Thailand's Prime Minister Yingluck Shinawatra gestures to residents during her visit to a flooded area at Don Muang district in Bangkok (Chaiwat Subprasom/Courtesy Reuters).

The flooding in Bangkok shows little sign of getting better, and its impact on Thailand’s economy and the global supply chain of many computer and automotive components has yet to be fully tallied. Japanese companies in particular have made enormous investments in Thailand and have been particularly hard hit by the flooding, but all computer disk drive makers and many car manufacturers have been affected. People are stranded throughout Bangkok, the government’s messages are still confusing and hard to understand, and the divisions in Thai political society have prevented the type of unity in the political system that should be necessary at such a time of crisis. In addition, diseases carried by the fetid water are beginning to be a problem in Bangkok and the outlying suburbs. Many foreign investors will now rethink their decisions to place so much of their supply chain in Thailand.

But even more worrying, these floods, which are the worst in Thailand in fifty years, could be a harbinger of the future.

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Global Green Growth Institute chairman Han Seung-soo of South Korea delivers a keynote speech during the Global Green Growth Summit 2011 in Seoul June 20, 2011 (Courtesy Global Green Growth Institute).

South Korean president Lee Myung-bak has made great strides internationally in propagating an international vision for green growth, especially through the work of the Global Green Growth Institute (GGGI). The Council on Foreign Relations has published a new report on South Korea’s green growth policies by Jill Kosch O’Donnell which describes South Korea’s newly emerging green growth partnerships with Denmark, the UAE, and the World Bank, as well as more mixed progress in implementing green growth strategies domestically. The report can be found here.

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A resident cycles past the Wumen Gate of the Forbidden City in Beijing. Reuters/Jason Lee.

As Vice President Biden meets with Xi Jinping and other Chinese leaders this week, his number one economic talking point is almost certain to be about “rebalancing.”  Nearly all of Washington’s principal economic concerns, from currency valuation to Chinese industrial policy, touch this central issue.  But, quite frankly, rebalancing is not just an American goal.  It is, too, a Chinese objective because Beijing’s existing growth model—predicated on the two pillars of exports and capital-intensive investment—is delivering diminishing returns, and China’s savvy leaders know it.

A major new report from Eurasia Group, China Great Rebalancing Act, explains why.

First, a little truth in advertising:  I’m the head of the Asia practice group at Eurasia Group, so I helped write the report.  But our team’s report is well worth reading because it provides a very comprehensive overview of the forces and dynamics shaping the future of China’s political economy.

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A couple walk at the seafront in Mumbai on May 11, 2009. (Punit Paranjpe/Courtesy Reuters)

I’m just back from a conference in Berlin, organized by my colleague Stewart Patrick, where the talk was all about the opportunities and challenges for the United States and European Union posed by the rise of the rest (the highly popular term popularized by Fareed Zakaria to describe the large emerging economies, such as China, India, Brazil, etc.). The conference included scholars and former officials from a number of the emerging economies, as well as the EU and U.S.

It was a fascinating set of discussions, primarily because there was so little agreement, and it seems to me, so little empirical work done on the topic. What constitutes the rest?  Where are the real issues of commonality among the countries?

A few fundamental issues to think about:
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The algae-filled Chaohu Lake is seen in Hefei, Anhui province, on August 3, 2010. (Stringer/Courtesy Reuters)

While China’s economy continues to grab headlines, a new report, “Choke Point: China,” suggests  that we ought to be spending a bit more time on an often-ignored economic fundamental: water.   China’s environment has been a long-standing passion of mine, both as a research focus and as an area to promote U.S.-China cooperation. While China’s poor air quality has received a lot of attention in the West—we can all see the pollution in Beijing or read about the pollution clouds that travel from China across the Pacific to the United States—the issue of greatest concern for China is access to clean water.

We know a fair amount about China’s water challenge already. Both municipal and industrial demand for water continues to grow, as both the economy and middle class expand, and levels of pollution throughout many of China’s major river systems and largest lakes make the water unusable even for agriculture or industry (forget about fishing or drinking). China is sinking as underground aquifers are drawn down, with the result that buildings are tilting, highways cracking, and people relocating as their coastal villages sink beneath sea level. Water is a source of societal concern: the public health costs from polluted water are mounting, and water pollution remains a source of significant social unrest in rural China. Civil society in China, in the form of environmental NGOs, has made enforcement of water pollution control regulations one of their top priorities.

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Courtesy of Reuters/Larry Downing

Last week I traveled down to Mexico City as part of a delegation led by my colleagues Michael Levi and Shannon O’Neil to discuss climate change issues with Mexican officials and civil society leaders. Aside from discovering that Mexico City is beautiful, I found that the Mexicans are “all systems go” as they prepare for the next round of climate negotiations to be held in Cancun in December. They are determined to ensure that the Cancun round avoids not only the logistical nightmares but also the political pitfalls of the Copenhagen meeting. For that to happen, they need a modicum of cooperation and constructive participation by both the United States and China. Unfortunately, it doesn’t seem that either country is getting the point.

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Everyone is in a tizzy over the supposed downturn in U.S.-China relations. (See here, here, and here.) The rhetoric is heating up on both sides, and new issues of contention appear to pop up daily. Our disputes over Copenhagen, Google, Taiwan arms sales, the Dalai Lama and Iran are all front page headlines. Are we indeed headed for an open rift in the relationship that could imperil future cooperation on a range of important, pressing global matters? Read more »

Without an eye-catching climate accord out of Copenhagen, what really grabbed the media spotlight were the behind-the-scenes negotiations and back-door politicking. And at the center of it all was China.

Two very different narratives emerged concerning China’s participation in the climate negotiations: savior versus spoiler. In the savior version–promulgated not surprisingly primarily by the Chinese media–Premier Wen through his leadership and perseverance not only brought hope to dispirited international negotiators but also played the central role in forging consensus at several critical junctures in the negotiations. In the spoiler version–put forward by some delegates from the G-77 and the developed countries–China refused critical compromises on issues such as global 2050 targets and measurement, reporting, and verification, making a meaningful deal impossible. Read more »