Archive for ‘Economics’

14/09/2013

Holding back the sands of time

China Daily: “Desert dwellers are slowly reclaiming cultivatable land, as Cui Jia and Mao Weihua report from Hotan, Xinjiang Uygur autonomous region.

Holding back the sands of time

Hotan prefecture in the southwest of the Xinjiang Uygur autonomous region is famous for two things: jade and sand. The locals still try to pluck the precious stones from the dry bed of the Yurungkash River, also known as the White Jade River, but the rising value of jade means the place has almost been picked clean after repeated treasure hunts, so the chances of making new discoveries are slim. However, in this area bordering the Taklimakan, the world’s second-largest desert, the sand will never disappear.

Almost every one in Hotan lives close to the more than 300 oases, large and small, that are dotted around the southern edge of the Taklimakan. Those enclosed by the desert only account for 3.7 percent of Hotan’s total area. As a result, people have to cope with windborne sand for more than 260 days a year. On a bad day, they have to be prepared to seek cover from sandstorms, which can blacken the sky within minutes and without warning. In addition to the health problems posed by the storms, sand carried at high speed can erode buildings and strip the paintwork from vehicles.

A new artificial greenbelt in Hotan county in the Xinjiang Uygur autonomous region. Photos by Mao Weihua / China Daily

In Hotan, the transition between oases, fed by the floodwater from northern Hotan’s Kunlun Mountains, and the desert is almost instantaneous. One minute the scenery along the road is pure yellow desert and the next, tall poplar trees on both sides of the road suddenly begin to provide comfortable shade from the searing heat.

“At the current rate, the prefecture has been losing 33 square kilometers of oases every year, due to the invasion of the Taklimakan and the construction of infrastructure. Meanwhile, the local population is booming, so we have no choice but to create about 66 sq km of oases every year,” said Chen Baojun, Party chief of the prefecture’s forestry bureau, who has 20 years experience in desertification control.

He said the sand from the Taklimakan can be carried as far away as Beijing and sometimes even as far as Japan, meaning control of desertification in Hotan has both a national and international resonance.

Qira county was once a kingdom on the ancient Silk Road in the days of the Eastern Han Dynasty (AD 25-220). The county seat has relocated north three times because the sands have eaten up the cultivatable land. The first relocation occurred more than 2,000 years ago and the most recent about 620 years ago.

In the 1980s, the county seat faced yet another relocation because the desert was only about 1.5 km away. Many locals were forced to move because their houses were buried under sand, often overnight.

It was at that point that the government stepped in to provide measures against desertification. In the days before the measures, the locals tried to prevent the sand from encroaching on their homes by erecting fences around the houses, said Chen.”

via Holding back the sands of time[1]|chinadaily.com.cn.

See also:

14/09/2013

Manmohan predicts more pressure on urban infrastructure

the Hindu: “Prime Minister Manmohan Singh on Saturday predicted a major pressure on infrastructure as at the present pace of urbanisation at least 60 crore Indians would be living in urban areas by 2033, while the population in slums would have increased to nearly 10.4 crores by 2017.

Prime Minister Manmohan Singh handing over the key to a beneficiary after inaugurating a housing complex in Chandigarh on Saturday. Photo: Akhilesh Kumar

Dr. Singh was addressing a gathering after initiating the process of handing over possession to beneficiaries of the “Slum rehabilitation scheme of Jawaharlal Nehru National Urban Renewal Mission (JNNURM)” a housing project completed for 8000 families at a cost of about Rs. 2400 crore near Dhanas village on the outskirts of the city. He said that while Chandigarh was expected to become “slum-free” within the next few years, the Union government had planned to construct at least 15 lakh such houses and dwelling units, for which Rs. 41,000 crore had been earmarked.

That such projects were the cornerstones for India progress towards becoming into a developed Nation, Dr Singh said that the Union government had launched Rajiv Awas Yojana to resolve the problem of slums, while another scheme for the urban poor involved private sector investment which would help economically weaker and lower income group category people build their houses.

In his address, Governor of Punjab, Shivraj V. Patil in his capacity as Administrator of the Union Territory of Chandigarh detailed that 25,000 such dwellings had been planned for the city, in its endeavour to provide basic amenties to all its citizens.

