Sunday, 30 September 2012


The Japan Times


Philip Brasor

The Japan Times, September 30, 2012

Tanaage, which means to put something on the shelf, is a term that pops up often in the coverage of the current imbroglio over the islands that Japan calls the Senkakus. There is disagreement over when China, which calls the islands Diaoyu, started insisting they were its territory, but in any case the two countries didn't confront each other with their respective claims until the 1970s. Japanese hardliners say the Chinese became possessive about the rocks in the East China Sea only when they determined there were valuable resources under them, while the Chinese say they've been visiting them before Japan was a twinkle in the goddess Amaterasu's eye.

But around 1978 the matter was "put on the shelf" in accordance with an unspoken understanding that China would continue claiming the islands for itself while tacitly acknowledging that Japan "realistically controlled them," to quote China-based freelance journalist Yoshiko Furumae in the Tokyo Shimbun. Japan could then assert to the void that there is no territorial problem.

Tokyo Governor Shintaro Ishihara effectively knocked the matter off the shelf when he offered to buy the islands from its Japanese owners on behalf of Tokyo, a move that prodded the national government to make its own offer, thus not only inflating the price of the rocks from ¥500 million to a staggering ¥2 billion, but also causing China to lose face, since the deal was sealed the day after Prime Minister Yoshihiko Noda and Chinese President Hu Jintao held a secret meeting at the APEC conference in Vladivostok, where Noda didn't even mention the pending purchase. Hu was furious.

(...) [article here]

Saturday, 29 September 2012




Louise Watt (Associated Press)

Newsday, September 29, 2012

BEIJING - (AP) -- One of the hottest items in bookstores across China is a map for a place that is closed to visitors, home only to animals such as goats and crabs, and the reason China's relations with Japan are at their lowest point in years.

China calls them the Diaoyus; Japan, the Senkakus. The new map shows a satellite image of a kidney-shaped main island with splotches of green, and a list of 70 affiliated "islands" that are really half-submerged rocks.

China hastily published the map to help maintain public outrage over the Japanese government's purchase of some of the islands from their private Japanese owners. Beijing also has engaged in another type of mapmaking that may end up escalating the conflict.

It has drawn new territorial markers, or baselines, around the islands, and submitted them to the United Nations. That could lead to a more serious attempt to claim the islands, and broad swaths of valuable ocean around them.

"The status quo has been broken in the last month by Japan's purchase and China's publishing of the baselines," said Stephanie Kleine-Ahlbrandt of the International Crisis Group. She said friction is likely to reach its worst level since the 1980s when China and Japan tacitly agreed to set aside the dispute in pursuit of better overall relations.

(...) [article here]

Friday, 28 September 2012


The Hankyoreh


China and Japan both reverting to ideology instead of addressing their real problems

Park Min-hee

The Hankyoreh, September 28, 2012

Portraits of Mao Zedong seemed to be dancing in every direction. It was Sept. 18, the peak of the protests in China against Japan’s nationalization of the Senkaku Islands (the Diaoyu Islands in China), and a huge stage had been erected in front of the Japanese Embassy in Beijing. Toting big portaits of the "Great Helmsman" and placards with such bloodthirsty slogans as "Open fire on Japan" and "Kill the Japanese bastards," demonstrators marched in teams a few hundred strong, while security police "directed" them at the front of the ranks. It was an unusual spectacle to say the least.

The ones holding pictures of Mao praised him as a "powerful leader" and a "hero in the resistance against Japan." It was baffling to see the same man whose Great Leap Forward and Culture Revolution took tens of millions of lives making this sort of comeback in the hearts of the Chinese.

Maoism may indeed be the single most powerful religion in China today. As rage against widespread corruption, income inequality, and injustice combines with anxieties over an economy that is losing steam by the day, people in China have been turning to their old leader. In his book "China in Ten Words," Yu Hua writes that the many problems that emerged after development may be "precisely why Mao keeps being brought back to life." A dangerous combination, fed by discontent with reality, is taking shape between China's left wing and patriots, who are presenting nostalgia for the Mao days as some kind of alternative.

In Japan, we can also find shadows reminiscent of this growing Sinocentrism. The latest round of friction was touched off by Japan's far right, which irresponsibly exploited a territorial issue in the hopes of winning political points. Having lost their way amid a Fukushima nuclear crisis, an economy mired in quicksand, an aging society, and the disgruntlement of young people robbed of opportunity, these right-wingers have derided the Peace Constitution and any kind of reflection on history, and are working to promote a sense of nostalgia for the glories of the militarist [imperial] era.

(...) [article here]

Thursday, 27 September 2012


The Japan Times


The Japan Times, September 27, 2012

As tension between Japan and China escalates over the ownership of the Senkaku Islands following the Japanese government's decision to purchase three of the five islets in the island group, there is the possibility that China will step up its confrontational attitude toward Japan.

