Posts tagged ‘China’

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14/05/2015

5 Gaps That Define the India-China Relationship, in Charts and Maps – WSJ

1 Trade Gap

To better understand why there is a gaping trade deficit between India and China, take a look at the list of things each country exports to the other.

Some of China’s biggest exports to India are telecommunications equipment, computer hardware, industrial machinery and other manufactured goods. India sends back mostly raw materials such as cotton yarn, copper, petroleum products and iron ore.

As India has grown its consumers and corporations have been importing an increasing amount of China’s affordable products but India’s exports to China have not kept pace.

During his visit to China, Prime Minister Narendra Modi will be seeking better access to Chinese markets to correct the widening trade imbalance.

“The visit is going to be crucial because our trade deficit with China is very huge compared to other countries,” says N.R. Bhanumurthy, an economist at think-tank National Institute of Public Finance and Policy.

While China has a cost advantage in most products, analysts say India is very competitive in the pharmaceutical, textile and some services sectors. That is where it needs more access if it wants to start to rectify the skewed trade balance.

2 The 13-Year Gap

Even though India is now growing faster than China (see number 4)  the world’s largest democracy still has a way to go to catch up with the size of the economy in the world’s most populous nation.

China, though, got a 13-year head start on India in opening its economy and giving companies greater freedom to invest and produce. In exports, capital spending and foreign investment, India today is remarkably similar to China circa 2001.

That should both console and concern India as it gets back on its feet after three years of weak growth and high inflation. Console, since it suggests the country’s economy could remain on a China-like trajectory for years to come. But concern, because India’s delay could mean that the country has missed out on some big advantages that catalyzed China’s boom.

3 The Border Perception Gap

Friction along the two nations’ 2,200-mile-long border, much of which is undefined and contested, has mounted in recent years, India says. And it poses a serious hurdle to improving relations between Delhi and Beijing.

Part of the problem, Indian officials say, is that India and China have “differing perceptions” of their de facto border, known as the Line of Actual Control. Both sides patrol up to their respective perceptions of the border, leading to frequent claims of transgressions.

Without a clearly demarcated border, “it is quite natural for some incidents to happen,” Chinese Defense Ministry spokesman Col.Geng Yansheng said in September during a border confrontation between the two countries.

4 The GDP Growth Rate Gap

Everyone from the World Bank to Goldman Sachs had predicted it wouldn’t happen for another two years but recent recalculations indicate that India has already dethroned China as the world’s fastest-growing big economy.

5 The FDI Gap

While Chinese companies have been great at peddling their products in India, they have been surprisingly reluctant to invest here. China has invested less in India than even Poland, Malaysia or Canada have.

via 5 Gaps That Define the India-China Relationship, in Charts and Maps – WSJ.

Posted in China alert, Chindia Alert, Economics, India alert, Politics | 1 Comment »

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12/05/2015

Optics as well as substance important as India’s Modi visits China | Reuters

When Indian Prime Minister Narendra Modi arrives in the ancient city of Xian on Thursday at the start of a visit to China, he will be met by Chinese President Xi Jinping, in an unusual departure from normal protocol.

India's Prime Minister Narendra Modi (R) and China's President Xi Jinping shake hands during a photo opportunity ahead of their meeting at Hyderabad House in New Delhi September 18, 2014. REUTERS/Ahmad Masood

Top Chinese leaders almost never travel outside Beijing to meet senior foreign guests on bilateral visits, and Xi’s appearance in Xian, located in Xi’s home province of Shaanxi, underscores China’s determination to set aside past rancor between the world’s two most populous nations, experts said.

“It definitely indicates the significance our president puts on Mr. Modi’s visit,” said Li Li, an India expert at the government-backed China Institutes of Contemporary International Relations.

“From the Chinese side, we were very impressed by the hospitality extended by Mr. Modi during Xi Jinping’s visit to India,” he added, referring to Modi greeting Xi in his home state of Gujarat when Xi visited India last year.

