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from MacroScope:

Will China make the world green?

Workers remove mine slag at an aluminium plant in Zibo, Shandong province December 6, 2008. REUTERS/Stringer

Joschka Fischer was never one to mince words when he was Germany's foreign minister in the late '90s and early noughts. So it is not overly surprising that he has painted a picture in a new post of a world with only two powers -- the United States and China -- and an ineffective and divided Europe on the sidelines.

More controversial, however, is his view that China will not only grow into the world's most important market over the coming years, but will determine what the world produces and consumes -- and that that will be green.

Fischer, who was leader of  Germany's Green Party, reckons that due to its sheer size and needed GDP growth, China will have to pursue a green economy. Without that, he writes in his Project Syndicate post, China will quickly reach limits to growth with disastrous ecological and, as a result, political consequences.

This will have serious consequences on the the way the West lives.

Consider the transition from the traditional automobile to electric transport. Despite European illusions to the contrary, this will be decided in China, not in the West. All that will be decided by the West’s globally dominant automobile industry is whether it will adapt and have a chance to survive or go the way of other old Western industries: to the developing world.

from MacroScope:

It’s the Summer of L-U-V

It's starting to look like the Summer of Love. Two reasons: The recovery is taking on a L-U-V shape globally, and it's going to require huge amounts of love and nurturing to keep growth alive.

    L stands for Europe, where slowness to confront deep damage and write down the remaining $500 billion odd in bad bank debt, mean rebuilding will be protracted and painful. The United States sports a U, bouncing along bottom right. But its financial giants swallowed harsh medicine early and the U.S. has the flexibility to stage an impressive rebound, if not undone by a fast-rising jobless rate at 9.5 percent and heavily indebted consumers. V stands for Asia (ex Japan), the surprise region showing resiliency, thanks to its rapid Q4/Q1 inventory workdown and huge infrastructure spend by China.

Like the Summer of Love 41 years ago, it is a drug-fueled affair. G20 governments are peddling $820 billion in stimulus this year, equivalent to 2 percent of GDP. Central bankers are spending even more. The Fed has doubled its balance sheet to $2.04 trillion the past 12 months.

Has swine flu made you change your ways?

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A couple wearing mask wait for their relatives to arrive from Mexico at Sao Paulo's international airport

There are fears that a swine flu outbreak that has leapfrogged from Mexico, across North America and into Europe could become a global pandemic,  rekindling memories of the SARS crisis that caused widespread turmoil six years ago.

The flu virus spreads quickly between humans and although it has so far only killed people in Mexico, governments across the world are taking measures to try to reduce its impact.

Can a new president repair relations with Europe?

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A man holds a banner reading 'Obama For Chancellor' before a speech of Democratic presidential candidate Senator Barack Obama during his visit in Berlin July 24, 2008.

Presidential candidate Barack Obama spoke at the “Victory Column” in Berlin’s Tiergarten park in front of thousands of Germans and tourists in his only formal address during his week-long foreign tour. He called on Europe to stand by the United States in bringing stability to Afghanistan and confronting other threats from climate change to nuclear proliferation.

Relations between the United States and Germany reached a post-war low under former Chancellor Gerhard Schroeder, who strongly opposed the U.S. invasion of Iraq. He said Germany would “not click its heels” and follow President Bush into war — a position that tapped into wells of German pacifism but infuriated Bush. But Chancellor Angela Merkel, who grew up behind the Wall in the communist East, has worked hard to repair ties with the U.S. and has emerged as one of Bush’s closest allies in Europe.

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