News & Commentary:

April 2005 Archives


The Overstretch Myth Recommended!
David H. Levey & Stuart S. Brown (Foreign Affairs) Mar/Apr 2005
The United States' current account deficit and foreign debt are not dire threats to its global position, as would-be Cassandras warn. U.S. power is firmly grounded on economic superiority and financial stability that will not end soon.

Sinking Globalization
Niall Ferguson (Foreign Affairs) Mar/Apr 2005
Could globalization collapse? It may seem unlikely today. Yet despite many warnings, people were shocked the last time globalization crumbled, with the onslaught of World War I. Like today, that period was marked by imperial overstretch, great-power rivalry, unstable alliances, rogue regimes, and terrorist organizations. And the world is no better prepared for calamity now.

The Development Challenge Recommended!
Jeffrey D. Sachs (Foreign Affairs) Mar/Apr 2005
As a matter of policy, Washington is committed to supporting development in impoverished countries, and most Americans believe that it is following through. In fact, U.S. assistance for the world's poorest countries is utterly inadequate. Only a new international development strategy can rectify the situation. Continued failure will be too expensive, for the United States and the world.

Wolfowitz era begins: Realpolitik 1, Democracy 0
Bretton Woods Update No. 45 Mar/Apr 2005
Plus: IMF and World Bank use of conditions under the microscope; Board approves Nam Theun 2 dam in Lao PDR; IFIs on trade: "enormous investment" but to what end?; and more.

Europe throws World Bank to Wolfowitz
AT Apr 1, 2005
Ending speculation of a possible standoff over another of the Bush administration's contentious decisions, Europe has endorsed the nomination of Paul Wolfowitz for the post of World Bank president. All it needed, it seems, were a few sweet nothings on poverty and multilateralism from the candidate.

Not an Issue For the WTO
WP Apr 1, 2005
Much has been made recently of the warming of U.S.-European relations.

US yet to accommodate China's rise Financial Times Subscription Required
Philip Stephens (FT) Apr 1, 2005
The issue of the moment is no longer how the global system adjusts to the American imperium but rather how the US accommodates the world's rising powers, above all China.

Oil prices may see 'super spike'
BBC Apr , 2005
Oil prices rise after Goldman Sachs says strong demand and instability in oil producing countries could push prices above $100 a barrel.

Global: Sputtering
Stephen Roach (MSDW) Apr 1, 2005
While a saving-short US economy keeps chugging along, the rest of the world is fraying around the edges. That’s especially the case in Europe and Japan, where the data have turned soft yet again. Nor is the developing world providing much of an offset, as strength in China is largely being offset by signs of weakness elsewhere in Asia. Our global forecast has long called for a sharp deceleration this year, with world GDP growth estimated to slow from a vigorous 4.8% gain in 2004 to a trend-like gain of 3.8% in 2005. In my view, the global economy is now sputtering, and risks to our baseline scenario are tipping to the downside.

Capital Markets in a Global Economy--Recent Developments
Rodrigo de Rato (IMF) Apr , 2005
I will focus my remarks on capital market developments and related issues, including the relationship between private and official actors in the international financial system. I shall address those themes against the backdrop of current conditions and the outlook for the world economy.

Trade war: US vs the rest of the world
AT Apr 2, 2005
Haunted by its increasingly unmanageable trade deficit, the United States blames virtually the entire trading world for putting up barriers to US exports. But the harshest words have been reserved for China and its "epidemic" of fake goods. Beijing has responded with its own attack on the US.

Before the Fall
NYT Apr 2, 2005
The recent rally of the United States dollar notwithstanding, the greenback has nowhere to go but down.

The Economics of Global Poverty: An Interview with Jeffrey Sachs Recommended!
Fran Quigley (Counterpunch) Apr 2, 2005
In a world of plenty, twenty thousand people died today because of extreme poverty. Tomorrow, twenty thousand more--many of them children--will succumb to the hunger and disease that prey on the poor of the developing world. Twenty thousand more will die the day after that, and so on.

A Man for All Seasons
WSJ Apr 2, 2005
The very modern papacy of John Paul II.

