Archive for October, 2012

20/10/2012

* Q&A: China’s new leaders

Another “must read” article from the BBC

China’s ruling Communist Party is about to hold an important congress and usher in sweeping leadership changes which could have a profound impact on the country’s future direction.

Wen Jiabao (L), Xi Jinping (C) and Hu Jintao (R) - archive image

With China now the world’s second largest economy and an increasingly important global player, the changes will be closely watched around the world. What are the main issues?

What is the party congress?

The congress is held every five years and is a platform to announce party policies and personnel changes in the party leadership.

More than 2,200 delegates from across China will gather in Beijing for the congress, which opens on 8 November.

The congress will be a well-choreographed display of power and unity, but the proceedings will mostly take place behind closed doors.

Most, if not all, of the outcomes will have been settled among top leaders before the congress gets under way.

It is not clear how long the meeting will go on for. But recent congresses have typically lasted seven days.

Why is it important?

This year’s congress is particularly important because it will endorse a once-in-a-decade leadership succession.

The party sets strict age limits for its leaders and seven out of the nine current members of the all-powerful Politburo Standing Committee – the party’s ruling body – are expected to step down. They include President Hu Jintao, who is head of the party and China’s head of state, and Premier Wen Jiabao, who is like a prime minister in charge of the government.

Immediately after the Congress ends, a new leadership will be unveiled to waiting journalists, and walk out in order of seniority.

The new leadership, the make-up of which has been determined in advance, will rule China for the next 10 years.

Who will China’s new leaders be?

Vice-President Xi Jinping is expected to replace Hu Jintao as the party’s general secretary after the congress, and become state president early next year.

The National Congress of the Communist Party of China (CPC) will convene on 8 November in Beijing

He is one of the select group of “princelings” – top party officials who are descended from former party grandees.

Vice-Premier Li Keqiang, a close ally of Mr Hu, is tipped to replace Wen Jiabao as premier.

There has been a lot of speculation as to who the other Politburo Standing Committee members will be, and its final line-up will be closely watched for hints as to China’s future direction.

It has been widely reported that the Standing Committee will shrink from nine members to seven, in an effort to streamline decision-making.

How are new leaders selected?

In theory, the party congress elects members of the Central Committee, who in turn elect the politburo, including its Standing Committee, China’s top decision-making body.

But in practice, the process has always been top-down rather than bottom-up, and the congress is really a rubber stamp for top leaders’ decisions.

Under Mao Zedong and Deng Xiaoping, the paramount leaders named their own successors.

Now that the era of political strongmen is over, the selection of new leaders has become a murky process of intrigue and horse trading among various party factions and interest groups.

Though Li Keqiang was believed to be Hu Jintao’s favourite candidate, Xi Jinping emerged on top because he was acceptable to all party factions.

What difference will the new leaders make?

Advocates of reform are calling on the new leadership to carry out urgent reforms to prevent economic and social problems from evolving into a crisis that could loosen the Communist Party’s grip on power.

In particular, they warn that, without incremental political reform, the unchecked powers of the state risk suffocating growth and exacerbating popular discontent.

It was recently reported that Mr Xi, the leader-in-waiting, hinted that he has heard the calls for him to take a bolder path.

But any more daring reform could face opposition from powerful interest groups, including party factions that chose the new leaders in the first place.

What happens to leaders who retire?

Retired Chinese leaders often continue to wield great influence from behind the scenes.

After Jiang Zemin stepped down as party leader in 2002, he remained as head of the Central Military Commission for two years, setting a precedent some say Hu Jintao may now seek to repeat.

Even party elders without official posts can stay active, especially in the lead-up to leadership successions.

Both Jiang and his rival Li Ruihuan, a former leader close to Hu Jintao, have reportedly made public appearances in a bid to boost their own factions.

With party elders still holding sway, new leaders can be quite constrained when they first take office.

Do we really know what’s happening, or is it educated guesswork?

