Wednesday 29 February 2012

THE PHILIPPINES IN 2050

Inquirer Phil

THE PHILIPPINES IN 2050

Fernando Fajardo

The Inquirer, February 29, 2012

From number 43 in 2010, the Philippine economy will become the 16th biggest in the world in 2050. This forecast is from HSBC’s report on “The World in 2050” released last January this year. Is this possible? Can we make it? What does it mean being in number 16? The HSBC itself has some answer if it is possible or not: “We openly admit that behind these projections we assume governments build on their recent progress and remain solely focused on increasing the living standards for their populations. Of course, this may be an overly glossy way of viewing the world, and we conclude there are a number of reasons our ‘World in 2050’ could turn out a little different.”

There are many possible reasons why its forecast may go nowhere? But before that, let us look at how the HSBC arrived at the Philippines becoming number 16 in 2050.

At the outset, HSBC grouped the country into three categories—the fast economies, growth economies and stable economies. The fast-growth economies are those that are at a low level of development but which have sufficiently strong underlying fundamentals so that they catch up with more developed economies with similarly strong fundamentals. The HSBC assigned the Philippines in this category together with China, India Malaysia and Vietnam, among others. The “growth” group, which are also set to outperform many of the developed world economies, includes Indonesia and Thailand, along with Pakistan because of sheer size of its working population. The stable group of countries offer more limited growth prospects. These largely include the high growth, ageing economies in the developed world, of which Europe fares particularly badly.

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Tuesday 28 February 2012

CONSUMPTION-BASED GROWTH IN CHINA

China Daily 3

CONSUMPTION TO LEAD GROWTH

Chi Fulin

China Daily, February 28, 2012

Urbanization and restructuring will boost residents' spending and promote more sustainable development

It is China's short-term policy goal as well as its medium and long-term strategic aim to reverse the imbalance between investment and consumption as soon as possible and establish a consumption-dominated development pattern.

China's economic prospects will to a large extent be decided by how successful it is in achieving the transformation to a consumption-dominated development pattern. If the process is smoothly pushed forward in the coming five to 10 years, it will have historical consequences for the country's successful medium and long-term development and will play a big role in promoting global economic rebalancing, recovery and growth.

China's economy is expected to continue growing in the coming decade, despite the probability of continuing turbulence and contraction in the international market. In the short term, investment is still likely to spur the country's economic growth, but investment can only be a long-term driver for growth if it is effectively converted into consumption. So short-term investment must serve medium and long-term consumption. Any investment that sacrifices consumption will damage the internal driving force for economic growth and will only add to the country's economic uncertainties in the long run.

The country can maintain economic growth of around 8 percent in the next two decades if it manages to fully tap its consumption potential. For example, by raising its consumption to GDP ratio to more than 60 percent and lowering the investment to the GDP ratio to less than 40 percent.

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Monday 27 February 2012

INDIA AND ENERGY IN 2030

Deccan Herald

INDIA WILL BE WORLD'S 3RD LARGEST ECONOMY BY 2030: BP

The Deccan Herald, February 27, 2012

India will world's third largest economy by 2030 but its energy demand will slow down to 4.5 per cent, global energy giant BP plc said today.

"By 2030 China and India will be the world's largest and third largest economies and energy consumers, jointly accounting for about 35 per cent of global population, GDP and energy demand," BP's chief economist Christof Ruhl said releasing BP's Energy Outlook 2030.

There would be "no surge in energy demand as India industrialises. Demand growth slows to 4.5 per cent per annum (vs. 5.5 per cent p.a. in 1999-2010) as improvements in energy efficiency partly offset the energy needs of industrialisation and infrastructure expansion."

India's dependence on imports to meet its gas needs will jump to 47 per cent by 2030 while the same for oil will grow to 91 per cent. The nation will be 40 per cent dependent on imports to meet its coal needs.

(...) [artículo aquí]

Sunday 26 February 2012

FACEBOOK AND CHINA

Denver Post

PESEK: FACEBOOK, CHINA HAVE A LOT IN COMMON

William Pesek

The Denver Post, February 26, 2012

Mark Zuckerberg is pulling off a feat bigger than becoming the world's richest 20-something: thriving in the cyber age even before "friending" the most populous nation and biggest Internet market.

