Monday, 30 April 2012


Business Spectator


Stephen Grenville

Business Spectator, April 30, 2012

In 2010, China's current account surplus was over 10 per cent of GDP. Just a year later the surplus had fallen to less than 3 per cent as imports grew faster than exports. The International Monetary Fund is expecting a further fall to 2.3 per cent this year, before rising to around 4 per cent over the next few years.

Does this mean that one of the key international imbalances is disappearing?

Before we cross this off the list of international economic worries, we might recall the perils of forecasting the Chinese economy: just a year ago the International Monetary Fund was forecasting 6 per cent for this year's surplus, rising to 8 per cent later. The IMF says the main explanation for the turnaround is China's terms of trade: its import prices (mainly commodities) have risen and its export prices (manufactures) have fallen.

But that doesn't seem to be a new story. Similarly, weak world demand (especially from Europe and the US) is not a new story. Maybe the 30 per cent change in China's real effective exchange rate since 2005 (when the yuan was given a bit of room to move) has had something to do with it. With wages growing at 15 per cent a year, international competitiveness is quickly eroded.

The wider story of re-balancing should show up in the domestic counterpart of the external surplus (if an abstemious country spends less than it produces, it must be accumulating an external surplus). It's hard to see much re-balancing going on here: we might expect to see investment trimmed back as growth slows from over 10 per cent to 8 per cent. But investment is still running at almost half of GDP. We might expect to see consumption rising towards the 60-70 per cent of GDP seen elsewhere, but it is still below 50 per cent and falling.

(...) [artículo aquí]

Sunday, 29 April 2012


The Japan Times


Jeff Kingston

The Japan Times, April 29, 2012

China or Japan: Which Will Lead Asia?, by Claude Meyer. Columbia University Press, 2011, 195 pp., $35.00 (hardcover)

The title poses a question with an obvious answer; a rising China is increasingly eclipsing Japan and seems destined to become the hegemonic power in Asia. So why read this book about old news? One reason is that the author succinctly assesses the rise of both nations, elucidates the respective strengths and weaknesses of the two economies that account for more than 75 percent of Asian GDP and presents scenarios for how regional rivalry will evolve over coming decades. Busy readers who want to quickly get up to speed on East Asia will learn much from this slim volume, one brimming with a veteran observer's insights and knowledge.

Meyer questions the popular view that "Asia's future is already mapped out, between the ineluctable decline of Japan on the one hand and the irresistible rise of China and India on the other." China has overtaken Japan as the world's second largest economy, but Meyer reminds us that tales of Japan's decline are overstated and it retains economic and financial domination of Asia.

While noting that "China and Japan are kept at odds not only by a burdensome past but also, and above all, by their conflicting ambitions", Meyer does not see these tensions spiraling into war, placing faith in pragmatism and the dynamics of increasing economic interdependence.

While everyone is writing off Japan and ogling the latest GDP growth figures for China, Meyer restores some perspective. By 2030 analysts believe that China will be the world's largest economy, but even so its per capita GDP will lag Japan by some 65 percent.

Moreover, "China will have to cope with a polarized society, an environmental crisis and heavy financial burdens." China's demographic time bomb is also looming, its comparative advantage in low-cost production is eroding, and it is dependent on global markets for resources and markets. The interplay of these factors could derail the prevailing onward, upward scenario, but on balance Meyer thinks China will manage to cope with its varied challenges.

(...) [artículo aquí]

Saturday, 28 April 2012


The Economic Times


The Economic Times, April 28, 2012

India is expected to have received $63.7 billion in remittances in 2011, marginally more than China that got $62.5 billion from nationals working overseas, data released by World Bank on Friday showed.

The bank has lifted India's kitty by $5.8 billion from its earlier forecast.

"An upward revision to flows to India in 2011 (by $5.8 billion) is primarily due to a weak rupee and robust economic activity in the Gulf Cooperation Council countries, which are major destinations of recent migrants," the bank said in a release.

The pickup in inflows have come very timely for India as it has struggled to attract capital flow to bridge the high current account deficit that is likely to breach 3.6% of GDP in the current year.

Despite a slowdown in global growth in the current calendar, remittances are expected to pick up further.

The inflow into South Asia will grow to $104 billion in 2012 from $97 billion in 2011, bulk of which will go to India.