He announced that in the next phase of such dwellings provision will be made for two rooms instead of the present one room. He thanked the Union Minister for Housing and Urban Poverty Alleviation, Girija Vyas, who assured adequate financial support to construct the next phase of such housing projects.

Earlier, the Dr Singh handed over possession of the 267 sq ft dweeling units to 10 couples, while the Haryana Governor, Jagannath Pahadia, Punjab and Haryana Chief Ministers, Parkash Singh Badal and Bhupinder Singh Hooda, respectively looked on along with Mr Patil and Ms Vyas. The housing complex which shall accommodate slum dwellers from Colony No 5, also provides necessary social infrastructure, police post, dispensary, primary school, anganwari, play grounds and parks, along with proper water supply, electricity connections and sewerage. The beneficiaries would pay a monthly rent of Rs 800 for the next 20 years, after which ownership rights would be transferred if they established continued possession of the dwelling unit allotted to them.”

via Manmohan predicts more pressure on urban infrastructure – The Hindu.

see also: https://chindia-alert.org/2013/07/30/china-urbanization-cost-could-top-106-billion-a-year-think-tank/

13/09/2013

China gets tough on air pollution

China Daily: “Updated action plan drawn up in response to severe smog at start of the year, Wu Wencong reports

China gets tough on air pollution

The toughest-ever measures to tackle China’s worsening air pollution have been announced by the government.

The Airborne Pollution Prevention and Control Action Plan (2013-17) unveiled on Thursday sets out goals for the nation’s 338 cities.

A couple in Beijing’s Jingshan Park take photos against the background of a smog-shrouded Forbidden City as bad air pollution hit the capital on June 30. ZHUO ENSEN / FOR CHINA DAILY

The plan aims for a marked improvement in air quality over the next five years, said Wang Jian, deputy head of the Pollution Prevention and Control Department at the Environmental Protection Ministry.

The concentration levels of breathable suspended particles with a diameter of 10 microns — known as PM10 — or less, must fall by at least 10 percent by 2017 from the levels in 2012.

Tougher objectives have been set for some key areas.

For the Beijing-Tianjin-Hebei regional cluster, concentration levels of PM2.5 particles — those smaller than 2.5 microns in diameter, which can penetrate deep into the lungs — must be cut by 25 percent by 2017 from the 2012 level, under the plan.

The target for the Yangtze River Delta region is a reduction of 20 percent and for the Pearl River Delta region it is a cut of about 15 percent.

The plan takes into account pollution and economic development in different areas, with the aim of reducing PM2.5 levels in the three key regions and PM10 levels in the other cities, Wang said.

“But this does not mean that controlling PM2.5 is not important in the other regions, as PM2.5 particles account for 50 to 60 percent of PM10 particles,” he added.

The plan is an updated version of one released late last year that was designed to tackle air pollution in 13 key areas.

via China gets tough on air pollution[1]|chinadaily.com.cn.

See also: 

11/09/2013

China ditches pointless awards in latest anti-waste push

More austerity.

Reuters: “China said on Wednesday that it will ditch 76 pointless official – and sometimes obscure – awards as it seeks to rein in waste and extravagance, part of President Xi Jinping‘s crusade against pervasive corruption.

Government departments will, for example, no longer be able to award prizes for “excellent vocational education teaching materials” or “administration in accordance with the law” for tax collectors, according to the new rules.

“In recent years, many government departments … have been obsessed with these kinds of awards and evaluations and formalism has run rampant,” the central government said in a statement on its website (www.gov.cn).

“Not only has this not had the desired effect, it has been a huge waste of personnel and resources and has even caused unhealthy tendencies, causing a strong reaction in society.”

A similar campaign in 2009 had resulted in annual savings of 6.4 billion yuan ($1.05 billion), the government said.

“The cancelling of these 76 awards is just the first step, and the project will continue and deepen,” it added.

Plaques marking the award of such prizes and evaluations can be seen everywhere in China from ministries to parks and subways and generally have little real meaning as they are mostly given for political rather than competitive reasons.

