INDIA’S CHALLENGE

INDIA'S NEXT CHALLENGE: SUSTAINING ITS GROWTH

Alan Wheatley (Reuters)

The New York Times, February 28, 2011

BEIJING — Twenty years ago, India was in the throes of a balance-of-payments crisis that forced it to airlift 47 tons of gold to London to pledge with the Bank of England as collateral for an emergency $400 million loan.

Since that national humiliation, nearly 200 million people have climbed out of extreme poverty and India’s share of global output has more than doubled. Per capita gross domestic product, measured in dollars at purchasing power parity, has risen more than fivefold.

The architect of India’s renaissance is the current prime minister, Manmohan Singh, who took over as finance minister in June 1991 and lit the fuse for growth by dismantling the “License Raj” system that had India tied up in red tape.

As prime minister, however, Mr. Singh has disappointed those who seek change. He has failed to overcome opposition to market opening in sectors like retailing and financial services; infrastructure, the sinew of any economy, is woeful; and a long-awaited goods and service tax has not been introduced.

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CHINA AND THE WORLD ECONOMY

CHINA'S INFLATION COULD THREATEN THE GLOBAL RECOVERY

Scott Boyd

Seeking Alpha, February 27, 2011

On February 8th, the People’s Bank of China raised the one-year lending rate twenty-five basis points to 6.06%. This marked the third rate increase in four months and most observers believe more interest rates hikes will be necessary for China to keep a lid on inflation.

The latest figures from China’s Statistics Bureau indicate that consumer prices jumped 4.9% in January compared to the same month one year ago. The actual result was less than the expected 5.3% but January’s outcome keeps intact a long string of monthly price increases, underscoring the risk of inflation in the Chinese economy.

In addition to raising rates further in the coming months, China’s monetary authority will likely continue the trend of forcing lending institutions to increase the percentage of funds to be held in reserve. This effectively removes liquidity from the money supply, leaving financial institutions with a smaller pool from which to lend to businesses and consumers. Rampant property speculation for instance has helped fuel a property bubble. In light of the Japanese and more recent American experience with property bubbles, authorities in China have good reason for concern.

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THE YEAR OF THE ANGRY RABBIT?

COULD THIS BE THE YEAR OF THE ANGRY RABBIT FOR CHINA?

Amid the recent wave of popular uprisings, Mark MacKinnon asks whether popular discontent fuelled by income inequality, oppression and rising inflation could push China to the brink next

Mark MacKinnon

Globe and Mail, February 26, 2011

As the lunar calendar ushered in the Year of the Rabbit, a cartoon video briefly ricocheted around the Chinese Internet. In the opening scene, a small village of rabbits is living happily when a truck selling Three Tiger baby milk pulls up and drops off bottles for all the little bunnies.

But the milk is poisonous - it makes the baby rabbits' heads explode - and soon one mother rabbit is running down to complain at the cave of the tigers (the outgoing lunar year) that rule over them. When she gets inside, the red banner hanging on the cave wall is familiar to anyone who lives in China. "Build a harmonious forest," it reads, in a clear reference to President Hu Jintao's oft-stated goal of establishing a "harmonious society."

But the tigers have no sympathy for what the rabbits are going through, mocking and beating them. Soon, the tigers are evicting the rabbits from their homes in the village and demolishing houses to make way for new developments.

Eventually, the rabbits decide that they have had enough and turn on the tigers, tearing them to bloody shreds with newly grown fangs. As the music rises from a lullaby to a heavy-metal climax, the screen is filled with a warning: "The Year of the Rabbit has come. Even rabbits bite when they're pushed."

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RESISTANCE IN NORTH KOREA

CAN N.KOREAN PROTESTS GROW INTO A REVOLUTION?

The Chosun Ilbo, February 25, 2011

Small pockets of resistance have been springing up in North Korea since last year, with protests sometimes turning violent, sources in the North say. On the night of Feb. 14, two days before leader Kim Jong-il's birthday, scores of people in Jongju, Yongchon and Sonchon in North Pyongan Province gathered and shouted, "Give us fire [electricity] and rice."