Facebook's founder will soon have to "like" China, where his website is banned. A post-initial-public-offering Facebook will have shareholders demanding that it tap China's 1.3 billion people, and now. Such is life when your business model is predicated on ever-growing ranks of users updating, sharing and poking to make advertisers and investors rich.

Zuckerberg will certainly face difficulties. Facebook's role in the Arab Spring movement caused many sleepless nights for Communist Party bigwigs. Yet more focus should be on the things China and Facebook have in common — things that may not jibe with Zuckerberg's claims of making the world a better place.

China's leaders will expect Facebook to bow to their censorship demands the way Google, Yahoo, Microsoft and Cisco Systems have. Twitter recently made an about-face, announcing it will block posts on behalf of governments. And Facebook will look forward to mining what it can from China's masses, just as it does America's.

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Saturday 25 February 2012

CHINA’S SLOWDOWN

Bloomberg

CHINA’S GROWTH MAY SLIP TO 8.6% THIS YEAR AS EUROPE SLOWS, REPORT SAYS

Bloomberg News

Bloomberg, February 25, 2012

China’s economic growth may slip to 8.59 percent this year due to slowing in Europe, while inflation will ease to 3.3 percent, according to a Xiamen University and National University of Singapore joint forecast.

Growth may bottom out in the second quarter, slowing to 8.35 percent before picking up again, according to the forecast released today at a forum in Beijing. Expansion in first quarter may be 8.42 percent, down from 8.9 percent in the final three months of 2011.

China’s growth is decelerating as Europe’s sovereign-debt turmoil hurts exports and Premier Wen Jiabao continues trying to cool his nation’s property market. Last month’s decline in overseas sales and weaker-than-forecast lending raised concerns that the world’s second-biggest economy may see a sharper slowdown.

“There are many external uncertainties out there,” Wang Yida, a deputy director at the Ministry of Finance, said today at the forum. “We should be wary about the downward pressure on economic growth brought about by sluggish external demand, although the nation’s economic fundamentals remain sound.”

Wang said today the government will further improve the policy of “structural tax cuts” and boost spending in areas including energy conservation, education and technology to help spur domestic demand.

(...) [artículo aquí]

Friday 24 February 2012

CHINA: CONTAINMENT OR ENGAGEMENT?

The Telegraph

TREATING CHINA AS AN ENEMY

Ambrose Evans-Pritchard

The Telegraph, February 24, 2012

I have just been sent a copy of Amitai Etzioni's essay "China: Making an Adversary" published in International Politics. It has been out for a while but is new to me and will not have been seen by most Telegraph readers.

As you all know, Washington (and the West) is deeply split over how to handle China's spectacular renaissance. This is by far the most important issue in 21st-century geopolitics. It is not one we can afford to get wrong, and errors made today may prove irreversible.

The new term "China hedge" has been coined, used by those who think that the country's growing economic and military might – combined with a new "truculent attitude" – is potentially so menacing that the US must rearm and reorganise its global alliance structure as an insurance policy.

These "containment" hawks cite the following reasons:
• China's defence budget grew at 12.9pc a year from 1996 to 2008, while GDP grew at 9.6pc. A State Department task force report concluded that "it is proceeding at a rate to be of concern even with the most benign interpretation of China's motivation".

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Tuesday 21 February 2012

CHINA, THE EU AND FOREIGN POLICY

New Europe

EU-CHINA SUMMIT HIGHLIGHTS FOREIGN-POLICY ISSUES

Peter Taberner

New Europe, February 21, 2012

Last week’s EU-China Summit provided a glance into China’s attitude to its foreign policy, with the views from the east taking a more assertive stance on issues surrounding Iran and Syria.

China incensed the western by vetoing a UN Security Council resolution to stop violence in Syria, and their main newspaper the People’s Daily, anorgan of the Communist Party, reiterated Beijing’s fear that other major powers are trying to stir up conflict with this comment in its 20 February edition.

"If Western countries continue to fully support Syria's opposition, then in the end a large-scale civil war will erupt and there will be no way to thus avoid the possibility of foreign armed intervention."

The Iran situation has also unravelled into a stalemate between east and west with Beijing not joining the EU in an embargo on buying Iranian oil set for 1 July, instead calling for talks over the Iranians’ desire to enrich its uranium for what Tehran claims to be for energy purposes only.

