23/07/2013

Indian development: Beyond bootstraps

The Economist: “An Uncertain Glory: India and its Contradictions. By Amartya Sen and Jean Drèze. Allen Lane; 434 pages; £20. To be published in America in August by Princeton University Press; $29.95. Buy from Amazon.com, Amazon.co.uk

AS A conundrum it could hardly be bigger. Six decades of laudably fair elections, a free press, rule of law and much else should have delivered rulers who are responsive to the ruled. India’s development record, however, is worse than poor. It is host to some of the world’s worst failures in health and education. If democracy works there, why are so many Indian lives still so wretched?

Social indicators leave that in no doubt. A massive blackout last summer caught global attention, yet 400m Indians had (and still have) no electricity. Sanitation and public hygiene are awful, especially in the north: half of all Indians still defecate in the open, resulting in many deaths from diarrhoea and encephalitis. Polio may be gone, but immunisation rates for most diseases are lower than in sub-Saharan Africa. Twice as many Indian children (43%) as African ones go hungry.

Many adults, especially women, are also undernourished, even as obesity and diabetes spread among wealthier Indians. Despite gains, extreme poverty is rife and death in childbirth all too common. Prejudice kills on an immense scale: as many as 600,000 fetuses are aborted each year because they are female. Compared even with its poorer neighbours, Bangladesh and Nepal, India’s social record is unusually grim.

“An Uncertain Glory”, an excellent but unsettling new book by two of India’s best-known development economists, Amartya Sen and Jean Drèze, sets out how and why this is so. They argue that Indian rulers have never been properly accountable to the needy majority. Belgian-born Mr Drèze has lived in India since 1979 and became an Indian citizen in 2002. Now at Allahabad University in the north, he is influential among Indian policymakers, particularly for pushing a right-to-information law. Mr Sen, a Nobel laureate, now at Harvard, famously showed how famines have never happened in democracies. The two men want a debate on India’s social failures and how to fix them.”

via Indian development: Beyond bootstraps | The Economist.

See also: https://chindia-alert.org/prognosis/and-india/

22/07/2013

Knife attacks and bomb threats follow Beijing airport explosion

SCMP: “Several incidents of violence have been reported in Beijing in the aftermath of the attempted suicide by an aggrieved petitioner at the capital’s international airport on Saturday.

screen_shot_2013-07-22_at_2.22.12_pm.png

On Monday, a man armed with a knife went on a rampage at a Carrefour shopping centre, in Beijing’s western district, wounding at least four people. Police have arrested a Beijing-native surnamed Wang, born in 1963 at the scene, local police said in a statement.

One child was among those wounded, Beijing News reported on its microblog. The report did not say what triggered the attack.

Last Thursday, a knife-yielding man stabbed two people, including one US woman, to death, in a similar incident.

In two unrelated incidents, Beijing police arrested two men for “threatening to carry bombs and attempting to disturb social order” in the capital.

Four hours after petitioner Ji Zhongxing caused an explosion at Beijing Capital International Airport on Saturday, a 39-year-old man surnamed Wang from Beijing’s Miyun county threatened to set off explosives at a Beijing airport to protest against land seizures, according to a statement by Beijing police.

Only one hour later, a 31-year-old man surnamed Liu from Jiangsu province, threatened to detonate explosives at a video arcade, police said. Both men have since been arrested.

Many Chinese netizens blamed a “butterfly effect” and criticised the government for failing to address petitioners’ grievances. “If the government continues in its corrupt ways, everybody will become Ji Zhongxing,” said one Weibo user. “Using lives to protest is the last way for ordinary people to seek changes,” wrote another.

via Knife attacks and bomb threats follow Beijing airport explosion | South China Morning Post.

22/07/2013

To Remain Tops in Innovation, the U.S. Needs Immigration Reform

BusinessWeek: “As China’s economy catches up with America’s in pure size, it’s worth asking whether China will eventually assume the top spot when it comes to innovation as well. The U.S. retains a strong global lead in research and new inventions, in large part because the U.S. continues to attract innovators from the world over—including from China. But to stay on top, the U.S. needs immigration reform that makes it easier for scientists and technology developers to come and stay in the country.

