Saturday, 17 July 2010


Asia Times


Donald Kirk

Asia Times, July 17, 2010

WASHINGTON - Behind brave blasts of bombast and bluster, North Korea has one urgent reason for wanting to renew six-party talks on its nuclear program and separate meetings with an American general at the truce village of Panmunjom.

The overwhelming problem for the North is the nation is now on the verge of its worst famine since the mid-1990s when approximately two million people are believed to have died of starvation and disease. "Food shortages and a more general economic crisis have persisted to this day," according to a report released this week by Amnesty International. The North's "delayed and inadequate response to the food crisis has significantly affected people's health".

The Amnesty report quotes an assessment by the World Food Program (WFP) that belies the victorious tone of North Korean rhetoric since the United Nations Security Council issued a watered-down statement that avoided holding the North responsible for the torpedo attack in March on a South Korean ship in the Yellow Sea that killed 46 sailors. "The progressive improvement in food security" in the first half of this decade "has been reversed in recent years", said the WFP. "The country's reliance on external food supplies is again increasing."

(...) [artículo aquí]

Friday, 16 July 2010




China’s Economic Growth: International Spillovers: By Vivek Arora and Athanasios Vamvakidis, IMF working paper

Simply Economics | Manas Chakravarty

Livemint, July 16, 2010

The recent slowdown in the Chinese economy has sparked a big debate about its impact on the rest of the world. The slowing of its economy may be good for China, but will it lead to a double dip in the fragile economies of the West? What will happen to commodity prices? These questions underline the importance of China’s rapid economic growth to the rest of the world.

At the outset, it’s best to clear up some myths. As the authors put it, “While China’s share in world trade has increased dramatically in recent decades it is still small compared with the US. The size of China’s GDP at current exchange rates is only one-fifth that of the US and that of its private consumption is only around one-eighth that of the US (IMF, 2009). Moreover, China accounts for only 3% of world imports of consumer goods and for only 4% of world import growth. China could not, therefore, replace the US as a ‘global consumer’ in the short run.”

That said, China does have a major impact on commodity prices, its surpluses reinvested in US government paper have helped to keep interest rates low in the US, and its exports are a source of envy to competitors and have kept prices low across the world. Also, its importance is growing rapidly. China’s share in total merchandise trade with India, for example, has increased from 0.1% in 1990 to 11.5% in 2008.

(...) [artículo aquí]

Wednesday, 14 July 2010




Bloomberg News, July 15, 2010

China’s economic expansion eased to 10.3 percent in the second quarter and industrial production cooled more than forecast in June, signaling a deeper second- half slowdown that may add to risks for the global economy.

The gain in gross domestic product was less than an 11.9 percent increase in January-March from a year earlier. Inflation cooled to 2.9 percent in June, the statistics bureau also reported in Beijing today. Industrial output rose 13.7 percent, less than all but one of 27 forecasts in a Bloomberg News survey.

The figures signal a diminishing risk of economic overheating and give Premier Wen Jiabao more room to scale back restrictions on bank lending or property purchases by year-end. The Shanghai Composite Index and stocks across Asia declined as weaker growth in China added to European budget cuts and limited American job gains in clouding prospects for the world recovery.

“There’s no more tightening happening in China” given the slowing expansion, said Stephen Green, head of China research for Standard Chartered Bank in Shanghai. Policy makers may loosen some real-estate curbs and approve more infrastructure and investment projects in the fourth quarter as growth slows toward 7 percent before picking up into 2011, he said.

(...) [artículo aquí]




Allison Jackson

AFP, July 14, 2010

BEIJING — A growing number of foreign companies in China, faced with spiralling wages and a shortage of skilled workers, are moving their factories inland to contain rising costs, analysts say.

After a spate of strikes and minimum wage hikes resulted in hefty pay rises for millions of workers, firms are looking to capitalise on government incentives to shift their operations to impoverished western China.

