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Exploring Cli-Fi Part II: Books by Theme

Posted on by Michele Wucker
earth floating on a wave
Photo by Grafner on Dreamstime using NASA image

Exploring climate fiction is a journey into scientific, political, social, economic, epidemiological, zoological, philosophical, and practical new horizons. Last week’s post on how authors are grappling with the climate crisis really struck a chord!

Thanks to the readers who suggested some of their favorite titles and sent me links to additional resources. Here are two good ones: The website Cli-Fi.net is a treasure trove of links to news and popular culture references to cli-fi. The Econ-SF wiki of books at the nexus of economics and sci-fi has some intriguing cli-fi recommendations, several of which are included below.

Forthwith, loosely sorted by theme but otherwise in no particular order, is a list of cli-fi books. Many are fairly new, but I’ve also included a few earlier books that paved the way. No doubt this list is woefully incomplete.

I’ve read a few of the novels below. Others are by authors who have written other books I’ve enjoyed, and the rest are now on my to-read list. Some come from the lists I shared last week, some from recommendations from friends and colleagues both on and off of LinkedIn.

Authors Who Are Sub-Genres Unto Themselves

Kim Stanley Robinson’s many books of speculative climate fiction are practically a sub-genre unto themselves: 2312, New York 2140, and the Science in the Capital series (Forty Signs of Rain, Fifty Degrees Below, Sixty Days and Counting) all look at the world after climate collapse. The Ministry for the Future (2020) imagines efforts to keep the collapse from happening. Other works by this extremely prolific writer, while not strictly about climate change, explore outposts on other planets, where humans presumably end up after ruining much or all of ours.

Margaret Atwood’s MaddAddam trilogy explores what might happen in the aftermath of environmental collapse. The first installment, Oryx and Crake (2004) explores a world where humans have been decimated by a plague and genetic engineering gone wrong. The second, The Year of the Flood (2010) takes readers through the aftermath of the Waterless Flood, a pandemic. In the final book of the trilogy, MaddAddam (2014), the Children of Crake, the bio-engineered successors to humans, forge a new future.

Biodiversity Loss

Amanda Kool, Resembling Lepus (2022) After Earth’s Sixth Great Extinction, humans have supplemented natural fauna with high-quality replicas. Every living thing –both natural and human-created—is tracked, numbered, and categorized. A detective’s quest to solve a series of strangely staged murders of rabbits raises another question: What is the impact on humanity when mankind is required to play god to the creatures they have all but destroyed?

Michael Christie, Greenwood (2020) In this Canadian writer’s eco-parable, a new fungus is killing off the last trees of the last remaining forests in what is known as “the great withering” in 2038 -not so far in the future from now. (reviewed in The Guardian)

Barbara Kingsolver’s Flight Behaviour (2012) imagines the catastrophic effects when pollution and other environmental disruptions send an entire colony of butterflies off track. No doubt you’ve heard of the butterfly effect whereby a single butterfly flapping its wings can cause a hurricane on the other side of the planet. Now think about that magnified many, many times over. (Read all the way to the bottom of this review in The Guardian for one of the funniest corrections I’ve seen.) While not strictly cli-fi, many of her other works engage the environment so closely as for it to count as a character.

Sarah Blake, Clean Air (2022) Decades after a climate apocalypse in which trees suffocated humans with pollen, a serial killer stalks the residents of the domes in which humanity rebuilt a new society.

Charlotte McConaghy, Migrations (2021) (The Last Migration in the UK)The protagonist of this Australian writer’s acclaimed novel tracks the world’s last Arctic terns across the high seas – migrating birds for what may be their last time– in search of the last fish. The Economist describes it as “Moby Dick for the age of climate change.”

Richard Powers, The Overstory (2018) This Pulitzer Prize–winning novel follows five trees and nine people across generations as a complex environmental catastrophe unfolds. (From The Guardian)

Security, War, Pandemics, and Other Cataclysms

Neal Stephenson, Termination Shock (2021) A geo-engineering scheme goes badly awry. Several people have mentioned this one, completely unprompted, so it’s high on my to-read list.

