Emerging markets face what some economists are calling a trilemma. They cannot simultaneously target exchange-rate stability, conduct an independent monetary policy, and have full financial integration. So what to do? This column looks at how Asia’s giants are responding – and in different ways.

China’s growth since the 1980s has been phenomenally high. This column argues that it has been driven not by exports, as widely believed, but by investment. It adds that this strategy makes China’s economy unsustainable as it creates significant overcapacity in a range of sectors and leads to increasing debt. China’s road towards more consumption-driven growth will be far from smooth.

In 2007 China set up its sovereign wealth fund, the China Investment Corporation, with an initial capital fund of $200 billion. Since then, Asia’s other emerging economic power – India – has been wondering if it should follow. This column argues that such a move is ill-advised and that India has more worthy investment opportunities at home.

Over the last few years, use of China’s currency for international trade has been growing steadily. Some argue this is the start of a journey that will see the renminbi displace the dollar and become the international reserve currency within a decade. This column asks whether such prophecies are realistic by looking at how other international currencies established themselves.

With the global economy in the treatment room, Asia’s economic giants are under examination as among the few exciting sources of world trade and growth. This column summarises the results of research on reforms, regionalism, and exports in China and India. It finds that China is likely to remain ahead in world trade in the next decade, although India has the opportunity to narrow the gap using policy measures.

As competition for FDI and trade share intensifies in a tightening global environment, more and more countries are looking at the potential of special economic zones to kickstart growth. But China aside, do these zones work? This column asks: what have we learned from the experiences of developing countries over recent decades?

The number of domestic patent filings in China increased at an annual rate of 35% from 1999 to 2006. But the reasons behind this ‘patent explosion’ are unclear. By compiling a new dataset of 20,000 Chinese manufacturing firms, this column shows that the explosion has been ignited by the ICT sector.

Recent research stresses the key role of a nation’s 'legal origin' – for example, common law versus civil law regimes – in determining economic performance. This column explores the much-overlooked origin of Chinese law and the role it is playing in the country’s development.

As tariffs have decreased around the world, many countries have started using other measures of protection, such as antidumping duties. This column explores China's imposition of such duties during 1997-2009. It finds that China’s antidumping duties disproportionally targeted high-income countries and were almost all in five sectors – chemicals, paper and pulp, plastics and rubber, steel, and textiles.

As fears mount of another phase in the global crisis, this column points out that despite the growing uncertainty, US Treasury and German Bund yields have actually declined in recent weeks. The reason, it argues, is the global saving glut theory.