It's a Flat World After All Recommended!
Thomas L. Friedman (NYT) Apr 3, 2005
In 1492 Christopher Columbus set sail for India, going west. He had the Nina, the Pinta and the Santa Maria. He never did find India, but he called the people he met "Indians" and came home and reported to his king and queen: "The world is round." I set off for India 512 years later. I knew just which direction I was going. I went east. I had Lufthansa business class, and I came home and reported only to my wife and only in a whisper: "The world is flat."

Global: The Big Squeeze
Stephen Roach (MSDW) Apr 4, 2005
A US-centric global economy continues to run on fumes. In the developed world, the current recovery has been notable for a lack of organic income growth -- the wage earnings derived from productive employment. For Europe and Japan, this income shortfall has restrained domestic consumption -- forcing these two economies to rely largely on external demand as their only real source of growth. America has been different: Consumption has boomed even in the face of subpar labor income growth. Can this anomaly persist?

Mohsin Khan on the Middle East Adobe Acrobat Required
IMF Survey Apr 4, 2005
Plus: Spring Meetings preview; Cyprus; Malaysia; Namibia; Ukraine; Global Financial Stability Report; Maputo seminar on aid and its trade-offs; Balance sheet approach.

Pope John Paul Symbolized European Integration
Matthew Lynn (Bloomberg) Apr 4, 2005
Pope John Paul II was a Catholic in both senses of the word. He was the leader of the Catholic Church, and so a religious figurehead to millions. Yet he was also catholic, with a small ``c,'' meaning ``universal'' or ``comprehensive,'' able to touch the lives and imaginations of people of many different nationalities and faiths.

U.S. Opens Challenge To Chinese Textiles
WP Apr 5, 2005
Shipments Soar After Lapse of Quota System

Who's for the WTO? Financial Times Subscription Required
FT Apr 5, 2005
The organisation's next chief needs to reconcile members' conflicting interests that arise from special treatment offered by the rich blocs.

China and India May Put Commerce Above Conflict
Andy Mukherjee (Bloomberg) Apr 5, 2005
The thrust of Chinese Premier Wen Jiabao's visit to India later this week will be to put commerce above conflict.

Pope John Paul II and Globalization
Globalist Apr 5, 2005
What were Pope John Paul II's thoughts on the defining issues of his time?

The Byrd Boomerang Wall Street Journal Subscription Required
WSJ Apr 6, 2005
Anti-dumping suits have become self-perpetuating payola for the corporate-welfare constituency.

Vast and rambling websites Financial Times Subscription Required
David Bowen (FT) Apr 6, 2005
International organisations are more used than most to putting the internet at the centre of their communication efforts. Unfortunately, this familiarity has also bred carelessness.

The world economy: You need us and we need you
Economist Apr 6, 2005
America and foreign central banks are locked in a codependent relationship: America is addicted to spending, and the banks can’t stop throwing money at it in order to keep their currencies down. This is unhealthy for both parties, say the IMF and the World Bank. But is there any political will to change it?

A titanic struggle between supply and demand
Economist Apr 6, 2005
Oil hit another new high this week and OPEC promised to raise its production by another 500,000 barrels per day to help ease the pain. But with capacity tight and demand continuing to grow, high oil prices may be here to stay.

Chinese Textile Exports Surge; US, EU To Invoke Textile Safeguard?
BRIDGES Weekly Trade News Digest - Vol. 9, Number 11 Apr 6, 2005
New data indicating a surge in Chinese textile and clothing imports since the abolition of trade quotas at the end of 2004 have prompted the US government to initiate a process that could potentially lead to the imposition of quantitative import restrictions on certain Chinese products. The EU, for its part, has unveiled a set of guidelines outlining the circumstances under which it will consider limiting imports.

Trade Facilitation Discussions Continue: Members Consider New Proposals
BRIDGES Weekly Trade News Digest - Vol. 9, Number 11 Apr 6, 2005
WTO Members discussed several new proposals for simplifying and speeding up the procedures related to the cross-border movement of goods at the 22-23 March meeting of the Negotiating Group on Trade Facilitation. Although Members did not have any major disagreements on the submissions considered, developing countries in particular expressed concerns about the cost of implementing the measures that were being proposed.