But North Korea experts say these protests are largely motivated by immediate material concerns like food shortages, rather than by any desire to overthrow the regime.

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JASMINE REVOLUTION IN CHINA?

CHINESE OFFICIAL DISMISSES "JASMINE" PROTEST CALLS

Chris Buckley

Reuters, February 24, 2011

BEIJING (Reuters) - China will not succumb to the kind of unrest rocking authoritarian governments across the Middle East, a senior official said, though a rash of detentions and censorship suggest Beijing remains nervous.

The comments by Zhao Qizheng, former head of the government's information office, were Beijing's most senior public response so far to online messages urging "Jasmine Revolution" protests.

So far, protests in China have been small and overwhelmed by swarms of police.

"There won't be any Jasmine Revolution in China," Zhao said, according to a report Thursday in the Wen Wei Po, a Hong Kong-based newspaper under mainland Chinese control.

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CHINA’S CONSUMPTION

THE REBALANCING OF CHINA

China's growth has largely been one-sided, with export and capital investment sectors having been prioritized over consumption. Although consumption has increased, there still needs to be a better balance, argues George Magnus in this excerpt from his book, "Uprising."

George Magnus

The Globalist, February 22, 2011

China has rebalanced before. It did so when introducing radical reforms in 1978 in order to move towards a socialist market economy, and again after 1993 when control over policy, previously ceded to more conservative factions after Tiananmen, returned to the reformers.

Today, China’s elite and intellectuals have again embarked on an as-yet-inconclusive series of significant debates about whether and how to reform.

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IS CHINA NEXT?

AMID MIDEAST UNREST, IS CHINA NEXT?

Like many Arab nations, China has one-party rule, corruption and soaring food prices – but experts say that its stunning record of economic success militates against pressure for revolutionary change.

AFP

Dawn.com, February 21, 2011

A fear of social chaos among a population who suffered through the Cultural Revolution and the feeling that there is a better future, even under the current political system, also make revolt unlikely, they say.

A web campaign calling for demonstrations Sunday in 13 major Chinese cities similar to those that brought down the regimes in Egypt and Tunisia was met with a massive security clampdown and the arrest of several top activists.

China’s ruling Communist party has seemingly learned the lessons of the 1989 Tiananmen Square democracy protests, which ended in a bloody crackdown that saw hundreds, if not thousands, killed by army fire in the heart of Beijing.

“I don’t think China will be the next domino,” Perry Link, a China scholar at the University of California at Riverside, told AFP.

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CHINA AND DEMOCRACY

 

CHINA TRIES TO STAMP OUT 'JASMINE REVOLUTION'

Anita Chang

The Associated Press

The Washington Post, February 20, 2011

BEIJING -- Jittery Chinese authorities staged a show of force Sunday to squelch a mysterious online call for a "Jasmine Revolution" apparently modeled after pro-democracy demonstrations sweeping the Middle East.

Authorities detained activists, increased the number of police on the streets and censored online calls to stage protests in Beijing, Shanghai and 11 other major cities. Citizens were urged to shout "We want food, we want work, we want housing, we want fairness" - a slogan that highlights common complaints among ordinary Chinese.

Many activists said they didn't know who was behind the campaign and weren't sure what to make of the call to protest, which was first posted on the U.S.-based Chinese-language advocacy website Boxun.com.

China's authoritarian government has appeared unnerved by recent protests in Egypt, Tunisia, Bahrain, Yemen, Algeria and Libya. It has limited media reports about them, stressing the instability caused by protests in Egypt, and restricted Internet searches to keep people uninformed.

The call to protest in China did not seem to garner much traction among citizens. In Beijing, 25-year-old Liu Xiaobai was stopped by police after he placed a white jasmine flower on a planter in front of a McDonald's restaurant that was the planned protest site and took some photos with his cell phone.