Modi will visit a Xian pagoda connected to Xuanzang, also known as Tripitaka, the monk who bought the Buddhist sutras to China from India thousands of years ago, according to people briefed on the trip.

“It is sending a very important message,” Li said of Xi’s going to Xian to greet Modi, a place closely connected to the deep historical links between China and India.

Still, the list of problems both countries face are considerable, ranging from a festering border dispute to China’s support for India’s arch-rival Pakistan.

Mistrust runs deep, something Xi will be keenly aware of despite the bonhomie and billions of dollars in deals likely to be signed.

Modi’s new account on Chinese social media site Weibo, China’s version of Twitter, was filled with messages soon after launching this month asking him to return what China calls South Tibet, otherwise known as the Indian state of Arunachal Pradesh.

“This is the great, great pressure the Chinese government is facing,” said Mao Siwei, a former senior Chinese diplomat who was based in India and Pakistan, talking about the need to manage Chinese public concern about the disputed area.

China claims more than 90,000 sq km (35,000 sq miles) disputed by New Delhi in the eastern sector of the Himalayas.

India says China occupies 38,000 square km (14,600 sq miles) of its territory on the Aksai Chin plateau in the west.

In September, the two armies faced off in the Ladakh sector in the western Himalayas just as Xi was visiting India for the first summit talks with Modi. This time, the border has been quiet ahead of Modi’s arrival.

While chances of a breakthrough on the border look distant, the exchange of visits by Modi and Xi so soon after both took office is a positive sign, said Ram Madhav, a senior leader of the Rashtriya Swayamsevak Sangh, a hardline Hindu nationalist organization that has close ties to Modi’s BJP.

“There is an earnest eagerness to connect with the Indian leadership,” Madhav told a forum in Beijing.

“Prime Minister Modi has chosen to come in his first year (of office) to China. It shows that the leaders on both sides are seriously attempting to … bridge the most important challenge between the two countries – the trust deficit.”

via Optics as well as substance important as India’s Modi visits China | Reuters.

Posted in China alert, Chindia Alert, Economics, Foreign invasion, GeoPolitics, India alert, Neighbour conflict, Politics, Territorial dispute | Leave a Comment »

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11/05/2015

Private banker KV Kamath named first BRICS bank head | Reuters

Indian private banker K.V. Kamath has been named as the first head of a new development bank being set up by the BRICS group of emerging market economies, Finance Secretary Rajiv Mehrishi told reporters on Monday.

K.V.Kamath gestures during the Reuters India Summit at his office in Mumbai in this November 25, 2008 file photo. REUTERS/Stringer/Files

The BRICS – Brazil, Russia, India, China and South Africa – agreed to set up the $100 billion development bank last July, in a step toward reshaping the Western-dominated international financial system.

“Kamath has been appointed as the head of the BRICS bank, the appointment will become effective when he becomes free from his current assignments,” Mehrishi told reporters in New Delhi.

It was agreed then that the New Development Bank, which will fund infrastructure projects in developing nations, would be based in Shanghai. It would be headed by an Indian for a first five-year term, followed by a Brazilian and then a Russian.

via Private banker KV Kamath named first BRICS bank head | Reuters.

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11/05/2015

U.S. Congressman says engagement with China has diminished under Xi | Reuters

A United States Congressman told reporters that China’s engagement with U.S. lawmakers has diminished under President Xi Jinping in a marked change from the policy of his predecessors.

Chinese President Xi Jinping speaks with U.S. State Secretary John Kerry (R) during a lunch banquet in the Great Hall of the People in Beijing November 12, 2014. REUTERS/Greg Baker/Pool

He also said that Chinese and Hong Kong officials were looking for a scapegoat when they blamed last years’ pro-democracy protests on “foreign forces”.

“I think it has diminished,” Congressman Matt Salmon said of China’s engagement with U.S. lawmakers under President Xi. “This president has a whole different philosophy. In fact I think if anything, this president is moving in the other direction, (away) from constructive engagement from the past two presidents.”

