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In a new paper published in the Journal of Environmental Economics and Management , UC Santa Barbara researchers shows that climate change will dramatically lower output for the Chinese manufacturing sector. Using detailed production data from a half-million Chinese manufacturing plants in the period , the research team estimated the effects of temperature on firm-level productivity, factor inputs and output.

Hot and bothered? Associations between temperature and crime in Australia.

With the Chinese manufacturing sector producing 32 percent of national gross domestic product GDP , this effect is equivalent to a 4 percent drop in overall Chinese GDP annually. Further, given that China's manufacturing sector supplies 12 percent of global imports, the worldwide economic consequences may be substantial. That is, increasing temperatures not only make workers less productive, they also make machines operate less well. High-tech industries include those that produce medical supplies, aerospace equipment and computer equipment.

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It is more flexible with a floating exchange rate and its central bank is still soundly run. The government insists that it wants to join the euro in A bigger worry is Hungary. The government is trying to regain control of public finances after a splurge to win last year's election. Hungarians have borrowed hugely in foreign currency, assuming the euro is a certainty.

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That creates all the conditions for a nasty crunch, with devaluation, possible default and recession. After some perilous wobbles last year, the government's austerity programme has won plaudits from bankers. But planned reforms of public spending have yet to bite, and the government has been timid in conceding higher public-sector pay. The underlying failing is weak and indecisive government across the region, which needs years of good government if it is to catch up. Romania, the second-largest east European EU member, is paralysed by a political feud between the prime minister and president.

As a by-product, the upper house of parliament has voted to dismiss the justice minister, Monica Macovei. In sunny economic weather, such political shenanigans would be mere details.

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More up icon. Eastern Europe's economies Hot and bothered Overheating economies, slow reform and messy politics make a grim mixture print-edition icon Print edition Europe Mar 8th Reuse this content About The Economist. Plug and pay Big Tech takes aim at the low-profit retail-banking industry Silicon Valley giants are after your data, not your money.

Trick or tweet? Daily chart The world's climate goals are not sufficient. They are also unlikely to be met. Subscribe now. Each week, over one million subscribers trust us to help them make sense of the world.