We ignore history at great peril. The latest disappointment for inflation-targeting central banks is really not a surprise after all.

China is upping the ante on its connection to an increasingly integrated world, running against the grain of the populist anti-globalisation backlash that is brewing in many developed countries.

The pendulum of world economic growth has swung - by 2018, the developing countries will have a greater share of world GDP (59%) than developed countries (41%). New? Absolutely. Normal? Not even close.

Another growth scare has come and gone for the Chinese economy. The near-term prognosis for the Chinese economy is far more encouraging than most had expected. China is actually making rapid progress on the road to rebalancing.

The lack of response at the zero bound of policy interest rates is hardly surprising. In fact, it is strikingly reminiscent of the so-called liquidity trap of the 1930s. What is particularly disconcerting is that central bankers remain largely in denial.

While seemingly elegant in theory, globalisation suffers in practice. That is the lesson of Brexit and of the rise of Donald Trump. Those who worship at the altar of free trade – including me – must come to grips with this glaring disconnect.

Market manipulation has become standard operating procedure in policy circles around the world. The more proactive Chinese approach is the policy equivalent of attempting to catch a falling knife – arresting a market in free-fall.

The upcoming US/China 6th Strategic & Economic Dialogue is an opportunity for serious reconsideration of the relationship between the world's two most powerful countries.

The US debt ceiling debacle sent a clear message to China. The US may have to pay a much steeper price for capital.