Posts tagged ‘Kazakhstan’


This Is How India Is Keeping Its Place as Asia’s Fastest-Growing Large Economy – India Real Time – WSJ

What a contrast! See pair of articles – this on on India, the other on China, both from WSJ.

India is on track to keep its spot as Asia’s fastest-growing large economy, the Asian Development Bank said Tuesday.

The Manila-based development lender expects the Indian economy to grow by 7.4% in the year that ends next March, keeping its earlier forecast unchanged in an update to its regional outlook.

The ADB lifted its forecast for China’s growth this calendar year slightly, to 6.6%, but it still expects India’s economic growth to broadly outpace its neighbors’ through 2017. (The comparison isn’t exact. India and other South Asian countries report economic data on a fiscal-year basis. China and others use calendar years.) In Asia, only Myanmar, which is opening up after decades of isolation but remains small by comparison, is expected to expand more quickly, at 8.4%.

The ADB said India’s growth prospects have been buoyed thanks to the enactment of “long-awaited structural reform.”

The bank lauded “strong progress” in restructuring Indian lenders’ balance sheets, which for years have been weighed down by bad loans. Large corporations are also finding ways to reduce debt, the bank said, which could also help resuscitate long-stagnant lending and investment.

Recent legislation that creates a national goods-and-services tax, the ADB said, is “a key step toward a much more integrated, productive economy.”

Other factors, the bank said, should keep Indian consumers spending.Government workers are due to receive a big boost to their pay and pensions, while abundant monsoon rains this summer will likely lift rural incomes.

There are risks, though, the ADB said.

Much of India’s recent growth has been driven by government spending. But that has slowed after a burst of public investment last year. New Delhi this financial year wants to shrink its budget deficit, but so far, it hasn’t raised as much money as expected from selling off stakes in state companies and other assets. That means expenditure may need to be reined in even further.Investment by private companies, meanwhile, has been “listless,” the ADB said.

Foreign direct investment in India has remained strong, the bank noted, and New Delhi has been raising limits on foreigners’ stakes in Indian enterprises. But the $63 billion flood of foreign investment seen last year “would be difficult to replicate,” the bank said.

Rapid price growth, too, could continue to weigh on Indian consumers and investors. Inflation in India, which the ADB forecasts at 5.4% this year, remains among the highest in Asia.The nation’s central bank is now actively mandated, for the first time in its history, to keep consumer inflation within a government-set range. “While this is a ground-breaking monetary policy reform, the target of 4% would seem somewhat ambitious,” the bank said.

Source: This Is How India Is Keeping Its Place as Asia’s Fastest-Growing Large Economy – India Real Time – WSJ


The Brics Are Harming Each Other’s Trade, and India Is Largely to Blame – India Real Time – WSJ

Like most families, the Brics bloc isn’t as happy as it looks from the outside.

Brazil, Russia, India, China and South Africa, whose leaders begin a two-day summit today in Russia, are responsible for a growing share of the world’s trade-distorting policies but an even larger portion of trade-liberalizing ones, a new report finds.

However, the temporary nature of some of the market-opening measures means that overall these countries are still discriminating significantly against their trade partners—many of which are fellow emerging markets.

The finding, documented by the Global Trade Alert project of the London-based Centre for Economic Policy Research, highlights some of the awkward contradictions in the effort to unite the Brics.

“On the one hand, the Brics have sought to bolster trade between themselves with more generous credit lines for exporters and the like,” writes the report’s author, Simon Evenett, a professor of economics at the University of St. Gallen, Switzerland. “On the other hand, the Brics are responsible for a third of the instances of the harm to each other’s commercial interests. This cannot make sense.”

Global Trade Alert monitors trade-distorting moves such as tariffs, investment restrictions, “buy local” requirements for public procurement and export-promotion tools such as tax incentives and trade finance. GTA says its dataset includes more than 4,500 trade-related policies enacted globally since the financial crisis, more than double the number tracked by the World Trade Organization.