"Remittance flows to developing countries are expected to grow at 7-8 percent annually to reach $467 billion by 2014," the bank has said in its Migration and Development Brief 18.

"Worldwide remittance flows, including those to high-income countries, are expected to exceed $615 billion by 2014."

(...) [artículo aquí]

Thursday, 26 April 2012


People's Daily Online



People's Daily, April 26, 2012

Although some feared the possibility of a hard landing after China posted lower-than-predicted quarterly growth, the economy may rebound more quickly than expected as a result of robust inner growth dynamics, according to several global economists.

Dragged down by sagging exports and domestic tightening efforts intended to curb inflation, China's GDP growth hit an 11-quarter low of 8.1 percent in the first quarter of 2012, well below expectations of 8.3 to 8.5 percent.

"I don't think China will have a hard landing. There is still sufficient robustness in the Chinese economy," said John Quelch, dean and vice president of the China Europe International Business School.

Heading for rebound

With the key growth drivers of trade and investment showing signs of regaining strength and consumption expanding after the softening of inflation, economists believe China's growth will rapidly pick up rather than suddenly fall.

(...)  [artículo aquí]

Wednesday, 25 April 2012


The Hankyoreh


NK's recent provocations leave Seoul and Washington with few options

Kim Kyu-won

The Hankyoreh, April 25, 2012

“Game changing.”

This was the word North Korea experts used to describe the recent volley of hard-line statements between Seoul and Pyongyang. Analysts suggested the situation may be a replay of previous instances where the Lee Myung-bak administration took a hard line on North Korea in an effort to “change the game,” only to have a concerned Pyongyang come back with even more provocative statements.

The barrage of strong words from Lee began with a radio broadcast on Apr. 16, shortly after the general election. At the time, Lee said, “the US$850 million spent on the missile launch could have bought 2.5 million tons of corn, the North Korean food shortfall for the past six years.” He also said, “In preventing itself from receiving 240,000 tons of nutritional aid by backing out of the North Korea-United States agreement [reached on Feb. 29], it basically took food away from its people.”

He followed this up with remarks made on an Apr. 19 visit to the Agency for Defense Development in Daejeon, where he said South Korea “can deter enemy provocations when it is strong. Then [North Korea] can’t behave rashly.”

(...) [artículo aquí]

Monday, 23 April 2012




"China has to rely on infrastructure investment to manage economic slowdown.”

Zhou Xin and Nick Edwards

AsiaOne, Apr 23, 2012

BEIJING - China is set to speed up spending on roads, railways and utilities to boost economic growth, the official China Securities Journal said on Monday, citing government economists.

The increased fiscal spending on infrastructure, which has already started, will fall within Beijing's framework of policy"fine-tuning" instead of another massive stimulus like the one Beijing launched at the end of 2008.

Zhang Hanya, the head of China's investment association, a think tank affiliated with China's economic planning agency, was quoted as saying that boosting investment is the only choice for Beijing to bolster growth since consumption is always stable and exports are meeting overseas demands.

Spending on roads, bridges, subways and airports will boom as investments in industrial facilities will worsen overcapacity and more property investments are discouraged by Beijing, Zhang said.

(...) [artículo aquí]

Sunday, 22 April 2012


The Economic Times


The Economic Times, April 22, 2012

India has just a 50% chance of becoming a breakout nation (exceeding expectations of 7% GDP growth) in coming years. So says Morgan Stanley honcho Ruchir Sharma in a fascinating new book, Breakout Nations.

There is no better book for country-by-country accounts of emerging markets (and riskier ones called frontier markets). Its strong point is the author's reliance on grassroots experience in each country, avoiding statistical charts.

His surprise prediction: the top breakout prospects include two Muslim democracies, Turkey and Indonesia. Tops in Europe are Poland and the Czech Republic. Asia's potential breakouts include Sri Lanka and the Philippines. Nigeria and East African nations may qualify too.

India's big advantage, says Sharma, is its low income base and big catch-up possibilities. He correctly sees huge potential in the sharply accelerating backward states of north and central India. These can grow fast for decades with little effort through catch-up with advanced states. They are being transformed by dynamic chief ministers, even as New Delhi dithers and wallows in corruption , premature welfarism and policy paralysis.

The book is a bit too pessimistic about India, which probably has more than a 50% chance of exceeding 7% growth. Sharma dismisses the demographic dividend, arising from a growing workforce, as a mere fad. But research shows that demographic dividends accelerated growth in every Asian tiger from Korea to China. India is no exception.