(...) [artículo aquí]

Sunday 19 February 2012

INDIA’S GROWTH AND DEVELOPMENT

The Times of India

THE SEVEN PER CENT HITCH

Unlike many developed nations, India can't afford to lose more points if its development and growth is to have any meaning

Praveen Dass & Atul Thakur

The Times of India, February 19, 2012

This really should be dubbed the winter of our economic discontent. India's GDP growth rate has shrunk and should settle somewhere around 7%. Yet finance minister Pranab Mukherjee and his mandarins keep brushing aside worry and castigating doomsayers. They point out that even 7% is robust growth when seen in the light of a global economic recession. Just how bad that recession is may be inferred by even a quick look at GDP growth figures of several Western countries for 2011. Many barely make it past 2%. An analysis of GDP growth over the last six years paints an even grimmer picture for such nations. Only China, with a whopping compound annual growth rate (CAGR) of 10.6%, and India (8.2%) come out on top of the class. So the spinmeisters are right, but not quite.

Unlike many developed nations, India - and for that matter China, too - simply can't afford to lose any more percentage points if its growth story is to have any meaning for most its citizens over the next decade or two. For a nation with one-fourth of its population still languishing below the poverty line, such high growth rates are necessities, not a luxury . Besides, all such growth figures for India and China (and indeed, for any large emerging economy) also need to be interpreted from that perspective.

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Saturday 18 February 2012

CHINA’S MACROMANAGEMENT

Reuters

FACTBOX - RECENT COMMENTS FROM CHINA'S TOP ECONOMIC ADVISERS

Reuters, February 18, 2012

BEIJING/SHANGHAI (Reuters) - China has pledged to keep monetary policy prudent and fiscal policy pro-active to stabilise economic growth while keeping inflation under control after ending a policy tightening cycle by cutting banks' required reserve ratios (RRR) in November.

Below are comments from leading advisers and former officials. They do not have direct influence over economic policy, which is set by the senior government leadership, but their recommendations are sometimes adopted.

LI DAOKUI, ACADEMIC ADVISER TO THE PEOPLE'S BANK OF CHINA
* Li sits on the central bank's monetary policy committee to provide advice on interest and exchange rate policy.

Li expects that China's economy will grow by 8.5 percent in 2012, and that consumer inflation will moderate to about 3 percent, eased by falls in food prices.

He said the biggest risk to the Chinese economy lies in the real estate market, and expects both transaction volumes and property prices to drop this year.

Source: China Securities Journal, February 18.

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Friday 17 February 2012

CHINA’S BOOM COULD LAST

Business Spectator logo

CHINA'S ECONOMIC BOOM NOT CLOSE TO OVER

AAP

Business Spectator, February 17, 2012

Europe might be on the brink of recession and the US recovery might be slow, but China's economic boom is not over by a long shot and that's good news for Australia, analysts say.

BNP Paribas' senior Asia economist Dominic Bryant said Australia's China-driven mining boom is a multi-year phenomenon.

"It could last five to 10 years, or even longer into the future," he said.

China's economic growth will slow, but only slightly, Mr Bryant said.

China's gross domestic product (GDP) grew at an annual pace of 8.9 per cent in the December quarter of 2011 and BNP Paribas is expecting growth to stay above eight per cent for 2012.

The slowest rate of growth for China that BNP Paribas is forecasting is 7.7 per cent in the December quarter of 2013.

(...) [artículo aquí]

Thursday 16 February 2012

XI JINPING IN THE US

The Korea Times

SINO-US RELATIONS

Seoul needs to pursue diplomatic balance

The Korea Times, February 16, 2012

South Korea paid much attention to Chinese Vice President Xi Jinping’s visit to Washington just as other countries did since Sino-U.S. ties are a key factor in ensuring peace, stability and prosperity in East Asia as well as across the globe.

Xi won an extraordinary welcome from U.S. leaders this week. He deserved it not only because of his status as China’s next leader but also because of his country’s rapid ascendance to the world’s No. 2 economic power. His visit was aimed at deepening ties with America before he succeeds President Hu Jintao as Communist Party leader late this year and becomes president in 2013.

Xi and U.S. leaders reaffirmed their commitment to forging a better bilateral relationship, despite differences over many issues such as human rights, trade imbalances and the Syrian problem. President Barack Obama told Xi on Tuesday that strong cooperation between the two countries is good for the rest of the world, welcoming Beijing’s rise. But he did not miss the chance to say that China should play by the same trade rules as other major global powers, urging the Asian giant to improve its human rights record.