'Food Should Be Left Off the Free Trade Table'
José Bové (YaleGlobal) Apr 6, 2005
Many economists believe that trade liberalization is the main driving force that created today's dynamic international market. The increasing exchange of goods and services produced and sold around the world have far-reaching implications for different localities – for better and for worse. One important area of world trade concerning this local and global relationship is agriculture, which has been extremely controversial: Should agricultural products created in the world's agrarian societies be freely traded under the auspices of the World Trade Organization?

The Chinese Menu (for Development) Wall Street Journal Subscription Required
Douglass C. North (WSJ) Apr 7, 2005
Beijing's experience tests basic economic tenets.

Return of the Trade Warriors
WSJ Apr 7, 2005
Signs the Bush administration has reverted to that old-time religion: protectionism.

World Bank forecasts gloom
AT Apr 8, 2005
While 2004 was annus mirabilis for the world economy, this year will be far less dramatic, predicts the World Bank. And if the US deficit is not reined in and oil prices don't stop heading north, not just a significant global slowdown, but a potential world recession could be in the making.

World Bank decision on Laos: A damning indictment
Alan Boyd (AT) Apr 8, 2005
When the World Bank issued its decision to back a US$1.2 billion hydroelectric dam in Laos, opening the door to investment in the country, it was not the poor Laotians the bank was thinking about: the green light was given because European and US money men needed it to happen.

EU follows US to hem in Chinese textiles
AT Apr 8, 2005
Alarmed by the flood of cheap Chinese apparel into its markets, the European Union, just like the US, has initiated an "early warning system" aimed at monitoring textile imports and blocking them if they reach "danger zones". So much for free trade, say critics of this EU move.

Innovation, Not Quotas
WP Apr 8, 2005
The American textile industry, my industry, should stop asking the American people to bail it out because of its failure to adapt to the global economy. That is essentially what industry trade groups have been doing with their efforts to retain artificial barriers to Chinese textile and apparel imports, which reportedly jumped 47 percent in January and have continued to surge.

Time to Get Serious About Development
Jeffrey Sachs Apr 8, 2005
How committed are U.S. policymakers to development assistance?

Oil for dollars, and dollars for the US deficit
Richard Benson (AT) Apr 9, 2005
The price of oil has gone up more than 60%, which really cuts down that US$3.4 trillion of net foreign holdings of US financial assets. It's a sure bet that America's OPEC buddies will stash their newly found Asian lucky bucks in good old American Treasury notes - and Asia will be out in the cold.

China Can Gain from Unshackling its Currency
Rob Trudel (YaleGlobal) Apr 8, 2005
Washington's pressure may be unwelcome, but a revaluation of the renminbi could ultimately benefit China.

As exports boom, China risks global backlash
IHT Apr 9, 2005
China is shifting its global trade balance faster than anyone expected but this might lead Europe to join the U.S. in stronger calls for trade restrictions.

How to Hurt American Business
NYT Apr 9, 2005
A 2000 bill designed to protect American steel from so-called dumping by foreign competitors has come back to haunt exporters and should be repealed.

In the Mood for Trade?
Irwin M. Stelzer (The Daily Standard) Apr 11, 2005
Tony Blair's old spinner-in-chief lets loose.

IMF Executive Board Reviews Fund's Work on International Trade
IMF Apr 11, 2005
On February 28, 2005, the Executive Board of the International Monetary Fund (IMF) reviewed the work of the Fund on international trade.

New IMF-World Bank Report Calls for Urgent Action to Cut Global Poverty and Win Better Development Results for Poor Countries
IMF Apr 12, 2005
Bold and urgent action is needed to reduce extreme poverty and improve people's economic and social prospects in developing countries in keeping with a set of key development targets, called the Millennium Development Goals (MDGs), says a report released today by the World Bank and International Monetary Fund.

Governments Meet In Geneva To Discuss WIPO Development Agenda
BRIDGES Weekly Trade News Digest - Vol. 9, Number 12 Apr 13, 2005
Members of the World Intellectual Property Organization (WIPO) met in Geneva from 11-13 April to discuss whether the organisation is fulfilling its ‘development mandate’ as a specialised agency of the UN. Discussions centred around four proposals on how WIPO could best address development concerns. This process, a direct response to calls for a 'development agenda' for WIPO, could potentially lead to substantial changes in the organisation's mandate. At the end of the meeting members decided to hold two further sessions of the IIM before the end of July 2005.

