China has enjoyed surging economic growth, even when the developed world was suffering through the recession. The country’s blistering expansion should continue: Goldman Sachs chief economist Jim O’Neill believes China’s economy will be larger than the U.S.’ in 2027.

Japan is not faring as well. The nation’s GDP expanded by just 0.4 percent, on an annualized basis, in the second quarter – much slower than the 4.4 percent annualized growth it posted in the first quarter.

Ironically, though, currency investors have looked favorably on the yen of late. It surged to 15-year highs against the dollar last week – investors lost interest in the greenback because of the U.S.’ economic slowdown – and it has risen so fast that Japanese exporters are asking finance officials to intervene in the currency markets.

There is a precedent for currency intervention: The Swiss National Bank bought euros during the second quarter when the Swiss franc was rising quickly. Stronger currencies hurt companies by reducing their overseas revenue; by intervening, the SNB helped Swiss export firms like Swatch.

Japan has a much larger export sector than Switzerland, though, and currency intervention may be more acutely needed in Japan than it was in Switzerland. Already, Japanese companies are feeling the pain: Their share prices slumped last week on concerns about the stronger yen’s impact on revenue.

But Finance Minister Yoshihiko Noda indicated that intervention wouldn’t occur in the near-term. "We will monitor economic conditions carefully and respond appropriately," he said August 12.

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The euro slipped about 9 percent against the dollar in the second quarter on fears that governments’ debt-reduction measures would curtail expansion of the European economy. The euro has risen in recent days as those fears subsided – but the International Monetary Fund argues that the euro-zone is in for months of slow growth.

While the Washington-based lender did not change the euro-zone expansion forecast it made in April, it’s expecting European debt to have a "modest negative effect" on regional growth. The euro-zone economy will grow by just 1.6 percent this year and 1.3 percent in 2011 – far slower than the U.S., which the IMF says will grow by 3.3 and 2.9 percent. Needless to say, Asian emerging markets are poised for even faster growth: 9.2 percent this year and 8.5 percent in 2011.

The IMF is also raising questions about the recently announced bank stress tests. While the announcement of the tests provided support to the euro, the IMF is asking who would provide funding to inadequately capitalized banks, MarketWatch reports.

"The IMF is asking very valid questions," the financial news site says. "And until bank and national government balance sheets are recapitalized, the market will be asking them too."

The European Central Bank, for its part, has been more bullish than the IMF on regional growth. But even bank president Jean-Claude Trichet was cautious: He said July 8 that the euro-zone would grow "at a moderate and still uneven pace in an environment of high uncertainty."

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Revenue from the proposed tax would be used to pay for future financial-institution bailouts, which – as the U.S. discovered late in 2008 – are quite expensive. The government’s Troubled Asset Relief Program has been paid back in full, but bailouts of insurer AIG and government-sponsored mortgage-finance companies Fannie Mae and Freddie Mac are costing hundreds billions of dollars.

In fact, the Fannie and Freddie bailouts could cost as much as $1 trillion, ratings firm president Sean Egan said two weeks ago to Bloomberg.

In last week’s reform-bill negotiations, representatives from the House proposed that big banks pay for the unwinding of Fannie and Freddie. The idea was shot down by those in the Senate; American Bankers Association CEO Edward Yingling called it "a tremendous additional liability on the banking industry of hundreds of billions of dollars."

Still, the idea of a bailout tax on the largest banks remains popular. President Barack Obama had hoped to achieve consensus on the measure at the G-20 meeting, but only European regulators gave it their imprimatur. Representatives from Canada, Australia and Japan vetoed the measure, arguing that an across-the-board tax might not be appropriate.

A "one-size-fits-all kind of approach may not be productive," Kazuo Kodama, the Japanese foreign ministry’s press secretary, said to the Associated Press over the weekend.

Prior to the G-20 meeting last week, representatives from the U.K., Germany and France signaled their support for a bank tax; those countries – along with the U.S. – may yet move to impose taxes on financial institutions.

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Ratings firms played an integral part in the financial crisis. Their role was arguably bigger in the U.S. than Europe – it was U.S.-originated mortgages and mortgage-backed securities that resulted in steep losses for financial institutions around the world – but Europe hasn’t been afraid to impose onerous regulation on American companies in the past. Microsoft, for example, faced the EC’s ire for bundling Internet Explorer with its Windows operating system.

Regulators argue that the ratings agencies did not effectively assess the risk of MBS. The agencies – Moody’s, Fitch and Standard & Poor’s are the biggest – allegedly rubber-stamped MBS with investment-grade ratings, even though the mortgages underlying the securities were risky and poorly documented.

