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China’s path to sustainable growth runs through its megalopolises
BY ASIA TIMES STAFF Success hinges on Beijing’s model of regional economic experiments, economists say
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Why is the Renminbi Depreciating?
Yu Yongding hopes that, whatever the reason, the People's Bank of China forswears market intervention. 
President Donald Trump said it’s not the right time for trade negotiations with China, denting expectations for a near term deal after a breakthrough agreement between the U.S. and Mexico. - Bloomberg
China is challenging the latest round of U.S. tariffs against Chinese goods through the World Trade Organization. - Associated Press For the first time in its long history, China has in President Xi Jinping a leader with a truly global vision. So, inevitably, Beijing looks to the U.S., the sole superpower, for a yardstick as to what that requires—be it a blue water navy or more research stations in Antarctica. - Bloomberg
Claude Barfield writes: In coming months as the US and China spar over its predatory mercantilist practices, the Trump administration should give notice that it will widely publicize any cyber intrusions or IP theft that it uncovers. - American Enterprise Institute
 Raghuram Rajan Sees Emerging Markets As A Global Risk
interview with Raghuram Rajan via Bloomberg Hoover Institution fellow Raghuram Rajan discusses the economic risks facing the global economy.  Strong Dollar Puts Emerging Markets in Danger – Jacob Shapiro, MarketWatch Has the Emerging-Economy Crisis Cycle Ended? – José Antonio Ocampo, Project Syndicate The Economic Costs of Erdoğan Timur Kuran and Dani Rodrik lay the blame for Turkey's crisis squarely at the feet of its autocratic president. Emerging Vulnerabilities in Emerging Economies Michael Spence calls for a rebalancing of growth patterns and more active management of debt and capital flows. The Turkish lira weakened on Tuesday as investors weighed up Turkey’s efforts to manage its rift with the United States after Finance Minister Berat Albayrak warned that U.S. trade sanctions against Ankara could destabilise the Middle East. - Reuters
 So much for China risk BY DAVID P. GOLDMAN Movement of the yuan vs the dollar during the past two months has nothing much to do about China Geoeconomics Isn’t Back – It Never Went Away By Mark Beeson, the interpreter: “The American Marshall Plan and China’s grandiose Belt and Road Initiative, which – if realised – will dwarf America’s post-war efforts, are similar in many ways.” How the United States Should Confront China Without Threatening the Global Trading Syste
The Trump administration’s willingness to violate trade rules to maximize its negotiating leverage is undermining its most important and most legitimate objective in international trade and investment: persuading China to reform its problematic economic system, in which foreign firms are...
Adam Taylor writes: But not everyone is convinced that Belt and Road is such a great plan — either for China or the countries in which it’s investing. And with Malaysia announcing Tuesday that it has shelved two major infrastructure projects being built by Chinese companies because of high costs, many more leaders around the world may be wondering whether Chinese investment is actually a good deal. - Washington Post
Kevin Rudd writes: While we won’t have any real indication as to the tenor of the Chinese discussions or their conclusions for awhile yet, it’s worth thinking through where this trade war could take us all in the absence of effective diplomatic intervention. History tells us trade wars are easy to start and hard to stop, just like real ones. There’s a reason for that. The material stakes become greater as hostilities continue. And the domestic political cost of backing down gets higher and higher. - Bloomberg  Massive P2P Failures in China: Underground Banks Going UndeR Online peer-to-peer (P2P) lending was once touted as a way to transform finance , making it more efficient and allowing less advanced economies to leapfrog the United States. No one embraced it more than China, which boasts the world's largest P2P lending sector. But after granting trillions of... REALITY CHECK Takeaways from Venezuela's Long Descent by Michael Dempsey
Erdogan again threatens Central Bank’s independence amid massive rate hike Turkish President Recep Tayyip Erdogan today denounced a “rather high” interest rate hike by Turkey’s Central Bank. “Here you go with independence. I am in a stage of patience at present but this patience has limits,” Erdogan said at a meeting of his Justice and Development Party. On Thursday, the Central Bank hiked its policy rate by 625 points to prop up the embattled Turkish lira. Hours before Erdogan spoke, Finance Minister Berat Albayrak, the president’s son-in-law, had said that the rate hike had put an end to the debate over whether the Central Bank was truly independent. Read More Turkish Central Bank hikes interest rate to 24% BY ALISON TAHMIZIAN MEUSE The move to steady the economy is imposed despite longstanding opposition from President Erdogan Trump’s hallmark is insularity Desmond Lachman | Official Monetary and Financial Institutions Forum Emerging markets account for more than half of world economic output and have been the main engine of global economic growth. The repercussions of the Turkish economic crisis provide ample forewarning. By ignoring the plight of emerging markets, the US is steering a perilous course.  