Saturday, 31 December 2011


China Org


John Ross

China.Org, December 31, 2011

As 2011 draws to an end, it is a suitable moment to look at China's economic prospects for next year. The overall perspective is clear – China's economy will continue to grow strongly, remaining the world's fastest growing major economy, and it will outperform Western pessimists predictions on the upside. This is overall the same prediction this column made for the last two years and results showed this to be factually correct - as opposed to the opposite perspective. Given accurate or inaccurate predictions do not depend on the personal characteristics of those making them, but of different fundamental analyses, what therefore leads to such repeatedly correct and incorrect projections regarding the growth path of China's economy?

The core issue is simple but difficult for many non-Chinese analysts to admit, despite constant confirmation by the facts and repeated falsified predictions of serious slowdown. The core is that statements by Chinese analysts that China has a stronger economic structure to the US and Europe, and that this therefore produces stronger economic performance, is not a boast but actually factually correct. As this stronger character of China's economic structure is not understood by many Western analysts, they therefore systematically, and each year, underestimate China's economic growth potential. However as a difficulty for non-Chinese analysts is that sometimes explanations of this economic strength are posed solely in terms of specifically 'Chinese characteristics,' it is therefore worth spelling out more generally why China has a stronger economic structure than the US and Europe, and how this relates to economic issues that will be faced in 2012.

(...) [artículo aquí]

Friday, 30 December 2011


The Telegraph - India


The Indian economy can no longer build castles in the air

Ashok Mitra

The Telegraph (Kolkotta, India), December 30, 2011

It was going to happen sooner or later; it has now happened. The gross domestic product growth party, all signs indicate, is over. Refusal to recognize this hard reality serves no good to either the government or the puffed-up India Incorporated. Indian economic growth over the past couple of decades is basically the narrative of a dependent economy. The economy has grown because the export sector has expanded at a spectacular pace. Even as late as in the early 1980s, the country’s exports were barely around 5 per cent of the GDP. A restrictive regime tried to keep imports, too, down to the same limit. The stress in policy-making since Independence was on promoting growth via import substitution. The rationale behind that policy had enough of credibility. The country had ample reserves of natural, including mineral, resources; it had almost unlimited supply of labour; it also had an infrastructure of scientific and technological skills which, while still narrowly based, promised to be capable of both improvisation and innovation. It was silly to export raw materials and minerals when these could be utilized at home for industrial processing, thereby propelling growth and creating employment.

(...) [artículo aquí]

Thursday, 29 December 2011


Today SG


But while the latter is in better shape, neither economy is likely to implode on its own

Stephen S Roach

Today, Dec 29, 2011

Asia's developing and newly industrialised economies grew at an 8.5 per cent average annual rate over 2010-11 - nearly triple the 3 per cent growth elsewhere in the world. If China and India are next to fall, Asia would be at risk, and it would be hard to avoid a global recession.

In one important sense, these concerns are understandable: Both economies depend heavily on the broader global climate.

China is sensitive to downside risks to external demand - more relevant than ever since crisis-torn Europe and the United States collectively accounted for 38 per cent of total exports in the past year. But India, with its large current-account deficit and external funding needs, is more exposed to tough conditions in global financial markets.

(…) [artículo aquí]

Wednesday, 28 December 2011




Janet Ong and Robyn Meredith

Bloomberg, December 28, 2011

Taiwan President Ma Ying-jeou said his rapprochement with China will encourage other nations to strengthen trade with the island and make it less dependent on the mainland, rebutting opposition criticism that he’s left the economy more vulnerable.

“Taiwan has transformed its role from a troublemaker to a peacemaker,” Ma, vying for a second four-year term in Jan. 14 elections, said in an interview in his Taipei office. “We’re seeing more windows and doors being opened for Taiwan because of improved cross-strait relations. They have lowered their concerns in developing relations with us, the logic being: If Beijing can develop better relations with Taiwan, why can’t we?”

Ma’s lead with voters has narrowed as slower growth in the export-reliant economy deepens concern over a wealth gap the opposition blames in part on Taiwanese jobs going to the mainland. Victory at the polls may turn on how close Taiwanese want China ties to be, said Alexander Huang, a professor of strategy and war-gaming at Tamkang University’s Graduate Institute of International Affairs.

With the impact of Europe’s debt woes contributing to the weakest gain in exports in two years last month, Ma said in the Dec. 23 interview that he expects the crisis to worsen in the first quarter. In the hour-long session, he called on China to remove missiles still pointed at Taiwan, said his administration isn’t considering investing in Chinese bonds and cautioned against overreacting to the death of Kim Jong-Il in North Korea.

(...) [artículo aquí]

Tuesday, 27 December 2011




Rohit Viswanath

DNA, December 27, 2011

Japanese Prime Minister Yoshihiko Noda arrives in New Delhi today to participate in the Sixth Annual Summit between the two countries. The visit comes at a crucial juncture in contemporary geopolitics. It closely follows the first trilateral meeting between the United States, India and Japan held in Washington, DC on December 19. The Washington meet was clearly aimed at containing China, which is being perceived as becoming increasingly aggressive in the Indo-Pacific, a region of great significance to the three countries. Further, the death of Kim Jong Il, the North Korean leader who led the country to become an intimidating nuclear power, has led to further uncertainty in the region.

