Friday, 31 August 2012



Julius Cesar I Trajano

Asia Times, August 31, 2012

SINGAPORE - The US's "pivot" strategy towards the Asia-Pacific aims to reinvigorate security alliances with its established partners in the region. In Southeast Asia, the Philippines and Thailand have long been US treaty allies, affording them privileged access to US armaments and in the case of the Philippines a mutual defense guarantee if attacked by a third party.

The Philippines and Thailand, however, have had decidedly different responses to the US's renewed security engagement with the region. While Manila has warmly welcomed the US's military presence, Bangkok has adopted a hedging strategy to preserve its vibrant ties with China. Washington's ties with Bangkok and Manila are now influenced by two crucial factors: (1) the perception of an existential threat and (2) domestic political and economic interests.

A key strategic hub for American forces, the Philippines has offered the US greater access to its military facilities in exchange for assistance in the modernization of its military. The Philippine government announced on August 24 that it welcomed America's plan to deploy "X-band", a powerful new early warning radar, in Japan and the Philippines. The plan is seen by some as the centerpiece of the US's defense build-up in Asia to counter threats from nuclear North Korea and to contain China's rising military power.

(...) [artículo aquí]

Thursday, 30 August 2012


Economic Times logo OK


The Economic Times, August 30, 2012

The Indian economy has slowed down more sharply than anybody could have imagined a year ago. Official forecasts peg growth for the current year in the range of 6-6.7%. Many private forecasts are more pessimistic: they project growth of below 6%. How to raise the growth rate is the big challenge for the government. To do so, we need to get a handle on what has caused the slowdown in the first place. The RBI's latest annual report sheds useful light on the subject.

Everybody understands that a combination of domestic and global factors is responsible for the slowdown. The disagreement is about the relative importance of these. The RBI report attempts to quantify the impact of each of these. The RBI's internal research suggests that a 1% increase in the real weighted average lending rate (WALR) depresses industrial output by 0.6% over a one-year horizon.

Between 2010-11 and 2011-12, there was an increase in the real WALR by 2% (using the wholesale price index as the deflator). This would translate into a decline in industrial output of 1.2%. The decline in output, however, was much steeper, down 5.3%. Thus, the rise in interest rates does not explain the sheer magnitude of the slowdown.

The RBI also estimates that a 1% increase in global growth causes industrial output to increase by 0.7%. Global growth declined by 1.4 percentage points between calendar years 2010 and 2011. The impact of the decline in global growth on industrial output should have been 0.98%, or roughly 1%.

(...) [artículo aquí]

Wednesday, 29 August 2012


The Business Times OK



The Business Times, August 29, 2012

MUMBAI - India is set to announce dismal new economic growth figures on Friday, with expansion in the April-June quarter forecast at near nine-year-lows.

"The numbers will be bad," Siddhartha Sanyal, chief India economist with Barclays Capital told AFP ahead of the publication of the data, which is expected to deepen the gloom surrounding Asia's third-biggest economy.

"Industrial growth is likely to be flat, inflation is high and it is unclear what the government can do in the next three to six months," Sanyal said.

He forecasts India's gross domestic product (GDP) grew at the same rate as the previous quarter at 5.3 per cent, a high figure by the standards of developed countries but far below the near double-digit growth of much of the past decade.

Leif Eskesen, HSBC's chief India economist predicts the same, saying "growth will be muted due to global headwinds and the lack of structural reforms in India." India's once booming industrial sector is in crisis, with output contracting by a shock 1.8 per cent in June due to high borrowing costs, declining confidence and falling demand.

Overseas investor confidence in the Indian economy is also on the wane, as shown by figures for foreign direct investment (FDI) for the quarter to June which tumbled year-on-year by 67 per cent to $4.43 billion, Global rating agencies like Fitch and Standard and Poor's have lowered their outlook on India's investment-grade rating amid rising worries about the government's deteriorating finances and negative current account.

(...) [artículo aquí]

Tuesday, 28 August 2012




Andy Sharp and Keiko Ujikane

Bloomberg, August 28, 2012

Japan’s government downgraded its assessment of the world’s third-biggest economy for the first time in 10 months as some analysts forecast that gross domestic product will shrink this quarter.

Risks include a “further slowing down of overseas economies and sharp fluctuations in the financial and capital markets,” the Cabinet Office said in a monthly report released in Tokyo today. It cut an evaluation of the global economy.

The government lowered its view on personal consumption, home-building, exports, imports and industrial output, while raising its assessment of the labor market. The Bank of Japan next meets on Sept. 18 and 19 to review monetary policy, while global investors are awaiting an Aug. 31 speech by Federal Reserve Chairman Ben S. Bernanke to gauge the outlook for stimulus in the world’s biggest economy.

“Europe’s debt crisis is having the effect of a body blow to Japan’s economy,” said Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo. “Concerns over Japan’s economic outlook will probably build pressure on the BOJ to apply more monetary stimulus,” said Maruyama, who says the central bank could move in October.

