DEVELOPING NATIONS UNITED IN CLIMATE TALKS, EU, US DIFFER

Xinhua

China Daily, December 8, 2009

COPENHAGEN: Developing nations spoke as one on Monday in calling for the continued functioning of the Kyoto Protocol, while the European Union (EU) and the United States differed on what should emerge from two weeks of UN climate talks in Copenhagen.

Speaking on behalf of the Group of 77 and China at the opening plenary session of the UN Climate Change Conference here, head of the Sudanese delegation Ambassador Ibrahim Mirghani Ibrahim said developing countries reject developed countries' objective of "concluding another legally binding instrument that would put together the obligations of developed countries under the Kyoto Protocol and similar actions of developing countries."

"This would revoke the principle of common but differentiated responsibilities and historical responsibility under the convention by imposing these obligations as well on developing countries under the guise of a 'shared vision,'" said Ibrahim, referring to the United Nations Framework Convention on Climate Change (UNFCCC).

Under the 1997 Kyoto Protocol, developed countries have committed to reducing their emissions by an average of 5 percent against 1990 levels over the five-year period 2008-2012. Pressure was mounting for developed countries to commit to ambitious targets on emission cuts and funding for developing nations beyond 2012.

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DEFLATION DEJA VU

Tim Kelly

Forbes, December 7, 2009

Just over four years since it clawed its way out of a consumption-sapping cycle of price slides that sucked the vitality out of Asia's biggest economy, Japan is back in deflation, officially at least. The news wasn't, however, greeted across the archipelago with panic, riots or wailing, just a little hand-wringing, and weary here-we-go-again sighs.

The feeling of deflation deja vu was compound by the nation's central bank response, which amounted to more of the same. The Bank of Japan is keeping the nation awash in corpuscles of cash in the hope that like an over-oxygenated athlete, the Japanese economy might burst into a sprint.

The official return to deflation didn't shock most Japanese, because after two decades of post-bubble stagnation, it never really felt like Japan had left deflation. Many are happy to keep it that way -- after all, how many shoppers are going to complain when goods get cheaper? When wages are shrinking and taxation and social welfare costs are ballooning, people will insist on value for money, especially when they have been overpaying for goods and services for years.

Even after several years of deflation Japan, or Tokyo at least, still features near or at the top of international cost-of-living comparisons. Lots of middlemen, and overstaffing are a few of the reasons why Japanese consumers are squeezed at every step of the distribution chain for what amounts to a de facto charge to keep unemployment low and vested interests vested. The price slide is rightly giving economists the jitters, because unchecked, it could bring the economy to a halt. But the still-high prices paid by Japan's consumers suggest there is a way to go before the nation reaches its equilibrium. The upside is that it will force Japan into the kind of structural change needed to boost productivity that its political leaders dare not suggest.

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LOOKING INTO CHINA'S FUTURE

David Olive

Toronto Star, December 6, 2009

China's economic transformation has been so rapid that even its abysmal human-rights record is set aside in the minds of economic planners elsewhere, who marvel at a nation whose Industrial Revolution has compressed two centuries of Western industrialization into what seems like a mere two decades.

Even as the West remains in the sick bay, China's continued dynamic growth will see it overtake Japan this year as the world's second-largest economy, and Germany as the world's biggest exporter.

But beneath the veneer of spectacular Chinese infrastructure projects at home and Wal-Mart stores abroad seemingly stocked with nothing but Chinese goods, China remains a poor, developing country without a Western-style social safety net. It remains an exporter with only a nascent consumer economy, heavily reliant on imported technology, and propelled by an artificially devalued currency that effectively takes jobs from other countries, notably its fellow developing nations.

On the latter score, "China's bad behaviour is posing a growing threat to the rest of the world economy," Nobel laureate economist Paul Krugman wrote recently, describing Beijing's persistence despite years of external criticism of refusing to let its currency float the way the loonie does, to the detriment of Canadian exporters.

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JAIRAM RAMESH: 20-25 % CARBON EMISSION INTENSITY CUT BY 2020

Aarti Dhar

The Hindu, December 4, 2009

Basic negotiating point is our low per capita income

Between 1990 and 2005, emission intensity went down by 17.6 per cent

NEW DELHI: India on Thursday announced 20-25 per cent carbon emission intensity cuts on the 2005 levels by 2020. This would be done through a series of measures including mandatory fuel efficiency standards for all vehicles, a compulsory green building code and switching over to clean coal technology.