On the other hand, Xi responded that the United States must respect the interests and concerns of China, while positively assessing Washington’s policy of playing a bigger role in the Asia-Pacific region.

Better ties between the two countries will certainly depend on how to step up collaboration while making joint efforts to overcome differences. In fact, the U.S. and China are economic and trade partners. Simultaneously, they are rivals on military and security issues. It is contradictory for the two to strengthen cooperation and check each other at the same time.

(...) [artículo aquí]

Wednesday 15 February 2012

CHINA AND THE EU’S SOVEREIGN DEBT

Reuters DEF

CHINA TO KEEP INVESTING IN EURO ZONE DEBT: CHINA C.BANK GOV

Aileen Wang and Nick Edwards

Reuters, February 15, 2012

BEIJING (Reuters) - China will continue to invest in euro zone government debt and it remains confident in the euro, the country's central bank governor said on Wednesday, while calling on Europeans to produce more attractive investment products for China.

Zhou Xiaochuan admitted that China and other emerging nations like Brazil, Russia or India were waiting for the right time to help the bloc, after a European Union state visit was once again met with encouraging words but no concrete public commitments on fresh funding from China.

But he also suggested Europe needed to work harder to entice Beijing to part with its capital.

"We also hope that the euro zone and EU can innovate their mechanisms to offer new products that are more helpful for Sino-Europe cooperation," he said.

The central bank governor reiterated previous comments from Premier Wen Jiabao that China was ready to play a bigger role in solving Europe's debt problems, noting China had not cut its reserves exposure to the euro zone.

"At the G20, our state leaders promised European leaders that, amid the global financial crisis and the Europe sovereign debt crisis, China will not cut the proportion of euro exposure" in its reserves, Zhou said in a speech at the University of International Business and Economics in Beijing.

"Some people had cast doubt or suspicion over the currency, but for the People's Bank of China, we have always been confident in the euro and its future," he added.

Although Zhou's comments largely underlined China's established stance, the remarks helped push the euro higher and were cited in markets for supporting stocks buying in Asia.

(...) [artículo aquí]

Tuesday 14 February 2012

CHINA’S DEFENCE BUDGET IN 2015

The Times of India

CHINA DEFENCE BUDGET TO DOUBLE OVER 5 YEARS: REPORT

AFP

The Times of India, February 14, 2012

SINGAPORE: China's defence budget will double between 2011 and 2015 and outstrip the combined spending of all other key defence markets in the Asia-Pacific region, global research group IHS said on Tuesday.

China's defence budget stood at $119.8 billion last year and will rise to $238.2 billion in 2015, marking a combined annual growth rate of 18.75 percent during the period, the US-based IHS said in a forecast.

The 2015 figure exceeds the combined total of the next 12 biggest defence budgets in the region, forecast to hit $232.5 billion, and will be almost four times second-placer Japan's defence spending that year, it added.

"Beijing has been able to devote an increasingly large portion of its overall budget towards defence and has been steadily building up its military capabilities for more than two decades," said Rajiv Biswas, Asia-Pacific chief economist for IHS Global Insight.

"This will continue unless there is an economic catastrophe."

The growth in China's defence budget -- which averaged 12 percent annually from 2000-2009 -- will benefit from the projected surge in the gross domestic product of Asia's largest economy in the next three years.

(...) [artículo aquí]

Monday 13 February 2012

XI JINPING GOES TO THE US

The Telegraph DEF

US PREPARES TO WELCOME CHINESE VICE PRESIDENT XI JINPING

Chinese Vice President Xi Jinping will visit the US this week for a crucial getting-acquainted visit aiming to strengthen trust between the sides.

The Telegraph, February 13, 2012

Xi is due to meet with President Barack Obama and other top officials in Washington on Tuesday. He will visit the Midwestern state of Iowa on Wednesday to meet local politicians and families with whom he stayed on a 1985 visit while serving as a local official in charge of the pork industry.

Xi finishes the US leg of his visit in California for meetings with business leaders and will stop in Ireland and Turkey before returning home. He was scheduled to leave Beijing later on Monday.

The US visit seeks to better acquaint politicians and opinion makers with the man widely expected to begin taking charge later this year of the world's second largest economy and biggest overseas holder of US government debt.

Despite their close economic links, China and the US remain major rivals in the Asia-Pacific region, with Washington's traditional alliances competing with China's economic and cultural influence. China sees the US as encouraging scepticism and dissent among neighbours in the region while trying to undermine communist rule by encouraging civil liberties and human rights causes.

