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China's economic growth is sputtering, the Euro is under threat, and the United States is combating serious trade disadvantages. However, this is not another great recession but rather a critical rebalancing of world economies.
Given the collective nature of China’s decision-making, more attention needs to be given to whether China’s unique form of regional decentralization can continue unchanged.
Rather than being an economic vulnerability, China's banks are too secure. The challenge is to introduce more competition and improve governance of the banking system.
Higher growth in China is no longer compatible with a strengthening balance sheet. Fortunately, the current Chinese leadership recognizes the need to implement informs and understands that it is going to be a politically difficult process.
The Chinese Party Congress is mainly about domestic political power and domestic policies, but it can also serve as an important indicator of future policy direction and power structure, including within the foreign policy arena.
China will become more "normal" in 2013, moving away from its unbalanced, unsustainable, and uncoordinated economic structure. However, this will make China more susceptible to business cycles and could undermine its current authoritarian model.
China’s impressive growth record has been facilitated by a unique relationship between Beijing and the provinces that encourages experimentation and incentivizes officials for driving economic growth.
A new report suggests that even under optimistic scenarios, it will be very hard to maintain a high rate of investment in China. The challenge is to find a readjustment strategy that does not lead to a sharp drop in GDP growth.
Even as the currency war between China and the United States recedes, the battle over foreign investment and technology transfer policies will continue to escalate in the coming months.
The United States and China must find ways to cooperate if the rebalance of American policy toward Asia is to succeed.