The GTA database documents three major spikes in protectionism since 2008. Over that period, the Brics governments have implemented a total of 1,451 policies that favor domestic commercial interests over foreign ones, or 32% of such measures world-wide. The Brics countries have since unwound just a fifth of these, suggesting that protectionist walls weren’t raised merely as temporary crisis-fighting measures. The Brics account for 17% of world trade.

Within the bloc, India stands out as an offender. According to GTA, the country is second only to the European Union both in the number of discriminatory measures imposed since November 2008—452 against the EU’s 604—and in the number of product categories affected by such measures—1,174 against the EU’s 1,220, both out of a possible 1,229.

Rich-country protectionism is still alive and kicking, the report shows. Of the 2,733 economic policies that harmed at least one Brics member, a fifth came from a member of the G-7 group of nations—the U.S., Canada, Japan, Germany, France, U.K. and Italy—or Australia. Nearly a third, however, came from fellow Brics nations.

All told, a greater share of G-7 policies were discriminatory, but the Brics’ protectionism affected a broader range of products. China was the most-common victim, with 2,153 foreign measures hitting its commercial interests.

The Brics also account for an increasing share of reforms world-wide to lower obstacles to foreign firms and investors, the report finds. But 28% of these liberalizations have already lapsed, compared to the global average of 15%.

Some economists say developing countries, in order to kick-start industrialization, need to shield and nurture local firms until they’re ready to compete on world markets. But Mr. Evenett argues that condoning “special and differential treatment” for poor countries doesn’t straightforwardly protect them against rich countries’ discrimination—it also provides cover for developing countries to step on other developing countries’ toes. China is the only one of the Brics whose exports haven’t stagnated over the past four years.

Hence, “a less selective approach to tackling crisis-era protectionism would seem to be in order,” Mr. Evenett writes. “The frequency with which Brics commercial interests are harmed by beggar-thy-neighbor interests ought to make the Brics champions of the monitoring of protectionism by international organizations.”

via The Brics Are Harming Each Other’s Trade, and India Is Largely to Blame – India Real Time – WSJ.


Putin Loses His Grip on Central Asia as China Moves In – Businessweek

As President Vladimir Putin strains to keep Ukraine within Russia’s grasp, he may be losing his grip on another part of his would-be empire: the former Soviet republics of Central Asia, which are increasingly turning toward China for investment and trade.

Russia's President Vladimir Putin and Tajik President Emomali Rakhmon meet on the sidelines of an informal summit of the regional security group in 2013

In the latest sign of its growing economic ties with the region, China is planning a $16.3 billion fund to finance railways, roads, and pipelines across Central Asia, reviving the centuries-old Silk Road trade route between China and Europe. President Xi Jinping first proposed the idea last year during a visit to Kazakhstan, the region’s wealthiest country.

Beijing has plenty of reasons to spend big in Central Asia. Improved infrastructure would help link China to European markets and give China increased access to the region’s rich natural resources. Kazakhstan is a major oil producer, while neighboring Kyrgyzstan has large mineral deposits and Turkmenistan produces natural gas.

At the same time, the planned construction would give an economic boost to adjoining areas of western China where Beijing is trying to quell a separatist insurgency, says Sarah Lain, a researcher at the Royal United Services Institute in London. As it has in Africa, China is likely to bring Chinese workers into Central Asia to do much of the construction.

During much of the 19th century, the Russian and British empires vied for control of Central Asia, a rivalry dubbed the “Great Game.” But the predominantly Muslim region, which also includes the countries of Tajikistan, Turkmenistan, and Uzbekistan, was annexed by the Soviet Union after the Bolshevik revolution and has remained close to Moscow in the post-Soviet era.

Putin has sought to maintain those ties—for example, by inviting Kazakhstan and Kyrgyzstan to join a customs union with Moscow. But with the Russian economy in a deep slump, he can’t match the big money that China is offering. Indeed, Russia’s economic malaise is clobbering some Central Asian economies, spurring them to seek help from China.

via Putin Loses His Grip on Central Asia as China Moves In – Businessweek.