This could cause difficulty on both political and economic fronts. Japan needs to carefully monitor Beijing's moves, ascertain the meaning behind those moves, and quickly take necessary steps to change the situation for the better.

It is important for Japan to take concrete action to resume constructive dialogue with China and thus it needs to mobilize all available means to that end. Neither repeating hawkish rhetoric toward its Asian neighbor nor taking a do-nothing attitude with unwarranted optimism will help end this difficult situation.

Symbolic of China's hard stance toward Japan is its decision to cancel celebrations scheduled to be held in Beijing marking the 40th anniversary of the normalization of diplomatic relations between Tokyo and Beijing. In view of the tense situation, the Japan-China Economic Association this week decided to postpone sending a delegation to China. The Japan-China Green Expo, which was to have begun last week in Shanghai, was also canceled.

China has tightened customs inspections of Japanese goods and slowed down the processing of visa applications by Japanese citizens. Chinese citizens are cancelling trips to Japan impacting the Japanese tourist industry such as hotels and inns. Grass-roots exchange events between Japan and China are also being canceled one after another.

(...) [article here]

Wednesday, 26 September 2012



Taipei Times, September 26, 2012

China’s economic growth is slowing down, but the country’s economy is unlikely to collapse in the near future, nor is the rising power likely to impose economic sanctions against Taiwan or Japan, experts said at a forum yesterday.

China’s economy would not collapse in the near future, because Chinese officials are very much aware of the problems they are facing and have sufficient policy tools and resources on hand to handle a possible crisis, the experts concluded.

For the third consecutive week, the Democratic Progressive Party (DPP) held a symposium on China affairs to improve its understanding of the country. Yesterday’s forum focused on China’s economy, following previous topics on social and political development.

Beijing understands very well that its rapid economic growth in the past decade could not be sustainable and it would have to tackle the three major issues of “imbalance, inconsistency and unsustainability,” National Chengchi University professor Tung Cheng-yuan (童振源) said.

In an analysis of China’s economic transformation to the audience, among them DPP Chairman Su Tseng-chang (蘇貞昌) and Policy Research Committee executive director Joseph Wu (吳釗燮), Tung said China has been trying to slow down its export and domestic investment to transform its export-oriented economy to one with emphasis on domestic consumption.

(...) [article here]

Tuesday, 25 September 2012




Bloomberg News

Bloomberg, September 25, 2012

Diplomats from China and Japan failed to ease tensions over a territorial dispute as the Japanese Coast Guard used water cannons to drive off Taiwanese vessels near the islands at the center of the spat.

Japan’s move this month to buy the islands was “blatantly illegal,” China’s Vice Foreign Minister Zhang Zhijun told Japanese counterpart Chikao Kawai today in Beijing, according to a Chinese Foreign Ministry statement. While the two sides agreed to more discussions, Kawai said no consensus was reached to hold a foreign ministers’ meeting this week at the United Nations General Assembly in New York, Kyodo News reported.

The meeting was the first since protests in China last week damaged operations for Japanese companies such as Toyota Motor Corp. (7203) and Aeon Co. Japan’s purchase of the islands, known as Senkaku in Japanese and Diaoyu in Chinese, exacerbated the worst diplomatic crisis since 2005, which has threatened a $340 billion trade relationship between Asia’s two biggest economies.

About 50 Taiwanese fishing boats and patrol vessels left waters administered by Japan after the Japanese Coast Guard fired water cannons at them this morning, the Coast Guard said in a statement. Five Chinese government boats were also spotted in or near what Japan calls its “contiguous zone,” according to a separate statement.

(...) [article here]

Monday, 24 September 2012


International Business Times


International Business Times, September 24, 2012

Global rating agency Standard & Poor’s (S&P) Monday cut the economic growth forecast for the Asia Pacific countries, including China and India, citing the slowdown in China, euro zone troubles and a slower-than-expected recovery in the U.S.

The rating agency lowered the base case forecasts of 2012 real GDP growth by about one percentage point each for Hong Kong (to 1.8 percent) and India (to 5.5 percent). It reduced about half a percentage point each for China (to 7.5 percent), Japan (to 2.0 percent), Republic of Korea (to 2.5 percent), Singapore (to 2.1 percent) and Taiwan (to 1.9 percent).

In its report titled "Asia Pacific Feels the Pressure of Ongoing Global Economic Uncertainty,” S&P’s credit analyst Andrew Palmer said: "The China slowdown has a flow-on effect to the export-oriented Asian economies of Japan, Korea and Taiwan, and the trading port cities of Hong Kong (in particular) and Singapore. The slowdown in China and the economies in the euro zone and U.S. have also resulted in lower commodity prices.”

"Our lower forecast for China recognizes that the central government had elected not to inject an economic stimulus of a size and speed necessary for an 8% growth rate. It appears that the approach by the Chinese authorities remains influenced by the unpleasant experience of the inflationary effect, particularly on real estate prices, of the stimulus they initiated in late 2008-2009," Palmer added.

