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Global Financial Crisis of 2007-2008

If policymakers had pursued moderate fiscal and monetary expansion while encouraging the market to play a decisive role in eliminating sectoral overcapacity in 2012, China may well have achieved higher GDP growth rates in the ensuing years. Photo: AP

Opinion | China must heed its own lessons in tackling past overcapacities

Overtightening hurt China’s economy in the past. Faced with new overcapacities, China should adopt a more expansionary fiscal and monetary policy.

  • Overtightening hurt China’s economy in the past. Faced with new overcapacities, China should adopt a more expansionary fiscal and monetary policy
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US House raises alarm over China’s multi-trillion-dollar ‘time bomb’

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Opinion | Era of freewheeling finance leading economic growth may soon be over

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Asian Angle | What China must learn from Japan’s decades-long debt-deflation slowdown

Policymakers can ill afford to dither or send mixed signals in their efforts to rejuvenate the economy. The immediate danger facing China today is systemic contagion.

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Japan’s national flag waves in the wind outside the Bank of Japan building in Tokyo. Japan’s debt-deflation lasted more than two decades, despite very low and even negative interest rates. Photo: Reuters

Macroscope | As private credit warnings grow, the fear is that the horse has bolted

The IMF is warning regulators about the systemic risks of the rapidly growing private credit market, a largely opaque sector involving direct lending to corporations

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The View | Why the IMF must give China and other emerging economies a greater say

The US, Europe and Japan will not gladly sacrifice their IMF quotas to give China and others more voting rights. But a failure to reform the organisation will worsen rifts and weaken its ability to deal with looming global crises.

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Opinion | Collaboration is vital if we’re to overcome our health challenges

Pandemic showed global health systems can pull together against an acute shared threat. The momentum must be kept up. Recent UK healthcare education mission to China is a testament to that.

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Illustration: Craig Stephens

Macroscope | Rate cuts or no, a new financial crisis may be inevitable

Markets and banking systems are stumbling on blindly and greedily towards a repeat of past mistakes both recent and distant. Banks being so big they can lend irresponsibly and ignore those meant to regulate them must change, and the coming crisis could do just that.

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Opinion | Imagine a world free from the oppression of a US-led global order

It would spell the end of the US ability to impose its will on the international community, shape other countries in its image and shift the burden of its economic crisis onto others.

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Opinion | In a risky, fragmenting world, we can all forge our own development path

Whether it’s macroeconomic modelling or export-led industrialisation, the game has changed with peak globalisation, technology diffusion and climate change. Development and how to finance it is the question, and brave countries can adopt very different models from the past.

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A child welcomes delegates to the Pacific Islands Forum on August 14, 2019, in Funafuti, Tuvalu, a sinking island nation. Even the global disaster of climate warming affects different geographies differently. There is no development model that fits all nations. Photo: EPA-EFE

Outside In | Economists made wrong call on 2023 recession. But their alarm is real

2023 ended without the technical recession economists expected, but their warning of stagflation and a potentially crippling debt crisis should not be easily dismissed.

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Federal Reserve Board Chairman Jerome Powell at a news conference on September 20. For those expecting a technical recession only in the US, the call was deeply and embarrassingly off target. Photo: Getty Images/TNS

Opinion | Policymakers must stop hiding behind myth of ‘unprecedented changes’

It is time to stop viewing crises as exceptional events and admit how frequently shocks actually occur. The task of forecasters and policymakers is not to predict the next catastrophe but to sharpen their focus on resilience – what it takes to stay the course with politically mandated policies while minimising inevitable dislocations.

Opinion | In a broken world, globalisation is dead. Long live globalisation lite

Tight coupling in a global world is breaking and we need a looser macro-management philosophy that allows for decentralised adjustments to different stresses and strains.

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Asian Angle | What Hong Kong must do to prepare for years of weaker growth in mainland China

Failure to anticipate and prepare for weaker growth would mean the city sleepwalks into stagnation, or worse, lurches from one crisis to another, writes Donald Low – not unlike during the pandemic.

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A man talks on his phone in front of the skyline in Hong Kong. The longer term implications of mainland China’s slower growth for the city are profound. Photo: AP

Opinion | A booming US economy and a Chinese crash? Think again

China is using its downturn to deflate bubbles and raise productivity while the US is doing the opposite – feeding the Bernanke bubble and hoping for an AI cure for falling productivity

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A woman rides a scooter past a construction site in Tianjin on August 18. China is busy dealing with its “twin cancers”: a property bubble and shadow banking system rife with Ponzi schemes. Photo: Reuters

Macroscope | Signs point to another global stock market crash. Somebody tell the Fed

Changes in monetary policy have a lagged effect. The Federal Reserve’s abrupt switch to tightening last year is now resulting in investor confusion. Today’s bond market jitters and monetary squeeze bring to mind the situation leading up to 1987’s global market crash, but the Fed seems oblivious.