Following a four-hour debate in the Lok Sabha, Minister of State for Environment and Forests (Independent charge), Jairam Ramesh said if nations arrived at a “comprehensive and equitable agreement,” India would be willing to do more but only through voluntary measures.

Reiterating that India would never agree to any legally binding emission cut or accept any agreement that stipulated a ‘peaking’ year for carbon emission, he, however, said the country would be willing to be a “little flexible” depending on the concessions it got for its mitigation action, by way of technology and finance from developed nations.

“Our basic negotiating point is our low per capita income but if India wants to lead the developing nations, we have to offer something during negotiations,” Mr. Ramesh said, adding “India stood for a comprehensive, equitable agreement.”

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JAPAN’S COMPANIES CUT CAPITAL SPENDING AT RECORD PACE

Keiko Ujikane

Bloomberg, December 3, 2009

Japanese businesses cut spending at a record pace last quarter, indicating they aren’t yet confident that the recovery from the country’s deepest postwar recession will be sustained.

Capital spending excluding software fell 25.7 percent in the three months ended Sept. 30 from a year earlier, the largest drop since the government began the survey in 1955, the Finance Ministry said today in Tokyo. It was the 10th decline.

The report adds to concerns about an economy that’s already under threat from deflation and the yen’s gain to a 14- year high against the dollar, which is eroding earnings at exporters such as Toyota Motor Corp. The Bank of Japan this week unveiled a 10 trillion yen ($115 billion) credit program, and the government plans to release a spending package to fight price declines and the surging currency.

“It will probably take time before capital investment returns to a sustainable recovery track,” said Naoki Tsuchiyama, market economist at Mizuho Securities Co. in Tokyo. “Concern over a stronger yen and deflation may affect corporate investment with a time lag.”

The Cabinet Office will use today’s report to revise third-quarter gross domestic product figures on Dec. 9. Tsuchiyama said annualized growth may be revised down to about 2.5 percent from the government’s initial figure of 4.8 percent, which was the fastest pace since the start of 2007.

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JAPAN’S RELATIONSHIP WITH U.S. GETS A CLOSER LOOK

Martin Fackler

The New York Times, December 2, 2009

TOKYO — Two months after taking power, Japan’s new leadership is still raising alarms in the United States with its continued scrutiny of the countries’ more than half-century-old security alliance. But this reconsideration is not a pulling away from the United States so much as part of a broader, mostly domestic effort to outgrow Japan’s failed postwar order, say political experts here.

More important, the analysts say, these stirrings may also be the first signs of something that both Tokyo and Washington should have had years ago: a more open dialogue on a security relationship that has failed to keep up with the changing realities in Japan and, more broadly, in Asia.

Even after President Obama’s feel-good visit to Tokyo last month, the government of Prime Minister Yukio Hatoyama has begun an inquiry to expose secret cold war-era agreements that allowed American nuclear weapons into Japan and has conducted a rare public review of its financial support for the 50,000 United States military workers based here. This continues the approach taken by Mr. Hatoyama since his Democratic Party scored a historic election victory in August on pledges to build a more equal partnership with Washington.

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THE DAY BEIJING BLINKED

Antoaneta Bezlova

Asia Times, December 1, 2009

BEIJING - The jury is still out on what Beijing and Washington achieved during President Barack Obama's first state visit to China last week. But one trait has emerged more strongly than anything else.

While eager to receive recognition for its star-power economy and financial crisis management, China balked at suggestions of global burden-sharing with the US and rejected the possibility that the Group of Two (G-2) would play a role in shaping the new world order.

Many other sensitive issues were broached only indirectly during Obama's stage-managed visit, but on the subject of G-2 and acting as US partner in global management, Beijing was more than explicit.

"We do not approve of the notion of G-2," Chinese Premier Wen Jiabao said. "China is the world's most populous developing nation, and we are very conscious of the long way China has to go before it becomes a modernized country."

Wen praised the importance of US-China cooperation in the current risky international situation, but emphasized that China was going to consider first and foremost its national interests.

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