Archive for ‘China alert’

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01/08/2013

China treads cautiously to rebalance economy

Xinhua: “Despite all the heightened attention and occasional panic over China’s economic health, authorities in the world’s second-largest economy have so far remained confident of its ongoing rebalancing act.

On Tuesday, the Political Bureau of the Communist Party of China (CPC) Central Committee pledged at a meeting to keep the economy growing steadily in the second half of this year, while promising to fine-tune policies when necessary.

“The macro policy should be stable, the micro policy should be flexible and the social policy should support the bottom line. All of them should be coordinated,” read the statement released after the meeting.

The comments were seen as a reaffirmation that a stable environment is necessary for pushing ahead with reforms for long-term sustainable growth.

“A stable policy environment would not only allow time for the market to adjust itself, but also help create a favorable condition for reforms and avoid drastic fluctuations in market expectations,” said Kuang Xianming, director of economic research with the China Institute for Reform and Development.

Drastic policy changes are unlikely unless there are unforeseeable external or internal shocks, he added.

China’s economy expanded 7.6 percent in the first half of the year, slightly above the annual 7.5-percent target set for 2013, and prospects for the second half remain complicated given the sluggish external market, weak domestic strength, persisting overcapacity and growing financial risks.

Chinese leaders have so far demonstrated greater tolerance for slower growth in their efforts to switch the country’s growth model from its dependence on credit expansion and manufacturing toward one driven by consumption, innovation and services.

Instead of initiating a massive stimulus program again to lift the economy, the authorities are moving cautiously to steady growth while driving through reforms in which President Xi Jinping has called for “greater political courage and wisdom.”

Since taking office in March, the new government has been proceeding with reforms in a wide range of areas, including delegating administrative power to lower levels and easing controls in the financial sector.”

via China treads cautiously to rebalance economy – Xinhua | English.news.cn.

See also: https://chindia-alert.org/economic-factors/china-needs-to-rebalance-her-economy/

Posted in China alert, Economics, Re-balancing the economy | 1 Comment »

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01/08/2013

Analysis: China risks following Japan into economic coma

Let us hope that this analysis is incorrect.  Because if it is then the world economy will experience a tailspin that will make the 2008 recession seem like a picnic!  Any of you, my readers, have a strong view one way or the other?

Reuters: “After decades of emulating Japan‘s export-driven economic miracle, China appears in danger of following it into the same kind of economic coma that Japan is trying to wake up from 20 years later.

A salesperson, dressed as the Chinese god of fortune, hands out leaflets for a jewellery shop at a shopping district in Beijing July 26, 2013. REUTERS-Kim Kyung-Hoon

China is struggling to wean itself off a habit picked up from its more advanced neighbor: relying for growth on exports and credit-fuelled investment. That has left its economy lopsided, economists say, with massive over investment in property and industries rapidly losing their cost advantage, from mining and electronics to cars and textiles. Wages are rising, the return on investments falling.

With growth slipping, China’s President Xi Jinping and Premier Li Keqiang seem determined to avoid a U.S.-style financial crisis, complete with widespread bankruptcies and job losses.

Preventing such a crisis though could embalm diseased sectors, stifling efforts to make growth more sustainable and instead create the kind of “zombie” banks and companies that sucked the life out of Japan’s economy, economists say.

Add a population graying faster than Japan’s did, and economists worry China may be attempting the impossible.

“There is a huge amount of denial. People think that demographics don’t matter,” said Chetan Ahya, chief Asia economist at Morgan Stanley in Hong Kong. “I’m worried about the deflationary risk.”

Deflation may seem unlikely in an economy still growing at a 7.5 percent clip and where consumer prices are rising 2.7 percent a year. But economists warn that China in many ways resembles Japan in 1989, two years before its crash.

Like Japan, China relied on banks to funnel investment into export industries to create jobs and finance development. In return, interest rates were regulated to ensure banks a healthy profit. Because the most profitable loans were those to the least-risky borrowers, banks concentrated their lending on big state-owned companies.

As Japan did in the 1980s, China tried to remedy this by partially liberalizing the financial sector, creating new avenues of finance, a bond market and other non-bank lending. But as in Japan, this encouraged banks to lend more, not more wisely, helping fuel a property bubble. Things got worse in 2009, when China launched a 4 trillion yuan, credit-powered stimulus to ward off the global crisis.