China in Central Asia: Rising China, sinking Russia

The Economist: “In a vast region, China’s economic clout is more than a match for Russia’s

LESS than a decade ago little doubt hung over where the newly independent states of Central Asia had to pump their huge supplies of oil and gas: Russia, their former imperial overlord, dominated their energy infrastructure and markets. Yet today, when a new field comes on stream, the pipelines head east, to China. As if to underline the point, this week China’s president, Xi Jinping, swept through Central Asia, gobbling up energy deals and promising billions in investment. His tour left no doubts as to the region’s new economic superpower.

In Turkmenistan, already China’s largest foreign supplier of natural gas, Mr Xi inaugurated production at the world’s second-biggest gasfield, Galkynysh. It will help triple Chinese imports from the country. In Kazakhstan $30 billion of announced deals included a stake in Kashagan, the world’s largest oil discovery in recent decades. In Uzbekistan Mr Xi and his host, President Islam Karimov, unveiled $15 billion in oil, gas and uranium deals, though details in this opaque country were few.

China is the biggest trading partner of four of the region’s five countries (the exception being Uzbekistan). During Mr Xi’s trip, Chinese state media reported that trade volumes with Central Asia topped $46 billion last year, up 100-fold since the countries’ independence from the Soviet Union two decades ago. Though neither side puts it like this, China’s growing presence clearly comes at Russia’s expense. Russia still controls the majority of Central Asia’s energy exports, but its relative economic clout in the region is slipping—other than as a destination for millions of migrant labourers. For years Russia has treated the region as its exclusive province, insisting on buying oil and gas at below-market rates through Soviet-era pipelines, while re-exporting it at a markup. The practice helped drive Kazakhstan and Turkmenistan, both with huge energy reserves, into China’s arms.

Yet Russia and China have much riding on their bilateral relationship. The government in Moscow is eager to benefit from its eastern neighbour’s economic might, while in Beijing policymakers view Russia as a critical ally on the world stage. (Knowing the premium China places on protocol, it was no accident that Mr Xi’s very first official visit as president was to Moscow; and that he went to St Petersburg for the G20 summit in the middle of his Central Asian tour.) All this suggests the two giants will aim to co-operate as much as compete, at least for the moment. As for Central Asians, says Vasily Kashin, a Moscow-based China expert, Russia has accepted that “they will try to get the best deals out of this rivalry.”

When it comes to security issues in Central Asia, in public China still defers to Russia. Both look warily on as NATO withdraws from Afghanistan. China’s chief concern is the threat posed by Uighur separatists and their sympathisers in Central Asia. And so, in security matters too, China’s influence is growing. As The Economist went to press, Mr Xi was expected in Bishkek, capital of Kyrgyzstan, to attend the annual summit of the Shanghai Co-operation Organisation, a block which China was instrumental in founding. A chief aim is to counter the “three evil forces” of terrorism, extremism and separatism.

Arguably, Chinese investment in Central Asia promotes that goal, by improving living standards and thus stability in a region that shares a 2,800km (1,750-mile) border with Xinjiang, China’s westernmost province and Uighur homeland. Yet China’s soft power is undermined by a beast it is not good at fighting: resentment. Chinese contractors are flooding into Central Asia, building roads and pipelines and even, in Tajikistan’s capital, Dushanbe, the government buildings. The cruel irony is not lost on the millions of unemployed men leaving for Russia to look for jobs. But it is lost, says Deirdre Tynan of the International Crisis Group, a think-tank, on policymakers. “Central Asia’s governments see China as a wealthy and willing partner, but on the ground little is being done to ease tensions between Chinese workers and their host communities,” she warns.”

via China in Central Asia: Rising China, sinking Russia | The Economist.

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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 –

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* Turkey becomes partner of China, Russia-led security bloc

One day Europe may well come to regret not wqelcoming Turkey into the EU.