(...) [article here]

Saturday, 22 September 2012


Eurasia Review


Ninan Koshy (FPIF)

Eurasia Review, September 23, 2012

The January 2012 Pentagon document on Strategic Guidance, entitled “Sustaining Global Leadership: Priorities for Twenty First Century,” has inaugurated a new cold war in the Asia-Pacific region between the United States and China. The document affirms that the United States will of necessity rebalance, or “pivot,” towards the Asia-Pacific region. The goal of the rebalancing—American “global leadership”—is a fancy name for empire, maintained by military superiority.

The document gives a prominent place for India in the U.S. strategy, which came as a surprise to many observers. While India is singled out with specific reference to strategic partnership, long-standing allies such as Japan, Australia, and South Korea are clubbed together under “existing alliances.” In his maiden visit to India in the first week of May, U.S. Secretary of Defense Leon Panetta piled on, calling defense cooperation with India “a linchpin in U.S. strategy” in Asia.

In what may be called cartographic diplomacy, the United States is keen to show that there is geostrategic and even territorial convergence between the United States and India in the region. The January Strategic Guidance document, for example, refers specifically to “the arc extending from the Western Pacific and East Asia into the Indian Ocean and South Asia.” In a November 2011 article for Foreign Policy, Secretary of State Hillary Clinton defined the Asia-Pacific as stretching “from the Indian subcontinent to the Western shores of the Americas. The region spans two oceans – the Pacific and the Indian–that are increasingly linked by shipping and strategy.” It is interesting to note the inclusion of South Asia in the geographic area of the Asia-Pacific pivot. South Asia has generally been considered a distinct strategic sub-region of Asia, one the United States apparently intends to integrate into its strategy for the broader continent.

(...) [artículo aquí]


Shanghai Daily


Wan Lixin

Shanghai Daily, September 22, 2012

CHINA seems to be entering a period of moderate growth, and moderate inflation. That's deeply unsettling for a nation that has become accustomed to panegyrics.

Mind you, the epithet "moderate" could only be properly understood in the China context, against a decade of double-digit growth, in GDP (and some prices).

So the case for economic adjustment gives way to the urgency of stabilizing growth.

The holy grail of growth reminds us of the "efficiency" that once inspired the whole nation when the market-oriented reform was kicked off more than 30 years ago.

Efficiency was so enshrined at the time that millions of state-owned enterprise (SOE) employees were persuaded to give up their jobs to help cut redundancies.

Today a job with a big SOE is one of the most sought after. The senior management of some SOE banks can enjoy compensation and perks that would likely be the envy of investment bankers in the West. Unlike investment bankers, SOE bankers never worry about their profits.

So when we reminisce today about the good old days when efficiency was first idealized, we sense something missing in our enthusiasm: efficient for whom, and at whose costs?

(...) [artículo aquí]

Friday, 21 September 2012


Indian Express


Indian Express, September 21, 2012

From 2003 to 2007, India experienced heady growth, averaging over 9 per cent a year. When the global economy threatened to melt down in 2008, the Indian slowdown was mild and the bounce back was rapid. These years came on the heels of nearly 15 prior years of dynamism. India had seemingly broken out of its low growth trap. The only competitor in the growth sweepstakes was China. Many predicted that China was bound to slow and India was likely to further accelerate, spurred by a deep well of entrepreneurial energies.

Instead, India’s GDP growth has decreased to about 5.5 per cent a year. True, other countries, including China, have also decelerated. But the Indian data shows a deeper malaise. The manufacturing sector has barely grown in recent months. If, as is likely, the double digit growth in construction and finance proves unsustainable, a further drop in growth may be imminent. Aggregate investment spending has been virtually stagnant over the past year and inventories of durable goods, notably cars, are piling up as the Indian consumer takes a deep breath.

Some argue that short-term growth numbers are fickle and could quickly reverse. But the Indian problem is more structurally embedded. Accompanying the slowdown has been persistently high inflation and a rising current account deficit. Inflation has remained among the highest in emerging economies, near or above double digit rates. The current account, which was close to balance in the early 2000s, has turned into a deficit of over four per cent of GDP, an unusually high level for India. Indeed, the trade deficit is eight per cent of GDP. Together, these are signs that India is constrained by supply bottlenecks and is losing international competitiveness.

Some suggest that easier monetary policy will kick-start the Indian economy and a high growth trajectory will re-emerge if a range of reforms are undertaken. Others are even more optimistic, arguing that the reform momentum is irreversible, as the electorate increasingly rewards politicians who deliver results.

[artículo aquí]

Thursday, 20 September 2012


The Telegraph


The EU-China annual summit got off on a sour note Thursday when Beijing raised long standing complaints over its treatment by the bloc even as both sides lauded the relationship.


The Telegraph, September 20, 2012

Premier Wen Jiabao, in opening remarks, gave a lengthy list of achievements over the past 10 years, stressing: "We do not have major conflicts of interest."