While Japan saw credit expand from 127 percent of GDP to 176 percent between 1980 and 1990, China’s credit rose from 105 percent in 2000 to 187 percent of GDP last year, JPMorgan Chase in Hong Kong says.”

via Analysis: China risks following Japan into economic coma | Reuters.

Posted in China alert, Economics | 6 Comments »

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31/07/2013

Divide Uttar Pradesh into four states, Mayawati says

As we said in our post yesterday – https://chindia-alert.org/2013/07/30/bbc-news-india-coalition-approves-new-state-of-telangana/, India now has double the states it started with after independence. And the more sub-divisions are approved, it seems that more ethnic/language groups want their own state.  Where will it all end?

Times of India: “The Bahujan Samaj Party demanded splitting of Uttar Pradesh into four smaller states on Wednesday, a day after the Congress Working Committee (CWC) urged the government to form a separate state of Telangana.

“We have always supported smaller states,” BSP chief Mayawati said here at a press conference.

She said Uttar Pradesh should be divided into four smaller states — Purvanchal, Bundelkhand, Awadh Pradesh and Pashchim Pradesh.

English: Map of UP subregions. It has been bui...

English: Map of UP subregions. It has been built on the public domain work “Uttar Pradesh locator map.svg” in Wikipedia. This work is also public domain. Free for any and all use without any restrictions whatsoever. (Photo credit: Wikipedia)

“When this population is divided between four states, development will increase,” she said.

“Ministers in central government who hail from Uttar Pradesh should build pressure on the central government for formation of these states,” she added.”

via Divide Uttar Pradesh into four states, Mayawati says – The Times of India.

Posted in China alert, Neighbour conflict, sports | 1 Comment »

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31/07/2013

China’s New Migrant Workers Want More

BusinessWeek: “The red neon sign over the front door of a new entertainment complex in Beijing’s suburban Daxing district—a local garment manufacturing hub—reads simply “The Skating Rink.” Inside, Lady Gaga’s “Poker Face” crackles over loudspeakers, and a strobe light casts red and green pixels of light across a hardwood floor. The young migrant workers who toil in the garment factories nearby typically work on weekends, and have only two or three days off a month. So a crowd begins to form only in the evenings, after overtime shifts end around 9 or 10 p.m.

Twenty-one-year-old He XiaoJie (right) lives in a five-person dorm room within his factory

On a recent Sunday afternoon, the rink has just a handful of early skaters. Among them is a family of five. (Many migrant families manage to disregard China’s one-child policy.) Pudgy 3-year-old Zhefang, wearing a yellow sundress and short pigtails, tugs playfully on the laces of her 5-year-old brother’s skates. Her other brother, who is 9, races full speed around the rink. Juping and Xinfing, the parents, are both 29 and moved here from Jiangxi province seven years ago. Today is one of the precious few days all year that they are together as a family. Because the parents lack a Beijing hukou—or residence permit—they cannot enroll their children in local schools. The two boys now live with their grandparents back in Jiangxi. Xinfing says she “really wants our girl to stay with us” once Zhefang reaches school age, but knows it’s not likely. She scoops up the little girl in her arms and lovingly pats down stray hairs that have shaken loose of her pigtails.

China’s great modern migration from countryside to city began roughly 30 years ago. Starting in the 1980s, new factories in southeastern China began to churn out goods for export and lured workers who could make more on the assembly line than on the farm. In the 1980s and ’90s, most of those who left home were young single people, like the women described in Leslie Chang’s book, Factory Girls. A majority of migrants expected to work for a few years, save money, and eventually return to their hometowns. However, in recent years this pattern has notably shifted. Government planning documents refer to migrants born after 1980 as “new generation migrant workers,” and recent reports from China’s National Bureau of Statistics show how they differ from their predecessors. Just as Juping and Xinfing moved to Beijing as a married couple with a young child in tow, several studies show that a majority of migrant workers now move with at least one other family member.

Beijing’s Daxing district lies outside the Sixth Ring Road, a 90-minute drive from the city center. The local government has made a push to attract garment factories ranging in size from those with a few hundred employees to those with less than a dozen. The workers who come here are mostly in their late teens and twenties. Like previous generations, they have come to start a new life with little savings and a lot of gumption. But they are more tech-savvy, fashion-conscious, and educated than their parents. Most significant, they expect to integrate permanently into city life—putting more urgent pressure on the government to change China’s current system of allocating social services (including schooling and health care) only to those with difficult-to-obtain city residence permits.

