Tannenbaum: It's quite clear that China is the real target of the new movement against trade in the US and elsewhere. I'm surprised at the number of of Europeans who say to me that whilst they didn't necessarily agree with the president and his style they felt he had a point on China.
China was admitted to the WTO in 2002 upon promising that some of their non-market practices would begin to recede. They promised to reduce state ownership in strategic industries. They had promised to relax the joint venture requirements that give foreign companies for a local partner that has access to intellectual property. They promised to reduce the practice of using regulation to harass foreign firms. A whole list of things on which many people feel that they've not made sufficient progress.
The fact is that there's a real desire not just in Washington, but in other world capitals to reset relationships with China. And whether by accident, or design, I believe that these discussions are actually happening at an opportune time for those who would like to see a renewed relationship with China.
The Chinese economy has performed what some would consider miracles, they've doubled the size of the GDP six times in the last 30 years or something. But they're really struggling to keep up that rate of growth as evidenced by doubling the amount of debt when you combine household, corporate and government debt in China over the last 10 years.
Are we heading for a new global financial crisis if asset prices tank?
Tannenbaum: One of the productive takeaways from the 2008 financial crisis is that the private or public sectors need to do a better job of surveillance to identify those markets that are offside or those practices that are dangerous.
I don't see anything that comes immediately to mind, but the longer that we go, and the lower that interest rates are globally, the more likely it is that investors seeking a rate of return will stretch themselves into areas that they may not be as comfortable with, and that could cause the quick reversal that was very much part of the 2008 experience.
You've had your lens on New Zealand do you have any observations on how New Zealand should specifically improve productivity which is top of mind here?
Tannenbaum: The anxiety that I hear here in New Zealand about debt levels, and preparedness and immigration, I apologise, it doesn't even rise to the top 10 globally.
I've long been an admirer of the way New Zealand has managed its resources and its budget.
There is of course a good healthy discussion about the funds that have been created and their size, but that foresightedness to take important funds and set them aside for those long tailed priorities and take them away from the short-termism that dominates the political process is something I wish that we could bottle and send to other countries including….. uh….. one that I'm very familiar with.
