James A. Dorn (Author at The Cato Institute)

Cato Scholar Comments on the Downturn in China's Economy (Scholar Comments)

Thu, 23 Oct 2008 00:00:00 EDT

The upheaval in the global financial markets and the sharp slowdown in U.S. and European growth are beginning to take their toll on the world's fastest growing economy. China's real GDP growth slowed to 9 percent in the third quarter, the lowest in five years. The appreciation of the yuan by more than 20 percent against the dollar since July 2005 and the U.S. recession have harmed China's export sector, as have product safety issues. Asset prices have fallen dramatically, as China's stock market has lost nearly 70 percent of its value since the 2007 peak, and the housing bubble is being deflated. The real drag on China's economy, however, may come as its heavily controlled financial sector experiences a rise in nonperforming loans. If U.S. market socialism is adversely affecting investment decisions, just think of what might happen in China.

Socialized Risks, Private Rewards (Daily Podcast)

Wed, 24 Sep 2008 00:00:00 EDT

Cato Scholar Comments on Proposed Bailout of Financial Sector (Scholar Comments)

Tue, 23 Sep 2008 00:00:00 EDT

Opening the doors of the U.S. Treasury to Wall Street may be necessary to avert financial meltdown, but it will expand the size and power of government far beyond what the Framers intended. The danger is that U.S. sovereign debt itself will be downgraded, not by official rating agencies but by global capital markets. It seems highly likely that the bailout will mean higher interest rates and lower asset prices, and do nothing to increase domestic saving, which is necessary to help restore global balances. Indeed, the increase in federal borrowing and the Federal Reserve's injection of liquidity threaten to lower, not increase, the gap between domestic investment and saving. The innocent victims will be market liberalism and taxpayers.

What Price Stability? (Commentary)

Mon, 15 Sep 2008 00:00:00 EDT

The US Treasury's takeover of Fannie Mae and Freddie Mac, the nation's largest mortgage financers, was predictable. The drive for profits while housing prices were rising, and the expectation that the federal government would not let these market-socialists fail, allowed Fannie and Freddie to accumu...

Olympian Task (Commentary)

Tue, 02 Sep 2008 00:00:00 EDT

The spectacular choreography in the opening and closing ceremonies at the Beijing Olympics leaves the impression that China can accomplish anything, including becoming the world's largest economy. But organizing a sports contest and achieving sustainable development - in the liberal sense of widenin...

Polluted Markets (Commentary)

Mon, 25 Aug 2008 00:00:00 EDT

The US subprime crisis has some valuable lessons for China, the foremost being that market socialism is no magic wand for wealth creation. When the US Congress created Fannie Mae and Freddie Mac, the two giant mortgage-financing companies, and gave them the status of "government-sponsored enterprise...

China Grows 'Faster, Higher, Stronger' (Commentary)

Mon, 11 Aug 2008 00:00:00 EDT

From an economic perspective, no country better represents the Olympic motto — "faster, higher, stronger" — than China. During the last 30 years of opening to the outside world and economic liberalization, China has grown to be the world's third-largest trading nation and fourth-largest ...

Cato Scholar Comments on President Bush Criticizing China's Human Rights Record (Scholar Comments)

Fri, 08 Aug 2008 00:00:00 EDT

As the leader of the free world, President Bush should use the bully pulpit to remind leaders in China and elsewhere that basic human rights to life, liberty and property pre-exist the state, and that a just government's role is to safeguard those sacred rights. The best way to help China move toward a freer society is to continue on the path of economic engagement and not surrender to protectionist forces. The U.S. should practice what it preaches.

China to World: We Are Ready (Daily Podcast)

Wed, 06 Aug 2008 00:00:00 EDT

Caveats on Reform (Commentary)

Mon, 28 Jul 2008 00:00:00 EDT

After 30 years of economic liberalisation and rapid growth, China is now the world's third-largest trading nation and the fourth-largest economy. In a new study for the Carnegie Endowment for International Peace, Albert Keidel, a former US treasury official, predicts that, by 2035, China will be the...

Now's Not the Time to End US-China Economic Dialogue (Commentary)

Wed, 25 Jun 2008 00:00:00 EDT

Powerful US House Democrats have expressed their skepticism with the latest round of the US-China Strategic Economic Dialogue, which ended last week. Congressional critics of US-China economic policy complain that little progress has been made on substantive issues such as "currency manipulation" si...

The Danger of Economic Nationalism (Commentary)

Tue, 24 Jun 2008 00:00:00 EDT

In his closing remarks at the Third Strategic Economic Dialogue (SED) in Beijing in December 2007, U.S. Treasury Secretary Henry Paulson stated that both China and the United States "recognize the need to fight economic nationalism in our two nations." Yet, it is much easier for Congress to politici...

Cato Scholars Comment on the U.S.-China Strategic Economic Dialogue (Scholar Comments)

Tue, 17 Jun 2008 00:00:00 EDT

The SED has played a constructive role in U.S.-Sino relations by taking a longer run view of current issues, and countering the China bashing that too often characterizes Congressional hearings. The SED is much less prone to politicization than is discussion on Capitol Hill, and that is a good thing. By considering long-run costs and benefits of policy alternatives, the SED has grounded U.S.-China relations in reality rather than rhetoric. Progress has been made on product safety issues, and irresponsible policies such as imposing a heavy duty on all Chinese imports unless the yuan is revalued upward by a considerable amount against the dollar have been avoided.

Disaster Protection (Daily Podcast)

Thu, 05 Jun 2008 00:00:00 EDT

Disaster Protection (Commentary)

Tue, 27 May 2008 00:00:00 EDT

The terrible devastation caused by the earthquake in Sichuan reminds us of the randomness of nature, the uncertainty of life and the compassion people have for those who suffer. But there is a more important, if less understood, lesson: countries with well-developed markets, private property rights ...

China's Financial Repression (Commentary)

Thu, 22 May 2008 00:00:00 EDT

China's phenomenal rise since 1978 has resulted from economic liberalization, not monetary ease. But China is still not a full-fledged market economy, and monetary policy is compromised by Beijing's reluctance to let market forces determine interest and exchange rates. In a world of mo...