Salmon is chairman of the subcommittee on Asia and the Pacific under the House Committee on Foreign Affairs. The Republican representative from Arizona is in the middle of his fifth term in Congress.

Salmon was in Hong Kong as the head of a U.S. Congressional delegation, which also visited Vietnam and discussed political, trade and economic issues.

Salmon said he had not been contacted by anyone from the Chinese Embassy since he became chairman of the Asia Pacific subcommittee.

“It’s kind of strange because every other embassy in the region has reached out to me, and their ambassadors have asked for an audience with me, every one of them except for China,” he said.

The United States and China are the world’s two biggest economies. Chinese President Xi is scheduled to make his first state visit to the United States in September as the countries seek to ease tensions over issues ranging from trade and human rights to Internet hacking and theft.

Salmon said he and his delegation had met Hong Kong Chief Executive Leung Chun-ying and told him the United States had not played any role in last year’s pro-democracy protests, in which tens of thousands of people occupied major highways for two and a half months to demand open nominations in the city’s next chief executive election.

Chinese and Hong Kong officials have blamed “foreign forces” for instigating the unrest, which Salmon said was “a convenient way to scapegoat someone else”.

via U.S. Congressman says engagement with China has diminished under Xi | Reuters.

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08/05/2015

China’s drive to settle new wave of migrants in restive Xinjiang | South China Morning Post

Newly employed as a hotel receptionist in Xinjiang, Fang Lihua is a foot soldier on the front line of a demographic contest for the mainly Muslim region’s identity as China opens it up for migration.

Uygur men visiting a night market in Hotan. Some Uygurs allege that ethnic Han settlers in Xinjiang receive preferential treatment. Photo: AFP

The resource-rich, far-western region is home to more than 10 million Uygurs, a Turkic minority with stronger cultural links to Central Asia than to the rest of China, dominated by the Han ethnic majority.

It sees sporadic violence the authorities blame on Islamist separatists, which has increased in intensity and spread beyond its borders in recent years.

Waves of mass migration from China’s heartland have raised Xinjiang’s Han population from six per cent in 1949 to 38 per cent four years ago.

Now Beijing hopes to trigger a new influx with the most liberal residency rules in China.

Fang, who is Han and in her 20s, took a three-day train ride from China’s ancient capital Xian to reach her new home in Hotan. The oasis town by the Taklamakan desert is renowned for its jade and fruit, but held little charm for her.

“I hate it here,” she said. “It’s completely foreign, I don’t think I’ll be able to adjust to life here.”

She and her builder husband are among the first to take advantage of new rules announced six months ago and she says they may stay despite her misgivings.

In cities across China, migration is strictly controlled, with new arrivals struggling for years to secure the all-important household registration, or hukou, entitling residents to education, healthcare, social insurance and more. Larger cities require advanced degrees, special skills or a job at a well-connected or government-owned company.

But in southern Xinjiang, the latest regulations mean a hukou is available with no educational or skill requirements at all.

Nationwide changes to the system are in the pipeline with urbanisation a key driver of the Chinese economy, but the fact that the Uygur-dominated area has been chosen for the country’s most liberal rules is striking.

More than 200 people died in Xinjiang-linked incidents last year according to official media reports, including a bloody mass stabbing in Kunming in southwestern China.

“The hukou reforms are about trying to encourage Han migration to southern Xinjiang, even though it’s not phrased in that way,” said James Leibold, an expert on ethnic relations in China at Australia’s La Trobe University.

“The idea behind that is to encourage more inter-ethnic mingling and hopefully by bringing more Han, the quality and the civilisation of southern Xinjiang will increase.”

At the same time the government is trying to stem population growth among minorities.

Propaganda throughout rural Hotan encourages residents to “have fewer children and get rich quick”, with a 3,000 yuan (HK$3,800) payout for those who forgo having the third child allowed to many ethnic minority couples under China’s family planning rules, compared to one or two for Han.

Security concerns and poor business opportunities would put off many potential migrants, Leibold said.

But that did not stop construction worker Du Yun, from the southwestern province of Sichuan, who arrived in November.

