Yet the signs are now unmistakable: China is in big trouble. We’re not talking about some minor setback along the way, but something more fundamental. The country’s whole way of doing business, the economic system that has driven three decades of incredible growth, has reached its limits. You could say that the Chinese model is about to hit its Great Wall, and the only question now is just how bad the crash will be.
Start with the data, unreliable as they may be. What immediately jumps out at you when you compare China with almost any other economy, aside from its rapid growth, is the lopsided balance between consumption and investment. All successful economies devote part of their current income to investment rather than consumption, so as to expand their future ability to consume. China, however, seems to invest only to expand its future ability to invest even more. America, admittedly on the high side, devotes 70 percent of its gross domestic product to consumption; for China, the number is only half that high, while almost half of G.D.P. is invested.Sponsored Ads
How is that even possible? …
It’s all very peculiar by our standards, but it worked for several decades. Now, however, China has hit the “Lewis point” — to put it crudely, it’s running out of surplus peasants.
Americans view China in a markedly less favorable light than two years ago, and Chinese attitudes toward the United States have also soured, a sign that the two countries are drifting apart at the level of public opinion, according to a Pew Global Survey to be released on Thursday.
That momentum has now been reversed.
In recent weeks, rebel groups have been killing one another with increasing ferocity, losing ground on the battlefield and alienating the very citizens they say they want to liberate. At the same time, the United States and other Western powers that have called for Mr. Assad to step down have shown new reluctance to provide the rebels with badly needed weapons.
Although few expect that Mr. Assad can reassert his authority over the whole of Syria, even some of his staunchest enemies acknowledge that his position is stronger than it has been in months. His resilience suggests that he has carved out what amounts to a rump state in central Syria that is firmly backed by Russia, Iran and Hezbollah and that Mr. Assad and his supporters will probably continue to chip away at the splintered rebel movement.
MOSCOW — “So tell me some good news,” Nadya kept demanding.
Nadya is Nadezhda Tolokonnikova, the informal leader of the punk group Pussy Riot, who is serving two years in a penal colony for the crime of felony hooliganism — for a 40-second performance in Moscow’s Cathedral of Christ the Savior. Nadya is allowed one four-hour visit every two months and one three-day conjugal visit every three months, and this time I was able to tag along with her husband and daughter on one of those visits because I am working on a book about Pussy Riot.
Russia and China appear to have decided that, to better advance their own interests, they need to knock Washington down a peg or two. Neither probably wants to kick off a new cold war, let alone hot conflicts, and their actions in the case of Mr. Snowden show it. China allowed him into Hong Kong, but gently nudged his departure, while Russia, after some provocative rhetoric, seems to have now softened its tone.
Still, both countries are seeking greater diplomatic clout that they apparently reckon they can acquire only by constraining the United States. And in world affairs, there’s no better way to flex one’s muscles than to visibly diminish the strongest power.
This new approach appears based in part on a sense of their growing strength relative to America and their increasing emphasis on differences over issues like Syria. Both Moscow and Beijing oppose the principle of international action to interfere in a country’s sovereign affairs, much less overthrow a government, as happened in Libya in 2011. After all, that principle could always backfire on them.
But while the fare increases might have been the spark that incited the protests, they unleashed a much broader wave of frustration against politicians from an array of parties that the government has openly acknowledged it did not see coming.
“It would be a presumption to think that we understand what is happening,” Gilberto Carvalho, a top aide to President Dilma Rousseff, told senators on Tuesday. “We need to be aware of the complexity of what is occurring.”
By this week, it was clear how thoroughly officials had miscalculated. At one point on Tuesday night, protesters tried to break into the Municipal Theater, where operagoers were watching Stravinsky’s “Rake’s Progress.” The doors to the elegant theater remained shut and as the show went on, they spray-painted the outside of the recently renovated structure with the words “Set Fire to the Bourgeoisie.”
So when Mr. Obama agreed this week for the first time to send small arms and ammunition to Syrian rebel forces, he had to be almost dragged into the decision at a time when critics, some advisers and even Bill Clinton were pressing for more action. Coming so late into the conflict, Mr. Obama expressed no confidence it would change the outcome, but privately expressed hope it might buy time to bring about a negotiated settlement.
Syrian rebel groups briefly took control Thursday of the only crossing between Israel and Syria, bringing the intense violence of that nation’s civil war closer than ever to the Golan Heights, where farmers were told to stay out of their fields, tourists were turned away from cherry-picking and roads were closed.
At the same time, not 70 miles away, scores of Israeli soldiers engaged in an elaborate combat exercise preparing for what is increasingly seen here as an inevitable war with Hezbollah, the Lebanese Shiite militant group that has come to the aid of President Bashar al-Assad in Syria.
“It’s really a situation that is not clear, and can take a turn at any moment,” warned Aviv Oreg, a major in the military reserves who founded Ceifit, a firm offering research and analysis on global jihad. “As soon as one bomb would leak and hit a kindergarten, that’s a whole new ballgame.”
Six months ago, as rocket fire was falling on Tel Aviv, my six-year-old daughter had to pay her first visit to a bomb shelter. On Monday, she had to pay her second and third visits.
On Sunday night, before she went to bed, we had reminded her that sirens would be going off the next day, and that she shouldn’t be afraid of them. Yes, yes, she said, impatiently brushing us off; she knows it’s a drill.
Along with all Israeli children, and the small part of the adult population willing to play a role, at 12:30 p.m. Monday she was duly marched by a teacher to the shelter. At 7:05 p.m. it was our turn as parents to run through the drill at home.
Such drills are not a novelty to Israelis, but the more a potential war seems imminent, the more sober they become. All day, radio announcers remind us: “In case of real emergency, another siren will be heard.”
Indeed, in recent weeks there was hardly a day without someone discussing the possibility of real war. Israel, as the New York Times reported less than a week ago, is reluctantly being dragged into Syria’s turmoil.
The numbers tell the story: U.S. oil production has reversed its 30-plus year decline; U.S. imports from OPEC producers have fallen more than 20 percent in the past three years; U.S. natural gas reserves and production are up significantly and prices have dropped 75 percent in the past five years. The International Energy Agency forecasts that the United States could become the world’s largest oil producer by 2020 and may be energy self-sufficient by 2035. That’s a game changer.
While this is not a free lunch, it should not be feared. The production process is complicated and expensive, and if the industry is not careful there can be risks to the environment. But the potential is staggering. Significant domestic job growth and economic expansion has begun.
The only problem here is that it could destabilize existing oil and gas exporting countries like Russia and Venezuela. Since both are already unstable, decreasing energy prices could start revolutions. In the case of Russia, that might be very bad news for the rest of us.