Meanwhile, the perceived economic threat posed by China to the US has also featured prominently in the Republican Party presidential nomination process. One aspect of Xi's visit will be to gauge public perceptions of China in the US and seek ways of overcoming a lack of trust between the sides, a task made more difficult by disputes over trade, Taiwan, human rights and international concerns such as intervening in the ongoing violence in Syria.

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Sunday 12 February 2012

CHINA AND ITS DISSIDENTS

WashPost logo3

WHY THERE IS A ‘TRUST DEFICIT’ WITH CHINA

The Washington Post, February 12, 2012

“IT’S TIME, people of China! It’s time. The square belongs to everyone.” Thus begins the poem we reprinted on the opposite page last week by Zhu Yufu, a veteran Chinese democracy advocate. On Friday, just four days before China’s next top leader is due to meet President Obama at the White House, Mr. Zhu was sentenced to seven years in prison for “inciting subversion.”

Beijing used to lay the groundwork for important U.S.-China meetings by releasing dissidents. Now it does the opposite. In the past seven weeks four pro-democracy activists have been handed lengthy jail sentences, and a fifth has been driven into exile. Chinese security forces meanwhile are conducting an offensive in Tibet and nearby areas, where at least six peaceful protesters have reportedly been shot in recent weeks.

Mr. Zhu’s sentencing was probably not a deliberate provocation to the United States before the Washington debut of Xi Jinping. Instead the Chinese leadership appears to be preoccupied with eliminating any possibility of a popular “Jasmine revolution” during a year in which Mr. Xi is due to succeed Hu Jintao as Communist Party general secretary.

Nevertheless, Mr. Xi and his comrades clearly have calculated that locking away peaceful opponents will have no impact on the new leader’s reception at the White House, State Department and Pentagon — all of which he is due to visit. Mr. Obama has encouraged this conclusion by failing to speak up about Chinese repression at past summits. After meeting Mr. Hu in Washington a year ago, Mr. Obama appeared to excuse Beijing’s repression and affirmed that it “doesn’t prevent us from cooperating in other critical areas.”

The president has an opportunity to shift that misguided approach as he begins a relationship with Mr. Xi. During Mr. Hu’s decade-long tenure China has become steadily less free politically. While a popular revolution may not be imminent, that trend is not sustainable in a country with a rapidly growing middle class and a growing appetite for free expression on the Internet. Meaningful political reform will be essential if Mr. Xi is to keep China on a stable course during his tenure. That means it is also an important interest of the United States, one that ought to be at the center, not the margin, of the bilateral relationship.

(...) [artículo aquí]

Saturday 11 February 2012

CHINA’S SOFT LANDING BUT…

Business Insider

STEPHEN ROACH: CHINA SHOULD EXPERIENCE A SOFT LANDING, BUT THERE'S ONE WILD CARD

Business Insider, February 11, 2012

Stephen Roach, the non-executive Chairman of Morgan Stanley Asia spoke with Bloomberg's Trish Regan on Friday about all things China.

Roach's baseline scenario for China's economy is a soft landing, which includes GDP growth decelerating to around 8.0 percent to 8.5 percent.

However, he warns that his assumption could prove too optimistic if one "wild card" turns up: a disorderly break-up of the European Union.

And with all of the economic and financial chaos across Europe, many experts haven't completely ruled out the possibility of a disorderly break-up.

(...) [artículo aquí]

Friday 10 February 2012

CHINA’S TRADE DECLINE

LAT logo DEF3

CHINESE TRADE ACTIVITY DECLINES FOR FIRST TIME IN TWO YEARS

David Pierson

Los Angeles Times, February 10, 2012

Beijing - Chinese imports and exports fell in January, the first declines in two years and a potential reflection of worsening economic conditions both at home and abroad.

Official trade data released Friday showed imports falling 15.3% from a year earlier and exports retreating 0.5%. The nation’s trade surplus rose to a six-month high of $27.3 billion.

Though both measures were distorted by the week-long lunar new year holiday, the plunge in imports reflected a weakening property sector and a scaling back of infrastructure building.

That’s of particular importance to the Chinese economy, which relies on so-called fixed-asset investment for up to 70% of its economic output – a level that has no comparison among other major economies.