Foreign-invested firms are also looking to tap into a young, talented labour force which no longer wants to sacrifice family ties by leaving home to work long days in the coastal industrial belt.

"It makes economic sense," Bhavtosh Vajpayee, an analyst at CLSA Asia-Pacific in Hong Kong, told AFP.

"Profitability is low in the assembly manufacturing business -- many of these companies have operating margins of two to four percent, so that is not a lot of headroom if your costs start going up."

(...) [artículo aquí]

Tuesday, 13 July 2010




Boonwara Sumano

Forbes, July 13, 2010

The future of Association of Southeast Asian Nations (ASEAN) member states is a source of considerable discussion, with economic recession, internal and interstate conflict and environmental degradation remaining top concerns. This decade signals the increasing significance of another issue in the structure of member countries' populations.

ASEAN Statistical Yearbook 2008 reports that population in most ASEAN countries is declining. Growth has fallen from an average 2.1% between 1980 and 1990, to 1.5% in the year 2008. Population growth has slowed substantially in Thailand, Vietnam and Brunei and even in labor-intensive industrial countries like Indonesia. In all member countries, crude birth ratio is diminishing while life expectancy is expanding. The dependency ratio is increasing in high-income countries like Singapore, which experienced a doubling in the proportion of dependents to working population from 2004 to 2008. This phenomenon no longer exempts developing countries such as Thailand and the Philippines in which dependency ratios are also widening. If this trend continues the demographic divide is likely to cause significant economic difficulties.

Labor-intensive industries are vital to many Southeast Asian economies. The theory of comparative advantage, which underpins international trade, stipulates that countries with cheap labor costs will export labor-intensive products and import capital-intensive goods, and vice versa. A declining labor force in a labor-abundant country is therefore likely to deteriorate both its importing and exporting capacity. Additionally, a declining population means in the future there will be fewer people to collect taxes from and accordingly decreases the government's ability to provide fundamental public services and infrastructure. ASEAN governments need to urgently and effectively respond to their changing demographic situation.

A popular and desirable option is to increase member countries' competitiveness by applying superior technology to the production processes. This requires ongoing investment and technically skilled workers. Given it may take a very long time to develop the required technical capacity, in the meantime labor liberalization should be considered.

(...) [artículo aquí]

Monday, 12 July 2010



Roland Buerk

BBC News, July 12, 2010

Naoto Kan has been Japan's prime minister since only last month, but already he has been dealt a stinging rebuke by the electorate.

His Democratic Party of Japan (DPJ) and its tiny coalition ally lost their majority in the upper house of parliament.

Japan has already suffered two decades of economic stagnation; now it faces political stagnation too unless Mr Kan can persuade small parties to help him pass laws.

Worse, this election may well have put paid, for now, to any thoughts of tackling Japan's massive public debt.

It is already nearly twice the size of the economy's annual output, and growing.

This year the government expects to borrow around as much as it raises from taxes.

The prime minister had argued that without action the country faced a Greece-style meltdown and he suggested doubling sales tax to 10%.

During the latter stages of the campaign Mr Kan rowed back, saying any tax increase would not come for several years.

It may be that it was the appearance of dithering and weak leadership that turned voters against the prime minister.

But the message being digested by Japan's politicians is that talking about austerity is poison at the ballot box.

(...) [artículo aquí]

Sunday, 11 July 2010




Martin Abbugao

AFP, July 11, 2010

SINGAPORE — Recent moves by Asian central banks to raise interest rates are a strong vote of confidence that the region will weather risks stemming from the European debt crisis, analysts say.

Since June 24, the central banks of Taiwan, India, Malaysia and South Korea have lifted interest rates by between 12.5 and 25 basis points, citing the need to tame inflation as their economies rebound from the global downturn.

While Asia is not totally immune to the effects of a slowdown in Europe and the United States, the region's dependence on them has been reduced as Asian consumers now play a bigger role in supporting domestic economies, analysts said.

