Posts tagged ‘The World Bank’

23/06/2015

China’s Air is Much Worse Than India’s, World Bank Report Shows – China Real Time Report – WSJ

India’s capital may have the worst air quality in the world on some days, but a new report shows that nationally, the air in the world’s second-most-populous country is far less polluted than in China.

In fact, China’s air is more than twice as dirty as India’s, according to recently released estimates by the World Bank.

The bank’s “Little Green Data Book” of environmental indicators, unveiled last week, included a new gauge of air pollution. To the standard measures of environmental health–including forest cover and carbon emissions–it added PM 2.5 levels, which measure airborne particles smaller than 2.5 microns.

These tiny pollutants are microscopic and can enter the lungs and even pollute a person’s blood stream. They are linked to severe health problems including lung cancer.

“These data show that in many parts of the world exposure to air pollution is increasing at an alarming rate and has become the main environmental threat to health,” the forward of the World Bank book said. “Exposure to ambient PM 2.5 pollution in 2010 resulted in more than 3.2 million premature deaths globally.”

Using this measure, India’s air is far from clean. The World Bank data put the South Asian nation’s annual mean PM 2.5 at 32 micrograms per cubic meter. That’s three times the bank’s recommended level of 10 or less, but in line with the global average. It is also well below China’s mean annual exposure of 73 micrograms per cubic meter. .

Of the 200 countries in the book, only the United Arab Emirates did worse than China.

India’s environmental rankings fared better than China’s in other categories as well. India’s energy use and carbon emissions per capita were less than one third of those in China.

India’s PM 2.5 air pollution average is on par with other fast-growing Asian countries, but will likely rise as its economy expands.

The World Bank data showed that air quality deteriorates as countries evolve from lower income levels and become more affluent. Air only starts to improve once countries attain high-income status, which the World Bank defines as having gross national income per capita of $12,746 or more.

via China’s Air is Much Worse Than India’s, World Bank Report Shows – China Real Time Report – WSJ.

12/06/2015

India to Widen Its Growth Lead Over China, World Bank Says – India Real Time – WSJ

India will continue to be the world’s fastest growing big economy and expand its lead on China over the next two years, the World Bank said Wednesday.

The bank expects global growth to slow this year, only to rebound next year. However, it expects India’s gross domestic product expansion to accelerate to 7.4% this calendar year, 7.8% next year and 8.0% in 2017.

Over the same three years, the multi-lateral lender predicts China’s growth to slow from 7.1% this year to 7.0% in 2016 and 6.9% the year after that.

While, India’s GDP expansion was faster than China’s during the third quarter of last calendar year and the first quarter of this year, it looks as if 2015 will be the first full calendar year India has outpaced China in decades.

Much of India’s progress on paper has more to do with a radical and controversial rejigging of how it calculates GDP, economists say.

To continue to outpace China—and improve the lives of India’s own billion-person populace—the South Asian nation needs to work harder to revamp its economy and build infrastructure, the World Bank said.

“To the extent that credible reform agendas boost investor sentiment, they will also help create a virtuous cycle of stronger investment (including foreign investment) and output growth in the short term,” the bank said in its Global Economic Prospects Report. “If, however, reforms stall, this could result in significantly lower investment and growth than projected in the baseline.”

Meanwhile the other three BRICS countriesBrazil, Russia and South Africa—do not seem to be living up to the hype from the days that acronym was created.  The World Bank predicts that the Brazilian and Russian economies will both shrink this year while South Africa’s will only expand by 2%. Things will improve for the three economies in the next two years but even then, they will each only see their GDPs expand by 2.5% or less in 2017.

via India to Widen Its Growth Lead Over China, World Bank Says – India Real Time – WSJ.

30/09/2014

Water consumption: A canal too far | The Economist

THREE years ago the residents of Hualiba village in central China’s Henan province were moved 10km (six miles) from their homes into squat, yellow houses far from any source of work or their newly allocated fields. These days only the very young and very old live there. Close to their old farms, a giant concrete canal now cuts a swathe. From October 31st the channel will gush with water flowing from China’s lush south to the parched north.

The new waterway is part of the biggest water-diversion scheme in the world: the second arm of what is known as the South-North Water Diversion Project. This is designed to solve an age-old imbalance. The north of China has only a fifth of the country’s naturally available fresh water but two-thirds of the farmland. The problem has grown in recent decades because of rapid urban growth and heavy pollution of scarce water supplies.

The result is a chronic shortage. The World Bank defines water scarcity as less than 1,000 cubic metres (35,300 cubic feet) of fresh water per person per year. Eleven of China’s 31 provinces are dryer than this. Each Beijing resident has only 145 cubic metres a year of available fresh water. In 2009 the government said that nearly half the water in seven main rivers in China was unfit for human consumption. All this has encouraged ever greater use of groundwater. Much of this is now polluted too.

In 1952 Mao Zedong suggested the north could “borrow” water from the south. After his death China’s economic boom boosted demand for such a scheme and provided the cash to enable it. In 2002 the diversion project got under way. An initial phase was completed last year. This involved deepening and broadening the existing Grand Canal, which was built some 1,400 years ago, to take 14.8 billion cubic metres of water a year more than 1,100km northward from the Yangzi river basin towards the port city of Tianjin.

