China

What Cameron can do next

What now? That’s the question. This morning it looks not like 17 versus 10, but like 1 versus 26, which is a cold and lonely place for Britain to be. But it is also the right place to be. David Cameron asked for a little and got less. He had to act as he did and will reap the benefit electorally and among his MPs. Labour’s position is not just politically weak, but also unrealistic: it has been clear for weeks it was not possible to run a ‘periphery strategy’ as the 10 states outside the Euro have different incentives to Britain and different long-term aims. And the idea that

Behold post-Putin Russia

Sunday’s parliamentary elections in Russia marked the beginning of the end of the Putin era. It won’t feel like it for another few years, as the Russian strongman ascends to the nation’s Presidency again and bestrides the international stage. But when future historians come to examine post-Putin Russia, the end of 2011 will be seen as the point at which the transition began. Exit polls showed Prime Minister Vladimir Putin’s United Russia party with less than 50 per cent of the vote. United Russia held a two-thirds majority in the outgoing State Duma. The significant drop in support for United Russia — despite electoral fraud and with only tame parties

Nigel Lawson versus Mervyn King

In this week’s Spectator we have a piece from one of our former editors, Nigel Lawson, where he confronts this idea that the West’s woes can be blamed on a new bogeyman called ‘global imbalances’. This is fast becoming the received wisdom, something that even the bankers can point to and blame. It gets everyone off the hook, and takes attention away from the basic failure to regulate the supply of money and quality of investments. CoffeeHousers may be familiar with the argument by now. Time and time again, we hear central bankers shrug their shoulders and say something like: ‘Don’t blame us central bankers and financial policymakers for the

Trouble in Tibet

Tenzin Wangmo, a 20-year-old Tibetan nun, woke up to clear skies on October 17th. At around noon, she gathered the things she needed and walked down the valley to the bridge below her nunnery. Once there, she found a suitable spot, perhaps thumbed the prayer beads strung around her neck one final time, and began to shout. “Let His Holiness the Dalai Lama return to Tibet!”, she cried. “We want religious freedom!” Then she set herself on fire. She walked up and down for about eight minutes, a witness says, before collapsing. Ten days before, two teenage former monks set themselves alight in the same region, Aba county in ethnically

The coming world oil order

Following on from Daniel’s post this morning about a more inward looking America, Daniel Yergin has a very interesting essay in the Washington Post about how the changing balance of the US’s energy supplies are going to change its geo-strategic priorities. Yergin makes the point that by 2020, Canada could be a bigger oil producer than Iran and Brazil could be producing more than half of what Saudi Arabia is currently pumping out. Put these developments together with increased domestic energy production in the States itself and the fact that China is on its way to overtaking the US as the world’s largest oil consumer, and the geo-politics of energy

Summit for nothing?

The punchline to yesterday’s eurosummit comes in the very first paragraph of the official statement, released in the darkness of morning: “The euro continues to rest on solid fundamentals.” Now that you’ve brushed away the tears from that one, what was it that was actually agreed upon in the end? The main measure is effectively a fiscal target for Greece: its national debt, expected to peak at around 180 per cent of GDP in 2013, will come down to 120 per cent by 2020. And this will be achieved by cutting the value of bonds held by private investors in half, alongside further waves of privitisation and Greek frugality. Brussels

Arresting the West’s crisis of confidence

What’s the most important geo-political event of this century? Most people would say 9/11. The Foreign Secretary believes that it is the Arab Spring. But in The Times today (£), Emma Duncan makes a persuasive case for it being the collapse of Lehman Brothers. Duncan argues that Lehman Brothers’ fall has three claims to be an epoch-making event. The first is its contribution to the financial crisis and subsequent economic stagnation. The second is the way that it has catalysed China’s economic rise vis-à-vis the US, with China now predicted to become the world’s largest economy within this decade. The third, the fact that that the economic troubles of the

Dark days

There’s a pessimistic mood in Westminster at the moment, a sense of gloom about the economic prospects of the West. The government expects there to be another round of the European sovereign debt crisis this autumn and believes that the problems of the eurozone will take at least a decade to resolve. No one I’ve spoken to really believes that the plan Merkel and Sarkozy announced on Tuesday will be enough to keep the markets at bay for long. Looking across the Atlantic doesn’t raise spirits either given the state of both the American economy and political system. But the global economic situation will get an awful lot worse if

America continues to unravel

The humbling of America — the cover theme of this week’s Spectator — continues with S&P stripping Uncle Sam of his AAA credit rating. The debt downgrade, it says, “reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” In other words: Obama’s still addicted to debt, and it’s time to stop pretending that his government’s IOU notes rank among the safest investments on earth. Its analysis seems to be pretty much that made by Christopher Caldwell in his brilliant cover story. This move will, as today’s

Some context for the death penalty debate

Something quite remarkable has happened over the past couple of the days. It started with the launch of the government’s new e-petition site, which promises that any petition which secures 100,000 signatures will be “eligible for debate in the House of Commons”. And it continued with Guido Fawkes submitting a petition to reinstate the death penalty for “the murder of children and police officers when killed in the line of duty.” Now national newspapers and MPs alike are adding their voice to Guido’s campaign. And an issue that has huge public resonance, but which is rarely discussed in Westminster, is suddenly getting an airing. Even if — like me —

Where next for the US and Pakistan?