But there was a sting in the tail when he used forceful diplomatic language to raise the issue of an EU arms embargo, imposed since the 1989 Tiananmen Square pro-democracy protests, and the EU's refusal to treat China as a fully-fledged market economy and so lift all tariffs on Chinese goods.

"I have to be very frank in saying this ... but the solution has been elusive over the past 10 years. I deeply regret this and I hope the EU side will take greater initiative to solve these issues," he said.

EU sources had said ahead of the summit, that "we have agreed to disagree" with the Chinese on the arms embargo.

The issue continues to divide EU member states and Britain notably has refused to bend to pressure from France and Spain to review the embargo.

(...) [artículo aquí]

Wednesday, 19 September 2012


The Asset


The Asset, September 19, 2012

Asia-Pacific’s healthy gross domestic product (GDP) growth and strong base of entrepreneurship helped the region overtake North America as home to the largest population of high net worth individuals (HNWIs) in the world, according to the Asia-Pacific Wealth Report 2012 released by Capgemini and RBC Wealth Management. The report provides HNWI market sizing with a review of economic drivers, market performance drivers and HNWI investing behaviors in the Asia-Pacific region.

The report finds that Asia-Pacific’s HNWI population grew by 1.6%, twice the global population rate in 2011, reaching 3.37 million HNWIs and surpassing North America for the first time. Asia-Pacific had seven of the top 20 fastest-growing HNWI populations globally in 2011, down from eight in 2010 and 14 in 2009. HNWI population growth was steady but uneven, with robust growth in Thailand (12.8%), Indonesia (8.2%), China (5.2%), and Japan (4.8% t) offsetting significant declines in the key markets of India (of 18%) and Hong Kong ( 17.4%) which had led growth in the last two years.

The report also notes that wealth is increasingly concentrated geographically in the region, with 76.1% of HNWIs located in Japan, China, and Australia in 2011, up from 74.4% in 2010.

(...) [artículo aquí]

Tuesday, 18 September 2012


The China Post


The China Post, September 18, 2012

Nationalism and protectionism are two of the most attractive qualities during dire economic times. European far-right political parties enjoyed widespread electoral success in the wake of the eurozone debt crisis.

Even in a country in need of focus and economic revival such as the post-lost decade, post-financial crisis and post-March 11 earthquake Japan, long-term nationalist firebrand Shintaro Ishihara mustered enough support to force the government to distract itself from economic reform and tackle a half-century-old territory dispute.

So it is not surprising to see populist and nationalistic demonstrations mushrooming across the world. In Egypt, Libya, Yemen, Sudan, Tunisia, Afghanistan, Pakistan and Bangladesh, protesters are rallying against the U.S. over an American-made anti-Muslim “movie.” Despite the amateurism of the video and the fact that it was made not by any U.S. government-sanctioned organization (in fact one of the film's reported makers was later questioned by U.S. police partially due to an earlier fraud conviction), protesters are targeting U.S. embassies. Demonstrators in Sudan were even urged to rally outside the German Embassy over the U.S.-made video. Violence that took place during one rally resulted in the death of four U.S. diplomatic personnel in Libya, including the ambassador to the North African country.

In cities across China, angry protesters rallied against the Japanese government's decision to “nationalize” the Diaoyutai Island by purchasing them from those believed by the Japanese to own them. The Japanese central government was forced to act after Ishihara launched a successful fundraising campaign to purchase the islands and build a shelter for vessels using the Tokyo local government's private fund. Japan's nationalization plan is aimed at stopping Ishihara's plan to escalate tension, but Chinese nationalists, of course, are not interested in the nuance of Japanese politics. Tens of thousands of patriotic protesters gathered outside Japanese embassies and consulates across mainland China, yelling anti-Japanese slogans and calling for the boycott of all Japanese goods and foods.

(...) [artículo aquí]

Monday, 17 September 2012


Manila Bulletin


Kazunori Takada

Manila Bulletin, September 17, 2012

SHANGHAI, (Reuters) --- Some Japanese firms have temporarily shut factories and shops in China after angry protests over a territorial dispute, with Chinese state media warning on Monday that Japan could suffer another ''lost decade'' if trade ties sour.

The volley of warnings from Chinese officials and papers came after a weekend of protests across dozens of cities, some violent. Japanese Prime Minister Yoshihiko Noda urged Beijing to ensure Japan's people and property were protected.

The Japanese government is warning its citizens about large-scale protests in China on Tuesday, when China marks its official memorial day for Japan's war-time occupation of parts of China.

''I'm not going out today and I've asked my Chinese boyfriend to be with me all day tomorrow,'' said Sayo Morimoto, a 29-year-old Japanese graduate student at a university in Shenzhen.

The ruling Chinese Communist Party, which rarely allows street protests, opened the door to the display of public anger after Japan's decision last week to buy disputed East China Sea islands, which Tokyo calls the Senkaku and Beijing calls the Diaoyu, from a private Japanese owner.

