The pessimists have always been wrong


Arthur Kroeber is one of the most perspicacious observers of China’s economy. His views are closely scrutinized by global investors. Kroeber has a cautiously optimistic, but entirely hype-free perspective on the movement of money in the Middle Kingdom that many of us at SupChina are in sympathy with, as you can hear in our Sinica Podcast: Arthur Kroeber vs. The Conventional Wisdom.

The China Economic Quarterly, a journal founded by Kroeber 20 years ago, is ceasing publication as the company behind it pursues one-off reports. In the Australian, Rowan Callick summarizes (paywall) “four hard-earned and important lessons about China’s economy” learned during the Quarterly’s 20 year run, and reflected in its final issue:

  • The pessimists have always been wrong;
  • Effectiveness — at allocating resources to produce sustained growth — trumps efficiency;
  • The financial system is stronger than it looks; and
  • And a dynamic economy can survive even authoritarian politics.

Kroeber also believes that “it is basically impossible for China ever to fully liberalise its capital account” because its economic stability depends on a large pool of captive domestic savings, restrictions on capital outflows and limits on borrowing from abroad. As long as this situation continues, China will not be able to take a leading role in the global financial system.

Comparisons are odious, solar power edition

Headlines from the U.S. today:

Meanwhile in China:

JOB AD: Schwarzman Scholars seeks academic officer

With a $550 million endowment, Schwarzman Scholars supports up to 200 scholars annually from the U.S., China, and around the world for a one-year master’s degree program at Tsinghua University in Beijing, one of China’s most prestigious universities and an indispensable base for the country’s science and technology research. Schwarzman Scholars is looking for an academic officer based in New York.