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...warning of the precarious state of the Chinese economy, Wen was expressing concerns about the nation's very risky macro bet. With nearly 80% of its GDP going to exports and fixed investment, China had become overly reliant on cross-border trade and on the investments required to support the logistics and capacity of its increasingly powerful export machine. Not only has China slowed dramatically - with export growth turning sharply negative in late 2008 and industrial output growth slipping into the low single digits - but the rest of an increasingly China-centric Asian economy has been quick to follow...

Author: /time Magazine | Title: The Evolution of Asia | 10/12/2009 | See Source »

...China's export dependency went far beyond the unbalanced structure of its real economy. Its financial and currency policies were also aimed at deriving maximum support from external demand. A closed capital account and an undervalued renminbi (RMB) were icing on the cake for China's powerful strain of export-led growth. Moreover, to the extent that its currency-management objectives required ongoing recycling of a massive reservoir of foreign-exchange reserves into U.S. dollar - based assets, such capital inflows helped keep longer-term U.S. interest rates at exceptionally low levels. In effect, China's implicit interest-rate subsidy ended...

Author: /time Magazine | Title: The Evolution of Asia | 10/12/2009 | See Source »

...think President Obama has started extremely well. There's lots of goodwill and support for him around the world. He has enormous challenges both [in the U.S.] and abroad. I think we all need to help him succeed, and we should start by reducing expectations. High expectations can cause problems for politicians...

Author: /time Magazine | Title: 10 Questions for Kofi Annan | 10/12/2009 | See Source »

...correct to do so. With the banking system still shaky, further big declines in house prices could bring disaster. Slowing a price collapse is a reasonable aim of government policy. But as we dig out of this mess, we ought to ask whether the vast infrastructure of government support for homeownership that has been built up since the 1930s is really such a wise policy...

Author: /time Magazine | Title: Get Homeowners Off Welfare | 10/12/2009 | See Source »

...York City continues to show Columbus Day pride - the city holds the largest parade for it in the country. But these public shows of support draw frequent protests from Native Americans, who make the point that Columbus discovered nothing - indigenous populations were living in the Americas long before European explorers made their first tentative trips across the Atlantic. And once here, Columbus wasn't exactly kind to his new neighbors. Indeed, on his very first day in the New World, Columbus took six natives as slaves. He'd go on to press thousands more into forced labor, killing dissenters. Even...

Author: /time Magazine | Title: Columbus Day | 10/12/2009 | See Source »

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