Archive for ‘Chindia Alert’

11/10/2017

Following the Money: Uncovering a Chinese state secret – BBC News

China has a long list of state secrets – how many people it puts to death every year, and even the birthdays of its top leaders. But now, overseas researchers have uncovered another Chinese state secret: how much money Beijing gives in aid to other countries.

Not very long ago, China was a foreign aid recipient. Now, it rivals the United States as one of the world’s largest donors, through traditional development aid or through financial loans.

For the first time, a large group of researchers outside China have compiled a major database detailing virtually all of China’s financial money flow to recipient countries. Citing more than 5,000 projects found across 140 countries, it reveals that China and the US rival each other in terms of how much they offer to other countries.

However, “they spend those budgets in radically different ways. And the different compositions of those portfolios have far-reaching consequences”, explains Brad Parks, the project’s chief researcher.

He heads the AidData research lab at the College of William & Mary in Virginia, which teamed up with other researchers at Harvard University and the University of Heidelberg in Germany to complete the research.

How did they uncover the secret?

Pictured in 2015, Chinese workers build railway infrastructure to link Djibouti with Addis Ababa, in neighbouring Ethiopia

The AidData team had to develop its own methodology to answer the questions that weren’t provided by the Chinese government. They tracked money flows from China to recipient countries using news reports, official embassy documents and aid and debt information from China’s counterparts.

Piece by painstaking piece, the information came together to draw a relatively complete picture of where Chinese aid is going and what impact it’s having.

“We think the methodology has revealed the known knowable universe,” Brad Parks says. “If the Chinese government really wants to conceal something, we won’t necessarily pick it up.” But if there are sizeable money transfers going from China to a recipient country, “word is going to get out”, he adds.

How does China hand out money?

One major finding from the study: China and the US, the world’s biggest donor, have handed out similar amounts of money in the years covered in the database, but the countries distribute that money in radically different ways.

The vast majority (93%) of US financial aid fits under the traditional definition of aid that’s agreed upon by all Western industrialised countries. That aid is given with the main goal of developing the economic development and welfare of recipient countries. At least a quarter of that money represents a direct grant, not a loan that needs to be repaid.

In contrast, only a small portion (21%) of the money that China gives to other countries can be considered as traditional aid. And the rest of that money? The “lion’s share” of that money is given in commercial loans that have to be repaid to Beijing with interest.

“China wants to get attractive economic returns on its capital,” Brad Parks explains.

And what does that money achieve?

The team’s other major finding: when China gives out traditional aid, the recipient countries reap impressive economic rewards. For a long period, there were suspicions that Chinese aid projects were only set up to benefit China; infrastructure projects built by imported Chinese workers, for instance, that did little to improve the lives of people on the ground. However, this research shows that China is just as capable of managing development aid projects as Western donors.

Chinese aid: How they spend it$362bn

total Chinese foreign aid and loans

21% of China’s aid spending is on grants – the rest is loans

$399bn is the total for US foreign aid and loans in the same period

93% of the US total is traditional aid, focused on economic development and welfare

Source: AidData, 2000-2014

Which countries are getting China’s money?

Since 2000, African countries have captured a large slice of the aid and loans given by China.

However, China’s wealth is distributed to points across the globe, from hospitals in Senegal to ports in Pakistan and Sri Lanka. In 2014, the most recent year covered by AidData, Russia topped the recipient list, followed by Pakistan and Nigeria.

In contrast, the US list in 2014 was topped by Iraq and Afghanistan, followed by Pakistan.

Image copyrightAAMIR QURESHI/AFP/GETTY IMAGES

Chinese cash has funded the development of Pakistan’s Gwadar port

Politics plays a big part in how both China and the US decide to spend their money. Earlier studies by the researchers behind AidData show that both Beijing and Washington tend to offer money to countries which support them at the United Nations.

But for China, economics play a key role: the AidData researchers found Beijing is often focused on promoting Chinese exports or market rate loans where China wants to get the loan repaid with interest.

The North Korea factor

China is often cited as the main source of aid propping up the fragile North Korean economy. But the AidData researchers tracked down just 17 Chinese projects in North Korea over the 14-year period, totalling a measly $210m.

Brad Parks calls North Korea “an informational black hole”, admitting that it’s the only recipient country that truly evaded the researchers. To a large extent, the vast amounts of money and other kinds of aid that China is believed to give North Korea fall outside the global financial system.

North Korean leader Kim Jong-Un with his sister Kim Yo-JongImage copyrightAFP PHOTO/KCNA VIA KNS
Image captionResearchers have struggled to track the Chinese aid flowing into secretive North Korea

Why is China’s money so attractive?

In the 1960s to the 1990s, Western countries offered high-interest market-rate loans to developing countries. However, that strategy misfired when recipient countries could not begin to repay the interest on the debts they had acquired. Outrage ensued and the Western aid model was overhauled.

“There was a shared principle that we should not be offering market-rate loans to developing countries,” Brad Parks says. “And now, here comes China, enter stage left. They’re not part of that coalition. They haven’t been socialised to that principle and they’re very willing and able to provide loans near or at market rate.

“Increasingly, countries that don’t want to go the IMF for a bailout when they’re in trouble, they will go to China instead.”

Will China continue to loan out money?

So far, the data shows that the countries that receive China’s market-rate loans are not suffering economically, but they aren’t experiencing economic growth either. Researchers fear that could change in 10 or 15 years, when countries build up debts because they can’t repay the money they will owe to Beijing. At that point, China might have to rethink things.