With the West reeling under severe financial crisis, Asia is being looked upon as the propeller of the global economy. It now accounts for 35% of the world’s GDP, up from less than 20% in 1980. Over the last 30 years, developing Asia has surpassed the rest of the world in recording a phenomenal GDP growth of 7.2 per cent. Japan perhaps may well be the fastest growing developed economy in 2012.

India and Japan have strengthened bilateral relations in recent years through new initiatives in the spheres of economic and cultural linkages to defence and security co-operation. It is hence no surprise that Japan and India’s leaders will devote considerable attention to reviewing this Strategic and Global Partnership. The two have shared interests in maintaining the security of sea lanes from Djiboiti in the Horn of Africa to Port Blair all the way up to the East China Sea. Cooperation for fighting international crime, terrorism, piracy and proliferation of weapons of mass destruction is of vital importance to them.

(…) [artículo aquí]

Monday, 26 December 2011




Rajeev Srinivasan

Firstpost, December 26, 2011

There have been a number of events, including a few unexpectedly dexterous moves by India, in the recent past that suggest a new set of strategic imperatives may well be emerging in Asia. In sum, there has been, for the first time, a mild pushback against the rampaging Chinese. But the Chinese may yet have the last laugh, though.

The Indian role in all this is a little surprising, but welcome nonetheless. Whether India suddenly grew a bit of a spine – after 50 years of supine “bhai-bhai” drivel – or whether Uncle Sam gave it some Dutch courage through pep-talk is not clear. Nevertheless, it is a welcome move, because of the usual Chinese modus operandi: make outrageous claims; if challenged, retreat; if not, push the claim further.

There are two aspects to all this: one, is there anything tangible and real about the moves, or is it all smoke and mirrors? And two, the importance of marketing and branding that Indians seem blissfully ignorant about, and implications for soft power.

(...) [artículo aquí]

Sunday, 25 December 2011

INDIA’S ECONOMY, 1991-2011

The Times of India


Srivatsa Krishna

The Times of India, December 25, 2011

An unprecedented fiscal deficit heading northwards of 5.4% of GDP; probably the highest ever-current account deficit in India's modern economic history; a crisis in the Middle Eastand rising oil prices; huge governance and institutional challenges with a weak minority government, along with a paralysis of decision-making and reforms.

Did you think i was talking about 2011? No! I was actually talking about 1991; exactly 20 years ago and the similarities couldn't be eerier or starker. So is India's economic miracle getting over?

From 1991 till today the progress has been remarkable. An infrastructure-constrained, foreign capital inflows-starved, democracy-adjusted economy moved to a 8-9% rate of growth, reduced poverty from about 46% to 31%; savings rate shot up from 22% to 36%, and per capita income moved from $300 to $1800 during these two decades. Not at all an unimpressive achievement, considering the fact that the period has seen five, 24 or 25-party coalition governments, and yet the direction of reforms so far has been by and large progressive.

(...) [artículo aquí]

Friday, 23 December 2011


Rediff News logo


China realises that its maritime strength will give it the strategic leverage it needs to emerge as the regional hegemon and a potential superpower.

Harsh V Pant

Rediff News, December 23, 2011

So finally it is out in the open. China will be setting up its first military base abroad in Seychelles to "seek supplies and recuperate" facilities for its Navy.

Seychelles has defended its decision by suggesting that it has invited China to set up a military base to tackle piracy off its coast and Beijing has played it down by underlining that it is standard global practice for naval fleets to re-supply at the closest port of a nearby state during long-distance missions. But there should be no ambiguity for the rest of the world: Chinese footprint in the Indian Ocean has got bigger and will continue to get bigger in the coming years.

China's foreign policy thinkers and political establishment have long been trying to convince the world that Beijing's rise is meant to be a peaceful one, that China has no expansionist intentions, that it will be a different kind of great power. Of course, the very nature of power makes this largely a charade, but more surprising is that western and Indian liberals have tended to take these assertions at face value. There is an entire industry in the West as well as in India that would have us believe that China is actually a different kind of a great power and that if the west could simply give China a stake in the established order, Beijing's rise would not create any complications.

(...) [artículo aquí]

Thursday, 22 December 2011


El Pais OK


Pablo Bustelo

El País, 22 de diciembre de 2011

La muerte de Kim Jong-il abre un periodo de transición potencialmente peligroso no solo para la península coreana, sino para toda la región del noreste de Asia y sus delicados equilibrios de seguridad. Las razones son bien conocidas. En primer lugar, las ambiciones nucleares de Corea del Norte, que, de mantenerse, pueden generar proliferación en la zona, además del riesgo, siempre presente, de accidentes en instalaciones vetustas. En segundo término, el comportamiento agresivo del régimen de Pyongyang, como se vio el año pasado, con el hundimiento de la corbeta Cheonan (46 muertos) y el bombardeo de la isla de Yeonpyeong (4 muertos).