(...) [artículo aquí]

Monday, 27 August 2012


Economic Times logo OK


Rama Bijapurkar

The Economic Times, August 27, 2012

In the decade after liberalisation, 'invisible India' referred to the poor, barely earning, mostly rural India, which many said had got lost as policymakers' attention was focused on the so-called middle class, whose steeply-increasing consumption was very important for GDP growth. Also, it was this consumption juggernaut that would attract FDI and vibrant domestic investment, and cause trickle-down of aspiration and incomes, and create jobs down the income ladder.

After that, when it was accepted that the trickle-down didn't trickle all the way down, the spotlight shifted to the plight of the poor and 'inclusive growth' became the new mantra. The hitherto-invisible India became the target for a slew of welfare programmes, most prominent being the MGNREGA. Financial inclusion, being pushed hard by the banking regulator for a while now, is also aimed at this segment, and more such programmes are on the anvil.

(...) [artículo aquí]

Sunday, 26 August 2012


China Daily



China Daily, August 26, 2012

GUANGZHOU - Premier Wen Jiabao said China should carry out targeted efforts to steady export growth so the country can hopefully meet this year's economic and social development goals.

During an inspection tour on Friday and Saturday to the southern province of Guangdong, the country's major exporter of goods, Wen said China should place high attention to the difficulties and uncertainties facing exports, which had taken a hit from the global economic headwinds.

"The third quarter of the year is a critical period for China to realize the year's export growth target and we should take targeted steps to stabilize growth," Wen said.

China aims to expand its foreign trade by 10 percent this year.

Wen's latest remarks came as export growth slowed sharply in July to a six-month low following dwindling demand from Europe and Japan.

Exports rose a mere 1 percent year-on-year to 176.9 billion U.S. dollars in July, plummeting from the 11.3-percent growth seen in June, official data showed.

During the trip, Wen visited several companies in cities of Guangzhou, Foshan and Dongguan, where he asked them to push forward structural adjustments, increase input in fostering innovation and make diversified strategies to adapt to the export markets.

Wen said that judging from the new export indexes, China's export outlook will continue to be clouded by difficulties and uncertainties.

(...) [artículo aquí]

Saturday, 25 August 2012


Asia Sentinel


Nobody wants to ask an international court to find out

Cyril Pereira

Asia Sentinel, August 25, 2012

Considerable heat has been generated on the streets of Chinese cities recently with enraged mobs burning Japanese cars while a fishing boat load of purported heroes from Hong Kong planted China and Taiwan flags on the disputed Diaoyu islands in the East China Sea.

Apart from plentiful bluster and jingoism there is neither clarity nor consensus over the legal merits of the claims by Taiwan and China. Japan controls the island cluster which they refer to as the Senkakus.
Chinese Imperial maritime logbooks going back to the 1400s refer to the Diaoyu Islands as navigational landmarks. Imperial Japan formally incorporated the Senkaku Islands as national territory on 14 January 1895, converting their prior terra nullius (no man’s land) status.

After Japan’s WWII surrender to America, the Senkakus were administered as part of the Okinawa Prefecture under the United States Civil Administration of the Ryuku Islands from 1945 to 1972 when they reverted to Japan under the Okinawa Reversion Treaty ratified by the US Congress in 1971.

The UN Economic Commission for Asia and the Far East (ECAFE) report of 1969 raised the potential of large oil reserves around the Senkaku/Daioyu archipelago. That energized the territorial claims between Taiwan, China and Japan, which continues unresolved.
Since 1972 the civic administration of the Senkaku Islands was placed under the mayor of Ishigaki but he is not permitted to develop them or initiate commercial activity without clearance from the central government.

(...) [artículo aquí]

Friday, 24 August 2012


The Times of India



The Times of India, August 24, 2012

MUMBAI: The Reserve Bank of India (RBI) said on Thursday that fighting inflation remained the cornerstone of its monetary policy, and urged the government to cut expenditure, indicating it was unlikely to act soon to ease rates despite slowing growth.

The RBI said poor summer rains had further clouded growth prospects for Asia's third largest economy, but the key was to cut government subsidies and revive capital spending.

"Such an action would also provide some space for monetary policy, but, importantly, lower interest rates alone are unlikely to jumpstart the investment cycle," the RBI said in its annual report.

The report, which is released at the end of the central bank's accounting year, is a review of the previous fiscal year's macroeconomic conditions and outlook for the current year.

The country's growth skidded to a nine-year low of 5.3% in the March quarter, and many economists have slashed their 2012-13 forecast to around 5.5%, lower than the RBI's downwardly revised projection of 6.5%.

Inflation, which had stayed well above 7% for two and half years, has eased, with both the wholesale price index and the consumer price index slowing, although food prices rose. But the RBI, which left its key repo rate steady at 8% last month, said a close vigil on prices would be necessary for the rest of the year to prevent re-emergence of inflationary pressures.

(...) [artículo aquí]

Thursday, 23 August 2012


The Jakarta Post


Ha Jiming

The Jakarta Post, August 23, 2012

China’s economy has grown at its slowest pace since the second half of 2009, recording 7.8 percent gross domestic product (GDP) growth in the first half of 2012 and 7.6 percent growth in the second quarter.