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CHINA’S MONETARY POLICY

CHINA SYNDROME

Mark Luschini

International Business Times, February 19, 2011

The central bank of China raised interest rates again last week and followed that by increasing the reserve requirement for the country's banks this week.  This has been a fairly consistent pattern by the People's Bank of China over the last four months.  The signs of creeping inflation and speculative activity in the property markets are clearly higher than the authorities' comfort level.  Consequently, monetary policy is in the midst of "catching up" to economic activity.

The one year lending rate in China today stands at 6%, which is well below that of nominal GDP growth.  That has elevated concerns that the tendency to have kept rates too low for too long, has caused overheating conditions that may be difficult to reign in though simple policy tools.  A central theme in China's recently released five-year plan is to expand domestic consumption.  Keeping interest rates low is a means by which to facilitate that goal.  However, it may also lead to asset inflation and possible market distortions that render the low interest rate policy counterproductive. 

The risk of China tightening monetary conditions, which is true for any country whose central bank is using conventional policies to manage growth and interest rates, is that it works with a lag.  Therefore, it will not be known for months if enough or even too much has been done to stem business activity and inflationary pressures.  Should policy be applied heavy handedly, it could thwart economic activity enough to scare Chinese officials into a possible stop-go blunder.

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CHINA SEEN BY INDIA

THE RISE OF CHINA

The Hindu, February 18, 2011

It is official. Measured in terms of nominal GDP converted to dollars at official exchange rates, China has, in 2010, overtaken Japan as the world's second largest economy. Figures from Japan released this week showed that Japan's nominal gross domestic product was worth $5,474 billion in 2010 compared with China's $5,879 billion. This is indeed a significant milestone. For many years before that China had been ahead of Japan only when GDP was measured in purchasing power parity terms. PPP is an indicator that takes into account relative prices and therefore the command over goods that a dollar of income provides. Since with lower wages and prices, a dollar in China when converted to RMB delivers more purchasing power, Chinese GDP measured in PPP dollars is significantly higher than at official exchange rates. Hence, becoming the world's second largest economy at official exchange rates does mark an important transition. There are only two features that seem to discount this achievement. The first is that while having overtaken Japan, China is far behind the U.S., with less than two-fifths of its GDP in nominal terms. The second is that with a population of more than 1.3 billion, compared with Japan's 128 million and the United States' 307 million, China's per capita nominal GDP in 2009 was less than a tenth that in both Japan and the U.S.

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CHINA AND JAPAN

RISE OF CHINA NOT ALL BAD NEWS FOR JAPAN

More confirmation of China's economic ascendancy over Japan came this week in the form of GDP figures for the October-December quarter.

Rick Wallace

The Australian, February 17, 2011

A reduction of 0.3 per cent (or 1.1 per cent annualised) in Japan's gross domestic product was better than most economists expected, but it was still enough to see Japan deposed by China as the world's second-largest economy behind the US.

China had already nudged past Japan on a quarterly basis in the March-June quarter, but the October-December quarter marked the first time it has occurred on an annual basis since such things were first measured. Japan's economy is worth about $US5.5 trillion ($5.51 trillion), China's almost $US5.8 trillion.

It is an important milestone in China's remarkable rise from impoverished communist isolation to becoming an emerging global power.

Still, one GDP comparison doesn't tell the whole story.

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CHINA’S INTERNATIONAL ROLE

WHAT INTERNATIONAL RESPONSIBILITIES SHOULD CHINA TAKE?

Wu Jianmin

People’s Daily, February 16, 2011

Data released by the Japanese Cabinet Office on Feb. 14 showed its gross domestic product is 400 billion U.S. dollars less than that of China, which confirmed China’s status as the world's second largest economy for the first time. In fact, there had been such expectation in last year, which triggered increasing cries demanding China to assume greater international responsibility.

