June 26th, 2013
09:37 PM ET

What we're reading

By Fareed Zakaria

“China’s leaders avoided bursting one bubble in 2008 by creating new ones. Yet China cannot forever delay its day of reckoning,” argues William Pesek on Bloomberg. “Total credit may reach 200 percent of GDP this quarter, up from 130 percent in 2008. Mainland banks are currently adding assets at the rate of an entire U.S. banking system every five years.”

“Traditionally, Beijing has viewed opacity as a powerful tool for policing the channeling of funds between banks and companies. That murkiness is now proving dangerous. The central bank needs to confirm it will rein in interbank liquidity, explain the means by which it plans to do so, and indicate what the endgame is. Its vague, boilerplate statements are only exacerbating distress in the markets.”

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“If the case of Edward Snowden…has revealed anything, it is that the U.S. intelligence services made some mistakes as they reformed after 9/11 and the Iraq war,” writes Sue Mi Terry in Foreign Affairs. “It is true that many of the changes they made have been for the better. But some, such as increased collaboration and information sharing, have now backfired.”

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“The most effective Sino-American strategic exchanges – Kissinger-Zhou, Brzezinski-Deng – have been small and involved many hours of conversation to develop a deeper understanding of worldviews, interests and conceptual frameworks,” argues Robert Zoellick in the National Interest.

“A true high-level strategic discussion, including pol-mil dimensions, should foster a dialogue on historical perspectives, geographical considerations, economic dimensions, technological shifts, political constraints, perceptions of changing conditions, national interests and a search for mutual interests. It should also assist China and the United States to manage differences.

“In such a dialogue, the United States should offer a clearer explanation why U.S. policies are not based on a ‘containment’ strategy, as some Chinese seem to think. The United States should also explain its strategic concept of relations with China and why ‘hedging’ policies by the United States and others are a reasonable reaction to worrisome Chinese behavior.”


soundoff (5 Responses)
  1. jekie

    In China, it is extremely equal to peace-at-any-price mind-set that the crafty human being underestimating it trusts China to the abyss of despair

    June 27, 2013 at 8:05 am |
  2. John

    We must not forget that China stole Hong Kong from Great Britain. It is not acceptable that USA plays out NATO alliance countries and illegally collaborates with China and S.Korea against Western interests. The West would significantly benefit with Great Britain's leadership.

    June 27, 2013 at 8:19 am |
    • Maersk

      Your cherry must also have been stolen by the Chinese.

      June 27, 2013 at 6:32 pm |
  3. j. von hettlingen

    Robert Zoellick should note since the deaths of Zhou Enlai and Deng Xiaoping, China hasn't seen any leader, who is pragmatic and charismatic enough to replace the one or the other.

    June 28, 2013 at 6:30 am |
  4. paofpa

    In China, bubbles do not need to burst. But they can on request. Or they can be inflated away. They are looking at old and the new and taking the best from both worlds. The “Best” is to help bring/keep a Stable Middle Class Economy to a Billion People.

    June 28, 2013 at 8:12 am |

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