“A fall of over 15% [in imports] in January cannot be entirely explained by the lunar calendar, and adds weight to the view that economic output is slower than headline indicators might suggest,” said Alistair Thornton of IHS Global Insight in Beijing. “Such a dramatically low import number reflects extremely weak domestic demand, as investment slumps and drags on economic activity.”

In a separate research note released earlier, Thornton noted recent steep declines in freight volume, cement production and even excavator sales as evidence a sharper than expected slowdown in China could not be discounted.

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Thursday 9 February 2012

CHINA: GROWTH AND INFLATION

WashPost logo3

CHINA’S STRUGGLES WITH BOUTS OF POLITICALLY DANGEROUS INFLATION AS ECONOMY BOOMS

Associated Press

The Washington Post, February 9, 2012

China’s ruling Communist Party has faced repeated struggles to tame bouts of politically dangerous inflation while keeping economic growth strong.

Chinese leaders are trying to shore up slowing growth by loosening lending curbs imposed to cool an overheated economy and inflation. But they are moving cautiously for fear of reigniting a price spiral.

Some of the challenges Chinese leaders have faced and their responses:

—1989: Inflation spikes to 18 percent, adding to public frustration that helps to fuel the Tiananmen Square pro-democracy protests. The government’s military crackdown on protests plunges China into international isolation, causing economic growth to plunge to 3.8 percent in 1990 while inflation falls to 3.1 percent.

—1994: Inflation soars to 24.1 percent while economic growth is just 4.1 percent, eroding gains that underpin the Communist Party’s claim to power. A former Shanghai mayor, Zhu Rongji, is put in charge of taming prices. He imposes price controls and clamps down on lending to state companies. Inflation falls to 2.8 percent by 1997, winning Zhu a reputation as China’s leading reformer and appointment the next year as premier, its top economic official.

—September 2007: After inflation rises to a decade high of 6 percent, Beijing responds by freezing prices of electricity and some other goods. That backfires when utility companies respond by cutting coal purchases. Power stations run out of fuel when freak snowstorms hit in January, leaving wide sections of southern China without power in freezing weather.

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Wednesday 8 February 2012

A SLOW SLOWDOWN IN CHINA?

Business Spectator logo

NOTHING TO FEAR IN A CHINESE WOBBLE

James Laurenceson

Business Spectator, February 8, 2012

These days, most economic commentators in Australia sing from the same hymn sheet when it comes to discussing our economic prospects: while the ongoing gloom in the US and the outright deterioration in conditions in Europe are obviously less than ideal, what really matters is what is happening in China.

Throughout most of 2011, the news on this front remained bright. At year-end, merchandise exports to China totalled $72 billion, up 23.5 per cent on the previous year. Our terms of trade, widely seen to be driven by developments in China, also continued to crack record highs.

The start of 2012 however has seen anxiety levels amongst economic commentators rise markedly. The latest official figures show that in the fourth quarter of 2011, China’s GDP grew at a seasonally-adjusted, annualised rate of 8.2 per cent. This was down from 9.5 per cent in the previous quarter and has been taken by some as signalling the start of a much sharper fall in growth.

The reasons for the predicted downturn are several but mainly revolve around fears that China is in danger of becoming the latest victim of a housing price bubble at the same time that its exports are being hammered by weak demand from overseas.

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Tuesday 7 February 2012

THE IMF ON CHINA

economic_times

CHINA'S GDP MAY HALVE ON EURO DEBT CRISIS, SAYS IMF

The Economic Times, February 7, 2012

BEIJING/SHANGHAI: China's economic expansion would be cut almost in half if Europe's debt crisis worsens, a scenario that would warrant "significant" fiscal stimulus from the nation's government, the International Monetary Fund (IMF) said. Based on the IMF's "downside" forecast for the global economy, China's growth could drop by as much as 4% points from the fund's current projection, which is for 8.2% this year, the organisation said in a report released on Monday by its China office in Beijing.

The outlook expands on the IMF's warning last month that the world could plunge into another recession if Europe's woes deepen. Premier Wen Jiabao reiterated last week his government will "fine-tune" policies to support growth amid the region's debt crisis and the cooling domestic property market.

"China's growth rate would drop abruptly if the euro area experiences a sharp recession," the Washington-based IMF said. "However, a track record of fiscal discipline has given China ample room to respond to such an external shock." The government should cushion the impact of a deeper slowdown with measures including tax cuts that amount to about 3% of gross domestic product, it said.