Antigua, US Gambling Dispute: Appellate Body Issues Mixed Report
BRIDGES Weekly Trade News Digest - Vol. 9, Number 12 Apr 13, 2005
On 7 April, the WTO Appellate Body released its ruling in the "gambling dispute" brought by Antigua and Barbuda against certain US laws restricting the cross-border supply of gambling and betting services from foreign operators. Although the Appellate Body's ruling was mixed, it upheld the panel's findings on two of the most crucial issues in this case, albeit for different reasons.

S&D Talks Adjourn Early Amidst Disagreement
BRIDGES Weekly Trade News Digest - Vol. 9, Number 12 Apr 13, 2005
WTO Members continued to debate the order in which to address agreement-specific and cross-cutting issues related to special and differential treatment (S&D) for developing countries during a meeting of the Committee on Trade and Development Special (negotiating) Session (CTD-SS) scheduled for 6-7 April. The meeting was cut short because some countries, led by India, were not interested in accepting an agenda that, in their view, did not give sufficient priority to the agreement-specific S&D proposals.

It's not the yuan, silly
Francesco Sisci (AT) Apr 14, 2005
So you thought China's currency was the problem? Revaluing the yuan before fixing the creaking banking system, the ailing stock market and the shaky legal framework would open the floodgates to hot money into China, and undermine the world economy.

Precautionary Principles Wall Street Journal Subscription Required
Josef Ackerman (WSJ) Apr 14, 2005
How to avoid another emerging-markets meltdown.

Meeting aid promises
NYT Apr 15, 2005
As the date rapidly approaches for a big meeting where the leaders of the rich world are supposed to come up with a plan to help lift Africa's poor, tired and huddled masses out of poverty, things are starting to get interesting. Last week, Japan announced that it would double its aid to Africa. Granted, Prime Minister Junichiro Koizumi is doing so to better Japan's chances of getting a seat on the UN Security Council, according to Yomiuri Shimbun, a Japanese newspaper, but so what? Money is money.

A Broader View of Aid
WP Apr 15, 2005
The spring meetings of the World Bank and the International Monetary Fund convene here this weekend against a background of a small boom in the aid business.

Mapping the global capital markets Recommended!
Diana Farrell, Aneta Marcheva Key, and Tim Shaver (McKinsey Quarterly) Apr 2005
Understanding the evolution of the world's capital markets is essential for financial institutions seeking to shape them, for policy makers who regulate them, for investors seeking to profit from them, and for executives raising capital in them. To develop such an understanding, the McKinsey Global Institute researched the world's capital markets in-depth and created a comprehensive database of the financial assets of more than 100 countries since 1980.

The world economy: Running out of puff? Recommended!
Economist Apr 15, 2005
At the World Bank/IMF spring meetings this weekend, officials will spend most of their time fretting about high oil prices. But the size and growth of global imbalances—particularly America’s twin deficits—are the real reason to worry.

Is Argentina a Role Model for Philippines?
William Pesek Jr. (Bloomberg) Apr 15, 2005
Ever since Argentina defaulted on debt in 2001, the Philippines has been fending off worries it may do the same.

Global: The Danger Zone of Global Rebalancing Recommended!
Stephen Roach (MSDW) Apr 11, 2005
Trade tensions are spilling over into the political arena. That’s the case in Washington and it could well be the case in Europe if Asia continues to resist on the currency front. All along, the biggest risk of global rebalancing is that the onus of adjustment could shift from economic and financial forces to the politics of trade frictions and protectionism. As global imbalances mount, those risks are now rising -- pushing the world into the danger zone of global rebalancing.

Globalization Is Not Made in the West
Robbie Robertson (YaleGlobal) Apr 13, 2005
Historically-rooted, globalization's latest challenge is to widen and deepen democracy.

