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China’s Obsession With Stability: Stephen Roach

Given centuries of turmoil in China, today’s leaders will do everything in their power to preserve political, social, and economic stability. That is why they removed Bo Xilai, the powerful Party Secretary of Chongqing, just before a major conference that attacked the economic model that he personified.

BEIJING – The first principle that I learned when I started focusing on China in the late 1990’s is that nothing is more important to the Chinese than stability – whether economic, social, or political.

Brics Nations To Explore Possibility Of A Common Development Bank

Finance ministers from the BRICS bloc have raised the idea of setting up a common development bank. This comes at the time when many questions have been raised over the group’s ability to function as a cohesive policy bloc.

Leaders from the five-nation bloc arrived in New Delhi yesterday for their annual summit. On the agenda, the emerging nations are expected to unveil closer trade and investment initiatives.

Africa To Receive $3.5 Billion Investment From IFC In 2012

The International Finance Corporation, the World Bank’s private-sector lending arm, will invest up to $3.5 billion in Sub-Saharan Africa this year, claimed a report by Reuters on Wednesday, as the organisation prepares to spend more cash in building up the region’s infrastructure sector.

America’s Full Recovery Is Not Yet Guaranteed: Mohamed El-Erian

Having reduced the risk of a relapse into recession, the US economy is now able to move on its own power, albeit gingerly. Consequently, the question on most people’s minds today is whether the US economy is ready not just to walk, but also to run and sprint. But the US faces a new problem: that the sense of relief now can – and probably will – be taken too far.

Fuel Hedging Ban Causes Major Dip In Chinese Airlines’ Profits

China’s biggest airlines have seen their profits plummet in recent months, claimed a report by the Financial Times on Tuesday, with most companies unable to hedge against rising oil prices due to a three-year old government ban on crude future contracts.

According to FT, profits for Air China and China Eastern fell by 38.8 percent and 9.1 percent respectively last year, as growing fuel costs continue to leave a dent on companies’ expense sheets.

OECD Calls For €1 Trillion ‘Mother of All Firewalls’

The eurozone remains stuck in a delicate balance in its recovery phase, but the risk of contagion remains extremely high. According to the Organization for Economic Cooperation and Development, eurozone leaders need to increase the financial firewall to 1 trillion euros to boost market confidence.

Speaking at a news conference in Brussels, Angel Gurria, secretary-general of the Paris-based organisation said that the existing firewall is not sufficient given the current state of the eurozone economies.

Queen’s Celebrations Could Hurt The UK Economy, Says King

The U.K.’s national economic output could shrink between April to June this year, said Bank of England governor Sir Mervyn King, as citizens prepare to indulge in an additional holiday in order to celebrate Queen Elizabeth II’s Diamond Jubilee.

Bailouts Alone Will Not Solve Europe’s Fiscal Problems: Leszek Balcerowicz

Bailouts appear to be the medicine du jour prescribed across Europe for debt-stricken nations. Large-scale purchases of government bonds by the ECB also seem to be the only focus of creditors and political leaders. But the true key to resolving the eurozone crisis actually lies in properly structured reforms in the ailing countries.

Chinese Village Gives Out Gold and Silver As Profit Sharing

Villagers in the eastern China’s Jiangsu province have received gold, and silver, bars as they celebrate the 40^th anniversary of a village-owned business. The Jiangsu Xinchangjiang Group is an electronics, metals and chemicals company, and a top 500 company in China.

According to China Daily, it is the second time the village has handed out gold and silver, after Li Liangbao, Chief of Changjiang village, promised to do so in 2009.

Key Economic News To Watch This Week: March 26

A quick preview of the key economic events for the upcoming week:

With recent economic data showing the slow and uncertain recovery of the European economy, EU leaders can ill afford a wrong move. The highlight for the week: Financial markets are looking forward to an expansion of the European bailout rescue funds, a move that EFSF chief Klaus Regling has said is necessary to calm markets.

With debt yields once again rising in Spain, Portugal and Italy, the eurozone crisis is far from over.

Monday, March 26