Jeff VanderMeer, Hummingbird Salamander (2020) A fast-paced thriller following a missing eco-terrorist.

Bethany Clift, Last One at the Party (2021) The diary of the sole human survivor of a pandemic and her golden retriever sidekick. (You knew I had to get a dog in this list somehow, right?)

Omar El Akkad, American War (2017) Northern U.S states outlaw fossil fuels in 2074, provoking a second civil war.

Tobias S. Buckell, Stochasticity, (2008) Eco-terrorists roam a dystopian post-fossil-fuel Detroit.

Tochi Onyebuchi, War Girls (2019) In 2172, two Nigerian sisters separated by civil war attempt to reunite after global climate and nuclear apocalypse.

Migration

Niall Bourke, Line (2021) This Irish writer’s fictional world is centered on the Line, a tented community and a state of the perpetual waiting, depending on whether you take things literally or metaphorically, in a world where people barely subsist 

Amitav Ghosh, Gun Island (2019) The Guardian describes this novel, focused on mass migrations of humans, languages, and animals, as the author’s answer to his own 2016 accusation that fiction writers were complicit in climate denial.

Water: Scarcity and Flooding

Paolo Bacigalupi, The Water Knife (2015) In a world where water is worth more than gold and the Colorado River is drying up, this thriller “deftly explores corporate greed, social inequality, deregulation, and privatization.”

Stephen Baxter, Flood (2009) and Ark (2011) This two-part series begins in 2016 -an interesting twist that puts the protagonists in what is now the recent past, though both were written just a few years before then– and continues for the next 42 years as the oceans rise higher and higher.

J.G. Ballard, The Drowned World (1962): Set in 2045 in a world that climate change has rendered barely livable, this novel is an early, prescient, precursor to today’s cli-fi.  

Jessie Greengrass, The High House (2021) A family takes refuge in a house built high on a bluff, protected from floods and pandemic, amidst an increasingly uninhabitable world. “As I grew up, crisis slid from distant threat to imminent probability, and we tuned it out like static. We adjusted to each emergent normality and we did what we had always done,” one of the survivors laments.

Emmi Itäranta, Memory of Water (2014) In the future, when wars are waged over water, tea masters are entrusted with the knowledge of remaining stashes of the precious liquid.

John Lanchester, The Wall (2019) In this Pulitzer Prize winning novel, young “defenders” patrol Britain after it erected a fortress along its shores to protect the nation from rising seas. Read the review in The Guardian.

Ursula K. Le Guin, The New Atlantis (1975) This short novel is a prescient depiction of geological and social upheaval after climate change has raised seas and as populations grow out of control.

Rita Indiana, Tentacle (2018) A young maid in Santo Domingo must travel backwards in time to save the ocean and humanity. Translated into English by the talented Achy Obejas, Tentacle was originally published in Spanish under the title La mucama de Omicunlé. (If you know my first book, Why the Cocks Fight, you’ll understand why this one in particular appeals to me.)

Social Justice

Octavia E. Butler, Parable of the Sower (1993) “This seminal cli-fi novel addresses climate change, social injustice, and corporate greed,” wrote the editors of Grist/The Fix.

N.K. Jemison, The Fifth Season (2015) A woman searches for her daughter in End Times. “The first book in the Broken Earth trilogy addresses racial and social oppression with obvious parallels to the injustices of this world.” 

Sam J Miller, Blackfish City (2018) Disease ravages a floating Arctic city of climate refugees beset by corruption and widening social inequality when a mysterious warrior, accompanied by her orca and polar bear, arrives.

Edward Abbey, The Monkey Wrench Gang (1975) Some commentators have credited this hallmark novel as having helped catalyze the rise of environmental activism.

The Shifting Nature of Humanity

Rebecca Roanhorse, Trail of Lightning (2018) As the gods and heroes of Indigenous legend roam a desolate world decimated by environmental disaster, a supernaturally gifted monster-killer and a medicine man must unravel a mystery that threatens the future. The Verge calls this novel “a fast-paced urban fantasy adventure with an exciting set of characters and an enticing world that begs for further exploration.”