The slowdown was attributable to weak external demand for China’s exports as well as slowing investment growth, particularly in real estate and its related sectors.

The Chinese government has introduced a series of measures to counter the slowdown, including interest rate cuts and the lowering of bank reserve requirements. There are also increasing calls for stimulus packages to boost spending.

However, to determine what measures are most effective in addressing the current economic slowdown, one must answer the question: Is China’s economic slowdown caused by structural or cyclical factors?

There has been a great deal of debate on this question. Some academics and commentators asserted that cyclical factors played a major role in China’s GDP growth slowdown, noting that continued urbanization and industrialization would allow China to maintain a growth rate of at least 8 percent in decades to come. They believe counter-cyclical policy responses are needed in the current environment.

(...) [artículo aquí]

Wednesday, 22 August 2012


Business Spectator


Stephen Koukoulas

Business Spectator, August 22, 2012

The Chinese economy has slowed and some wise heads are painting yesterday’s intervention in the repo market from the People’s Bank of China (PBoC) as a sign of panic. All key economic indicators from GDP, to inflation, to house prices, to international trade confirm a slowing in economic activity.

The 64-Yuan questions are exactly how much has the economy has slowed. Will it keep slowing or are we getting near a turning point that suggests better economic times in the late 2012 and into 2013? China, already the second largest country in the world, is on track to over take the US as the world’s largest economy in the next few years. This inevitably means that what happens in China is critical for the global economy.

Yesterday, the PBoC unexpectedly injected a record Yuan220 billion (A$33 billion) in to the interest rate repo market as it moved to push interest rates lower. The action suggests all is not well, although this view is not shared the Reserve Bank of Australia.

The RBA, which in recent years has ramped up its China research effort, including opening an office in Beijing, released the minutes from the August Board meeting at about the same time the PBoC was intervening to drive interest rates lower. According to the RBA assessment, in China “there were signs that investment growth had steadied and some early indications that conditions in the housing market had also improved a little in recent months.”

This view sits oddly with a raft of other news and it could be the case that the RBA is looking at developments in China through rose coloured glasses.

(...) [artículo aquí]

Tuesday, 21 August 2012




Jean Chua

CNBC, August 21, 2012

China’s economy has slowed for six consecutive quarters and exports growth is almost stagnant, but the world’s second-largest economy is still “flying” high compared to advanced economies like the United States and Europe and will do very well over the long term, said Mark Mobius, Executive Chairman at Templeton Emerging Markets Group.

Exports, while slowing, are “not disappearing,” Mobius said in an interview with CNBC on Tuesday. “They are still very, very big and I am quite optimistic China will continue to power ahead,” he added.

Mobius says a very pessimistic view would put China’s GDP growth at 5 percent for the current year, which is still “five times more than the U.S.”

“They are not landing, they are continuing to fly and chances are growth would be better than that. It'd be more like 7 percent,” he said.

Faltering demand from China’s two biggest customers – the European Union and U.S. – caused Chinese exports to post just one percent growth in July from a year earlier, the poorest showing since January, when exports fell. A Reuters poll had expected exports to grow 8.6 percent in July.

The 7.6 percent expansion of the economy posted in the second quarter was also the weakest in three years, prompting some economists to say that the country is already in a “hard landing.”

(...) [artículo aquí]

Monday, 20 August 2012




Indonesia, Thailand, Philippines and India all star as China begins to create statistical anomalies

Chris Devonshire-Ellis

China Briefing, August 20, 2012

Aug. 20 – As Emerging Asia releases its Q1 figures, there are a whole bunch of stats that spring out, not least the continuing GDP growth throughout the region. However, digging deeper, some surprising trends seem to e developing concerning China and the neighboring countries that are increasingly competing with it. I’m the first to admit I’m not an economist, so readers may just take this as a finger held in the breeze. However that does come with some 25 years of Asian experience, and what follows are my gut feelings, an analysis of the stats we have, and some nose to the ground research. I do use such personal views to plan ahead Dezan Shira’s own investments into Asia, accordingly some of our readers may also be interested to know where I feel the wind is blowing. Make of it what you will.

(…) [artículo aquí]

Sunday, 19 August 2012


The Sunday Times (SL)


Nimal Sanderatne

The Sunday Times (Sri Lanka), July 19, 2012

The rise of China is one of the most momentous transformations in modern world history. According to Prof. Premachandra Autukorala, the Chinese economy is likely to overtake the US economy in terms of GDP within this decade, would be the world’s biggest economy in size and be a dominant trading and investment source in the coming decade. Since 2008 China has been the world’s largest exporter, followed by the US, Germany and Japan, in that order.

Prof. Atukorala, who teaches economics at the Australian National University (ANU) and is an Honorary Professorial Fellow of the University of Manchester, UK, made these remarks while delivering the third Gamani Corea Foundation Lecture on the topic “China’s Rise in The World Economy: Opportunities and Challenges for Developing Countries”.

