The world economy is rattled by a crisis in the U.S. property market, with struggling borrowers defaulting en masse on mortgage payments, causing a credit crunch and wider concerns about the world’s biggest economy. The dollar staggers from record low to record low and stock markets tumble. World oil prices come in November close to the US$100 mark on global supply concerns. Prices ease after OPEC decides to keep its output levels unchanged.

CHINA’S RED HOT ECONOMY

China’s red hot economy continues to expand, as the Asian giant’s leaders worry about how to prevent it from overheating and to curb inflation. Europe and the United States urge Beijing to move faster on exchange flexibility to boost the weak yuan, arguing that it is giving Chinese exporters an advantage. China continues to increase its influence by pouring investment into the resource rich African continent, as it seeks raw materials to fuel growth.

MIDDLE EAST PEACE

In November, Israelis and Palestinians agree at a conference in Annapolis, Maryland to restart negotiations with the goal of creating a Palestinian state by late 2008, but the effort is greeted with scepticism in the Middle East. The Gaza Strip descends into factional fighting after Hamas takes the area under its control after overrunning Fatah loyalists in June.

DARFUR

Violence continues in the western Sudanese region of Darfur as rebel groups splinter into dozens of factions, jeopardising relief efforts for the two million displaced in the region, where the U.N. says more than 200,000 people have been killed. The U.N. voices disappointment at obstacles placed by Khartoum delaying the deployment of a major U.N. peacekeeping mission, due to start on Jan. 1.

PEACE PRIZE

The Nobel Peace Prize is awarded jointly to a U.N. climate change body and former U.S. vice president Al Gore on October 12, raising the profile of the fight against global warming. In July pop stars, politicians and Hollywood celebrities drum home the dangers of global warming in a series of Live Earth concerts spanning the globe.

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