“They may very well 10 years from now, or 15 years from now, encounter the same problems that Western donors and creditors encountered when loans are not getting repaid,” Brad Parks explains. “If and when that point of reckoning occurs, then perhaps Beijing will revisit how it structures these loans.”

Already, researchers have uncovered signs that China’s starting to shift its approach to lending, researcher Xiaojun Li from the University of British Columbia says. Increasingly, Beijing is lending through multilateral institutions like the Asian Infrastructure Investment Bank, China’s answer to the World Bank.

Why does it matter if China becomes a big global lender?

There is evidence that China’s no-strings loans have had an effect on the entire global lending system, forcing traditional donors to stop placing so many requirements on receiving countries. Using AidData’s database, economist Diego Hernandez revealed that China’s role as a major lender has boosted competition between traditional donors.

“When an African country is also assisted by China,” he writes, “the World Bank provides fewer conditions attached to its loans”. For every 1% increase in Chinese aid, Hernandez found the World Bank lessened its typical demands for things like market liberalisation or economic transparency by 15%.

map
map

Critics have long charged that “rogue aid” from China allows some countries to avoid democratic reforms because they can simply turn to China for aid, dodging the scrutiny of traditional Western donors.

Cambodia is a recent example; independent newspapers and western NGOs have been shuttered, as Cambodian leaders’ strengthening ties with China embolden them to turn away from Washington’s demands to hold fair elections.

Xiaojun Li studied how Chinese aid has changed countries in Africa, arguing that democratic reforms have slowed as the developing countries concluded they could bypass the political demands of Western donors by turning to Chinese aid.

“Traditional donors have criticised China’s approach to aid,” he says, but “many African countries embrace the assistance from Beijing, or at least are glad to have more options”.

Source: Following the Money: Uncovering a Chinese state secret – BBC News

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11/10/2017

Bangladesh soldiers build Chinese relief tents to house displaced Rohingyas people – Xinhua | English.news.cn

COX’S BAZAR, Bangladesh, Oct. 4 (Xinhua) — Bangladesh soldiers have started to build Chinese relief tents to accommodate the Rohingyas people crossing into the country from Myanmar.

Hundreds of tents have already been built at a new refugee camp in the southeastern Cox’s Bazar district, some 292 km away from capital Dhaka.

Chinese relief tents will be able to accommodate tens of thousands of people.

Military personnel are seen on Tuesday to build Chinese tents or extend support to Rohingyas who got allocation of the Chinese relief tents.

China last week sent relief materials for Rohingyas.

A second Chinese cargo plane carrying relief supplies for Rohingya refugees arrived in Bangladesh’s southeastern Chittagong region on Thursday after the first one which arrived last Wednesday. The relief materials included about 2,000 tents and 3,000 blankets.

A Cox’s Bazar district administration official who preferred to be unnamed said Prime Minister Sheikh Hasina is expected to visit the Rohingya camps again and distributes personally the Chinese relief blankets which will be crucial for the refugees during the winter months from November to May in the country.

Over half a million Rohingyas have so far fled to Bangladesh since the fresh wave of violence erupted in Myanmar.Extremist terrorists launched fresh attacks on police outposts in Myanmar’s Rakhine state on Aug. 25, displacing residents from a number of areas in Maungtaw district to border areas with Bangladesh.

Source: Bangladesh soldiers build Chinese relief tents to house displaced Rohingyas people – Xinhua | English.news.cn

11/10/2017

China to shut down North Korean companies – BBC News

China has told North Korean companies operating in its territory to close down as it implements United Nations sanctions against the reclusive state.

The companies will be shut by early January. Joint Chinese and North Korean ventures will also be forced to close.China, Pyongyang’s only major ally, has already banned textile trade and limited oil exports.

The move is part of an international response to North Korea’s sixth and most powerful nuclear test.

The UN Security Council, of which China is a member, voted unanimously for fresh sanctions on 11 September.China’s commerce ministry said it had set a deadline of 120 days from the passing of the resolution for any North Korean companies within its borders to close.

North Korea is politically and economically isolated, and the vast majority of its trade is with China.

Beijing has traditionally been protective of its neighbour, but has sharply criticised its nuclear tests and escalating rhetoric.

Was your T-shirt made in North Korea?

Earlier this year, it clamped down on its purchase of coal from Pyongyang and on seafood and iron trade across the border.

Coupled with the textile trade ban, North Korea has lost several of its scant sources of foreign currency income.

Beijing has been under public pressure to take action from US President Donald Trump, who has both applauded and denounced Chinese policy at different times.

N Korea: Trump exploiting student’s death

North Korea crisis in 300 wordsMr Trump has also been involved in a direct war of words with North Korean leader Kim Jong-un, labelling him a “rocket man” on “a suicide mission”. The US president warned that he would have no choice but to “totally destroy” North Korea if forced to defend the US or its allies.

Mr Kim, in turn, has called Mr Trump “deranged” and a “dotard”, and said the US president’s comments have convinced him he is right to seek a nuclear deterrent, and has even accused Mr Trump of declaring war.

At a news briefing on Thursday, China’s foreign ministry spokesman Lu Kang said: “We are opposed to any war on the Korean peninsula.”

“Sanctions and the promoting of talks are both the requirements of the UN Security Council. We should not overemphasise one aspect while ignoring the other.”