In late October the second, far more ambitious and costly route is due to open. This new watercourse, over a decade in the making, will push 13 billion cubic metres of water more than 1,200km from the Danjiangkou dam in the central province of Hubei to the capital, Beijing. The aim is to allow industry and agriculture to keep functioning; already in 2008 Beijing started pumping in emergency supplies from its neighbouring province, Hebei. The new canal will help avert an imminent crisis. But the gap between water supply and demand will remain large and keep growing.

The transfer will supply about a third of Beijing’s annual demand. A spur of the canal will provide an even greater proportion of Tianjin’s. But these shares will shrink over time. Even if people use less water, population growth, the expansion of cities and industrialisation will increase China’s overall demand. By lubricating further water-intensive growth the current project may even end up exacerbating water stress in the north.

Shifting billions of cubic metres across the country has caused huge disruption. The government says it has moved 330,000 people to make way for the central route. Laixiang Sun of the University of Maryland in America reckons the number uprooted is at least half a million. There will also be health and environmental costs. Diverting river-water northward could promote the spread of diseases common in the south, particularly schistosomiasis, a debilitating snail-borne disease. Reduced flow in the Yangzi may make coastal water supplies vulnerable to intrusion by seawater and increase the potential for drought.

The financial cost is also high. Mr Sun puts the cost of the project at more than $62 billion—far higher than the original $15 billion price tag. His estimate does not include the running of the project or the building of 13 new water-treatment plants to clean the water.

By increasing supply, the government is failing to confront the real source of the problem: high demand for water and inefficient use of it. Chinese industry uses ten times more water per unit of production than the average in industrialised countries, according to a report by the World Bank in 2009. A big reason for this is that water in China is far too cheap. In May 2014 Beijing introduced a new system that makes tap water more expensive the more people use. But prices are still far from market levels. Officials turn a blind eye to widespread extraction of un-tariffed groundwater by city dwellers and farmers, despite plummeting groundwater levels.

Raising the price would cut demand and encourage more efficient use. It should also help lure industry away from water-scarce areas where prices would be set at higher rates. Arid areas that are forced by the government to pipe water into desiccated cities like Beijing could offset their losses by charging higher tariffs.

via Water consumption: A canal too far | The Economist.

02/05/2014

Maybe China’s Currency Isn’t Undervalued After All – China Real Time Report – WSJ

Note to rest of the world: Stop bugging China on undervaluation of its currency.

The World Bank’s re-estimation of global pricing is leading to a second day of questioning of economic verities. Yesterday, a number of publications used the new numbers to pronounce that the U.S. would next year lose its century-long ranking as the world’s number one economy. (China Real Time came to a more nuanced—and skeptical—conclusion.)

Today, two economists at the Peterson Institute for International Economics, perhaps the world’s top econ think tank, used the numbers to conclude that the Chinese yuan was no longer undervalued, as it has been for decades.

“This estimate is of potential historic significance,” conclude Martin Kessler and Arvind Subramanian. “The end of Chinese mercantilism—and relief for the rest of the world—may be in sight,” they write in a Peterson blog post.

To review, the World Bank re-estimated the size of different economies using a calculation known as purchasing power parity (PPP), which tries to estimate relative wealth by looking at differing prices in different countries for the same goods or services. Such comparisons usually show that developing countries aren’t as poor as they seem.  For instance: A haircut in Beijing costs far less than a haircut in Boston, which means the wealth of a Chinese person with a full head of hair –- let’s call him Mr. Wang—is greater than usually understood.

Cheaper in China: haircuts. Not cheaper: iPhones, BMWs and other imports. Reuters

But Mr. Wang doesn’t buy things in PPP; he buys them using actual currency. When he leaves the hair salon and buys an import, say a U.S. iPhone or a German car, his yuan are converted into dollars or euros at the current exchange rate. Given that Chinese earn far less money than Americans or Germans on average, exchange rate comparisons accentuate the gap between developing and developed nations. Most comparisons of international power are done using the prevailing exchange rate, not PPP.

Now, back to the value of the yuan.

Messrs. Kessler and Subramanian use the new PPP calculations to estimate that between 2011 and March 2014 China’s per-capita GDP grew about 13 percentage points faster than the U.S., which they say should translate into a currency appreciation of around 3.2%. Since the actual appreciation was 7%, that suggests the yuan appreciated too rapidly during that period and made up for some of the time when the yuan didn’t strengthen rapidly enough.  “The renminbi in 2014 is thus fairly valued,” they conclude.

Any estimate of a currency’s valuation is a black art. Different economists use different methods and come up with different conclusions, especially if there isn’t an obvious undervaluation or overvaluation.

It’s hardly surprising that many countries accuse the others of deliberately undervaluing their currencies, and use estimates of currency valuation to make their point. Nearly every government has the same strategy for growth — export more — and a cheap currency helps exporters.

via Maybe China’s Currency Isn’t Undervalued After All – China Real Time Report – WSJ.

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