Posts tagged ‘Gross domestic product’

07/11/2014

China vs. India? It’s India by a Nose, Roubini Says – Businessweek

Nouriel Roubini is an India optimist. The country may have spent years lagging behind fast-growing Asian neighbors, such as China, but the NYU professor and chairman of Roubini Global Economics sees a role switch ahead, he told Bloomberg Television today.

Nouriel Roubini: Indian Tortoise Will Soon Pass Chinese Hare

Economic growth in China, weighed down by an aging population and an obsolete investment-driven economic model, is going to fall to 6.5 percent next year and will drop below 6 percent in 2016, “while in India, with the right reforms, it could go to 7 percent,” he said. “So for the first time ever the tortoise becomes the hare and the hare becomes the tortoise.”

China’s leaders know the problems they face, according to Roubini, who is visiting Hong Kong for a Barclays-sponsored conference, but so far they have been reluctant to follow through on promises to address them. “The Chinese understand their growth model is unsustainable—too much fixed investment, not enough consumption,” Roubini said.

via China vs. India? It’s India by a Nose, Roubini Says – Businessweek.

22/10/2014

Diesel Deregulation Frees Up Billions for India to Spend More Wisely – India Real Time – WSJ

India’s decision to end government control of diesel fuel prices will save the government billions of dollars which can be better spent on more pressing needs such as building schools, roads and ports, analysts say.

India announced over the weekend that it would end a decades-old policy of controlling the retail price of diesel fuel. Providing diesel at below-market rates cost the government about $10 billion last year, hampering India’s ability to spend on other things.

The government had given up control over the prices of gasoline back in 2010 but had continued to regulate prices of diesel – the primary fuel used in trucks and tractors as well as for running generators used to power irrigation pumps.

“It shields the government’s finances from volatility in global oil prices, because of which the subsidy bill often went up,” said Radhika Rao, an economist at DBS Bank.

HSBC estimates that the diesel deregulation will drop fuel subsidy bill to around 0.4% of gross domestic product, half of the 0.8% of GDP it paid last year.

“Our estimate is that over the next few years, fuel subsidies should remain contained,” said Prithviraj Srinivas, an economist at HSBC.

Diesel subsidies cost India close to $50 billion over the last five years, economists say. If India sticks to its guns and lets fuel prices meander with global markets, it will no longer have to foot that kind of unproductive expense. Instead, it can now choose to lower its fiscal deficit or spend more on infrastructure development or social development programs.

Analysts say the government’s fiscal deficit target of 4.1% of GDP this fiscal year – a level that many analysts had thought optimistic – now looks within reach.

via Diesel Deregulation Frees Up Billions for India to Spend More Wisely – India Real Time – WSJ.

21/10/2014

China’s growth slowest since global crisis, annual target at risk | Reuters

China grew at its slowest pace since the global financial crisis in the September quarter and risks missing its official target for the first time in 15 years, adding to concerns the world’s second-largest economy is becoming a drag on global growth.

Employees work at a shoe factory in Lishui, Zhejiang province, in this January 24, 2013 file photo.  REUTERS/Lang Lang/Files

A pick-up in factory output and government confidence that the labor market remains stable were offset by further slowing in the property sector, and economists remained divided on whether or not authorities would step in with major stimulus measures such as interest rate cuts.

China’s gross domestic product (GDP) grew 7.3 percent in the third quarter from a year earlier, official data showed on Tuesday, the weakest rate since the first quarter of 2009.

That was slightly above the 7.2 percent forecast by analysts but slower than 7.5 percent in the second quarter, and even then some economists were surprised.

“It’s hard to square the GDP print with the industrial production numbers for the quarter,” said Andrew Polk, economist at the Conference Board in Beijing, one of the more pessimistic research houses on the Chinese economy.

“There are confusing things going on. You have credit growing at the slowest pace since 2002. You have real estate investment slowing on a monthly basis and you have industrial production averaging slightly above 8 percent on a quarterly basis, slightly down from Q2. With that being the most reliable component of GDP on a quarterly basis, 7.3 percent seems a bit high to me.”

via China’s growth slowest since global crisis, annual target at risk | Reuters.

19/10/2014

How Poor Is China? – Businessweek

By one measure, China is set to surpass the U.S. this year in gross domestic product as the world’s largest economy—in terms of purchasing power parity (rather than nominal GDP), says the International Monetary Fund. China also has the world’s second-largest population of ultra-wealthy, with some 7,600 people possessing at least $50 million, according to a report released on Tuesday by Credit Suisse. (The U.S. remains No. 1 in its number of super-rich).

Sifting through trash near Hefei, China

Still, that wealth contrasts with impoverishment. About 82 million Chinese still live in poverty, an official announced at a press conference in Beijing on Tuesday, reported the China Daily.