“I prefer the air in Sichuan, we don’t have sandstorms, but the social benefits are better in cities,” he said.

Areas of Xinjiang have at times been part of different states, including Russia, sometimes independent, but it has largely been ruled by Beijing since the late 1800s.

After the Communists won China’s civil war in 1949, it saw waves of migration from the east.

The semi-military Xinjiang Production and Construction Corps settled demobilised soldiers on work farms and today runs businesses including real estate, insurance, plastics and cement across the region, with its own universities and media.

Throughout Xinjiang, the Han and Uygur communities live almost entirely separately.

At one bazaar nearly all the patrons and merchants were Uygur, and blamed rising prices on new arrivals.

“The government has plenty of money, but any subsidies we’re entitled to just get taken by officials,” said Abduljan, who was buying lamb. “But we can’t do anything, we have no voice, no power.”

Almost none of about two dozen Han Chinese living in Hotan interviewed for this article spoke Uygur.

“Even if these policies do manage to attract Han to places like Hotan it doesn’t mean they will intermingle,” Leibold said.

“They’ll just live in segregated communities and they’ll be guarded by the People’s Armed Police,” he added.

“To create a truly cohesive society you need first and foremost trust, and interethnic trust is in extremely short supply.”

More than 300,000 people live in Hotan, but at night it is a ghost town.

Eighteen people were killed in an assault on a police station four years ago, according to the authorities, who say all the attackers who mounted a fatal car crash in Beijing’s Tiananmen Square 18 months ago were from Hotan.

Now most Han are afraid to go out after sunset and those who gather for nightly dances under a Mao Zedong statue in the main square are guarded by armed police.

The security presence is ubiquitous and many Uygurs similarly avoid the streets during darkness, citing harassment in the form of constant identity checks and probing questioning.

“The police, the checkpoints, the guns,” said a Uygur man who refused to give his name. “It’s all here to make the Han feel safe.”

 

via China’s drive to settle new wave of migrants in restive Xinjiang | South China Morning Post.

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08/05/2015

For returning migrant workers, a changed and desolate homeland|Society|chinadaily.com.cn

As the first wave of Chinese migrant workers return to live in their hometowns, they may find that life has changed dramatically from when they first left, a PhD student in Shanghai University revealed in his journal published in The Paper.

For returning migrant workers, a changed and desolate homeland

Rural areas tend to evoke empty villages where the working population has left, but the fact is that more and more middle-aged migrant workers are coming back home in recent years, said Wang Leiguang, a native of Luotian county of Hubei province who impressed readers with his “Journal of returning to hometown” during the Spring Festival.

Ever since China’s reform and opening-up in the late 1970s, waves of farmers left their land and worked in cities, where they could enjoy higher incomes but faced various disadvantages.

After working in cities for decades, they feel tired and no longer welcome in the city. Most of them have built new houses in their hometowns and have some savings. More importantly, they have to look after their grandchildren, as Wang elaborated in his article.

The year-on-year growth rate in the number of migrant workers has been declining since 2010, said a report released by the National Bureau of Statistics in late April. Since 2004, China has encountered a continuous labor shortage and many migrant workers aged above 50 have returned to their hometowns, as Wang has noticed in his hometown, Luotian.

However, returning home doesn’t mean a return to farming. Since most young laborers moved to the cities, the remote farmlands have become wastelands no one wants to reclaim. Meanwhile machines have replaced manual work in the remaining farms. Even so, many don’t really care about the harvest and some even give up their land.

City life has apparently estranged them from the farmland.

Meanwhile, the pace of urbanization in China during the past 25 years has seen the decline of many villages. As people have drifted away to urban areas, the countryside has become stripped of community and culture.

Unlike twenty years ago when villagers could enjoy various activities such as temple fairs, outdoor movies and opera performances, there are almost no cultural activities these days, as rural people left for cities to find better-paid jobs. When those migrant workers return, they find that villagers have less contact with each other, even between neighbors. Most of them stay at home watching TV.