Legendary investor Warren Buffett offered a defense of the ratings firms in testimony delivered to the Financial Crisis Inquiry Commission Wednesday. He argued that the agencies made the same mistake about MBS that everyone else in the country – including regulators – did.

The ratings firms "made big mistakes, but who didn’t during the housing bubble," Buffett said rhetorically.

But, Britain’s Guardian newspaper reports, the EC appears unmoved by defenses of the ratings agencies. The commission released this week a proposal to create a watchdog that would have the power to investigate and suspend the licenses of the ratings companies.

"The changes to rules on credit rating agencies will mean better supervision and increased transparency in this crucial sector," the paper quoted EU financial services commissioner Michel Barnier as saying.

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Protests in the country, which began on March 12, have actually caused Thai stocks to rise in value, Bloomberg says. The country’s main equity index has gained more than 5 percent since the unrest began – a phenomenon that Kokusai Asset Management Co. emerging- market research head Takahide Irimura credited to the manufacturing sector’s separation from riot-plagued Bangkok.

"The manufacturing sector hasn’t been much affected by the political turmoil as the factories aren’t in central Bangkok," Irimura indicated.

But foreign direct investment, on which Thailand’s economy is dependent, could suffer as a result of the unrest. An anonymous former banker at Merrill Lynch wrote in AsianInvestor this week that FDI may be imperiled by two factors: political unrest, which will not have a quick or easy solution, and the strength of the baht, which makes Thai manufacturers less competitive than those in other Asian nations.

"More likely [than civil war] is a low-grade campaign of civil insurrection, which, if it targets infrastructure and/or productive capacity, is clearly of concern to the foreign investor," the banker wrote.

Analysts interviewed by the Wall Street Journal over the weekend expressed similar sentiment. The lack of resolution to the political situation is a threat to foreign investment, HSBC economist Frederic Neumann was quoted as saying.

"There’s now a realization [among investors] that there is a political gridlock in Thailand," he noted.

While major multinationals like Ford Motor have emphasized their intent to remain in the country, new investment may be scarce. More-stable Southeast Asian nations could curry investors’ favor – particularly if and when the protests begin anew.

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The new Kazakhstan OSCE leadership also expresses the mutual interests of the CIS countries according to Belarus President Alexander Lukashenko. The president recently held a meeting with the current OSCE chairman, Kanat Saudabayev. The Kazakh state secretary and foreign minister agrees with Nursultan Nazarbayev regarding his statement that Kazakhstan was given its position as OSCE chairman to represent the CIS nations. As a member of the Commonwealth of Independent States, Belarus announced its support for the priorities that were set by Kazakhstan.

Hoping for the full implementation of Kazakhstan OSCE priorities, Belarus claims that it has always been an advocate of the Kazakhstan OSCE chairmanship. According to President Lukashenko, the Organization of Security and Cooperation in Europe is currently struggling with an issue regarding positions, and Belarus assures its full support for Kazakhstan in working out solutions for this challenge.

In response to this, Kanat Saudabayev invited the Belarus president, in behalf of the Kazakhstan president, to attend this year’s OSCE summit in Astana. The OSCE chairperson says that an informal session of the OSCE Council of Foreign Ministers will be held in Almaty in the summertime in order to formulate and finalize the upcoming Astana summit.

Kanat Saudabayev adds that although an air of ambivalent attitude towards the summit’s agenda prevails inside the organization, everyone in the group agrees with the importance of holding the meeting. Additionally, Saudabayev also placed an emphasis over the unity among CIS member states by citing the recent CIS Council of Foreign Ministers in Moscow.

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As the cost of holding Greek debt increases – measured by Greek bonds’ spreads against benchmark German government securities – the cost of servicing debt will get higher for the Mediterranean country. As a result, the government’s recently instituted austerity measures may not be enough to shore up Greece’s shattered public finances.

And the German government – the euro-zone’s main economic power and de facto leader – is looking increasingly responsible for managing the Greek situation. The New York Times reports that Germany’s chancellor, Angela Merkel, was reluctant to take an active position in Greece – the chief concern being that, if Germany helped Greece, it would be tapped to provide aid to Portugal and Spain.

Spain, Portugal and Greece had their sovereign debt downgraded in recent days.

But Merkel’s hand is being forced, the Times notes, and Germany will have little choice but to act on Greece. A member of Germany’s Green Party, Jürgen Trittin, estimated recently that helping the country could cost Germany $32 billion in the next three years.