There is no contagion from Turkey BY DAVID P. GOLDMAN On the contrary, investors are taking each market on its own merit Turkey crisis rattles Asian nations with rising Belt and Road debts (Asia Nikkei Review) Turkey's currency crisis is adding to the financial troubles of emerging Asian economies that have taken big loans for infrastructure projects under China's Belt and Road initiative. The Turkish Emerging Market Timebomb Jim O'Neill shows that the currency crisis is long overdue, and expects sober minds ultimately to prevail. Erdoğan's Authoritarian Quackery Nina Khrushcheva argues that the Turkish president's bizarre theories provide some fundamental insight into dictatorship. Can Turkey Rewrite the Crisis-Management Rules?
Mohamed El-Erian hopes the government reverses its rejection of interest-rate hikes and IMF support before it's too late.   Chinese investments in the US
Derek Scissors | AEIdeas The China Global Investment Tracker follows large Chinese investments around the world. The leading recipient of these investments is the US, which received $175 billion between January 2005 and June 2018. However, Chinese investment in the US has plunged since its 2016 peak.  Beijing's problems in the trade war with the US (Deutsche Welle) There are allegedly differences within the Chinese leadership over the course of the trade dispute with the US. A consensus might be found at the traditional summer party conference in Beidaihe. Tariffs Prompt U.S. Manufacturers To Review Plans: Fed Survey quoting Steven J. Davis via Bloomberg America’s escalating trade dispute with China and other trading partners has prompted almost a fifth of U.S. businesses including about 30 percent of manufacturers to review their capital spending plans, according to a study by the Federal Reserve Bank of Atlanta. Whose stocks took a beating from China tariffs?
BY DAVID P. GOLDMAN Stocks that reflect America’s export potential have been hit just as hard has Chinese equities
US-Turkish alliance reaches the point of no return
BY M.K. BHADRAKUMAR The sense of indignation among Turks should not be underestimated, which makes this an exceptional rupture
Turkey contagion is limited
BY DAVID P. GOLDMAN Among emerging market ETFs, China has been one of the most resilient, despite the ongoing trade war
Is Turkey’s 'strategic partnership' with America coming to an end?
An expert maintains that if solutions to the structural factors poisoning ties cannot be found, Turkish-American relations will continue to deteriorate.
The Turkish lira dropped dramatically against the dollar Friday, losing more than 18 percent of its value in one day — worsening an already months-long decline for Turkey’s currency. What caused this steep drop in the price of the lira? There are multiple factors, many of which are related to the economic policies of Turkey’s leader, Recep Tayyip Erdogan. - Washington Post
Editorial: Like King Lear raging on the heath, Turkey’s Recep Tayyan Erdogan is lashing out at Donald Trump, financial markets, the almighty U.S. dollar and anyone else he can find to assign blame for his country’s currency and debt crisis. Someone should introduce him to economist Steve Hanke, who is offering the Turkish strongman the best lifeline available to stop the panic. - Wall Street Journal Ishaan Tharoor writes: On Friday, the Turkish lira suffered its biggest one-day devaluation in nearly two decades, dropping more than 14 percent against the dollar. The minister of finance — the son-in-law of Turkish President Recep Tayyip Erdogan — couldn’t avert the slide, delivering a halting speech that did little to boost confidence. But Erdogan, as he so often does, placed the blame on a foreign scapegoat: the United States. - Washington Post Desmond Lachman writes: Among the more important lessons that can be learned from the ever-deepening Turkish economic and financial market crisis is that years of ultra easy monetary policies by the world’s major central banks can have serious adverse consequences. - American Enterprise Institute Desmond Lachman writes: One has to wonder what it will take for Erdogan, Turkey’s president, to recognize that his country has a major investor confidence problem that needs to be addressed immediately if his country is not to succumb to the deepest of economic recessions. One also has to wonder how long it will take him to realize that his country has little realistic option but to approach the IMF for assistance to restore investor confidence. - American Enterprise Institute
Turkish currency crisis adds to misery of Indian rupee
BY ASIA TIMES STAFF The market contagion caused by turmoil in the Turkish lira took its toll on the beleaguered Indian rupee, which slipped to record lows
Turkey steps up efforts to shun dollar
As the Turkish lira plunges to a record low, some voices in Ankara are warning that the United States is furious over Turkey’s efforts to reduce its dependency on the dollar.