China is producing ever more science and technology graduates and climbing the global rankings in patent applications

China is churning out ever more science and technology graduates and climbing the global rankings in patent applications. By 2004 it was the fifth-largest producer of academic scientific publications—behind only the U.K., Germany, Japan, and the U.S. And in 2011, China’s ZTE (000063:CH) alone made 2,826 international patent filings—the most of any company in the world.

More global innovation is a good thing for everyone—so there’s no reason to fear China’s increasing technological heft. Regardless, that heft is still a fraction of America’s. According to the World Intellectual Property Organization (WIPO), the U.S. is still first by a big margin in terms of widely cited articles—a measure of the quality of research. China ranks 17th. Per dollar of gross domestic product, the U.S. produces more than six times China’s number of patents that are filed in at least three different countries, which is an indicator of marketable innovation.

In 2012, China earned $1 billion in foreign royalty and license payments—this for intellectual property the country had created that was being exploited by companies elsewhere. Meanwhile, it paid $18 billion in royalty and license payments to foreign firms, for a total deficit of $17 billion. Compare that with the U.S., which ran a $82 billion surplus.

A new paper co-authored by Carsten Fink, chief economist of WIPO, suggests one big reason for the U.S.’s continued lead: The country remains a magnet for global innovators. Fink’s paper studies patent applications filed under WIPO’s Patent Cooperation Treaty, which records more than half of all international applications and lists the residence and nationality of the inventors of more than 4 million patents. Using that data, Fink and his colleague Ernest Miguelez found that in 2010 about 10 percent of inventors worldwide lived outside their country of nationality when making their international patent application. The proportion of international patent applications made from the U.S. by non-nationals was twice as high—around 20 percent. That proportion approximately doubled from 1985 to 2010, and it’s the highest share out of any large economy. It compares with a non-national share of international patent applications of about 2 percent in Japan and closer to 5 percent in Germany and France.

The U.S. is by far the biggest global net beneficiary of innovator migration. Between 2001 and 2010, 14,893 inventors with U.K. nationality applied for international patents while residing in the U.S., for example. And there were three times as many Chinese inventors in the U.S. than British ones. That illustrates the U.S. has done particularly well in attracting innovative talent from the developing world—more than half of the U.S. non-national innovator population comes from countries outside the Organisation for Economic Co-operation and Development club of rich countries.

Still, recent trends are disturbing. Duke University’s Vivek Wadhwa reports that the proportion of high-tech startups founded by Chinese and Indian immigrants in Silicon Valley dropped from 52 percent in 2005 to 44 percent in 2011, in part because more and more Indian and Chinese graduates of U.S. universities are returning home rather than dealing with the hassle of American immigration procedures. The U.S. is becoming less attractive to the very people who help power the U.S. innovation economy.

via To Remain Tops in Innovation, the U.S. Needs Immigration Reform – Businessweek.

See also: https://chindia-alert.org/prognosis/how-well-will-china-and-india-innovate/

21/07/2013

How poverty wages for tea pickers fuel India’s trade in child slavery

The Observer: “When the trafficker came knocking on the door of Elaina Kujar’s hut on a tea plantation at the north-eastern end of Assam, she had just got back from school. Elaina was 14 and wanted to be a nurse. Instead, she was about to lose four years of her life as a child slave.

Saphira Khatun, whose daughter Minu Begum was trafficked to Delhi at the age of 12

She sits on a low chair inside the hut, playing with her long dark hair as she recalls how her owner would sit next to her watching porn in the living room of his Delhi house, while she waited to sleep on the floor. “Then he raped me,” she says, looking down at her hands, then out of the door. Outside, the monsoon rain is falling on the tin roof and against the mud-rendered bamboo strip walls, on which her parents have pinned a church calendar bearing the slogan The Lord is Good to All.