La desaparición del Querido Líder en 2011 no es comparable a la de Kim Il-sung en 1994. El país es más pobre y más inestable. El sucesor de entonces tenía 53 años y llevaba 14 preparándose para tomar las riendas del país. El de ahora, de 29 años, fue nombrado sucesor en septiembre de 2010 y no tiene ninguna experiencia política o militar.

(...) [artículo aquí]

Wednesday, 21 December 2011


Globe and Mail 2


Gordon Houlden

The Globe and Mail, December 21, 2011

The passing of Kim Jong-il constitutes a political earthquake in the Democratic People’s Republic of Korea. The North Korean transition is being accompanied by the ritualized mourning that followed the death of his father, Kim Il-sung, in 1994. But this period immediately following Kim Jong-il’s death is also being closely scrutinized by foreign ministries and intelligence agencies, who will be alert to the implications for the stability of the Korean Peninsula given the million-strong Korean People’s Army, whose nuclear and missile capacity threatens South Korea, Japan and U.S. forces in East Asia.

Kim Jong-il was never as robust as his father, who served 46 years as top leader in North Korea until being named “Eternal President” in the DPRK constitution following his death. Kim Jong-il never achieved the same profile as his father, either within North Korea or internationally, but neither was he pushed aside by party or military rivals as many observers had expected he would be.

North Korea’s achievement of nuclear weapons status took place on Kim Jong-il’s watch, and perhaps more remarkably, a regime that many had predicted would collapse in the early 1990s following the collapse of the Soviet Union managed to survive, outlasting almost all communist states.

What Kim Jong-il never managed to do was to undertake a reform of North Korea’s feeble economic base. During visits to North Korea over two decades, I found little interest in reform of any sort. China repeatedly organized tours for him of China’s reformed state enterprises, and lively commercially focused cities, but with no significant or successful subsequent uptake by Pyongyang.

Surrounded by states that are either prosperous or en route to prosperity, North Korea maintained its brittle stability through self-imposed isolation from the international community. North Koreans are dependent on the scraps of information that filter through the official media, and are closely supervised by agents of the ruling Workers’ Party of Korea.

(...) [artículo aquí]

Tuesday, 20 December 2011


Reuters DEF


Jack Kim

Reuters, December 20, 2011

SEOUL (Reuters) - Real power in North Korea now probably belongs to a coterie of advisers following the death of Kim Jong-il, not his youngest son, an untested man in his 20s who has been anointed the "Great Successor."

These advisers will decide whether North Korea launches military action against South Korea to strengthen the succession around Kim Jong-un -- or seeks a peaceful transition.

Confucian respect for age and the influence of the military means the younger Kim lacks the untrammelled authority of his father or grandfather, North Korean founder Kim Il-Sung.

The most powerful adviser is Jang Song-thaek, 65, brother-in-law of Kim Jong-il.

Jang is a survivor of the bloody tradition of purge and political rehabilitation that kept the two elder Kims in power for more than six decades.

"Jang has played a considerable role during Kim Jong-il's illness of managing the succession problem and even the North's relations with the United States and China," said Yang Moo-jin of the University of North Korean Studies.

"Jang is in overall charge of the job of making it formal for Kim Jong-un to be the legal and systematic leader by pulling together the party and the military."

Jong-un is Kim Jong-il's third known son and was given official titles only last year. He was hailed by state media this week as the "Great Successor" to his father, who died on Saturday of a heart attack.

Jang had the full backing of his brother-in-law, who named him to the National Defence Commission in 2009, the supreme leadership council Kim Jong-il led as head of the military state.

That appointment was part of a flurry of moves Kim Jong-il made following a stroke in 2008 which probably brought home the reality that, unlike his father at his death in 1994, he was unprepared for a trusted son to take over.

The commission has been the pinnacle of power in North Korea and which Kim had used to preach his own version of political teaching called Songun, or "military first."

The naming of Jang as a vice chairman of the commission effectively catapulted him to the second most powerful position in the country.

(...) [artículo aquí]

Monday, 19 December 2011


WashPost logo3


Associated Press

The Washington Post, December 19, 2011

SEOUL, South Korea — Kim Jong Il, the mercurial and enigmatic North Korean leader whose iron rule and nuclear ambitions dominated world security fears for more than a decade, has died. He was 69.

Kim’s death 17 years after he inherited power from his father was announced Monday by the state television from the North Korean capital, Pyongyang. The country’s “Dear Leader” — reputed to have had a taste for cigars, cognac and gourmet cuisine — was believed to have had diabetes and heart disease.

North Korea has been grooming Kim’s third son to take over power from his father in the impoverished nation that celebrates the ruling family with an intense cult of personality.

Kim’s longtime pursuit of nuclear weapons and his military’s repeated threats to South Korea and the U.S. have stoked fears that war might again break out or that North Korea might provide weapons of mass destruction to terrorist movements.