North Korea’s slowly growing economy

Pyongyang does not publish accounts or economic data, which leaves economists guessing over the country’s performance. But South Korea’s central bank bases its estimates on information from its National Intelligence Service.

It believes that last year, North Korea’s economy grew at its fastest pace in 17 years – with GDP up 3.9% despite international economic sanctions. Small shops and markets have been springing up in the capital over the past decade.

But that does not mean ordinary people are doing well. North Korea’s economy is geared towards supporting its large military – which analysts believe consumes up to 25% of the country’s GDP. Income inequality is rife, with some shops in Pyongyang stocked with all sorts of luxury goods, while other citizens have very little.

Even the latest sanctions have exceptions. China, for example, can still trade oil to its neighbour in limited supply.

Source: China to shut down North Korean companies – BBC News

22/09/2017

Online matchmaking businesses in India have many ways to woo

“IT WAS 2012…I was number 37,” says Ashwini, referring to the badge that was pinned on her shirt pocket.

Her task was to go onto the stage and introduce herself to around 70 eligible bachelors and their parents. Families then conferred and, provided caste and religious background proved no obstacle, would approach the event’s moderator asking to meet number 37. At midday girls would wait for prospects to swing by, again with parents on either side. A brief exchange might establish the potential bride’s cooking skills or her intention to work after marriage. If the two sides hit it off, they would exchange copies of their horoscopes. Nearly 50 men lined up to meet Ashwini that day, speed-dating style. No one made the cut. She later married a colleague.

Such gatherings form an important part of the wedding industry, worth around $50bn a year, in a country where arranged marriages continue to be the norm. India has 440m millennials—roughly, the generation born between 1980 and 1996—and a further 390m youngsters have been born since 2000, so there are plenty of anguished parents for marriage facilitators to pitch to. KPMG, a consultancy, estimates that out of 107m single men and women, 63m are “active seekers”. For now, only a tenth surf the internet to find a spouse. But the number who do is about to explode, argue executives in the marriage-portal business (India has 2,600 such sites). “After Facebook [took off], people are more open about their lives than ever before, which has had a great knock-on effect,” says Gourav Rakshit of Shaadi.com, one of India’s oldest matrimonial sites.

Take Matrimony.com, the country’s biggest online matchmaker, which raised $78m in its initial public offering on September 13th. Its shares began trading this week. It runs 300-odd websites in 15 languages, catering to different castes and religions. It has sites for divorcees, the disabled, the affluent (“Elite Matrimony”) and for those with unfavourable astrological charts, which make it difficult to find a match. All online firms run a “freemium” model: upload your profile at no charge and let an algorithm match horoscope details with potential partners filtered by age, caste, education, income and sometimes (alas) complexion. Or you can pay for features like instant chat or a colourful border around your profile to ensure the algorithm returns you as a top search result.

Such a long list of options means that finding a match on the web can be time-consuming and tedious. “It’s like looking for a needle in a haystack,” says one suitor. Predictably, many also complain that online profiles often do not reflect reality. Outright fakes remain a scourge. This month a man was arrested in Delhi for extorting over 5m rupees ($77,700) from 15 women by luring them on matrimonial websites. And no amount of artificial intelligence can yet identify what will make two youngsters click.

Spouseup, a south Indian startup, is undaunted. It trawls social media to determine a candidate’s personality and recommends matches by calculating a “compatibility score”. Nine-tenths of its 50,000 users are non-resident Indians who usually fly to India for a month or so, scout for partners, settle on one, get hitched and fly back together. For these time-starved travellers, the machine-led scouring “provides an insight that would come from five coffee dates,” says Karthik Iyer, the firm’s founder. Banihal, which is based in Silicon Valley, relies on a long psychometric questionnaire of around 100 questions to match like-minded partners.

Real-world complements to online efforts can help secure a match. Some services, such as IITIIMShaadi.com, aimed at people graduating from prestigious universities, also act as conventional wedding-brokers, by meeting prospects on their clients’ behalf. The job is no different from that of a headhunter, says Taksh Gupta, its founder. He charges anywhere between 50,000 and 200,000 rupees for the service. His most recent catch, after a search lasting over two years, was a husband for a 45-year-old woman from a prestigious university who would settle for no less than an Ivy League groom. Matrimony.com, too, has over 400 “relationship managers” and 140 physical outlets.

“The opportunity is huge”, enthuses Murugavel Janakiraman, boss of Matrimony.com. Around four-fifths of new customers now come via smartphones, lured by instant alerts about new potential matches and services that match up people in the same town. But the spread of smartphones also brings competition. Casual-dating apps are spreading fast. Tinder, on which decisions about eligibility rarely benefit from parental advice, now counts India as Asia’s largest, fastest-growing market.

Source: Online matchmaking businesses in India have many ways to woo

22/09/2017

China’s demographic divisions are getting deeper

IF DEMOGRAPHY is destiny, as Auguste Comte, a French philosopher, once said, then China has many destinies.

As a result of 30 years of the now-relaxed one-child policy, the country has an exceptionally low overall fertility rate: 1.2 according to the census of 2010. (The fertility rate is the number of children an average woman can expect to bear during her lifetime. If it is less than 2.1 a population will shrink in the long run, unless immigration makes up for the dearth of babies.) What is almost never recognised, however, is that this is not a uniform problem. Just as China has richer and poorer regions, so it has areas of higher and lower fertility—or, to be more precise, of low and lower fertility.