Prof. Atukorala thought that: “The extent to which China becomes either an opportunity or a challenge for a given country is not predetermined but will depend greatly on its own policy choices and internal economic dynamics.” Due to its size, possibilities for further economic expansion, and the uniqueness of its political system, he observed, China poses unprecedented opportunities and challenges for the global community in both economic and geo-political terms. He was of the view that the extent to which China becomes either an opportunity or a challenge depends on the policy choices of other countries and how they respond to China’s rise in the global economy.

(...) [artículo aquí]

Saturday, 18 August 2012



Indian Express, August 18, 2012

New Delhi: A continuing decline in investment and capital formation, widening current account deficit, and depleting financial savings of both the government and household are some of the structural factors impeding India’s growth, the Prime Minister’s Economic Advisory Council (PMEAC) today said.

Raising red flag over these issues, the PM panel in its Economic Outlook 2012-13 report, said there has been a sharp dip in private corporate investment, which dropped to 9.9 per cent in 2010-11 from 14.3 per cent in 2007-08 while the gross domestic fixed capital formation has also continued to decline, falling from a peak of 32.9 per cent in 2007-08 to 30.4 per cent in 2010-11.

On the savings front too, both the government and private savings depleted. Due to fiscal stimulus provided earlier and burgeoning subsidy bill, the negative saving of the government has increased to 3.2 per cent of the GDP in 2011-12 from 2.1 per cent of GDP between 2007-2011.

Under pressure due to rising wages, raw material cost and high interest rates, the retained margins of the private corporate sector also saw a decline from 9.4 per cent in 2007-08 to 7.9 per cent in 2010-11. Savings of households also fell, partly due to problems in distribution of financial instruments like mutual funds and life insurance. “This is a situation that policy must squarely address and resolve,” the PMEAC said.

(...) [artículo aquí]

Friday, 17 August 2012


Business Standard


PM panel cuts 2012-13 GDP forecast: experts


Business Standard, August 17, 2012

India's economy will grow at 6.7 percent in the current fiscal year, less than an earlier estimate of 7.5-8 percent, Prime Minister Manmohan Singh's Economic Advisory Council forecast on Friday.

Following are some of the experts commenting on the data:-

Rajeev Malik, Senior economist, CLSA, Singapore

"The assessment of the current account deficit is realistic but higher than what many have been gushing with. However, the GDP growth forecast seems to be on the optimistic side. Apart from the Economic Advisory Council's more optimistic assessment, one underlying factor could also be the scope of data revisions that may show that the January-March was better than what has been reported.

"There has been some quickness in the economic data and one wonders about the impact of data revisions. The timing of such revisions is painfully uncertain. The outlook for the service sector in FY13 appears rather optimistic. On the fiscal deficit, the EAC seems to be running with the official forecast, which has become fiction.

"The suggestions about/wish list of increasing fuel prices and raising FDI limits are well meaning and sound. But we all know the problems and the solutions. But the political will to implement the solutions has been lacking. Technocrats cannot do anything about that."

(...) [artículo aquí]

Thursday, 16 August 2012




Rajesh Kumar Singh and Jo Winterbottom

Reuters, August 16, 2012

NEW DELHI, Aug 16 (Reuters) - Expect a popular backlash if India's government raises diesel prices to halt the subsidy drain on its finances - not only from the millions of poor who need cheap fuel but from increasing numbers of the well-off and businesses who don't.

Faced with the risk that its sovereign credit rating could be cut to junk if it fails to rein in its fiscal deficit, the government is under pressure to cut runaway spending on fuel subsidies.

But, already on a backfoot over corruption, slowing economic growth and the caprices of coalition allies, Prime Minister Manmohan Singh has held back. Like LPG cooking gas and kerosene, diesel is seen as a poor man's fuel and so the government fears it would be forced by popular outrage into a u-turn if it cut subsidies, just as it was when petrol prices were raised in May. )

It should fear less the wrath of the common man, however, than the hostility of big businesses and middle-class voters, who have become big users of diesel because it is so cheap and because regular power supplies are so unreliable.

When the north of the country was hit by massive power blackouts on two consecutive days earlier this month, the lights stayed on in offices, five-star hotels and swanky residential areas across New Delhi as thousands of diesel generators purred into action.

With petrol costing on average 42 percent more than diesel, there has been a jump in the share of cars powered by the subsidised fuel, while in the countryside only wealthy farmers who can afford a tractor or water pump benefit from the government's largesse.

"The economy is being dieselised," said a senior Finance Ministry official, who asked not to be named due to the sensitive nature of the matter. "People are using it to run their private generators, telecom towers, cars. It is no longer the poor man's fuel."

Diesel subsidies cost New Delhi about 411 billion rupees ($7.39 billion) in 2011/12, or 0.7 pct of GDP, making the fuel much cheaper than petrol and costing state-run retailers about 11.25 rupees for every litre sold.

Government data shows diesel accounts for nearly 44 percent of fuel consumption in Asia's third-largest oil importer compared with 35 percent nine years ago.