South Korea put its military on “high alert” and President Lee Myung-bak convened a national security council meeting after the news of Kim’s death. The two Koreas remain technically in a state of war more than 50 years after the peninsula’s Cold War-era armed conflict ended in a cease-fire.

Kim is believed to have suffered a stroke in 2008 but he had appeared relatively vigorous in photos and video from recent trips to China and Russia and in numerous trips around the country carefully documented by state media.

(...) [artículo aquí]

Sunday, 18 December 2011




Chang Jae-soon

Yonhap News

South Korean President Lee Myung-bak urged Japan Sunday to "muster up courage" and resolve long-running grievances over Tokyo's wartime sexual enslavement of Korean women, calling the issue a "stumbling block" to the improvement in relations between the two countries.

Lee made the appeal during summit talks with Japanese Prime Minister Yoshihiko Noda held in this ancient Japanese city of Kyoto under the shadow of fresh tensions over the issue of the so-called "comfort women."

Historians say that tens of thousands of Asian women, mostly Koreans, were forced to work at front-line brothels for Japanese soldiers during the war. Korea was a colony of Japan from 1910 to 1945.

"South Korea and Japan should become true partners for peace and stability in the region, and for that, we need to have the genuine courage of resolving as a priority the issue of military comfort women, which has been a stumbling block between the two countries," Lee said at the start of the meeting.

(...) [artículo aquí]

Saturday, 17 December 2011




Lan Lan

China Daily, December 17, 2011

BEIJING - China is set to unveil a plan to impose controls on total energy consumption, said Zhang Ping, director of the National Development and Reform Commission (NDRC) on Friday.

The new plan, together with an energy-intensity target that has already been set for the period between 2011 and 2015, will provide policy guidelines for energy conservation and the reduction of emissions, said Zhang, without outlining a timetable.

"We need to achieve a better balance between economic growth, economic transformation, energy conservation and emissions reduction," said Zhang, at the NDRC's annual work meeting, which came on the back of an extended two-week conference on climate change, held in Durban, South Africa.

In Durban, emerging nations such as China were put under greater pressure to shoulder more responsibility for cutting emissions.

"It will be an unavoidable dilemma that China will have to deal with in the coming years - continuing the processes of industrialization and urbanization while coming under pressure to act more in cutting emissions," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

China has set a target of cutting energy intensity - which is calculated as units of energy for each unit of GDP - by 16 percent by 2015 from the 2010 level.

(...) [artículo aquí]

Friday, 16 December 2011


Economic Times logo OK


India's economy has entered a phase of deteriorating growth-inflation equilibrium, says Richard Iley , chief Asia economist with BNP Paribas. In an exclusive interview to Rishi Shah , Iley says 9-10% growth is now history and India should brace itself for a 6.5% GDP growth in the current fiscal.

The Economic Times, December 16, 2011

What is your view on India's growth story?

In a way, it is the essence of my latest 'Eye on the Tiger' report. I think the underlying story is that the growth/inflation trade off has deteriorated quite appreciably. My concern is that foreign investors haven't fully priced in this deterioration in the economy's performance. I would quantify that by saying that before the crisis of 2008-09, GDP was growing by roughly 15%, with the split between growth and inflation being 9-10% for growth and 4-5% for inflation.

Clearly, the days of 9-10% growth are in the rear view mirror and we are seeing a marked deterioration in inflation performance. The new trade off for Indian growth and inflation could be a 7-7 split. Even though the GDP would still be growing at a very rapid 15%, the growth/inflation trade off would have significantly deteriorated. The trade off may be worse in the short term.

What is your forecast of GDP growth in the current year?

GDP growth in the September quarter fell to 6.9%. This is likely to be trimmed further when the export data is revised. A range of indicators suggest that the economy lost further momentum in the last three months of 2011. My base assumption is that second half growth will average about 6%, maybe a little lower. That would leave us with a 6.5% average for the whole year.

(...) [artículo aquí]

Thursday, 15 December 2011


China Daily 3


China Daily, December 15, 2011

Catherine Shu-Ling Tan, Steffen Dyck and Syetarn Hansakul

China's financial integration into the world economy progressed rapidly between 2004 and 2010, mostly through accumulation of reserve assets and direct investment. A study of China's international investment position, an important holistic indicator of the extent of its financial integration into the world, sheds light on the strategy and motivation behind China's growing importance in the global financial system. 

China's overseas assets and liabilities both grew strongly during 2004-2010. Its net foreign assets increased more than six-fold from $276.4 billion in 2004 to $1.79 trillion in 2010, which translates into 36.5 percent compound annual growth rate (CAGR). 

This was primarily driven by the growth of reserve assets, which increased at 29.5 percent CAGR during the same period. China ranks among the world's major creditors in contrast to the United States, which had an external net debtor position of $2.47 trillion in 2010. 

By component, reserve assets represent the lion's share of China's total assets, with the share fluctuating between 65 and 70 percent. The second largest component on its assets side is "other investment", which comprises trade credits, loans, currency and deposits and other assets, accounting for 16 percent of the total assets in 2010. 

