Friday, 30 September 2011


People's Daily logo


Ye Xiaonan

People's Daily, September 30, 2011

Given the many uncertainties in China's economic development due to the uneven growth of the world economy, fragile recoveries in the United States and the European Union and the inflationary pressure faced by emerging economies, what kind of macroeconomic situation will China face? What direction will it take?

Lu Zhongyuan, vice director of the Development Research Center of the State Council, said at a news briefing hosted by the State Council Information Office on Sept. 28 that China's economic growth rate climbed beyond 9 percent in the first three quarters of 2011 and was within a reasonable range determined by the country's growth potential. China's economic growth rate in 2011 is expected to remain at higher than 9 percent. This will play a role in promoting the recovery of the world economy and avoiding a double-dip recession.

Signs of a slowdown in economic growth appear 
China's economic growth rate has gradually dropped to the range of 9.5 to 9.8 percent since the second half of 2010, with an economic growth rate of 9.7 percent in the first half of 2011 and 9.5 percent in the second quarter. Some leading indicators have shown the signs of slowdown in economic growth.

(...) [artículo aquí]

Thursday, 29 September 2011


asia_times_logo OK


Robert M Cutler

Asia Times, September 29, 2011

MONTREAL - China has been implementing deeper and deeper energy cooperation with Central Asia, for over a decade, beginning with Beijing's acquisition of energy infrastructure in western Kazakhstan not far from the Caspian Sea, which they operated for years at a loss in order to have and maintain a foothold there.

The strategy first bore fruit with the 1998 signature on the Kazakhstan-China oil pipeline. The pipeline is now operating despite the fact that four years were required before construction began on its first phase, due to Kazakhstani discomfort over the prospect that Chinese workers sent to build it might not go home after the job was done.

The pipeline has been extended gradually westward across Kazakhstan and will probably reach Chinese-owned infrastructure Beijing, Obama met the Dalai Lama. In May and July, People's Liberation Army (PLA) chief of the General Staff General Chen Bingde and Chairman of the Joint Chiefs of Staff Admiral Mike Mullen exchanged visits. In August, Joe Biden made his first visit to China as vice president.

South China Sea is high on the agenda
The South China Sea featured prominently in US-Chinese interactions in this four-month period. Tensions flared in May and June in a spate of incidents that involved Chinese intimidation and harassment of other claimants. Chinese forces shot at Filipino fisherman, deployed navy patrol boats to chase off an oil exploration vessel, and unloaded building materials and erected posts on an uninhabited reef 230 km from the Philippines' southwestern Palawan province.

(...) [artículo aquí]

Tuesday, 27 September 2011




The Economic Times, September 27, 2011

Arvind Subramanian's new book, Eclipse: Living in the Shadow of China's Economic Dominance, argues that China will elbow out the US in the next two decades as an economic superpower. No wonder then that he was asked to testify before the US Congress joint economic committee on US China relations a few days ago.

For his part, Subramanian insists that China will become the first middle-income country to become the most powerful nation in the world. The senior fellow at the Washington-based Peterson Institute for International Economics adds that India and other neighbours shouldn't worry because Beijing is unlikely to become a malign hegemon.

He anticipates that China will suffer a financial setback or two in the next two decades, but will not grow so low so as to stoke political discontent. While this former IMF economist expects China to slowly move away from the practice of undervaluing the renminbi, its currency, he is optimistic about India forging ahead despite many odds. India will go the China way, but many years later, predicts this IIM-A alumnus.

What are your views on accountability failures in China?
The public delivery systems may have deteriorated in China the way it happened in India. My book looks at how China, despite all these weaknesses, will be able to post decent growth in the next 15-20 years.

You predict that in less than two decades China will become the world's biggest economic power? How tough or easy was it to arrive at this conclusion?
I have actually constructed an index of economic dominance. I looked at history and all those variables that determine a country's power internationally. Then I narrowed it down to three variables, the country's GDP, its trade and the extent to which it is a net creditor or net debtor to the rest of the world. I combined these to create an index and projected it forward to 2030. Based on some very conservative assumptions and wellestablished methods, I concluded that China will be as dominant as the UK in the 1870s and the US after World War II.

(...) [artículo aquí]

Monday, 26 September 2011




China does not have the ability to come to the rescue of the western economies, according to the head of Asian equities at Schroders.

Adam Lewis and Gary Jackson

Fund Strategy, September 26, 2011

As global stockmarkets plummeted again last week, Robin Parbrook says the scope for the Chinese authorities to put through a major stimulus package is low.

