Carnegie Endowment for International Peace
This year may mark the beginning of China’s most difficult period since the beginning of the reforms in 1978.
Without a huge increase in German spending, there is no way to eliminate years of unemployment, in which case Madrid must quickly decide whether the pain will be paid by German households or by Spanish households.
While some analysts have quickly hailed new economic data from China as confirmation that the Chinese economy has truly bottomed, such data may represent only temporary lulls.
China's reserve currency status is far from settled, as the costs of becoming a reserve currency may outweigh any potential benefits.
If Spain wants to continue along its current path, it must be prepared to suffer another five to ten years of extraordinarily high unemployment, an erosion of the productive capabilities of its economy, and rising political chaos.
China needs a new economic growth model, with a different financial system, modified state sector, and the political reforms necessary to accommodate both.
Experts disagree how soon rising consumption can replace investment as an engine of economic growth in China, a question that will determine whether or not China undergoes a painful rebalancing.
Growth forecasts based on China's current development model overstate future growth rates because they fail to account for structural shifts during the necessary rebalancing process.
Europeans are so concerned with the crises in peripheral economies that it will come as a surprise that we may be at the beginning of a developing crisis in China.
In order to sustain the bullish argument for China's growth prospects over the next decade, questions debt, further investment projects, and growth rate of household consumption must be answered.