Global: Oil Alert -- Products Drive Prices Higher
Richard Berner and Eric Chaney (MSDW) Apr 13, 2005
We’re again marking our oil price trajectory higher, this time by roughly $7/barrel for both Brent and West Texas Intermediate through the end of 2006. We now see Brent quotes averaging $49 this year and $42 next year, versus $42 and $36 in our previous note (“Oil Price Alert: Marking to Markets”, Global Economic Forum, 18 February, 2005). However, unlike many who now see prices rising to $80/bbl. or higher, we believe that by 2006 energy quotes will have been high for long enough to affect demand. Thus, we stubbornly stick to the view that the long-run equilibrium crude price will range between $30-40/bbl.

Global: Tough Love
Stephen Roach (MSDW) Apr 15, 2005
There seems to be no end in sight to the widening of America’s gaping external imbalance. A record $61 billion trade deficit for February is only the latest in a long string of warning signs for an unbalanced US and global economy. The rebalancing required to temper these deficits requires significant adjustments in macro policies. Yet with America’s fiscal and monetary authorities basically frozen at the switch, politicians are asserting greater control over the adjustment process — firing one protectionist salvo after another. The tradeoff between policy adjustments and political actions lies at the heart of the sustainability debate for ever-mounting global imbalances. A tipping point could be close at hand. There’s really no other way to put it — the latest trade numbers in the US were simply terrible. Annualizing the February shortfall puts the US trade deficit at a record 6.0% of GDP — up dramatically from the 4.8% gap only 12 months earlier. (Note: Our estimates would put the broader current-account deficit at yet another new record of around 6.6% of GDP in 1Q05 versus 5.1% a year earlier). For the first two months of 2005, the average annualized trade deficit was $33 billion wider than it was in the final period of 2004. Sure, surging oil prices were an important factor in February, but even after stripping out the trade flows associated with energy products, there was deterioration in the so-called non-petroleum deficit. In fact, over the 12 months ending February 2005, the real, or inflation-adjusted, non-petroleum trade balance widened from -$39.2 billion to -$49.4 billion (monthly rates) — accounting for virtually all the deterioration in the overall real trade balance over the same 12-month period (from -$51.0 billion in February 2004 to -$61.8 billion in February 2005).

Debt relief experts call for IMF gold sales
Mineweb Apr 15, 2005
Two Washington, DC-based think tanks--dedicated to global development and international economic policies--Thursday estimate that the sale of 16 million ounces of IMF gold would raise about $7 billion for developing nation debt relief.

Transcript of Press Conference of the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (Group of 24)
IMF/G24 Apr 15, 2005
The members of the Intergovernmental Group of 24 on international monetary affairs and development met this morning. As you can read in our communiqué which has been circulated to you, we consider the outstanding contemporary concerns of our countries in particular the world economic situation and outlook, crisis prevention, the Millennium Development Goals, international trade issues, the role of the International Monetary Fund and the World Bank, and governance in the Bretton Woods Institutions.

IMF Executive Board Discusses Review of the Conditionality Guidelines
IMF Apr 15, 2005
On March 25, 2005, the Executive Board of the International Monetary Fund (IMF) discussed a staff paper covering the review of conditionality guidelines adopted by the IMF in 2002.

More Than Free Trade
WP Apr 16, 2005
Five years ago free-traders had a lazy time: Anti-globalization protesters were crude, their arguments easily deflated. Today a harder debate is underway. Troubling questions about trade are being raised by globalization's defenders. The risk is that politicians will seize hold of those questions and provide the wrong answers.

Global: Tilt!
Stephen Roach (MSDW) Apr 16, 2005
An unbalanced global economy is at risk of becoming unhinged. Beset by record imbalances between current account deficits and surpluses, it doesn’t take much to derail a system that is already in serious disequilibrium. Such a possibility now seems less remote in the face of a confluence of powerful blows -- an energy shock, threats to European unity, an outbreak of overt hostility between China and Japan, and the rising tide of US-led protectionist sentiment. Meanwhile, steeped in denial, global policymakers are asleep at the switch. With an unbalanced world lacking the inherent resilience needed to overcome these mounting tensions, the global expansion is now at risk. That conclusion does not seem to be lost on stretched and still overvalued financial markets.

Facing facts on China trade Financial Times Subscription Required
Guy de Jonquières (FT) Apr 18, 2005
In the gathering storm in Washington over "unfair" trading by China, there is no more sensitive lightning rod than textiles and clothing.