The new rules echo demands made of officials to simplify their lives and get closer to the people by Xi since he took over as Communist Party chief last November.

He has made cutting back on ostentation and waste a key theme of his administration, seeking to assuage anger over corruption and restore faith in the party.”

via China ditches pointless awards in latest anti-waste push | Reuters.

see also: https://chindia-alert.org/2013/05/25/restraint-is-the-new-red-in-china/

11/09/2013

Changing China set to shake world economy, again

In my view, this is a ‘must read’ article for anyone interested in how China will impact their own countries and lives in the foreseeable future. It complements another recent article – https://chindia-alert.org/2013/09/11/reading-li-keqiangs-tea-leaves-at-the-world-economic-forum/

Reuters: “Long after concerns about tightening U.S. monetary policy have faded, a more profound issue will still dog global policymakers: how to handle the second stage of China’s economic revolution.

A view of the city's skyline from the Beijing Yintai Centre building at sunset is seen in Beijing, August 29, 2013. REUTERS/Jason Lee

The first phase, industrialization, shook the world. Commodity-producing countries boomed as they fed China’s endless appetite for natural resources. Six of the 10 fastest-growing economies last decade were in Africa.

China’s flood of keenly priced manufactured goods hollowed out jobs in advanced and emerging nations alike but also helped cap inflation and made an array of consumer goods affordable for tens of millions of people for the first time.

The second stage of China’s development promises to be no less momentous.

Consumption will take over the growth baton from investment. Services will grow as a share of the economy, while industry shrinks. Commodity-intensive mass manufacturing based on cheap labor will give way to greener, cleaner ways of making things.

More of the value added by a better-educated, more productive workforce harnessing new technologies will stay in China instead of going to multinational companies.

That’s the plan, anyway.

China will remain the most powerful engine of global growth for the next couple of decades, but it will no longer be just processing imported raw materials and components for re-export, said Li Jian with the Chinese Academy of International Trade and Economic Cooperation, the Commerce Ministry‘s think tank.

“China has realized that it cannot blindly rely on investment and exports as the main drivers of growth. So China’s demand will be more balanced,” Li said.

HIGH STAKES

To show it is serious about more sustainable growth, China deliberately engineered the first-half slowdown that unnerved markets in order to address these longer-term structural priorities, according to President Xi Jinping.

Xi and the other new leaders of China’s Communist Party are expected to approve a blueprint for reform at a plenum in November. Overcoming vested interests opposed to the new economic model will be a stern test of their credibility.

A lot is at stake for the global economy too.

Philip Schellekens, an economist with the World Bank in Washington, said the importance of the reforms Beijing intends to make cannot be overstated. As China changes, so will the rest of the world.

“The structural transformations that we think are going to happen in China over the next two decades will matter far more than the near-term vulnerabilities,” he said.

On balance, commodity-exporting developing economies stand to be affected more than rich nations – an obvious exception being Australia, where the end of a China-driven mining boom was a big issue in Saturday’s election. China buys a third of Australia’s exports.

Commodity demand should stay strong, especially as China’s capital stock per head is only 10 percent that of America’s and urbanization has a long way to go. But rebalancing will favor commodities more closely tied to consumption than to investment.

Economists fret that too many emerging markets spent their windfalls from surging raw material prices instead of sloughing them into infrastructure and other investment. As a result, growth is slowing now that China’s demand is softening.

China’s appetite for agricultural commodities and energy should hold up well but Capital Economics, a London consultancy, said it was concerned about large metals exporters that have not saved their extra income and so are running current account deficits.

It singled out South Africa, Zambia, Chile and Peru as being particularly vulnerable.

via Insight: Changing China set to shake world economy, again | Reuters.

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

11/09/2013

Reading Li Keqiang’s Tea Leaves at the World Economic Forum

In my opinion, this is another important article to read. It complements the Reuter’s piece: see – https://chindia-alert.org/2013/09/11/changing-china-set-to-shake-world-economy-again/

 

WSJ: “What’s the outlook for growth and the plans for reform of China’s economy? China Real Time planned an exclusive interview with Premier Li Keqiang to get the lowdown.

