Archive for ‘Economics’

25/03/2014

Why China’s Manufacturing Sector Has Hit a Wall – Businessweek

More bad economic news out of China: A key indicator released on March 24 showed that the manufacturing sector of the world’s second-largest economy contracted for the fifth straight month.

The HSBC and Markit purchasing managers’ index fell to 48.1 in March, below the 48.7 expected by analysts in a Bloomberg News survey (a number above 50 indicates growth). “The weakness appears even more pronounced given that there is usually a seasonal rebound after the Chinese New Year holiday,” said Julian Evans-Pritchard, China economist at London-based Capital Economics, in a March 24 note.

The lackluster showing of the so-called Flash PMI (usually based on results from 85 percent to 90 percent of companies surveyed; the final reading will be released April 1) follows weak investment, industrial production, and export numbers in the first two months. “The old growth engine is losing steam,” Chen Xingdong, chief China economist at BNP Paribas in Beijing, told Bloomberg News.

via Why China’s Manufacturing Sector Has Hit a Wall – Businessweek.

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24/03/2014

China Cracks Down on Ghost City Monoliths – Businessweek

China is getting serious about reining in at least one aspect of its ghost cities—the monolithic work palaces built for civil servants. On March 19, the central government announced it has investigated 147 officials and punished 55 for violating a five-year ban, imposed last July, on construction of all new government buildings.

An empty apartment building construction project in Ordos city, Inner Mongolia, China

“The malpractice of constructing new government buildings should be exposed. Departments and individuals should never cover or shield the malpractice,” said the State Council in its statement. “Precious funds should be used for safeguarding and improving the people’s well-being,” the statement said, as reported by the official Xinhua News Agency.

The ban has at least two purposes. One is to compel local governments to spend state funds more wisely, as concerns about growing levels of debt are mounting. China’s National Development and Reform Commission last year announced that 144 cities in 12 provinces were planning to build more than 200 new towns.

STORY: Breaking Through China’s Great Firewall

A Feb. 20 analysis by Beijing economic consultancy Gavekal Dragonomics showed that by 2011, 45 percent of all investment in China was channeled into “stagnant or loser prefectures,”—defined as those with little or negative population growth.

“Empty towns and ghost cities are redundant constructions that do not generate much economic benefit. They are a huge waste of resources which pile debt pressure onto local governments,” editorialized the People’s Daily last year.

The ban is also part of President Xi Jinping’s effort to curb ostentatious behavior by government officials and crack down on graft. The aim is “to promote a national frugality campaign and curb official’s appropriation of public funds,” explained Xinhua.

via China Cracks Down on Ghost City Monoliths – Businessweek.

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21/03/2014

India’s Diesel Fuel Subsidy Breeds Toxic Air Pollution – Businessweek

Molecular biologist George Easow’s move to India to start a clinical diagnostics business lasted just three weeks before he decided to give up and return to the U.K. Within days of the family’s move to New Delhi, his 7-month-old daughter, Fiona, was wheezing and gasping for air because of smog. “She could hardly breathe,” says her father.

India's Diesel Cars Are Proving Lethal

Fiona was kept indoors and put on medication. Nothing worked. “We had to make a call,” Easow says, adding that her symptoms disappeared once they were back in the U.K. and haven’t returned. For the 16.8 million residents of India’s capital, the wheezing continues. The bad news is, it’s going to get worse.

Cities across India suffer from some of the poorest air quality in the world. The problem is so severe that it’s costing the country 1.1 trillion rupees ($18 billion) annually in the shortened life spans of productive members of the urban population, according to a June World Bank report.

STORY: Who Has Dirtier Air: China or India?

While Beijing and Shanghai air pollution caused by coal-burning factories are well known, Delhi residents suffer even more by some measures, though the main source of the smog is cars and trucks running on cheap diesel. Indian government subsidies for the fuel add up to $15 billion a year. Farmers and truckers, both big voting blocs, rely on cheap diesel.

India’s diesel-powered vehicles pump out exhaust gases with 10 times the carcinogenic particles found in gasoline exhaust. The result: Delhi’s air on average last year was laced with double the toxic particles per cubic meter reported in Beijing, leading to respiratory diseases, lung cancer, and heart attacks. “I have no doubt, 100 percent, that diesel exhaust is contributing to a rise in asthma, respiratory illnesses, and hospitalizations,” says Dr. T.K. Joshi, director of Delhi’s Centre for Occupational and Environmental Health at Maulana Azad Medical College.

via India’s Diesel Fuel Subsidy Breeds Toxic Air Pollution – Businessweek.

