exchange rates, probably. Assuming there is some action to go with the People’s Bank of China’s stilted language, two critical errors are being made in the international response. The first concerns the nature of the change. The one-line summary, in China and elsewhere, is … More