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	<title>Business &#38; Money &#187; Michael Schuman &#124; TIME.com</title>
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		<title>Business &#38; Money &#187; Michael Schuman &#124; TIME.com</title>
		<link>http://business.time.com</link>
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		<title>The Real Reason to Worry About China</title>
		<link>http://business.time.com/2013/04/28/the-real-reason-to-worry-about-china/</link>
		<comments>http://business.time.com/2013/04/28/the-real-reason-to-worry-about-china/#comments</comments>
		<pubDate>Mon, 29 Apr 2013 02:46:04 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Financial Reform]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=78814</guid>
		<description><![CDATA[The world is worried about China, but not for the right reasons. Global financial markets were roiled after the world’s second largest economy notched only a 7.7% boost to GDP in the first quarter — a drool-worthy performance for most nations, but a disappointment for a country that routinely jumped 10% or more over the past three decades. Economists are busily debating the usual: Will China have a hard or soft landing? Will the government step in and stimulate growth? Those questions miss the bigger picture. The reality is that China is unlikely to witness those astronomical growth rates, at least for some time. We may never see them again. The recent slowdown is not a temporary cyclical blip or solely the knockoff effect of the tepid global recovery. China’s growth model is broken and can’t be so easily fixed. Since the start of capitalist reforms in the 1980s, China excelled by throwing tons of resources into a modernizing economy — mountains of cash to build factories, roads and apartment towers, and millions of poor people into making iPads, blue jeans and cars. Under China’s “state capitalism,” bureaucrats often directed the cash into massive infrastructure projects or favored industries. However, this growth engine can’t keep purring indefinitely. The pools of idle labor that filled Foxconn’s assembly lines are drying up — China’s one-child policy made sure of that, by aging the population more rapidly. The workforce has already started to shrink. Even more worrying, the state-led, investment-obsessed system spawns too much debt and too many factories, leading to wasted resources and a debased financial sector. (MORE: Can China Escape the Middle-Income Trap?) That’s what is happening in China today. Everywhere you look, the signs of rot are apparent. In a mad-cap quest to dominate green energy, China’s banks pumped billions into solar-panel manufacturing, creating hundreds of factories and vaulting China into the world’s largest producer. Now the sector has become a victim of its own excess: companies are failing, symbolized by the recent bankruptcy of market leader Suntech Power. Steel companies<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=78814&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/economy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/04/biz-china-economy-130429.jpg?w=240</featured_image>
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			<media:title type="html">A laborer works in a chemical plant in Hefei, central China&#039;s Anhui province, April 7, 2013.</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<item>
		<title>A Yen for Cash: How the Bank of Japan Could Threaten the Global Economy</title>
		<link>http://business.time.com/2013/04/08/a-yen-for-cash-how-the-bank-of-japan-could-threaten-the-global-economy/</link>
		<comments>http://business.time.com/2013/04/08/a-yen-for-cash-how-the-bank-of-japan-could-threaten-the-global-economy/#comments</comments>
		<pubDate>Mon, 08 Apr 2013 16:52:00 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[World Finance]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=77110</guid>
		<description><![CDATA[Japan has been an experiment in economics ever since its crushing defeat at the end of World War II. First, Tokyo employed inventive techniques to rebuild its economy and wealth — the export-led, state-directed system in which bureaucrats “targeted” industries for special support — that broke with economic tradition and became a development model for the rest of the region to follow. Then after the country’s massive stock-and-property-price bubble exploded in the early 1990s, Japan became a much examined case study in how to handle (or not handle) a financial crisis. After that, economists have puzzled over why Japan has been unable to escape the long stagnation it has suffered ever since. Now Japan is embarking on yet another set of unconventional policies in an attempt to revive itself, which, if successful, could rewrite the rules of fiscal and monetary policy. Whatever the result, economists will likely be studying Japan for decades to come. On Thursday, the new governor of the Bank of Japan (BOJ), Haruhiko Kuroda, announced that the central bank would double the monetary base of the country — adding an additional $1.4 trillion — by the end of 2014 in an attempt to end the deflation plaguing the economy. To achieve that, Kuroda will buy government bonds and other assets to inject cash into the economy — what has now become familiar as quantitative easing, or QE — to bump inflation up to a targeted 2%. The plan is part of a greater strategy ushered in by new Japanese Prime Minister Shinzo Abe to restart the economy through massive fiscal and monetary stimulus. It also expands on the efforts by the Federal Reserve, Bank of England and European Central Bank to stimulate growth and smooth over financial turmoil by infusing huge sums of new money into the global economy. Even by the standards of central-bank largesse since the 2008 financial crisis, however, the BOJ’s plan is massive, unprecedented and untested. You’d think that traditional economists would be screaming that revving up the cash printing presses on such a scale would spark hyperinflation and turn<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=77110&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/04/biz-japan-bank-130408.jpg?w=240</featured_image>
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			<media:title type="html">Pedestrians are watching Tokyo stock indexes on a public display board in Tokyo, April 8, 2013.</media:title>
		</media:content>

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			<media:title type="html">michaeljschuman</media:title>
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		<item>
		<title>Marx’s Revenge: How Class Struggle Is Shaping the World</title>
		<link>http://business.time.com/2013/03/25/marxs-revenge-how-class-struggle-is-shaping-the-world/</link>
		<comments>http://business.time.com/2013/03/25/marxs-revenge-how-class-struggle-is-shaping-the-world/#comments</comments>
		<pubDate>Mon, 25 Mar 2013 04:01:13 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[World Finance]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=75631</guid>