Beijing called that a severe violation of its sovereignty and the dispute has triggered a wave of nationalist ire that the Chinese government has sought to both channel and contain.

(...) [artículo aquí]

Sunday, 16 September 2012


Gulf Times


Gulf Times, September 16, 2012

The summer has seen a string of disappointing economic data that has dented optimism about a pickup in China during the second half of the year, according to analysis by QNB Group.

China’s growth rate has been steadily slowing since the start of 2010, but many economists had hoped that the trend would be reversed. However, leading indicators such as weak trade data, disappointing purchasing manager indices (PMIs) and slow industrial production suggest that the deceleration is continuing into the third quarter of the year, despite some efforts at stimulus. However, much of the slowdown is related to external factors and the domestic market remains relatively buoyant, and there is an ongoing boom in the west of the country.

The latest disappointments were the values of PMIs in August. These indices are based on surveys of companies inquiring about trends in factors such as their orders, production and employment levels. Significantly, the official manufacturing PMI fell to 49.2. This was only the second time since February 2009 that it has measured below the 50 point mark, which divides expansion from contraction.

An alternative manufacturing PMI, published by HSBC, has been in negative territory for almost a year, and fell further to 47.6 in August. Worryingly, the PMI component relating to new orders was particularly low and the component relating to inventory reached a record level since the index was launched in 2004. This suggests that the sector is producing well above demand levels and that output is likely to fall further as it will not make sense to continue building inventory.

(...) [artículo aquí]

Saturday, 15 September 2012




Sui-Lee Wee and Maxim Duncan

Reuters, September 15, 2012

BEIJING (Reuters) - Thousands of Chinese besieged the Japanese embassy in Beijing on Saturday, hurling rocks, eggs and bottles with protests reported in other major cities in China amid growing tension between Asia's two biggest economies over a group of disputed islands.

Paramilitary police with shields and batons barricaded the embassy, holding back slogan-chanting, flag-waving protesters who at times appeared to be trying to storm the building.

"Return our islands! Japanese devils get out!" some shouted. One of them held up a sign reading: "For the respect of the motherland, we must go to war with Japan."

Protester Liu Gang, a migrant worker from the southern region of Guangxi, said: "We hate Japan. We've always hated Japan. Japan invaded China and killed a lot of Chinese. We will never forget."

As tensions escalated, and reports emerged of other protests around China, Japan said its foreign minister had cut short a visit to Australia, arriving back in Tokyo on Saturday.

The long-standing territorial dispute escalated dramatically on Friday when China sent six surveillance ships to a group of uninhabited islets in the East China Sea, raising tension between the two countries to its highest level since 2010.

(...) [artículo aquí]

Friday, 14 September 2012


Business Standard


The tide of the global economy has again turned to anti-growth in general

Indivjal Dhasmana

Business Standard, September 14, 2012

Lehman Brothers’ collapse broke off India’s brief run of nine per cent economic growth a year — from 2005-06 to 2007-08. The journey to high growth, snapped in 2008-09, was partly restored next year when the economy grew 8.4 per cent against 6.7 per cent a year ago. However, it came with a cost to the exchequer. Fiscal deficit, targeted to fall to three per cent of gross domestic product (GDP) during 2008-09, rose to six per cent that year.

As economic expansion dipped to 5.8 per cent in the third quarter of 2008-09, the government rushed to facilitate growth. It cut excise duty and service tax and increased public expenditure. This cost the exchequer Rs 1.67 lakh crore more, doubling the fiscal deficit from budget estimates as a proportion of GDP.

The tide of the global economy has again turned to anti-growth in general. From a banking crisis, now we are in the midst of a sovereign debt crisis in the Euro zone and a faltering recovery in the United States.

The Indian economy was originally estimated to revert to nine per cent growth in 2011-12, but economic expansion fell to 6.5 per cent, 0.2 percentage points lower than the crisis period. Fiscal deficit again touched over 5.7 per cent of GDP.

(...) [artículo aquí]

Thursday, 13 September 2012


The Diplomat


Anthony Fensom

The Diplomat, September 13, 2012

It’s the 1 trillion yuan question: has China’s economic bubble finally burst?

It’s an unnerving issue for the global economy, particularly at a time when the presumed leader in waiting, Xi Jinping, has apparently gone “missing in action” just a month ahead of the once-in-a-decade leadership transition at the 18th Party Congress.

After clocking up an average 10 percent annual growth rate for 30 years, this year’s forecast for the Chinese economy is 7.5 percent, its lowest expansion since 1990. In August, industrial output growth dropped to its lowest level since May 2009, imports dipped 2.6 percent and steel output is expected to contract this year for the first time in three decades.

The recent 1 trillion yuan ($160 billion) infrastructure package announced by China’s top economic planning agency gave financial markets a brief bounce, but it was only a quarter of the amount spent in response to the global financial crisis. Among the 60 projects announced by the National Development and Reform Commission were urban rail, highway and water projects, yet little detail was released concerning their financing and the spending is expected to be spread out over a number of years.