Unfortunately there wasn’t a time when both of us were free. So instead we read the transcript of Mr. Li’s question and answer session with executives at a closed door session at the World Economic Forum in Dalian, Tuesday.

Mr. Li’s remarks on everything from the role of government to the importance of financial reforms contained little in the way of new commitments. But coming ahead of a November meeting of senior Communist Party leaders – billed as the decisive moment for shifting China’s economic model – they raise expectations of concrete progress.

Here are the edited highlights of what Mr. Li said, and what we think it means.

“First, I think we need to get the relationship between government, the market and society right, that’s the key to economic reform, let the market do what the market should do, society do what society should do, and the government do what the government should do.”

A theme Mr. Li hit at his first press conference as Premier back at the National People’s Congress in March, and again here, is the need to get the roles of government and the market right. One of the main criticisms of Wen Jiabao – Mr. Li’s predecessor – was that he allowed the state to grow its role at the expense of a dynamic private sector. The hope among many economists is that Mr. Li will push back in the other direction.

“When there’s downward pressure on growth, one choice is to adjust economic policy, increase deficits, relax monetary policy. That might have a short-term benefit, but may not be beneficial for the future.”

Another criticism of Mr. Wen’s approach was that every hiccup in the economy was greeted with a credit- and investment-fueled stimulus. That helped keep growth buoyant and employment high, but also left a legacy of high debt and industrial overcapacity. Mr. Li is signaling he wants to focus on long-term reform rather than short-term stimulus.

“We will continue to liberalize interest rates… we eliminated the floor on lending interest rates. This is a step forward in the process of making interest rates market based, and we will keep moving forward.”

China’s artificially low government-set interest rates channel funds from household savers to business borrowers – contributing to lackluster consumption and overdone investment. Mr. Wen struck an early blow to liberalize interest rates toward the end of his administration by raising the ceiling on deposit rates and lowering the floor on loan rates. Mr. Li has continued in the same direction, with loan rates now set entirely by the market. The next step is further liberalization of deposit rates – good for savers but bad for banks, which would see profit margins fall.

“We will continue to open up the financial markets – to internal and external competition. For example… we are moving ahead with making the yuan convertible on the capital account.”

Mr. Li says he wants to allow a greater role for private firms in the financial system, and a more open capital account. Both would increase the efficiency of capital allocation. But some economists worry that with China’s state banks overextended from years of breakneck lending, rapid reforms could lay weakness bare and precipitate a crisis.

“We want to create a market environment of fair competition… Enterprises of different ownerships should all enjoy fair opportunities and conditions to compete in the market.”

Low productivity in state-dominated sectors of the economy is a key barrier to sustaining growth. Mr. Li stops short of any specific proposals, but the hope is that areas like telecoms, banking and logistics will be increasingly open to competition.

With an audience of foreign executives, Mr. Li also threw in a reference to protecting intellectual property, a key concern for multinationals that fear their technology and know-how will be pilfered by Chinese rivals.

“I can also tell you all, a few decades ago I was a farmer. That experience has helped me a lot as Premier. If the managers of this building have the experience of ‘cleaning the toilet,’ I believe they can better manage this complex.”

China’s domestic media have focused attention on this line, where Mr. Li nods to his experience as a farmer in the 1970s in inland Anhui province.The message is aimed partly at China’s students.  Anticipating close to 7 million university graduates nationwide this year, the government has been trying to encourage realistic expectation on employment prospects. High ambitions are good, but starting at the bottom is OK.

via Reading Li Keqiang’s Tea Leaves at the World Economic Forum – China Real Time Report – WSJ.

See also: https://chindia-alert.org/2013/08/01/china-treads-cautiously-to-rebalance-economy/

10/09/2013

Russia to invest $1 billion in rare earths to cut dependence on China

Reuters: “Russia will invest $1 billion in rare earths production by 2018 in a bid to become less dependent on China, which controls more than 90 percent of global supply of the elements used in sectors including defense, telecommunications and renewable energy.