That figure is according to the Chinese poverty standard of about 2,300 yuan a year, or about $1 a day. Using the international standard of $1.25 a day, set by the World Bank, raises the figure to 200 million, said Zheng Wenkai, vice-minister of the State Council Leading Group Office of Poverty Alleviation and Development. This means that 15 percent of China’s population is impoverished, according to the broader measure.

All told, China has 120,000 villages plagued by poverty. Residents lack electricity, running water, schools, and proper health care, the English-language paper reported. Dire conditions are exacerbated by the fact that most are in remote, often mountainous parts of the country that have inadequate roads.

Poor populations are concentrated in extremely poor contiguous regions with poor living conditions, inadequate infrastructure as well as being afflicted with natural disasters,” the Global Times reported. Last year, China lifted 40 million residents out of poverty, and it plans to bring an additional 10 million out in 2014. China will send resident-assistance teams to the worst hit regions, the official said.

via How Poor Is China? – Businessweek.

19/10/2014

A pocket guide to doing business in China | McKinsey & Company

A pocket guide to doing business in China

McKinsey director Gordon Orr goes behind the trends shaping the world’s second-largest economy to explain what companies must do to operate effectively.

October 2014 | byGordon Orr

China, a $10 trillion economy growing at 7 percent annually, is a never-before-seen force reshaping our global economy. Over the past 30 years, the Chinese government has at times opened the door wide for foreign companies to participate in its domestic economic growth. At other times, it has kept the door firmly closed. While some global leaders, such as automotive original-equipment manufacturers, have turned China into their single largest source of profits, others, especially in the service sectors, have been challenged to capture a meaningful share of revenue or profits.

This article summarizes some of the trends shaping the next phase of China’s economic growth, which industries might benefit the most, and what could potentially go wrong. It also lays out what I believe it takes to build a successful, large-scale, and profitable business in China today as a foreign company.

via A pocket guide to doing business in China | McKinsey & Company.

02/10/2014

China’s $163 Billion R&D Budget – Businessweek

The amount of money China spends annually on research and development has tripled since 1995—reaching $163 billion in 2012, or 1.98 percent of GDP. As China cracks down on corruption elsewhere in government, so too has Xi Jinping’s administration turned greater attention to curtailing massive graft in research fields—including arresting top scientists and administrators suspected of skimming off the top. In June, for instance, Song Maoqiang, former dean of Beijing University of Posts & Telecommunications’ school of computer science and technology, was given a harsh 10-year prison term for embezzling $110,000 in research funds.

One component of China’s campaign to clean up corruption is requiring central government agencies to disclose their annual research budgets. In the Aug. 29 issue of the journal Science, two researchers—based at China’s Dalian University of Technology and the U.K.’s University of Nottingham—mined and compiled available budget information to “open [up] the ‘black box’ of China’s government R&D expenditures.”

Three agencies—the Ministry of Science and Technology (MOST), the Chinese Academy of Sciences (CAS), and the National Science Foundation of China (NSFC)—together were responsible for distributing nearly three-quarters of China’s research spending in 2011. The agencies dole out grants through both competitive, peer-reviewed proposal processes (sometimes aimed at achieving national goals or research priorities) and through more inscrutable, contract-based research. In general, the latter is more susceptible to corruption. Defense-related research usually falls into this category.

After combing through extensive records only recently made public, the Science authors, Yutao Sun and Cong Cao, could still not fully determine where all of Beijing’s research money has gone. “Slightly less than half (45.25%) of the central government R&D spending in 2011 is not accounted for,” they write, speculating that it is “likely spent at eight defense-related agencies that have not yet disclosed [their department annual reports].”

The authors calculate that in 2011, China devoted 4.7 percent and 11.8 percent of its total R&D budget to basic and applied research, respectively. That is a much lower percentage than in countries whose science and technology achievements Beijing hopes one day to rival, including the U.S. and Japan. In 2009, the U.S. spent 19.7 percent and 17.8 percent of total R&D budget on basic and applied research, respectively, and Japan spent 12.5 percent and 22.4 percent. “The low share of scientific research expenditure has negatively affected China’s innovation capability and may jeopardize China’s ambition to become an innovation-oriented nation,” the authors conclude.

via China’s $163 Billion R&D Budget – Businessweek.

30/09/2014

China’s Rapidly Aging Population Drives $652 Billion ‘Silver Hair’ Market – Businessweek

The increase in China’s elderly people to more than 200 million has created a host of challenges, from a shrinking labor force to soaring pension needs. But there’s a silver-haired lining.

China's Rapidly Aging Population Drives $652 Billion 'Silver Hair' Market

The market of goods and services for China’s rapidly aging population will reach 4 trillion yuan ($652 billion) this year, or eight percent of GDP, according to the “China Report on the Development of the Silver Hair Industry” issued Tuesday in Beijing.

The industry is expected to rise to 106 trillion yuan ($17 trillion) by 2050, amounting to a third of the Chinese economy. That would make it the world’s largest market for the aged. That year China will have 480 million people over 60—one quarter of the world’s elderly—says the report, which was published Sept. 23 by the China National Committee on Aging.

