Trade & Globalization

China has grown rapidly for over a few decades but the engine of China's recent growth may be reaching its limit. Are the rapid GDP gains from its fixed investment and export model coming to an end?  And what, if anything, will replace it, and with what consequences for the world economy?

-- This is a guest post by Jay Pelosky, Principal, J2Z Advisory, LLC --

I recently attended a very interesting roundtable on China’s future growth path, led by The New America think tank and the World Policy Institute.

While listening to the debate over China’s need/ability to change its economic model, it struck me that the catalyst for such change could be developing right before our eyes – namely, inflation.

The opening theme of the 2011 State of the Union address, and the theme that the President has carried forward since then, was his insistence that the nation has at long last emerged from economic crisis.  He said: “Two years after the worst recession most of us have ever known, the stock market has come roaring back.  Corporate profits are up.  The economy is growing again.  And after two years of job losses, we’ve added private-sector jobs for 12 straight months -- more than 1 million in all.”

Everybody loves Disney. Last year, Walt's empire was the No. 1 entertainment business in Fortune's annual ranking of the most admired companies in the world, and it's regularly a star performer in corporate-responsibility ratings. And why not? Global comity has been central to Disney's image ever since EPCOT Center, with its pavilions honoring the local traditions of countries from Canada to China, opened its gates.

Mohammed Bouazizi was the young man who set himself alight in protest against the lack of economic opportunities available in Tunisia. This young man’s act of desperation may have sparked a revolution in his own country, but what of the millions of unemployed youth in the Arab world? Already others have copied his act in protest. What must be done to prevent a whole generation from becoming burned?

The crisis in Egypt, however it plays out, provides Americans with an opportunity to reconsider the role of the Middle East in American foreign policy. Since the end of the Cold War, the U.S. has pursued a global grand strategy centered on the Middle East, while treating the rise of China as a secondary strategic concern. The growing costs of both excessive military intervention in the Middle East and inattention to China’s military and economic policies raise the question of whether America's obsession with the Middle East has been an expensive distraction.

In his 2011 State of the Union, President Obama outlined a sweeping program for economic transformation, resting on innovation, education, infrastructure, deficit reduction, and governmental reform. The New America Foundation asks whether these are the right “pillars” of a national agenda.  

In last week's State of the Union address, President Barack Obama highlighted government programs "rebuilding for the 21st century." Among the investments in vital public infrastructure he mentioned -- roads, bridges, rail -- he promised "high-speed wireless coverage to 98 percent of all Americans." The president was referring to mobile broadband Internet and similar services advertised as "3G" or "4G" -- low-cost ways to help make basic broadband near universally availabl

There wasn't a single North American accent among them, but the show went on smoothly without anyone so much as noticing. Onstage were Gao Xiqing, president of the China Investment Corporation; Juan Carlos Echeverry, Colombia's Minister of Finance; and other figures from what used to be called "the South."

This year is my 10th trudge up the "Magic Mountain" to attend the World Economic Forum (WEF) annual meeting in Davos, Switzerland. I'm not Dmitry Medvedev, Bill Gates, or Jamie Dimon -- all of whom were visible in the Congress Center corridors today -- but like them, I wouldn't be here if it wasn't worthwhile. The critics who dismiss Davos as a waste of time are often those who were either not invited or not interested in making a contribution to anything beyond their own bottom line.