A labourer operates a bulldozer at a site of a rare earth metals mine at Nancheng county, Jiangxi province March 14, 2012. REUTERS/Stringer

The United States, Japan and the European Union have complained to the World Trade Organization about China’s efforts to control the sector, saying China is trying to use its stranglehold over supply to drive up prices and gain a competitive advantage.

Rostec and IST group, an investment company belonging to Russian tycoon Alexander Nesis, have agreed to invest $1 billion in rare earths production by 2018, they said in a statement on Tuesday.

Rostec aims to cover Russian demand for these raw materials by 2017, the company added.

“The (Russian) President (Vladimir Putin) and the government have set a task to expand rare earths production as Russia’s stocks are almost depleted,” a source in state industrial and defense conglomerate Rostec told Reuters on Tuesday.

“Stocks need to be replenished as the main producer, China, has increased prices sharply,” the source said.

TriArkMining, a joint venture (JV) between Rostec and IST, has won the right to acquire 82,653 tonnes (1.1023 tons) of monazite concentrate, stored in warehouses of state-owned Uralmonatsit in the Sverdlovsk region of Russia’s Urals.

The JV plans to extract about 40,000 tonnes of rare earths from the monazite concentrate stored in the warehouses over the course of seven or eight years starting from 2015, the companies said.

The stock is rich in heavy rare earths, such as dysprosium and terbium, crucial for high-power magnets needed by the auto, defense and clean energy industries.

Heavy rare earths are scarcer than cerium and other light rare earths, making them much more valuable.

Russia consumes about 1,500 tonnes of rare earths per year and annual demand is expected to reach 6,000 tonnes by 2020, Rostec said.

The company, which has eight firms producing a wide range of defense products, sees rare earths as a strategic raw material.

China will cap rare earth production at 93,800 tonnes for 2013 as part of efforts to rein in unlicensed production in the sector, it said last week.”

via Russia to invest $1 billion in rare earths to cut dependence on China | Reuters.

09/09/2013

India has 40% of world’s child brides, survey finds

Times of India: “Jhumki’s (name changed) red and white sakha-pola (wedding bangles) and sindoor jar sharply with her starched uniform. She was forced by her father to marry when she was barely 11 but she feels lucky to be allowed to attend school.

Is this a Child Marriage in 2009?

Is this a Child Marriage in 2009? (Photo credit: Nagarick)

Forty-six per cent of women (between the ages of 18 and 29) in India were married before the age of 18, according to the National Family Health Survey-3. It is estimated that there are 23 million child brides in the country, around 40% of child brides globally. Global human rights NGO Breakthrough, working in districts of Hazaribagh and Gaya (in Bihar) and Ranchi in Jharkhand found that over 60% of women between the ages of 20-24 were married before 18.

Breakthrough, which launched its ‘Nation Against Early Marriage’ campaign in Ranchi recently, has so far reached 35,000 women and expects to expand the campaign nationwide and target 100,000 women in the coming months. The NGO — which had spearheaded the successful ‘bell bajao’ campaign against domestic violence — hopes to change the culture that drives and perpetuates early marriage to replace it with one where the lives, rights and personhood of girls is valued. Worldwide, 60 million girls become child brides every year, of which around 30 million belong to South Asia alone.”

via India has 40% of world’s child brides, survey finds – The Times of India.

08/09/2013

Jairam blames ‘forcible acquisition’ for Naxal problem

The Hindu: “Coming down heavily on PSUs for displacing tribals, Union Minister Jairam Ramesh on Sunday blamed their actions for growth of Naxalism in many areas and cautioned that the era of “forcible acquisition” was now over.

The Union Rural Development Minister said if the new Land Acquisition Act is implemented properly, it will put an end to “inhumane” displacement of tribals from forests and check Maoist menace. File photo

The Union Rural Development Minister said if the new Land Acquisition Act is implemented properly, it will put an end to “inhumane” displacement of tribals from forests and check Maoist menace.

“The record of public sector (PSUs) in displacements is worse than the record of the private sector. This is a sad truth… that more displacement has been caused by government and public sector projects than private sector projects…particularly in Naxal areas. And this is why Naxalism has grown in these areas,” the Minister said.

