CHINA AND EGYPT

WHAT CHINA'S LEADERS NEED TO LEARN FROM EGYPT’S TURMOIL

Shaun Rein

CNBC.com, January 31, 2011

The protests in Egypt are unsettling regimes around the world as thousands of everyday Egyptians rise and declare that they want an end to President Hosni Mubarak’s 30-year rule. Time will tell if Mubarak’s regime really will collapse or be forced to undertake major reforms, but what is true is there are lessons for China's leaders as well as those through the Middle East.

The turmoil along the Nile is being led by disenfranchised middle class who feel they have no future because of overwhelming corruption and limited job opportunities. The situation isn't too different from China, with many commentators pointing to the growing income gap between the rich and the poor as a potential source of instability. 

However, while China’s government does need to care for its poor, peasants are unlikely to cause systemic instability. While there are riots in many of China’s smaller cities and counties, they are often short-lived focused on local problems involving corruption, not national ones. Even if discontent were to turn toward the central government, peasants do not have the financial resources to sustain long-term protests – they literally have to work to eat – and they lack the means to rally large-scale support.

If countrywide protests do occur in China, the far more likely source will be university graduates who feel marginalized and unable to find good jobs.

(...) [artículo aquí]

CHINA’S RISE (AND RISKS)

THE CHINA SYNDROME: YEAR OF THE RABBIT

As another Chinese New Year dawns this week, Jonathan Fenby assesses the world's second-biggest economic power - and charts the risks ahead

Jonathan Fenby

The Independent, January 30, 2011

China enters its lunar new year on Thursday in anything but rabbit fashion. Having overtaken Japan to become the world's second biggest economy late in 2010, it has just unveiled economic figures that underline its continuing ability to deliver high levels of growth (10.3 per cent) accompanied by a string of superlatives – from having the world's biggest car market (13.8 million sales) to holding the largest cache of foreign reserves ($2.85trn). Goldman Sachs forecasts that the last major power ruled by a Communist Party will surpass the United States by 2027. Others see this happening earlier.

For many Americans, China's ascendancy appears already to be a fact: though the US economy is well over twice as big as China's, a recent poll of Americans showed 47 per cent naming China as the world's leading economy compared to 31 per cent who opted for their own country. The US magazine Forbes recently named the Chinese leader, Hu Jintao, as the most powerful man on earth. In a recent article, the historian Niall Ferguson wondered if, when they met at the G20 summit in South Korea in the autumn, President Barack Obama saw a thought balloon over Hu's head reading: "We are the masters now."

(...) [artículo aquí]

CHINA AND THE US

THE 'CHINA BRAND' ENTICES AMERICA

John J. Metzler

The China Post, January 29, 2011

The recent State Visit by Chinese President Hu Jintao to the United States evoked a business trip as much as a glittering diplomatic sojourn.

The three-day venture was a smoothly scripted event showcasing China's "peaceful rise." Meetings with U.S. President Barack Obama, and congressional leaders provided the backdrop.

The People's Republic of China strives to appear and be treated as an equal "fellow global player" not an aspiring political adversary or for that matter recalled as the world's largest authoritarian dictatorship.

So when Hu Jintao went to Washington DC, it evoked a visit from America's largest Banker or Lender rather than the trip by the Chairman of the Communist Party of China.

Shortly after Jimmy Carter the human rights president opened full diplomatic ties with Beijing the world's largest dictatorship in 1979, I vividly recall when then paramount leader Deng Xiaoping visited America; the diminutive dictator was touted in many American cities. In Atlanta after visiting Coca Cola, one newspaper gushed "Teng Twinkles, Atlantans Learn."

(...) [artículo aquí]

INDIA’S INDUSTRY

A MANUFACTURING STRATEGY FOR INDIA

Arun Maira

The Economic Times, January 28, 2011

Indian manufacturing has failed to be an engine of growth, which it must urgently become. Rather than exceeding and leading the overall growth of the economy as it should, manufacturing has just about come along. Moreover, the formal manufacturing sector has added few jobs in the past decade.