China started opening to the world in 1978, and observers now know vastly more about its people and society than ever before.

But China’s political system remains opaque and secretive.

For example, just weeks before the congress, Xi Jinping was not heard from for two weeks, sparking a flurry of online rumours which Beijing’s official silence only served to fan.

One insight we will get into the party’s latest thinking will be Hu Jintao’s much-anticipated “political report”, to be delivered on 8 November.

Chinese political speeches are usually full of jargon and hard to decipher. But observers will pore over the report for new watchwords

via BBC News – Q&A: China’s new leaders.

20/10/2012

* How China is ruled: Communist Party

This is a “must read” article from the BBC.

Communist Party

The Chinese Communist Party’s more than 80m-strong membership makes it the biggest political party in the world. Its tight organisation and ruthlessness help explain why it is also still in power.

The party oversees and influences many aspects of people’s lives – what they learn at school and watch on TV, even the number of children they are allowed.

It is made up largely of government officials, army officers, farmers, model workers and employees of state-owned companies.

It is unrepresentative of China as a whole. Only a quarter of its members are women, for example. It is also obsessive about control, regularly showing itself capable of great brutality in suppressing dissent or any challenge to its authority.

The party is still the guiding hand

Joining the party brings significant privileges. Members get access to better information, and many jobs are only open to members. Most significantly in China, where personal relationships are often more important than ability, members get to network with decision-makers influencing their careers, lives or businesses.

Pyramid structure

To join, applicants need the backing of existing members and to undergo exhaustive checks and examination by their local party branch. They then face a year’s probation, again involving assessments and training.

The party has a pyramid structure resting on millions of local-level party organisations across the country and reaching all the way up to the highest decision-making bodies in Beijing.

In theory, the top of the pyramid is the National Party Congress, which is convened once every five years and brings together more than 2,000 delegates from party organisations across the country.

The congress’ main function is to “elect” a central committee of about 200 full members and 150 lower-ranking or “alternate” members”, though in fact almost all of these people are approved in advance.

In turn, the central committee’s main job is to elect a new politburo and its smaller, standing committee, where real decision-making powers lie.

via BBC News – How China is ruled: Communist Party.

19/10/2012

* Rahul Gandhi can change Congress’ image with cabinet entry

Will Rahul Gandhi step up to his heritage and take the reins or forever stand in the sidelines?  And if he does, will it make a difference to India or will she continue as she is?

Reuters: “India is asking the same old question after news reports said Congress General Secretary Rahul Gandhi met Prime Minister Manmohan Singh on Wednesday before a possible cabinet reshuffle later this month: will Gandhi be one of the cards in his deck?

Gandhi’s entry into the government would be the only opportunity for him to prove that he has what it takes to one day rule India. He’s seen as the prime-minister-in-waiting, and a cabinet post would better equip him to deal with the hurly-burly of Indian politics.

Several cabinet posts are vacant, and some cabinet ministers hold additional portfolios. And even after passing market-moving reform measures, Congress’ task of boosting its public image is incomplete.

If you go by age, Gandhi is 42, just about ripe. David Cameron became the youngest prime minister of Britain at 44. When Barack Obama took over as the 44th American president, he was 47. Gandhi’s grandmother and India’s first woman to serve as prime minister, Indira Gandhi, was appointed Congress president when she was in her early 40′s.

But Rahul has never expressed willingness to join the government or lead the Congress party. He wants to work with the people. The Uttar Pradesh poll disaster, in which the Congress party suffered a major setback, perhaps makes it more attractive for him to take the humble approach.

Gandhi’s biggest problem is communication, which is also true of his mother, Congress President Sonia Gandhi. How can you be in politics and not talk? It is tough to imagine India’s top leaders sharing a stage for debate, speaking to each other in a civilised manner, or worse yet, barely at all and without any melodrama.