(...) [artículo aquí]

Saturday, 21 April 2012


The Star


Tan Sri Lin See-Yan

The Star, April 21, 2012

SINCE Susilo Bambang Yudhoyono (SBY) came to power, I have been a fan. Mind you, Indonesia remains today a nation full of problems: political, economic and social. His reputation was built on sustaining a predictable regulatory environment.

Despite its problems, Fitch re-rated Indonesia in December 2011 with an investment-grade credit after 14 years in junk status, followed by a similar move in January 2012 from Moody's Investors Service. Indonesia, like many in Asia, expects sluggish global demand to slow its rapid growth, to 6.43% in the first quarter of 2012 after posting GDP growth of 6.5% in 2011, the quickest pace since the 1997-98 currency crisis.

During my last visit in March, I gathered investors are still flocking to Indonesia simply because there is a deep affiliation that “tomorrow will be better than today” and today is pretty good so far. Indonesia must realise that a good reputation is fragile. It is built over years but can be destroyed overnight.

(...) [artículo aquí]

Friday, 20 April 2012


The China Post



The China Post, April 20, 2012

TOKYO -- Japan could fall out of the league of developed nations by 2050 as a shrinking and graying population as well as slowing productivity make its economy contract, a think tank has warned.

The 21st Century Public Policy Institute said a dwindling workforce, caused by a chronic low birthrate, will combine with lower savings and shriveling investment to drag the once mighty economy down.

The think tank, linked to Japan's powerful Keidanren business federation, said the economy will start getting smaller at some point in the 2030s, even if productivity recovers to the average level of the world's top economies.

Japan's GDP will fall behind India in 2014 and by 2050 it will lose its economic presence “significantly,” dipping to be only one sixth that of China and the United States and one third that of India, said the report.

Until it was overtaken by China last year, Japan's economy was the world's second largest.

In the most pessimistic scenario, the economy will continue contracting because of a worsening fiscal condition, with its GDP shrinking to the point where it is no longer among the world's top economies.

(...) [artículo aquí]

Thursday, 19 April 2012




Commentary: Once-promising nation has only itself to blame

Satyajit Das

MarketWatch, April 19, 2012

SYDNEY (MarketWatch) — In the aftermath of the global financial crisis, optimists hoped that the BRIC (Brazil, Russia, India, China) countries would drive the world’s economic engine. But those hopes have sputtered.

China’s economic growth has slowed to its lowest rate in three years. Brazil’s economic growth has fallen to under 3% from around 7.5%. Russia’s economy is heavily dependent on oil and energy prices.

And India? It seems destined to never fulfill its economic potential.

In the 30 years following independence in 1947, India achieved a modest rate of economic growth of 3-4% per annum. The “Hindu rate of growth” was a derogatory term coined by economist Raj Krishna to draw attention to India’s poor performance compared to other Asian economies.

Reforms in the 1990s paved the way for a period of expansion and relative prosperity for India — exemplified by the marketing slogan “India Shining,” which was first popularized by the then-ruling Bharatiya Janata Party for the 2004 Indian general elections.

Over the last two decades, India’s economy has almost quadrupled in size, growing at an average rate of about 7% per annum. India’s GDP rose by 43% between 2007 and 2012, slightly less than China’s, which increased by 56%, but much faster than developed economies that grew only 2%.

In late 2011, the Indian government’s 12th five-year plan forecast growth of 9% between 2012 and 2017. Yet by early 2012, India’s growth had slowed to around 6%, high by the standards of developed countries but well below the levels required to maintain economic momentum and improve the living standards of its citizens.

(...) [artículo aquí]

Wednesday, 18 April 2012


The Guardian


Embracing globalisation and regional co-operation has helped bring Asia success. Greater economic access and inclusion, and improved governance, would bring further gains

Stephen P Groff

The Guardian, April 18, 2012

Asia's rapid rise is the most successful story of economic development in recent history. Income per capita reached nearly $5,000 in purchasing power parity terms in 2010. Investment rates averaged 35% of GDP over the decade. The number of people living below the $1.25-a-day poverty line fell by 430 million between 2005 and 2010.

With such achievements at a time when much of the rest of the world struggles with austerity measures and economic recovery, Asian leaders might be tempted to switch to autopilot. But closer examination of the region's economic and social prospects soon reveals many paradoxes.

