Forsaking the fluff, China joins the cloud
BEIJING | By Qin Min via Caixin | Government agencies are leading a shift to cloud-based computing to save money and promote a new industry.
In the World
The degree of “great” in “Great Stagnation” is a choice variable
SAO PAOLO | By Marcus Nunes via Historinhas | Scott Sumner writes “What kind of Great Stagnation?” It seems to me that the Krugman/Summers view has three big problems: The standard textbook model says demand shocks have cyclical effects, and that after wages and prices adjust the economy self-corrects back to the natural rate after a few years. Even if it takes 10 years, it would not explain the longer-term stagnation that they believe is occurring.
Economic growth is not enough
By the RSA | Two-thirds of the world’s population live in countries that are now more unequal than they were in 1980. Our politicians are hung up on keeping the economic growth curve rising. But does GDP really tell us all we need to know about a country’s wealth and well-being? In this Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) Short, Kate Raworth makes a powerful argument to look beyond economic growth alone for a true measure of prosperity and progress.
USE-ME to avoid secular economic stagnation
SAO PAULO | Benjamin Cole via Marcus Nune’s Historinhas | Well, if a Martin Wolf can call for permanent QE by all Western governments, and if a John Cochrane can suggest the U.S. Federal Reserve should completely liquidate the U.S. national debt, than I guess my USE-ME program is worth trotting out as well. I mean anything goes these days, no?
ECB buying sovereign bonds: why it doesn’t make sense for Spain
MADRID | By Julia Pastor | Mario Draghi has been saying he doesn’t rule out a sovereing debt QE: he reminded it at Jackson Hole, then at the European Parliament and in a euro summit in Lithuania on Thursday. Markets are discounting those eventual state debt’s purchases. But do they make sense? Although the eurozone does not have a liquidity problem, analysts remind that the US didn’t either, and yet half of the QE3 went into govies.
China: It’s either pure growth or rebalancing
MADRID | The Corner | As markets continue to worry about China’s slowing growth, an increasing number of observers believe that Beijing is at a crossroads. Chinese authorities have a decision to make: should they choose to simply focus on the numbers or to increase quality? According to a Morgan Stanley analyst on Thursday, it is a case of “either-or” for the Asian giant’s. With the country highly leveraged and its economic imbalances also coming into focus, the time appears to have arrived for the Chinese to plot a definitive roadmap for the way ahead.
US economy likely to stay buoyant despite corrections
Guest post by Jean-Sylvain Perrig, UPB Chief Investment Officer | The US economy is back on track. Its second-quarter bounce was sharper than previously thought and it is expected to stay on a reasonably good path of 3% in the coming quarters, thanks notably to a rebound in capex, a falling unemployment rate and a sharp improvement in the real estate sector. That will further boost consumer confidence, which has already reached its highest level in seven years.
Britain betrays Hong Kong… again
The British government has failed to condemn China for breaking its promise of greater democracy in Hong Kong. If you were told the Chinese government — an unelected, one-party state — will decide who you can vote for, what would your response be? Not only would you likely object, you would expect others, especially democracies, to loudly condemn the idea. But Britain has done just the opposite to the people of Hong Kong, when it failed to call China out for breaking its promise of greater democracy for the island territory.
Alibaba’s big deal
BEIJING | By Caixin | E-commerce giant Alibaba Group’s huge initial public offering in New York has stirred the market. Raising US$ 25 billion in total after the company and some of its shareholders sold extra shares, Alibaba’s IPO now ranks as the biggest ever.
Barking at Russia is Easy, Biting is Not
Bungling with Russia over Crimea will send the West knocked out with a bloody nose. One way or another, it was a crisis a long time coming. Europe has arguably sleepwalked into a reluctant confrontation with Russia. The continent’s next-door behemoth of a neighbor, saddled by a man it secretly detests the most, is also its largest energy supplier, irascible trading partner and purveyor of most maladies diplomatic.