Mr. Ramesh slammed National Thermal Power Corporation for allegedly seeking police help for forcibly acquiring land in Keredari block of Jharkhand’s Hazaribagh district, where a villager agitating against land acquisition was shot dead two months ago.

He was addressing Hindi and regional media two days after Parliament passed the path-breaking ‘Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013’.

Criticising NTPC for the alleged forced acquisition, Ramesh said, “Companies must also learn to be sensitive, changing aspirations.”

“NTPC will face a challenge. If there is firing in an NTPC project and people get killed in that firing, they cannot acquire the land…Indian companies still believe that they can use government to forcibly acquire land. That era is gone. You cannot do forcible acquisition,” the Minister said when asked about the reported criticism by a top NTPC official of the new Land Acquisition legislation.

“If this (new) land acquisition law is properly implemented, it will defeat Naxalism,” he said, referring to incidents of “inhumane” displacement of tribals from forests for various public and private sector projects in mineral-rich states like Jharkhand, Odisha and Chhattisgarh.

The new law will be notified in three months.

Mr. Ramesh said, “Land Acquisition is the root of the Maoist issue. If you have a humane, sensitive and responsible land acquisition policy, lot of your problems relating to Naxalism would go. Tribals will be with you.

“It is a fact that many of the tribals have been displaced and they have not got proper compensation, they have not got rehabilitation and resettlement…particularly in mining of coal and irrigation projects,” he added.

Mr. Ramesh, the architect of the new Land Acquisition Bill, said the 119-year-old Land Acquisition Act, 1894, had a “very important role” in encouraging Maoist activities in Odisha, Chhattisgarh, Jharkhand, parts of tribal Maharashtra and tribal Andhra Pradesh.

When asked that 13 laws, including the Indian Railways Act, National Highways Act, Land Acquisition Mines Act and Coal Bearing Areas Acquisition and Development Act, under which bulk of the land acquisition takes place, are exempted from the purview of the Bill, the Minister said, “Within one year, all compensation, all rehabilitation and resettlement…all these Acts will come under the newly enacted legislation.””

via Jairam blames ‘forcible acquisition’ for Naxal problem – The Hindu.

See also:

08/09/2013

Army summoned to quell communal violence that kills 15 in north Indian state

Reuters: “The Indian army was called in, an unusual measure, to contain communal violence pitting Hindus against Muslims that killed at least 15 people in northern Uttar Pradesh state.

Indian army vehicles patrol on a deserted road during a curfew in Muzaffarnagar, in the northern Indian state of Uttar Pradesh September 8, 2013. REUTERS/Stringer

An army contingent of up to 800 was dispatched to the area on Saturday night, as armed gangs of Jats, a group practicing Hinduism, stormed a mosque and a village with Muslim residents, the state’s principal home secretary R.M. Srivastava said.

“We had sought assistance of the army last night after we found the violence spreading across to other villages,” Srivastava told Reuters.

“In fact, we were able to bring things under control until fresh violence broke out in (a) village Sunday morning.”

The violence erupted on Saturday following a meeting attended by Jats in Muzaffarnagar district, 140 km (90 miles) northeast of New Delhi. Police said 10 people died, including a journalist and photographer, and about 35 were injured.

Five more were killed in a fresh outbreak on Sunday morning.

A curfew was imposed in three districts,

“I would appeal to all the people there to maintain peace and do not trust or listen to any rumors,” Akhilesh Yadav, Uttar Pradesh’s chief minister, told reporters.

The Jats are demanding the rescinding of charges against members of their community in connection with a communal clash last month in which three people were killed.

Arun Kumar, a senior police official, said tensions were fuelled by an online video purporting to show the killing of two Muslim youths last month.

Local media said about 50 outbreaks of communal tension have occurred in populous Uttar Pradesh since the region’s Samajwadi (Socialist) Party came to power last year. More than 25 people have died.”

via Army summoned to quell communal violence that kills 15 in north Indian state | Reuters.

See also: 

Law of Unintended Consequences

continuously updated blog about China & India

ChiaHou's Book Reviews

continuously updated blog about China & India

What's wrong with the world; and its economy

continuously updated blog about China & India