As a whole, China has too few young adults relative to the size of older generations, meaning it will not have enough workers to support its pensioners (or children) properly in the future. But some areas will hit demographic trouble earlier and harder than others, with serious implications for economic growth and regional stability. Wang Feng, of the University of California, Irvine, dubs the problem “the Balkanisation of Chinese demography”.

The place with the lowest fertility is Beijing, where the rate was 0.71 in 2010. The highest rate that year was in Guangxi, a province in the south bordering Vietnam, where the fertility rate was 1.79. Both rates are below the replacement level. But Guangxi’s fertility is two-and-a-half times higher than Beijing’s, which is a wider spread than the one separating the states with the highest and lowest fertility in Brazil, and only a little less than the equivalent gap in India.

Degrees of dwindling

The main reason is that, in practice, the one-child policy was never uniform. Ethnic minorities, such as Tibetans or Uighurs (the largest group in the western province of Xinjiang), were never subject to it. Minorities, who account for 8% of the population nationwide, were usually allowed two children in urban areas and three or four in rural ones. In addition, in most rural areas, everyone, including the majority Han group, was allowed two children.

As a result China has four categories of fertility, not one (see map):

  1. Areas of ultra-low fertility (rates of less than 1). These are three mega-cities, Beijing, Shanghai and Tianjin, and three provinces in the north-east, sometimes called Manchuria, where the one-child policy was applied most strictly. They have a total population of 170m
  2. Areas where fertility is between 1 and 1.29. These include provinces on China’s populous coastline, as well as the huge Sichuan basin in western China. They are overwhelmingly Han areas, so had few exceptions to the one-child policy. They were also the places where China’s growth and urbanisation took off quickest after 1980, so have relatively few rural dwellers. This is the largest category, with 600m people.
  3. Provinces with fertility rates between 1.3 and 1.49. Many, such as Henan, Hunan and Anhui, are just inland from the coast. They, too, are populous (460m in total) and mostly Han but have fewer city-dwellers: more than half of the populations of Hunan and Anhui is rural. This group also includes several provinces with lots of members of minorities, such as Ningxia, in the north-west, which is a third Muslim.
  4. Areas with rates above 1.5, which tend both to be more rural and to have big minority populations, such as Guangxi. These have a total population of 116m.

Since the one-child policy was in force so long, differences in fertility have become entrenched and their impact profound. To take one example, provinces with relatively low fertility tend to have an even bigger excess of boys over girls than is the norm. Nationally, the imbalance has ebbed somewhat since 2000, with the sex ratio at birth falling from 121 boys for every 100 girls in 2005 to 114 in 2015. But in the north-east there has been little or no improvement—a worry considering the high levels of crime associated with large numbers of unmarried men (called “bare branches” in China).

Fertility is not the only force pushing provincial demography in different directions. The migration of more than 245m workers from poor, rural areas to booming cities amplifies the difference in fertility in some places and counteracts it in others.

In the decade before 2010 the population of Chongqing, a large urban province in the west, fell by 2m (or 6%); in neighbouring Sichuan it fell by 3m. Births exceeded deaths in both places over the period, so the population should have grown. But this was offset by the outflow of migrants. Cai Yong of the University of North Carolina calculates that more than 10m people left Sichuan and nearby Hubei.

The combination of migration and varying fertility means that provinces are ageing at different speeds. The median age nationally rose from 25 in 1990 to 35 in 2010; it had increased to 37 by 2016. But the three north-eastern provinces all aged by even more than average. In Liaoning the median age reached 39.2 in 2010, about the same as Russia. In contrast, the median age in Tibet, the youngest province, is 27.8, about the same as India.

Ageing matters because pension provision is partly a provincial responsibility in China. The value of the basic state pension is fixed nationally, but provinces set their own contribution rates, administer the money collected and distribute the pensions. How heavy a burden this is depends on a province’s demography. As a rule, the lower the fertility rate, the faster the rise in the dependency ratio (the number of pensioners relative to the number of working people). In relatively fecund Guizhou and Yunnan, the ratio is still falling. In Beijing and Shanghai, it rose by more than four percentage points between 2010 and 2015, more than the national average.

Giant cities such as Beijing, Shanghai and Tianjin have ultra-low fertility and fast-rising dependency ratios yet are still able to attract young workers because China’s highest-paying jobs are clustered there. As a result, their demographic profile is healthier than you would expect. The three cities, which have provincial-level status, are China’s fastest-growing provinces by population, increasing by around 3% a year in 2000-10, thanks largely to migration. Since the migrants are mostly young, the cities’ median ages rose much more slowly than the national average and their dependency ratios remain relatively low. And since the cities are also rich, they have hospitals, social services and schools to cope with their demographic problems.

Provinces with high fertility and outward migration are the opposite. Take Hainan, a tropical island in the far south. It has high fertility (by Chinese standards) and stable dependency. It ought to be doing well. Yet it is one of China’s poorest provinces (23rd out of 31) and is ageing fast, mainly because hundreds of thousands of workers from the freezing north-east are spending their retirement there. Its medical services are collapsing under the strain.

To see the convergence of all these trends, compare two regions, the north-east and Guangdong. The north-east is China’s rust belt, a place of depleted coal mines and decayed steel mills. It has had low fertility for decades, falling below replacement levels as long ago as 1982, much earlier than elsewhere (and before the one-child policy even began). It also implemented the policy especially strictly because it is dominated by state-owned industries which decreed that people who had a second child would lose their jobs. “Who would risk it?” asks a former steel worker. The area’s high wages used to attract migrants from elsewhere in China. But since 2000, when heavy industry ran into trouble, it has suffered a net outflow of over 2m people. Hotels near the Harbin Institute of Technology (in the region’s largest city) are packed around graduation day with recruiters from southern firms.