China is a responsible and reasonable big country. In the globalized world, China's development is inseparable from the world, and the world's prosperity and stability is inextricably linked with China. What international responsibility should China bear is worth thinking about. In my opinion, we bear responsibility in the following four aspects:

First, we need to address China's problems well. According to U.N. standards, 150 million Chinese people are still living below the poverty line. Lifting these people out of poverty is a very arduous task. Development is the key to solving the problems China faces. If China is doing well, the world is doing well; if China has big troubles, the world will suffer. Therefore doing a good job in China is our primary responsibility.

Second, we need to fulfill duties and responsibilities imposed by the "U.N. Charter" and more than 300 international conventions it joined. We have kept a good record in fulfilling these duties and responsibilities.

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JAPAN AS No. 3

JAPAN'S ECONOMY SLIPS TO NO. 3, WITH FURTHER DECLINE POSSIBLE

The Mainichi Daily News, February 15, 2011

TOKYO (Kyodo) -- Japan's loss of its long-held spot as the world's second-biggest economy to China has been accepted philosophically in political and financial circles, as many say it had been expected, while there are others who regard it as a harbinger of further decline.

It became official on Monday that China has become the world's No. 2 economy after the United States in terms of gross domestic product, as the Japanese government released its growth data for 2010 after the announcement by Beijing last month.

"A leap in the Chinese economy is a welcome occurrence for Japan as a neighboring country," Kaoru Yosano, Japan's economic and fiscal policy minister, told a press conference after the Cabinet Office said the nation's nominal GDP came to $5,474.2 billion last year, short of China's $5,878.6 billion.

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CHINA AS No. 2

CHINA IS THE WORLD'S SECOND LARGEST ECONOMY

China became the world's second largest in 2010 after data from Japan on Monday confirmed the country had lost the ranking it had held for 42 years.

The Telegraph, February 14, 2011

China was acknowledged last year as having surpassed Japan, but full-year Japanese data confirming it were not available until today.

The historic shift underscores a stark change in fortunes for the two countries: China is growing rapidly and driving the global economy, while Japan never fully bounced back from the stagnation that followed the bursting of its property bubble.

However, Japan said its economy would be lifted by a rising tide of recovery in key markets such as the US and elsewhere, and would aim to reap the benefits of its booming neighbour and top export market China.

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TAHRIR AND TIANANMEN

BEIJING LOOKS WARILY AT EGYPT UPRISING

The Chinese government, nervous about comparisons between Tahrir and Tiananmen, is downplaying Egyptian protesters' joy and emphasizing the need for stability in Cairo.

Barbara Demick

Los Angeles Times, February 13, 2011

Wary of the parallels between Tahrir and Tiananmen, Beijing is hardly celebrating the popular uprising in Egypt that brought down an authoritarian regime.

The Chinese government offered a sobering assessment Saturday of Egyptian President Hosni Mubarak's resignation. Foreign Ministry spokesman Ma Zhaoxu said in a statement that China hoped "the latest developments help restore national stability and social order at an early date."

News coverage of the 18-day uprising has emphasized looting, rioting and violence, while downplaying the jubilation of the protesters in Cairo's Tahrir Square. A short editorial Saturday in the state-run English-language China Daily used the word "stability," a favorite of the Chinese Communist Party, seven times. It warned that "any political changes will be meaningless if the country falls prey to chaos in the end."

But Chinese dissidents and critics greeted Mubarak's downfall with undisguised glee.

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THE RISKS OF CHINA’S FOREIGN POLICY

CHINA AS RUMPELSTILTSKIN

China’s assertiveness has alarmed many of its neighbours. Does a foot stamping foreign policy risk creating a counter-coalition?

June Teufel Dreyer

The Diplomat, February 12, 2011

China ushered in the year of the rabbit in buoyant mood. Prices of high-end commodities rose sharply – not, it seems, because of a spike in food prices, but because there are so many people with spare cash to spend. Internationally, meanwhile, China’s rapid recovery from the global financial crisis, its successful test of the J-20 stealth plane, and the achievements of its athletes and artists have all served to create an image of China as the power to emulate in much of the world.