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Macroscope | Two lessons for the global economy, from the Fed’s 2007 missteps

The US central bank is expected to maintain higher interest rates for longer, not unlike in the months leading up to the global financial crisis. The trouble is that monetary policy eventually works and central banks can’t really control how that plays out.

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The View | Is the next subprime crisis brewing in China’s property market?

The slowdown in China’s asset-backed securities is raising fears of a repeat of 2008, when the opaque products triggered a domino effect. China’s potential trouble could start in its beleaguered property sector.

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A view of downtown Guangzhou, seen on August 22. China’s property sector burdens, from falling sales to eroding values, are straining developers’ refinancing efforts, and a spillover to the broader economy is inevitable. Photo: Bloomberg

Banks worldwide got US$280 billion boost from rising rates, McKinsey says

Banks globally reaped a US$280 billion profit boost in 2022 thanks to rising rates, in the sector’s best performance since the 2008 global financial crisis, McKinsey & Co said.

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Macroscope | To avoid another global crisis, beef up financial supervision

Pressure from inflation and rising interest rates may have abated but global debt is rising again amid shadow banking risks, putting financial stability in jeopardy. It’s time to set aside ‘light touch’ financial supervision.

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Macroscope | Not just China, the world is at risk of hidden debt and financial shocks

Why is a spotlight focused on everything “bad” in China while adverse developments elsewhere are treated as though they were happening on the dark side of the moon?

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People are seen on Wall Street outside the New York Stock Exchange in New York City in March 2021. The Financial Stability Board has warned of “further challenges and shocks” in coming months as high interest rates undermine economic recovery and threaten key sectors, including real estate. Photo: Reuters

Explainer | What tools did Beijing use to defuse China’s past financial crises?

From intentionally setting up ‘bad banks’ in the ’90s to more recent bank takeovers, Beijing has a history of reaching into its deep bag of policy tools to make economic repairs.

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Chinese leadership has stopped saying that “houses are for living in, not for speculation”. Photo: Reuters

China halves stamp duty on stock transactions to boost investor confidence

The government’s stamp duty reduction and move to lower margin requirements for investors to buy securities form part of new stimulus measures to invigorate the country’s capital market.

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Opinion | China should learn from America’s past mistakes to save its economy

Any rescue plan for a crashing property sector should support prudent homeowners but penalise errant banks and companies. Bailing out the big banks while leaving ordinary citizens to suffer the pain of foreclosure, as the US did, will only fuel populist anger.

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Unmakeable in America? China-targeted tariffs forcing US manufacturers abroad

Businesses whose stateside production depends on components from China decry costs they bear due to Trump-era policy continued by Biden administration.

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Illustration: Henry Wong

China bets on better policy enforcement to save economy, vows more help coming

China is trying to boost domestic demand, improve confidence and prevent risks for the remainder of the year, while looking to avoid past stimulus fallout as it intensifies efforts to shore up growth.

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Beijing has rolled out a variety of measures to shore up investor confidence and improve market sentiment in the past month. Photo: EPA-EFE

Macroscope | China’s recovery woes are real but not a repeat of Japan’s

Sentiment towards China is bleak, but the differences between China and Japan are far more consequential than the similarities. The bigger China’s vulnerabilities, the stronger the likelihood that Beijing will deliver the necessary fiscal stimulus to kick-start growth.

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Opinion | Why China should maintain open and inclusive debate about its economy

Open and candid exchanges about the national economy have helped authorities pinpoint problems and find quick solutions, but the silencing of prominent financial writer Wu Xiaobo could put a dent in those lively debates.

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Global Financial Crisis of 2007-2008
The Global Financial Crisis of 2007-2008 was widely blamed on the subprime crisis and its fallout, which led to the collapse of Lehman Brothers in 2008, with the US government forced to bail out AIG, and to rescue both General Motors and Chrysler, while also adding liquidity to avert a severe credit crunch in the banking sector. Banks in Europe, the US and Britain also came under extreme pressure and the GFC contributed to the euro zone sovereign debt crisis.
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