Elaina was in that Delhi house for one reason: her parents, who picked the world-famous Assam tea on an estate in Lakhimpur district, were paid so little they could not afford to keep her. There are thousands like her, taken to Delhi from the tea plantations in the north-east Indian state by a trafficker, sold to an agent for as little as £45, sold on again to an employer for up to £650, then kept as slaves, raped, abused. It is a 21st-century slave trade. There are thought to be 100,000 girls as young as 12 under lock and key in Delhi alone: others are sold on to the Middle East and some are even thought to have reached the UK.

Every tea plantation pays the same wages. Every leaf of every box of Assam tea sold by Tetley and Lipton and Twinings and the supermarket own brands – Asda, Waitrose, Tesco, Sainsbury’s and the rest – is picked by workers who earn a basic 12p an hour.

If it says Fairtrade on the box, or certified by the Rainforest Alliance or the Ethical Tea Partnership, it makes no difference: the worker received the same basic cash payment – 89 rupees (£1) a day, a little over half the legal wage for an unskilled worker in Assam of 158.54 rupees. To place that in context, a worker receives about 2p in cash for picking enough tea to fill a box of 80 tea bags, which then sells for upwards of £2 in the UK. The companies say they know the wages are low, and they are trying to make things better, but their hands are tied by the growers. The growers, who set the wages by collective bargaining, say it is all they can afford.

But there is a price for keeping wages so low, and it is paid by the workers who cannot afford to keep their daughters. When the traffickers come knocking, offering to take the girls away, promising good wages and an exciting new life, they find it hard to say no. “He said he would change our lives,” says Elaina, now 20. “The tea garden was closed when he came and my parents were not working, so my father wanted to send me.”

The trafficker had promised excitement and glamour: instead she started work every day at 4am and worked until midnight, and though he promised to give her 1,500 rupees a month, she was never paid. He kept her as a prisoner, unable to leave the house or contact her family.

“His wife was suspicious about what was happening. I told her he had raped me but he denied it and told me to shut up my mouth,” she says. “After that, I was always crying, but he kept me locked in the house. I was afraid. I had no money and he threatened that I would end up in a brothel.”

She was saved only when he sent her to a new owner who, on learning her story, sent her home.”

via How poverty wages for tea pickers fuel India’s trade in child slavery | World news | The Observer.

21/07/2013

Kashmir militants rebuild their lives as hopes of a lasting peace grow

The Observer: “Shabir Ahmed Dar has come home. His children play under the walnut trees where he once played. His father, white-bearded and thin now, watches them. The village of Degoom, the cluster of traditional brick-and-wood houses in Kashmir where Dar grew up, is still reached by a dirt road and hay is still hung from the branches of the soaring chinar trees to dry.

Shabir Ahmed Dar with one of his children

But Dar has changed, even if Degoom has not. It is 22 years since he left the village to steal over the “line of control” (LoC), the de facto border separating the Indian and Pakistani parts of this long-disputed former princely state high in the Himalayan foothills. Along with a dozen or so other teenagers, he hoped to take part in the insurgency which pitted groups of young Muslim Kashmiris enrolled in Islamist militant groups, and later extremists from Pakistan too, against Indian security forces.

“I went because everyone else was going. The situation was bad here. I had my beliefs, my dream for my homeland. I was very young,” he said, sitting in the room where he had slept as a child.

The conflict had only just begun when he left. Over the next two decades, an estimated 50,000 soldiers, policemen, militants and, above all, ordinary people were to die. Dar’s aim had been to “create a true Islamic society” in Kashmir. This could only be achieved by accession to Pakistan or independence, he believed.

But once across the LoC, even though he spent only a few months with the militant group he had set out to join and never took part in any fighting, he was unable to return. “I was stuck there. I made a new life. I married and found work. I didn’t think I would ever come back here,” Dar said.

But now the 36-year-old has finally come home, with his Pakistani-born wife and three children. He is one of 400 former militants who have taken advantage of a new “rehabilitation” policy launched by the youthful chief minister of the state, Omar Abdullah.

Dar’s father heard of the scheme and convinced his son to return last year. “I am an old man. I wanted to see my son and grandchildren before I die. I wanted him to have his share of our land,” said Dar senior, who is 70.