(...) [artículo aquí]

Wednesday, 15 August 2012


China Daily 3


Lee Il Houng

China Daily, August 15, 2012

The Chinese government took its foot off the brake earlier in the year in response to the deteriorating external environment facing the nation's economy. It front loaded its fiscal spending, eased access to credit, and accelerated investment approvals. Local governments started announcing stimulus packages and relaxed some property measures. Against these developments, the debate continues whether China should again ratchet up investment.

The government, on the other hand, has been relatively firm in its resolve to moderate investment growth and promote consumption, keep property market measures in place, and address income inequality. Can such a position be justified in the face of the current uncertain global environment? Yes.

Let us look at China's consumption, which is at the center of the government's rebalancing efforts and often accused of being too low. At about 47 percent of GDP, consumption in China is indeed low compared with 63-68 percent in Japan and South Korea when their respective per capita GDP was around the same level as China in 2011.

However, a different comparison, taking into account each country's 20-year peak growth period, tells a different story. China's consumption spending from 1991 to 2011 rose 9.0 percent a year in real terms, well surpassing the 6.3 percent in South Korea (1966-86) and 6.9 percent in Japan (1956-76). This, by any measure, is a very impressive achievement.

The reason for the low share of consumption to GDP is because of China's own success. Led by investment, China's GDP growth during its peak growth period averaged 10.4 percent, well exceeding the 8.2 percent in Japan and 9.5 percent in South Korea. This is even more remarkable when one considers that China was able to lift its economy at this speed with a population that is 35 times larger than that of South Korea and 13 times larger than that of Japan.

(...) [artículo aquí]

Monday, 13 August 2012


Global Economic Intersection


A growing literature uses sub-national data from China to measure trends in regional inequality and to test models of economic growth and convergence.

John Gibson and Chao Li (Voxeu)

Global Economic Intersection, August 13, 2012

Most published studies use provincial-level data although finer spatial scales, such as prefectures (Roberts et al. 2012) and counties (Banerjee et al. 2012), are starting to be used. But regardless of scale, most authors ignore that China’s local GDP per capita data cannot be interpreted in the way that economists would expect, of measuring value-added or output per resident. Instead, for most of the reform era in China, what has been reported is the GDP per registered population.

Unlike in most countries, China’s local populations can be counted in two ways; by how many people have hukou household registration from each place and by how many people actually reside in each place. The counts differ by the non-hukou migrants – people that move from their place of registration – who have grown from fewer than five million when reform began in 1978 to over 200 million by 2010. For most of the first three decades of the reform era, the hukou count was used to produce per capita GDP figures. In coastal provinces the hukou count is many millions more than the resident count, while for migrant-sending inland provinces it is the reverse, creating a systematic and time-varying error in provincial GDP per capita.

For example, at the time of the 2000 census, Guangdong province had a registered population of 75 million but residents numbered 86 million, so the hukou count overstates GDP per capita by 15%. At finer spatial scales, such as for individual counties and cities, the error is much larger. The city of Shenzhen provides an extreme example; its registered population was just over one million by the time of the 2000 census but its residents numbered seven million, so per capita GDP was overstated by almost 600% in the official data of the time (Chan 2009).

(...) [artículo aquí]

Sunday, 12 August 2012




Daniel Yergin

Asahi Shimbun, August 12, 2012

Chinese and Indian economic growth is leading to a surging demand for energy. Which energy sources can meet this demand? Since the nuclear accident in Japan, each country has adopted a different approach to nuclear energy. More time is needed before renewable energies become widely used. As in past crises, the key lies in technological innovation. It is time for developed and developing nations to work together to find solutions.

Since around 2004, the globalization of energy demand has fundamentally changed the international environment. In the old days, the drivers of energy demand were the United States, Western Europe and Japan, but the drivers these days are the emerging markets. China and India now have a decisive impact on energy markets and on the global economy as a whole. At the same time, energy security is now a very important issue, not just for developed nations but for these newly emerging economies too. This was symbolized by Chinese Premier Wen Jiabao's warning to Iran that it should refrain from "extreme acts" such as disrupting the Strait of Hormuz.

On the eve of World War I, when he was converting the British Navy from coal to oil, Winston Churchill made the famous statement that "safety in oil lies in variety and variety alone." The words are as relevant in 2012 as they were a century ago. Churchill was talking about the need to diversify sources of oil, but the key to energy security has to be the diversification of all energy sources.

One immediate issue nowadays is the world's unprecedented dependence on electricity. We wouldn't have the Internet, iPhones or home computers without it. With regards to the fuel mix for electricity generation, on a global basis a triumvirate of coal, nuclear and natural gas will remain dominant for at least another two decades.

[artículo aquí]

Saturday, 11 August 2012




Economists say central bank could ease monetary policy as early as this weekend

Today, August 11, 2012

BEIJING - China's trade and domestic demand have weakened even faster than expected, adding to pressure on Beijing for a more aggressive stimulus to boost the world's second-largest economy out of its worst slump since the 2008 crisis.