The world's fastest growing region remains home to nearly half the world's extreme poor. While Asia has made tremendous inroads in the fight against poverty, not enough of the region's economic prosperity is reaching its poorest people.

In urban areas of China, for example, the Gini coefficient (a measurement used to calculate inequality) has risen more than 35% since 1990. Nearly half a billion Asians still lack access to safe drinking water and infant mortality in many nations is more than 10 times higher than the levels seen in developed economies.

(...) [artículo aquí]

Tuesday, 17 April 2012


Business Insider


Also Sprach

Business Insider,April 17, 2012

The topic of corruption and purging of Bo Xilai were touched on briefly earlier, as I started to connect the dots. So corruption is part of China’s life, and it somehow contributes to the increase in debt and over-investment, which is, of course, financed by debts.

After Bo Xilai was purged and as new people will be running Chongqing government, the new Chongqing government decides to review the debts outstanding for the government, including the local government financing vehicles (LGFVs) debts, which are used in funding many of the infrastructure projects.

Bank of America Merrill Lynch came out with a note yesterday and made a very nice summary to illustrate the point of how the fastest growing region in China was growing via unsustainable level of borrowing that funds the over-investment:

Chongqing is reviewing its local government debt levels

The new leadership of Chongqing local government has reportedly required CQ LGFVs and SOEs to report local government investment projects and BT (Build-Transfer) financing projects. There are increasing concerns with respect to the mounting debts of CQ government, esp. at county and district levels. The new government is reportedly considering correcting its growth model to be less aggressive and to focus more on steady growth.

(...) [artículo aquí]

Monday, 16 April 2012


China Daily


Branko Milanovic

China Daily, April 16, 2012

The current economic crisis is called the "global financial crisis". But is the term "global" really justified?

Yes, in much of the developed world - in Europe, North America and Russia - growth spluttered - and in many countries, but not in all years, rates of GDP growth turned negative. And yes, global output declined by 2 percent in 2009, but it also rebounded by 2.7 percent in 2010, and it is estimated to have risen by least as much in 2011.

The rebound of the global economy was actually dampened in the last two years because the crisis affected most developed parts of the world. These parts produce more goods and services than the other parts, so if their output goes down or stagnates, it tends to drag the global GDP down with it.

The global economic statistics we use show a tremendous Western, or rich world, bias. There is an implicit weighting scheme in the calculation that is seldom acknowledged. It is called "plutocratic" weighting, and it gives greater weight in the overall calculation to richer countries.

While the "plutocratic" growth rate gives an exact metric regarding what happens to overall economic output, a "people's", or population weighed, growth rate gives a more accurate idea as to how economic growth, or lack of it, affects individuals across the world.

(...) [artículo aquí]

Sunday, 15 April 2012





CNBC, April 15 2012

BEIJING - China's weekend reform of its currency regime nails shut the coffin on the last remains of doubt about whether the world's second biggest economy has successfully steered a course past a hard economic landing.

Investors were questioning whether the worst sequential slowdown in China's economy since the 2008-09 global financial crisis could enter a sixth quarter after data on Friday revealed the weakest three months of annual growth in three years and a run rate below the official 7.5 percent 2012 target.

Shifting the yuan trading rules is about the strongest signal Beijing could give that growth downside has diminished and potential pitfalls are manageable. Few reforms are as replete with risk as tinkering with the currency because faith in its soundness directly correlates to economic stability.

"For everybody who thought China was heading for a hard landing, it's over. This move says they are comfortable with the direction the economy is moving in," Paul Markowski, president of New York-based MES Advisers and a long-time investment adviser to China's monetary authorities, told Reuters.

International investors are certainly in need of something to calm concerns about the health of the global economy after asset markets worldwide were rattled on Friday by a combination of below-par Chinese growth data and renewed fears of contagion risks in the debt-plagued euro zone.

Timing, politics and diplomacy are all in focus after Saturday's milestone step towards turning the yuan into a global currency that doubled the size of its trading band against the dollar to 1 percent.
But the economics of the move, predicted by a Reuters poll four weeks ago, are the most crucial for the 200 million or so jobs in China's vast factory sector that analysts estimate directly depend on foreign trade.