An economy described previously by Chinese President China's economy is slowing. It can only mean bad news for the Asia-Pacific, and the global economy. as having a “lack of balance, co-ordination and sustainability” is still overly reliant on fixed asset investment, which accounts for at least half of GDP, as well as exports.

(...) [artículo aquí]

Wednesday, 12 September 2012




Michael Richardson

The Japan Times, September 12, 2012

SINGAPORE — In the latest step in its naval modernization and expansion, China recently announced that it is accelerating serial production of an advanced destroyer. This will tilt the regional balance of power at sea in its favor and put it in a stronger position to enforce its sovereignty claims over Taiwan and in the South and East China Seas.

Yet the significance of this development and earlier moves to re-shape the Chinese Navy has tended to be overshadowed by seemingly more dramatic news about China's refurbished Soviet-era aircraft carrier, which has just completed its 10th sea trial. The carrier has also had the hull number "16" painted near its bow, suggesting that it may be closer to being named and commissioned.

In fact, if the 60,000-ton carrier becomes the nominal flagship of the Chinese Navy, it is still quite a way from operational readiness. Even in service, it will have a limited role, mainly for training and evaluation before the expected launch of China's first home-built carriers after 2015.

Meanwhile, several decades of double-digit growth in military spending and improvements in Chinese naval engineering are producing a fleet that is primarily focused on regional maritime dominance and deterring intervention by the United States in any potential conflict over Taiwan or in the South and East China seas, where Beijing contests control of disputed islands and maritime resources with several Southeast Asian countries and Japan.

(...) [artículo aquí]

Tuesday, 11 September 2012




Wayne Arnold

Reuters, September 11, 2012

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Coal’s slide poses a problem for Indonesia. As the biggest exporter of coal used for generating power, the country’s fortunes might seem directly tied to China and India’s economic slowdown. In fact, exports account for only a sliver of GDP. The bigger risk is that falling demand spooks foreign investors, undermines a provincial boom, and hurts poor workers.

It’s tempting to see coal as king in Southeast Asia’s largest economy. Indonesia exported 309 million metric tons of the stuff in 2011, according to the World Coal Association, making it the world’s largest exporter of the thermal coal that powers Chinese and Indian power. Slowing demand meant Indonesian coal exports fell 13 percent from May to June.

However, the link to Indonesia’s economic fortunes is not straightforward. Coal accounts for only about 14 percent of Indonesia’s exports and 4.4 percent of GDP. A 30 percent increase in foreign direct investment in the second quarter suggests the country’s growing population and rising incomes remain compelling.

(...) [artículo aquí]

Monday, 10 September 2012


The Asset


Mike Riddell

The Asset, September 10, 2012

The emerging markets (EM) ‘grand narrative’ that is constantly churned out is at best misleading and at worst dangerous. The story goes that you should have a large allocation to emerging markets debt because countries like China and India have: much higher GDP growth rates, lower public debt levels, and far superior demographics than developed countries. Further, experts contend that EM debt in these countries yields more than developed country debt, and EM debt is an ‘under-owned’ asset class in investors’ portfolios.

But performance of EM debt has not been driven by the EM grand narrative of stronger GDP growth, superior demographics and low public debt/GDP levels. It is driven primarily by global risk appetite, US treasury yields, and in the case of external debt, the US. dollar.

Evidence of the past half decade suggests that EM debt remains wedded to the ongoing global financial crisis. Local currency debt is particularly exposed to Europe; indeed, Poland, Turkey, Russia and Hungary together form over 35% of the commonly used JPM GBI-EM Global Diversified Composite Index. Meanwhile, the Hungarian forint (HUF) and Polish zloty (PLN) tend to behave as a high beta exposure to the euro.

(...) [articulo aquí]

Sunday, 9 September 2012




Aditya Sinha

DNA, September 9, 2012

These days, I tell my kids to go, and not look back. My eldest is at university in the US and my son is preparing for admissions. Make your lives in America, I tell them. For the first time in a quarter century I’m pessimistic about India. In fact, 20 summers ago I visited the US and found its mood so negative and in such contrast to newly-liberalised India’s optimism that it seemed the two countries were on different trajectories; and I believed the choice to live in India was the right one.

In 2004 the US National Intelligence Council projected the 2020 world scenario in a report called “Mapping the Global Future”. It mostly dwelled on how the rise of China and India would affect the US and the rest of the planet. It was optimistic about India’s prospects in the long term — though by 2050 our per capita GDP was projected to be only 20% of the USA’s, even though our total GDP might be second in the world; and demography and political development gave India more hope than China — but it still listed three economic growth prospects for India: good, bad and ugly. Here, bad meant middling along, always verging on greatness but never quite there; and ugly meant slipping back into a 1970s-type morass.