This optimistic mood has been reflected in China’s increasingly assertive behaviour on the international stage. China has moved from being a rule-breaker in the 1950s – one trying to overturn the world order – to a rule-maker in the 21st century, seeking to modify the world order in ways meant to ensure its continued prosperity. And, while there are certainly similarities between the two periods, there is also a crucial difference – China now has the economic and military power to back up its aspirations.

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CHINA’S DISSIDENTS

CHINA ACTIVIST CHEN GUANGCHENG 'BEATEN'

A prominent Chinese activist and his wife are reported to have been beaten following the release of a video showing their house arrest.

BBC News, February 11, 2011

Chen Guangcheng and his wife, Yuan Weijin, were badly injured by security officials, according to the group Chinese Human Rights Defenders.

It says the beating came after the release of a secretly shot film showing Mr Chen as a prisoner in his own home.

He said he has been under surveillance since his release from jail last year.

Mr Chen - one of China's best-known activists - was imprisoned after claiming the authorities had carried out forced abortions.

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CHINA AND EGYPT

THE CHINESE SPHINX: HOW CHINA REPORTS ON EGYPT

The Daily Maverick, February 10, 2011

Unsurprisingly, the People’s Republic of China has been extraordinarily uncomfortable with the popular uprising in Egypt. Hosni Mubarak’s 30 years of authoritarianism, suddenly under existential threat, has many a corollary with the Chinese Communist Party. The question is not so much whether this could happen in China—it has, and might well again—but how the Chinese have reacted to it.

Tahrir Square in late January 2011, must have looked to the Chinese upper echelons like hell on earth. Memories of Tiananmen Square—the defining event of post-revolutionary China—were unwelcome, but inevitable. Squint at the TV, and the two uprisings looked incredibly similar.

Thing is, most Chinese were not squinting at the Egyptian revolt on their television screens. The CCP was determined to manage the outflow of information, even as it crackled across the Internet, trending high on Chinese Twitter and Facebook sites. Too much has been made of the Egyptian uprising being a result of online social networking - Frank Rich handily debunks this nonsense in a recent New York Times op-ed piece - but no one is arguing that news of the events in Cairo and beyond were disseminated over the web.

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CHINA AND GLOBAL REBALANCING

ANALYSIS: CHINA'S TIGHTENING SHOWS GLOBAL REBALANCING AT WORK

Alan Wheatley

Reuters, February 9, 2010

The inflationary pressures that prompted China to raise interest rates for the third time in four months are evidence that the imbalances destabilizing the global economy are slowly but surely being ironed out.

China's current account surplus, though shrinking, will not melt away overnight. Finance ministers from the Group of 20 major economies who are meeting next week are still likely to urge China to let the yuan's nominal exchange rate rise faster.

"This broader story of rising inflation in China contributes to global rebalancing," said Ashley Davies, an economist with Commerzbank in Singapore. "China is getting more expensive relative to the West."

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INDIA’S PER CAPITA INCOME

INDIA NOW ON MIDDLE INCOME PATH

Economy projected to grow by 8.6% in current fiscal; robust growth likely for farm, industry and services sectors

Asit Ranjan Mishra

Livemint, February 8, 2011

The Indian economy is projected to expand by 8.6% to a record $1.73 trillion (around `80 trillion) in the current fiscal, according to the Central Statistical Organisation (CSO), sustaining its growth trajectory.

At this level of nominal gross domestic product (GDP), India’s per capita income works out to about $1,200, effectively making it a middle-income country. While this will enhance the country’s global standing, it will be less eligible for soft loans from multilateral institutions for social sector projects and, hence, make it that much more difficult for the government to generate the desired resources.

The economy’s size was $1.4 trillion in 2009-10 and its per capita income estimated at $1,019. The country crossed the per capita threshold of $500 in 1999-2000.

During the current fiscal, the farm sector is expected to see robust growth of 5.4% as against 0.4% a year ago due to a normal monsoon and bumper harvests. Industry and the services sector are expected to hold on to their robust growth at 8.1% and 9.6%, respectively, compared with 8% and 10.05% a year ago.

