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TALKING POINTS


CHINESE WHISPERS, P20 A review of novelist Yu Hua's 'China in Ten Words'


BILL DODSON, P22


Can China dodge the looming threat of climate change?


GABRIELLE COYNE, P24 Penguin's Asia-Pacific CEO discusses trends in publishing


Postcard from Tokyo


The view from the IMF and World Bank meetings in Tokyo shows the global economy is at the mercy of politics, writes Frederic Neumann


with officials and investors at the annual meetings of the IMF and World Bank in Japan these last few days. Te mood, unsurprisingly, was som-


T 18


ber. Te IMF’s recent downgrades of its growth forecasts, merely acknowledging reality, didn't help. More worrying were the deep disagreements about the appro- priate policy response. Above all, the world is seemingly


devoid of political leadership at the moment. Over the next three months, it is not data, but politics that will decide


China Economic Review • November 2012


he world is adrift. Tat is the con- clusion of this economist, who got to sip buckets of green tea


whether the global economy is make or break in 2013.


By the numbers


We drew several conclusions from the annual meetings. First, fiscal policy is broken. Te mess in Europe is obvious, but delegates, rightly, were equally wor- ried about the lack of fiscal clarity in the US. Even if a last-minute compromise can blunt the impact of the looming fis- cal cliff, the drag from the public sector in the US might be bigger next year than in the euro zone. But the West is not alone. In China, it is not yet clear what the government's


response will be to the current downturn. Fiscal policy, as our chief China econo- mist, Qu Hongbin, has noted, will be decisive in stabilizing growth. But, apart from a trickle of project approvals in recent weeks, there is no apparent road- map of how the country will pull its fiscal levers in the coming quarters. Meanwhile, in Japan, political grid-


lock has so far prevented the passage of legislation to finance the ongoing budget. Te government is still confident it will obtain a last minute passage, enabling it to stick to its budget plans. But it already had to postpone disbursement of tax grants to local governments to preserve


Imaginechina


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