Archive for ‘Infrastructure’

17/09/2014

5 Things to Look Out for During Xi Jinping’s Visit to India – WSJ

Manan Vatsyayana/Agence France-Presse/Getty Images

1 INFRASTRUCTURE

Prime Minister Narendra Modi is looking for foreign capital and expertise to build “smart cities”, high-speed trains and modern airports of the kind that China has built for itself in the past decade. The two leaders are expected to sign a deal to bring bullet trains to India and may also reach an agreement for the building of world-class railway stations and airports.

2 INDUSTRIAL PARKS

The two countries laid the groundwork for Chinese investment in industrial parks in India when Indian Vice-President Hamid Ansari visited Beijing in June. Indian officials say they expect to ink deals worth $5 billion for two parks – one in the western state of Gujarat, Mr. Modi’s home state, and the other in Maharashtra. The idea is to make it easier for Chinese companies to set up shop in India.

3 BORDER TROUBLES

Territorial disputes that have long dogged Sino-Indian ties aren’t the focus of this visit, but are sure to come up. Two reports this week – one about an alleged incursion by Chinese troops in Ladakh and another about protests by Chinese civilians and troops against the construction of an Indian canal along the disputed border – have highlighted the unresolved issues. Even after 17 rounds of talks, no solution has emerged – don’t expect one during this visit either.

4 COMPETITION WITH JAPAN

Indian newspapers have been filled with anticipation about whether China will outdo its Asian rival, Japan, in promising investments for India. Earlier this month, Japan pledged to pour $35 billion into India over five years; China is expected to go further. Expect reams of analysis of Mr. Xi’s rapport with Mr. Modi. When Japanese Premier Shinzo Abe met Mr. Modi, they bear hugged.

5 BREAKING OUT OF THE MOLD

Officials have raised hopes of a “directional change” and an “orbital jump” in Sino-Indian ties, which have long been bogged down by bureaucratic mistrust. Trade relations have flourished in the past decade, but are skewed in China’s favor– and investments have remained very low. Experts are hoping Mr. Modi – who worked with Chinese as chief minister of Gujarat – will adopt a pragmatic approach to push for Chinese money. If he succeeds, the visit may set the stage for an era of economic collaboration between the two Asian giants.

via 5 Things to Look Out for During Xi Jinping’s Visit to India – WSJ.

17/09/2014

Is China’s promised $100 billion India investment more dangerous than its border policy?

Experts believe that China deliberately uses trade as part of its geo-strategic arsenal.

The script is almost predictable. Right before meetings of Indian and Chinese heads of state, something happens on the border to remind everyone that sentiment between the two countries is not exactly neighbourly. Last year it was a standoff in Daulat Beg Oldi about infiltration by the Chinese army. This year, with everyone excited at China’s promise to pump $100 billion into India, there’s another incursion by the Chinese into Demchok in Ladhak.

Chinese President Xi Jinping arrives in India today and will visit Ahmedabad on Prime Minister Narendra Modi’s birthday. But Chinese troops have also been reported to have moved 500 meters into Indian territory.

Beijing’s approach seems to be sweet-talking – this time taking the form of foreign direct investment – coupled with regular pinpricks that remind India that they have the stronger position on the border.

But could the proposed investment be as much of a threat to India as the border dispute?

Trading places

India’s total trade with China was around $65 billion in 2013-’14. Of that, only $14 billion were Indian exports heading into China, leaving India with a trade deficit of $36 billion. If oil imports are included, Chinese imports are responsible for nearly half of India’s overall trade deficit. This is a great many Indian eggs in one Chinese basket.

For many economists, this isn’t a problem. It’s simply the way efficient markets ought to function, with India buying the goods it needs from the most competitive seller. “The more competitive the trading partner, the more India should buy from it, and the bigger should be the bilateral trade deficit,” wrote commentator Swaminathan Aiyar last year. “China is the most competitive exporter of all, so India should run its biggest trade deficit with this country.”

Yet India does feel the need to reduce the trade deficit with China. Answering a question in the Lok Sabha earlier this year, minister of state for commerce Nirmala Sitharaman admitted that the balance of trade was heavily in China’s favour and that India was taking steps to address this.