But, as Bloomberg reports, members of Merkel’s Christian Democrat party are pressuring banks to accept some of the costs of a bailout by taking losses on their Greek debt holdings. Deutsche Presse-Agentur quoted government sources as saying that officials will meet with banks over the weekend to discuss the prospects of bank contributions to a Greek bailout.

And Greece’s banks will come under increasing pressure, too, from skittish investors. Dow Jones Newswires reported this week that Greek banks are expected to face a prolonged downturn as the value of their Greek securities decline precipitously.

"Greek banks are, in our opinion, directly exposed to the sovereign’s deteriorating credit quality through their large portfolios of Greek government debt," Standard and Poor’s said Tuesday.

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The BBC, which gained access to the IMF’s proposal after it was shown to representatives from the G20 countries, reports that the IMF wants to levy two taxes on large banks and nonbank financial institutions.

The first tax would be a flat tax on all such companies and the second would come later on profits and pay. Firms involved in higher-risk activities would pay more of the second tax, the BBC notes.

Interestingly, a similar proposal was made in U.S. Senator Chris Dodd’s financial-regulatory reform proposal. In Dodd’s bill – which is being worked on by lawmakers – banks would capitalize a $50 billion account that could be used to unwind troubled financial institutions.

But, facing strong opposition from prominent Republicans, Democrats shelved the bank tax late last week. The GOP was concerned that banks would see the account as a fail-safe and behave more riskily in the future.

The Obama administration agreed; last week, it called on Senate Democrats to leave out the $50 billion fund.

"We don’t feel it is an essential part of final legislation," a senior administration official said to Fox News.

Yet forcing banks to pay for future bailouts could be popular elsewhere in the world, particularly after the IMF estimated this week that banks will lose an aggregate of $2.3 trillion because of the financial crisis. The New York Times, reporting the release of the IMF’s Global Financial Stability Report, noted that the group was not in any hurry to impose an onerous tax on still-recovering financial institutions.

"The credit recovery will be slow, shallow and uneven as banks continue to repair balance sheets," the report said.

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The country’s Haaretz newspaper interviewed ministry director Eden Bar Tal Thursday about the ban, which was imposed two days ago. The director indicated that iPads would eventually be sold in the country – but under the European wireless standard, which is reportedly more robust than the standard used in U.S.-spec devices.

"If I let transmitters in freely," he said to Haaretz, "that would be against the law and also an injury to the devices operating according to European standards in Israel."

Bar Tal added that the ban may be an annoyance to travelers, but said the public good is best served by imposing technological standards on all devices that are brought into the country. "The individual benefits from the fact that we regulate the importation of transmission devices so that it does no harm to general use," he argued.

PC World, in reporting the issue, said as many as 10 American travelers have had their iPads confiscated at Israeli Customs. They will be able to get the devices back upon departure – but, PC World columnist Jared Newman said, "having dealt with Israeli Customs before, I have a feeling that won’t be as simple as it sounds."

With half a million iPads sold thus far and trips to Israel on the rise, more people may have to contend with the country’s no-iPad rule in the future.

Israel has a history of defending its borders carefully, even if its chief concern is terrorism, not rogue electronic goods. But its concerns about the iPad are indicative of the challenges posed by standards incompatibility – even in an increasingly interconnected world.

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The crew of the Shen Nang 1 – a freighter transporting 72,000 tons of coal between Queensland and China – was trying to shave off an hour from the journey by taking a shortcut through a shoal in the reef. While the shortcut was not illegal, it is outside carriers’ authorized shipping lanes – and Australian Prime Minister Kevin Rudd said the crew’s deviation from the approved course was unconscionable.

"It is outrageous that any vessel could find itself 12 kilometers off course, it seems, in the Great Barrier Reef," he said Wednesday.

Queensland Premier Anna Bligh was equally terse. When the ship’s captain said his crew needed water, she suggested that the captain was not taking seriously the ramifications of his mistake.

"When [the crew members] get off the boat and see what the world has to say they’ll understand a bit more clearly just how serious this is," she said.

But, as Brisbane’s Courier-Mail reported Wednesday, the ship’s crew had registered their course with Australia’s Maritime Safety Authority, whose policy is to leave routes to captains’ discretion.

Still, with the course of the Shen Nang 1 coming under close scrutiny, it’s likely that shipping in the Great Barrier Reef – designated as an UNESCO World Heritage Site in 1981 – will be banned in the near future.

"I take any threat to the Great Barrier Reef fundamentally seriously," Bloomberg quoted Prime Minister Rudd as saying.

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