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The IMF released its economic outlook for China this morning, and the big takeaway is that IMF economists have lowered their expectations for economic growth. The Chinese economy has, once again, shown its resilience in the midst of a difficult external environment, buoyed by robust corporate profitability and rising household incomes. However, net exports will prove to be a significant drag on growth in the coming two years, with the current account surplus remaining at 3–4 percent of GDP. As a result, growth is expected to fall to 81⁄4 percent this year (from 9.2 percent in 2011), gathering speed in the latter part of this year and rising to 83⁄4 percent in 2013. Here is a look at the IMF's GDP growth projections for China this year: And here is one look at the importance of exports to China's economy: While China weathered the Global Economic Recession of 2008-2009 relatively well, the big concern is that Europe's economic woes will hit China harder this time around. Read the IMF's China Economic Outlook here . (Hat tip Reuters )

With Europe's leaders meeting today to take on the difficult task of righting the EU economy , Javier Solana , former General Secretary of NATO and former EU High Representative for the Common Foreign and Security Policy, weighs in at Project Syndicate . Solana argues that the devotion to austerity measures has proven to be a limited solution, at best, to the EU's problems. "Austerity at all costs is a flawed strategy," Solana writes, and he believes that all efforts at this point should go into priming the pump for growth: Public debt, moreover, should not be demonized. It makes financial sense for states to share the cost of public investments, such as infrastructure projects or public services, with future generations, which will also benefit from them. Debt is the mechanism by which we institutionalize intergenerational solidarity. The problem is not debt, but ensuring that it finances productive investment, that it is kept within reasonable limits, and that it can be serviced with little difficulty. Yet, ominously, the same arguments that turned the 1929 financial crisis into the Great Depression are being used today in favor of austerity at all costs. We cannot allow history to repeat itself. Political leaders must take the initiative to avert an economically driven social crisis. Two actions are urgently needed. At a global level, more must be done to address macroeconomic imbalances and generate demand in surplus countries, including developed economies like Germany. Surplus emerging-market economies must understand that a prolonged contraction in the developed world creates a real danger of a global downturn at a time when they no longer retain the room for maneuver that they had four years ago. Within the eurozone, structural reforms and more efficient public spending, which are essential to sustainable long-term growth and debt levels, must be combined with policies to support demand and recovery in the short term. The steps taken in this direction by German Chancellor Angela Merkel and French President Nicolas Sarkozy are welcome but insufficient. What is needed is a grand bargain, with countries that lack policy credibility undertaking structural reforms without delay, in exchange for more room within the EU for growth-generating measures, even at the cost of higher short-term deficits. The world is facing unprecedented challenges. Never before in recent history has a deep recession coincided with seismic geopolitical change. The temptation to favor misguided national priorities could lead to disaster for all. Read Austerity vs. Europe here .

In a compelling post for Fast Company , Shawn Parr tells us it is time for companies to stop looking at fostering a strong workplace culture as "touchy-feely," and recognize that the conditions that build a vibrant culture also build profit and sustainability. He points to some of the usual standouts like Southwest Airlines, Costco, and Zappos as models: A vibrant culture provides a cooperative and collaborative environment for a brand to thrive in. Your brand is the single most important asset to differentiate you consistently over time, and it needs to be nurtured, evolved, and invigorated by the people entrusted to keep it true and alive. Without a functional and relevant culture, the money invested in research and development, product differentiation, marketing, and human resources is never maximized and often wasted because it's not fueled by a sustaining and functional culture. Look at Zappos, one of the fastest companies to reach $1 billion in recent years, fueled by an electric and eclectic culture, one that's inclusionary, encouraging, and empowering. It's well-documented, celebrated, and shared willingly with anyone who wants to learn from it. Compare that to American Apparel, the controversial and prolific fashion retailer with a well-documented and highly dysfunctional culture. Zappos is thriving and on its way to $2 billion, while American Apparel is mired in bankruptcy and controversy. Both companies are living out their missions--one is to create happiness, and the other is based on self-centered perversity. Authenticity and values always win. Read Culture Eats Strategy For Lunch here .