If Rahul wants to be a mass leader and win hearts, he should reach out to people. In this day and age, communication is a Twitter account or a camera link away. There’s a lot to talk about that doesn’t involve implying that 70 percent of Punjab’s youth are junkies … from corruption to social activism to the state of the economy and ways to fix it.”

via Rahul Gandhi can change Congress’ image with cabinet entry | India Insight.

19/10/2012

* Huawei – leaked report shows no evidence of spying

Was the recent US congressional report just trying to “even out a level playing field” for US telecoms companies or was it based on genuine security concerns?

BBC: “A US government security review has found no evidence telecoms equipment firm Huawei Technology spies for China.

Huawei stand at mobile communications show

The 18-month review, details of which were leaked to the Reuters news agency, suggests security vulnerabilities posed a greater threat than any links between the firm and the Chinese government.

Last week a US congressional report warned against allowing Chinese companies Huawei and ZTE Corp to supply critical telecom infrastructure.

The firms have always denied espionage.

The classified inquiry was a thorough review of how Huawei worked, involving nearly 1,000 telecom equipment buyers.

One of the government employees involved with the inquiry told Reuters: “We knew certain parts of government really wanted evidence of active spying. We would have found it if it were there.”

Huawei spokesman Bill Plummer said: “Huawei is not familiar with the review, but we are not surprised to hear that the White House has concluded there is no evidence of any Huawei involvement with any espionage or other non-commercial activities.

“Huawei is a $32bn [£19bn] independent multinational that would not jeopardise its success or the integrity of its customers’ networks for any government or third party – ever,” he added.

ZTE’s senior vice president of Europe and North America, Zhu Jiny, told the BBC: “The security issues should not be focused on the Chinese companies. These are problems of the world situation. It’s not only Chinese companies – it’s a global issue.””

via BBC News – Huawei – leaked report shows no evidence of spying.

19/10/2012

* Water scarcity compounds India’s food insecurity

To add to India’s many owes, now we have a water scarcity issue. This issue also features in the China-India rivalry, as many of the large rivers in north India has the Tibetan plateau as their source.

Reuters: These are the personal views of Siddharth Chatterjee  and do not reflect those of his employer, the International Federation of Red Cross and Red Crescent Societies.

“Since India’s independence, the mammoth task of feeding its hundreds of millions, most of whom are extremely poor, has been a major challenge to policymakers. In the coming decades, the issue of food insecurity is likely to affect almost all Indians. However, for the poorest amongst us, it could be catastrophic. India ranks 65 of 79 countries in the Global Hunger Index. This is extremely alarming.

In the past few years, uneven weather patterns combined with over exploited and depleting water resources in various parts of India have wreaked havoc on food security, particularly for small and marginal farmers, as well as the rural poor.

The recently launched Global Food Security Index (GFSI) estimates that in 2012, there are 224 million Indians, around 19 percent of the total population, who are undernourished. The same report also estimates that while the Indian government has various institutions designed to deal with the impact of inflation on food prices, it only spends 1 percent of agricultural GDP on research to build food security for the poorest. Overall, India ranked 66th on the GFSI. It is estimated that one in four of the world’s malnourished children is in India, more even than in sub-Saharan Africa.

Water insecurity, further exacerbated by climate change, is arguably the most important factor for India’s food security. India’s total water availability per capita is expected to decline to 1,240 cubic metres per person per year by 2030, perilously close to the 1,000 cubic metre benchmark set by the World Bank as ‘water scarce’.

Factors such as increasing usage, poor infrastructure, and pollution have led to a decline of water quantity and quality in India. Climate change, meanwhile, is expected to cause a two-fold impact.

One, increasing temperatures have hastened the rate of melt of the Himalayan glaciers, upon which major Indian rivers like the Ganges, Indus and Brahmaputra depend.

