From Paul Brandus at marketwatch.com:
Three huge, vastly important countries on the world stage are in deep economic and political trouble—far worse than we may realize. I’m talking about Russia, China and Saudi Arabia. Think America has problems? They pale in comparison to what Moscow, Beijing and Riyadh face, and our next president may have quite a bit of geopolitical leverage.
China, Russia and the Saudis share some very nasty characteristics. They are secretive, autocratic, brutally repressive police states that ruthlessly crush free speech and political dissent. I’ll start with China. For reasons mentioned in my July column, things have gotten worse in China. Its economy is slumping, crushing the global commodity trade, and sending financial markets into a freefall.
In a raucous, open economy like America’s, ideas, labor and capital move quickly to where they can add the most value; China is proving to be nowhere near as nimble. Promised reforms have sputtered under the weight of corruption and communist bureaucracy. President Xi Jinping’s answer thus far has been to increase repression and intimidate forces that could help move the People’s Republic away from heavy-handed and tone deaf central planning. China’s days of easy growth are over; ten million people enter the labor force every year, and there’s nowhere for them to go. Like Russian President Vladimir Putin, Xi has found it easier to distract his people by stirring up trouble abroad rather than fixing problems at home.
As for broiling Saudi Arabia and frigid Russia, what do they have in common? Oil, of course. The economies of both—the world’s #2 and #3 oil producers—are buckling under the strains of crude’s stunning collapse. Liked a caged animal backed into a corner, both are desperate—and lashing out in dangerous ways.
To continue reading: Russia, China and Saudi Arabia are on the ropes