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CHINA’S PROPERTY: A BUBBLE?

CHINA COULD BE ANOTHER JAPAN

Rising property prices lead to concerns of a similar asset bubble

Jo-Ann Huang Limin

Today Online, February 7, 2011

SINGAPORE - As property prices in China continue to rise - frustrating government efforts to rein them in - some analysts are concerned that China may end up with a Japanese-style asset bubble, which kept growing in the '80s before it burst with painful consequences for the economy.

The analysts noted that China's property market seemed to be fuelled by low interest rates - the same driver that distorted the Japanese market slightly more than two decades ago.

In a recent speech at a National University of Singapore forum, Mr Fan Yifei, executive vice-president of China's sovereign wealth fund China Investment Corporation, drew parallels between the frothy real-estate market in today's China and the real-estate mania that had gripped Japan in the late '80s.

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CHINESE IN AFRICA

CHINA'S ECONOMIC INVASION OF AFRICA

About a million Chinese, from engineers to chefs, have moved to work in Africa in the past decade. Xan Rice talks to some of them to find out why.

Xan Rice

The Guardian, February 6, 2011

In December 1999, a 24-year-old Chinese man called Zhang Hao left behind the freezing winter of his native Shenyang province to fly to Uganda. Zhang was nervous. He spoke no English. The journey was not even his idea, but that of his father, who had worked in Uganda a few years before on a fishing project involving the Chinese government.

"If you want to start something – and be the boss – Africa is the place to do it," Zhang's father had told him when he asked for business advice.

Zhang had quit university to travel to east Africa, but he did not need a degree to spot easy money-making opportunities as soon as he set foot in Kampala: goods that were available cheaply in every city in China were either expensive here, or unavailable. He started by importing shoes. Then schoolbags. Then fishing nets, nails and bicycles.

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OIL IN INDIA

OIL ON THE BOIL

Indian Express, February 5, 2011

The political unrest in the middle east, high demand from the US and China have once again pushed up the price crude to over $100 a barrel for the first time in over two years, raising concerns among policymakers on the widespread fiscal and inflation risks.

The upward pressure on crude is expected to persist this year and the International Monetary Fund baseline projection for oil in 2011 is $90 a barrel, up from $79 per barrel last year. Since India imports about 80% of its crude requirements and with domestic production remaining stagnant over the years, a Deutsche Bank estimate suggests that higher oil prices in 2011 could pose a risk, increasing the fiscal deficit by 0.5% of GDP in the 2011-12 budget. The research note, however, says authorities are unlikely to absorb the entire additional cost, preferring to push some of the spending to the next fiscal year and some off-budget.

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JAPAN’S RECOVERY

JAPAN—TURNING IT AROUND?

For the past decade and a half, the world has become used to a Japanese economy in the doldrums. Is Prime Minister Kan about to turn that around?

Ron Fraser

theTrumpet.com, February 4, 2011

Following decades of energetic growth after recovering from World War ii, the Japanese economy had peaked by the last decade of the 20th century. Having been the powerhouse of Asia for years, as the previous century closed Japan slid into the doldrums economically.

Throughout the first decade of the 21st century, the Japanese economy wallowed in a slough of negative growth, its banks and investment houses, its great corporations moribund under an entrenched system enslaved to the deeply seated culture of “saving face.”

Prime ministers came and went in Japan it seemed as quickly as the seasons changed. Japan languished economically to the point where a number of its high-profile corporations that previously prided themselves on the quality of their products faced embarrassing recall after recall.

Japan’s problem was systemic. It would simply take drastic surgery to cut deep into the corporate and societal mores that were placing a drag on any effort for forward momentum.

Perhaps that surgery is now about to happen.