(...) [artículo aquí]

Saturday, 14 April 2012




Cary Huang

South China Morning Post, April 14, 2012

The mainland economy grew 8.1 per cent in the first quarter, its slowest pace in nearly three years, amid weak demand in key export markets and sluggish construction activity at home.

The figure was well below the 8.9 per cent year-on-year growth of the previous three months and marked the fifth consecutive quarterly slowdown, adding pressure for Beijing to further ease monetary policies.

But just hours after the release of the data, the central government announced it would continue using macroeconomic controls to deal with the challenges

Beijing also reiterated that it would keep its restrictions on the property market, in a statement released after a State Council meeting presided over by Premier Wen Jiabao .

The quarterly growth figure was even below market expectations of 8.3 to 8.5 per cent.

"The global situation in the first quarter is complex … the pressure on exports growth is enormous," a National Bureau of Statistics spokesman said.

However, analysts predicted the world's second-largest economy would avoid a hard landing, with most expecting easing measures and a rebound later in the year.

Share prices reflected this sentiment, with the Shanghai and Shenzhen stock markets up slightly and Hong Kong's Hang Seng Index jumping 1.84 per cent.

Dr Liao Qun, chief economist of Citic Bank International, said that while a continued slowdown in gross domestic product growth was widely anticipated, the pace of slowdown turned out faster than expected.

(...) [artículo aquí]

Friday, 13 April 2012


Associated Press


Jean H. Lee

Associated Press, April 13, 2012

PYONGYANG, North Korea (AP) — North Korea's widely condemned rocket splintered into pieces over the Yellow Sea soon after takeoff Friday, an embarrassing end to a launch that Pyongyang had infused with national pride during a week of high-level political meetings and celebrations.

Within minutes of the early morning launch, the United States and South Korea declared it a failure. North Korea acknowledged that hours later in an announcement broadcast on state TV, saying the satellite that the rocket was carrying had been unable to enter into orbit.

World leaders were swift to denounce the launch, calling it a covert test of missile technology and a flagrant violation of international resolutions prohibiting North Korea from developing its nuclear and missile programs.

The rocket's destruction suggests the country has yet to master the technology needed to build long-range missiles that could threaten the United States. Still, worries remain about North Korea's nuclear program amid reports that it may be planning an atomic test soon.

(...) [artículo aquí]

Thursday, 12 April 2012


The Financial


The Financial, April 12, 2012

A new World Bank report projects GDP growth in China will be 8.2 percent in 2012 and 8.6 percent in 2013. According to the World Bank , the China Quarterly Update, released today, says that the prospects for a gradual adjustment of growth remain high.

“China’s gradual slowdown is expected to continue into 2012, as consumption growth slows somewhat, investment growth decelerates more pronouncedly and external demand remains weak,” says Ardo Hansson, Lead Economist for China. “The risks of overheating are moderating, increasing the prospects to achieve a soft landing.”

The China Quarterly Update, a regular assessment of China’s economy, identifies as the key near-term policy challenge the need to facilitate a soft landing and sustain growth. Key risk factors include the weak and uncertain growth prospects of high-income economies and the evolution of the ongoing correction in China’s property markets. Sufficient policy space exists to respond to downside risks, but any policy response would need to be carefully crafted keeping in mind longer-term effects and objectives.

(...) [artículo aquí]

Wednesday, 11 April 2012



The Economic Times, April 11,2012

HONG KONG: Emerging Asian economies will experience flat growth this year before recovering in 2013, the Asian Development Bank (ADB) said in a regional report released on Wednesday.

The Asian Development Outlook report for 2012 said the region was shifting toward a "more sustainable long-run growth path" based on strong domestic demand instead of exports, which have been hit by wobbly Western demand.

But the study also warned that the region's rising wealth was fuelling inequality and income disparities, with the underprivileged at risk of being sucked into a "vicious circle" of poverty and neglect.
The vast region's gross domestic product (GDP) growth will "cool somewhat" to 6.9 percent in 2012, down from 7.2 percent last year, before edging higher again to 7.3 percent in 2013.

"Despite the weak global environment, developing Asia's growth momentum continues," it said.

"Strong domestic demand provided necessary support in 2011, and this will need to continue in light of the soft export demand expected from the major industrial economies of the United States (US), eurozone, and Japan."