Last year a series of articles in China Business News, a state-run newspaper, revealed the extent of the region’s demographic problems. In China as a whole, it said, there were 2.9 people paying into provincial pension schemes for every person drawing a pension. In Liaoning, there was only 1.8; in Jilin, 1.5; and in Heilongjiang, just 1.3. The region’s share of China’s young workers (20 to 39 years of age) fell from 10% in 1982 to 8% in 2010. Zhou Tianyong of the Central Party School in Beijing says the region’s lack of young workers is his biggest worry. The national government has a grand policy to help the region called “the north-east revitalisation plan”, but as one of the articles noted, the region’s demographic crisis is never discussed.

Now compare that with Guangdong at the other end of the country, next to Hong Kong. On the face of it, China’s largest province, with a population of 108m, also faces severe problems. Its fertility rate was reported to be 1 in 2010, more than in the north-east but still alarmingly low. Yet its population rose more quickly in 2000-10 than any other province except the three huge cities. Its median age is five years below that in the north-east. It has 9.7 workers per pensioner, three times the national average, which has helped it to stash more money in its pension fund than any other province.

Whereas Beijing and Shanghai are attempting, misguidedly, to curb migration, Guangdong is trying to attract new arrivals. It has made it easier for their children to enroll in local schools (elsewhere the household-registration, or hukou, system, raises barriers to this). It also encourages everyone, including migrants, to join local social-insurance schemes. In mid-July, the province’s capital, Guangzhou, said it would allow the children of better-off migrants who rent property the same access to schools as local home-owners. This is significant since almost all migrants rent, not own, their houses.

Unlike in Guangzhou, the national authorities have been slow to recognise the problems of demographic decline. As a result, low fertility, ageing, labour shortages and dependency have all taken on a provincial aspect. The three great cities look relatively healthy, as do Guangdong and Zhejiang, a nearby province that shares some of its features. But provinces with low fertility, declining or ageing populations, and rising dependency are in deep trouble. These include the north-east, Sichuan and Chongqing in the west and several provinces in the third category in terms of fertility, such as Anhui.

The result is a big problem for the national government. Even now, it is having to bail out some provincial pension funds. But the threat is also philosophical. The Communist Party has long sought to narrow economic differences and erase local political distinctions because it is terrified of regional challenges. It thinks the only way to keep China together is to impose strong central control. If it is right, its failure to deal with demographic problems is setting back that cause.

Source: China’s demographic divisions are getting deeper

22/09/2017

China ahead of schedule on construction of hydropower plant in Pakistan | South China Morning Post

Facility in disputed Kashmir could be completed nine months before its December 2021 deadline

China is racing to finish one of the biggest hydropower projects in Pakistan ahead of schedule, yet its location in the long-contested region of Kashmir will draw ire from India.

Construction of the 720MW Karot power station on the Jhelum river began in December and looked set to finish nine months ahead of its December 2021 completion date, a first for a Pakistan hydro-project, said Qin Guobin, chief executive officer of the state-owned China Three Gorges South Asia Investment Ltd.

The company has put in place an aggressive strategy to cut the project’s financing costs.“For us, Pakistan is a strategic market,” Qin said at the site. “If we managed to complete it earlier we can save financing costs and make it more competitive.”

China pips US in race to start the world’s first meltdown-proof nuclear power plant

Pakistan’s energy demand is expected to grow by 6 per cent to 35,000MW by 2024 as its population of more than 200 million people grows along with the economy. For more than a decade, it has been struggling to overcome daily power shortages that have left industry and residents in the dark.

China has stepped in to meet some of those shortages, financing projects worth more than US$50 billion in an economic corridor that runs through Pakistan. The route is part of Chinese President Xi Jinping’s “Belt and Road Initiative” to connect Asia with Europe and Africa with a web of ports, railways and motorways links for trade.

Three Gorges’ focus in Pakistan is clean energy and it has a US$6 billion portfolio in three hydro and three solar power plants. The Karot project is in the Pakistan-administrated part of Kashmir, which India and Pakistan both claim and have fought two wars over since independence in 1947.

The ‘Belt and Road’ projects China doesn’t want anyone talking about

India’s foreign ministry said its views on “Pakistan’s illegal occupation” of Kashmir was “a matter of record”.

“We have objected, they have proceeded nevertheless,” said G. Parthasarathy, a former Indian high commissioner to Pakistan. “This has been going on since the 1960s and 1970s, when they built the Karakoram highway” that links Pakistan with China through the disputed territory, he said.

China has a neutral stance on the Kashmir dispute, said Zhao Gancheng, director of the Centre for South Asia Studies at the Shanghai Institute for International Studies.

“The ‘Belt and Road Initiative’ cannot be delayed or sidetracked by the territorial disputes,” he said.

Relations between China and India hit a recent low during a dispute between a three-way junction between Bhutan, China’s Tibet and India’s Sikkim, which was resolved with both sides standing down in August.

China, Pakistan and the challenges of Silk Road connectivity

More broadly, New Delhi is wary of Chinese investments in neighbouring countries such as Pakistan and Sri Lanka, while Beijing is irked by India’s lack of support for its infrastructure and trade initiative.

