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The plummeting valuation of China’s banks suggests that investors are losing confidence in China’s growth prospects.
Much of China’s explosive debt growth has been driven by the development of a private land market over the past decade, making the surge in debt a sign of financial deepening rather than instability.
The Korean Peninsula is an increasingly dangerous, unstable place, and more provocations from Pyongyang are likely. It is time for responsible officials to show initiative.
China’s failure to reassure other nations and clearly define the enforcement and impacts of its ADIZ has undermined any purported stabilizing intentions and damaged its larger strategic interests.
The Third Plenum all but guarantees that growth rates in China will slow down. In fact, slowing growth is a reasonable proxy for judging the success of the reforms.
It remains to be seen whether the third plenum decisions can put China on a sustainable and robust growth path.
Arguing that China’s deposit interest rate is too low leads to a misplaced emphasis on liberalizing interest rates: the real priorities are capital deepening and regulatory reform.
China’s glut of college graduates may help it become competitive with developed countries in high-skill services and manufacturing, thus helping China escape the middle-income trap.
The reforms proposed at the Third Plenum, if implemented, will remedy the imbalances that have made China’s economic growth unsustainable, but doing so will imply a shard drop in growth.
It will take time and hard work to dispel the mistrust which currently characterizes U.S.-China relations.