		<description><![CDATA[Karl Marx was supposed to be dead and buried. With the collapse of the Soviet Union and China’s Great Leap Forward into capitalism, communism faded into the quaint backdrop of James Bond movies or the deviant mantra of Kim Jong Un. The class conflict that Marx believed determined the course of history seemed to melt away in a prosperous era of free trade and free enterprise. The far-reaching power of globalization, linking the most remote corners of the planet in lucrative bonds of finance, outsourcing and “borderless” manufacturing, offered everybody from Silicon Valley tech gurus to Chinese farm girls ample opportunities to get rich. Asia in the latter decades of the 20th century witnessed perhaps the most remarkable record of poverty alleviation in human history — all thanks to the very capitalist tools of trade, entrepreneurship and foreign investment. Capitalism appeared to be fulfilling its promise — to uplift everyone to new heights of wealth and welfare. Or so we thought. With the global economy in a protracted crisis, and workers around the world burdened by joblessness, debt and stagnant incomes, Marx’s biting critique of capitalism — that the system is inherently unjust and self-destructive — cannot be so easily dismissed. Marx theorized that the capitalist system would inevitably impoverish the masses as the world’s wealth became concentrated in the hands of a greedy few, causing economic crises and heightened conflict between the rich and working classes. “Accumulation of wealth at one pole is at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole,” Marx wrote. A growing dossier of evidence suggests that he may have been right. It is sadly all too easy to find statistics that show the rich are getting richer while the middle class and poor are not. A September study from the Economic Policy Institute (EPI) in Washington noted that the median annual earnings of a full-time, male worker in the U.S. in 2011, at $48,202, were smaller than in 1973. Between 1983 and 2010, 74% of the gains in wealth in the<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=75631&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://business.time.com/2013/03/25/marxs-revenge-how-class-struggle-is-shaping-the-world/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>World Finance</primary_category><primary_category_link>http://business.time.com/category/world-finance/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/03/karl_marx_0325.jpg?w=240</featured_image>
		<media:thumbnail url="http://timebusinessblog.files.wordpress.com/2013/03/karl_marx_0325.jpg?w=240" />
		<media:content url="http://timebusinessblog.files.wordpress.com/2013/03/karl_marx_0325.jpg?w=240" medium="image">
			<media:title type="html">Karl Maxr</media:title>
		</media:content>

		<media:content url="http://1.gravatar.com/avatar/16f24a6058e54145f5ee65b322784b28?s=96&#38;d=http%3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">michaeljschuman</media:title>
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		<item>
		<title>Can China Escape the Middle-Income Trap?</title>
		<link>http://business.time.com/2013/03/12/can-china-escape-the-middle-income-trap/</link>
		<comments>http://business.time.com/2013/03/12/can-china-escape-the-middle-income-trap/#comments</comments>
		<pubDate>Wed, 13 Mar 2013 02:00:48 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[china]]></category>
		<category><![CDATA[economic growth]]></category>
		<category><![CDATA[GDP growth]]></category>
		<category><![CDATA[middle-income trap]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=73867</guid>
		<description><![CDATA[One of the great questions facing China is whether or not its economy can continue to produce the rapid gains in welfare for its giant population that the country has witnessed over the past 30 years. The answer is critical to the political and social stability in the nation. There is already quite a bit of grumbling among the working class that they aren’t enjoying the benefits of China’s economic ascent as much as they should be. The gap between rich and poor is worsening — according to one private study, it could be significantly wider than previous estimates. Growth has already drifted downward, in comparison with China’s recent history. In 2012, GDP increased at the slowest rate in more than a decade. If China encounters a prolonged period of slower growth, it could prove catastrophic. The topic of growth and people’s welfare is at the center of this year’s National People’s Congress, taking place right now in Beijing. Wen Jiabao, in his final major speech as Premier before handing over the reins of government to a new crop of leaders, stressed the need to boost the incomes and spending power of the nation’s masses to put the country’s growth on a more sustainable path. “To expand individual consumption, we should enhance people&#8217;s ability to consume, keep their consumption expectations stable, boost their desire to consume, improve their consumption environment and make economic growth more consumption-driven,” Wen said. (MORE: As China&#8217;s Congress Meets, Call for Rights Protection Grows) That’s all very nice. But we’ve heard it many times before. And in the end, a slowdown in China could well be inevitable. Making the transition from an investment-led to a consumption-led economy, as Wen preaches, will likely result in slower overall growth, at least while the shift is taking place. Demographics are working against China’s future performance as well. As a result of China’s controversial one-child policy, the population is aging quicker than it otherwise would have, which will drag on growth in coming years. And then there is the possibility China<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=73867&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/03/china_middle_income_0305.jpg?w=240</featured_image>
		<media:thumbnail url="http://timebusinessblog.files.wordpress.com/2013/03/china_middle_income_0305.jpg?w=240" />
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			<media:title type="html">National People&#039;s Congress</media:title>
		</media:content>

		<media:content url="http://1.gravatar.com/avatar/16f24a6058e54145f5ee65b322784b28?s=96&#38;d=http%3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">michaeljschuman</media:title>
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		<title>Viewpoint: Why Capping Bankers’ Pay Is a Bad Idea</title>
		<link>http://business.time.com/2013/02/28/viewpoint-why-capping-bankers-pay-is-a-bad-idea/</link>
		<comments>http://business.time.com/2013/02/28/viewpoint-why-capping-bankers-pay-is-a-bad-idea/#comments</comments>
		<pubDate>Thu, 28 Feb 2013 10:21:26 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Banking]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=73324</guid>
		<description><![CDATA[I’ve come to dislike bankers as much as the next guy. How can anyone with a sense of justice and fair play not be angry at them? First they tank the global economy with their risky shenanigans, then they take taxpayer money in costly bailouts, then they unrepentantly continue to pay themselves gargantuan bonuses, then they complain about the big deficits and rising government debt that are a result of the recession they caused and the rescues they received. What’s to love? Still, for me at least, the proposed limits on banker pay being considered by the European Union are a misguided – if not dangerous – intrusion of government into the affairs of private companies. On Wednesday, negotiators for the European Parliament and E.U. member states reached a preliminary agreement to cap banker bonuses at the same level as their salaries. (With shareholder approval, that can be increased to two times the salary.) There may be some wiggle room built into the rules – for instance, some sorts of long-term compensation may be counted differently and allow bankers to earn more money – but the restrictions the E.U. is proposing are still the most overbearing recently considered in the industrialized world. (MORE: Bankers: Who Needs Them?) Such measures may soothe the public, but if they are finalized and come into effect, they have the potential to reshape the international banking industry – without making the finance industry any more stable. Ostensibly, the restrictions on pay are an attempt to force bankers to take fewer risks of the type that caused the 2008 financial crisis. Back then, bankers gorged on high-risk but high-return sub-prime mortgage securities that eventually caused the balance sheets of some of the world’s most venerable institutions to implode, rippling through the global economy and sparking the Great Recession. To prevent that from happening again, governments have tried various means to place more restrictions on or improve the oversight of the banking industry, such as the Dodd-Frank reform legislation in the U.S. The E.U. caps on banker pay<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=73324&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Banking</primary_category><primary_category_link>http://business.time.com/category/banking-2/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/02/161587473-copy.jpg?w=240</featured_image>