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21/03/2014

BBC News – Megadams: Battle on the Brahmaputra

China and India have their eye on the energy potential of the vast Brahmaputra river. Will a new wave of “megadams” bring power to the people – or put millions at risk? The BBC World Service environment reporter Navin Singh Khadka reports from Assam, India.

map

On the banks of the Brahmaputra it is hard to get a sense of where the river starts and ends. It begins far away as a Tibetan mountain stream. On the floodplains of Assam, though, its waters spread as far as the eye can see, merging with the horizon and the sky.

From here it continues through north-eastern India into Bangladesh, where it joins with the Ganges to form a mighty river delta.

For centuries the Brahmaputra has nourished the land, and fed and watered the people on its banks.

Today, though, India and China’s growing economies mean the river is increasingly seen as a source of energy. Both countries are planning major dams on long stretches of the river.

In Assam the plans are being greeted with scepticism and some fear.

The fear is that dams upstream could give China great power over their lives. And many in Assam worry whether China has honourable intentions.

Brahmaputra voices: What next for their river?

Brahmaputra stories: The businessman, the activist, the expert and the official

After a landslide in China in 2000, the river was blocked for several days, unknown to those downstream.

When the water forced its way past the blockage Assam faced an oncoming torrent. There was no advance warning. There are concerns this could happen more frequently.

Some also believe that China may divert water to its parched north – as it has done with other southern rivers.

India’s central government says China has given them assurances about the new Tibetan dams.

“Our foreign ministry has checked with China and we have been told that the flow will not be affected, and we will make sure that the people’s lives are not affected by the dams,” Paban Singh Ghatowar, minister for the development of north-eastern India, told the BBC.

By engaging in a race to dam the Brahmaputra as quickly as possible, China and India will cause cumulative environmental impacts beyond the limits of the river’s ecosystem”

Peter Bosshard

International Rivers Network

Do massive dams ever make sense?

Beijing says the dams it is building on the Tibetan stretch of the river will ease power shortages for people in that region.

“All new projects will go through scientific planning and feasibility studies and the impact to both upstream and downstream will be fully considered,” China’s foreign ministry told the BBC.

It said three new dams at Dagu, Jiacha, and Jeixu were small-scale projects: “They will not affect flood control or the ecological environment of downstream areas,” the foreign ministry said.

Despite the statements, there is no official water-sharing deal between India and China – just an agreement to share monsoon flood data.

via BBC News – Megadams: Battle on the Brahmaputra.

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21/03/2014

China Wants Its People in the Cities – Reuters

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

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

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

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

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

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

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

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

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

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

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

 

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18/03/2014

Children’s shelter closes doors[1]- Chinadaily.com.cn

The trial operation of the temporary shelter in Guangzhou, Guangdong province, for abandoned children was suspended on Sunday, after 262 babies and children were accepted since it opened on Jan 28.

Children's shelter closes doors

Nanjing Children’s Welfare Institution in Jiangsu province may also suspend its temporary shelter due to a lack of capacity to care for the children. The institution has received 136 babies since it opened the shelter in December.

“Normally we just receive 160 abandoned babies and children a year,” said Zhu Hong, director of the Nanjing institution.

A man walks past a baby shelter outside the Guangzhou Social Welfare Home on Monday. The shelter was suspended on Sunday after receiving a total of 262 babies and children since it was put into use on Jan 28. Zou Zhongpin / China Daily

“I may refuse to be interviewed in the future to avoid more publicity for the shelter,” Zhu said. “Many people know about the shelter from the media and choose to abandon their children. Some people even drive from other cities to Nanjing to abandon their children.”

Xu Jiu, director of Guangzhou Social Welfare Home, said the increasing number of children being dropped off at the facility’s temporary shelter has put a strain on resources.

“Doctors and medical staff worry about the cross infection of diseases among the abandoned babies and children at the city’s welfare home, as many abandoned babies now have to share a bed and other facilities,” Xu said at news conference on Sunday afternoon.

The social welfare home, which has 1,000 beds, now houses 2,395 orphans and disabled young people.

“We have not decided when we will reopen the temporary shelter, and the Guangzhou Social Welfare Home will focus on curing the diseases of the abandoned babies and children who have been left at the shelter,” Xu said.

In addition to infants, children aged 5 to 6 were also abandoned at the facility, Xu said.

All of the 148 boys and 114 girls abandoned at the temporary shelter over the past two months have been diagnosed with ailments including congenital heart disease, Down syndrome, brain failure and cleft lip.

Ninety-eight percent of the babies abandoned at the Nanjing temporary shelter have serious diseases and physical or mental disabilities.

via Children’s shelter closes doors[1]- Chinadaily.com.cn.

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17/03/2014

China pushes forward urbanizing migrant workers – Xinhua | English.news.cn

China pledged increasing efforts to help migrant workers win urbanite status, removing restrictions in towns and lowering threshold in big cities, said a national plan unveiled on Sunday.

The country promised to help migrant workers from countryside to settle down in cities, by fully eliminating restriction of household registration in towns and small cities and gradually easing restrictions in medium-sized cities, according to the 2014-2020 urbanization plan released by the State Council, China’s Cabinet.

