Global growth faces risks; China's political gamble of the century; Climate change impacts 'overwhelming'

1 Global growth faces risks (Khaleej Times) Known unknowns are multiplying in a new threat to global economic expansion. While economists Mohamed El Erian of Allianz, Allen Sinai of Decision Economics and Morgan Stanley’s Joachim Fels see growth speeding up this year, mounting geopolitical strains in Ukraine and elsewhere are prompting them to turn more guarded about the outlook. Sinai sees a 10 per cent chance of a global recession triggered by escalating tensions between Russia and the US and Europe over Ukraine.

The crisis in Crimea isn’t the only concern financial markets must grapple with. On the lengthy list of what former US Defence Secretary Donald Rumsfeld dubbed “known unknowns” are elections in some emerging markets starting with Turkey on March 30, the Syrian civil war and negotiations over Iran’s nuclear programme, which could be complicated by the US-Russia standoff in eastern Europe. Global investors are on the alert. The share of cash in their portfolios is the highest since July 2012, according to a survey by Bank of America Merrill Lynch.

Russia has consolidated control over Crimea and the confrontation between Moscow and Washington is the most serious since the Soviet Union collapsed more than two decades ago. “It raises an unknown,” said Russ Koesterich, chief investment strategist at New York-based BlackRock, which manages $4.3 trillion in assets. “This may be a longer-term issue that doesn’t significantly resolve itself in the next two to three months.” Citigroup’s Ebrahim Rahbari and colleagues said in a report that "A major crisis in Russia could impart a substantial negative impulse to the euro-area growth.”

http://khaleejtimes.com/biz/inside.asp?section=internationbusiness&xfile=/data/internationbusiness/2014/March/internationbusiness_March133.xml

2 China's political gamble of the century (Timothy Garton Ash in The Guardian) Xi Jinping is trying to turn China into an advanced economy and three-dimensional superpower, drawing on the energies of capitalism, patriotism and Chinese traditions, yet all still under the control of what remains, at its core, a Leninist party-state. He may be a Chinese emperor but he is also a Leninist emperor. This is the most surprising and important political experiment on the face of the earth. No one in the 20th century expected it. No one in the 21st will be unaffected by its success or failure.

Back in 1989, as communism was trembling in Warsaw, Berlin, Moscow and Beijing, who would have predicted that 25 years later we would be poring over the 60-point Decision of the 3rd Plenum of the 18th Party Congress, so as to understand exactly how the party leadership proposed to keep China both economically growing and politically under control?

You may exclaim, Beijing in 2014 is light years away from Moscow in 1974, let alone 1934! Of course you are right. For every bit of the old there is a byte of the new. My point is not for a moment that there is nothing new under the Chinese sun. On the contrary, there is a fizzling cocktail of new and old. My point is that we should not lose sight of the old inside the new, and imagine that the politbureaucratic language of a 3rd Plenum is purely formalistic. Wherever you turn, whether in the factory, the newspaper, the farm or the university, the party secretary retains a decisive voice. There are Communist party committees or cells inside private companies, including foreign-owned ones.

Since the next few years are crunch time for the Chinese economy, the Chinese question is now sharply posed. It is no longer: could evolutionary political reform, gradually increasing transparency, constitutional-type balances, freedom of expression and civil society dynamism be used to complement and reinforce economic reform? Rather it is: can a reinvigorated party-state, harnessing in unprecedented fashion the energies of capitalism, patriotism and older Chinese traditions, succeed in mastering the ever more difficult challenges of continuing modernisation?

And the answer is? Within the space of a few hours, I spoke to two of the most experienced foreign correspondents in China, both of them formidably well informed. Their diagnosis of the problems was almost identical, and their predictions spectacularly different. One thinks the party can still keep the show on the road, with skilful management of state-led development. The other foresees economic meltdown, social revolt and political upheaval. In short, nobody knows. But at least we should be clear about the question.

http://www.theguardian.com/commentisfree/2014/mar/30/china-political-gamble-of-century-president-xi-jinping

3 Climate change impacts 'overwhelming' (BBC) Scientists and officials meeting in Japan have published the most comprehensive assessment to date of the impacts of climate change on the world. Members of the UN's climate panel say that their report provides overwhelming evidence of the scale of these effects. Natural systems are bearing the brunt right now but the scientists fear a growing impact on humans.

Our health, homes, food and safety are all likely to be threatened by rising temperatures, the summary says. Be it the melting of glaciers or warming of permafrost, the summary highlights the fact that on all continents and across the oceans, changes in the climate have caused impacts on natural and human systems in recent decades. In the words of the report, "increasing magnitudes of warming increase the likelihood of severe, pervasive and irreversible impacts".

Michel Jarraud, secretary-general of the World Meteorological Organization, said that, previously, people could have damaged the Earth's climate out of "ignorance". He added, "Now, ignorance is no longer a good excuse". Animals, plants and other species will begin to move towards higher ground or towards the poles as the mercury rises. Humans, though, are also increasingly affected as the century goes on.

http://www.bbc.com/news/science-environment-26810559