Leandra Vane, Cast From the Earth (2017) In this post-apocalyptic novel, an epidemic turns men into monsters. The protagonist, a one-legged woman, and her companions fight for survival.

Lauren C. Teffeau, Implanted (2018) Climate catastrophe has forced humans into domed cities, where human connections are artificially heightened by neural implants. (from Grist’s Definitive Climate Fiction list)

This article is part of my LinkedIn newsletter series, “Around My Mind” – a regular walk through the ideas, events, people, and places that kick my synapses into action, sparking sometimes surprising or counter-intuitive connections. 

To subscribe to “Around My Mind” and get notifications of new posts, click the blue button at the top right corner of this page. Please don’t be shy about sharing, leaving comments or dropping me a private note with your own reactions.

For more content, including guest posts and ways to engage me for keynotes, workshops, or strategic deep dives, please visit www.thegrayrhino.com.

Exploring the Future via Cli-Fi

Posted on by Michele Wucker

Earth on tightrope above flames
Image © Grafner via Dreamstime.com

Several colleagues have recently suggested novels that imagine the future if the world fails to arrest climate change. When a national security specialist recently asked for recommendations along the same lines, I asked around for more books, which I realized fit into the relatively new genre of “cli-fi.”

“Born as the unfortunate love child of global environmental crisis and narrative imagination, climate fiction is a timely cultural reaction to the growing societal awareness of human impact upon the planet and its climate system,” Juha Raipola wrote in Fafnir, the Nordic Journal of Science Fiction and Fantasy Research.

Climate fiction tends to fall into two categories: one that is realistic, describing climate change affecting its protagonists in a world like the one we know, and the other more closely resembling science fiction. Raipola describes the latter as follows: “Speculative visions of flooding cities, melting glaciers, catastrophic storms, or drought-suffering environments demonstrate the potentially disastrous effects of climate change on the global environment, while the plot-level events of the narrative focus on the experience of living in a changed world.”

Cli-fi novels can play an important part in changing the conversation about climate crisis because of the way that fiction immerses readers in the reality that the author creates. It establishes an emotional connection in a way that no scientific analysis, modeling, or regurgitation of facts can do. That’s why the most dedicated policy wonks and business nerds can benefit from reading fiction related to their work.

Without an emotional connection to a challenge, it is hard to create urgency. And without a sense of urgency, it’s hard to change the way we do things.

I’ve started reading a few of the suggestions I dug up. This week, I’ll share some of the places I found promising lists and anthologies.

Grist, a nonprofit media outlet dedicated to telling stories of climate solutions, has published a glossary of cli-fi sub-genres, which you can peruse HERE. You’ll find descriptions and book recommendations exploring diverse versions of futurism; solar, eco, cyber, and hope punk; ecotopia, dystopia, and “ustopia” (a mix of the two). The list is part of the Climate Fiction Issue published by Fix, Grist’s networking and events arm.

The Guardian’s Claire Armistead compiled a list focused on “the new wave of climate fiction” and reached out to Margaret Atwood, Amitav Ghosh, and other novelists for insightful comments about their own work and the genre writ large. “Cli-fi often rests on the familiar trope of a nightmarish new reality unleashed by a catastrophic event,” Armistead wrote. But authors have also woven in various narrative tools and tropes including myth and mysticism, social comedy, thriller plots, stream-of-consciousness, and experimental formats.

Heather Hansman recently compiled a list for The Atlantic of books in which climate change plays a role. “The books below aren’t about climate change—they’re about immigration, corporate malfeasance, and tourism; they focus on families, neighbors, and friends,” she wrote. “But in each, the anxieties of our warming age force their way in, simmering quietly in the background or erupting across the page.”