(...)  [artículo aquí]

Tuesday, 10 April 2012




* $5.35 bln surplus confounds expectations of $1.3 bln deficit
* Exports up 8.9 percent in March vs year ago, ahead of consensus
* Imports up 5.3 percent in March vs year ago, below consensus
* Exports to U.S. up 10.4 percent vs year ago

Nick Edwards

Reuters, April 10, 2012

BEIJING, April 10 (Reuters) - China returned to an export-led trade surplus in March, heralding the prospect that the global economy may be passing its low point in the current cycle and lifting overseas orders just in time to compensate for a slowdown in domestic demand.

The trade surplus of $5.35 billion last month confounded expectations of a $1.3 billion deficit as exports grew faster than expected and import growth eased from a 13-month peak, customs data showed on Tuesday.

The data reinforced the view of most analysts that China's trade-sensitive economy is set for a soft landing, with GDP growth likely to have eased for a fifth successive quarter to 8.3 percent in the first three months of 2012 and remaining on course for its slowest year of expansion in a decade.

"The trade data looks okay... it shows the global economy is recovering, albeit slowly," said Zhou Hao, an economist with ANZ Bank in Shanghai.

"Given that China had a trade surplus in the first quarter versus a deficit in the Q1 last year, it indicates a positive contribution to GDP growth. We reckon Q1 GDP growth should be 8.6 percent. I think the market is a bit too pessimistic about China's economy."

(...) [artículo aquí]

Monday, 9 April 2012


The Wahington Post


Associated Press,

The Washington Post, April 9, 9:10 AM

SEOUL, South Korea — Recent satellite images show North Korea is digging a new underground tunnel in what appears to be preparation for a third nuclear test, according to South Korean intelligence officials.

The excavation at North Korea’s northeast Punggye-ri site, where nuclear tests were conducted in 2006 and 2009, is in its final stages, according to a report by intelligence officials that was shared Monday with The Associated Press.

Its release comes as North Korea prepares to launch a long-range rocket that Washington and others say is a cover for testing missile technology that could be used to fire on the United States.

Observers fear a repeat of 2009, when international criticism of the North’s last long-range rocket launch prompted Pyongyang to walk away from nuclear disarmament negotiations and, weeks later, conduct its second nuclear test. A year later, 50 South Korean were killed in attacks blamed on the North.

“North Korea is covertly preparing for a third nuclear test, which would be another grave provocation,” said the report, which cited U.S. commercial satellite photos taken April 1. “North Korea is digging up a new underground tunnel at the Punggye-ri nuclear test site, in addition to its existing two underground tunnels, and it has been confirmed that the excavation works are in the final stages.”

(...) [artículo aquí]

Sunday, 8 April 2012


El País


Los problemas bancarios no resueltos y el pacto de austeridad fiscal amenazan a la región

Alicia González

El País, 8 de abril de 2012

Los pájaros negros sobrevolaban el pasado fin de semana el elegante hotel Villa d'Este, a orillas del lago Como, en la Lombardía italiana. Los mensajes de los participantes en el Foro Ambrosetti resultaban tremendamente sombríos sobre el futuro de la eurozona. En especial, el del economista jefe de Nomura, Richard Koo, que alertaba del riesgo de que Europa acabe como Japón y de la necesidad de dar marcha atrás con la actual oleada de ajustes. A su lado, negando que ese sea el resultado de las políticas de austeridad, el consejero delegado del Fondo Europeo de Estabilidad Financiera, Christophe Frankel, y el que fuera uno de los halcones más duros del Banco Central Europeo (BCE), Jürgen Stark. Pero los murmullos de los corrillos indicaban que el augurio de Koo no caía en saco roto.

Su argumento es que el diagnóstico de la crisis económica por parte de las autoridades europeas es erróneo. “Asistimos a una crisis de balances que está forzando un desendeudamiento masivo del sector privado. La clave es que si el sector privado está en un proceso de desapalancamiento, lo último que necesitas es que el Gobierno reduzca su déficit presupuestario”, alertaba Koo. Así sucedió con Japón en 1997, desde luego. En su opinión, “si el Banco Central tiene los tipos de interés próximos a cero y nada pasa, es que has dejado de estar en un mundo normal”. En esas conferencias, el más agorero de los economistas, Nouriel Roubini, asentía. “Europa puede ser peor que Japón”, aseguraba. “Japón tuvo una gran recesión y un gran estancamiento, pero nunca tuvo una Gran Depresión. Y la recesión en algunos países de la eurozona puede convertirse en una depresión, lo mismo que sucedió en los años treinta”.