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			<media:title type="html">Views Of the Canary Wharf Business And Financial District</media:title>
		</media:content>

		<media:content url="http://1.gravatar.com/avatar/16f24a6058e54145f5ee65b322784b28?s=96&#38;d=http%3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">michaeljschuman</media:title>
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		<title>Italy’s Political Mess: Why the Euro Debt Crisis Never Ended</title>
		<link>http://business.time.com/2013/02/26/italys-political-mess-why-the-euro-debt-crisis-never-ended/</link>
		<comments>http://business.time.com/2013/02/26/italys-political-mess-why-the-euro-debt-crisis-never-ended/#comments</comments>
		<pubDate>Tue, 26 Feb 2013 08:55:36 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[austerity]]></category>
		<category><![CDATA[Euro Debt Crisis]]></category>
		<category><![CDATA[euro zone]]></category>
		<category><![CDATA[Italy's election]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=72999</guid>
		<description><![CDATA[Updated: Feb. 26, 2013 at 11:45 a.m. EST Over the last few months, Europe seemed to be proving its doubters wrong. Thanks to a timely intervention by European Central Bank President Mario Draghi in mid-2012, yields on Spanish and Italian bonds, which had been spiking towards levels that threatened to topple them into costly bailouts, had receded to more tolerable levels and calm was restored to jittery financial markets. The European Union crept towards the greater integration that is the only true route out of the debt crisis by agreeing to form a banking union in December. The leaders of the euro zone and Greece managed to patch up their differences enough to keep the country in the monetary union. Reforms in troubled economies continued, albeit slowly. Spain is steadily repairing its banking sector, laid low by the country’s housing bust, with the help of E.U. aid. Yes, it looked like gloating time for the optimists who had insisted that those who predicted a much more dismal outcome of the euro zone’s debt crisis – the exit of one or more of members, or the collapse of the monetary union altogether – were gravely mistaken. I have to admit that I was one of the naysayers. Many of us warned that without major structural changes to strengthen the monetary union, intensive reforms within euro zone countries and an entirely different approach to tackling the crisis (not just austerity, austerity and more austerity), the debt crisis was impossible to resolve. Had Europe really escaped the jaws of death, without the dramatic reforms so many economists thought were necessary? In recent weeks I was wondering if my analysis had gone badly awry. (MORE: What Mario Monti’s Exit Tells Us About Europe’s Debt Crisis) Ah, but then, there’s Italy. The political upheaval in the euro zone’s third-largest economy in the wake of this week’s national election shows us just how troubled the euro zone really is, and how dangerous its debt crisis remains to the global economy. Preliminary results on Monday showed that<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=72999&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/02/2013-02-15t101830z_15449014.jpg?w=240</featured_image>
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			<media:title type="html">European Central Bank President Mario Draghi</media:title>
		</media:content>

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			<media:title type="html">michaeljschuman</media:title>
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		<title>Is Asia Heading for a Debt Crisis?</title>
		<link>http://business.time.com/2013/02/25/is-asia-heading-for-a-debt-crisis/</link>
		<comments>http://business.time.com/2013/02/25/is-asia-heading-for-a-debt-crisis/#comments</comments>
		<pubDate>Tue, 26 Feb 2013 01:00:55 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[banks]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[Financial Crisis]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=72848</guid>
		<description><![CDATA[Of the many reasons why Asia (outside of Japan) weathered the Great Recession more ably than other parts of the world, one of the most important was the fact that the region never experienced a financial crisis. The banks of Asia generally avoided indulging in the toxic subprime securities that tanked some of Wall Street’s most famous institutions. Part of the reason was they could earn real returns in their core business — lending to expanding companies in their high-growth home economies. The banks had also learned a lesson — a painful lesson — from the 1997 Asian financial crisis about the dangers of risky lending and unsustainable debt, and had become more conservative than they had been in the past. Government officials in Asia, as well, tend to take an old-fashioned attitude on budget spending and borrowing (again, outside of Japan), and they, unlike their counterparts in Europe, were able to stimulate their economies without undercutting their solvency. Now, however, analysts in Asia are ringing alarm bells that debt in the region is rising at a worrying pace. A recent study from megabank HSBC noted that, based on the ratios of bank credit to GDP for the region, “leverage is now higher than at the peak before the Asian crisis in 1997.” Adding in record bond issuance in recent years, a financing option not common in 1990s, “overall leverage is even higher today than implied by traditional measures of bank lending,” the report explained. In some countries, debt is rising at a disturbing rate. According to data from Standard &#38; Poor’s, lending from financial institutions to the corporate and household sector as a percentage of GDP in Hong Kong jumped from 143% in 2005 to an estimated 202% in 2012. In South Korea, the same ratio surged from 132% to 166% over that same time period; in Singapore, 91% to 117%; and in China from 112% to 130%. Vietnam’s ratio nearly doubled from 66% to 113%. The culprits differ from economy to economy. In Vietnam, state-owned enterprises are to blame. In South<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=72848&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Asia</primary_category><primary_category_link>http://business.time.com/category/economy-policy/asia/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/02/cc5ab0fa90334e2fb7029f1d7cdc85f7-0-copy.jpg?w=240</featured_image>
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			<media:title type="html">Asian Markets</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>The Great Central-Banking Experiment: Will Unlimited Cash Solve Problems or Cause Them?</title>
		<link>http://business.time.com/2013/01/28/the-great-central-banking-experiment-will-unlimited-cash-solve-problems-or-cause-them-2/</link>
		<comments>http://business.time.com/2013/01/28/the-great-central-banking-experiment-will-unlimited-cash-solve-problems-or-cause-them-2/#comments</comments>
		<pubDate>Mon, 28 Jan 2013 08:00:17 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=68881</guid>