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CHINA AND EGYPT’S UPRISING

CHINESE REGIME FEARS “EGYPTIZATION”

The words “Egypt” and “Tunisia” have been added to the list of censored items on the internet in China

Vincent Kolo

China Worker, February 3, 2011

Earlier this week, the League of Social Democrats held a protest at the Egyptian Consulate in Hong Kong in solidarity with the mass struggle against dictator Hosni Mubarak. The protesters held placards with the message “Egypt today, Hong Kong tomorrow”. In a similar vein, the website Tibetan Review ran an article headlined “As Egypt sneezes democracy, China fears catching a cold.” This idea, of the mood of revolt gaining an echo in China, is taken very seriously by the strategists of the Beijing regime.

The magnificent popular uprisings sweeping North Africa and the Arab world are causing jitters not just for Middle Eastern autocrats. In addition to forcing the governments of the United States and Israel into crisis meetings, the appearance on the streets of hundreds of thousands – even millions – against corrupt dictatorships in Tunisia, Egypt, Yemen and Jordan, has also unsettled China’s so-called ‘communist’ rulers. This is more than a little ironic considering Communist Parties have been banned for decades in Mubarak’s Egypt, Ben Ali’s Tunisia, and most of the other states now facing mass upheavals.

But there is no mistaking on which side the Chinese regime stands today. It has been a close ally of Mubarak’s repressive regime. While it does not have the same strategic presence in the region as US imperialism, trade with Egypt increased threefold over the past five years to reach US$7 billion in 2010, making it China’s second largest trading partner in Africa and the Middle East, excluding oil. Foreign ministry spokesman Hong Lei said “Egypt is a friend of China and we hope Egypt will return to social stability and normal order as soon as possible.”

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CHINA’S GREEN ECONOMY

CHINA’S COMING GREEN BOOM

Yuhan Zhang

The Diplomat, February 2, 2011

Policymakers in China are thrashing out the details of the next five-year plan. Will it set the country on the path toward a green economy?

For years now, China has been at the receiving end of stinging criticism from the West over its environmental policies, with critics describing it variously as one of the most polluted countries, an insatiable, consumer-driven energy guzzler, and the world’s worst emitter of greenhouse gases.

These labels have been prompted by China’s rapid industrialization and urbanization over the past 30 years, which has allowed it to achieve blistering economic growth, but at enormous cost to its environment. Given the widespread criticism, it’s understandable why many in the West might find it hard to imagine this ‘dirty’ giant ever getting clean.

Yet these difficulties shouldn’t overshadow an encouraging reality—China’s top decision makers are planning to take a more holistic approach to the quest for greener growth that could transform the country’s image.

China’s central government is currently thrashing out details of how best to steer towards greener growth as part of closed-door discussions aimed at finalizing the country’s 12^th Five Year Plan (2011-2015), which will be announced in March. The plan is expected to become China’s first national plan to shift the development agenda decisively toward a pattern of green growth, accelerating the country’s efforts at green modernization. Expect ‘establishing a low carbon society’ to be a key political slogan over the next five years.

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CHINA’S QUALITY OF GROWTH

CHINA’S QUALITY TIME FOR DEVELOPMENT

Zhang Monan

The Korea Herald, February 1, 2011

China’s double-digital economic growth over the past years has helped it replace Japan as the world’s second largest economy.

In terms of gross domestic product China exceeded Japan from the second quarter of 2010 and its full-year GDP was more than 39 trillion yuan ($5.93 trillion), as indicated by statistics from the National Bureau of Statistics. That means China now has the second largest global economic status that Japan held for four decades. China’s percentage of the global economy also increased from 1.8 percent in 1978 to 8.5 percent in 2009.

However, despite its economic size, China’s economic quality and overall development are still far behind its neighbor and many economic indexes show there still exists a wide gap between them.

China’s per capita GDP is only one-10th of Japan’s. Statistics from the International Monetary Fund (IMF) show that China’s per capita GDP is only $4,412, far below Japan’s $42,431 and Japan does not include its overseas assets in its GDP value, a statistical method that makes its real national wealth underestimated.

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