Addicted to Protectionism Wall Street Journal Subscription Required
Laura E. Jones (WSJ) Apr 19, 2005
The U.S. textile industry and its supporters in Congress have been singing the same refrain for decades.

The Dollar Danger
WP Apr 19, 2005
Trasury Secretary John W. Snow did his best to sound serious over the weekend about the fault lines in the world economy. He called on China to stop pegging its currency to the dollar, a reform intended to allow the Chinese currency to rise, easing the flood of cheap exports that contributes to the record U.S. trade deficit. At the same time, Mr. Snow promised cuts in the U.S. budget deficit, which would reduce the nation's consumption, including the consumption of imports; Japan and the European Union were urged to promote growth, which would suck in U.S. exports. All of these reforms are intended to bring the nation's trade deficit back toward balance. If they fail, markets may cut the trade deficit in their own blunt way -- via a precipitous collapse of the dollar.

Revaluing the Yuan Would Do More Harm Than Good Wall Street Journal Subscription Required
Fang Xinghai (AWSJ) Apr 20, 2005
The current exchange-rate regime has served China, and the world, so well.

Should the Magi Have Bought Bethlehem?
Llewellyn H. Rockwell, Jr. (Mises Daily) Apr 20, 2005
Some of the most vociferous attacks on free trade in recent years have come from religious lobbies, and are led by people who believe that they have the best interests of the workers in mind. They call on us to buy products labeled fair trade, or to boycott growers who employ low-cost labor, or to refuse products made by international corporations operating in the third world, or to join protestors at any international conferences where it is believed that the conspirators inside are seeking to lower barriers to trade. They do all of these things under the conviction that to limit the right to buy and sell is part of the mission of spreading the social gospel.

Agriculture Negotiations Suspended Over AVEs - Again
BRIDGES Weekly Trade News Digest - Vol. 9, Number 13 Apr 20, 2005
On 19 April, New Zealand's WTO Ambassador Tim Groser, who chairs the WTO agriculture negotiations, suspended a meeting of the Committee on Agriculture (CoA) special (negotiating) session due to Members' differences over the process for converting 'specific' agricultural tariffs based on quantities imported into 'ad valorem' equivalents (AVEs), i.e., tariffs based upon the price of the product. The 'agriculture week,' which started on 13 April and was set to conclude on 19 April, focused intensely on clearing the hurdle of AVE conversion, with key Members meeting informally on the issue. AVE conversion had also been left inconclusive at the end of the previous agriculture week on 18 March.

Argentina, Brazil, India Put Forward Proposal On NAMA
BRIDGES Weekly Trade News Digest - Vol. 9, Number 13 Apr 20, 2005
Argentina, Brazil, and India have put forward a long-awaited proposal (TN/MA/W/54) for liberalising trade in non-agricultural products in the ongoing round of WTO talks, calling on Members to entrench favourable treatment for developing countries in both the structure and implementation of the formula for cutting tariffs.

DG Race: Seixas Out, Lamy 'Enjoyed Highest Level Of Support'
BRIDGES Weekly Trade News Digest - Vol. 9, Number 13 Apr 20, 2005
Brazilian WTO Ambassador Luiz Felipe de Seixas Correa has become the first candidate to withdraw from the race to succeed Director-General Supachai Panitchpakdi. WTO General Council Chair Ambassador Amina Chawahir Mohamed of Kenya reported on the first round of the selection process she is leading to an informal 15 April meeting of heads of Member delegations, describing Seixas Correa as "the candidate least likely to attract consensus."

Blame China?
NYT Apr 21, 2005
When it comes to the value of China's currency, neoprotectionist members of Congress should be careful about what they ask for.

The coming crisis
Rohit Chawdhry (AT) Apr 22, 2005
Several factors tend to precipitate emerging market crises: a slowdown in the global economy, falling global liquidity, rising interest rates in the US, and a crisis in a specific country. Conditions are now falling into place for just such a market dislocation, and a renewed rally by the beleaguered dollar.

Free Trade in Rice Too
WSJ Apr 22, 2005
Japan's long-suffering consumers would benefit from Australian goods.

China-bashing and trade
Economist Apr 22, 2005
America's Congress is taking a harsher line on trade, particularly with China. The Bush administration is also getting into the act, with the treasury secretary and even the newly nominated trade representative talking tough. Is America turning protectionist?