		<description><![CDATA[The Bank of Japan folded as easily as a hot slice of New York pizza. After a few weeks of pounding by newly installed Prime Minister Shinzo Abe, the BOJ’s (officially independent) managers capitulated on Jan. 22 to his demands that the central bank hike its inflation target to 2% (from 1%) and undertake the necessary monetary easing to meet that target. That means the BOJ will keep printing cash until Japanese deflation is reversed. &#8220;One can say that it marks a &#8216;regime change&#8217; in managing macroeconomic policy,” a victorious Abe declared. A regime change it is, and it isn’t just taking place in Japan. With the BOJ’s surrender, all three of the world’s major central banks have committed themselves to open-ended, cash-pumping programs to stimulate economies and protect financial stability. The Federal Reserve has pledged to keep easing until the U.S. job market improves. And in September, the European Central Bank promised to purchase unlimited amounts of certain government bonds for any troubled country that signs up to a reform program — a move ECB President Mario Draghi took to help quell the euro zone’s debt crisis. These moves, of course, are on top of the already generous policies the three banks have implemented since the 2008 Lehman Brothers collapse. We’re in uncharted territory for monetary policy here, folks. Never before have the world’s most important central banks engaged in this sort of limitless largesse. If you don’t believe me, believe William White, chairman of the Economic Development and Review Committee at the OECD in Paris. Central banks “have embarked upon one of the greatest economic experiments of all time,” White wrote last year. “The size and global scope of these discretionary policies makes them historically unprecedented.” (MORE: Will Japan’s New Prime Minister Start a Debt Crisis?) Whether these experiments in supereasy money are wise or not, well, that’s another matter. The classical economist in me immediately hears sirens go off. Money is like any other commodity — the more of it there is, the less it is worth. At some<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=68881&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/01/central_banks_cash_0128.jpg?w=240</featured_image>
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			<media:title type="html">Central Banking Experiment</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>Will Japan’s New Prime Minister Start a Debt Crisis?</title>
		<link>http://business.time.com/2012/12/17/will-japans-new-prime-minister-start-a-debt-crisis/</link>
		<comments>http://business.time.com/2012/12/17/will-japans-new-prime-minister-start-a-debt-crisis/#comments</comments>
		<pubDate>Mon, 17 Dec 2012 08:13:41 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=64416</guid>
		<description><![CDATA[It’s back to the future for Japanese politics. The Liberal Democratic Party (LDP) crushed its rivals with an ally to gain a supermajority in the lower house of the Diet, the national parliament, which means the party’s president, Shinzo Abe, will become the nation’s next Prime Minister. This would be a repeat performance for Abe, who had a less-than-stellar stint in the Prime Minister’s job from 2006 to ’07. His term was distinguished by his miserable approval ratings and scandals among members of his Cabinet, leading to his sudden resignation in September 2007. But in the weird and wacky world of Japanese politics, such issues as competency don’t seem to matter much. Abe will get a chance to redeem himself. Can he? Looking at his policy statements, the odds don’t look good. If Abe is a blast from the past, so are his economic policies. The agenda he has forwarded during the campaign promises a return to the days of frivolous government spending and easy money — policies that have already proved unable to extricate Japan from 20 years of economic malaise. And this time around, the damage could be severe. Abe, if he follows through on his promises, could seriously weaken Japan’s already fragile financial position. (MORE: A Familiar Party Returns to Rule Japan, Promising a Fresh Start. Don’t Hold Your Breath) In simple terms, Abe’s plan is to flood the economy with cash, either from government coffers or the Bank of Japan (BOJ), to boost growth. The LDP advocates a plan to lavish a staggering $2.4 trillion on public-works programs over the next decade — a gargantuan stimulus equivalent to 40% of the country’s GDP. And where will Abe find the money to pay for all of that construction? The government itself, already posting huge deficits, doesn’t have the resources. So Abe figures he can extract the cash from the supposedly independent Bank of Japan. Here’s Abe’s position from a campaign speech (reported in the Wall Street Journal): To protect people’s lives and keep our children safe, we must implement public-works<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=64416&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Asia</primary_category><primary_category_link>http://business.time.com/category/economy-policy/asia/</primary_category_link>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>What Mario Monti’s Exit Tells Us About Europe’s Debt Crisis</title>
		<link>http://business.time.com/2012/12/12/what-mario-montis-exit-tells-us-about-europes-debt-crisis/</link>
		<comments>http://business.time.com/2012/12/12/what-mario-montis-exit-tells-us-about-europes-debt-crisis/#comments</comments>
		<pubDate>Wed, 12 Dec 2012 06:26:37 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Europe]]></category>
		<category><![CDATA[Debt Crisis]]></category>
		<category><![CDATA[euro zone]]></category>
		<category><![CDATA[Italy]]></category>
		<category><![CDATA[Mario Monti]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=63972</guid>
		<description><![CDATA[So much for a quiet Christmas in the euro zone. The European debt crisis has been off boil for the past several months, but we all knew it was just a matter of time before the steam started rising again. The question was: What would turn up the heat? I would have put my money on Spain stumbling into a bailout program, but instead the spark has come from one of the key figures in the euro zone: Italian Prime Minister Mario Monti. The respected economist surprised financial markets on Saturday when he announced he would step down early, after the latest budget passed through Parliament. Italy watchers had assumed he would stay on until fresh elections took place in the spring, but now that poll will likely take place earlier in 2013. Immediately, the debt crisis sprung to life. Yields on Italian 10-year bonds jumped on the news. They are still well below the more dangerous levels reached over the summer, but the negative reaction from investors to Monti’s decision tells us quite a bit about the course of Europe’s debt crisis. (VIDEO: Interview with Italian Prime Minister Mario Monti) Investor concerns make perfect sense. Monti, a former E.U. commissioner, has been one of the most important individuals in Europe’s quest to resolve its debt crisis. In his year in office, Monti managed to pull Italy back from the brink of an ugly tumble, possibly into a bailout or default. He was ushered in a year ago by political parties who realized they needed a technocratic outsider, with limited political interests, to push through the reforms necessary to avert disaster. He quickly lived up to expectations, short-circuiting the usually fractious political process to ram though an austerity budget and a liberalization of Italy’s professions. After months of heated debate, he also managed to get a reform of Italy’s convoluted labor laws enacted, which aims to encourage hiring and ease restrictions on downsizing. Monti was also a loud voice for the struggling economies of the euro zone in summits with<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=63972&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Europe</primary_category><primary_category_link>http://business.time.com/category/economy-policy/europe-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/12/par409996.jpg?w=240</featured_image>
