January, 08 2016, 10:30am EDT
For Immediate Release
Contact:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167
Dynamics of China's Sell Off
The New York Times is reporting: "Stocks in the U.S. and Europe sank after trading was halted in China for the second time this week. Markets had plummeted in Asia over concerns about China's currency."
JAMES HENRY, jamesshelburnehenry at mac.com,@submergingmkt
Henry is former chief economist at the international consultancy firm McKinsey & Co. He is now senior fellow at the Columbia University Center for Sustainable International Investment.
WASHINGTON
The New York Times is reporting: "Stocks in the U.S. and Europe sank after trading was halted in China for the second time this week. Markets had plummeted in Asia over concerns about China's currency."
JAMES HENRY, jamesshelburnehenry at mac.com,@submergingmkt
Henry is former chief economist at the international consultancy firm McKinsey & Co. He is now senior fellow at the Columbia University Center for Sustainable International Investment.
He said today: "There are several critical aspects to this:
"Stock turbulence is a great example of why we need a Financial Transaction Tax -- Bernie Sanders has been recommending this. A tiny tax on financial translations carried out by institutions would raise hundreds of billions of dollars and it would lessen the volatility.
"Such a tax could be especially useful in China since there's partially a lack of transparency in their financial system. That should be remedied. Part of what's happening with China is that you're seeing capital flight. Part of this is economic -- Chinese who have made enormous amounts of money in the last decade wanting to diversify. But part of it is fear that the Chinese government is going to go after them, either for corruption in how they made their fortunes or for political payback.
"At a certain level, the stock markets have too central a role in the global economy -- partly because there are now scores of them.
"But there are real problems in China -- you have many, sizable worker protests happening because workers are simply not getting paid.
"More broadly, the entire world economy is genuinely vulnerable and there are few tools left to fix things. It is remarkable that you're seeing these problems despite low oil prices. Monetary policy has been tapped out unless you're wanting to look at negative interest rates. The 'first world' is going to have to start pulling its weight here since the developing powers -- basically the BRICS [Brazil, Russia, India, China, South Africa] that helped pull the global economy out of the 2008 crisis are in trouble themselves now. But you have a U.S. Congress that's not going to allow much traditional Keynesian spending."
A nationwide consortium, the Institute for Public Accuracy (IPA) represents an unprecedented effort to bring other voices to the mass-media table often dominated by a few major think tanks. IPA works to broaden public discourse in mainstream media, while building communication with alternative media outlets and grassroots activists.
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Tom Fletcher, under-secretary-general at the U.N. Office for the Coordination of Humanitarian Affairs (OCHA), said governments, particularly those in wealthy countries like the United States, face "a choice" as the world bears witness to starvation, increasingly frequent climate disasters, and other suffering in Gaza, Sudan, Yemen, and elsewhere.
"We can respond to these numbers with generosity, with compassion, with genuine solidarity for those in the most dire need on the planet—or we can carry on," said Fletcher at a news briefing. "We can choose to leave them alone to face these crises. We can choose to let them down."
Fletcher and other humanitarian leaders noted that as of last month, just 43% of the $50 billion funding appeal made for 2024 had been met.
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