IMF option looms larger for Turkey amid row with US
Turkey’s economic woes keep growing, exacerbated by central bank inaction and simmering tensions with the United States, in what many see as an inevitable march to the IMF.
The coming battle for Idlib
Syrian regime forces are deploying near and around Idlib province, in northwestern Syria, suggesting that the battle for Idlib is shaping up despite diplomatic gesturing and a statement by Russia denying an imminent operation.
Turkey’s banks at risk of a global run
BY DAVID P. GOLDMAN The selloff in Garanti bonds is a flashing red signal for Turkey’s financial system
Turkish lira slumps further as US reports no real progress on Brunson
The lira slumped again on Wednesday after a American and Turkish negotiators failed to come to a deal over the detention of an American pastor that has resulted in US sanctions against Ankara. The lira fell 4% against the dollar, hiking up losses this year to nearly 30%, after a Turkish delegation led by Deputy Foreign Minister Sedat Onal failed to get the Donald Trump administration to ease pressure on Halkbank, which could face a major US fine for allegedly evading Iran sanctions. The State Department reportedly refused to discuss the issue without a deal to release US pastor Andrew Brunson, who Turkish authorities moved to house arrest last month. “That’s the real progress that we’re looking for, and obviously we’re not there yet,” State Department spokeswoman Heather Nauert said. Read More
Desmond Lachman writes: Two major obstacles stand in the way for Turkey to approach the IMF. The first is that Mr. Erdogan would have to swallow humble pie and in effect admit the waywardness of his past economic policies. The second is that Mr. Erdogan would have to mend fences with the United States, the IMF’s largest shareholder, which would need to sign off on any IMF deal for Turkey. - American Enterprise Institute
Belt and Road: More Than Just a Brand
By Euan Graham, the interpreter: “Fundamentally, beyond the “community of shared destiny for humanity” claimed by Xi, BRI is selling a China-centred order, encompassing Eurasia and its maritime periphery.”
China plants ramping up currency printing for Belt and Road countries
BY ASIA TIMES STAFF Increased overseas demand comes as local Chinese switch to mobile payments
(Think Tank) China’s Belt and Road Initiative: Strategic Implications and International Opposition
(Heritage Foundation) China’s expansive Belt and Road Initiative (BRI)—through which Beijing intends to spend or invest over $1 trillion on new infrastructure and connectivity investments across the Indo-Pacific and Eurasian supercontinent—is already reshaping the economic and geopolitical landscape of the region.
Soviet collapse echoes in China’s Belt and Road
(Bloomberg) Grand investment plans for unproductive regions have caused empires to founder before.
Spending speed bumps hit China’s massive Belt and Road project
BY GORDON WATTS Investment drops by around 15% in the first half of the year as Beijing grapples with US trade war, a cooling economy and domestic problems
Xi Jinping and the China-US trade war. Our experts also commented on the risks of the Belt and Road Initiative, and China's attempt to challenge the rules-based order in the South China Sea.
The Unintended Consequences of a Trade War With China by Wilson VornDick
Rising Deficit Fueling Growth – Justin Fox, Bloomberg View
Trump Policies Have Us Headed for Twin Deficits – Desmond Lachman, AEI  Trade deficits are associated with higher, not lower, levels of US employment
Mark J. Perry | AEIdeas |
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