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			<media:title type="html">image: Mario Monti at Palazzo Chigi in Rome, Feb of 2012.</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>The Latest Greek Debt Deal: Why This Time Is Different</title>
		<link>http://business.time.com/2012/11/27/the-latest-greek-debt-deal-why-this-time-is-different/</link>
		<comments>http://business.time.com/2012/11/27/the-latest-greek-debt-deal-why-this-time-is-different/#comments</comments>
		<pubDate>Tue, 27 Nov 2012 10:10:30 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Europe]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=62192</guid>
		<description><![CDATA[I must admit to having tuned out the Greek debt crisis a bit. It’s not that the effective bankruptcy of Greece no longer has implications for the world economy — the country could still be forced from Europe’s monetary union, with potentially destabilizing consequences. Nor has the suffering of the Greek people diminished. Unemployment has soared over 25%, and with more budget cutting to come, the economic prospects for the Greeks are unlikely to brighten anytime soon. Yet the repetitive antics of the leaders of Europe in their endless negotiations over what to do with Greece can easily lull even the most curious into a stupor. For three years now, European policymakers have been bickering, procrastinating and denying the reality of what economists have been saying since the beginning: that Greece’s debt is unsustainable, the bailouts as structured would never bring the burden down to a more tolerable level and the only way to resolve the crisis is some serious debt relief. That’s a step European leaders have been reluctant to take. It is true that earlier this year a swap of Greek bonds took a bite out of the country’s debt load by forcing a “haircut,” the cute word bankers use to describe losses, onto creditors. But that restructuring included only private bondholders, not official creditors. It became clear almost immediately that the relief offered to Greece wasn’t going deep enough. To get Greece’s government debt-to-GDP ratio to a more acceptable level, like 120% (from some 170% now), Europe’s leaders were going to have to reduce Greece’s debt burden even more, and that potentially meant having to take a haircut of their own. Doing so, however, was politically difficult. The two bailouts of Greece were unpopular with voters in the richer nations of Europe to begin with; taking losses on that aid would be even less popular. So the negotiations over the Greek bailout dragged on and on and on, with the debt can getting kicked down the road again and again. (MORE: On Europe’s Thanksgiving Menu: Stiffing Greece) So<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=62192&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Europe</primary_category><primary_category_link>http://business.time.com/category/economy-policy/europe-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/11/greece_s-debt.jpg?w=240</featured_image>
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			<media:title type="html">Greek Prime Minister Antonis Samaras arr</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>Forget the Fiscal Cliff: Why Obama Is in Asia</title>
		<link>http://business.time.com/2012/11/19/forget-the-fiscal-cliff-why-obama-is-in-asia/</link>
		<comments>http://business.time.com/2012/11/19/forget-the-fiscal-cliff-why-obama-is-in-asia/#comments</comments>
		<pubDate>Mon, 19 Nov 2012 08:50:30 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Asia tour]]></category>
		<category><![CDATA[U.S. President Barack Obama]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=61487</guid>
		<description><![CDATA[It might seem strange that newly re-elected President Barack Obama has chosen this moment to jet off to Asia. After all, he’s left a mess of problems back home. The White House is in the midst of tense negotiations with Republican Congressmen over a budget compromise to avoid the looming “fiscal cliff.” The nation is still smarting from a long and divisive election. And even in the realm of foreign policy, Asia doesn’t seem to be the priority right now, with a conflict escalating between Israel and Hamas in Gaza. Obama isn’t even visiting Japan or South Korea, historically America’s most important allies in Asia, or landing in China to deal with Washington’s many economic issues with the world’s second largest economy. Instead, he’s attending a summit in Cambodia of the leaders of the Association of Southeast Asian Nations (ASEAN) and others from the region, and making the first visit by a U.S. President to Burma (also known as Myanmar). Over the weekend, he toured a Buddhist temple in Bangkok and chatted with Thailand’s King. Has Obama gotten his priorities all screwed up? (PHOTOS: Obama Abroad: Scenes of a U.S. President in Burma) The answer is no. What might seem like a tropical vacation is in fact a major foreign policy initiative. Not only is Southeast Asia one of the most important regions for world economic growth, but it is also a key front in America’s geopolitical struggle with China for influence in Asia. The 10-member ASEAN  includes important U.S. allies, such as Singapore and Indonesia, the world’s most populous majority-Muslim country. If Obama is serious about his “pivot” to Asia in Washington’s foreign policy, then this is a crucial overseas jaunt for America’s global political, economic and security interests. Here’s how U.S. National Security Adviser Tom Donilon explained Obama’s motivation in a speech ahead of his Asia trip: His decision to travel to Asia so soon after his re-election speaks to the importance that he places on the region and its centrality to so many of our national-security interests and<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=61487&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Economy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/economy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/11/asia.jpg?w=240</featured_image>
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			<media:title type="html">U.S. President Barack Obama tours the Reclining Buddha in Thailand</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>India vs China: Which Has a Bigger Reform Challenge?</title>
		<link>http://business.time.com/2012/11/15/india-vs-china-which-has-a-bigger-reform-challenge/</link>
		<comments>http://business.time.com/2012/11/15/india-vs-china-which-has-a-bigger-reform-challenge/#comments</comments>
		<pubDate>Fri, 16 Nov 2012 02:30:15 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=61211</guid>