Surging credit and a weak banking system, which has to absorb 20-25% of bad loans over the next five years, are just two factors that make China “structurally unattractive” says Parbrook, speaking at a Schroders investment conference in Hong Kong last week.“If the West is slowing, don’t expect to see this offset again by the emerging markets,” he says.

However, while Parbrook expects Chinese growth to slow to between a “healthy” 5-6% from next year onwards, Jim Walker, the founder of economic research consultancy Asianomics, says Chinese GDP growth is set to fall to between zero and 3% from 2012.

Walker describes the Chinese economy as a “catastrophe” which is set to be enveloped by an inflationary bust. He forecasts economic growth of between 7-8% this year, followed by 0-3% from 2012 onwards if China is “lucky”.

(...) [artículo aquí]

Sunday, 25 September 2011


The Times of IndiaWRONG DRILL?

Virendra Sahai Verma

The Times of India, September 25, 2011

Last week, one day after a Chinese foreign ministry spokesperson said his government was "opposed to any country engaging in oil exploration in waters under China's jurisdiction" , an editorial in 'Global Times' , a mouthpiece of the Communist Party of China, warned India of "serious political provocation" that would "push China to the limit". The "provocation" , it seems, is ONGC Videsh Ltd's reported plans of exploring two offshore oil blocks that Vietnam claims to be in its Exclusive Economic Zone in the South China Sea. Tension has been building for some time. On July 22, an Indian vessel, INS Airavat, was contacted on open radio channel by a caller identifying himself as the "Chinese navy" and told "You are entering Chinese waters" when it was sailing from Vietnamese port Nha Trang towards Hai Phong.

The Indian government not only confirmed that the Indian ship was on a friendly visit to Vietnam, the ministry of external affairs also asserted that "India supports freedom of navigation in international waters, including in South China Sea, and the right of passage in accordance with accepted principles of international law. These principles should be respected by all."

But the ground reality is more complex. South China Sea encompasses 3,500,000 km from Malacca Straits to Strait of Taiwan. The sea is rich in fish and believed to hold over 50 billion tons of crude oil and more than 20 trillion cubic meters of natural gas. The state-owned Chinese firm China National Offshore Oil Corporation (CNOOC) is scheduled to spend US$ 30 billion in oil drilling in the sea during the 12th Five Year Plan (2011-2016). Its strategic location links Indian Ocean with Pacific Ocean - a vital sea artery of world trade. The semi-closed sea is integral to China's nuclear strategy. China also wants to dominate these waters to protect its underwater nuclear submarine base on Hainan Island.

(...) [artículo aquí]

Saturday, 24 September 2011



The Economic Times, September 24, 2011

NEW DELHI: Shrugging off Chinese warnings, ONGC said on Friday it would press ahead with long-term partner Vietnam in exploring the disputed South China Sea for oil.

The plans have stoked concerns that the exploration could exacerbate tensions between fast-growing neighbours China and India, who fought a brief, bloody war in 1962 over their disputed Himalayan border.

China has repeatedly said it has &quotindisputable sovereignty" over essentially all of the South China Sea, a key trading route, and that Beijing is opposed to any country engaged in oil and gas exploration there without its permission.

But India insists the area ONGC wishes to explore is well within Vietnam's territorial waters. “We will proceed with drilling at our block (in the South China Sea) on a schedule established according to our technical convenience," a senior Oil and Natural Gas Corp (ONGC) executive told AFP, asking not to be named.

He added India's foreign ministry had told ONGC the area where the oil firm wished to explore was &quotvery much inside Vietnam's territory."

(...) [artículo aquí]

Friday, 23 September 2011




Brett Miller and Matthew Winkler

Bloomberg, September 23, 2011

South Korean President Lee Myung Bak said plans to build a natural-gas pipeline across the divided peninsula are realistic, less than a year after a deadly North Korean artillery attack on a disputed island.

“I do not consider this as a far-fetched dream,” Lee said in an interview in New York, speaking through an interpreter. He called the project “a win-win for everyone involved.”

OAO Gazprom, Russia’s gas-export monopoly, this month signed preliminary agreements with South Korea’s Korea Gas Corp. and the North Korean government to build a pipeline that would carry as much as 10 billion cubic meters of gas a year across its eastern border to the peninsula. Lee’s support for the project may signal an easing of tensions between the two nations, which haven’t signed a peace treaty following their 1950-1953 civil war.

“I’m aware that the Russians and the North Koreans have been discussing this issue and that some progress, good progress, is being made,” Lee said. “We can buy gas at reasonable prices; and for the North Koreans, they can also get some benefit by collecting the transaction fee.”