“The silver hair industry has started the rapid booming phase, making it a new promising industry in China,” said Wu Yushao, deputy director of the committee, reports the China Dailytoday. “The major reason for the boom is based on the growing number of aging people.”

Future opportunities to serve the elderly will be clustered in four main fields, the report explains. Those include appliances (to serve the less-mobile elderly, for example), services (such as home care and special transportation), real estate (assisted living centers), and financial services. The latter—insurance and money management for the elderly, for example—will make up the biggest portion of the market and still has lots of room to grow.

While 6.21 million people work in the U.S. financial industry and more than half focus on retirees, China has only 5.27 million, estimates Dang Junwu, deputy head of the Beijing’s Chinese Research Center on Aging. “There has been a huge gap in the financing industry for senior residents between China and the developed countries,” Dang told the English-language paper.

via China’s Rapidly Aging Population Drives $652 Billion ‘Silver Hair’ Market – Businessweek.

20/09/2014

China approves plan to combat climate change – China – Chinadaily.com.cn

The Chinese central government on Friday approved a plan that maps out major climate change goals to be met by 2020.

The State Council, China’s cabinet, gave a green light to the plan, which was proposed by the National Development and Reform Commission (NDRC), the country’s economic planner. A statement released on the State Council’s website urged the NDRC to carry out the plan.

China has pledged to reduce its carbon emission intensity, namely emissions per unit of GDP, by 40 percent to 45 percent by 2020 from the 2005 level. It will also aim to bring the proportion of non-fossil fuels to about 15 percent of its total primary energy consumption.

Other targets include increasing forest coverage by 40 million hectares within the next five years.

The government will speed up efforts to establish a carbon emission permit market, under the plan, which also calls for deepened international cooperation under the principles of “common but differentiated responsibilities,” equity and respective capability.

The State Council said local governments and departments at all levels should recognize the significance and urgency in dealing with climate change and give higher priority to action on this issue.

China’s release of the action plan came just before a climate summit to be held at UN Headquarters in New York on Tuesday. Chinese Vice Premier Zhang Gaoli will attend.

Xie Zhenhua, deputy chief of the NDRC and the country’s top official on climate change, told a press conference that the plan was concrete action by China to participate in the global process to tackle climate change.

By the end of last year, China had reduced carbon dioxide emissions per unit of GDP by 28.56 percent from 2005, which was equivalent to saving the world 2.5 billion tonnes of carbon dioxide emissions, Xie said.

At the end of 2013, China’s consumption ratio of non-fossil energy to primary energy stood at 9.8 percent. Forest growing stock had increased by 1.3 trillion cubic meters from 2005 to two trillion cubic meters, seven years ahead of schedule, according to the official.

In the first nine months of 2014, China’s energy consumption per unit of GDP dropped by 4.2 percent year on year and carbon intensity was cut by about 5 percent, both representing the largest drops in years, he said.

As a developing country, China is the world’s largest greenhouse gas emitter. With the plan, the country has showed its confidence in achieving its green goals.

via China approves plan to combat climate change – China – Chinadaily.com.cn.

11/09/2014

Despite Sluggish Economy, China Has Yet Again More Millionaires – China Real Time Report – WSJ

Perhaps the Chinese economy is doing OK after all: The country’s ranks of the rich are growing slightly faster, according to a new report.

By slightly, we mean very: one percentage point.

Still, those who track the rich point to it as an optimistic signal. At the end of 2013, there were 1,090,000 people with a net worth of more than 10 million yuan ($1.6 million) and 67,000 with more than 100 million yuan, according to the Hurun Wealth Report 2014. That’s an increase of 4% for both categories. In the previous year, the growth rate was 3% and 2%, respectively, which represented the lowest increase over the six years Hurun has compiled the report.

Hurun, which also puts together an annual list of the richest people in China, said it came up with its headcount by two methods. First, it looked at the sales of high-end real estate and cars, as well as income tax returns and other data related to wealthy individuals. Then, it rounded out its headcount by taking into account macroeconomic data like gross domestic product growth and gross national product.

So who are the new rich? Mostly private business owners, said Hurun, who make up 55% of all millionaires (up from 50% last year). The report said the wealthy typically own a personal residence worth at least 2 million yuan, multiple cars worth more than 200,000 yuan as well as 1.7 million yuan in “investable assets.”

via Despite Sluggish Economy, China Has Yet Again More Millionaires – China Real Time Report – WSJ.

30/08/2014

India posts highest GDP growth figures in over two years

GDP up by 5.7 per cent in April-June quarter

India’s Gross Domestic Product increased by 5.7 per cent in the April-June quarter, up from 4.6% in the previous quarter. Growth in this quarter was the highest since March 2012, and it was sparked by a boost in the manufacturing and service sectors. However, economists said that this rebound could be temporary and stifled by poor monsoon rains and rising food inflation.

via Scroll.in – News. Politics. Culture..

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