Second, the effect of climate change on monsoons in India will cause them to become more erratic, arriving earlier or later and lasting for shorter, more intense periods of time. India’s farming communities depend overwhelmingly on the monsoon, as their cropping patterns are built around it. The combined effect of climate change and over exploitation is violating the water cycle, degrading aquifers and  eroding ground water resources.

Over 50 percent of agricultural land in India depends entirely on groundwater. In North and Northeast India, where perennial rivers (rivers that have water year round, i.e. glacier fed rivers in India, such as the Ganges) sustain the agricultural land, have to deal with issues such as flooding caused by climate change impacts such as speedier glacier melt and erratic monsoons.

Meanwhile, farmers in states in West and South India, where rivers are seasonal, have to depend heavily on rapidly depleting groundwater resources.

The worst affected by this type of water-fuelled food insecurity are the small farmers of India. Estimates suggest that between 1995 and 2010, over 2,50,000 farmers in India, mostly from states like Andhra Pradesh and Maharashtra, killed themselves. Most of these farmers were drowning in vicious cycles of debt caused by failed monsoons and increasing droughts.

Responses to this crisis, including the National Action Plan on Climate Change, lay out various solutions and intended interventions, but most focus on the long term. To secure the future of India’s water resources vis-à-vis its agriculture in the future, it is important that certain steps be taken immediately. First and foremost, authorities will have to remove the mindset that water is an endless resource and the solution to water woes is simply a further development of India’s fast depleting groundwater.

Indeed, Dr. Mihir Shah, co-Founder, Samaj Pragati Sahayog (SPS) and member of the Planning Commission of India has stated that the ‘era of further water development may be over’ and emphasized that we have to urgently introduce more efficient water management. In this regard, promotion of irrigation efficiency will be crucial in the future.

Systems such as drip irrigation and System of Rice Intensification (SRI) to farmers across India will be essential. It will also be necessary to promote water conservation methods such as rain water harvesting, which has been successful in urban India, in villages as well.

At the same time, reducing inefficiencies and water wastage through conveyance losses will require governmental and NGO support in actions such as replacing faulty pipes and pumps.  Hence, India needs to invest on improving its water productivity, and any capacity to produce more food like rice with less water will be an important contribution to sustainable water and food security.

In short, India is facing a bleak future of becoming water scarce and painfully food insecure. How exactly are the country’s hundreds of millions, who depend entirely on agriculture for their livelihoods, as well as those that depend on agriculture for their food needs, to make ends meet?

Delaying this issue is simply not an option for India as this could lead to increased instability, poor human development and enhance inter-generational poverty. India needs to ensure food security through sustainable development and create resilience amongst the most vulnerable in the country: the poor.”

via From AlertNet: Water scarcity compounds India’s food insecurity | India Insight.

See also: https://chindia-alert.org/political-factors/geopolitics-indian/

18/10/2012

Wonder if this is in honour of the imminent leadership change or something deeper and more meaningful. We’ll just have to “watch this space”.

 

See also: https://chindia-alert.org/prognosis/chinese-challenges/

18/10/2012

* Feuds in the Pacific over islands: it’s not simply a case of China against everyone else

Unfortunately for China, its recent military posturing has obscured the fact that territorial claims in the South China Sea is not only between China and its neighbours but endemic.

WorldTimes: “When it comes to feuds in the Pacific over islands and what lies beneath, it’s not simply a case of China against everyone else. Depending on the dispute, it’s also South Korea vs. Japan, Japan vs. Taiwan, Taiwan vs. Vietnam, Vietnam vs. Cambodia and numerous other permutations — for many of the same reasons supposedly behind China’s actions. Resource grab. Patriotic posturing. Historical baggage (mostly to do with Japan’s brutal occupation of most of East Asia before and through World War II). Referring to the South China Sea, former ASEAN secretary general Rodolfo Severino, who now heads Singapore’s Institute of Southeast Asian Studies, wrote recently that “all claimants feel their footholds are essential to what they consider their national interests … This clash of national interests … makes it most difficult even to appear to be making compromises on national integrity or maritime regimes and, thus, almost impossible to resolve [the] disputes.””