The scheme is an indication of the changes in this beautiful, battered land. In recent years, economic growth in India has begun to benefit Kashmir, the country’s only Muslim-majority state. At the same time, despite a series of spectacular attacks on security forces by militants in recent months, violence has fallen to its lowest levels since the insurgency broke out in the late 1980s. The two phenomena are connected, many observers say.

It is this relative calm that has allowed Dar and the others to return – and allows even some hardened veterans who have renounced violence to live unmolested. “A few years ago the [Indian intelligence] agencies would have shot this down because they would have seen it as another move to infiltrate [militants from Pakistan],” Abdullah, the chief minister, said.

The scheme is not, however, an amnesty. “If there are cases against them they will still be arrested [and] prosecuted … Largely this scheme has been taken up by those who have not carried out any acts of terrorism. Either they never came [across the LoC], or if they came we never knew about it,” Abdullah said.”

via Kashmir militants rebuild their lives as hopes of a lasting peace grow | World news | The Observer.

21/07/2013

China starts construction on ‘world’s tallest building’

SCMP: “China has embarked on the construction of an 838-metre-tall building in Changsha that is billed as the “world’s tallest”.

111.jpg

Developer Broad Group on Saturday held a ground-breaking ceremony in the capital city of central province Hunan to start building the 208-storey tower, the Xiaoxiang Morning Herald newspaper reported on Sunday. Upon completion, the building would be about 10 metres taller than the Burj Khalifa in Dubai, currently the world’s tallest.

The Changsha project, carried out by China Construction Fifth Building, is expected to be completed in April 2014, said Zhang Yue, founder and chairman of the Broad Group. It was slated to open in May or June next year.

The skycraper will contain a total area of 1.05 million square metres and will cost a whopping 5.2 billion yuan (HK$6.5 billion) to build, government-run news portal voc.com.cn reported.

Named “Sky City”, the mega building is designed to house various public facilities so the “building can serve as a city”, the developer said. It would house schools, an elderly care centre, hospital, offices in lower levels, while apartments and hotels would make up the upper levels.

Changsha-based technology enterprise Broad Group was founded in 1988. Its products include energy-saving electronic equipment and quake-proof construction materials.

China is home to five of the world’s top-10 tallest buildings, according to a list in Forbes magazine last year.”

via China starts construction on ‘world’s tallest building’ | South China Morning Post.

21/07/2013

Hauling New Treasure Along the Silk Road

NY Times: “AZAMAT KULYENOV, a 26-year-old train driver, slid the black-knobbed throttle forward, and the 1,800-ton express freight train, nearly a half-mile long, began rolling west across the vast, deserted grasslands of eastern Kazakhstan, leaving the Chinese border behind.

Dispatchers in the Kazakh border town of Dostyk gave this train priority over all other traffic, including passenger trains. Specially trained guards rode on board. Later in the trip, as the train traveled across desolate Eurasian steppes, guards toting AK-47 military assault rifles boarded the locomotive to keep watch for bandits who might try to drive alongside and rob the train. Sometimes, the guards would even sit on top of the steel shipping containers.

The train roughly follows the fabled Silk Road, the ancient route linking China and Europe that was used to transport spices, gems and, of course, silks before falling into disuse six centuries ago. Now the overland route is being resurrected for a new precious cargo: several million laptop computers and accessories made each year in China and bound for customers in European cities like London, Paris, Berlin and Rome.

Hewlett-Packard, the Silicon Valley electronics company, has pioneered the revival of a route famous in the West since the Roman Empire. For the last two years, the company has shipped laptops and accessories to stores in Europe with increasing frequency aboard express trains that cross Central Asia at a clip of 50 miles an hour. Initially an experiment run in summer months, H.P. is now dispatching trains on the nearly 7,000-mile route at least once a week, and up to three times a week when demand warrants. H.P. plans to ship by rail throughout the coming winter, having taken elaborate measures to protect the cargo from temperatures that can drop to 40 degrees below zero.