“With a view to reducing the trade deficit with China, efforts are being made to diversify the export basket,” Sitharaman said.

via Scroll.in – News. Politics. Culture..

21/03/2014

China Wants Its People in the Cities – Reuters

From: http://www.businessweek.com/articles/2014-03-20/china-wants-its-people-in-the-cities

Thirty-five years ago, when paramount leader Deng Xiaoping launched gaige kaifang, or “reform and opening,” China was a much more agricultural country, with less than a fifth of its people living in cities. Since then hundreds of millions of rural residents have left the countryside, many seeking jobs in the export-oriented factories and construction sites that Deng’s policy promoted.

Commercial and residential buildings stand in the Luohu district of Shenzhen, China, on Dec. 18, 2013 In 1978 there were no Chinese cities with more than 10 million people and only two with 5 million to 10 million; by 2010, six cities had more than 10 million and 10 had from 5 million to 10 million. By the following year, a majority of Chinese were living in urban areas for the first time in the country’s history.

Now urbanization has been designated a national priority and is expected to occur even more rapidly. On March 16, Premier Li Keqiang’s State Council and the central committee of the Communist Party released the “National New-type Urbanization Plan (2014-2020),” which sets clear targets: By 2020 the country will have 60 percent of its people living in cities, up from 53.7 percent now.

What’s the ultimate aim of creating a much more urban country? Simply put, all those new, more free-spending urbanites are expected to help drive a more vibrant economy, helping wean China off its present reliance on unsustainable investment-heavy growth. “Domestic demand is the fundamental impetus for China’s development, and the greatest potential for expanding domestic demand lies in urbanization,” the plan says.

To get there, China’s policymakers know they have to loosen the restrictive hukou, the household registration policy that today keeps many Chinese migrants second-class urban residents. China will ensure that the proportion of those who live in the cities with full urban hukou, which provides better access to education, health care, and pensions, will rise from last year’s level of 35.7 percent of city dwellers to 45 percent by 2020. That means 100 million rural migrant workers, out of a total 270 million today, will have to be given urban household registration.

To prepare for the new masses, China knows it must vastly expand urban infrastructure. The plan calls for ensuring that expressways and railways link all cities with more than 200,000 people by 2020; high-speed rail is expected to link cities with more than a half million by then. Civil aviation will expand to be available to 90 percent of the population.

Access to affordable housing projects funded by the government is also expected to rise substantially. The target is to provide social housing (roughly analogous to public housing in the U.S.) to 23 percent of the urban populace by 2020; that’s up from an estimated 14.3 percent last year, according to Tao Wang, China economist at UBS Securities (UBS) in Hong Kong. That means providing social housing for an additional 90 million people, amounting to about 30 million units, over the next seven years, Wang writes in a March 18 report.

The urbanization plan appears to face several big challenges. First, the government wants to maintain restrictions on migration to China’s biggest cities, which also happen to be its most popular. Instead, the plan calls for liberalizing migration to small and midsize cities, or those with less than 5 million. Whether migrants will willingly flock to designated smaller cities, rather than the megacities including Beijing, Shanghai, Guangzhou, and Shenzhen, is an unanswered question.

Another obstacle to faster urbanization is that the plan doesn’t propose how to reform China’s decades-old land tenure system. Changing the system could allow farmers more freedom to mortgage, rent, or sell their land.

Finally, one of the most daunting problems is figuring out how to pay for implementing the ambitious urbanization targets. The cost of rolling out a much more extensive social welfare network will be substantial (today, most Chinese in the countryside have far lower levels of medical and pension coverage, as well as far inferior schools); building the new urban infrastructure will also be expensive.

 

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11/02/2014

Rail budget: Mallikarjun Kharge likely to announce more trains, new lines – The Times of India

Faced with a revenue shortfall, railway minister Mallikarjun Kharge will not bring about reduction in basic passenger fares in the interim budget on Wednesday but is likely to make adjustment in fuel adjustment component so that impact on fares is minimum in an election year.

Kharge is likely to announce more trains, new lines and better passenger amenities in the interim budget.