The Brookings Institution 's Global MetroMonitor for 2011 paints a picture of shifting strength from cities in the developed nations to Asia and South America. Not that the metro areas of the US and Western Europe are not still vital drivers of the global economy, but the growth was elsewhere in between 2010 and 2011. Note where much of the blue is on this map: The map is a helpful supplement to the report (click here to access the interactive map). As it shows, most of the strongest performing metro areas--90%, in fact--are outside of the US and Western Europe, while almost all of the weakest are in Japan, the US, and Western Europe. Alan Berube , director of research for the Brookings Metropolitan Policy Program and one of the authors of the report, notes some of the key takeaways from the Global MetroMonitor in this video: Read the full report here .

Take a look at this figure from Barclays Capital : A sign of progress? Sure. China is rapidly building more skyscrapers because of its recent economic growth. But this could also be a sign of the bad things to come. The Barclays Capital Skyscraper Index has shown "an unhealthy correlation between construction of the next world’s tallest building and an impending financial crisis." With 14 new skyscrapers going up in China, the question we have is whether this portends bad things for China's economy or the global economy as a whole? Hat tip BBC News .

In a new report at the McKinsey Quarterly , McKinsey analysts Richard Dobbs , Jeremy Oppenheim , and Fraser Thompson point out that we are in the midst of an historic expansion of middle class consumers globally. They estimate the global middle class will reach 5 billion people by 2030, with China and India leading that growth. This has brought on a significant challenge for economies and for global business: resource costs. While the economic growth of the 20th century was aided by "cheaper natural resources," commodity prices have been high for the start of this century, and are likely to remain so. Dobbs, Oppenheim, and Thompson argue that this problem represents an opportunity to companies that are willing and able to lead a "resource revolution," and take measures to adapt. The chart below shows their estimates of how much value companies can find in adjusting strategies to account for rising costs. They call this the "resource prize": The authors write that the key is to "create cost advantages" and "generate new stresses on the management of risk and regulation" by pursuing the following: Pursue growth opportunities. Helping consumers and companies to use or access resources more efficiently should be very good business in the years ahead. For instance, the fastest-selling elevator line in Otis’s 150-year history is the Gen2, which uses up to 75 percent less energy than conventional elevators. Major companies, such as General Electric and Siemens, are building resource productivity businesses by investing heavily in emerging clean-energy and clean-water opportunities ranging from wind turbines to industrial-energy efficiency. And in technology centers such as Silicon Valley, a broad range of clean-tech investors and entrepreneurs seek profits by revolutionizing resource productivity. In fact, venture capitalist Vinod Khosla predicted in a recent paper that positive “Black Swans” will “completely upend assumptions in oil, electricity, materials, storage, agriculture, and the like.” Boost internal efficiency. Companies have large, profitable opportunities to improve the efficiency of their resource use across the value chain. Consumer-packaged-goods manufacturers have cut their energy costs by up to 50 percent by pulling productivity levers that pay back their costs in less than three years. Wal-Mart Stores has implemented a sourcing strategy that aims to reduce supplier packaging from 2008 levels by 5 percent no later than 2013, for estimated direct savings of $3.4 billion.7 Capturing many of these supply chain opportunities will require much closer collaboration between upstream and downstream players. Manage risk. As resource inputs to production processes become increasingly scarce, companies need to develop a more sophisticated understanding of their exposure to different natural resources, including supply chain dependencies and regulatory risks. Steel, for example, is becoming ever more critical in the oil-and-gas sector because of the shift to offshore deepwater drilling. Steel production depends crucially on the supply of iron ore, which in turn relies heavily on the water used to extract it. Almost 40 percent of iron ore mines are in areas with moderate to high water scarcity, and a lot of steel is produced in places where water is relatively scarce. Read Mobilizing for a resource revolution here .

Here is a new video from the World Economic Forum on the future of manufacturing. While it comes across as a bit earnest in parts, we are sharing it here because it does a nice job of explaining how manufacturing--"advanced manufacturing" in particular--drives global economic growth. What is your take? Do policymakers need to work harder to drive advanced manufacturing in their economies? Can developed economies like the US compete with the new manufacturing juggernauts like Brazil and China?