The future of Asia in 10 uneasy questions
IHT Apr 23, 2005
Here are 10 questions for Asia that seem critical to the future of the most dynamic region in the world.

A 'Peaceful Rise'?
WP Apr 23, 2005
China's promise of a "peaceful rise" to great power status sounded reassuring when it was first articulated by President Hu Jintao. As it has taken on substance over the past several years it has rung increasingly hollow. Mr. Hu's idea of "peaceful" so far has included the blunt suppression of democracy in Hong Kong; outreach to rogue regimes around the world, such as Iran and Sudan; double-digit annual increases in defense spending; adoption of a law committing China to a war of aggression against democratic Taiwan if it fails to satisfy Beijing's demands; and now, the crude use of nationalist sentiment to intimidate Japan. Far from ensuring stability, Mr. Hu's policy risks polarizing the region and forcing the United States and other outside powers to choose sides.

Global: How the Fed Is Doing China a Favor
Stephen Roach (MSDW) Apr 23, 2005
The co-dependent relationship between the US and Chinese economies is about to take a new twist. As the US Federal Reserve finally gets serious about monetary tightening, an export-led Chinese economy could come under pressure. China can ill afford to ignore this risk.

A Fragile Success in Africa
NYT Apr 25, 2005
With its steady though slow economic growth, Ghana has lately taken up the mantle of what passes for a success story in Africa.

An electronic exchange
IHT Apr 25, 2005
The proposed merger between the New York Stock Exchange and Archipelago, an electronic trading network, is being touted as the salvation of the Big Board, whose trading-floor auction system has looked increasingly archaic in an era of high-speed communications.

China's alternative to revaluation Financial Times Subscription Required
Lawrence Lau and Joseph Stiglitz (FT) Apr 24, 2005
There are several reasons voluntary imposition of a tax on its exports may be preferable to a renminbi revaluation.

Protect Us From Protectionists Wall Street Journal Subscription Required
Richard W. Fisher (WSJ) Apr 25, 2005
When will our politicians learn the truth about trade?

Global: Original Sin
Stephen Roach (MSDW) Apr 25, 2005
In all my years in this business, never before have I seen a central bank attempt to spin the debate as America’s Federal Reserve has over the past six or seven years. From the New Paradigm mantra of the late 1990s to today’s new theories of the current-account adjustment, the US central bank has led the charge in attempting to rewrite conventional macroeconomics and in making an effort to convince market participants of the wisdom of its revisionist theories. The problem is that this recasting of macro is very self-serving. It is a concentrated effort on the part of the Fed to exonerate itself from the Original Sin of failing to address asset bubbles. The result is an ever-deepening moral hazard dilemma that poses grave threats to financial markets.

Spring Meetings wrap-up Adobe Acrobat Required
IMF Survey Apr 25, 2005
Plus: IMFC communiqué; IMF strategic review; World Economic Outlook; Oil; Low-income countries; Global Monitoring Report; African outlook; Brazil; Honduras; World Development Indicators.

Asia shuns African textiles
AT Apr 26, 2005
The end of the quota system for the international textile trade has spelled doom for the textile industry in South Africa and many of its neighbors. With the center of the international textile trade set to move to Asia, Asian investors are turning their backs on Africa.

13 members pressure EU over textiles from China
IHT Apr 26, 2005
China said that it would "resolutely oppose" any moves to reimpose quotas.

The Cafta Opportunity Wall Street Journal Subscription Required
WSJ Apr 26, 2005
Quaking at competition from El Salvador.

We Have to Have Cafta Wall Street Journal Subscription Required
William S. Cohen & William J. Perry (WSJ) Apr 26, 2005
The treaty is important for trade -- and vital for security.

A test for economic openness Financial Times Subscription Required
Guy de Jonquières (FT) Apr 25, 2005
Hunger for raw materials will continue to pit China against Japan in a global contest that engages their diplomatic, as well as commercial, muscle.

Greenspan Misses the Point About Yuan
Andy Mukherjee (Bloomberg) Apr 26, 2005
Alan Greenspan has once again missed the point about what's going to unfix the pegged Chinese currency.