The stock of outward portfolio investment (6 percent of total assets) exceeded that of inward portfolio investment. In the case of direct investment, the opposite was true: the stock of inward foreign direct investment (FDI) far exceeded outward direct investment (ODI), which made up 7.5 percent of the total assets. 

The profile of China's international investment position can be characterized as "long debt, short equity". While this phenomenon is not unusual among emerging markets with capital flow restrictions for residents, the return differential between equity and debt carries a cost. Specifically in China's case, its sizeable holdings of foreign governments' debts mean that it pays more on its equity liabilities (that is, inward FDI) than it earns on its debt assets. In addition, China is vulnerable to credit risks such as the downgrade of developed markets' sovereign debt ratings. 

(...) [artículo aquí]

Wednesday, 14 December 2011


International Business Times


Koh Gui Qing and Zhou Xin

International Business Times, December 14, 2011

(Reuters) China pledged to guarantee growth in the face of an "extremely grim" outlook for the global economy in 2012, as its annual policy-setting conference closed on Wednesday with a series of commitments to deliver economic stability.

Laying out a blueprint for the world's second-biggest economy in the year ahead, Beijing promised to keep monetary policy "prudent" and fiscal policy "pro-active" while ensuring stable consumer prices -- language broadly in line with previous commitments.

But it was China's view on the global economic backdrop that was a sign of the policy challenge that could lie ahead.

"Looking into next year, the trend in the global economy on the whole is grim and complicated. Uncertainties are rising around a recovery in the world economy," said a statement published on the official Xinhua news agency after the end of the annual conference.

Beijing's wish to downplay those risks domestically was apparent in all the economic plans outlined, which broadly endorsed a decision by China's top leaders last week to avoid big policy changes before a critical leadership succession in 2012 that will see the nation's top two leaders retire.

"Stability means to maintain basically steady macro-economic policy, relatively fast economic growth, stable consumer prices and social stability," one of several statements carried by the official Xinhua news agency said.

(...) [artículo aquí]

Tuesday, 13 December 2011




Daniel Ten Kate

Bloomberg, December 13, 2011

Myanmar’s government granted legal status to Aung Sang Suu Kyi’s political party in a further sign of reforms before planned by-elections in which the democracy advocate will run for parliament for the first time.

Suu Kyi’s National League for Democracy plans to submit its policies and constitution to authorities in Naypyidaw, Myanmar’s capital, after being permitted to register, party spokesman Nyan Win said by phone. The NLD voted last month to formally re- register after boycotting 2010 elections won by allies of the former ruling junta.

“We received permission to register and we decided to run in the by-elections,” Nyan Win said by phone from Yangon, the former capital. “It’s a good sign.”

Suu Kyi’s participation in yet-to-be-scheduled elections would build on President Thein Sein’s efforts to ease political repression and end the country’s international isolation. Secretary of State Hillary Clinton said Dec. 2 she was “cautiously hopeful” after completing the highest-level U.S. visit to Myanmar in more than five decades.

Derek Mitchell, a special U.S. envoy to Myanmar, met with Chinese foreign ministry officials yesterday in an effort to coordinate policies. U.S. sanctions in place for more than two decades have left Myanmar dependent on neighbors China, India and Thailand, which have poured more than $25 billion into ports, power plants, and oil and gas pipelines.

(...) [artículo aquí]

Monday, 12 December 2011


The Express Tribune


Pakist­an is creati­ng condit­ions that could produc­e politi­cal and social upheav­al in the not-too-distan­t future.

Shahid Javed Burki

The Express Tribune, December 12, 2011

A developing country without robust economic growth cannot know social peace and political tranquillity. This is especially so, if the country also has a high rate of population increase. This is certainly the case with Pakistan. Currently, the rate of GDP increase is stuck in the three to 3.5 per cent range, while the country’s population is still increasing at a rate of close to two per cent a year. This means that the income per head of the population is growing at a rate of no more than 1.5 per cent per annum. The rate of increase could be as low as one per cent a year. Since the distribution of income is becoming increasingly unequal, much of the growth in national income is being captured by the rich and the very rich. The poor and the not-so-poor are left with very little. There cannot be any doubt that the number of people living in absolute poverty is increasing at a rate higher than the rate of increase in population. Therefore the proportion of the poor in the population is increasing — perhaps increasing very rapidly. Pakistan is creating conditions that could produce political and social upheaval in the not-too -distant future.

The only way to address this problem is to move the economy forward at a rate much higher than the one at the present. This could be done but, it will need serious reflection on the part of policymakers and hard work by people in power. It would not be too ambitious to aim at a rate of growth twice the present rate — to set the goal at 6.5 to 7 per cent a year. This leads me to ask two obvious questions. Is such acceleration possible? If it is possible, how soon can this target be reached? I will take up the second question first.