According to data released yesterday, China's export growth in July plunged to just 1 per cent from the previous month's 11.3 per cent, well below forecasts of about 5 per cent.

Besides China, weak second quarter gross domestic product (GDP) figures from Hong Kong and Singapore showed that Europe's debt crisis and the broader global downturn are taking a growing toll on the region, even as governments respond with extra spending and lower lending rates.

Other reports this month from economies including India, South Korea and Taiwan underlined the challenges the export-reliant region is facing.

"Given this backdrop, the 1 per cent from China merely reconfirmed that the severe headwind from the euro zone crisis and the United States slowdown is blowing harder," said Societe Generale economist Yao Wei.

Some economists say China's central bank could move as early as this weekend to ease monetary policy. It has reduced banks' required reserve ratio (RRR) in three steps since November to free up an estimated 1.2 trillion yuan (S$235 billion) for new lending and cut interest rates in June and July.

(...) [artículo aquí]

Friday, 10 August 2012


China Daily 3


It would take a series of cataclysms to knock china off its economic course
Bill McDermott
China Daily, August 10, 2012

When Chinese Premier Wen Jiabao met US business leaders last month, he called for confidence in his country's economy and a joint effort to cope with the global economic crisis.

According to government data, the Chinese economy is slowing down, with a GDP growth rate of 7.6 percent in the second quarter, down from 9.5 percent a year ago. This month the International Monetary Fund lowered its 2012 growth projection for China from 8.2 to 8 percent.

Still, I support Wen's cautiously optimistic appeal. Even though the economy is growing at a slower pace, predictions of a dramatic downturn in China are nonsense. There are big possibilities in the growing middle class, increasing urbanization and development, and active government investment.

As China becomes more global, more moderate growth in its economy may even be a perfect incentive to switch to a more green, modern, and efficient economy.

First off, it is worth pointing out that at $7.3 trillion the Chinese economy is already huge by all economic standards. The gravity and momentum of such an economy is considerable. It would take episodes of earthshaking proportions to dramatically restrict business activity on this scale once it is under way.

For instance, consider the impact of the Tohoku earthquake and tsunami that struck Japan last year. Japan was the world's third-largest economy before the earthquake struck, and still is today. Despite the enormous human tragedy of the disaster and the huge national and international effort to rebuild the nation, experts have estimated that the calamity may have knocked only half of 1 percent off the country's 2011 GDP.

(...) [artículo aquí]

Thursday, 9 August 2012


The New York Times OK


Bettina Wassener

The New York Times, August 9, 2012

HONG KONG — Hopes dimmed for a pickup in China, the world’s growth engine, as a batch of disappointing economic data on Thursday showed industrial production and retail sales falling well short of expectations in July.

Industrial output, a key measure of how healthy the China’s giant manufacturing sector is, grew 9.2 percent from a year earlier, far below the 9.8 percent that analysts polled by Reuters had expected. The figure also marked a slowdown from the 9.5 percent seen in June.

Retail sales, which give an indication of domestic demand, grew 13.1 percent in July. Economists had expected the figure to remain at the 13.7 percent level recorded in June.

Finally, investment in fixed assets — items like equipment and property that are expected to be held for long periods of time and cannot easily be converted to cash — expanded 20.4 percent in the first seven months of the year, about the same as in the January-June period, disappointing hopes for a more marked pickup that could help lift the overall economy.

The Chinese economy has been stumbling for months, stung by weak overseas demand for its exports and by the lingering effect of Beijing’s efforts last year to rein in inflation.

The authorities have been reversing many of those measures this year, raising hopes that the economy may have put the worst behind it during the past few months.

The weak data for July, however, appeared to indicate that Beijing needed to step up its stimulus efforts for the recovery to take root.

(...) [artículo aquí]

Wednesday, 8 August 2012




Andy Sharp

Bloomberg, August 8, 2012

Japan posted a bigger-than-estimated current-account surplus in June as oil prices fell to a low for the year, easing concern that the nation is at immediate risk of needing overseas funding to service its debt burden.

The excess in the widest measure of the nation’s trade was 433.3 billion yen ($5.5 billion), compared with 215.1 billion yen in May, the Ministry of Finance said in Tokyo today. The median estimate of 21 economists surveyed by Bloomberg News was for a surplus of 415.4 billion yen.

The decline in crude prices limited Japan’s fuel bills, as trade figures showed the first drop in imports since 2009, after last year’s earthquake and nuclear meltdown bolstered demand for imported oil. The nation has become more reliant on overseas investment to support its current account with the trade portion in deficit for eight of the last 12 months.

“The rebound pushes back concern that the current account will deteriorate,” said Yoshimasa Maruyama, chief economist at Itochu Corp. (8001) in Tokyo. “There will be no change to the picture that the income surplus will make up for the trade deficit.”

The current account’s trade portion showed a 112 billion yen surplus in June, after an 848.2 billion yen deficit in May. Japan posted a 3.44 trillion yen trade deficit in the fiscal year ended March 31. Income from investment abroad, which includes interest payments and dividends on equities and securities, has served as a buffer against a slide into a current-account deficit.