Andrew Dana Hudson, himself a prolific author of climate fiction, in a Medium essay similarly poses the question of how to define the genre. “Many stories set in the future are classified as science fiction, or sci-fi. Doesn’t that make climate fiction, or cli-fi, just a form of sci-fi?” He makes the point that “In most science fiction, social change is driven by advancements in science and technology. It’s fiction about science.” In imagining science-driven transformations, sci-fi examines the impact on society. And here, Hudson argues, is how climate fiction differs from the broader sci-fi genre: It lets us pick up a different theory: that the biggest driver of social change in the coming century or more will be climate change.

The anthologies below give a taste of cli-fi in a wide-ranging set of short stories.

Anthologies

Everything Change: An Anthology of Climate Fiction, Vol. 1 (2016), Vol. 2 (2018), and Vol. 3 (2021). Published by Arizona State University Imagination and Climate Future Initiative, this series of anthologies was named after a quote from a talk that Margaret Atwood gave at Arizona State University in 2014.

Glass and Gardens: Solarpunk Summers (2018) and Glass and Gardens: Solarpunk Winters (2020). This pair of anthologies combines utopian and dystopian visions of a future characterized by extreme heat and extreme cold.

Imagine 2200: Climate Fiction for Future Ancestors. The winners and finalists of the first climate fiction contest organized by Fix and the National Resources Defense Council.

McSweeney’s Issue 58: 2040 A.D., (2019) A collaboration between McSweeney’s and the National Resources Defense Council, this anthology brings together literary luminaries including Tommy Orange, Elif Shafak, Luis Alberto Urrea, Asja Bakic, and Rachel Heng, all of whom set their stories in 2040.

Multispecies Cities: Solarpunk Urban Futures (2021) A global roster of authors explores the impact of climate change on cities.

The Weight of Light: A Collection of Solar Futures (2019) This optimistic anthology of short fiction imagines what a solar-powered world might look like.

Warmer. (2018) A collection of seven short Kindle books, also available as audio books, which amazon.com plugs as “Fear and hope collide in this collection of possible tomorrows.”

Next week, I’ll share a list of novels sorted by focus, ranging from drought and flood to violent conflict to biodiversity loss and social justice, with a few authors qualifying as genres unto themselves.

Do you have any favorite cli-fi authors or books? Please share them in the comments.

[Links to bookshop.org are affiliate links]

This article is part of my LinkedIn newsletter series, “Around My Mind” – a regular walk through the ideas, events, people, and places that kick my synapses into action, sparking sometimes surprising or counter-intuitive connections. 

To subscribe to “Around My Mind” and get notifications of new posts, click the blue button at the top right corner of this page. Please don’t be shy about sharing, leaving comments or dropping me a private note with your own reactions.

For more content, including guest posts and ways to engage me for keynotes, workshops, or strategic deep dives, please visit www.thegrayrhino.com.

Michele’s Favorite Thought-Provoking Global TV Binges

Posted on by Michele Wucker

During the Covid-19 pandemic, I haven’t been able to go around the world the way I did in Before Times but traveled virtually via way more time watching television than ever before.

When a friend recently asked me for recommendations of the TV binges that have gotten me through the pandemic, I realized that my favorites had common threads running through them. As you might have expected, I particularly enjoy shows that let me travel the world vicariously and have something to say about society, present and past.

So, since I’m in the mood for something a bit lighter this week, I wanted to share the list with you. Here it is:

Dramas

Photo credit: Netflix

Money Heist (“La casa de papel”) Set against the backdrop of the massive money printing unleashed during the Great Financial Crisis, this series is the story of not one but (eventually) two robberies: of the Spanish Central Bank and of the Spanish Mint. Every time you think the series could not possibly do more with the story of a rag-tag band of thieves led by a nerdy master criminal (who is hot despite, or maybe because of his nerdiness), it proves you wrong. (2017-2022)

The Bureau (“Le bureau des legendes”) is a French spy thriller exploring the complex relationship between the US CIA and European intelligence agencies in the Middle East, North Africa, and Russia. Powerful story lines, great writing, moral dilemmas, and fully drawn characters. (2015-2020)