Though the route still accounts for just a small fraction of manufacturers’ overall shipments from China to Europe, other companies are starting to follow H.P.’s example. Chinese authorities announced on Wednesday the first of six long freight trains this year from Zhengzhou, a manufacturing center in central China, to Hamburg, Germany, following much the same route across western China, Kazakhstan, Russia, Belarus and Poland as the H.P. trains. The authorities said they planned 50 trains on the route next year, hauling $1 billion worth of goods; the first train this month is carrying $1.5 million worth of tires, shoes and clothes, while the trains are to bring back German electronics, construction machinery, vehicles, auto parts and medical equipment.

DHL announced on June 20 that it had begun weekly express freight train service from Chengdu in western China across Kazakhstan and ultimately to Poland. Some of H.P.’s rivals in the electronics industry are in various stages of starting to use the route for exports from China, freight executives said.

The Silk Road was never a single route, but a web of paths taken by caravans of camels and horses that began around 120 B.C., when Xi’an in west-central China — best known for its terra cotta warriors — was China’s capital. The caravans started across the deserts of western China, traveled through the mountain ranges along China’s western borders with what are now Kazakhstan and Kyrgyzstan and then journeyed across the sparsely populated steppes of Central Asia to the Caspian Sea and beyond.

These routes flourished through the Dark Ages and the early medieval period in Europe. But as maritime navigation expanded in the 1300s and 1400s, and as China’s political center shifted east to Beijing, China’s economic activity also moved toward the coast.

Today, the economic geography is changing again. Labor costs in China’s eastern cities have surged in the last decade, so manufacturers are trying to reduce costs by moving production west to the nation’s interior. Trucking products from the new inland factories to coastal ports is costly and slow. High oil prices have made airfreight exorbitantly expensive and prompted the world’s container shipping lines to reduce sharply the speed of their vessels.

Slow steaming cuts oil consumption, but the resulting delays have infuriated shippers of high-value electronics goods like H.P’s. Such delays drive up their costs and make it harder to respond quickly to changes in consumer demand in distant markets.”

via Hauling New Treasure Along the Silk Road – NYTimes.com.

Related articles

20/07/2013

Joe Biden’s India Itinerary

WSJ: “U.S. Vice President Joe Biden arrives in New Delhi Monday for a visit focused on improving business ties between the two nations.

Mr. Biden, 70, begins his four-day India tour with a trip to Gandhi Smriti in New Delhi, a museum dedicated to Mahatma Gandhi, who led India to independence from Britain in 1947. The Democratic Party politician, who is visiting India with his wife, is also expected to meet Prime Minister Manmohan Singh, President Pranab Mukherjee and Vice President Mohammad Hamid Ansari, among other leaders, before travelling to Mumbai. Mr. Biden last visited India in 2008, when he was a member of the American Senate.

Mr. Biden’s wife, Jill Biden, will visit the Taj Mahal in Agra and is expected to address school children in Mumbai.

Relations between Washington and New Delhi have been warming in recent years, with the U.S. viewing India as an emerging superpower that can serve as a counterbalance to China’s growing influence in South Asia.

In a speech at the George Washington University in the U.S. on Friday, Mr. Biden singled out civil-nuclear cooperation, trade and investment as key issues the U.S. sought to collaborate on with India in the coming years. “There’s a lot of work to do,” Mr. Biden said in his speech, referring to strengthening India-U.S. ties. He also welcomed India’s decision this week to ease overseas-investment rules for telecom, defense and insurance.”

via Joe Biden’s India Itinerary – India Real Time – WSJ.

20/07/2013

China frees up lending rates in major reform

Reuters: “China’s central bank removed controls on bank lending rates, effective Saturday, in a long-awaited move that signals the new leadership’s determination to carry out market-oriented reforms.

An employee counts money on the last workday of the week at a bank in Taiyuan, Shanxi province in this June 28, 2013 file picture. China's central bank announced long-awaited interest rate reforms on July 19, 2013, scrapping the previous floor on the rates that banks charge clients for loans. Picture taken June 28, 2013. REUTERS/Jon Woo

The move gives commercial banks the freedom to compete for borrowers, a reform the People’s Bank of China said on Friday will help lower financial costs for companies. Previously, the lending floor was 70 percent of the benchmark lending rate.