My own six-year experience with Latin America at the World Bank, from late 1993 to late 1999, left me with some understanding about how fast economies that had faltered can recover. This can happen once policies are set right and once the right kind of people begin to walk the corridors of power. I saw the economies of Argentina, Brazil and Mexico recover rapidly when the policymakers began to pursue the right set of objectives with the right sets of policies. In all three cases, the command of the economy was taken over by new groups who could quickly reorient their economies. In other words, sluggish economies can bounce back reasonably quickly.

(...) [artículo aquí]

Sunday, 11 December 2011




Kim Chipman and Alex Morales

Bloomberg, December 11, 2011

Developing nations led by China and India pledged they’d work toward an agreement that would limit their fossil fuel emissions for the first time, the biggest advance in the fight against global warming in 14 years.

Envoys from more than 190 nations also extended the Kyoto Protocol, the only ratified treaty limiting greenhouse gases. They will develop document with “legal force” by 2015 that would curb pollution for all nations, according to a text adopted today in Durban, South Africa.

The move breaks a division enshrined in the United Nations- led discussions since 1992 that allowed the poorest nations to escape commitments on burning coal and oil while requiring industrial nations to clean up the atmosphere. That rift prevented the U.S. from ratifying Kyoto, which is the heart of the international effort to protect the environment.

“Historic is the word,” Grenadian ambassador Dessima Williams, lead negotiator for a coalition of 42 island nations, said in an interview. “The idea that we got everybody to agree to take some form of legal commitment is a major outcome.”

The talks dragged more than 28 hours past their scheduled Dec. 9 finish as a division emerged between a coalition of more than 120 nations backing a road map to a legally-binding deal and China and India, which sought weaker language on the eventual legal form of the pact. It was the longest meeting since the climate talks began in 1992.

(...) [artículo aquí]

Saturday, 10 December 2011


Reuters DEF


Don Durfee and Nick Edwards

Reuters, December 10, 2011

BEIJING (Reuters) - The managers of Chongqing Changan Automobile could be forgiven for wishing it was 2008 again.

China's No. 4 car maker was one of the obscure winners of Beijing's decision to release a flood of cash into its economy during the darkest moment of the global financial crisis.

But when the stimulus stopped, particularly incentives for car buyers earlier this year, so did the company's runaway growth.

After car sales growth of 46 percent in 2009 and 32 percent in 2010, the maker of the squat Ben Ben mini car and Changan Star van saw a modest 3 percent rise in the first 10 months of 2011. It also watched its share price plunge.

If Changan is hoping for a repeat of the 4 trillion yuan that China spent on roads and rails and other projects, it may be in for a long wait.

"China's leaders understand that safeguarding growth is very important, but in 2008 the government had more policy tools they could use," said Liang Youcai, a senior economist at the State Information Centre, a top government think-tank in Beijing.

"They won't unveil a large-scale economic stimulus anywhere close to the 4 trillion yuan programme."

Beijing has reasons to steer clear of big stimulus, including the need to avoid firing up inflation, which remains relatively high.

A local government debt crisis is an awkward side effect of the government incentives in 2008, making stimulus a loaded word.

And a looming 2012 political transition that will see top leaders step down, leaves policymakers aiming for stability, not a big fiscal injection of cash into the economy.

Furthermore, China may have the fiscal leeway to do enough for the economy anyway, with the "fine tuning" that Premier Wen Jiabao has said will keep its economic engine running smoothly, analysts say.

(...) [artículo aquí]

Friday, 9 December 2011




Elaine Kurtenbach

Associated Press, December 9, 2011

SHANGHAI (AP) — China's economy is losing steam, with industrial production dropping to its slowest pace in two years last month and inflation also cooling — raising the likelihood of fresh moves to keep growth on track.

A decline in inflation to 4.2 percent in November from 5.5 percent the month before, reported Friday, will allow authorities more flexibility in easing policies that were imposed to cool the overheated economy but now may pose a threat to growth.

The National Bureau of Statistics reported that industrial output rose 12.4 percent in November, its slowest increase in two years.

China's ability to help offset the malaise in Europe and the U.S. will depend on its ability to support growth while avoiding a relapse into higher inflation that undermines the economic gains underpinning support for the ruling Communist Party.

A recent surge in labor unrest and public dissatisfaction over the widening gap between rich and poor, corruption, pollution and other issues have added to jitters as the party prepares for a transition next year to a new generation of leadership.

Moves toward an easier monetary stance may come as early as next week at an annual economic work conference in Beijing that will set policy for the coming year. But the support will be tempered by concern that too much stimulus could touch off another round of excess investment and inflation.

In one indication of that risk, the statistics bureau reported retail sales rose 17.3 percent year-on-year in November, up slightly from October, suggesting sustained demand in China's domestic market even as exports to crisis-stricken Europe falter

(...) [artículo aquí]

Thursday, 8 December 2011




David J. Lynch

Bloomberg, December 8, 2011

Most global investors predict China will face a banking crisis within the next five years, paring their appetite for the nation’s shares and eroding confidence in its leadership, a Bloomberg Global Poll indicated.

Sixty-one percent of respondents said they anticipate a crash in the financial industry by late 2016, and only 10 percent were confident China’s banks will escape trouble, according to the quarterly poll of 1,097 investors, analysts and traders who are Bloomberg subscribers conducted Dec. 5-6.

