China: ‘Important Information’ vs. Information that Is Important
BEIJING | By Yang Hengjun via Caixin | Leaders in China should beware of reports and views that are sanitized so as not to offend because they will lead to distorted decision-making.
World economy
China’s growing private sector
By Richard N. Cooper via Caixin | There is a widespread impression both inside China and out that after the vigorous economic reforms of the 1980s and 1990s, moving away from central planning and state control to greater emphasis on markets, the reform process stopped, or even reversed, during the 2002-2012 period. This view was perhaps reinforced by the emphasis in the third plenum of the Communist Party’s 18th Central Committee in November 2013 on the need to move further toward less guidance from the state and greater reliance on market prices to allocate resources.
The Fed becomes slightly more hawkish
MADRID | The Corner | As expected, the Fed confirmed the end of its QE3, although the announcement was slightly more restrictive. According to experts at Link Securitites, “while the decision shows that US economic conditions have improved (especially the labour market) and inflation remains at low levels, the message tone was more hawkish.”
Fed shutters bond-buying program
MADRID | The Corner | Showing its confidence in the US economic recovery and the jobs market, the Fed announced it will put an end to its bond purchases scheme before the end of this week, the central bank announced after its FOMC two-days meeting on Thursday. Short-term interest rates will remain near zero for a “considerable time”.
Central bankers are blind to new Phillips curve? Or just sadists?
SAO PAULO | By Benjamin Cole via Historinhas | No, I do not have dense pages of calculus for the reader, purporting that QE would be ruin or divine salvation, or that minor deflation is the theoretical apex of an economic model.
China builds in Africa, but the foundations are shallow
BEIJING | By Zhou Xin | The positive side of Chinese involvement in Africa is well-known, but a lack of shared values means projects are inefficient and lack vision.
Brazil’s poor ready to sweep Dilma to victory in spite of market concerns
MADRID | By Sean Duffy | A faltering economy, a plummeting currency, skeptical markets and a polarized electorate are just some of the issues observers are focusing on this weekend as Brazilians go to the polls in what has been labeled the tightest election for a generation.
Are we talking about deflation?
MADRID | The Corner | Which is the real origin of the deflationist pressure that the global economy is facing? A greater desire of saving money than investing at a global scale, experts at Morgan Stanley point out. The eurozone, Japan and the most stable emerging countries have a greater control over their domestic interest rates, whereas China, whose currency is pegged to the USD, will also import deflation -something Beijing won’t like.
Australia: A “Swedish Governor” at the RBA?
SAO PAULO | By Marcus Nunes via Historinhas | It would be pretty depressing, so late in the game, to see “gold medalist” Australia fall into a Swedish-type trap. I hope Mr Lowe is a lone voice: Australian central bank Deputy Governor Philip Lowe urged vigilance on asset prices inflated by record-low interest rates and said government action is needed to encourage companies to invest.
For China’s property market, all is not lost
BEIJING | By Liu Ligang via Caixin | Pessimistic voices are saying China’s property market is nearing a Japan-style collapse of the late 1980s, but this ignores the fact urbanization will continue to create demand for homes.