After the collapse of Theresa May’s efforts to push her withdrawal agreement through parliament, and the failed subsequent Conservative Party motion of no-confidence against her, two factors have been fairly well established. There appears to be no withdrawal agreement available that commands a majority in the House of Commons, least of all the current one. And both parliament and the Conservative Party lack the will to oust the prime minister. Not only is opposition leader Jeremy Corbyn reluctant to submit the motion required for parliament to hold a vote of no confidence because he does not think it would pass, but in addition, May is safe from another confidence vote from her party for a full year. In short, Britain is now in a situation where the prime minister is relatively safe in her position but unable to move forward on the most important subject of the day. This is a profound level of political stalemate at a time when some form of forward motion is urgently required. There are no immediate solutions available. The …

It is hard for me to identify as both British and Romanian because people make me feel as if you can’t be both – as if being foreign is a permanent thing and can’t be changed no matter how long you’ve spent in a country or what you consider to be “home”. I consider the UK to be my home. Like Romanian teenager Ioana, whose words above articulate her painful reality, 15-year-old Alicja moved to Britain from Bulgaria when she was a young child. On the night of the EU referendum, her family gathered around the TV to watch the result. Her mother said she saw it coming; having listened to comments at work about Eastern Europeans taking local jobs in their small fishing town, she realised that anti-immigration feelings were running deep. For Alicja, who had grown up in Scotland, “Brexit had me in tears – it has changed everything”. In the months since, her family’s economic security and plans to stay in the UK are up in the air. They don’t have the …

At a top regional security forum on Saturday, US Defence Secretary Jim Mattis said China’s recent militarisation efforts in the disputed South China Sea were intended to intimidate and coerce regional countries. Mattis told the Shangri-La Dialogue that China’s actions stood in “stark contrast with the openness of [the US] strategy,” and warned of “much larger consequences” if China continued its current approach. As an “initial response”, China’s navy has been disinvited by the US from the upcoming 2018 Rim of the Pacific Exercise, the world’s largest international naval exercise. It is important to understand the context of the current tensions, and the strategic stakes for both China and the US. In recent years, China has sought to bolster its control over the South China Sea, where a number of claimants have overlapping territorial claims with China, including Vietnam, the Philippines and Taiwan. China’s efforts have continued unabated, despite rising tensions and international protests. Just recently, China landed a long-range heavy bomber for the first time on an island in the disputed Paracels, and deployed anti-ship and anti-air missile systems  to its outposts …

Immigration is at the heart of the Brexit debate. It’s a large reason why economic arguments have failed to sway voters. Despite warnings of the high economic costs of leaving the EU (warnings supported by a majority of economists), immigration has continued to have a powerful influence – and is perhaps the major reason why the opinion polls have become so close in recent weeks. The immigration debate is quite polarised. On one side, the Remain campaign either ducks the issue or focuses on the benefits that immigration brings to the economy as a whole. On the other side, the Leave camp focuses on its costs and plays into fears (often in a cruel and cynical way) that migrants are putting pressure on public services that are already at breaking point. At least among Labour supporters intending to vote leave, immigration also appears to be a key issue. The need for a more even-handed assessment of the costs and benefits of immigration is sorely needed. While immigration brings undoubted benefits, it also places pressures on particular communities. It also feeds a sense of …

Emerging markets have come under a bit of pressure recently, with the combination of the dollar’s rise and higher U.S. ten year rates serving as the trigger. The Governor of the Reserve Bank of India has—rather remarkably—even called on the U.S. Federal Reserve to slow the pace of its quantitative tightening to give emerging economies a bit of a break. (He could have equally called on the Administration to change its fiscal policy so as to reduce issuance, but the Fed is presumably a softer target.) Yet the pressure on emerging economies hasn’t been uniform (the exchange rate moves in the chart are through Wednesday, June 13th; they don’t reflect Thursday’s selloff). That really shouldn’t be a surprise. Emerging economies are more different than they are the same. With the help of Benjamin Della Rocca, a research analyst at the Council on Foreign Relations, I split emerging economies into three main groupings: Oil importing economies with current account deficits Oil importing economies with significant current account surpluses (a group consisting of emerging Asian economies) And …

I increasingly suspect my view on Chinese “rebalancing” is at odds with the current consensus (or perhaps just with a plurality of the investment bank analysts and financial journalists who watch China). In two significant ways. One. I think China’s balance of payments position is fairly robust. In both a “flow” and a “stock” sense. The current account isn’t that close to falling into a deficit (and it wouldn’t be that big a deal if China did have a modest deficit). And China’s state is back to adding to its foreign assets in a significant way. The days of “China selling reserves” are long past. And two, I think the rebalancing that has lowered the measured current account surplus is more fragile than most think. It is a function of policies—call it a large off-budget “augmented” fiscal deficit or excessive credit growth—that some believe to be unsustainable, and many think are unwise. The IMF, for example, wants China to bring down its fiscal deficit and slow the pace of credit growth, policies that directionally would …

Impact studies have revealed how different parts of the UK will suffer from Brexit more than others. One irony, as many have pointed out, is that a lot of these regions voted for Brexit. Another irony, which is less talked about, is that these are also regions that benefit a great deal from EU regional policy. The UK is an unevenly developed state. Some territories (such as London) are much more well off than others (such as the northeast of England) as a result of decades of investment (or under-investment) in their economies. Others benefit from varying levels of devolution, which gives them a relatively greater autonomy to tailor policy to their own needs, and stronger political representation within Britain and the EU. Over recent decades, when the UK government has fallen short in terms of regional policy to address the needs of less economically favoured regions, the EU has provided much-needed support. So the key question now is what will happen to the regions which have relied on this in the event of any Brexit? So far this remains …