Evidence of slowing growth in China -- including the weakest manufacturing performance in more than two years, falling home sales and ebbing export growth -- has stoked concern that non-performing loans will climb in the world’s second-largest economy. The risk is a legacy of a record 17.6 trillion-yuan ($2.8 trillion) lending boom unleashed by Premier Wen Jiabao in 2009-2010 amid the global recession.

“The deep-seated misallocation of resources, particularly in the real estate and banking sectors, will lead to a combination of political and economic instability,” says Lance Depew, managing director of UPI Management LLC in Santa Barbara, California, and a participant in the poll. “I expect further macroeconomic weakness and sub-par returns in the stock market for the foreseeable future.”

(...) [artículo aquí]

Wednesday, 7 December 2011




AFP, December 7, 2011

BEIJING — Chinese and US defence officials opened military talks in Beijing on Wednesday after ties were strained by American arms sales to Taiwan and a planned US troop deployment in Australia.

The talks, led by US undersecretary of defence for policy Michele Flournoy and her Chinese counterpart Ma Xiaotian, come a day after China's President Hu Jintao urged the navy to prepare for military combat.

They are the first ministry-level talks between the two nations since September, when Washington announced a $5.85 billion upgrade to Taiwan's fleet of F-16 fighter jets, angering Beijing, which considers the island a breakaway province.

China's official Xinhua news agency said military relations between the two powers, the situations in the Korean Peninsula and the South China Sea and the sale of US arms to Taiwan would be on the agenda.

Several Asian nations have competing claims over parts of the South China Sea, a strategically vital area believed to encompass huge oil and gas reserves, while China claims it all.

One-third of global seaborne trade passes through the maritime area and Vietnam and the Philippines have accused Chinese forces of increasing aggression there, ratcheting up tensions in the region.

(...) [artículo aquí]

Tuesday, 6 December 2011


Bloomber - BWok



Bloomberg BusinessWeek, December 06, 2011

Asian economies are facing “much greater downside risks” now because of the possibility of a recession in the U.S. and Europe and the threat of destabilizing capital flows, the Asian Development Bank said.

The biggest challenge for policy makers in emerging East Asian nations is to safeguard growth against the threat of another global economic crisis, the Manila-based lender said in its Asia Economic Monitor report today. Uncertainty over the world economy means officials in the region must have “sufficient flexibility” to adjust policies quickly, it said.

“The cautiously optimistic outlook for emerging East Asia is subject to much greater downside risks now than just a few months ago,” the ADB said. “The global economic recovery could flounder if the euro zone and the U.S. fall back into recession, causing another global financial crisis. Large and destabilizing capital flows could complicate the region’s macroeconomic management and jeopardize economic growth.”

Asian policy makers have shifted their focus to shielding growth, rather than stemming inflation, as Europe’s debt woes and a struggling U.S. economy increase the risk of another global recession. Australia lowered borrowing costs for a second straight month today and Indonesia and Thailand cut interest rates last month, while the Philippines in October unveiled a fiscal stimulus package to spur the economy.

Asia stocks fell for the first time in seven days today after Standard & Poor’s put 15 European nations on watch for potential ratings downgrades. The MSCI Asia Pacific Index retreated 1.3 percent as of 1:13 p.m. in Tokyo.

(...) [artículo aquí]

Monday, 5 December 2011




Zhou Xin and Nick Edwards

Reuters, December 5, 2011

China's services sector cooled in November to its weakest growth in three months, an HSBC purchasing managers' index showed on Monday, the latest data portraying an economy slowing quickly and in need of policy support.

The index fell to 52.5, a sharp decline given that October's reading was 54.1 -- the highest in four months -- though the index remains above the 50 level that separates expansion from contraction in the sector.

Expectations for new business dropped to their lowest level in three months too, but remained firmly above 50.

"With price pressures easing further, Beijing can and should use policies that are targeted on small businesses and service sectors to keep GDP growth at above 8 percent for the coming year," Qu Hongbin, HSBC's chief China economist, said in a statement.

China's official PMI for its non-manufacturing sector, released on Saturday, fell to 49.7 in November from 57.7 in October, the China Federation of Logistics and Purchasing said.

The readings mirror similar weakness in the country's giant manufacturing sector and underline expectations that Beijing will ease monetary policy further to cushion the blows of the global economy.

PMI data in the past week has shown that both domestic and export orders are weakening, helping explain the central bank's decision last week to cut bank reserve requirements for the first time in three years.

The move to free up cash was a signal that the central bank was shifting toward loosening monetary policy to support the economy, which is widely expected to grow next year at less than 9 percent for the first time in a decade, economists said.

(...) [artículo aquí]

Sunday, 4 December 2011


The Khaleej Times


Jim O'Neill

The Khaleej Times, December 4, 2011

Wednesday, November 30 was the 10th anniversary of when I first mentioned the Bric acronym when I published GS Global Economics Paper No: 66, “Building better global economic Brics.” In this week’s Viewpoints I decided to highlight some of the major observations involving the Bric development over the past decade, as well as some key issues related to ongoing recent events.