Lupin Assane Diop, a French-Senegalese gentleman master thief out to avenge his father, who as a boy saw his father’s wealthy employer frame him for a diamond “heist.” Diop is inspired in his exploits by a series –17 novels and 39 novellas–written by French novelist Maurice Leblanc about the gentleman burglar and master of disguise, Arsène Lupin. (2021)

Homeland Brilliant and bipolar, CIA officer Carrie Mathison (Claire Danes) risks everything, including heartbreak and sanity, at every twist and turn of this long-running thriller. Against a global backdrop that takes viewers from Washington, DC, to Iran, Syria, Germany, Afghanistan, Russia, and Israel, Homeland has its own take on the global War on Terror and its unintended consequences. Oh, and it showcases award-winning performances by Claire Danes, Damien Lewis, and Mandy Patinkin. Need I say more? (2011-2020)

The Americans This drama about two Russian spies posing as Americans in suburban Washington, DC, in the 1980s, was inspired by the spy ring that the FBI busted in 2010. A few months before that bust, I briefly met one of those spies, an eager young man who handed me his card after a panel in New York City where I was speaking about risk. He later became a travel agent, inspiring the profession of the husband in this series, played by the talented Matthew Rhys. Keri Russell was also fantastic, as was Costa Ronin, who later played a Russian spy in Homeland. (2013-2018)

El Presidente (Do you really need this translated?) This Emmy-nominated eight-episode Chilean drama takes viewers inside the 2015 FIFA soccer scandal from the perspective of a hapless small-town soccer association club who is tapped to head Chile’s national soccer association. The FBI later leans on Sergio Jadue, who becomes the linchpin of their case against FIFA. It’s a poignant, sometimes comical, look at how corruption insidiously drags people in and how hard it is to give it up. (2020)

Quirky Comedies

Call My Agent (“Dix pour cent”) is a French comedy drama about a talent agency, with cameos by real-life movie stars playing versions of themselves. (2015-2019)

Kim’s Convenience Based on a play of the same name by co-producer Ins Choi, Kim’s Convenience is the story of a Korean family in Toronto running a small convenience store. The dynamic between the Korean-born parents, Umma and Apa, and their Canadian-raised children, is achingly bittersweet. See the performances that got Simu Liu noticed and cast as the Marvel hero, Shang-Chi. (2016-2021)

The One I Missed

I may be the last person on the planet who has not seen Squid Game, the global phenomenon released in 2021. I was eager to watch because I’ve enjoyed so much other TV, film, and music from Korea’s amazing culture industry, and because of its implied commentary on global inequality and economic desperation. Alas, I only got a few minutes in to the first episode then became too squeamish. But as I understand it, that’s entirely my loss.

I’m always looking for new suggestions, particularly smartly written series from around the world with well-developed characters and insights into salient issues. Please share your favorites in the comments.

This article is part of my LinkedIn newsletter series, “Around My Mind” – a regular walk through the ideas, events, people, and places that kick my synapses into action, sparking sometimes surprising or counter-intuitive connections. 

To subscribe to “Around My Mind” and get notifications of new posts, click the blue button at the top of this page. Please don’t be shy about sharing, leaving comments or dropping me a private note with your own reactions.

For more content, including guest posts and ways to engage me for keynotes, workshops, or strategic deep dives, please visit www.thegrayrhino.com.

You Are What You Risk Taiwan Edition Launched

Posted on by Michele Wucker

Michele’s latest book, YOU ARE WHAT YOU RISK, is now available in Taiwan in traditional/complex Chinese characters as “Find the Gray Rhino in Your Life: Knowing Your Risk Fingerprints and turning a Crisis into Opportunity,” published by Commonwealth (Tianxia/World Culture imprint).

Use your browser translator (if needed) to read this profile in Global Views Monthly Magazine published on occasion of the book launch.

Watch video highlights (in English with traditional Chinese character subtitles) below:

You Are What You Risk China Edition

Posted on by Michele Wucker

The Chinese edition of YOU ARE WHAT YOU RISK: The New Art and Science of Navigating an Uncertain World (Pegasus Books, April 2021), translated by Feng Yi and Zhang Liying, as “Gray Rhino 2: How individuals and Organizations Dance with Risk,” was published in September 2021 by CITIC Press Group to high praise.