The US-Pakistani relationship is fast deteriorating. In May, I argued that unless President Asif Ali Zardari took decisive action against the ISI, the country’s military would continue to undermine relations with the West. Last week, the New York Times reached the same conclusion, calling for the removal of Lieutenant-General Ahmed Shuja Pasha. As President Zardari did nothing — probably fearing a military coup if he did act — the situation has merely been aggravated. What’s more, Secretary of State Hillary Clinton has warned that the US could suspend military aid to Pakistan unless it took unspecified steps to help find and fight terrorists. And the White House has since confirmed

Chinese whispers

River of Smoke begins with the storm that struck the convict ship the Ibis at the end of Amitav Ghosh’s 2008 Man Booker-shortlisted Sea of Poppies. River of Smoke begins with the storm that struck the convict ship the Ibis at the end of Amitav Ghosh’s 2008 Man Booker-shortlisted Sea of Poppies. Redruth, the vessel of a Cornish plant-hunter, Frederick ‘Fitcher’ Penrose, sails in to Port Louis, Mauritius, two days after the Ibis, while the Anahita, belonging to Bahram Modi, a Bombay opium merchant, encounters the same storm on the other side of the Indian Ocean. Counting the cost of their voyages, characters from all three ships make their way

Gove gets mathematical

Go go Gove, still trying to pack in the initiatives before summer recess. The focus today is on maths and the sciences, where the Education Secretary feels our students are falling behind. In a speech earlier, he set out a number of measures to help ameliorate the situation, including adding his name to City AM’s appeal for bankers to donate to the Further Maths Support Programme charity. But, really, it was his more general remarks that caught the ear. He emphasised, for instance, the growing gap between us and the Asian nations: “At school, British 15-year-olds’ maths skills are now more than two whole academic years behind 15-year-olds in China.

Lagarde three giant steps closer as Russia, China and the US back her IMF bid

The 24 members of the IMF board are meeting to see if they can agree that Christine Lagarde should be the organisation’s next leader without a formal vote. Lagarde has already gained formidable backing. 40 per cent of the membership had indicated its support before today’s meetings, while her closest competitor, Mexican Augustin Carstens, had mustered just 12 per cent of the IMF’s votes. The remaining 48 per cent is now concentrating behind Lagarde’s candidacy. Her popularity extends beyond Europe into the vital emerging markets.  Russian Finance Minister Alexei Kudrin gave his signature today, saying that he hopes she will ‘secure reform of the IMF in the interests of developing

The danger of unbalanced trade with China

The Chinese premier seems to like cars; the Chinese in general seem to like cars. China has bought MG in Britain and Volvo in Sweden, to which it has just added Saab. If the Chinese can make European car companies viable, then what’s the problem? Theoretically nothing: trade will help the Chinese and Europeans alike. But, as Robert Peston made clear in his questioning of Wen Jiabao, trade remains unbalanced. For example, European companies are excluded from public procurement contracts in China. It is also worth noting that China’s purchase of Spanish and Greek bonds over the past year, coupled with their promise to buy from Hungary, have made it

James Forsyth

Britain’s future economic challenge

Wen Jibao’s performance at today’s press conference was typically diplomatic. He declined to say that the UK was going too far in Libya and was emollient on the question of human rights. But his honeyed words can’t obscure the true nature of the Chinese regime. But Wen Jibao’s presence here was also a reminder that the economic competition Britain is going to face in the future is going to come increasingly from the east. If Britain is going to thrive in this world, then it is going to have to produce a huge amount of intellectual property. It is in this context, that Michael Gove’s educational reforms should be seen.

The bear and the euro

Wen Jibao’s comments to the BBC about the euro crisis dramatise the shift in economic power from west to east. Jibao remarked that: “Trust is more important than currency and gold and now, during the debt crisis, we again bring trust to Europe. I have total trust in Europe’s economic development”. But China’s role in the euro crisis is far less problematic than Russia’s. As Stratfor has highlighted, if Russia — or one of its effectively state controlled companies — were to buy a considerable stake in Greece’s gas company DEPA when it is privatised (as it will be as part of the bailout package)  it could render irrelevant the

Unseating Gaddafi

The pressure is being turned up on Colonel Gaddafi, but it may still take a while to have an effect. The Libyan dictator retains some form of power and has told the only person who has been granted access to see him, South Africa’s Jacob Zuma, that he intends to stay on in Libya. He wants a ceasefire before anything else is discussed. The rebels in Benghazi, meanwhile, want him to go before anything else is discussed. And so the bombing goes on. At the UN, people talk of negotiated settlement, fearing that chaos would follow Gaddafi’s killing. That may be true, but there has been little evidence so far

Meeting Christine Lagarde

The FT has been speaking to Christine Lagarde, the French finance minister tipped to become managing director of the IMF. A few salient points emerge from it. First, she has more than a dash of hard-nosed Gallic defiance. Responding to the charge of a lack of a qualification in economics, she reiterated the comments she made to the Today programme earlier in the years: “From what I know of the job, I think I can do it. One of the qualities that people recognise in me is my ability to reach out, to try to build a consensus, to bring people to the common interest while still being a very firm

Hillary Clinton: Chinese regime can’t defy history

Hillary Clinton has given a fascinating interview to the Atlantic Monthly’s Jeffrey Goldberg. The main topic of it is the Arab spring but it is her comments about China that are making waves. When Goldberg comments that the Chinese have been scared by the sight of dictatorships toppling across the Middle East, Clinton replies:“They’re worried, and they are trying to stop history, which is a fool’s errand. They cannot do it. But they’re going to hold it off as long as possible. “ As Goldberg says, it is quite remarkable to hear the US Secretary of State say so frankly that the Communist dictatorship in China will collapse at some point.