(...) [artículo aquí]

Tuesday, 7 August 2012


Sydney Morning Herald


Asian stability cannot be directed by American military force.

Paul Keating

The Sydney Morning Herald, August 7, 2012

I BELIEVE the reason Hugh White asked me to launch his book, The China Choice, was not that he wanted a former prime minister to do it, but at least one who regarded his subject as central to Australia's security and prosperity.

White reminds us that the United States has never dealt with a country which is as rich and as powerful as China, instancing that the Soviet Union was never its economic match. He asks why the US never saw it coming; how did it not see the challenge to its primacy in the Pacific developing? And he answers his own question by nominating September 11, 2001: the time when the US, at the height of its unipolar moment, decided to lay off its strategic bets in the Middle East, leaving the Chinese to the vagaries of their struggle with poverty.

The failure to understand the dispersal of global power at the end of the Cold War, of the post-colonial blossoming, of the availability of capital and technology, saw the US miss the chance to create a new and more representative world order.

But not all of us missed it. For two decades, I have been making the point in public speeches that the industrial revolution broke the nexus between population and GDP. That once the productivity-inducing inputs of capital and technology became ubiquitous, it was only a matter of time before the great states by way of population once again became the great states by way of GDP. Hugh White has long been making the same point.

(...) [artículo aquí]

Monday, 6 August 2012


China Daily 3


How China and India compare economically, demographically

Tuo Yannan

China Daily, August 6, 2012

China and India are the two countries most often compared with each other among the economic grouping known as BRIC nations - Brazil, Russia, India and China.

Many are speculating which of the largest and second largest populous nations will become the winner in the information technology era.

Comparing the two countries' gross domestic products, average annual per capita incomes, PC shipments, basic infrastructure and IT spendings, China nearly always comes out on top.

"India's PC market development is at least five years behind China," said Amar Babu, managing director of Lenovo India, who has been working in India's IT industry for more than 23 years.

However, even though the Chinese economy historically has outpaced India's by just about every measure, who will win the IT war in the future?


As the only two countries in the world with populations exceeding 1 billion, China and India share many common points.

Surging GDP growth, an emerging middle class, rising urbanization, increasing small and medium-sized enterprises and the number of female company owners have all provided big opportunities for the two countries' information technology development.

Both of the countries have sustained the world's highest annual GDP growth in the past 10 years - 9 percent for China, about 7 percent for India. After the 2008 financial global crisis, the two have been said by global financial experts to be "among the world's most successful in weathering the challenges of the global economy's great recession".

According to the most recent censuses of each nation, China's National Bureau of Statistics reported that there were 1.266 billion people in China in 2000 while the Registrar General and Census Commissioner of India said the country had 1.029 billion in 2001.

(...) [artículo aquí]

Sunday, 5 August 2012




China Daily/Asia News Network

AsiaOne, Aug 05, 2012

CHINA - Partnership between China and African countries will benefit Africa's economic development, a South African official said as the US Secretary of State made what appeared to be veiled attacks on China while visiting the continent.

Hillary Clinton arrived in Senegal on Wednesday, on the first stop of an 11-day tour of Africa. It is the highest-level visit to the continent by a US official since June, when Washington issued a strategy for Africa that calls for greater access to investment between the United States and African countries.

Clinton told a university audience that the US was committed to "a model of sustainable partnership that adds value, rather than extracts it" from Africa.

Unlike other countries, the United States "will stand up for democracy and universal human rights even when it might be easier to look the other way and keep the resources flowing," she said.

Although Clinton did not mention any country by name, her remarks were widely interpreted as a swipe at China, which eclipsed the US as Africa's biggest trading partner three years ago, reported the Guardian, a London-based newspaper.

Analysts view Clinton's visit as an attempt to compete with Sino-African cooperation, which has been growing rapidly in recent years despite continuing criticism from Western countries, which say China is practicing neocolonialism in Africa.

(...) [artículo aquí]

Saturday, 4 August 2012


The Japan Times


Craig Martin

The Japan Times , August 4, 2012

TOPEKA, Kansas — The pressure is mounting to either amend Article 9, the war-renouncing provision of Japan's Constitution, or to increasingly disregard it and so make it irrelevant. In April the Liberal Democratic Party (LDP) published its proposal for amending the Constitution, and the dangers it posed for Article 9 was analyzed here on June 6 ("LDP's dangerous proposals for amending antiwar article"). But the response to such amendment proposals by the supporters of Article 9 continues to be one of complete denial — that is, a categorical argument that Article 9 should not be amended at all.

This position is misguided. There are both strategic and legal reasons why the left must develop realistic alternative amendment proposals that would preserve and strengthen the core elements of the provision, but eliminate those elements that undermine it. In a chapter in the book "A Time for Change? Japan's 'Peace' Constitution at 65," published last month by the Woodrow Wilson Center for International Scholars (the chapter is available online:, I explain why Article 9 should be amended, and provide draft language that can serve as a basis for beginning a discussion on alternate amendment proposals.