The book is part of the Rhino Books imprint featuring high-profile business books by international authors, which was created in 2017 around THE GRAY RHINO: How to Recognize and Act on the Obvious Dangers We Ignore (translated as The Gray Rhino: How to Deal with High Probability Crisis).

Cover of white book cover with red simplified Chinese characters for "GRAY RHINO 2" and image of fingerprint superimposed on a rhino

From the publisher:
“The popularity of the author and the popularity of the previous book. “Grey Rhino: How to Deal with High Probability Crisis” has become a well-known, hotly discussed and widely used phenomenon-level vocabulary since it was published by CITIC Publishing House in 2017. “Gray Rhino: How Individuals and Organizations Dance with Risk” is not only an extension and supplement to the concept of “gray rhino”, but also a deeper and more microscopic exploration of the essence of “risk”. We cannot ignore the constructive significance of this book for every reader, enterprise, government, and country in the future. “Gray Rhino 2: How Individuals and Organizations Dance with Risks” will once again become a work of the era with great influence with its acumen, foresight and professional depth of content.”

Praise for the China edition of YOU ARE WHAT YOU RISK/Gray Rhino 2:

SINA FINANCE Book recommendation: “This book is Michele Wucker’s new masterpiece.”

Wucker’s “Grey Rhino: How to Deal with a High Probability Crisis” allows us to improve our awareness and trade-offs in the face of political and commercial risks. Her new book reveals to us that individuals at risk, their risk personality, organization, and society’s dynamic feedback loop will affect citizens, organizations, and the government’s different perceptions, reactions, and response results to risks. Building a good risk ecosystem, establishing healthy risk relationships, and fairly distributing risks-related gains and losses, so that as many people as possible can live a better life, should be our principles and pursuit of understanding and weighing risks. 
— Wu Xiaoling (Executive Vice President of China Finance Society)             

??There are various gray rhino risks in the current society. Personal risks, policy risks, professional risks, economic risks, organizational risks and global risks are intertwined to shape our lives, work and the world. Wucker’s new book, based on the tremendous changes that have taken place in the world in recent years, deeply explores how we make our own choices based on our unique risk fingerprints, and how risk choices shape the relationship between individuals, organizations, and society, and help us inspire us. Work together to build a benign risk ecosystem to support the sustainable development of the economy and society.?
— Xiao Gang (Member of the National Committee of the Chinese People’s Political Consultative Conference)  

??The great changes unseen in a century and the superposition of super-epidemics mean that this era is one of frequent occurrences of “black swan” and “gray rhino” events. To gain insight into the new laws of this era, we should peruse this new book by Wucker. This book is not only an extension and supplement to the concept of “gray rhino,” but also a deeper and more micro-systematic exploration of “risk,” which has constructive significance for individuals, enterprises and governments.
–Liu Yuanchun (Vice President of Renmin University of China, Economist)    ?

??We have entered an era of comprehensive, full-time, and global risk. Whether it is an individual or an organization, how to accompany risks and build a constructive relationship with them will determine their future. Wucker’s new book provides guidance and an operating system for this.
-Qin Shuo (China Commercial Civilization Research Center, initiator of Qin Shuo Moments of Friends)  

??Risk has become the norm in this era. The theme of Wucker’s new book is how to deal with the endless risks. There is no uniform standard answer, and people of different cultures, generations, and personalities have different views on risk. You need to understand your “risk fingerprint” first, and then exercise your “risk muscles.” This book is a survival guide everyone needs to read in the age of risk.
–He Fan (Professor of Economics at Shanghai Jiaotong University, author of “Variables“) 

??The big change that has not been seen in a century is also a big opportunity that has not been seen in a century. “Danger” and “opportunity” are always dialectical and mutually transforming. Embrace change, promote change with a positive attitude, shape a good risk personality, and dance with risk. This is the law of nature and the wisdom for us to get along better with the world. Wucker’s new book has strong enlightening value for us to refresh our risk awareness and prevent and resolve risk events.
— Ren Zeping (Economist)  

The Economist the World in 2021

Posted on by Michele Wucker

The Economist invited Michele Wucker to contribute to its annual The World Ahead/The World in 2021 issue. The resulting article, Was the pandemic a gray rhino or a black swan?, was published November 17, 2020.