"Concerns over Europe's debt crisis continue to smoulder but that hasn't stopped Asia's central banks from pushing ahead with monetary tightening" in the wake of rapid and sustained GDP growth, said Singapore's DBS Bank.

(...) [artículo aquí]

Saturday, 10 July 2010


The Star


Yvonne Tan

The Star, July 10, 2010

Asian economies credited for global economic rebound but may be affected by eurozone debt crisis.

The failure of US banks in 2008 left the global economy particularly the Western economies in tatters. And just as a global rebound was making some substantial headway, economies were hit with the eurozone debt crisis this year.

Asian economies with huge domestic bases like China and India were largely responsible for pulling the global economy out of recession last year.

In fact, some economists estimate that the two fast-growing economies collectively contributed half of the global economic rebound.

Can they continue their growth trends? Experts seem to think so albeit at a slower pace and without being completely shielded from what is going on in the eurozone.

In its latest report on the outlook of the world economy, the International Monetary Fund (IMF) said the large domestic demand bases in nations including China and India “could provide a cushion to growth” in the event of external demand shocks emanating from Europe.

Let’s take a look at how some of these major world economies are faring.

(...) [artículo aquí]

Friday, 9 July 2010



Chikako Mogi and Cho Mee-young

Reuters, July 9, 2010

Japanese and South Korean firms, backed increasingly by the state, are stepping up their game in the dash for global resources in which they face fierce competition from China.

For resource-poor Japan and South Korea, China with its tremendous purchasing power is a formidable opponent -- in June China secured more than $8.8 billion worth of commercial and mining deals with Australia.

Still, analysts say the tide may be turning for Japan and South Korea because of increased state funding, more state and private sector partnerships and in Japan's case, a change in the law to encourage firms to seek resources abroad.

There are some positive signs for South Korea and Japan:

Korea National Oil Corp (KNOC), armed with a $6.5 billion war chest, is mulling a cash offer for Britain's Dana Petroleum as part of a move aimed at doubling national oil reserves, while state-backed Japan Bank for International Cooperation (JBIC) recently signed an agreement of cooperation with Vietnam's state oil group.

"Three winning factors in global bidding for resources are money, relationship with the government there, and technologies," says Korea Investment & Securities analyst Ki-yong Park.

"State-run (South Korean) companies, SK Energy and POSCO have advantages in those factors."

(...) [artículo aquí]

Thursday, 8 July 2010


Hannah Beech

Time, July 8, 2010

Studying introductory Mandarin at a college in the backwoods of Maine was disorienting enough. But I almost abandoned my linguistic expedition when I turned to the textbook chapter dedicated to all things family. "Cousin" was the deceptively simple heading on the page. Then came a bewildering array of words of which I offer a sampling: father's brother's son who's older than you (tangge), father's brother's daughter who's younger than you (tangmei), mother's sister's son who's younger than you (biaodi), mother's sister's daughter who's older than you (biaojie). Even amid a Maine winter, my brain began to overheat.

My 1980s-era textbook, though, was somewhat out of date. Thirty years ago this September, China began seriously pruning family trees of cousins — and simplifying kinship taxonomy in the process — through the mandatory enforcement of its so-called one-child policy (a misnomer because, among others, rural families and ethnic minorities are allowed to have more than a single kid). By becoming the only country in the world to make compulsory family planning a pillar of national identity, China hoped to prevent a Malthusian nightmare. Chinese authorities believe they succeeded: they claim that the nation's massive social-engineering project has spared the planet 400 million people.

(...) [artículo aquí]

Wednesday, 7 July 2010


Taipei Times


The world is nervously watching as leaders in Tokyo and Beijing attempt to steer their countries, through a very different set of circumstances, to continued sucess

Heizo Takenaka

Taipei Times, July 7, 2010

In today’s Asia, there are two economic powers of global standing: Japan and China. The balance of economic power between the two is changing, and fast. Sometime this year, China’s GDP will exceed that of Japan (if it has not already done so). China’s economic footprint, moreover, is spreading rapidly across Asia and the rest of the world.

