Archive for ‘Economics’

21/10/2012

* Construction of new economic zone starts in mid-west China

It has been some years since China established a new economic zone. This one could be due to three main reasons: 1. as stated – to develop and modernise a region that is heavily Muslim populated to forge links with Arab and other neighbouring Muslim countries to the west of China; 2. to continue the drive to reduce reliance on the coastal east; 3. to stimulate the economy in the longer term.

Xinhua News: “The construction of a new economic pilot zone, the first of its kind in China’s inland areas, has started in the country’s north western Ningxia Hui Autonomous Region.

At the inaugural meeting held on Friday, the construction of a comprehensive bonded area in the regional capital of Yinchuan was also announced.

The pilot zone and the four-square-km bonded area in the zone aim to deepen the opening up of China’s western inland areas to countries located directly west of China, especially in order to boost trade, investment and friendly exchanges between China and the Arab world, said Wang Zhengwei, chairman of the regional government.

According to the establishment program approved by the State Council in September, projects in the zone will enjoy 66 preferential policies in investment, tax, finance and land use after its establishment.

The League of Arab States has become China’s seventh-largest trade partner. Trade between China and the member countries surged 34.7 percent to 195.9 billion U.S. dollars last year.

Ningxia is the only provincial-level autonomous region for the Hui people, the largest Muslim ethnic group in China. About 30 percent of the region’s population is Hui.

As many people in the area share religious beliefs and customs with Muslims living in Arab countries, the region is a perfect platform for boosting cooperation with those countries, according to Wang.”

via Construction of new economic zone starts in W China – Xinhua | English.news.cn.

21/10/2012

* New age vegetarians in Beijing

We hope that this is a genuine trend and not just a passing fad. If it catches on, not only in restaurants  but at home, the pressure on meat sources will be substantially reduced.  It will also mean healthier Chinese with reduced call for medical services.

China Daily: “A new eating trend is popping up on the doorstep of the Peking duck, and it has nothing to do with meat, but plenty to do with a generation of young, rich, health-conscious consumers. Sarah Marsh and Thomas Hale restaurant-hop in Beijing to find out more.

New age vegetarians

An array of colorful and carefully put together dishes is brought to the table. All of the traditional Beijing favorites are there, including a round tray filled with pancakes and strips of cucumber served with a hoisin dipping sauce. However, instead of Peking duck completing the dish, diners are served something quite different. They are instead presented with beancurd skin, milk curds and toon tree shoots. It might sound unusual but vegetarian food like this is taking over China’s capital. A growing number of restaurant-goers now opt for vegetarian dishes over meat.

The dish imitating Beijing’s world-renowned Peking duck is served at the Gingko Tree in Sanlitun, a restaurant that opened on Oct 5, 2011.

According to its owner, 32-year-old Wang Rui, when it first opened, the restaurant welcomed 20 visitors daily, but this number has now increased 500 percent to approximately 100.

This is no one-off. Wang explains that more non-meat eateries are opening up all the time.

“The trend started about seven years ago as the Chinese gradually became more aware of the health benefits. Lots of new vegetarian restaurants sprung up between 2002 and 2006,” Wang says.

About 15 years ago there were one or two vegetarian cafes but now there are nearly 100 and competition is fierce.

Many vegetarian restaurants promote organic food, a growing phenomenon in China. The Seattle Times reported that overall Chinese organic exports have rocketed from $300,000 in 1995 to about $500 million in 2008. Both vegetarianism and organic foods are associated with healthy eating in China.”

via New age vegetarians[1]|chinadaily.com.cn.

19/10/2012

* Water scarcity compounds India’s food insecurity

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

17/10/2012

* In search of a dream

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

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

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

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

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

Modest changes, big fuss

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

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

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

Another time, another place

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

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

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

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

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

17/10/2012

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

 

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

15/10/2012

* The consuming challenge of food safety

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

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

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

The consuming challenge of food safety

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

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

Food experts

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

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

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

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

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

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

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

15/10/2012

Assuming that this is the beginning and not the end of state pensions in China, then in no time at all, China may well have better state pensions than many Western countries!

14/10/2012

* China’s trade climbs in Sept amid bottoming-out

“One swallow does not a summer make”  But it sure is reassuring after all the bad news in recent months.  There are also signs in the US that the 2008 recession is finally bottoming out. Let’s hope it’s for real. And even more importantly, let’s hope both nations and individuals don’t get carried away with getting into deep depth, again.

China Daily: “China’s exports significantly expanded in September while imports resumed growth after a decline in August, suggesting a recovery in overseas markets and a moderate improvement of domestic demand amid a bottoming-out in the world’s second largest economy.

Economists and analysts are still cautious about China’s foreign trade outlook owing to the medium and long-term pressure from the festering EU debt crisis and worrisome fiscal outlook in the US despite improvement in overseas demand.

China’s exports increased by 9.9 percent in September from a year earlier, a record monthly high and much higher than the 2.7-percent growth in August. Imports, meanwhile, stepped out of the 2.6-percent fall in August, registering a gain of 2.4 percent in September, according to data from the General Administration of Customs on Saturday.

Total foreign trade in September grew by 6.3 percent year-on-year while the trade surplus widened to $27.67 billion from $26.7 billion in August.