Midway between the year of the report and the year of its projections, it is not a stretch to say that India would be lucky to achieve the bad scenario outlined by the USA’s NIC. The irony is that Prime Minister Manmohan Singh, who, under the direction of the late PV Narasimha Rao, liberalised the economy and gladdened the middle-class’s heart, is the same man responsible for the despondency that has now set in. For it is now a commonplace to hear that there no longer is an “India story”.

Last week, the Washington Post asserted this. There were two reactions: one was that the Indian media has been saying this for a while, and such views are only taken seriously when a Westerner says so; this is nonsense. The Indian media’s attacks on the prime minister and UPA-2 have strictly been political, and at the most bemoaned the depths of corruption to which our public life has sunk. No one has said India has failed. Secondly, the political class’s reaction has been to shoot the messenger. While some of us might feel schadenfreude over an instance of pseudo-plagiarism by a Western journalist, the fact is that what he said remains true: that silence in the face of staggering corruption has contributed to Manmohan Singh’s “fall from grace”, and that the prime minister is “going down in history as a failure”.

[artículo aquí]

Saturday, 8 September 2012




Bloomberg News

Bloomberg, September 8, 2012

Chinese President Hu Jintao said a slowdown in exports is putting downward pressure on the world’s second-biggest economy, and he pledged to boost domestic demand and promote more balanced growth.

“Economic growth is facing notable downward pressure, some small and medium enterprises are facing a hard time and exporters are facing more difficulties,” Hu said today at the Asia-Pacific Economic Cooperation CEO Summit in Vladivostok,Russia.

“We have an arduous task of creating jobs for new entrants to the labor force.”

The slowdown is increasing pressure on Hu as China tries to ensure a smooth transition of power to a new generation of leaders at a once-in-a-decade Communist Party Congress this year. Europe’s debt crisis and anemic U.S. growth may hinder a rebound in exports while at home a slump in earnings is deterring companies from spending and banks face rising debts.

Asia’s biggest economy expanded 7.6 percent in the second quarter from a year earlier, the slowest pace in three years, after the government moved to counter inflation and surging property prices after its 2009 stimulus. Exports in July rose 1 percent from a year earlier and shipments in the first seven months rose 7.8 percent, compared with a 23.4 percent rise in the same period in 2011.

UBS AG and ING Groep NV yesterday cut their full-year forecasts for economic expansion to 7.5 percent, which would be the slowest pace in 22 years.

[artículo aquí]

Friday, 7 September 2012




Koh Gui Qing

Reuters, September 7, 2012

BEIJING (Reuters) - A deluge of data out of China on Sunday could confirm investors' worst fears that a downswing in the world's second-biggest economy has stretched into a seventh straight quarter, leaving global markets with no respite from the gloom.

But any hope that the data, covering August, will spur Beijing to shore up the economy by cutting interest rates may be misplaced, as inflation is expected to accelerate, albeit from low levels.

The awkward combination of rising prices while growth in exports and factory output wilts puts Beijing in a policy dilemma: relax policy and risk an inflation spike, or stand still and risk a sharper cooldown in activity.

With the Communist Party's once-a-decade leadership change looming, it could happen as early as next month, analysts fear China could fall prey to "policy paralysis".

Despite growing evidence that the economy needs new stimulus measures to regather momentum, policymakers could opt to hold fire out of fear that a surge in prices could stoke social unrest at a politically sensitive time.

Goldman Sachs reflected that pessimism on Thursday by lowering its growth forecasts for China's gross domestic product (GDP) for this year and next.

Other analysts say they will follow suit if Sunday's inflation, factory output, fixed-asset investment and retail sales data for August are as bad as thought.

"Growth is bouncing along the bottom and we haven't seen any convincing signs that a rebound is underway," said Mark Williams, an analyst at Capital Economics in London.

"We haven't had a spurt in lending in the past few months. The government hasn't become more active with fiscal policy. The global economy hasn't picked up."

(...) [artículo aquí]

Thursday, 6 September 2012


India today


Manoj Joshi

India Today, September 6, 2012

China is making special effort to gear up its forces for high-altitude operations.

The Chinese are on a peace offensive now. In keeping with the precision with which they operate, the Chinese have sent three top military officers across the world to convey the message that China's actions in South Asia and the South China Sea should not be seen as threatening by anyone. It is quite another matter whether their interlocutors will receive the message that China wishes to convey. But you can't fault Beijing for not trying.

China's Defence Minister Liang Guanglie came on a four-day official visit to India on Sunday, at the head of a 23 member delegation. The delegation included Yang Jinshan, commander of the Tibet autonomous region's military district. This was the first visit by a Chinese defence minister since 2004, but Liang had visited India as chief of the general staff in 2005.

(...) [artículo aquí]

Tuesday, 4 September 2012


International Business Times


Raman Ahmed, Heleen Mees

International Business Times, September 4, 2012

China's monumental savings rate is a popular topic of for policy discussion.1 It has been blamed for the global financial crisis, currency wars (Portes 2010), and the ensuing Great Recession (Mees 2012). But what explains the high savings rate?