India’s concern did not bother Qin. “It’s a political issue and not the concern of a private investor,” he said.

Pakistan considers the hydropower site a national security priority. It is dotted with army pickets and plain clothes security officials. None of the Chinese staff can leave the camp office without registering his or her name at the main gate. Of the 2,070 workers at the site, 750 are Chinese.

The concern is being taken seriously by both sides. Pakistan had created a special force of 15,000 troops to defend the Chinese projects and that number might be doubled, according to people with direct knowledge of the plans, who asked not to be identified as they were not authorised to speak to the media.

Chinese social media users fume over Indian magazine’s omission of Tibet and Taiwan from ‘map’

Yet risks remain after two Chinese nationals were killed in southwestern Balochistan in June. Islamic State claimed their murders.

The stakes are high for Pakistan, with the planned power generation projects potentially adding US$13 billion to its economy in the next seven years, according to an International Monetary Fund report published in July.

Pakistan’s hydropower generation potential is an estimated 40,000MW, although the existing installed capacity was only 7,116MW in the 2015-16 financial year, according to the National Electric Power Regulatory Authority’s latest report.

Three Gorges is now eyeing the contract for the construction of a 4,500MW Diamir-Bhasha power project in northern Gilgit-Baltistan and northwestern Chillas district.

“Pakistan’s total installed capacity is equal to one big Chinese city, like Shanghai,” Qin said. “That’s not enough.”

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Source: China ahead of schedule on construction of hydropower plant in Pakistan | South China Morning Post

18/09/2017

China and India water ‘dispute’ after border stand-off – BBC News

The river gets severely flooded during monsoon season every year causing huge losses in northeast India and Bangladesh

China and India may have defused a potential border conflict but the stand-off seems to have led to dispute over another contentious issue: water.Delhi says it has not received any hydrological – the scientific study of the movement, distribution and quality of water – data for the Brahmaputra river from upstream China this monsoon season, notwithstanding an agreement.

One of Asia’s major rivers, the Brahmaputra, originates in Tibet and flows down to India before entering Bangladesh where it joins the Ganges and empties into the Bay of Bengal.

Beijing has said its hydrological stations are being upgraded which means it cannot share data..

But the BBC has found that China continues to share data for the same river with Bangladesh, the lowest downstream country in the Brahmaputra basin.

The river data issue between China and India comes after the two countries ended a tense stand-off over a disputed Himalayan border area that lasted more than two months.

The Brahmaputra gets severely flooded during monsoon season every year, causing huge losses in northeast India and Bangladesh.

Megadams: Battle on the Brahmaputra

  • The two countries have agreements with China that requires the upstream country to share hydrological data of the river during monsoon season between 15 May and 15 October.
  • The data is mainly of the water level of the river to alert downstream countries in case of floods.

“For this year…we have not received the hydrological data from the Chinese side beginning 15 May until now,” Raveesh Kumar, spokesperson of India’s External Affairs Ministry said last month at a regular briefing.

“We don’t know the technical reasons behind this but there is an existing mechanism under which China is to provide hydrological data to us.

Disputes along the long border between China and India remain unresolved in several areas

The Chinese side last week said there was a technical problem.

“Last year, due to the needs for reconstruction after being damaged by the flood and out of such technological reasons as upgrading and renovation, the relevant hydrological stations in China do not have the conditions to collect relevant hydrological data now,” China’s Foreign Ministry Spokesperson Geng Shuang said at a press briefing last week.Officials from Bangladesh, however, said they were still receiving water level and discharge level data of the Brahmaputra from China.

“We received data of water level of the Bramahaputra from China few days ago,” Mofazzal Hossain, a member of the joint rivers commission of Bangladesh told the BBC.

“We have been receiving such data from three hydrological stations in Tibet since 2002 and they have continued to share the figure with us even during this monsoon season”.

Uncertainty

Bangladesh’s water resources minister Anisul Islam Mohammad also confirmed to the BBC that his country was receiving hydrological data from China.

But for India, China has hinted at an uncertainty over resumption of sharing of data.

“As regards whether the providing of relevant hydrological data will be resumed, it depends on the progress of the above-mentioned work,” spokesperson Geng Shuang said.

India only recently secured the agreement with China on receiving monsoon data of the Brahmaputra river, after years of efforts.

Delhi has also asked for data for non-monsoonal flows of the river, because there are suspicions in India that China could divert the waters of the Brahmaputra to its parched regions during dry seasons.

The river flows down to India before entering Bangladesh

Beijing has constructed several hydropower dams on the river, which is known as Yarlung Zangbo in Tibet.

It says they do not store or divert water and they will not be against the interest of downstream countries.

But in recent years, particularly in northeastern India, fears are also growing that China could suddenly release a huge amount of water.Residents of Dibrugarh in Assam, where the river has one of its widest stretches, say they have witnessed the water levels of Brahmaputra sharply rise and fall in very short periods of time.

There have also been increasing incidents of landslides blocking rivers and unleashing sudden floods in the Himalayas.

Flood warnings

A recent study has in fact, shown Tibet topping the list of places across the globe that has experienced an increase in water. Experts say all these factors make early flood warnings from China even more crucial.

Officials with India’s water resources ministry say the recent developments have left them somewhat worried.

“We thought we would now be able to convince them to share the hydrological data of the non-monsoon season so that there is no suspicion that they would divert water during lean season,” an official, preferring anonymity, told the BBC.”