“Facing the daunting challenges ahead will require long-term thinking, a greater emphasis on the real economy rather than stockmarket performance and, above all, a commitment to hold ourselves and our leaders accountable,” she wrote. The article puts into context the gray rhinos ahead of us in 2021: climate change, financial fragilities, and inequality that has made the rich even richer while front-line essential workers struggle.

Read the full article HERE.

Washington Post: No, the coronavirus pandemic wasn’t an ‘unforeseen problem’

Posted on by Michele Wucker

The Washington Post published an op-ed by Michele Wucker, “No, the coronavirus pandemic wasn’t an ‘unforeseen problem’,” published on March 17, 2020.

“An obsession with the “unforeseeable” black swan metaphor has promoted a mentality that led us straight into the mess we’re in now: a sense of helplessness in the face of daunting threats and a sucker’s mentality that encourages people to keep throwing good money after bad. And the facile willingness to see crises as black swans has provided policymakers cover for failing to act in the face of clear and present dangers from climate change to health care to economic insecurity. This accountability vacuum has pervaded U.S. policy on financial risk and on the pandemic,” she wrote, calling for readers to use the coronavirus crisis as a catalyst for adopting a more pro-active response to the obvious risks we tend to ignore. “Let’s trade the black swan for the gray rhino: a mind-set that holds ourselves and our government accountable for heeding warnings and acting when we still have a chance to change the course of events for the better instead of waiting for a crisis to act,” she wrote. Read the full article HERE.

Ben Zimmer of The Wall Street Journal quoted the Washington Post piece in an article published March 19, 2020 online and in print in the Weekend edition: ‘Black Swan’: A Rare Disaster, Not as Rare as Once Believed [paywall], noting her challenge to the black swan trope –for unknowable, unforeseeable events– which became popular during the last financial crisis.

FT Beyond Brics: China’s Biggest Financial Risk Is the US

Posted on by Michele Wucker

Washington’s devil-may-care attitude has become Beijing’s top priority

Michele Wucker published this op-ed on the Financial Times beyondbrics blog November 13, 2018.

In its new annual financial stability report, China’s central bank has again sounded the alarm that “grey rhino” risks — clear and present dangers that are often neglected — continue to threaten the economy.

The report focused on China’s real estate market and high levels of local government, household and corporate debt, consistent with the concerns of Chinese and international observers.

Indeed, a popular narrative among western analysts is that China’s debt is a likely trigger for the next financial crisis. But the finger on that trigger is US complacency about risk.

President Xi Jinping has made containing financial risk a top priority and top officials have been vocal and active in addressing the danger areas they have identified.

By contrast, you could be forgiven for thinking that US officials had forgotten about the financial crisis that exploded a decade ago, not to mention the global dangers posed by 10 years of extremely loose monetary policy.

Washington’s approach appears to be to ignore warning signs and count on being able to frame the inevitable crash as a surprise “black swan” that “nobody saw coming”.

Yet many smart people do see trouble coming and are sounding urgent warnings for the US and the global economy. The International Monetary Fund warned in April that global debt had hit a new record high of $164tn, or 225 per cent of GDP. The US, it noted, is the only advanced economy where debt is outpacing economic growth.

Albert Edwards of SocGen forecast that financial winter is on the way, George F Will wrote of the giant sucking sound of a debt spiral, and Bridgewater’s Ray Dalio predicted a looming new debt crisis. Dozens of other smart analysts are sounding the alarm.

Well aware of the looming challenges, by contrast, China has been trying to gradually let the air out of credit bubbles without bursting them and to guide the economy to “quality growth” that may be slower but is more evenly distributed and less volatile.