Railway ministry sources said it will be a growth-oriented budget and not a deficit one despite fall in earnings.

via Rail budget: Mallikarjun Kharge likely to announce more trains, new lines – The Times of India.

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15/01/2014

Wuhan overpass swings into place[1]- Chinadaily.com.cn

A 17,000-ton section of an overpass was rotated 106 degrees, one step closer to the completion of an elevated highway in Wuhan city, Central China\’s Hubei province, on Jan 14, 2014. The section on pier number Z63, at a height of 15 meters, was built along the railway to not disturb trains. It finished rotating and joined its other parts in 90 minutes. The completed overpass will be 256 meters long and span 11 railways, including the Beijing-Guangzhou Railway and Wuhan-Hefei Railway. It is expected to open to traffic this month.

Wuhan overpass swings into place

via Wuhan overpass swings into place[1]- Chinadaily.com.cn.

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11/01/2014

Seeing India by Luxury Train – India Real Time – WSJ

WHEN WE STEPPED off the train at the small station of Pachora, 250 miles northeast of Mumbai, Lord Ganesha was waiting.

A man costumed as the Hindu god was carried by turbaned attendants and accompanied by folk dancers who whirled to ancient stringed instruments, reedy horns and hand drums. Ganesha sported a pinkish elephant head, complete with trunk and oversize ears, but he blessed us with a very human hand. Locals must have felt like the circus had arrived in town, for despite the early hour, they had come to watch the welcome arranged specially for us.

It was appropriate to be greeted by the god of good fortune: We were a lucky group—passengers taking a 2,000-mile journey from Mumbai to New Delhi on the Maharajas’ Express, one of the most luxurious trains in the world.

Roger Toll

Guests playing elephant polo in the private garden of the Maharaja of Jaipur.

The train’s name conjures images of hilltop forts, bejeweled scimitars and armies on camels and elephants— for good reason. The maharajas (“great kings”) ruled India’s hundreds of princely states from as early as the 1600s to the mid-20th century. In Rajasthan, in particular, the warrior-kings built impressive cities they named for themselves: Udaipur, Jodhpur, Jaipur. Their heirs, allying themselves with the British Raj, continued a sumptuous style of living until Indian independence in 1947. (While the princely families lost their power post-Raj, they kept most of their palaces and forts.)

The Maharajas’ Express pays tribute to that regal lifestyle. Nearly half a mile long, the train is a glossy burgundy on the outside. Inside, guests sleep in cabins that feel like upscale hotel rooms, with silk window treatments, carved wood paneling and marble-tiled floors. Travelers feast off fine china and crisp linens in the two dining cars. The staff seems almost to outnumber the guests, which total 88 at full capacity. In the morning, valets brought tea to our rooms. When we trundled through the long line of cars to dinner, staffers folded down our beds, delivered clean laundry and left behind chocolates or a flower. Upon our return from outings, they greeted us with fresh juice or cocktails and cool, damp cloths for wiping the dust from our faces.

via Seeing India by Luxury Train – India Real Time – WSJ.

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23/11/2013

Property in China: Haunted housing | The Economist

IN CHINA, property prices can keep going up forever. At least, that is what optimists seem to think. They point out that the country is undergoing the largest urbanisation in history. The throngs of migrants from the countryside all need homes, the argument runs. China’s swelling middle classes, many of whom live in shoddy 1980s housing, are also eagerly moving to fancier flats or McMansions. The result has been a spectacular property boom over the past decade.

At first glance, it seems the good times are still rolling (see chart). During the first three quarters of this year residential sales shot up by 35% versus the same period a year ago. Prices for new homes rose year-on-year in September in 69 of the 70 biggest cities. In Shanghai, Shenzhen and Beijing prices jumped by more than 20%; in slightly smaller cities, such as Nanjing and Xiamen, they rose by around 15%.

Despite these signs of rude health, even some of China’s biggest property moguls appear to be growing uneasy. Wang Shi, the chairman of China Vanke, the country’s largest residential-property firm by volume, has called the market a bubble. Wang Jianlin, the country’s richest man and the chairman of Dalian Wanda, a property giant turned entertainment firm, acknowledges that parts of the country may be experiencing a property bubble, though he thinks it “controllable”. Li Ka-Shing, a Hong Kong tycoon who has long been bullish on China, has started to sell his mainland holdings.