And worryingly, it is losing depth. While China's GDP is 3.8 times larger than India's, its production of machine tools, the 'mother industry' of manufacturing, is 55 times more! India needs a strategy to grow manufacturing 12% to 14% per annum, create 100 million new manufacturing jobs in the next 15 years to realise its 'demographic dividend', and create more depth in capital goods industries and innovation for its manufacturing sector to be competitive and sustainable.

China's remarkable success in manufacturing is the result of a strategy to win, as was the growth of the other Asian industrial powerhouses, Japan and South Korea. Having built its manufacturing base, China is scaring the world with its strategy to build 'indigenous innovation'. India too has announced its intention to strengthen innovation. An innovation strategy must be closely intertwined with a manufacturing one.

(...) [artículo aquí]

CHINA AND ASIA

THE CHINAFICATION OF ASIA

Beijing is not satisfied with the status quo and is maneuvering to expand its reach, especially in Asia.

Jeremiah Jacques

The Trumpet, January 27, 2011

“Anybody who ignores China would have to reexamine his head,” said the Philippines Senate President Juan Ponce Enrile last month. And a growing number of Asian policymakers are demonstrating that they agree with Enrile.

Wielding the twin forces of soft-power diplomacy and intimidating military growth, Beijing is rapidly expanding China’s reach throughout Asia. Viewed individually, the gains China has made don’t appear terribly significant, but, when analyzed together, they paint a sobering picture of a rapidly rising Chinese powerhouse and of a dramatic shift in Asia’s balance of power.

(...) [artículo aquí]

ASIA AND CHINA’S INFLATION

CHINA PRICE GAINS POSE RISK TO ASIA’S 2011 GROWTH, FITCH SAYS

Katrina Nicholas

Bloomberg, January 26, 2011

Inflation in China could hinder Asia’s economic growth and damage the ratings outlook for countries in the region this year, according to Fitch Ratings.

China’s policy makers are likely to face greater difficulty as the world’s fastest-growing major economy battles “hot money inflows” and consumer prices that rose 4.6 percent in December after advancing 5.1 percent in November, Andrew Colquhoun, Senior Director and Head of Asia Pacific Sovereigns, said today.

“If we see evidence inflationary pressures are worse or more intense than we thought, that could lead to slower growth which would be negative for the region,” he said in a telephone interview in Singapore.

Surging prices prompted China’s central bank to raise its lending rate twice last quarter and lift banks’ reserve requirements four times in about two months. Inflation may peak at 6 percent this month as snowstorms damage crops and disrupt transport ahead of the Lunar New Year holiday, Daiwa Capital Markets said in an e-mailed note today.

(...) [artículo aquí]

ASIA 2050

WHY A RISING ASIA MAY NOT BE A CHANGED ASIA

Maria Monica Wihardja

The Jakarta Post, January 25, 2011

The Asian Development Bank (ADB) along with Indonesian ministries including the Trade Ministry and the National Development Planning Ministry, held a symposium on “Asia's Development Agenda in Regional and International Forums” on Jan. 18, 2011, and a consultation meeting on “Asia 2050” on Jan. 19, 2011.

These themes are timely since Asia still faces developmental challenges despite its growth miracles, while Asia's stake in the global economic recovery is high with the ADB projecting Asia's global economic share to be 61 percent by 2050.

Asia's success is not pre-ordained, said Shigeo Katsu, a senior associate of the Centennial Group, at the Asia 2050 meeting. He proposed three possible scenarios for Asia in 2050.

First is the benchmark case of “converging Asia” in which production chains and networks and total factor productivities, especially in China and India, continue on their current tracks. Second is the “non-converging Asia” in which Asian countries, especially India and China, are trapped as middle-income countries with poor institutions and governance as well as growing inequalities and urbanization buzz. Third is the “prosperous Asia”. 

(...) [artículo aquí]