Rural life is lonely and dull. Wang described the common sight of an old man or woman sitting in the sun at the gate every day, greeting acquaintances when they pass by, as if waiting for death to come.

Increasing social bonds may be a solution to fight the alienation in the countryside, Wang suggested. He found that villagers communicated more and felt happier during their efforts to build a road.

Zhou Jinming, an agricultural official with the Yulin government of Shaanxi province, suggested that the government should focus on supporting large villages by improving conditions, such as setting up libraries and clinics.

via For returning migrant workers, a changed and desolate homeland|Society|chinadaily.com.cn.

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08/05/2015

China Parades Closer Ties in Moscow – China Real Time Report – WSJ

When a Chinese honor guard joins a military parade in Russia’s capital this weekend, watched by China’s President Xi Jinping, it will mark more than just a symbolic recognition of the two countries’ contributions to the Allied victory in 1945. As the WSJ’s Jeremy Page reports:

China’s participation also reflects an upgrade of its military ties with Russia, including joint naval exercises and a revival of arms purchases, that could complicate U.S.-led efforts to counter both nations’ expanding military activities, analysts and diplomats say.

The 102 Chinese troops who will join the Victory Day parade in Moscow on Saturday were seen during a rehearsal this week marching through streets near Red Square singing the Russian wartime ballad “Katyusha”, according to video footage posted online.

The only other foreign countries with troops in the parade are India, Mongolia, Serbia and six former Soviet states.

Three Chinese navy ships also made a rare foray into the Black Sea on their way to join commemorations in Russia’s southern port of Novorossiysk on Saturday.

The Chinese ships—two missile destroyers and a supply vessel — will then take part in joint exercises with the Russian navy in the Mediterranean Sea for the first time, according to Chinese and Russian authorities.

Both sides say the drills aren’t directed at other countries, but the timing, after Russia’s 2014 annexation of Crimea, and the location, on NATO’s southern flank, have compounded Western concerns about an emerging Moscow-Beijing axis.

via China Parades Closer Ties in Moscow – China Real Time Report – WSJ.

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07/05/2015

Corruption: Not so far away | The Economist

“THE mountains are high; the emperor is far away,” goes a Chinese saying that has always given comfort to bureaucrats who play fast and loose with the law in remote parts of the country. But often, these days, distance is not enough. Those who hanker after the added protection of a foreign jurisdiction are often called “naked officials”. The term describes people who have moved families and assets abroad in readiness for escape themselves. Now, however, anti-graft officers are trying to extend their reach beyond China’s borders.

Since late last year, as part of the most intense and sustained anti-corruption drive in the history of Communist-ruled China, officials have been stepping up efforts to persuade foreign countries to send back those who have fled with their ill-gotten gains. On April 22nd they released a wanted list, together with mugshots, of 100 such people, as part of a new operation called Sky Net. The list was compiled by a Communist Party body, the Central Commission for Discipline Inspection (CCDI), whose agents often hold suspects in secret detention and torture them. “We will apprehend them no matter where they flee to,” Fu Kui, a member of the CCDI, told state media. The operation involves other agencies such as the police, the central bank and the foreign ministry.

Among the wanted fugitives, for whom Interpol has issued arrest warrants, 48 were the most senior officials in their workplaces. One was the deputy head of a provincial construction bureau accused of fleeing to America with 250m yuan ($40m) in embezzled funds. Another was a county-level finance official who allegedly took 94m yuan to Singapore.

Officials say that Sky Net is a new phase of Operation Fox Hunt, a campaign launched by the police last year to secure the repatriation of criminals (not just the corrupt). Officials say the exercise has been a success, having secured the repatriation of 680 fugitives from 69 countries. On April 27th the state prosecutor’s office said a further 61 people suspected of “dereliction of duty” had been arrested after spending time on the run abroad. Many had turned themselves in.