Foreign trade from January to September went up by 6.2 percent from a year earlier with exports rising 7.4 percent and imports gaining 4.8 percent, yielding a trade surplus of $148.31 billion.

“The full year is likely to see a trade surplus of over $200 billion,” said Wang Jun, a senior economist with China Center for International Economic Exchanges.

“Trade figures of September are relatively satisfactory. China’s exports in the coming two or three months will keep up the momentum as the manufacturing index [also known as the purchasing managers index, or PMI] improves in the US and EU, in addition to Christmas demand and the central government’s measures to boost China’s foreign trade,” Wang said.

The State Council introduced a raft of measures in September to stabilize trade growth, including speeding up export tax rebates, reducing administrative costs for companies, lowering financing costs for small and micro-sized enterprises and increasing credit to exporters.”

via China’s trade climbs in Sept amid bottoming-out |Economy |chinadaily.com.cn.

09/10/2012

* Ice train begins trial operations

China’s investment in infrastructure continues relentlessly.

China Daily: “Railway built to withstand extreme cold prepares to welcome travelers

A high-speed railway linking major cities in Northeast China began trial operations on Monday, ahead of its launch at the end of the year.

Ice train begins trial operations

The new line, which links Dalian, a port city in Liaoning province and Harbin, capital of Heilongjiang province, is the world’s first high-speed railway built to withstand extreme cold weather conditions, according to a statement by Harbin railway authorities.

A test train departs from the Dalian North Railway Station, a terminus of the new Harbin-Dalian High-Speed Railway, in Dalian, Nnortheast China’s Liaoning province, Oct 8, 2012. [Photo/Xinhua]

A test train departed Harbin on Monday morning, arriving in Dalian three-and-a-half hours later. The journey takes nine hours on an ordinary train.

The new line will make 24 stops and connect 10 cities, including the capitals of Liaoning, Jilin and Heilongjiang provinces.

Construction of the 921-kilometer line began in 2008. It is designed to reach a top speed of 350 kilometers per hour, but will travel initially at a maximum of 300 km/h, railway authorities said.

The line has to withstand extreme temperatures as low as -39.9 C in winter and as high as 40 C in summer, which poses major challenges to the trains and railway construction.

Zhang Xize, chief engineer of the Harbin-Dalian high-speed railway program, said the low temperatures in Northeast China could threaten the roadbed and rail track and ice could also disrupt the power supply and signal system.

“We researched the experiences of high-speed railway line construction in relatively cold areas of Germany and Japan and took reference from road, water conservancy and electric supply projects in frigid areas,” Zhang said.

The railway is fitted with special facilities to remove snow and ice from the line and to protect its power supply systems from the elements.

“We have used all the measures that we can come up with to ensure the safety of this project,” said Zhang.

The line could provide a boost to the tourism industry in Harbin and Dalian, both major vacation destinations.

Harbin is notable for its beautiful ice sculptures in winter and its Russian legacy, and Dalian is well known for its mild climate and multiple beaches.

“The railway comes at the right time as I was planning to take my daughter to see the ice lanterns in Harbin this winter,” said Liu Yan, a 38-year-old resident of Dalian.

The new railway is also expected to ease pressure on the current rail system during peak holiday times.”

via Ice train begins trial operations[1]|chinadaily.com.cn.

08/10/2012

* Chinese tourists head overseas during holiday

As China gains in middle class affluence, its own tourists sites get completely jammed , especially as a China has three major long public holidays: Lunar New Year, Tomb Sweeping ceremony and October National celebrations. It is therefore not surprising that those who can afford it go abroad instead.

China Daily: “A large number of Chinese tourists flocked to Thailand, South Korea and Europe during China’s National Day holiday. It’s estimated that the number of tourists booking overseas trips rose by 50 percent from last year.

South Korea emerged as the most attractive destination for Chinese tourists keen to exploit this year’s longer-than-normal holiday, because of the stronger yuan and the ease of obtaining a visa and travel.

The Korea Tourism Organization said that 100,000 Chinese tourists visited the country during the holiday, a rise of 35 percent from last year. The tourist hotspot of Jeju Island alone hosted nearly 33,000 Chinese visitors between Sept 29 and Oct 3, a 59 percent increase over last year, according to the Korea JoongAng Daily newspaper.

Most first-time visitors tended to stay north of the Han River, where famous tourist sites such as the Mt Nam peak and the Gyeongbok Palace are located. However, regular visitors tend to spend their time in Gangnam, south of the river, shopping. Duty-free stores in the Gangnam area have seen sales rise, reflecting the increase in the number of Chinese tourists who regularly visit the country.

Medical tourism is also becoming more popular. Dermatologists in Gangnam are attracting more and more Chinese customers, who come on a regular basis for procedures such as skin whitening, according to the Chosun Ilbo newspaper.

During the holiday season, charter flights to Thailand, especially Bangkok and Phuket, were available from many second- and third-tier cities. Tourism industry insiders said Thailand is popular with Chinese tourists because of it’s relatively inexpensive and easy to get to.

Meanwhile, long haul flights to France, Germany and Belgium were booked well in advance and tour agencies had sold all their seats to the Middle East and Africa by early September, making destinations such as Turkey, Egypt, South Africa and Dubai the best reserve options.”

via Chinese tourists head overseas during holiday |Society |chinadaily.com.cn.

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