China's economy is unlikely to experience a "hard landing" and the nation has room to boost fiscal spending, Anoop Singh, director of the IMF's Asia-Pacific department, said. China should strengthen domestic consumption, he said

(...) [artículo aquí]

Monday 6 February 2012

IS CHINA REALLY CATCHING UP?

Business Espectator logo

THE OTHER SIDE OF CHINA'S ASCENT

Michael Beckley

Business Interpreter, February 6, 2012

Is the US in relative economic decline to China? In a recent article in International Security, I say 'no'. In a post on The Interpreter, Mark Thirlwell says 'yes'. Who's right? 

The answer is: we both are, but only by our own definitions of decline. I define decline as a narrowing of the wealth gap between the US and China. Thirlwell defines decline in terms of economic growth rates. Thirlwell and I come to opposing conclusions because the US is growing at a slower rate than China while simultaneously becoming wealthier. 

How can this be? Normally, growth rates dovetail with changes in wealth gaps. But these measures often diverge when comparing a rich country like the US to a poor one like China. 

Since 1991, China's per capita income rose 11 per cent annually while America's rose 3.5 per cent annually. But 11 per cent of $US900 (China's per capita income in 1991) is less than 3.5 per cent of $US24,000, the US per capita income for that year. As a result, the average Chinese citizen is $US17,000 poorer compared with the average American today than he was in 1991.

(...) [artículo aquí]

Sunday 5 February 2012

CHINA’S SOUL

The Diplomat

DOES CHINA HAVE A SOUL?

If China is to navigate the rough waters ahead it will need to show that it is about more than its GDP numbers.

Jiang Xueqin

The Diplomat, February 5, 2012

The New York Review of Books blog has posted an Ian Johnson interview with Zhang Ping (who writes under the name Chang Ping), one of China’s most daring writers whom the Communist Party previously hounded out of reporting from China.

The piece is worth reading for both the interviewee and the interviewer.

Inspired by Liu Binyan to become a journalist, Chang Ping has a career that shares many similarities with that of his role model. But there’s one major difference. Liu, with his journalistic exposes of the inept Communist Party political, economic, social, and moral management of China, inspired a generation of disaffected youth to carry the intellectual flame.

By the late 1990s, when Chang Ping came into prominence at Southern Weekend, a Guangzhou-based newspaper famed for its investigative journalism, the Party had begun to buy out China’s intellectual class so successfully that it could easily persecute those who couldn’t be bought out – individuals such as He Qinglian, Ai Weiwei, and Chang Ping.

Chang Ping now lives in Germany, but is attempting to start a new media organization to effect change in China. Unfortunately, as was the case with Liu and He, Chinese intellectuals tend to fade away once in exile.

(...) [artículo aquí]

Saturday 4 February 2012

FACEBOOK IN INDIA

The Asian Age

A LIKEABLE PHENOMENON?

Ram Ruman Ramaswamy

The Asian Age, February 4, 2012

Out of the approximate 845 million users of Facebook, India has now pipped Indonesia to emerge as its second largest user base.

In 2011, India was number 6 on the list. As of February 1, India had as many as 43,497,980 registered users, following a 144 per cent growth in 2011 alone.

Although only less than four per cent of India is active on social networks, this is a sign of things to come. Because not only is the country’s social networking growing a never-seen-before pace, it has also been revealed by a study that Facebook users worldwide do not have any major ‘fatigue’ because of continued usage. The Pew Research Report said Facebook helps the ‘basic human need of being in touch with loved ones and in getting the much needed support when need arises’.

Its easy reach and the ‘sharing’ ecosystem has been a big reason behind the success, added the study.

But is this all really true? Will India, one day, become Mark Zuckerberg’s treasure chest?

(...) [artículo aquí]

INDIA AS A MARITIME POWER

The Hindustan Times

REVIEW: INDIA – AS AN ASIA PACIFIC POWER

Pramit Pal Chaudhuri

The Hindustan Times, February 3, 2012

India: As An Asia Pacific Power
David Brewster
Routledge
Rs. 7,157 pp 219

India is in the throes of rekindling ambitions to be a maritime power. At the heart of this is a belief that its interests in the Indian Ocean are expanding and under threat. An offshoot of that is a bit of flag-waving in the Pacific as well. David Brewster, an analyst from Australia, a littoral country of both oceans, gives a useful if limited assessment of whether New Delhi has the will and wherewithal to be an ‘Indo-Pacific’ power.