(...) [artículo aquí]

Saturday, 7 April 2012


Business Standard


Indian companies must avoid the errors in the West's models for managing services

V S Mahesh

Business Standard, April 7, 2012

The last few centuries have seen the Western economies record phenomenal growth even as India slid from being the largest contributor to world GDP in 1500 to accounting for a fraction of one per cent in 1947. By the time the Industrial Revolution peaked in the 19th century, Western business enterprises had become the undisputed leaders in the production, distribution and marketing of products. Mass production, automation and computerisation were the internal strengths on which success was built.

An Indian born and brought up in an impoverished country could not be faulted for assuming that the only way to succeed was to follow Western ways. Corporate India led the drift Westwards. Along the way, we appear to have lost the self-confidence to create and use home-grown approaches to the management of organisations – and economies – without discarding the strengths of Western models.

(...) [artículo aquí]

Friday, 6 April 2012


China Daily


Hu Yifan

China Daily, April 6, 2012

In the aftermath of the global financial crisis, and in the course of the continuing European sovereign debt crisis, large developed economies have struggled to regain growth momentum, while China has continued to grow at a robust pace. This has led to speculation of a concurrent decline of the developed countries and the rise of China changing the power structure of the international system. Recent events have thrust China, still in the process of developing its economy, into the spotlight as a superpower.

While few are likely to contest that China is on the rise, the question of whether or not it is already a fully-fledged superpower today is a fair question. In my view, China is indeed a superpower on the rise, with vast amounts of still untapped potential for further growth, but it is not quite there yet. However, China reaching its full potential is far from guaranteed. Despite its undeniable scale and resources, important economic, institutional, social, and diplomatic issues need to be dealt with, and the country still needs time to deal with its transition from a developing country to a real superpower.

Over the past three decades China's growth has been a wonder to behold. Since economic reforms in 1978 it has experienced unprecedented growth. Over the past 32 years the annual growth rate has averaged 10.02 percent. At the end of last year nominal GDP was about 23 times its value in 1980. Additionally, China managed to maintain robust growth through the global financial crisis of 2007-09, while many economies suffered significant economic malaise if not outright recession. While high GDP is undeniable, GDP per capita is low, exports are high but low-value- added, foreign exchange reserves are high but with little diversity, the fiscal position is strong but welfare is weak, oil is consumed in high amounts and inefficiently, and the capital market is rising, with many initial public offerings.

(...)  [artículo aquí]

Thursday, 5 April 2012




Rediff, April 5, 2012

A significant part of China's growth has been an illusion. China's headline growth of eight to 10 per cent has been driven by new lending averaging around 30 to 40 per cent of GDP. Given that, up to 25 per cent of these loans may prove to be non-performing, amounting to losses of six to 10 per cent of GDP. If these losses are deducted, then Chinese growth is much lower.

Unfortunately, China now faces significant problems in maintaining its high-growth strategy, especially given the weakness in its major export markets. As early as 2009, Premier Wen Jiabao admitted that the "stabilisation and recovery of the Chinese economy are not yet steady, solid and balanced".

China needs to boost domestic consumption. The world hopes that China can become a significant source of global demand, replacing the US as the world's consumer of last resort.

Consumption totals 35 to 40 per cent of China's GDP, a decrease from over 50 per cent in 1980. Even by the thrifty standards of Asia, Chinese consumption is low. Japan, India, Taiwan and Thailand are at 55 to 60 per cent, while South Korea and Malaysia are 45 to 50 per cent.

American consumption is around 65 to 70 per cent of GDP. In contrast, Chinese fixed investment is around 46 per cent of GDP, an increase of 12 per cent over the last decade.

At a comparable stage of economic development, fixed investment in Japan and South Korea was 10 to 20 per cent of GDP lower than China.

(...) [artículo aquí]

Wednesday, 4 April 2012




Martin Wolf

The Irish Times, April 4, 2012

ECONOMIC COMMENT: CHINA’S ECONOMY is changing. Indeed, it has to change, as I argued two weeks ago. The good news is the scale of the external rebalancing. The bad news is that this is at the cost of larger internal imbalances.