The problem is not the wealthiest cities with the most vertiginous valuations. Indeed, in those markets prices may yet go higher. People from all over China buy trophy apartments in Shanghai and Beijing, making their markets as resilient as those of Manhattan and central London. In fact, policies aimed at squelching speculation may be artificially suppressing demand in those places.

Shanghai and Shenzhen recently followed Beijing’s lead by requiring that buyers of second homes put up 70% of the purchase price as a deposit. In Beijing, the sale of a second home incurs a 20% capital-gains tax. (This is supposedly a nationwide policy, but is not always enforced in other cities.) Couples with two homes are reportedly divorcing to avoid the tax, since once officially single they can each own a primary residence, and thus sell either one without penalty.

Demand does not look so robust, however, in places like Yingkou Coastal Industrial Base, in north-eastern China. This development was promoted by the local government as a future hub of economic activity, but the future has not yet arrived. There are rows of empty buildings and few people on the streets. Property salesmen claim that big companies ranging from Coca-Cola to PetroChina are building factories nearby. But even Xinhua, an official media outlet, is sceptical: except for street lamps and the occasional passing vehicle, it reported recently, “at night the base was completely dark.”

Many property developments outside the big cities appear to be ghost towns of this sort. Moody’s, a credit-rating agency, laments that a large and rising share of new supply has gone to smaller cities. People’s Daily, another official organ, recently fulminated against the “huge waste of resources” such construction represents. Nonetheless, by the government’s count, 144 cities in 12 provinces are planning 200 new towns.

via Property in China: Haunted housing | The Economist.

21/06/2013

4.7-trillion-yuan plan to double mainland road network by 2030

SCMP: “Central government earmarks 4.7 trillion yuan for upgrading and extending roads, giving the country 400,000km of highway by 2030

shenzhen_international_toll_roads_4634887.jpg Newspapers suggest 4.7-trillion-yuan plan to double mainland road network by 2030

The mainland will spend 4.7 trillion yuan (HK$5.9 trillion) in the next 17 years to more than double its network of major roads, top transport officials said yesterday.

Dai Dongchang , chief planner with the Ministry of Transport‘s general planning department, told a press conference that a recently approved blueprint for road expansion included 50,000 kilometres of toll highways and 160,000 kilometres of toll-free “national trunk ways”, which are narrower and have slower top speeds.

The mainland has 173,000 kilometres of the two kinds of road at present and the plan approved by the State Council last month says that should rise to 400,000 kilometres by 2030.

By then, toll-free trunk ways should connect all counties, Dai said, while highways should connect all cities with populations of more than 200,000, as well as important transport junctions and border ports.

Huang Min , head of the National Development and Reform Commission‘s basic industry department, said 18 cities of more than 200,000 lacked highway links at present, while more than 900 counties were not connected to national trunk ways.

The new highways would include two north-south routes in the nation’s west, Huang said, with many of the 900 counties expecting new trunk ways also located in the west.

The mainland now had about 110 million private vehicles, 60 times the number in 1981, when the plan for the existing road system was drafted, he said.

Dai said the volume of goods carried on mainland roads was 3.7 times the volume carried on United States’ roads and was expected to at least double by 2030, along with the number of passenger vehicles.

He said China had previously paid more attention to the construction of highways and small roads in the countryside, leading to sluggish development and poor maintenance of trunk ways.

The blueprint forecasts a total of 5.8 million kilometres of roads on the mainland by 2030 – 84 per cent countryside roads, 9 per cent provincial roads and 7 per cent highways and trunk ways.”

via 4.7-trillion-yuan plan to double mainland road network by 2030 | South China Morning Post.

See also: http://chindia-alert.org/economic-factors/chinas-infrastructure/

11/05/2013

* Should China Try to Feed Itself?

BusinessWeek: “For China’s leaders, there was one problem in an otherwise benign inflation report for April. First, the good news: The consumer price index rose 2.4 percent, about in line with economists’ expectations. While inflation accelerated from 2.1 percent in March, the April figure is still well below the government’s target of 3.5 percent for the year.