		<description><![CDATA[Both India and China are in the middle of their worst economic slowdowns in many years. If IMF projections for 2012 prove accurate, China’s GDP will advance at the slowest pace since 1999, and India’s at the slowest pace since 2002. There is a lot to learn from these downturns. One is that economies, no matter how promising, can’t grow at fantastically high rates indefinitely, with GDP ascending in neat, upward straight lines. We also learn that “decoupling” is still not a reality (especially for China). Despite rising domestic demand and burgeoning ties of trade and investment between emerging economies, the developing world is still connected to the developed, and what happens in the U.S. and Europe still matters a great deal. Perhaps the most important takeaway from the slowdown, however, is that even rapidly growing economies can’t be complacent. Though it is true that the poor performance of emerging economies everywhere is a function of the weakness of the global economy generally, that is only part of the story. Both India and China have been slowing down because neither country has done what they need to keep growth going, in a healthy and sustainable fashion. The big question going forward is: Will they? The answer matters to everybody. If India and China get their reforms right, the world economy will be better able to create jobs. These two markets are becoming crucial to major companies in the U.S. and Europe. Yum! Brands, which controls the KFC and Pizza Hut fast-food chains, now earns roughly half its revenue in China, for example. If India and China don’t move ahead on reform, the global economy will lose out on a key source of growth that is vital as the U.S. and Europe struggle with debt, deficits and unemployment. (MORE: Indian Business Elite Fret Over Growth) In many respects, the sort of reform necessary in the two economies is similar. Both require greater liberalization. India must continue to dismantle the leftover red tape of the License Raj to free up private companies and open<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=61211&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Asia</primary_category><primary_category_link>http://business.time.com/category/economy-policy/asia/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/11/china_market.jpg?w=240</featured_image>
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			<media:title type="html">An investor gestures as he talks in front of an electronic board</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>Will the Global Economy Tumble Off America&#8217;s Fiscal Cliff?</title>
		<link>http://business.time.com/2012/11/13/will-the-global-economy-tumble-off-americas-fiscal-cliff/</link>
		<comments>http://business.time.com/2012/11/13/will-the-global-economy-tumble-off-americas-fiscal-cliff/#comments</comments>
		<pubDate>Wed, 14 Nov 2012 02:00:44 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Financial Reform]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[budget deficit]]></category>
		<category><![CDATA[Debt Crisis]]></category>
		<category><![CDATA[fiscal cliff]]></category>
		<category><![CDATA[global economy]]></category>
		<category><![CDATA[recession]]></category>
		<category><![CDATA[U.S. economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=60944</guid>
		<description><![CDATA[Forget all of the talk about the rise of China and the shift of economic power from West to East. The U.S. economy remains the largest and most important in the world, and what happens in America still determines what happens to the global economy. No wonder, then, that investors from Hong Kong to London have become fixated on the looming “fiscal cliff” facing the U.S. government. If re-elected President Barack Obama can’t reach a new deal with Republican Party Congressmen in the House of Representatives on closing the country’s trillion-dollar budget deficit, a slate of deep spending cuts and tax hikes will automatically come into effect next year that will in all likelihood derail the slow-moving U.S. recovery from the 2008 financial crisis. That would without doubt do some serious damage to growth globally. Rating agency Fitch proclaimed that “the U.S. fiscal cliff represents the single biggest near-term threat to a global economic recovery.” A U.S. plunge off the fiscal cliff would hit the global economy at an especially fragile moment. The news just about everywhere has already been bad. Fears that Japan might slip into (yet another) recession rose on Monday when the world’s third-largest economy reported its GDP shrank by an annualized 3.5% in the quarter ending September. The euro zone is expected to contract in 2012 as well. On November 7, Mario Draghi, president of the European Central Bank, warned  that even powerhouse Germany is starting to suffer the ill effects of the debt crisis. “Germany has so far been largely insulated from some of the difficulties elsewhere in the euro area,” Draghi said. “But the latest data suggest that these developments are now starting to affect the German economy.” European leaders and the IMF continue to bicker over the bailout of Greece, leaving open the possibility that the country could still get forced from the monetary union. Even emerging markets are struggling. China and India are experiencing their worst slowdowns in many years and both have major reform challenges to confront. No wonder the IMF<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=60944&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/11/1360_2012-11-07t143326z_50155388.jpg?w=240</featured_image>
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			<media:title type="html">image: European Central Bank President Mario Draghi speaks during the Economy Day 2012 in Frankfurt Nov. 7, 2012.</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>Can China&#8217;s New Leader Prevent an Economic Crisis?</title>
		<link>http://business.time.com/2012/11/07/can-chinas-new-leader-prevent-an-economic-crisis/</link>
		<comments>http://business.time.com/2012/11/07/can-chinas-new-leader-prevent-an-economic-crisis/#comments</comments>
		<pubDate>Thu, 08 Nov 2012 01:30:39 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>
		<category><![CDATA[Economy & Policy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=60470</guid>
		<description><![CDATA[In a very uncertain global economy, we’re finally getting some certainty from the world’s two largest economies – at least on the political front. In the U.S., the interminably long election season finally ended with the re-election of President Barack Obama. Meanwhile, halfway around the planet in Beijing, a congress of China’s Communist Party, which begins today (EDS: Thursday), is expected to finally anoint Xi Jinping as the nation’s next leader. The two political processes couldn’t be more different – one politician fought for his job on CNN, the other maneuvered behind tightly sealed doors – but the outcome of each is equally important for the global economy. What happens with growth, jobs and investment around the world will depend to a healthy degree on the decisions taken by these two men. The common perception is that one of these leaders faces a bigger economic headache than the other. Obama will have to resolve the fractious battle over how to close the government’s yawning budget deficit before the nation falls off the fiscal cliff, bring down stubborn unemployment and recharge American competitiveness. Xi, meanwhile, seems to be sitting pretty. Growth in China has slowed, but to a rate that remains the envy of the world, while Chinese industry continues its march onto the world stage. But in this case, looks can be deceiving. Sure, Obama has tremendous economic problems to resolve, but Xi’s challenge is just as daunting – perhaps more so. Obama has to dig the U.S. out from the baggage of the last financial crisis, but Xi has to undertake sweeping reforms to ensure China doesn’t fall into a crisis. When I write about China potentially facing an economic crisis, I often get laughed at or verbally abused. The official People’s Daily accused me of being a “China basher.” This is part of China’s problem. Any attempt to have an open and honest discussion of what is really happening inside the Chinese economy gets shouted down. But that doesn’t solve the underlying flaws in the Chinese economy. It is<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=60470&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>1</slash:comments>
	<primary_category>Asia</primary_category><primary_category_link>http://business.time.com/category/economy-policy/asia/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/11/91788003.jpg?w=240</featured_image>
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			<media:title type="html">Merkel Meets With Chinese Vice President Xi Jinping</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>Tackling the Myth of Indian Inefficiency (Sort Of)</title>