In his recent book, China’s Urban Billion, analyst Tom Miller of GK Dragonomics writes, “Surveys show that the majority of the new generation of migrant workers [have] no intention of returning to the penury of rural life.” In explaining the attitudinal shift, he notes: “They are significantly better educated than their parents, and usually adapt far more quickly to urban ways. They hope to become fully fledged urban citizens and enjoy a modern consumer lifestyle.””

via China’s New Migrant Workers Want More – Businessweek.

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31/07/2013

China to invest $375 billion on energy conservation, pollution: paper

Reuters: “China plans to invest 2.3 trillion yuan ($375 billion) in energy saving and emission-reduction projects in the five years through 2015 to clean up its environment, the China Daily newspaper reported on Wednesday, citing a senior government official.

The plan, which has been approved by the State Council, is on top of a 1.85 trillion yuan investment in the renewable energy sector, underscoring the government’s concerns about addressing a key source of social discontent.

China has set a target of reducing its carbon emissions per unit of GDP by 40-45 percent by 2020 from the 2005 level, and raising non-fossil energy consumption to 15 percent of its energy mix, Xie Zhenhua, deputy director of the National Development and Reform Commission (NDRC), was quoted as saying.

As part of broader plans to curb pollution, the government will also roll out tiered power pricing for eight energy intensive industries, while sectors that struggle with overcapacity will face higher power tariffs, Xie said.

The government will also gradually expand a carbon trading pilot program to more cities starting from 2015, with the aim of creating a national market, he said.

Seven cities and provinces, including Shanghai, were ordered by the NDRC in late 2011 to set up regional carbon trading markets.”

via China to invest $375 billion on energy conservation, pollution: paper | Reuters.

See also: https://chindia-alert.org/economic-factors/greening-of-china/

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Posted in carbon emission, China alert, Ecology, Economics, Environment, Green, greenhouse gas, Pollution | 2 Comments »

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30/07/2013

China urbanization cost could top $106 billion a year: think-tank

Reuters: “The cost of settling China’s rural workers into city life in the government’s urbanization drive could be about 650 billion yuan ($106 billion) a year, the equivalent of 5.5 percent of fiscal revenue last year, a government think-tank said on Tuesday.

A man rides an escalator near Shanghai Tower (R, under construction), Jin Mao Tower (C) and the Shanghai World Financial Center (L) at the Pudong financial district in Shanghai July 4, 2013. REUTERS/Carlos Barria

The figure is based on the assumption that 25 million people a year settle in cities, with the government spending the money on making sure they enjoy the same benefits in healthcare, housing and schools that city residents have, the Chinese Academy of Social Sciences(CASS) said.

“I think the biggest obstacle for turning rural migrant workers into urban citizens is the cost issue,” Wei Houkai, a researcher at CASS, told a news conference, adding that to achieve equality of treatment could take until 2025.

Millions of migrant workers from the countryside and smaller towns work in China’s big cities, often in low-paid manual work, but lack access to education, health and other services tied to the country’s strict household registration – or hukou – system.

China sees the urbanization drive as pushing domestic consumption, which it wants to make the main engine of growth for the economy, replacing exports and manufacturing and investment.

Rural migrant laborers only earned an average 2,049 yuan a month in 2011, or 59 percent of average urban workers’ salary, CASS added.

But they need to pay about 18,000 yuan annually per capita to be able to live in cities and another 100,000 yuan on average for housing, it said.”

via China urbanization cost could top $106 billion a year: think-tank | Reuters.

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29/07/2013

Capability building in China

Abbreviated from: http://www.mckinsey.com/insights/asia-pacific/capability_building_in_china?cid=china-eml-alt-mip-mck-oth-1307

Article|McKinsey Quarterly

Capability building in China

 

Skill building must be rewards-based, rooted in real work, and tailored to local conditions.

 
July 2013 | byKarel Eloot, Gernot Strube, and Arthur Wang
 

Capability building—leadership, managerial, and team-based skills rather than technical ones—has become an urgent imperative for many companies in China. As the country loses its extreme low-cost-labor advantage, businesses must look for ways to increase productivity and internal collaboration, to better understand consumers, and to develop a more sophisticated appetite for risk.