Most Asian countries are recovering strongly from the global recession that set in following the collapse of Lehman Brothers in 2008. China’s growth rate last year was 8.7 percent, and more than 10 percent in the past two quarters. Neighboring countries, like South Korea and Singapore, also are recording very high rates of growth. The only exception is Japan, where a lack of political leadership and a limited knowledge of basic economics among government ministers undermines mid-term growth prospects.
While China’s ability to maintain high growth through the “Lehman Shock” was a remarkable feat of economic management, three important changes in China hold geopolitical implications for the region and the world.

The first change concerns China’s pattern of economic growth, which so far has been achieved mostly by rapidly increasing factor inputs — labor, capital, and energy. According to recent research, however, about one-third of growth in China now comes from technological progress, or an increase in total factor productivity. In other words, China’s growth pattern is coming to resemble that of industrialized economies.

(...) [artículo aquí]

Tuesday, 6 July 2010


Economic Times



The Economic Times, July 6 2010

Oil minister Murli Deora travelled to Nigeria, Angola, Uganda, Sudan, Saudi Arabia and Venezuela this year, leading a record number of delegations to gain oil for the world’s third-fastest-growing major economy. The flurry of visits is part of a new drive to find oil for India’s 1.2 billion people after losing out to China in at least $12.5 billion of contracts in the past year.

India proposed a sovereign wealth fund to bid for reserves, told Oil & Natural Gas Corporation and Oil India to make a major acquisition each this year, and raised the amount they can spend without government approval to Rs 50 billion ($1.1 billion). “There is a new push,” said NM Borah, chairman of Oil India. “Going abroad is part of the government’s policy — diplomatic support is very, very crucial as we search for assets overseas.” India’s energy use may more than double by 2030 to the equivalent of 833 million metric tonnes of oil from 2007, while China’s demand may rise 87% to 2.4 billion tonnes, the International Energy Agency said.

India faces an uneven contest to close the gap with China, which is dipping into $2.4 trillion of foreign currency reserves to buy stakes in oil and natural gas fields from Iraq to Uganda, compared with India’s $250 billion in foreign exchange reserves. State-run Chinese companies spent a record $32 billion last year acquiring energy and resources assets overseas versus India’s single $2.1 billion investment by ONGC. China’s June 19 decision to allow the yuan to appreciate will strengthen the hand of Chinese companies buying overseas.

(...) [artículo aquí]

Monday, 5 July 2010



Austin Ramzy

Time, July 5, 2010

One year ago, the streets of Urumqi were awash in blood. On July 5, 2009, hundreds of young men belonging to the predominantly Muslim Uighur ethnic minority rioted, beating and stabbing members of the Han majority on the streets of the capital of China's restive northwestern region of Xinjiang. Two days later, Han residents took to the streets and, armed with clubs and knives, took revenge on the city's Uighur community. All told, 197 people, mostly Han, were killed, and some 1,700 were wounded.

It was China's worst ethnic violence in years. The central government blamed the bloodshed on outside agitators, namely overseas Uighur activist Rebiya Kadeer, who has denied any involvement. But the ease with which the city's running racial tensions exploded into mass violence made it clear that China had some deep problems within its own borders. In the past year it has turned to both economic incentives and a leadership shake-up to rebuild the peace in Xinjiang.

Urumqi's Communist Party secretary Li Zhi was sacked in September following public protests over a series of suspected syringe attacks that targeted the city's Han population. Wang Lequan, a hard-liner and ally of President Hu Jintao who ran Xinjiang as Communist Party secretary for 16 years, was removed from office in April. Wang was replaced by former Hunan party secretary Zhang Chunxian, who has a reputation as a savvy politician and has advocated using the Internet to better understand public opinion. But while Wang is out, the government's tough security measures that he helped install in the far west aren't expected to change. The security budget for Xinjiang is expected to nearly double this year to $423 million, the official China Daily reported. On June 24, Chinese authorities announced they had cracked a terrorist cell that was responsible for a 2008 attack in the southwestern Xinjiang city of Kashgar that killed 17 border police. Ten suspects were arrested.