		<link>http://business.time.com/2012/10/29/tackling-the-myth-of-indian-inefficiency-sort-of/</link>
		<comments>http://business.time.com/2012/10/29/tackling-the-myth-of-indian-inefficiency-sort-of/#comments</comments>
		<pubDate>Mon, 29 Oct 2012 04:26:48 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[china]]></category>
		<category><![CDATA[economy]]></category>
		<category><![CDATA[india]]></category>
		<category><![CDATA[inefficiency]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=59311</guid>
		<description><![CDATA[A couple of weeks ago, I tried to convince the world that China isn’t as efficient as many believe. Now I’m about to take on an even more daunting challenge — making the case that India isn’t quite as inefficient as most people insist. Many of you reading right now are probably having a good laugh. How can India, with its cow-lined roadways and infamously entrenched bureaucracy, even come close to the slick, high-speed railways and directed policymaking of China? Those same people who praise the modern transport and quick decisionmaking of China often go on to criticize India for its miserable infrastructure and plodding reform efforts. India’s fractious democratic political system, the critique goes, compares poorly with China’s more clinical authoritarian regime when it comes to implementing tough economic policies and building necessary roads and airports. Is the comparison fair? To a great degree, yes. Reform in India has often ebbed and flowed on the unpredictable tides of electoral politics. While villagers in China can get cleared away to build a new road, villagers in India have rights to protect their interests and their land, slowing down the pace of development. India’s overly bureaucratic bureaucracy ties up power projects and other important investments in regulatory knots. Consulting firm McKinsey figures that completing a power plant in India takes about twice as long as in China. In the World Bank’s rankings of countries by ease of doing business, China, at 91, sits well ahead of India, at 132. These hurdles are having a detrimental impact on India’s growth and are big reasons why India’s development has trailed China’s. (MORE: In Search of a New India) But the situation in India is improving. I was recently in the New Delhi airport for the first time in three years, and I discovered that the old international terminal, in which I have spent far too many bleary-eyed hours in the middle of the night waiting in interminable lines, has been replaced with a spiffy new one that is every bit as efficient as anything<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=59311&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Asia</primary_category><primary_category_link>http://business.time.com/category/economy-policy/asia/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/10/india_inefficiency_1028.jpg?w=240</featured_image>
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			<media:title type="html">India</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>Obama vs. Romney: Who’s Right on China?</title>
		<link>http://business.time.com/2012/10/24/obama-vs-romney-whos-right-on-china/</link>
		<comments>http://business.time.com/2012/10/24/obama-vs-romney-whos-right-on-china/#comments</comments>
		<pubDate>Wed, 24 Oct 2012 04:15:40 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Economy & Policy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=58869</guid>
		<description><![CDATA[The most shocking part of the third debate between President Barack Obama and Republican presidential nominee Mitt Romney on Monday was how little attention they paid to China. I counted an hour and 15 minutes before the subject even came up in earnest. That’s not to say the other topics discussed — terrorism, the Middle East, Afghanistan — aren’t important as well. But looking out over the next several decades, the rise of China to superpower status is, in my opinion, the single most important foreign policy challenge facing the U.S. We’re shifting back to a bipolar world from Pax Americana, and whether that results in a new Cold War or a more peaceful, prosperous globe will depend on how Washington handles a richer, more assertive and more powerful Beijing. That means the China policy of the next President of the U.S. is of crucial importance for the future of America and the economic and political stability of the world. So the big question is: Does Obama or Romney have a sounder, smarter strategy on China? (MORE: The U.S. and China Are Still Wary After All These Years) It is not an easy question to answer. Both candidates have engaged in rather unproductive attacks on China to score political points with an electorate frustrated by the feeble recovery at home. To both Obama and Romney, China can easily be portrayed as an irresponsible adversary, stealing American jobs and technology through various nefarious trade practices. Each candidate has tried to convince voters he’d be tougher on China than the other guy in protecting American interests and workers. Let’s look at some major issues with regard to America’s economic relationship with China and where the candidates stand on them: CHINA’S CURRENCY For me, the most misguided statement on China comes out of Romney’s mouth. That concerns China’s currency. Here’s what Romney said during Monday’s debate: On day one, I will label [China] a currency manipulator, which allows us to apply tariffs where they&#8217;re taking jobs &#8230; We have to understand that we<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=58869&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/10/obama_romney_china_1024.jpg?w=240</featured_image>
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			<media:title type="html">Obama and Romney</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>Can Japan Change?</title>
		<link>http://business.time.com/2012/10/21/can-japan-change/</link>
		<comments>http://business.time.com/2012/10/21/can-japan-change/#comments</comments>
		<pubDate>Mon, 22 Oct 2012 00:00:26 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[economic recovery]]></category>
		<category><![CDATA[economy]]></category>
		<category><![CDATA[japan]]></category>
		<category><![CDATA[South Korea]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=53071</guid>
		<description><![CDATA[One of the more frustrating tasks I regularly face in my job as an economics correspondent in Asia is explaining (or attempting to explain) what goes on in the Japanese economy. In many ways, the place seems to simply defy logic, or the basic laws of human nature. How can a society watch its economic fortunes deteriorate for two decades and do almost nothing about it? I’ve explored this subject before and have tossed out a few possible explanations. The bureaucrats who shape economic policy are insular and self-interested and won’t reform Japan since that would undercut their own power. Corporate managers who rose to the top in a bureaucratic, consensus-based system have no interest in changing it to make their firms more entrepreneurial. Politicians cater to the narrow demands of their constituents, not the greater needs of the nation. Political and business leaders fear globalization and have limited the degree of integration Japan has forged with high-growth developing Asia. There is another reason, though, that might explain the situation best, which I hear from my friends in South Korea. I covered the Asian financial crisis in 1997 from Seoul, and I can tell you that the Koreans know something about crisis management. At the time, the economy seemed to plunge off a cliff. Koreans truly worried that their three-decade economic miracle had come to a sudden, devastating end. Yet in the aftermath, a stronger, healthier, more innovative economy emerged. (MORE: Is India&#8217;s Growth Story Over?) Many Koreans I have spoken to believe that their country’s postcrisis success could never have happened without the crisis itself. The collapse showed everyone just how out-of-date and flawed their economic model had become and washed away the opposition to change. In fact, the reforms South Korea eventually adopted, at both the national and corporate level, broke through many of the same hurdles now blocking Japan’s way. South Korea, too, suffered from cozy ties between government and business, too much bureaucratic interference and a lack of entrepreneurship. Seoul addressed these issues after the Asian crisis<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=53071&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Asia</primary_category><primary_category_link>http://business.time.com/category/economy-policy/asia/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/10/977660-001-e13506697249241.jpg?w=240</featured_image>