Companies in China face many of the same challenges—a lack of up-front planning and inadequate resources—that bedevil capability-building exercises everywhere. But certain “China factors” stand out. For starters, the demand for managers with strong leadership skills and international experience is growing significantly faster than the supply of qualified candidates. That imbalance makes it more difficult to pull off successful skill-building efforts, even for multinationals that typically invest more in training than Chinese companies do. (Indeed, one implication of China’s white-hot war for talent is that outside trainers brought in by multinational companies to set up and run new programs often move on before relevant tools and internal processes are in place.) Another perennial challenge for multinationals: the Chinese context and culture, which may require local tailoring of global approaches.

Then, of course, there are China’s state-owned enterprises. Many of them only recently converted from government departments into commercial entities and are still working to adapt to a competitive environment and adopt a true business mind-set. These companies generally lack a systematic approach to nurturing employees moving up the organizational ladder. They misconstrue capability building as a classroom activity, missing the impact of linking it to actual business. And they are too inflexible either to fire underperformers or to reward and promote employees, including managers, who change their behavior and adopt the necessary mind-sets.

While the challenges facing multinationals and state-owned enterprises differ, our experience with leaders at both kinds of organizations (as well as with private-sector Chinese companies) has highlighted the importance of some common, broadly applicable principles. In this article, we describe three that should help companies overcome many of the obstacles that have frustrated capability-building efforts in the past.

1. Relate capability building to real activities

…

2. Instill incentives and create opportunities for promotion

…

3. Don’t forget China’s unique culture

…

The solutions may sound obvious: developing Chinese teaching materials to help solve problems, building day-to-day business problems around products that participants would find in the Chinese market, and localizing global training materials through culturally appropriate metaphors and examples. But we know from experience how easy it is to overlook these issues. In our own work, we routinely use a case involving a coffee machine to teach managers about the seven types of waste and how a “lean” perspective can address them. When we recently used this case at a Chinese state-owned enterprise, however, the managers couldn’t make sense of the story, because they had never used a coffee machine. We have now adapted the context to tea making.

About the authors

Karel Eloot is a director in McKinsey’s Shanghai office; Gernot Strube is a director in the Hong Kong office, where Arthur Wang is a principal.

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29/07/2013

China opens pipeline to bring gas from Myanmar | South China Morning Post

SCMP: “China has switched on a new pipeline bringing natural gas from Myanmar, a state company said on Monday, in a project that has raised concerns in Myanmar’s nascent civil society about whether its giant neighbour’s resource grabs will benefit local people.

myanmar_china_pipeline.jpg

The 793-kilometre pipeline connects the Bay of Bengal with southwest China’s Yunnan province and is expected to transfer 12 billion cubic metres of natural gas to China annually, according to a news release on the website of China National Petroleum Corporation (CNPC). A parallel 771-kilometre pipeline that will carry Middle East oil – shipped via the Indian Ocean – is still under construction.

China’s investments, largely in energy and mining, have generated controversy in Myanmar because they have done little to relieve that country’s chronic power shortages. In response, last year the Myanmar government abruptly suspended construction of the China-backed Myitsone dam, which would displace thousands and flood the spiritual heartland of Myanmar’s Kachin ethnic minority.

While the pipelines are only expected to provide a small proportion of China’s oil and gas consumption, they are strategically important to Beijing. The gas pipeline that began operating on Sunday offers a nearby source of gas, and the oil pipeline would eliminate the need for tankers from the Middle East to pass through the crowded Malacca Strait between Malaysia and Indonesia.

The two joint ventures are between state-owned CNPC and Myanmar’s national petroleum company Myanmar Oil and Gas Enterprise. Four other companies from India and South Korea also have stakes in the project, according to CNPC.”

via China opens pipeline to bring gas from Myanmar | South China Morning Post.

Posted in China alert, Diplomacy, Economics, GeoPolitics, oil & gas, Politics | 3 Comments »

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29/07/2013

Japan’s top diplomat heads for China seeking better ties | Reuters

Reuters: “Japanese Vice Foreign Minister Akitaka Saiki will visit China on Monday and Tuesday for talks with senior officials, the latest in a series of efforts by Prime Minister Shinzo Abe to improve relations soured by a bitter territorial row.