But anti-corruption officials have a big problem: the 39 countries with which China has extradition treaties do not include America, Australia or Canada, which are among the favoured destinations of corrupt fugitives. China has been pressing these countries for more co-operation. After a visit to Beijing in April by Jeh Johnson, America’s secretary for homeland security, state media said America “actively” supported China’s efforts. The Americans say they have agreed to a more “streamlined” procedure for handing back Chinese nationals whom they decide to repatriate. But they insist that such cases be handled according to American law and “values”.

China says it has sent 61 agents abroad (it has not said where) to “persuade” accused fugitives to return and face justice. It has also been trying a new tactic: scaring them with horror stories. State media last month reported one fugitive in America who dared not even see a doctor, so worried was he that his identity might become known. He returned home of his own will, a broken man.

via Corruption: Not so far away | The Economist.

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07/05/2015

China pulls out stops to avoid lay-offs as economy cools | Reuters

As growth in China’s sagging economy looks on the verge of spilling below 7 percent, officials worried about a spike in unemployment are pulling out all the stops to avoid mass lay-offs.

State firms are encouraged to keep idle workers employed, subsidies and tax breaks are given to companies that do not fire their workers, and some businesses are even enticed into hiring despite the slackening economic growth.

The measures appear to be working for now, said a senior economist at the Development Research Center, a think-tank affiliated to China’s cabinet.

“There is no big problem in employment. They (top leaders) are more worried about financial risks and debt risks,” said the economist, who declined to be named.

But things could change quickly.

In one of the first signs of distress in China’s labor market, the Liaoning government said in April it had slashed its 2015 job creation target to 400,000 from 700,000, to reflect a “severe” employment trend.

That came in the wake of data that showed Liaoning, one of three rustbelt provinces in northeastern China, grew just 1.9 percent in the first three months of the year, the slowest of China’s 31 provinces and regions.

Disappearing job opportunities or a spike in unemployment are always a concern for China’s stability-obsessed government, especially with 7.5 million university graduates estimated to join the labor market this year.

via China pulls out stops to avoid lay-offs as economy cools | Reuters.

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27/04/2015

China plans to cut number of big state firms to 40: state media | Reuters

China will likely cut the number of its central government-owned conglomerates to 40 through massive mergers, as Beijing pushes forward a sweeping plan to overhaul the country’s underperforming state sector, state media reported on Monday.

The consolidation will first take place in commercial sectors, especially in competitive industries, said the official newspaper Economic Information Daily, quoting an anonymous authority.

“Resources will be increasingly concentrated on large enterprises to avoid cut-throat competition, like what CSR Corp Ltd and China CNR Corp Ltd did when competing against each other for projects overseas,” the newspaper said.

The restructuring plan is critical to President Xi Jinping‘s broader push to raise the performance of China’s lumbering state sector, at a time when Beijing struggles to find the right policy mix to support the world’s second-largest economy that grew in the first quarter at its slowest pace in six years.

The policy-directed merger of state-owned CNR and CSR, China’s top two train makers, created a $26 billion company able to win global rail deals from rivals such as Germany’s Siemens AG and Canada’s Bombardier Inc.

“SOEs‘ non-core businesses, particularly in tertiary industry, will be sold publicly on the capital market,” the newspaper quoted the authority as saying.

Avoiding the loss of state assets will be “the most important and core requirement” when mergers that involve sensitive assets take place, the newspaper said.

Earlier this month, Beijing committed to stepping up public scrutiny of state firms’ financial and performance information as well as changes of enterprise leadership, to increase transparency and fight corruption.

The Central Commission for Discipline Inspection, the ruling Communist Party’s top graft-buster, is also intensifying its two-year inspections of state firms in strategic sectors.

In recent weeks, China FAW Group Corp Chairman Xu Jianyi, Baosteel Group Vice President Cui Jian, and a general manager at China National Petroleum Corp were put under investigation for corruption.

Currently, the central government owns 112 conglomerates, including 277 public firms listed on the Shanghai or Shenzhen stock exchanges with a market capitalization of more than 10 trillion yuan ($1.61 trillion), according to the newspaper.

via China plans to cut number of big state firms to 40: state media | Reuters.

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