Lee rolled back his predecessor’s “Sunshine Policy” of engaging with North Korea when he came to office in 2008, arguing that the policy rewarded Kim Jong Il’s regime for provocative behavior -- a view echoed by the administration of U.S. President Barack Obama.

(...) [artículo aquí]

Thursday, 22 September 2011




Sean Daly

Seeking Alpha, September 22, 2011

“What 9/11 told me was that there was no way that globalization was going to be Americanization in the future – nor should it be. . . . In order for globalization to advance, it had to be accepted by more people … but not by imposing the dominant American social and philosophical beliefs and structures.”
--Jim O’Neil, describing his
initial inspiration for the “BRICs” concept.

“Had you heeded O’Neill’s work and gotten invested in the stock markets of those four nations [back in 2001], you’d have made more money this past decade than by doing virtually anything else conceivable.”
-- Joshua Brown, Economic Commentator

First published in November 2001 and partly inspired by the World Trade Center attacks, Jim O’Neill’s “Building Better Global Economic BRICs” offered up a new acronym, a few predictions, and a wider discussion of global governance.

With its rather muddled title, the paper gave little indication of just how immensely influential it would become. O'Neill, as a newly appointed Goldman Sachs director, had grouped a set of rather disparate nations together based on population size and a new openness to global marketplace.

He predicted that “over the next 10 years, the weight of the BRICs and especially China in world GDP will grow” – and warned that “in line with these prospects, world policymaking forums should be re-organized” to give more voice and power to this new bloc.

(...) [artículo aquí]

Wednesday, 14 September 2011


The Telegraph DEF


China has called for major strategic concessions from Europe before agreeing to rescue the eurozone, chilling hopes for immediate purchases of Italian bonds.

Ambrose Evans-Pritchard

The Telegraph, September 14, 2011

Premier Wen Jiabao said his country and will play its part to "prevent the further spread of the sovereign debt crisis," but warned that China will not sign a blank cheque for states that have failed to carry out full reform.

"Countries must first put their own houses in order," he told the World Economic Forum in Dalian.

Mr Wen said he had spoken to José Manuel Barroso, the president of the European Commission, laying the conditions for Chinese intervention.

"I made clear to him that we are confident Europe will overcome its difficulties and make a full recovery. We have on many occasions expressed our readiness to extend a helping hand, and that we are willing to invest more in European countries."

"At the same time, we need bold steps to give redirection to China's strategic objective. We believe they should recognise China’s full market economy status," he said, referring to World Trade Organisation rules.

(...) [artículo aquí]

Tuesday, 13 September 2011




Shamim Adam and Lorenzo Totaro

Bloomberg, September 13, 2011

China’s status as the fastest- growing major economy and holder of the largest foreign-exchange reserves lured another bailout candidate as Italy struggles to avoid a collapse in investor confidence.

Italian officials held talks in the past few weeks with Chinese counterparts about potential investments in the country, an Italian government official said yesterday, adding that bonds weren’t the focus. Finance Minister Giulio Tremonti met with Chinese officials in Rome earlier this month, his spokesman Filippo Pepe said by phone today, declining to say exactly when the talks took place or what was discussed.

Foreign Ministry spokeswoman Jiang Yu, asked about buying Italian assets, said Europe is one of China’s main investment destinations, without specifically mentioning Italy.

Italy joins Spain, Greece, Portugal and investment bank Morgan Stanley among distressed borrowers that turned to China since the 2007 collapse in U.S. mortgage securities set off a crisis that widened to engulf euro-region sovereign debtors. Stocks rose on the potential Chinese investment in Italy even as previous commitments failed to have a lasting impact.

(...) [artículo aquí]

Monday, 12 September 2011


The Telegraph - Calcutta


Vivek Nair

The Telegraph (Calcutta), September 12, 2011

Mumbai, Sept. 11: The central bankers at four Asian countries — South Korea, the Philippines, Indonesia and Malaysia — have hit the pause button on rate increases even though they have been battling the spectre of rising inflation just as India.

Is there a cue here that Reserve Bank of India governor Duvvuri Subbarao and his bunch of policymakers will take when they hunker down for the mid-quarter review of the monetary policy on September 16?

Early last week, finance minister Pranab Mukherjee said at an event organised by the Confederation of Indian Industry that the central bank could hold off on a rate hike as the economy had started to slow.

“I agree with the finance minister that the RBI should pause on rate hikes,” Planning Commission deputy chairman Montek Singh Ahluwalia said last Thursday.