China’s balance of payments has been on a rollercoaster. Thus, between 2003 and 2007, the current account surplus rose from 2.8 per cent to 10.1 per cent of gross domestic product. The surplus then fell sharply, to 2.9 per cent, by 2011. Over the same period, the share of exports and imports in GDP exploded upwards and then fell once again.

In orthodox theory, the level of current account surpluses and deficits reflect voluntary decisions to save and invest – countries with surplus savings, such as China, export capital while countries with a deficit import it. Surplus countries enjoy a higher return on savings; deficit countries enjoy a lower cost of investment. Everything is for the best in the best of all possible worlds. It seems peculiar that a poor country exports capital to rich ones, as China has done, but there is no reason, in this view, to question the wisdom of the underlying choices.

Unfortunately, this Panglossian view is hardly plausible after the repeated shocks in international finance over the past three decades, which culminated with the crisis in high-income countries that broke out in 2007.

The US, in particular, proved incapable of using its capital inflows wisely – they financed fiscal deficits and the construction of unneeded houses. Of course, the US is largely to blame for such a sad outcome, as are other capital importers. But large external deficits also have a contractionary impact on demand. This did not seem to matter when the latter was strong. It matters a great deal now, when it is weak.

(...) [artículo aquí]

Tuesday, 3 April 2012




Talk of a BRICS development bank is a convenient front for China’s bid to promote its own currency as an alternative to the dollar. Both concepts, however, are flawed, says IFR Asia’s Jonathan Rogers.

Jonathan Rogers

International Finance Review, April 3, 2012

The fourth meeting of the BRIC nations drew to a close last Thursday in New Dehli with the usual back-slapping and self-congratulation that accompanies such events once the cocktail glasses have been drained and the limo drivers summoned.

Now enlarged to include South Africa as a fifth initial, it can’t have been lost on any of the attendees that the acronym first dreamed up in 2001 by Goldman Sachs’ then head of research Jim O’Neill (if he’d copyrighted the term and got a royalty from every BRIC conference organised since then, he’d be laughing) has lost some of its sex appeal.

China has dropped its growth target this year to 7.5% and faces a deteriorating demographic that may soon make the days of 10% GDP growth seem like a distant memory. In the meantime, India’s growth has sagged to just over 6% and a host of fiscal and political woes are threatening to squeeze it further.

(,,,) [artículo aquí]

Monday, 2 April 2012




Todd Pitman and Aye Aye Win (AP)

Time, April 2, 2012

(RANGOON, BURMA) Aung San Suu Kyi claimed victory Monday in Burma's historic by-election, saying she hoped it would mark the beginning of a new era for the long-repressed country.

Suu Kyi spoke to thousands of cheering supporters who gathered outside her opposition party headquarters a day after her party declared she had won a parliamentary seat in the closely watched vote.

The Election Commission has not yet confirmed the results, but government officials have commented on Suu Kyi's victory and the people of Burma have reacted with jubilation.

"The success we are having is the success of the people," Suu Kyi said, as a sea of supporters chanted her name and thrust their hands into the air to flash "V" for victory signs.

"It is not so much our triumph as a triumph of the people who have decided that they have to be involved in the political process in this country," she said. "We hope this will be the beginning of a new era."

If confirmed, Suu Kyi will take public office for the first time and lead a small bloc of lawmakers from her opposition National League for Democracy in Burma's military-dominated Parliament.

(...) [artículo aquí]

Sunday, 1 April 2012




Jaswant Singh (author of "Jinnah: India - Partition - Independence")

The Philadelphia Inquirer, April 1, 2012

Isolated and impoverished by decades of international sanctions, Myanmar (Burma) has emerged in recent months as both a beacon of hope and a potential new Asian flashpoint.

With Nobel laureate Aung San Suu Kyi freed from two decades of house arrest to campaign vigorously for a seat in parliament in the special election to be held Sunday, Burma's commitment to rejoining the international community appears to be genuine. But this opening has other consequences, most importantly setting the stage for a new "great game" of strategic competition.

No one should be surprised that Burma is a locus of interest for great powers.

Burma's strategic importance reflects, first and foremost, its geographic location between India, China, Thailand, and Southeast Asia. Ringed in the north by the southern ridges of the Himalayas, to the east by foothills of dense teak forests, and to the west and south by the Bay of Bengal and Indian Ocean, Burma's geography has always shaped the country's history and politics.

(...) [artículo aquí]