(...) [artículo aquí]

Sunday, 4 July 2010



A bold bid for Greece's premier port of Piraeus by state-owned Cosco has given Beijing a foothold on the doorstep of the Continent.

Harriet Alexander

The Telegraph, July 4, 2010

Golfis Yiannis stands on the dock of the Athenian port of Piraeus, unflinching among the dust clouds stirred by the thundering lorries and clattering forklift trucks unloading the vast container ships.

"That's Europe's new China Town over there," he says, pointing to the pier adjacent to where he is standing. "The only thing that is certain is that we've sold our soul to the Chinese."

Pier Two of the container port, where Mr Yiannis, 48, has worked for the last 22 years, may seem exactly the same as Pier One – certainly larger, but similarly flanked by gigantic ships and stacked with huge Lego brick-style containers.

But where as Pier One is Greek, Pier Two is now Chinese.

(...) [artículo aquí]

Saturday, 3 July 2010



Emily Wax

The Washington Post, July 3, 2010

NEW DELHI -- For years, this aspiring superpower's main international airport looked more like a congested, rundown bus station.

The low ceilings were stained with mold, fluorescent lights buzzed on and off during frequent power cuts, and the overrun bathrooms were harrowing tests of fortitude.

But that all changes Saturday when Prime Minister Manmohan Singh inaugurates a $2.8 billion terminal at Indira Gandhi International Airport, a symbol of India's economic surge ahead.

Spread over 5.5 million square feet, the glass and steel terminal can handle 34 million passengers a year. It has 92 moving walkways and 78 aerobridges connecting the boarding area directly to the aircraft. The new world-class hub is designed to support the Airbus A380, a super-jumbo jet.

"This is a huge step forward, and for India it feels like a celebration," said Kapil Kaul, who heads the Indian and Middle East arm of the Center for Asian Pacific Aviation, a consulting firm. "Terminal 3 in New Delhi is a visible symbol of the new India and our new economy. It's also a game-changing moment for India's business world. It's a momentous occasion for building confidence in our country."

Less than 1 percent of India's 1.2 billion people travel by air, Kaul said, with most in the middle and lower classes taking less expensive trains, the backbone of the country's transportation system. But the number of Indians flying is expected to reach about 165 million by 2020, he said, which would make the country's airports among the busiest in the world.

(...) [artículo aquí]

Friday, 2 July 2010

Fan Gang on China’s economic policies

Getting economic recipe right

Fan Gang

China Daily, July 2, 2010

China's active counter cyclical policy interventions in boom times has tamed overheating over the past three decades

China's GDP growth this year may approach 10 percent. While some countries are still dealing with economic crisis or its aftermath, China's challenge is - once again - how to manage a boom.

Thanks to decisive policy moves to pre-empt a housing bubble, the real-estate market has stabilized, and further corrections are expected soon. This is good news for China's economy, but disappointing, perhaps, to those who assumed that the government would allow the bubble to grow bigger and bigger, eventually precipitating a crash.

China has sustained rapid economic growth for 30 years without significant fluctuations or interruption - so far. Excluding the 1989-1990 slowdown, average annual growth over this period was 9.45 percent, with a peak of 14.2 percent in 1994 and 2007, and a nadir of 7.6 percent in 1999.

While most major economies in their early stages of growth suffered crises, China's story seems abnormal (or accidental), and has elicited periodic predictions of an "upcoming crash." All such predictions have proved wrong, but the longer the story lasts, the more people will forecast a bad end.

For me, there is nothing more abnormal about China's unbroken pattern of growth than effective macroeconomic intervention in boom times.

(…) [artículo aquí]