Neither feat would be easy, even without having to wrangle external shocks caused by the US administration either not knowing or not caring about the global impact of its policies. China’s officials have been open about the real risks facing its economy, and made no secret of their intentions to cool off overheated sectors.

Using a combination of regulations, increased enforcement and liquidity controls, China has targeted the grey rhino risks that senior officials raised in a key five-year policy-setting meeting in July 2017: high corporate debt, excessive liquidity, shadow banking, capital market vulnerabilities, real estate bubbles, and emerging online financial products and services.

Regulators have cracked down on wealth management products marketed as “less risky” while promising higher yields. With corporate bond defaults up 40 per cent in the first half of 2018 and thousands of peer-to-peer lending platforms allowed to fail, China’s government has sent a message that people cannot count on it to fix every problem.

By contrast, Trump and senior officials have trumpeted US economic strength and downplayed risks and weaknesses.

Until the market volatility of the past few weeks, Trump had repeatedly bragged about how US shares were hitting record after record high, while China’s market indices were down more than 20 per cent for the year.

But a recent Council on Foreign Relations analysis shows how Chinese shares closely track a slowdown in credit growth over the past year or so. This suggests that much of the drop was the direct result of China’s efforts to let the air out of asset bubbles.

The Trump administration’s cavalier approach to financial risk increasingly suggests that its economic policies will not end well.

As the US Congress was preparing to pass a massive tax cut in December 2017, senior Chinese officials called the US tax plan a grey rhino, citing its potential impact on capital flows and financial stability. Responding quickly, Beijing developed a contingency plan involving higher interest rates, tighter capital controls and more active currency intervention.

The new Trump-supported tax cuts are widening the budget deficit while pushing up the cost of interest on the deficit. Even as financial risks increase, Washington has been chipping away at safeguards and emergency powers that could help contain the next crisis.

To be sure, the US Federal Reserve has been gradually increasing interest rates and shrinking its balance sheet, in a delayed attempt at normalising monetary policy. But this has created new global instabilities as money rushes out of emerging markets.

In contrast to China’s more surgical approach to specific vulnerabilities, the US relying mainly on interest rates as a broad-brush economic lever threatens to bring all boats down with it.

China is so concerned about this devil-may-care approach to financial risk that its politburo recently announced that dealing with US-generated economic shocks was an even higher priority than de-risking.

Paradoxically, current US-China policy threatens to slow down reforms that investors would like to see, such as reducing overcapacity at state-owned enterprises and intervening less in currency markets.

Trump’s bellicose rhetoric has ignored that China has been gradually opening its economy: easing foreign investment rules on 15 industries, particularly financial services, and evidence of some progress on intellectual property issues. Both of these are in China’s interest: it sees the benefit of increasing equity financing compared with debt, and it wants to encourage homegrown technological advances.

To counter the economic drag that trade war-related fears were creating, China has loosened its monetary policy in recent months. Its earlier belt-tightening gave it some wriggle room to do so.

But were China to completely abandon its de-risking strategy, it would resume heading towards a feared “Minsky moment” when the country’s ability to support debt collapses.

If the US paid as much attention as China does to the dangers lurking in the global economy and markets, it wouldn’t let itself appear to be so intent on throwing a monkey wrench into China’s sensible efforts to reduce financial risk.

Recall that demand from China for western goods, combined with China’s aggressive fiscal policy, played a big part in getting the world out of the 2008 crisis.

At one point, hopes that China would bail out Europe were dashed when Chinese officials rightly chided western governments for irresponsible economic policies.

Smart US policy would be to pay as much attention as China to heading off the grey rhino risks facing the global economy, and the role each country can play. An agreement ending the trade war would be a start. But unless the US takes financial risk more seriously, the threat to the global economy will remain — and China won’t be the main culprit.

Emerging markets guest forum beyondbrics is a forum on emerging markets for contributors from the worlds of business, finance, politics, academia and the third sector. 

Read this article at FT.com.