The 2001 paper didn’t create a lot of attention at the time. It was not really until after the publication in 2003 of GS Economics Paper No: 99, “Dreaming with Brics: The path to 2050,” authored by Dominic Wilson and Roopa Purushothaman, that the theme really caught on. The fact that many large multinationals started to embrace the Bric concept around this time and, of course, the happiness of the four Bric countries themselves, helped give the theme such a push.

(...) [artículo aquí]

Saturday, 3 December 2011


China Org


By Andy Xie, December 3, 2011

There are five reasons why participation in any bailout plan for the Eurozone area is not in China's best interest.

First, the fiscal payback is not good. So far, no fruit has been borne by China's financial adventures in overseas markets. Investments in the Blackstone Group, Morgan Stanley and Rio Tinto Group have all failed. Since state-owned financial institutions mix business and politics, decision-making is often arduous. These failures have proven, thus far, that China's state financial system is not capable of selecting and operating overseas investments.

Secondly, Europe will not repay China's assistance politically. Although multinational corporations like BMW, Mercedes-Benz and Carrefour make huge profits in China, the European media and politicians blame China for their unemployment woes. The European Union's refusal to recognize China's market economy is solid proof of prevalent attitudes towards China in the region. The EU's discontent with China is growing with the worsening of Eurozone debt crisis. Assistance in a bailout may result in further worries about China's true intentions, harboring even stronger opposition from critics.

Thirdly, China's assistance would greatly weaken German influence in Europe, and imbed China in the quagmire of European politics. China needs at least ten more years before it will be poised take on issues related to handling of European affairs.

(...) [artículo aquí]

Friday, 2 December 2011


Economic Times logo OK


The Economic Times, December 2, 2011

The Chinese economy is headed for troubled waters, with its manufacturing sector shrinking in November for the first time in nearly three years, in a fresh sign of a further economic slowdown that may prompt it to loosen its monetary policy.

The purchasing managers' index (PMI), a gauge of manufacturing activity, tumbled to 49 from 50.4 in October, according to the China Federation of Logistics and Purchasing.

A PMI under 50 indicates a contraction of manufacturing activity, a situation that hasn't been seen in China since February, 2009.

The sub-index for export orders fell sharply to 45.6 in November from 48.6 in October, indicating that the spreading euro zone debt crisis and weakened demand from the United States were hurting growth in the world's second-largest economy.

Some analysts said a lull in China's property market also contributed to the economic slowdown, with both prices and sales dropping significantly following the last round of credit tightening.

“It reinforces our view that China's economy will fall sharply in the months ahead as the property sector has reached a tipping point," Zhang Zhiwei, an economist with Nomura Securities, said.

The risk of a sharp deterioration of GDP growth in the first quarter next year is rising significantly, he told state-run China Daily today.

The poor PMI data released on Thursday came one day after the Chinese government slashed the reserve ratio for the country's commercial lenders to improve money supply.

“The message is clear: the economy is slowing much faster than expected and the government has stepped into the ring. The loosening campaign has begun," Alistair Thornton, an analyst with IHS Global Insight, was quoted as saying by the China Daily

(...) [artículo aquí]

Thursday, 1 December 2011




SouthEastAsiaRealTime, December 1, 2011

Businesses in Myanmar are beginning to realize they may have a looming problem on their borders — and this time it’s not cheap goods from China.

As the country’s economy begins to open up further, it is clear to many entrepreneurs here that decades of isolation have led them to lag far behind competitors in places such as Thailand and Singapore. That’s worrying to some, as firms from across the region, including Japan and South Korea, step up their presence here, especially after the severe floods that have shut down much of Thailand’s manufacturing base in the last few months. There also are some Europeans and Americans waiting in the wings to do more business in the country if Western sanctions against the Myanmar government are eventually dropped.

“A lot of us feel we might be swept away — we can’t compete because we’ve been locked away for so long,” said Maung Maung Lay, vice president of the Federation of Chambers of Commerce and Industry in Yangon and the proprietor of a business that distributes medical equipment. “We might all just end up being the employees of foreign companies.”

He says there is little risk of a backlash against the globalization of Myanmar’s economy, though, mainly because most people realize Myanmar desperately needs investment, even if it creates some growing pains.

“It’s part of what we’ve been waiting for — to become part of the international family of nations instead of relying too heavily on one country, China, for support, which is not healthy,” Dr. Maung Maung Lay said. “We need to improve our human development indices, and foreign investment can help us.”

With U.S. Secretary of State Hillary Clinton visiting Myanmar this week, anticipation is growing that long-standing sanctions against the country’s military-backed rulers will sooner or later be dropped, though many dissidents remain wary of easing them too soon. U.S. officials have made clear they’re not ready to ease just yet, but they’ve been pleasantly surprised by a series of reforms this year, including easing of press restrictions and new laws to allow protests and labor unions.

(...) [artículo aquí]