Brewster sees two external drivers pushing Indiato take a blue water view of its neighbourhood. One is the pull of United States’ encouragement, the other the push of China’s growing military profile. He accepts this is not the whole story, that “India’s strategic motivations in the Asia-Pacific go well beyond balancing China”. Yet there is sense that a book so grounded in geopolitics underestimates how much economic concerns are influencing India’s maritime policy. And there is a Washington push factor as well — India is starting to worry at the vacuum that is going to arise from the steady shrinkage of the US naval presence in the southern Indian Ocean.

Brewster has no illusions about the many limitations and failings that afflict India’s great power ambitions. Mastery of its coastal areas, let alone the Indian Ocean, will strain India’s capacities. The Pacific Ocean is on the outer edge of its ambitions. In both oceans, India will need to secure its interests by winning friends and building influence. Diplomacy and defence relationships will be as important as laying keels and laying out runways. This is doubly true for the Pacific. “For many years to come, India will to a significant degree need to cooperate with local partners to project power into the region — much more so then major powers situated on the Pacific Ocean.”

(...) [artículo aquí]

Friday 3 February 2012

IS THE DECLINE OF THE WEST IRREVERSIBLE?

The Straits Times

THE DECLINE OF THE WEST REVISITED

Shlomo Ben-Ami

The Straits Times, February 3, 2012

MADRID - Since the publication in 1918 of the first volume of Oswald Spengler's The Decline of the West, prophecies about the inexorable doom of what he called the 'Faustian Civilisation' have been a recurrent topic for thinkers and public intellectuals. The current crises in the United States and Europe - the result primarily of US capitalism's inherent ethical failures, and to Europe's dysfunction - might be seen as lending credibility to Spengler's view of democracy's inadequacy, and to his dismissal of Western civilization as essentially being driven by a corrupting lust for money.

But determinism in history has always been defeated by the unpredictable forces of human will, and, in this case, by the West's extraordinary capacity for renewal, even after cataclysmic defeats. True, the West is no longer alone in dictating the global agenda, and its values are bound to be increasingly challenged by emerging powers, but its decline is not a linear, irreversible process.

There can be no doubt that the West's military mastery and economic edge have been severely diminished recently. In 2000, America's GDP was eight times larger than China's; today it is only twice as large. Worse, appalling income inequalities, a squeezed middle class, and evidence of widespread ethical lapses and impunity are fueling a dangerous disenchantment with democracy and a growing loss of trust in a system that has betrayed the American dream of constant progress and improvement.

[artículo aquí]

Thursday 2 February 2012

IS NORTH KOREA A NUCLEAR STATE?

The Chosun Ilbo

THINK TANK UPSETS GOV'T WITH THOUGHTS ON NUCLEAR N.KOREA

The Chosun Ilbo, February 2, 2012

A government-funded think tank has upset the Foreign Ministry with a report that advises treating North Korea as a de facto nuclear state.

The report published recently by the Korea Institute for National Unification says Seoul "cannot recognize the North as a nuclear state officially, but the stark reality is that the North is a nuclear state from a strategic point of view." South Korea "will have no choice but to formulate strategies toward the North and implement North Korea policy based on this reality."

A senior Foreign Ministry official on Wednesday slammed the conclusion. "The moment we recognize the North as a nuclear state, all the rules of the game will change," he said. "Such a proposal shouldn't have been made by a government agency."

(...) [artículo aquí]

Wednesday 1 February 2012

CHINA AND THE US IN THE ASIA-PACIFIC REGION

The China Post

RISING CHINA MUST TREAD CAREFULLY

Frank Ching

The China Post, February 1, 2012

The United States has recently, and repeatedly, made clear that its new defense policy is to put greater emphasis on the Asia-Pacific region, with a view to playing a leadership role in Asia, to China's evident discomfiture.

U.S. President Barack Obama personally proposed a “leaner” military strategy, with almost half a trillion dollars in spending cuts over the next 10 years, while calling for a larger U.S. military presence in Asia.

The new policy was embodied in a “Defense Strategic Guidance” report issued by the Pentagon.

It said, in part, that “over the long term, China's emergence as a regional power will have the potential to affect the U.S. economy and our security in a variety of ways.”

(...) [artículo aquí]