Flat out rejection of any and all possible amendments to Article 9 is dangerous as a strategic matter. The national security environment of Japan has shifted in the last couple of decades, with the emergence of a nuclear-armed North Korea, and the growing military strength of China. In addition to these perceived threats, there is an increasing sense that Japan should be doing more to fulfill its international responsibilities. Moreover, the Japanese Self-Defense Force (SDF) has participated in non-combat roles in such conflicts as Afghanistan and Iraq with no adverse consequences.

Public opinion on Article 9 is shifting in response. The reality is that the left can no longer count on the public rejecting all amendments of Article 9, and so it must start developing reasonable alternatives to the more dangerous proposals advanced by the right. If it loses the fight and Article 9 is to be amended, and the left has no viable alternatives to the proposals of the right to offer the nation, the Japanese people will be left to vote on amendments designed to gut the provision's constraints on the use of force.

(...) [artículo aquí]

Friday, 3 August 2012




Sangwon Yoon

Bloomberg, August 3, 2012

North Korea requested emergency supplies, including food, as it tries to recover from last month’s torrential rains and flooding, the United Nations said.

The North Korean government “requested that the UN release its pre-positioned emergency stocks, including food and fuel”after more than 100 people died and 100,000 lost their homes, Martin Nesirky, spokesman for Secretary-General Ban Ki Moon, said yesterday in a statement on Ban’s website. Nesirky didn’t say whether supplies will be provided.

North Korea needs immediate food assistance and better access to clean water to avoid diseases, the UN resident coordinator’s office in the capital, Pyongyang, said in an e-mailed report yesterday after making two visits with the Red Cross and other NGOs on July 31 to the three most affected counties.

Natural disasters more severely affect the communist nation, which has suffered for decades from chronic food shortages, economic mismanagement, and growing isolation from the international community because of its nuclear weapons and missile programs.

The UN expanded sanctions against North Korea for firing a long-range missile on April 13, a test that failed. The launch cost North Korea’s new leader Kim Jong Un a deal with the U.S. for 240,000 metric tons of food that was promised in exchange for a moratorium on nuclear and missile tests.

(...) [artículo aquí]

Thursday, 2 August 2012


Gulf Times


Yu Yongding

The Gulf Times, August 2, 2012

China’s annual GDP growth slowed to 7.6% in the second quarter of 2012, down from 8.1% in the first quarter and the lowest growth rate since the second quarter of 2009.

The newly released growth data may have dispelled fears of a hard landing for China, but have nonetheless prompted many to argue that China must stimulate its economy further to guarantee 8% annual growth.

Since early 2010, in order to contain inflation and property bubbles, the Chinese government has tightened monetary policy. As a result, inflation fell in June to 2.2%, a 29-month low, and house prices, for which the National Bureau of Statistics unfortunately has stopped issuing official data, seem to be stabilising, and may even have fallen, albeit modestly.

The slowdown in China’s growth rate is, to a certain extent, a reflection of the success of the government’s effort to rein in the real-estate bubble, as well as of other official policies aimed at rebalancing the economy.

The growth rate of investment in real-estate development, which directly accounts for more than 10% of GDP, plummeted by 16.3 percentage points year on year in the first half of 2012. That led to an investment slowdown in many related industries, such as construction materials, furniture, and appliances, causing annual growth in fixed-asset investment to fall from 25.6% to 20.4%.

(...) [artículo aquí]

Wednesday, 1 August 2012



Simon Denyer and Rama Lakshmi

The Washington Post, August 1, 2012

NEW DELHI — Power was restored in India on Wednesday after two days of blackouts that had cast a huge shadow over the nation’s economic ambitions.

On Tuesday, the overburdened electrical grid had collapsed across the whole of northern and eastern India, depriving more than half the country, or around 600 million people, of power. It was the largest blackout in global history in terms of the number of people affected — about 10 percent of the world population.

“Superpower India, RIP,” said the banner headline in The Economic Times newspaper.

The crisis had reinforced concerns that industry leaders had been raising for years — that the nation’s horribly inefficient power sector could undermine its long-term economic ambitions.

More generally, it sharpened fears about India’s failure to invest in the infrastructure needed to support its rapidly growing economy, in sharp contrast to neighboring China. It also destroyed any lingering hope that the nation’s entrepreneurial spirit and vibrant private sector could somehow deliver a significantly brighter future without a dramatic improvement in the way the country is governed.

“As one of the emerging economies of the world, which is home to almost a sixth of the world population, it is imperative that our basic infrastructure requirements are in keeping with India’s aspirations,” Chandrajit Banerjee, director general of the Confederation of Indian Industry, said in a statement Tuesday. “The developments of yesterday and today have created a huge dent in the country’s reputation that is most unfortunate.”

Tuesday’s blackout, which hit the northern and eastern parts of the country, brought more than 500 trains screeching to a halt, left thousands of passengers stuck for nearly an hour inside the capital’s Metro line and trapped more than 200 miners underground.

(...) [artículo aquí]