The steady state in the Asian region is growth and dynamism that requires continuous structural change and adjustment. The trajectory of China’s potential rate of growth is certainly 2 or 3 percentage points lower than it was a decade ago, but even at around 6 per cent over the coming decade the massive Chinese economy can still grow at two to three times the rate of the world economy as a whole. India is on the way back towards its growth potential, upwards of 8 per cent over the next decade in which the young will be pouring into its labour markets.

The steady state in the Asian region is growth and dynamism that requires continuous structural change and adjustment. The trajectory of China’s potential rate of growth is certainly 2 or 3 percentage points lower than it was a decade ago, but even at around 6 per cent over the coming decade the massive Chinese economy can still grow at two to three times the rate of the world economy as a whole. India is on the way back towards its growth potential, upwards of 8 per cent over the next decade in which the young will be pouring into its labour markets.

After a turbulent 2015, China’s major stock exchanges took another hit in January. Chinese authorities have in the past clumsily tried to stop the free fall in markets with various degrees of success. In the past, intervening in markets has worked. But for China to avoid a middle-income trap and become a high-income country, it will need to develop and trust the markets instead of distorting them with unsustainable growth, just like its Northeast Asian neighbours did.

After a turbulent 2015, China’s major stock exchanges took another hit in January. Chinese authorities have in the past clumsily tried to stop the free fall in markets with various degrees of success. In the past, intervening in markets has worked. But for China to avoid a middle-income trap and become a high-income country, it will need to develop and trust the markets instead of distorting them with unsustainable growth, just like its Northeast Asian neighbours did.

South Asia’s economic potential has long been constrained by low levels of economic integration. Despite being closely linked geographically, culturally and historically, intra-regional trade is very low. A major problem has, of course, been political difficulties within and between South Asian countries. But an important, and overlooked, barrier to greater economic integration is the poor quality and inadequate investment in infrastructure in the region. The newly established Asian Infrastructure Investment Bank (AIIB) can play a pivotal role in fixing this problem.

South Asia’s economic potential has long been constrained by low levels of economic integration. Despite being closely linked geographically, culturally and historically, intra-regional trade is very low. A major problem has, of course, been political difficulties within and between South Asian countries. But an important, and overlooked, barrier to greater economic integration is the poor quality and inadequate investment in infrastructure in the region. The newly established Asian Infrastructure Investment Bank (AIIB) can play a pivotal role in fixing this problem.

On the last day of November, at the conclusion of its five-yearly review of the composition of the Special Drawing Rights (SDR), the IMF elevated the renminbi to its SDR basket. The RMB is now one of five major ‘freely usable’ reserve currencies in the international monetary system.

On the last day of November, at the conclusion of its five-yearly review of the composition of the Special Drawing Rights (SDR), the IMF elevated the renminbi to its SDR basket. The RMB is now one of five major ‘freely usable’ reserve currencies in the international monetary system.

China’s state monopolies survive alongside a cut-throat private sector. The recent announcement of China Minmetals merger with MCG and this year’s mergers of China North Rail with China South Rail have fuelled ongoing speculation about the further consolidation of China’s state sector. These mega-mergers feed the perception that China is pursuing ‘state capitalism’ dominated by massive state monopolies. But other economists, emphasising the triumph of private markets, argue that the dominance of state-owned enterprises (SOEs) is a misconception. A close look at China’s industrial data shows that while manufacturing is private-sector led and highly competitive, resources and utilities are in state hands and much more likely to be concentrated.

China’s state monopolies survive alongside a cut-throat private sector. The recent announcement of China Minmetals merger with MCG and this year’s mergers of China North Rail with China South Rail have fuelled ongoing speculation about the further consolidation of China’s state sector. These mega-mergers feed the perception that China is pursuing ‘state capitalism’ dominated by massive state monopolies. But other economists, emphasising the triumph of private markets, argue that the dominance of state-owned enterprises (SOEs) is a misconception. A close look at China’s industrial data shows that while manufacturing is private-sector led and highly competitive, resources and utilities are in state hands and much more likely to be concentrated.