Reuters: “NATO member Turkey signed up on Friday to became a “dialogue partner” of a security bloc dominated by China and Russia, and declared that its destiny is in Asia.

Turkey's Prime Minister Tayyip Erdogan makes a speech during the Global Alcohol Policy Symposium in Istanbul April 26, 2013. REUTERS/Murad Sezer

“This is really a historic day for us,” Turkish Foreign Minister Ahmet Davutoglu said in Kazakhstan’s commercial capital Almaty after signing a memorandum of understanding with Shanghai Cooperation Organisation Secretary General Dmitry Mezentsev.

“Now, with this choice, Turkey is declaring that our destiny is the same as the destiny of the Shanghai Cooperation Organisation (SCO) countries.”

China, Russia and four Central Asian nations – Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan – formed the SCO in 2001 as a regional security bloc to fight threats posed by radical Islam and drug trafficking from neighboring Afghanistan.”

via Turkey becomes partner of China, Russia-led security bloc | Reuters.


* China opens second railway to Kazakhstan

China’s “go west” policy now extends even further west than its most western province! This is good news for Xinjiang, long deemed by its Muslim residents to be looked down upon and mistreated by the majority Han Chinese, for Chinese migrants who would otherwise have headed east into heavily crowded and over-competitive eastern sea board, and for Kazakhstan and countries beyond. A win-win-win situation, indeed.

Xinhua: “A second cross-border railway between China and Kazakhstan opened Saturday.

The railway is composed of a 292-km section in China and the remaining 293-km section in Kazakhstan. They were joined at the Korgas Pass in Xinjiang Uygur autonomous region.

Contruction of the Chinese side of the railway cost 6 billion yuan (962 million U.S. dollars), railway officials said.

The rail line is expected to ease the burden of the Alataw trade pass, where the first China-central Asia railway traverses. It handles 15.6 million tonnes of train-laden cargo a year.

Industry observers expect the Korgas pass, which now connects China and Kazakhstan by a railway, a highway, and an oil pipeline, to handle 20 million tonnes of cargo a year by 2020 and 35 million tonnes a year by 2030.

The railway launch followed the meet of Chinese Vice Premier Wang Qishan and his Kazakh counterpart Kairat Kelimbetov in Astana earlier this month, vowing to enhance bilateral cooperation in energy, trade, communication and other fields.

Wang suggested enhancing the China-Kazzkhstan interconnection by the rails and a trans-continental highway that links China with Europe.

China and five central Asian countries have been deepening trade and economic cooperations in recent years. The total trade volume between China and central, west, and south Asian countries increased from 25.4 billion U.S. dollars to more than 370 billion, up about 30 percent annually.

In particular, trade between Xinjiang and five central Asian countries reached a historical high of 16.98 billion U.S. dollars last year, according to the customs figures.

Observers said the railway will also help the border city of Korgas become a key logistics hub with a network of highways, railways and pipelines.

Since 2010, the central government has been redoubling the efforts to build Xinjiang into a regional economic center, eyeing its geological closeness to central Asia and the region’s abundant natural resources including oil, coal and natural gas.”

via China opens second railway to Kazakhstan – Xinhua |


* China, Central Asian countries hold cooperation forum

The proposed Central Asian Union, covering the...

Xinhua: “China and five Central Asian nations held a cooperation forum on Monday in Tongxiang of east China’s Zhejiang province. The forum, themed around mutual trust, cooperation and harmonious development, focused on pragmatic, social and cultural cooperation between China and Kyrgyzstan, Tajikistan, Kazakhstan, Turkmenistan and Uzbekistan.

It also saw the signing of a declaration on further promoting their cooperation. Bai Lichen, vice chairman of the Chinese Peoples Political Consultative Conference, Chinas top advisory body, attended the opening ceremony and met with representatives from the five Central Asian countries.”

via China, Central Asian countries hold cooperation forum – Xinhua |

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