Reasonable conditions for settling in big cities will be set, while population in mega cities will remain to be strictly controlled, the plan said.

The plan also granted city services and public welfare to the migrants.

In China, cities with population between three million and five million are defined as big cities, while those above five million are mega cities.

via China pushes forward urbanizing migrant workers – Xinhua | English.news.cn.

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16/03/2014

China to bypass Malacca Strait by Kra Isthmus Canal in Thailand

15/03/2014

Fighting corruption in India: A bad boom | The Economist

IN THE early hours of February 20th 2010 Uday Vir Singh, an Indian forestry officer, bluffed his way past a private militia guarding a dusty port called Belekeri. For months suspicious-looking convoys of trucks had been thundering across India to the port’s quays on the country’s west coast, just south of the Goan beach where the super-spy mayhem which opened “The Bourne Supremacy” was filmed.

Mr Singh is no more a Jason Bourne than the next entomologist—he has a doctorate on metamorphosis in insects—and the infiltration he mounted with a few colleagues led to no gunplay. But it did uncover a massive scam, with hundreds of officials and politicians in the state of Karnataka in the pockets of an illegal mining mafia that, over five years, had made profits of $2 billion or more shipping illegal iron ore to China.

Such scandals have rocked Asia’s third-largest economy in the past decade. A lot of transactions that put public resources into private hands—allocations of radio spectrum, for example, and of credit from state banks—have come under suspicion. Of the ten biggest family firms by sales, seven have faced controversies. The brash new tycoons who came of age during the boom years of 2003-10 are under a cloud, too. Before he became boss of the central bank last year, Raghuram Rajan worried publicly that India could start looking like an oligarchy along the lines seen in Russia: “too many people have got too rich based on their proximity to the government.”

via Fighting corruption in India: A bad boom | The Economist.

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15/03/2014

Why caste still matters in India | The Economist

INDIA’S general election will take place before May. The front-runner to be the next prime minister is Narendra Modi of the Bharatiya Janata Party, currently chief minister of Gujarat. A former tea-seller, he has previously attacked leaders of the ruling Congress party as elitist, corrupt and out of touch. Now he is emphasising his humble caste origins. In a speech in January he said “high caste” Congress leaders were scared of taking on a rival from “a backward caste”. If Mr Modi does win, he would be the first prime minister drawn from the “other backward classes”, or OBC, group. He is not the only politician to see electoral advantage in bringing up the subject: caste still matters enormously to most Indians.

The country’s great, liberal constitution was supposed to end the millennia-old obsession with the idea that your place in life, including your occupation, is set at birth. It abolished “untouchability”—the practice whereby others in society exclude so-called untouchables, or Dalits, as polluting—which has now mostly disappeared from Indian society. Various laws forbid discrimination by caste. At the same time (it is somewhat contradictory) official schemes push “positive” discrimination by caste, reserving quotas of places in higher education, plus jobs in government, to help groups deemed backward or deprived. In turn, some politicians have excelled at appealing to voters by caste, promising them ever more goodies. For example Mayawati, formerly chief minister of Uttar Pradesh state (population: over 200m) and just possibly a future prime minister, leads a Dalit party. In another northern state, Bihar, parties jostle to build coalitions of caste groups. Everywhere voters can be swayed by the caste of candidates.

But don’t blame politicians alone. Strong social actors—such as leaders of “khap panchayats” (all-male, unelected village councils) or doughty family elders—do much more to keep caste-identity going. Consider marriages. In rural areas it can be fatal to disregard social rules and marry someone of a different, especially if lower caste. Haryana, a socially conservative state in north India, is notorious for frequent murders of young men and women who transgress. Even in town, caste is an important criterion when marriages are arranged. Look at matrimonial ads in any newspaper, or try registering for a dating site, and intricate details on caste and sub-caste are explicitly listed and sought (“Brahmin seeks Brahmin”, “Mahar looking for Mahar”) along with those on religion, education, qualifications, earning power and looks. Studies of such sites suggest that only a quarter of participants state that “caste is no bar”. Such attitudes also reflect the anxieties of parents, who are keen for children to marry within the same group, because marriages bring extended families intimately together.

As long as marriages are mostly within the same caste, therefore, don’t expect any law or public effort to wipe away the persistent obsession with it. That seems set to continue for a long time: a survey in 2005 found that only 11% of women in India had married outside their caste, for example. What is changing for the better, if too slowly, is the importance of caste in determining what jobs, wealth, education and other opportunities are available to an average person. No caste exists for a call-centre worker, computer programmer or English teacher, for example. The more of those jobs that are created, and the more people escape India’s repressive villages, the quicker progress can come.

via The Economist explains: Why caste still matters in India | The Economist.

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