“But now we are not getting even the monsoon flow information, this is a worrying sign and it also shows their [China’s] intention.”

A year ago, China blocked a tributary of the Yarlung Zangbo river as part of its most expensive hydro project, Chinese state-run news agency Xinhua reported.

The news came just when Indian media were suggesting that Delhi could pull out of the Indus Water Treaty – signed with Pakistan – following a militant attack in Indian-administered Kashmir.

As an upstream country for Bangladesh and Pakistan, India too has time and again been accused by these downstream countries of ignoring their concerns.

Experts say these are compelling evidences that water is indeed emerging as a key issue in South Asia’s geopolitics.

Source: China and India water ‘dispute’ after border stand-off – BBC News

15/09/2017

China declares itself a global power

N RECENT days government employees across China, from postal officials in the north-east to tax auditors in the south-west, have been corralled into watching state television.

The Communist Party often orders bureaucrats to study propaganda. This time, however, the mandatory viewing has deviated from the usual themes of domestic politics and economic development. Instead, it has focused on China’s emergence as a global power, and the role of the president, Xi Jinping, in bringing this about.In late August and early September the state broadcaster aired six 45-minute programmes on this topic at peak viewing hours. The Chinese title could be rendered as “Great-Power Diplomacy”, but some state media prefer to call it “Major-Country Diplomacy”. That sounds a little more modest. Describing China’s growing global clout has long been a problem for propagandists. In 2003 they seemed to have settled on the term “peaceful rise”, only to abandon it a few months later in favour of “peaceful development”—the word “rise”, they thought, risked causing alarm abroad.

There is not a hint of reticence, however, in the series’ portrayal of China’s purported foreign-policy successes under Mr Xi, and his personal involvement in them. The programmes, made with the help of the party’s own Publicity Department, are peppered with fawning remarks by Chinese and foreigners alike. In a clip from a speech given in 2015, Zimbabwe’s leader, Robert Mugabe, says of the smiling Mr Xi: “We will say he is a God-sent person.” (China has long admired Mr Mugabe’s contempt for the West.) “I really liked him, we had a great chemistry, I think,” America’s president, Donald Trump, is shown telling an American television interviewer after meeting Mr Xi in Florida in April.

Must-Xi TV

The main message is that Mr Xi is responsible for crafting a new approach to foreign policy that has won China global admiration: “great-power diplomacy with Chinese characteristics”. Mr Xi emphasised the need for this in November 2014 in a speech on foreign affairs (official translations of which often used the words “major country” instead). Last year the term appeared for the first time in the government’s annual work report. Like Deng Xiaoping’s “socialism with Chinese characteristics”, the phrase serves more to obfuscate than enlighten.

The nub of it is said to be “win-win co-operation”. But its introduction marked a clear departure from Deng’s more reticent approach to foreign policy, which was often described in China as taoguang yanghui, or “hiding brightness, nourishing obscurity”. By contrast, in the television series, the narrator says: “Maintaining world peace and stability is the unshirkable responsibility and burden of a great power.” It shows Chinese troops evacuating Chinese (and others) from strife-torn Yemen in 2015, the Chinese navy on anti-piracy missions off the Horn of Africa and Chinese marines setting off in July to establish the country’s first overseas military base in Djibouti.

While the series was being aired, a party newspaper published an article by the foreign minister, Wang Yi, on Mr Xi’s “diplomatic thought”. It said the president’s approach to foreign affairs had “blazed new trails and gone beyond traditional Western international-relations theory of the past 300 years”. The programmes aim to show that, unlike other rising powers in history, China (thanks to Mr Xi) has managed to maintain stable relations with established powers. They gloss over huge underlying tensions with Japan and America. Time and again Mr Xi is shown standing still while foreign leaders walk towards him to shake his hand. “It’s the ancient Chinese tributary system re-enacted,” says a Chinese academic, referring to emissaries from neighbouring states who brought gifts to the Chinese emperor as a means of securing peace.

But for all the talk of Mr Xi’s skills as a global leader, he still shares Deng’s aversion to risk-taking abroad. The series skates over the crisis on the Korean peninsula (a day after the final episode was shown, North Korea tested what appeared to be a hydrogen bomb.) Mr Xi’s great-power diplomacy had clearly failed to avert a grave international crisis—one that has developed not least as a result of China sitting on its hands.

Source: China declares itself a global power

15/09/2017

India launches first bullet train project – BBC News

Mostly funded by a $17bn loan from Japan, the bullet train will run between Ahmedabad and Mumbai

Japan’s Prime Minister Shinzo Abe has launched work to build India’s first high-speed train in Prime Minister Narendra Modi’s home state of Gujarat.Mostly funded by a $17bn (£12.78bn) loan from Japan, the bullet train will run between Ahmedabad city and Mumbai.

When the service starts operating in five years’ time, the 500km (310-mile) journey time is expected to be cut to three hours from the current eight.

Mr Abe is making a two-day visit to India, a close ally of Japan.

“My good friend Prime Minister Narendra Modi is a far-sighted leader. He took a decision two years ago to bring high-speed train in India and to create a new India,” he said, after laying the foundation stone on Thursday.

“I hope to enjoy the beautiful scenery of India through the windows of the bullet train when I come back here in a few years.”

The 750-seat train is scheduled to run from August 2022.

Does India need bullet trains?

  • Japan and India sign bullet train deal amid closer ties
  • India’s railway system carries more than 22 million passengers a day and much of the equipment is out of date, leading to frequent accidents and chronic delays.