Read more: http://world.time.com/2012/08/19/why-asias-maritime-disputes-are-not-just-about-china/#ixzz29dhhV78F

17/10/2012

* In search of a dream

As usual, The Economist has encapsulated India’s dilemma superbly. India is at a crossroads between a welfare oriented approach that has not really worked for 60+ years and a growth driven approach that has been of great service to China for the past two decades. But are Indians ready to make a paradigm shift? Only future history will tell.

The Economist: “When India won independence 65 years ago, its leaders had a vision for the country’s future. In part, their dream was admirable and rare for Asia: liberal democracy. Thanks to them, Indians mostly enjoy the freedom to protest, speak up, vote, travel and pray however and wherever they want to; and those liberties have ensured that elected civilians, not generals, spies, religious leaders or self-selecting partymen, are in charge. If only their counterparts in China, Russia, Pakistan and beyond could say the same.

But the economic part of the vision was a failure. Mahatma Gandhi, leader of the independence movement, Jawaharlal Nehru, India’s first prime minister, and his daughter, Indira Gandhi, left the country with a reverence for poverty, a belief in self-reliance and an overweening state that together condemned the country to a dismal 3-4% increase in annual GDP—known as the “Hindu rate of growth”—for the best part of half a century.

That led to a balance-of-payments crisis 21 years ago which forced India to change. Guided by Manmohan Singh, then finance minister, the government liberalised the economy, scrapping licensing and opening up to traders and investors. The results, in time, were spectacular. A flourishing services industry spawned world-class companies. The economy boomed. Wealth and social gains followed, literacy soared, life-expectancy and incomes rose, and gradually Indians started decamping from villages to towns.

But reforms have not gone far enough (see our special report). Indian policy still discourages foreign investment and discriminates in favour of small, inefficient firms and against large, efficient ones. The state controls too much of the economy and subsidies distort prices. The damage is felt in both the private and the public sectors. Although India’s service industries employ millions of skilled people, the country has failed to create the vast manufacturing base that in China has drawn unskilled workers into the productive economy. Corruption in the public sector acts as a drag on business, while the state fails to fulfil basic functions in health and education. Many more people are therefore condemned to poverty in India than in China, and their prospects are deteriorating with India’s economic outlook. Growth is falling and inflation and the government’s deficit are rising.

Modest changes, big fuss

To ease the immediate problems and to raise the country’s growth rate, more reforms are needed. Labour laws that help make Indian workers as costly to employers as much better-paid Chinese ones need to be scrapped. Foreign-investment rules need to be loosened to raise standards in finance, higher education and infrastructure. The state’s role in power, coal, railways and air travel needs to shrink. Archaic, British-era rules on buying land need to be changed.

Among economists, there is a widespread consensus about the necessary policy measures. Among politicians, there is great resistance to them. Look at the storm that erupted over welcome but modest reformist tinkering earlier this month. Mr Singh’s government lost its biggest coalition ally for daring to lift the price of subsidised diesel and to let in foreign supermarkets, under tight conditions.

Democracy, some say, is the problem, because governments that risk being tipped out of power are especially unwilling to impose pain on their people. That’s not so. Plenty of democracies—from Brazil through Sweden to Poland—have pushed through difficult reforms. The fault lies, rather, with India’s political elite. If the country’s voters are not sold on the idea of reform, it is because its politicians have presented it to them as unpleasant medicine necessary to fend off economic illness rather than as a means of fulfilling a dream.

Another time, another place

In many ways, India looks strikingly like America in the late 19th century. It is huge, diverse, secular (though its people are religious), materialistic, largely tolerant and proudly democratic. Its constitution balances the central government’s authority with considerable state-level powers. Rapid social change is coming with urban growth, more education and the rise of big companies. Robber barons with immense riches and poor taste may be shamed into becoming legitimate political donors, philanthropists and promoters of education. As the country’s wealth grows, so does its influence abroad.