Bankers and corporate honchos are also beginning to wonder whether Subbarao will abandon his hawkish monetary stance and slam the brakes on the repo rate hikes that started in March last year. The repo has been raised 11 times in about 18 months, going up 325 basis points to 8 per cent — the most frenetic rate increase anywhere in the world. The repo is the rate at which the RBI provides liquidity to banks.

In July — the latest month for which data is available — inflation was running at 9.22 per cent, marginally down from the 9.44 per cent in the previous month. Data for August will come out on September 14, just two days before the RBI policymakers meet to review the monetary policy.

Data for August will be a key factor in deciding whether the RBI hits the pause button. It chose to pass up the opportunity to raise rates only once — on April 24 — out of the past 12 policy review meetings.

(...) [artículo aquí]

Sunday, 11 September 2011


The Times of India


Indrani Bagchi

The Times of India, September 11, 2011

The most enduring images of what is known as the "9/11 decade" are of suicide bombings, Predators, dead al-Qaeda leaders and new al-Qaeda leaders. But did we miss another, equally powerful image? Yes, that of China, growing unhindered and becoming a superpower in its own right, when the US was busy fighting its wars?

Ten years since 9/11, the jury is still out on whether the US is winning the war against al-Qaida. But there is no doubt that in the past decade the world has found a new fulcrum. As Lionel Barber wrote in the 'FT' , the three most important words in the last decade was not "war on terror" but "made in China" . Derek Scissors, economist at conservative think tank, Heritage Foundation says, "The US met the narrow security challenge of 9/11 but meeting any security challenge has an economic component. The US lacked the political courage to pay the economic price, weakening America's global position and making China a more serious challenger than it otherwise would be in 2011." The year 2001 was the zenith of America's unipolar status. Ten years later, the world is talking about Pax Sinica. After the 9/11 attacks, the US decided to go after the guys who planned and executed the terror plot. But instead of hot pursuit , US decided to go after Saddam Hussein in Iraq, which was a war of "choice" . But despite pouring billions into its war effort in Iraq and Afghanistan, al-Qaida and Taliban remain a potent threat to the US and a drain on an imploding US economy.

All this while, China stayed in the background. They did not have to spend murderous amounts of money, or send thousands of soldiers to die in a war where their main ally was also their main enemy. China retained its "all weather " friendship with Pakistan - on the cheap. China never spent the kind of money America did in Pakistan, yet its influence with Islamabad was disproportionately high

(...) [artículo aquí]

Saturday, 10 September 2011


The Star


What Are We To Do

Tan Sri Lin See-Yan

The Star, September 10, 2011

THE term BRIC (Brazil, Russia, India, China) was first used in 2001 by economist Jim O'Neill (Goldman Sachs) to call attention to four rapidly rising large emerging economies considered able to play a significant role in global affairs, championing the interests of developing nations. Very much like what G-7 does for the developed world.

For years since, it was treated by investors and journalists as a shorthand for the big emerging markets. Adding South Africa to the group widens its focus to include more from outside fast-growing China and India.

The BRICs held its first summit in 2009 in Russia, discussing issues on international monetary reform, including the possibilities of a new dominant reserve regime to replace the US dollar-based system. This year, China played host and invited South Africa to join, formally naming the group BRICS. Together they exceeded three billion people, nearly 45% of the world, and about 25% of the world's 2011 gross domestic product (GDP) based on purchasing power parity.

China's total output is bigger than the other four put together. The economic clout of the BRICS is now growing as the developed world struggles to expand and pare debt. Indeed, they are starting to operate as a common bloc in the G-20, providing a counterpoint to the United States and Europe.

(…) [artículo aquí]

Friday, 9 September 2011


The Australian


China's inflation slowed in August, raising hopes Beijing will not further tighten monetary policy this year.

Michael Sainsbury

The Australian, September 9, 2011

But an annual inflation pace of 6.2 per cent last month – well ahead of the 4 per cent government target -- is still being driven by high food and real estate prices.

Increasing demand for food by China’s swelling middle class, combined with double-digit wages growth across the country, has lead many to conclude inflation in the world’s second largest economy will remain stubbornly elevated.

Premier Wen Jiabao this week emphasised stabilising prices remained the government’s number one economic priority.

While inflation edged down from a three-year high of 6.5 per cent in July, the August data exceeded slightly market expectations of 6.1 per cent.

“The moderation in headline inflation is largely due to a high base recorded in the second half of 2010,” ANZ economists said in a note.