However, the PBOC, in a statement, left a ceiling on deposit rates unchanged at 110 percent of benchmark rates, avoiding for now what many economists see as the most important step Beijing needs to take to free up interest rates.

The latest step underscores Beijing’s resolve to start fixing distortions in its financial system and the economy more broadly as it tries to shift from export- and investment-led growth to more consumption-led activity.

Some analysts said cheaper credit could help support the economy, which has seen year-on-year growth fall in nine of the last 10 quarters.

“This is a big breakthrough in financial reforms,” said Wang Jun, senior economist at China Centre for International Economic Exchanges, a prominent government think-tank in Beijing.

“Previously, people had thought the central bank would only gradually lower the floor on lending rates. Now they scrapped the floor once and for all.”

The Australian dollar rose modestly on the news on hopes cheaper credit will lead to more demand from Australia’s biggest export market.

The announcement provided some support to weak stock markets in Europe .FTEU3 and a timely reminder to the world’s top financial leaders meeting in Moscow of China’s intention to rebalance its economy.

A Group of 20 draft communiqué will urge China to encourage more domestic demand-driven growth as part of wider efforts to rebalance the world economy, G20 sources said.

The United States welcomed the move, saying China promised to let markets play a bigger role in allocating credit during the U.S.-China Strategic and Economic Dialogue in Washington last week.

“This is a welcome further step in the reform and liberalization of China’s financial system,” Holly Shulman, a spokeswoman for the U.S. Treasury, said in an email.”

via China frees up lending rates in major reform | Reuters.

20/07/2013

China officials held over watermelon-seller death

BBC : “Six urban security personnel have been detained by police investigating the death of a fruit seller in southern China, state media say.

Local residents demonstrate with a banner saying "urban enforcers (chengguan) killed people" in Linwu county, central China's Hunan province, 17 July 2013

Deng Zhengjia, in his 50s, died on Wednesday in Chenzhou City, Hunan.

He was hit with a weight from a set of scales after a row erupted with the officials, known as “chengguan”, Xinhua reported, citing Mr Deng’s niece.

The six are being held on suspicion of intentionally harming others, added the news agency.

 

The row in Linwu county, Chenzhou, erupted after Mr Deng, 56, and his wife tried to sell home-grown watermelons at a scenic riverside spot without a licence, the county government said in a statement.

Having asked the couple to leave, “the enforcers temporarily confiscated four of the watermelons, requesting that the couple sell their melons in an authorised location instead”.

The couple began “insulting” the officers when they encountered them again 50 minutes later, the statement said.

“The enforcers tried to reason with the couple, the dispute between the two sides became a physical conflict, and in the process Deng Zhengjia suddenly collapsed and died,” it added.

There were anti-chengguan protests in Linwu on Wednesday, and the fruit seller’s death has also sparked outrage on China’s microblogs.

In July 2011, the death of a disabled street vendor who was reportedly beaten by local law enforcers sparked a riot in Guizhou province.

Who are the chengguan?

Urban law enforcers tasked with enforcing ”non-criminal administrative regulations” such as traffic, environment and sanitation rules

Chengguan operate separately from the police

They are employed by the Urban Administrative and Law Enforcement Bureaux of their individual cities

Critics call them “violent government thugs”

Reports that a disabled street vendor was beaten to death by chengguan in 2011 sparked riots in China’s Guizhou province

There are thousands of chengguan in at least 656 cities across China, Human Rights Watch says

The chengguan, or Urban Management Law Enforcement force, support the police in tackling low-level crime in cities and have become unpopular with the Chinese public after a series of high-profile violent incidents.

“They are now synonymous for many Chinese citizens with physical violence, illegal detention and theft,” said Sophie Richardson, China director at Human Rights Watch (HRW), in a report last year.

via BBC News – China officials held over watermelon-seller death.

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