The Downsizing of the Dollar in Oil Prices
Bernard Wasow (Globalist) Apr 26, 2005
How are oil prices impacting the value of the dollar in relation to other foreign currencies?

Imbalances will require global solutions Financial Times Subscription Required
Martin Wolf (FT) Apr 26, 2005
The way to achieve change in the real exchange rate is via a big fall in the dollar and a jump in the domestic prices of tradeable goods.

Spend more, dare more, do more
IHT Apr 27, 2005
The EU must become more competitive and remove barriers to economic growth.

When the Dollar Bill Comes Due
Catherine L. Mann & Katharina Pluck (NYT) Apr 27, 2005
We aren't paying for the drop in the value of the dollar — yet.

The Global Savings Glut
Robert J. Samuelson (WP) Apr 27, 2005
We are all taught that saving is good -- indeed, Americans are often chided for spending too much and saving too little. But what if the problem of today's global economy is that people elsewhere -- in Europe, Asia and Latin America -- are saving too much and spending too little? Former Princeton University economist Ben Bernanke argues that this is precisely the case. He calls it "the global savings glut."

The End of the U.S. Dollar’s Reign?
Joseph Quinlan (Globalist) Apr 27, 2005
How likely is it that the dollar will be dumped as the world’s reserve currency?

Imports? Never!
T. Norman Van Cott (Mises Daily) Apr 27, 2005
Late in 2001 and early in 2002, America's economic mercantilists (who tend to ascribe domestic economic difficulties to all things foreign) were complaining about cheap foreign steel in the U.S. economy. No sooner had the Bush administration slapped higher tariffs on foreign steel than the mercantilists started spinning sky-is-falling tales about Asians selling computer software and medical technology to Americans at bargain basement prices. The latter spawned a media cottage industry around the term, "outsourcing."

Bonds for Dummies? Yes, and It's About Time
William Pesek Jr. (Bloomberg) Apr 27, 2005
The ``For Dummies'' book people can't be happy. The purveyors of ``how-to'' guides on everything from investing to sex to rugby to gardening haven't gotten around to one on buying Asian debt. That's too bad, considering the vast potential for bonds in the world's most vibrant economic region and the paucity of information on them.

NAMA Week: Members Discuss Argentina-Brazil-India Proposal
BRIDGES Weekly Trade News Digest - Vol. 9, Number 14 Apr 27, 2005
A recent proposal from Argentina, Brazil, and India for reducing tariffs on non-agricultural goods dominated discussions during the first two days of talks in the WTO Negotiating Group on Non-Agricultural Market Access (NAMA). The US was particularly critical of the proposal, arguing that it would not guarantee increased market access for global goods trade.

EU Launches Textiles Safeguard Investigations
BRIDGES Weekly Trade News Digest - Vol. 9, Number 14 Apr 27, 2005
EU Trade Commissioner Peter Mandelson announced on 24 April that he had decided to launch investigations into surges in Chinese textile exports to the EU. The process could potentially culminate in the imposition of restrictions on certain Chinese imports.

China integrates into the global supply chain
Michael Mackey (AT) Apr 28, 2005
The increasing incorporation of the Chinese economy into the global supply chain has profound implications for both China and the rest of the world.

The Future of the World Economy
Stefan Karlsson (Mises Daily) Apr 29, 2005
Last year, the world economy grew by 5%, its fastest rate for many years, led by the extraordinary boom in China and very high growth in most other third world countries too. America and Japan also had fairly strong growth, although Western Europe had a more dismal performance. Can the good times last? Or is the world economy heading for a crisis?

Global: Asia's Only Hope
Stephen Roach (MSDW) Apr 29, 2005
Here in Asia (again), they have only one question for me: How’s the American consumer? For a region lacking in self-sustaining internal demand, this concern is understandable. More than ever, externally led Asian economies remain a levered play on US consumption. Therein lies Asia’s biggest pitfall: If the American consumer ever fades, Asia could be headed for serious trouble. The coming US current account adjustment offers good reason to worry about just such a possibility.

Yuan takes test drive into the open range
IHT Apr 30, 2005
People's Bank of China officials told news agencies in Beijing late Friday that the currency policy had not yet been changed but did not discuss what might happen in the coming weeks.

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