”As sequential growth remains upbeat, it is too early to say that inflationary pressures have eased. Food prices, led by pork, are still on the rise, suggesting strong inflation expectations and soaring pesticide costs.”

(...) [artículo aquí]

Thursday, 8 September 2011




Bloomberg News

Bloomberg, September 8, 2011

China, the world’s biggest energy user, signed an accord with Kazakhstan to expand the capacity of a pipeline network delivering natural gas from Central Asia by more than 80 percent.

The two governments agreed to build the Kazakh section of Pipeline “C” that will originate from Turkmenistan and cut through Uzbekistan, China National Petroleum Corp., the country’s biggest oil and gas producer, said in its online newsletter today. The link will flank two existing pipelines running through the three Central Asian nations.

China is turning to Central Asia for gas supplies to diversify fuel sources and to help cut the nation’s reliance on coal and oil. Turkmenistan started deliveries in December 2009 and is the only country transporting gas to China by pipeline.

The capacity of Pipeline “C” will rise to 25 billion cubic meters a year by December 2015, boosting the network’s capacity to 55 billion cubic meters, CNPC said.

(...) [artículo aquí]

Wednesday, 7 September 2011



Yong Kwon

Asia Times, September 7, 2011

Beijing has finally achieved its aspiration to be a force to be reckoned with on the high seas. The long-awaited launch of China's aircraft carrier signaled the incremental readjustment of power relations in East Asia. However, the rise of one power does not necessarily translate to the decline of all others in the vicinity. The rise of China as a naval power will inevitably highlight the indispensability of Japan and prompt Tokyo's ascent to a position of greater political and military importance in Northeast Asia.

Recently, Professor Robert Farley drew parallels between military conditions today and those in the 1920s when Japan and the United States challenged the naval supremacy of Great Britain. [1] Noting the economic burden of an arms race, he lauded the 1922 Washington Naval Treaty and recommended a new treaty between India, China and Japan to limit the size of their fleets.

However, Beijing has yet to show any signs of budgetary or economic difficulties in providing for massive naval buildup. Furthermore, considering how internal opposition to naval arms control in Japan in the 1920s ultimately caused Tokyo to withdraw from the treaty in 1934, there is no reason to believe Beijing would abide by, much less initiate, control measures on its own longtime military objectives.

(...) [artículo aquí]

Monday, 5 September 2011




Jayadeva Ranade

Daily News and Analysis, September 5, 2011

The recent downgrading of the US credit rating was received with shock in numerous capitals including Beijing. Amidst reports of a likely global economic downturn, China’s leadership is additionally confronted with growing inflation and rising food prices. Inflation accelerated last month to its fastest pace in three years, with consumer prices rising by 6.5%. Rising food prices were a prime contributor, adding to the leadership’s concern.

There is speculation in Beijing that, prompted by these concerns, China’s top leadership revived a practice suspended since 2003 and met over one and half months this June at the northern seaside resort of Beidaihe. The economy and economic strategy were at the top of their agenda.

China’s leadership is very sensitive to any threat to ‘social stability’. Premier Wen Jiabao bluntly warned in March this year that rising prices, gap between the rich and poor, and corruption could ‘even hit the government’s control of power.’ While it is felt that an annual GDP growth of 7% would generate adequate employment, rising food prices are a more immediate worry. The effort is to keep the Consumer Price Index (CPI) under 4%.

Recent official Chinese reports reveal an increase in prices of consumer items. The price of eggs rose by 16.1% over last year while edible oil prices had risen by 21% in 50 cities across China. Ministry of Commerce data revealed a 38% increase in pork prices from the beginning of the year in 36 major Chinese cities. Chinese authorities were compelled to release stocks from 2,00,000 tons of State-held reserves of frozen pork into markets in eleven provinces. The price rise had another deleterious effect. Farmers producing grain are reluctant to sell crops at current prices and grain buyers report that purchases dropped by 90% this year. The drought of past months has adversely affected rice and cereal crops, compounding problems. Intervening to curb the trend, the People’s Bank of China informed banks that it will begin applying reserve requirements to some of the money that has been channeled into off-balance sheet lending.

The economic situation has, however, sparked a larger debate inside China, including advocating internationalisation or rapid appreciation of the Renminbi (RMB) though that could mean seriously slowing down GDP growth. Late this August, former Director General of the prestigious Institute of World Economics and Politics of the Chinese Academy of Social Sciences, Yu Yongding, criticised China’s large scale purchases of US Treasury Bills.

(...) [artículo aquí]