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			<media:title type="html">A pedestrian checks the share prices on</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>The Myth of Chinese Efficiency</title>
		<link>http://business.time.com/2012/10/01/dispelling-the-myth-of-chinese-efficiency/</link>
		<comments>http://business.time.com/2012/10/01/dispelling-the-myth-of-chinese-efficiency/#comments</comments>
		<pubDate>Tue, 02 Oct 2012 02:45:49 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Asia]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Beijing]]></category>
		<category><![CDATA[capitalism]]></category>
		<category><![CDATA[china]]></category>
		<category><![CDATA[efficiency]]></category>
		<category><![CDATA[state capitalism]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=50747</guid>
		<description><![CDATA[Many people in the U.S. and Europe believe China is a model of modern transport and political effectiveness. They should try to live here. On the road to Beijing’s international airport the other day, I noticed dark clouds moving in on the horizon. My stress level immediately spiked. Flight delays have become almost the norm here in Beijing, even on the brightest of days; a little rain would certainly spell trouble. As the drops began to splat on the windshield, I had dispiriting visions of getting stuck in Beijing and missing my connecting flight in Hong Kong &#8212; and my next deadline for TIME with it. My fears were confirmed when I arrived at the gate, where the departure time came and went. Though the sun had peeked through the clouds, the damage had already been done. Of course, the trials of air travel are not unique to China. Just ask anyone brave enough to depart from a major American airport these days. But no one would ever call the U.S. airport system a model of efficiency. For some reason, though, lots of people think China is. (MORE: Is India&#8217;s Growth Story Over?) One of the most persistent – and persistently bewildering – conversations I’m forced to endure with international businessmen (and especially Americans) is about their view on the marvels of Chinese efficiency. They paint China as a wonderland of quick transport, quick decision making, and quick-witted government officials. If only the U.S. operated like China, the argument goes, all of America’s problems could get solved. My response to this is: Live here for a while. I can imagine pampered visitors thinking China is something it is not. If you fly into the nifty airports in Beijing or Shanghai, get whisked by a waiting driver to your snazzy hotel, have a few meetings, and then get escorted out again, China might appear to be a sparkling vision of modernity. But spend any time here, or try to really do anything, and the notion that China is an efficient place<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=50747&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>23</slash:comments>
	<primary_category>Asia</primary_category><primary_category_link>http://business.time.com/category/economy-policy/asia/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/10/137264743.jpg?w=240</featured_image>
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		<title>When Central Bankers Attack: Why Ben and Company Can’t Save the Global Economy</title>
		<link>http://business.time.com/2012/09/24/when-central-bankers-attack-why-ben-co-cant-save-the-global-economy/</link>
		<comments>http://business.time.com/2012/09/24/when-central-bankers-attack-why-ben-co-cant-save-the-global-economy/#comments</comments>
		<pubDate>Mon, 24 Sep 2012 10:19:56 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Economy]]></category>
		<category><![CDATA[Bank of America]]></category>
		<category><![CDATA[Bank of Japan]]></category>
		<category><![CDATA[Ben Bernanke]]></category>
		<category><![CDATA[European Central Bank]]></category>
		<category><![CDATA[European Union]]></category>
		<category><![CDATA[federal reserve]]></category>
		<category><![CDATA[japan]]></category>
		<category><![CDATA[Mario Draghi]]></category>
		<category><![CDATA[Masaaki Shirakawa]]></category>
		<category><![CDATA[Spain]]></category>
		<category><![CDATA[unemployment]]></category>
		<category><![CDATA[United States]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=49992</guid>
		<description><![CDATA[With the global economy still struggling to emerge from the Great Recession, the world’s central bankers have stepped in yet again in an attempt to spur growth and strengthen the recovery. In mid-September, the Federal Reserve announced it would extend its bond-buying program to bring down long-term interest rates and stimulate investment and employment. Federal Reserve Chairman Ben Bernanke said the effort, being called QE3, will “employ our policy tools as appropriate” until the U.S. finally sees a jobs recovery. In Europe a few days before, European Central Bank (ECB) President Mario Draghi inserted himself to ease the euro zone’s debt crisis. He announced a potentially unlimited program to buy one- to three-year sovereign bonds from debt-burdened euro-zone governments that agree to an E.U. budget-cutting conditionality program. Draghi called the program “a fully effective backstop to avoid destructive scenarios” for the monetary union. In Japan, the central bank surprised markets and followed the Fed by expanding its asset-purchasing scheme to boost a sagging Japanese economy. &#8220;The [Bank of Japan] deemed it necessary to act so that Japan&#8217;s economy will not be derailed from a track toward sustainable growth,&#8221; bank governor Masaaki Shirakawa said. Give Ben, Mario and Masaaki credit where it is due: at least they are trying to do something to help the global economy. Markets have cheered their perseverance. Stocks in the U.S. have rallied on Bernanke’s new policy. “Super Mario” Draghi has (yet again) pulled the euro zone back from the brink of disaster. Yields on the bonds issued by the Spanish and Italian governments have plunged, easing the crisis. Yet this good feeling is unlikely to last for very long. The reality is that central banks cannot on their own solve the problems of the world economy — stamp out unemployment, restore healthy growth or rescue the euro — with the tools available in their toolbox. Not even the bankers themselves believe they can. Bernanke himself admitted that the Fed lacks &#8220;tools that are strong enough to solve the unemployment problem.” In Europe, the difficulties facing the monetary union are<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=49992&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/09/600_centralbanks_0924.jpg?w=240</featured_image>
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			<media:title type="html">Prime Minister of Greece Antonis Samaras</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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