An aerial view of the fish farms in the countryside next to Hefei, in central China's Anhui province

So what’s the catch? Food prices. With vegetables getting more expensive, the cost of eating jumped 4 percent last month, compared with an increase of 2.7 percent in March. The rising cost of food could create more difficulties in the coming months, the People’s Bank of China warned yesterday.

The Chinese government is well aware of the political sensitivity of food, which is one reason the country is sticking to a policy that promotes self-sufficiency. The country’s farmers met about 98 percent of China’s demand for grain last year, Vice Minister of Agriculture Chen Xiaohua said at a news conference in March.

If the country wants to ensure lower prices, though, China should rethink that self-sufficiency policy, argues Paul Conway, the vice chairman of Cargill. “As they become richer and more urbanized, they will have to become less self-sufficient in grain,” he says. The Minnesota-based agribusiness giant is a major player in exporting wheat, corn, and soybeans from the U.S. and other countries in the Western Hemisphere to Asia, so he certainly has a good business reason for wanting China to buy more food from abroad.

But, Conway says, China and other Asian countries with huge populations, such as India and Indonesia, stand to benefit from reducing their reliance on local farmers. “There is still a tendency in some parts of Asia to food security through food self-sufficiency,” he says from Singapore, where he gave a speech on May 8 about food security. Giving up on that idea and instead importing food from low-cost producers in the U.S., Canada, Brazil, and Argentina would be “the best guarantee of Asian food security,” he says. “For grains and oilseeds, Asia’s self-interest is to have access to the surpluses from the Western Hemisphere.”

In order to bolster its food security, China also should be investing in agricultural infrastructure in other countries, Conway says. Just as Chinese investors are helping to fund transportation projects in African countries that supply minerals to China’s factories, the country should also be putting money into projects that could make it easier for farmers in places like Brazil to get their crops to seaports. That, he argues, makes more sense than just buying farms overseas. “From a food security standpoint, the fact that you own land in another country doesn’t guarantee you anything. Borders can always be closed. If China wants to improve the flow of grains, instead of investing in land, invest in infrastructure.””

via Should China Try to Feed Itself? – Businessweek.

07/05/2013

* 2,400 MTonnes wheat rotting in govt granaries for past 2 years

Times of India: “India may be facing the shame of 47% of its children suffering from malnutrition and about 30% of its population living below poverty line, but food continues to rot in government granaries. The Food Corporation of India (FCI) has admitted in data accessed through RTI that the amount of damaged wheat has increased from 2,010 million tonnes (MT) in 2009-2010 to 2,401.61 MT (2011-2012). The country has already suffered a loss of 932.46 MT damaged wheat this year, with the worst affected being Bihar.

Food Corporation of India

Food Corporation of India (Photo credit: Wikipedia)

The data has been given in response to an application filed by Uttar Pradesh resident, Kush Kalra. Till February, 2013, the FCI has on its hands “non-issuable wheat” or damaged wheat amounting to 932.46 MT. Bihar has the highest quantity of rotting wheat at 306.5 MT, followed by Uttarakhand (221 MT) and Gujarat (195 MT).

The total damaged wheat in 2009-2010 was 2010 MT. This came down marginally to 1997 MT in 2010-2011, but again rose to 2401.61 MT in 2011-2012.

According to data, the worst offender in 2011-2012 was Maharashtra (1444 MT), while in 2010-2011 Uttarakhand recorded (931 MT) of damaged wheat. Gujarat had the maximum (785 MT) damaged wheat in 2009-2010.

Ironically, India has lagged in improving its Global Hunger Index (GHI) score despite strong economic growth and food production. According to the 2012 Global Hunger Index report, 43.5% of children below five years are underweight, which accounts for almost two-thirds of the country’s alarmingly high GHI score. From 2005-10, India ranked second to last on child underweight — below Ethiopia, Niger, Nepal and Bangladesh.

Limited access for farmers to the open market, lack of covered or adequate storage space for grains have only served to compound the problem. As on April 1, 2013, FCI has covered godown space with capacity to store 33.99 MT that falls woefully short of the demand.”

via 2,400 MT wheat rotting in govt granaries for past 2 years – The Times of India.

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