It is part of the government’s ambition to link major cities with high-speed trains, but critics say passengers would be better served if investments were made to improve safety on the current, ageing rail network.

Supporters of the project say high speed trains will lead to improved commuter convenience, reduced congestion in big cities, more business, and improved infrastructure along the route.

Mr Modi has promised to make vast improvements to the network, and the bullet train was one of his key promises in the 2014 election.

India’s bullet train

Japan is a pioneer in high-speed rail transport

It will travel a distance of 500km (310 miles), cutting the journey time from Ahmedabad to Mumbai from eight to three hours.

  • There will be 12 stations on the route.
  • The majority of the route will be elevated. A part of it will run through a 7km long undersea tunnel.
  • It will have top speeds of up to 350km/h (217mph), more than double the maximum speed offered by the fastest trains running in India.

Japan is a pioneer in high-speed rail transport and some of their trains are ranked among the fastest in the world.

“This technology will revolutionise and transform the transport sector,” Indian Railways Minister Piyush Goyal was quoted as saying by Reuters news agency.

India’s railway tracks need to be modernised

Mr Modi recently replaced his railway minister after a series of accidents, including one last month which killed at least 23 passengers in the northern state of Uttar Pradesh.

A previous accident in the same state last November killed 150 people, while one the year before killed 39.

Mr Modi and Mr Abe are expected to sign several agreements during the visit, and also inaugurate a Japanese industrial park. Gujarat already hosts Japanese automobile plants.The two leaders enjoy a close friendship – Mr Modi chose Japan as the destination for his first bilateral visit outside South Asia as prime minister.

Both countries are in territorial disputes with China, and their close ties are seen by some as a response against China’s growing influence in the region.

Source: India launches first bullet train project – BBC News

12/09/2017

Why inequality in India is at its highest level in 92 years – BBC News

Did India’s economic reforms lead to a sharp rise in inequality?

New research by French economists Lucas Chancel and Thomas Piketty, author of Capital, the 2013 bestselling book on capitalism and increasing inequality, clearly points to this conclusion.

They studied household consumption surveys, federal accounts and income tax data from 1922 – when the tax was introduced in India – to 2014.

The data shows that the share of national income accruing to the top 1% of wage earners is now at its highest level since Indians began paying income tax.

The economists say the top 1% of the earners captured less than 21% of the total income in the late 1930s, before dropping to 6% in the early 1980s and rising to 22% today. India, in fact, comes out as a country with one of the highest increase in top 1% income share concentration over the past 30 years,” they say.

How India’s currency ban is hurting the poorIs India winning the war on poverty?

To be sure, India’s economy has undergone a radical transformation over the last three decades.Up to the 1970s, India was a tightly regulated, straitlaced economy with socialist planning. Growth crawled (3.5% per year), development was weak and poverty endemic.

Some easing of regulation, decline in tax rates and modest reforms led to growth picking up in the 1980s, trundling at around 5% a year. This was followed by some substantial reforms in the early 1990s after which the economy grew briskly, nudging close to double digits in the mid-2000s.

Last November’s controversial cash ban slowed down the economy

Growth has slowed substantially since then, but India still remains one of the fastest-growing economies in the world. The ongoing slowdown – growth was 5.7% in the April-June quarter, the slowest pace in three years – largely triggered by feeble demand, a controversial cash ban, declining private investment and weak credit growth, is a cause for concern.

And the need for fast-paced growth, according to Nobel Prize winning economist Amartya Sen, is “far from over since India, after two decades of rapid growth, is still one of the poorest countries in the world”.

From their latest work on income inequality, Lucas Chancel and Thomas Piketty contend that there has been a “sharp increase in wealth concentration from 1991 to 2012, particularly after 2002”. Also, they conclude, India has only been really shining for the top 10% of the population – roughly 80 million people in 2014 – rather than the middle 40%.

The economists plan to release the first World Inequality Report, produced by a network of more than 100 researchers in December, where they will compare India’s inequality with other countries and suggest ways to tackle it.

Striking transition

They agree that unequal growth over a period of time is not specific to India, but market economies are not bound to be unequal. India’s case is striking in the fact that it is the country with the highest gap between the growth of the top 1% and that of the full population. Incomes of those at the very top have actually grown at a faster pace than in China.

The economists contend that the growth strategy pursued by successive governments has led to a sharp increase in inequality. China also liberalised and opened up after 1978, and experienced a sharp income growth as well as a sharp rise in inequality. This rise was however stabilised in the 2000s and is currently at a lower level than India.

In Russia, the move from a communist to a market economy was “swift and brutal” and today has a similar level of inequality to India.

“This shows that there are different strategies to transit from a highly regulated economy to a liberalised one. In the arrays of possible pathways, India pursued a very unequal way but could probably have chosen another path,” Dr Chancel told me.

India’s economy grew at its slowest pace for three years in the April-to-June quarter

While inequality is rising in most parts of the world, certain countries are resisting this trend. For example, he says, the rise in inequality is much lesser in western Europe than in the Anglo-Saxon world or in emerging markets.

“This largely owes to social security mechanisms that are relatively more favourable to workers than capital as compared to other parts of the world, to relatively more efficient tax systems and government investment in public goods such as education, housing, health or transport.”

Clearly, the new research should help promote a vigorous debate on what more can be done to promote more inclusive growth in India and the need for more transparent income and wealth data.

Source: Why inequality in India is at its highest level in 92 years – BBC News

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