President Obama is meeting today and tomorrow with Xi Jinping, the new president of China, at an estate in Rancho Mirage, Calif. Today’s forecast high: 113. Who thought this was a good idea, when the mild Northwest would have provided a more pleasant venue. Anyway, the leaders of the world’s No. 1 and No. 2 economies won’t lack for things to discuss. Thanks to China’s state capitalism and mercantilist policies — and to America’s debt and consumer appetites — we are no longer either the world’s No. 1 exporter or the world’s largest trading nation. Those titles go to China.
On the other hand, Chinese growth is slowing, the country faces massive environmental, poverty and demographic challenges. The Communist Party’s hold on power is not to be taken for granted, nor the relationship between the party and the People’s Liberation Army, which is also a massive player in the economy. As always, Washington is an outlier. Where China’s trade plays have decimated manufacturing in many states, China is Washington’s largest export destination. The health of China’s economy and expanding our trade ties was high on the agenda of last night’s Trade Development Alliance of Greater Seattle annual dinner, where Gov. Jay Inslee was the keynote speaker.
The two leaders will have plenty to discuss. What do you think should be No. 1?
Read on for some of the most interesting stories of the week you might have missed and the haiku:
This Week’s Links:
• Number of older workers rises to all-time high | Zero Hedge
• Perspective on post-World War II recessions and recoveries (charts) | Minneapolis Fed
• Drillers silence fracking claims with sealed settlements | Bloomberg
• Costco CEO leads the cheapest, happiest company in the world | BusinessWeek
• The Asian housing bubble burst | Triple Crisis
• This is the way blue-collar America ends | The Atlantic
• The student loan issue in graphics | St. Louis Fed
Today’s Econ Haiku:
So Franklin warned us
‘He who would trade liberty…’
Now: Ben there, done that