Comment, analysis and offerings from Thursday’s FT,
John Gapper: China takes a short-cut to power 
To travel on one of China’s high-speed trains is to experience China’s rapid industrial advance, writes the FT’s Gapper. On a recent trip, we cruised from Nanjing to Shanghai at speeds of which Amtrak can only dream. If CSR Corp, the Chinese company that built the train, has its way, the US will get a taste of the technology in the next decade. This week, CSR agreed with GE to bid jointly against Siemens and Alstom for the high-speed rail services intended for Florida and California. On the face of it, the high-speed train is a shining symbol of China’s shift to being a skilled, innovative economy. But it is as much a symbol of its determination to gain technological ascendancy by any means possible, including taking western technology and reworking it just enough to claim it as its own.
Gordon Brown: How the west can reverse decline
For two centuries Europe and America dominated global output and consumed far more than the rest of the world combined, writes Brown, former UK prime minister and author of “Beyond the Crash”. Now in 2010 the US and the EU are being out-produced, out-manufactured, out-traded and out-invested by the rest of the world – but not out-consumed. The danger for America and Europe is years of low growth and high unemployment. But fortunately, the same forces that have already restructured our economic lives – the global sourcing of goods and the global flow of capital – are now starting to engineer a second transformative shift.
Analysis: European banking, big gaps to fill in
What does the future hold for European banking?, ask FT reporters. Will Portugal, Spain, even Italy go the same way as Greece and Ireland? And is it all inevitable? Most observers are already looking past Portugal, assuming both that it is a probably lost cause and that its banking system is too small to cause widespread ructions. It is the fate of Spain, the eurozone’s fifth-biggest economy, that most worries bank investors.
David Pilling: Rock lobster lessons for a booming Australia
Australia is booming, but China’s ban on rock lobster imports last week, which sent prices tumbling, raises the question: what can the country do to protect itself against bust?, says the FT’s Asia editor. One of the best ideas being put forward is to establish a resources fund on the lines of Norway’s. By saving part of today’s windfall, Canberra could help offset the inevitable fall. Part, if not all, of a planned levy on miners’ super-profits could be diverted to such a fund. Indeed, ordinary Australians are now saving a full tenth of their disposable income compared with practically nothing before the 2008 crisis. Canberra would do well to follow the public’s lesson in thrift.
Lex on sovereign CDS
“I told you so”. That is a summary of how hedge funds will respond to a new internal European Commission report on the sovereign credit default swap market, predicts Lex. The report came to the same conclusion as an earlier study by BaFin, the German financial regulator: the data does not support accusations that hedgies’ short positions in the CDS market caused instability that pushed up government borrowing costs. It leads to a sensible conclusion: there is no reason for excessive regulation of the CDS market.
Money supply: George Osborne on UK trend growth
In evidence to the Treasury Select Committee on Wednesday, George Osborne claimed the UK economy was back on track, writes the FT’s economics editor Chris Giles. He added that it was pretty clear to him that the previous Labour government had overstated trend growth for much of its time in office and there had been a big “boom” in the economy for much of the decade. This is interesting, and to see why, turn to the Office for Budget Responsibility and its calculations on the output gap.
The Short View, video: Norsk haven
Nervousness associated with the US fiscal stimulus has highlighted a new safe haven – Norway. It looks to be everything the US is not. But Jennifer Hughes, senior markets correspondent, questions whether this new port is of a stature to cope with the influx and the inevitable withdrawal.
Beyond brics: Brazil rates unchanged — but not for long?
Wednesday night’s decision by Brazil’s central bank to leave interest rates unchanged was expected by most economists, writes the FT’s Jonathan Wheatley. But it still raised several analysts’ eyebrows and poses some big questions about the conduct of monetary policy as a new government prepares to take office next year. But if the bank – as it almost never has before – is signalling the need for an early rise in interest rates, why did it not do it now?
Michael Pomerleano: Are central banks up to the task?
In response to the financial crisis, the most immediate fundamental reform adopted by several developed countries is to have a “systemic regulator” overseeing the stability of the financial system as a whole, writes Pomerleano, who has worked at the Bank of International Settlements and at the Bank of Israel. Through data gathering, analysis and ultimately regulation, the systemic regulator is expected to mitigate the risks associated with highly inter-dependent relationships between financial institutions. Many central banks are receiving significant new responsibilities for macroprudential supervision.
Market Insight: Euro’s woes should spark rethink
The euro crisis has highlighted once again the interdependencies in the international monetary system and the need for change, writes Ousmène Mandeng, head of public sector investment advisory at Ashmore. Establishment of a multiple-currency system seems the most straightforward reform to implement; central banks could start today making gradual reserve allocations to a sufficiently large set of new currencies. It would mark in essence the official exit from the currency duopoly towards integration of emerging markets currencies. For the market, this would be as important an event as the introduction of the euro itself. Sadly, while the euro epitomised the advantages of currency consolidation, it may now be a reason for currency diversification.