Japan's chief envoy to the six-party talks Akitaka Saiki arrives at Beijing airport November 30, 2010. REUTERS/Jason Lee

The hawkish Abe, who cemented his grip on power in an upper house election last week, called on Friday for an unconditional meeting between Japanese and Chinese leaders.

On Sunday, Isao Iijima, an adviser to the premier, told reporters that Abe could soon hold a summit with Chinese President Xi Jinping.

Often fragile Sino-Japanese ties have been seriously strained since September, when a territorial row over tiny islands in the East China Sea flared following Japan’s nationalization of the uninhabited isles.

Concern that the conservative Japanese leader wants to recast Japan’s wartime history with a less apologetic tone has added to the tension.

“Vice Minister Saiki will visit China on July 29-30 and exchange views with Chinese officials,” a Japanese foreign ministry spokesman said. He did not give further details.

China’s Foreign Ministry responded to Abe’s overture on Friday by saying its door was always open for talks but that the problem lay in Japan’s attitude.”

via Japan’s top diplomat heads for China seeking better ties | Reuters.

Posted in China alert, Diplomacy, Economics, Foreign invasion, GeoPolitics, Good news, History, Neighbour conflict, Politics, Territorial dispute | Leave a Comment »

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28/07/2013

U.S. – China Five Initiative Plan Will Foster Future Climate Actions

Climate Law Blog: “The United States and China agreed upon a multi-faceted climate plan to curb GHG emission at the U.S.-China Strategic and Economic Dialogue (S&ED) on July 10, 2013. The plan was designed by the U.S.-China Working Group on Climate Change, which was established pursuant to a Joint Statement from both governments in April 2013. It is led by the U.S. Special Envoy for Climate Change, Todd Stern, and the Vice Chairman of China’s National Development and Reform Commission, Xie Zhenhua.

The first Strategic and Economic Dialogue was ...

The first Strategic and Economic Dialogue was held in Washington, DC on July 27th and 28th. (Photo credit: Wikipedia)

The U.S. and China together account for around 45% of the world’s annual GHG emissions; the two countries thus bear much of the global responsibility for the changing climate. The Working Group’s Report first took stock of existing cooperative efforts between the two countries and found a breadth of joint programs and projects. Recognizing the enormous potential to deepen those collaborative actions, the Working Group recommended five key initiatives, which will be implemented to facilitate large-scale cooperative efforts and domestic actions beginning in October 2013. These new initiatives include:

* Reducing emissions from heavy-duty and other vehicles

* Increasing carbon capture, utilization, and storage (CCUS)

* Increasing energy efficiency in buildings, industry, and transport

* Improving greenhouse gas data collection and management

* Promoting smart grids

Both sides will gain sustainable economic growth from these low carbon developments on the basis of existing domestic policy and bilateral collaboration. Moreover, China will particularly benefit from reducing its air pollution and thereby improving public health through reducing emissions from heavy-duty and other vehicles.

The five-initiative plan directly followed a recent bilateral meeting in June 2013 in which presidents Obama and Xi agreed that the two countries will work together to phase down the production and consumption of HFC on both sides of the Pacific.

Though the agreement is non-binding, collaboration in climate strategy between U.S. and China is likely to spur a global response to come up with new efforts to combat climate change through enhancing domestic actions. Through October 2013, specific implementation plans regarding each of the five initiatives will be worked out. The Working Group will ensure that these are implemented with the involvement of large companies and non-governmental organizations.

Domestically, both countries have adopted laws or regulations addressing climate change. President Obama’s new climate policy announced in late June signaled the Administration’s commitment to regulating power plants, further promoting renewable energy, and increasing energy efficiency. China has enacted a renewable energy act and an energy conservation law which provide mid-to-long-term targets for shifting to clean energy and sustainable development. The five-initiative plan is another important step in furthering these domestic agendas, and, hopefully, greater world action.

via Climate Law Blog » Blog Archive » U.S. – China Five Initiative Plan Will Foster Future Climate Actions.

Posted in carbon emission, China alert, Climate change, Ecology, Economics, Environment, GeoPolitics, Green, greenhouse gas, Pollution | Leave a Comment »

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