The growing body of work on this question has put forward many answers, ranging from the one-child policy to the role of marriage and the weak welfare state (see for example Horioka and Wan 2007, Wei and Zhang 2009, Chamon and Prasad 2010, Jin et al. 2010 and Ma and Yi 2010).

In recent research (Mees and Ahmed 2012), we use a dataset that is more recent and covers a longer time span (1960-2009), including the periods with the most important economic reforms, to find the determinants of the household savings rate in China. To that extent we combine Modigliani and Cao's data with our data, and subsequently use a dummy to account for a level shift in the data for the regressions (see Figure 1). For the analysis, we make use of an error-correction model. Within this specific regression framework we include other exogenous variables next to the variables in the cointegration equation to find the effects on the savings rate. To investigate the presence of cointegration between the variables, we follow the method set out in Boswijk (1994) and use his critical values for the significance of the cointegrating factors.

(...) [artículo aquí]

Monday, 3 September 2012


Reuters DEF


Lucy Hornby

Reuters, September 3, 2012

BEIJING (Reuters) - China's vast manufacturing sector has been badly hit by slowing new orders, two complementary surveys showed, a sign that the pace of growth in the world's second-largest economy will weaken well into the third quarter.

The final reading of the HSBC China manufacturing purchasing managers' index (PMI) for August fell to a seasonally adjusted 47.6, its lowest level since March 2009, down from 49.3 in July and slightly below a flash reading of the index late last month.

It followed China's official factory purchasing managers' index (PMI) - one of the early indicators of the state of the economy - which fell to a lower-than-expected 49.2 in August, the National Bureau of Statistics said on Saturday.

It was the first time since November 2011 that the official PMI had fallen below 50, which separates expansion from contraction. Economists polled by Reuters last week had expected it to slip to 50 from 50.1 in July.

The HSBC PMI though has been below 50 for 10 straight months.

"Beijing must step up policy easing to stabilise growth and foster job market conditions," Qu Hongbin, chief China economist at HSBC said in a statement accompanying the survey.

Chief among manufacturers' concerns are the softness in new orders as demand falters, particularly from the euro zone.

(...) [artículo aquí]

Sunday, 2 September 2012


The Financial Express


Shivangi Shukla

The Financial Express, September 2, 2012

Even as China's manufacturing activity continues to slide, with its purchasing managers index (PMI) falling below the 50% mark in August, the country has completed a rail link between two of its provinces, as part of a pan-Asian network that eventually stretches up to Singapore, with an eye on improving exports to south-east Asia.

The rail line between Yuxi and Mengzi in Yunan province of China is part of the pan-Asian network that will become operational by December, according to Chinese media, at a cost of $707 million, and has been completed ahead of schedule.

The line connecting China with most countries of Association of South-East Asian Countries (ASEAN) would run from Kunming, Laos, Thailand and Malaysia, to Singapore with alternate routes through Vietnam, Cambodia and Myanmar. This would mean easier transportation of goods and services via rail instead of shipment over the South China sea.

However, Indian business and trade officials are confident the new Chinese rail link will not significantly impact Indian trade with south-east Asia.

Abhijit Das of Center for WTO Studies says the new line will make India's trade with the ASEAN market slightly more difficult. "China is faster in completing infrastructure projects. But India and China can work together to come to a mutually beneficial solution," says Das.

Sanjay Budhia, member of the CII National Committee on Exports and Imports, says the new development in China should not affect India-China relations. "Competition is always welcome but not at the expense of one country having exclusive advantage over the other," says Budhia.

The line now has a total length of 141 km passing through 35 tunnels and 61 bridges, accounting for 55% of its total length.

(...) [artículo aquí]

Saturday, 1 September 2012


The Star


Fintan Ng

The Star, Septenber 1, 2012

Debates on the possibility of hard landing rage on but is it a cause for concern?

IS China facing a hard landing? The debate rages on but the pessimists seem to have the upper hand now despite the arguments of the likes of emerging markets guru and executive chairman of the Templeton Emerging Markets Group Mark Mobius, who argues that China continues to grow, albeit at a slower pace.

Recent economic indicators and corporate earnings suggest that despite the push for domestic demand to bolster the economy, external challenges have taken a toll on economic growth and outlook.

China posted a second-quarter gross domestic product (GDP) growth of 7.6% year-on-year, a three-year low. The official growth estimate for the year is for GDP to grow 7.5%, marginally lower than the 8% estimated earlier in the year.

The pace of growth, while better than the United States or eurozone, is where the crux of the hard landing/soft landing argument lies. What is hard or soft landing in the spectrum of growth?

Pessimists believe that China's economy will continue to slow but have not made a case or a definition for a hard landing. Is the definition of a hard landing anything below the official estimate for this year or is it anything below the double-digit growth of recent years or perhaps below-par growth which will not be able to support long-term trend growth?

(...) [artículo aquí]