For India to fulfil its promise, it needs its own version of America’s dream. It must commit itself not just to political and civic freedoms, but also to the economic liberalism that will allow it to build a productive, competitive and open economy, and give every Indian a greater chance of prosperity. That does not mean shrinking government everywhere, but it does mean that the state should pull out of sectors it has no business to be in. And where it is needed—to organise investment in infrastructure, for instance, and to regulate markets—it needs to become more open in its dealings.

India’s politicians need to espouse this vision and articulate it to the voters. Mr Singh has done his best; but he turned 80 on September 26th, and is anyway a bureaucrat at heart, not a leader. The remnants of the Nehru-Gandhi dynasty, to whom many Indians still naturally turn, are providing no leadership either— maybe because they do not have it in them, maybe because they have too much at stake to abandon the old, failed vision. Sonia Gandhi, Nehru’s grand-daughter-in-law and Congress’s shadowy president, shows enthusiasm for welfare schemes, usually named after a relative, but not for job-creating reforms. If her son Rahul, the heir apparent to lead Congress, understands the need for a dynamic economy, there’s no way of knowing it, for he never says anything much.

These people are hindering India’s progress, not helping it. It is time to shake off the past and dump them. The country needs politicians who see the direction it should take, understand the difficult steps required, and can persuade their countrymen that the journey is worthwhile. If it finds such leaders, there is no limit to how far India might go.”

From: http://www.economist.com/node/21563720

17/10/2012

Just shows, there is no satisfying people, no matter what you do for them!

 

See also: https://chindia-alert.org/prognosis/chinese-challenges/

15/10/2012

* The consuming challenge of food safety

Once again we see China’s central government trying to do the right thing, but thwarted by both selfish interests of unethical and unscrupulous business people, often with local authorities turning a blind eye to malpractices as any remedial action may reduce local economic gains.

China Daily: “Report shows eating healthily is a major concern for Chinese people

Food safety is a top concern for Chinese shoppers, especially regarding such produce as vegetables, meat, seafood, grain, cooking oils and dairy goods, according to a report from Ipsos.

The consuming challenge of food safety

It shows Chinese people are very concerned about the quality of what they eat, especially those who are older (aged 31 to 50) and those who earn a higher monthly salary (12,000 yuan a year and above – more than $1,900).

Most people are highly aware of various channels through which they can obtain information on food safety, especially with incidents regarding clenbuterol in meat (showing awareness rates as high as 94 percent), melamine in baby milk formulas (92 percent), swill-cooked “gutter” oil (85 percent) and tainted steamed buns (80 percent).

Food experts

Public concern about food safety results in food experts and third-party institutes being listened to in greater numbers and in more detail.

As a result, the Ipsos report shows that shoppers’ trust in experts and authorities has reached 83 percent. A total of 89 percent of the respondents have shown an interest in participating in science activities organized by such experts.

However, people do not always form an accurate picture. When there is negative news about one brand, trust in all brands in that or similar sectors tends to be affected. As many as 70 percent of the respondents said they would doubt not only the brand in question but also similar brands when news of a safety issue emerges.

“Food safety incidents that have occurred in China attracted a lot of attention but the general public still has a very limited knowledge base on the issue. In the United States and European countries, there have been fully fledged food manufacturing practice and response measures toward safety issues,” said Jennifer Tsai, managing director of Innovation and Forecasting at Ipsos Marketing in Greater China.

“Therefore, the consumers in those countries are less likely to become over-panicked and form serious doubts about all brands.”

Tsai added that an independent third-party body should be set up to provide information about manufacturers’ processes in raw material selection, production and distribution. The government should also have a role to play in this. However, this might require several years and the public still needs to learn more about food safety.”

via The consuming challenge of food safety |Economy |chinadaily.com.cn.

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