In The News

US Debt Standoff Provokes Ire in China

Simon Rabinovitch October 14, 2013
The threat of US debt default is bolstering China’s desire to lessen the world’s reliance on the dollar, reports Simon Rabinovitch for the Financial Times. Chinese officials and analysts are angry and incredulous about US budget shenanigans, but so far are avoiding public comment or drastic moves. “With $1.3tn invested in US Treasuries, any sudden move to sell those holdings would by itself shake...

Global Consequences of US Failure to Pay Debt

October 9, 2013
Deadlock over lifting the US debt limit – arbitrary, created by Congress to control spending – is unnerving economists worldwide. A few in Congress are willing to test a bizarre theory that refusing to pay debt, thus disrupting the global economy, will win them voters’ respect and force the country to tighten spending. Analysts in the US, China and Europe do not agree. Instead, US leaders will be...

Reform and Rebalance

Nayan Chanda October 9, 2013
The US Federal Reserve Board decides monetary policy that influences interest rates at home and overseas. Since the 2007 credit crisis, the Federal Reserve has purchased bonds to inject money into the economy – a policy that lowered interest rates and prompted investors to hunt for higher returns overseas. With slow improvement in the economy, many investors began thinking about returning to US...

Our Democracy Is at Stake

Thomas L. Friedman October 4, 2013
A Republican plan to approve parts of the US budget piecemeal, starting with the popular national parks, would allow a small minority to control spending and end health care, education or other programs favored by Democrats. Thomas Friedman, of the New York Times, argues that “the future of how we govern ourselves is at stake.” He points to structural changes in US politics, including political...

To Shut Down Washington, Republicans Must Ask China's Permission First

Eamonn Fingleton October 2, 2013
China could step in to influence the latest political squabble in the United States by slowing down its purchases of US Treasury debt. A small group of conservative Republicans in US Congress want to slash spending and forced a shutdown of many government operations, while demanding a delay in a health care law, even though that has already slowed rising US health costs. Overseas creditors don’t...

Default or Not, Asia Hostage to US Debt

Choonsik Yoo, Kevin Yao September 30, 2013
Asia is shaking its collective head over dysfunctional US politics. A minority group of US legislators is toying with procedures, presenting the possibility of a government shutdown and a default on the country’s debt while expecting the majority of legislators to meet their demands to delay a healthcare law and cut spending. Creditors in China, Japan and elsewhere in Asia hold about $5 trillion...

Merkel Victory Will Mask Germany's Long-Term Economic Problems

Ambrose Evans-Pritchard September 23, 2013
Angela Merkel was reelected chancellor of Germany for a third term. The world’s fourth largest economy, and Europe’s largest, leads in tackling the eurozone crisis. But writing for the Telegraph, Ambrose Evans-Pritchard warns that Germany’s economic strength is deceptive, “an illusion of the business cycle and a China-driven global boom in machinery and capital goods that is running out of steam...