Posts Tagged ‘China’
Pic of the Day
Click to enlarge
Yueyaquan Crescent Lake in Dunhuang, north west China is completely surrounded by sand dunes. The arid region barely gets any rain each year
Delightful success at preservation.
Long live China’s slowdown!
At 7.7%, China’s annual GDP growth in the first quarter of this year was slower than many expected. While the data were hardly devastating relative to a consensus forecast of 8.2%, many (including me) expected a second consecutive quarterly rebound from the slowdown that appeared to have ended in the third quarter of 2012. China doubters around the world were quick to pounce on the number, expressing fears of a stall, or even a dreaded double dip.
But slower GDP growth is actually good for China, provided that it reflects the long-awaited structural transformation of the world’s most dynamic economy. The broad outlines of this transformation are well known – a shift from export- and investment-led growth to an economic structure that draws greater support from domestic private consumption. Less well known is that a rebalanced China should have a slower growth rate – the first hints of which may now be evident.
A rebalanced China can grow more slowly for one simple reason: By drawing increased support from services-led consumer demand, China’s new model will embrace a more labor-intensive growth recipe. The numbers seem to bear that out. China’s services sector requires about 35% more jobs per unit of GDP than do manufacturing and construction – the primary drivers of the old model.
That number has potentially huge implications, because it means that China could grow at an annual rate in the 7-8% range and still achieve its objectives with respect to employment and poverty reduction…
…Capital-labor substitution is at the heart of modern productivity strategies for manufacturing-based economies. But it left China in a deepening hole: increasingly deficient in jobs per unit of output, it needed more units of output to absorb its surplus labor. Ultimately, that became more of a problem than a solution…
It is premature, of course, to conclude that a services-led transformation to slower growth is now at hand. The latest data hint at such a possibility, with the tertiary sector (services) expanding at an 8.3% annual rate in the first quarter of this year – the third consecutive quarter of acceleration and a half-percentage point faster than the 7.8% first-quarter gain recorded by the secondary sector (manufacturing and construction). But it will take more than a few quarters of mildly encouraging data to validate such an important shift in the Chinese economy’s underlying structure…
Financial markets, as well as growth-starved developed economies, are not thrilled with the natural rhythm of slower growth that a rebalanced Chinese economy is likely to experience. Resource industries – indeed, resource-based economies like Australia, Canada, Brazil, and Russia – have become addicted to China’s old strain of unsustainable hyper-growth. Yet China knows that it is time to break that dangerous habit.
Uncle Sugar and agitprop flunkies like the NY TIMES have a problem with consumer-led growth in China. It defies Cold Warrior slander. And China’s surplus saving will stay home instead of being stuffed into dollar-based assets such as US Treasury bills.
As China embraces slower growth as a natural consequence of its rebalancing, Stephen Roach notes that “the rest of the world will need to figure out how to cope when it does”.
When animals attack – sort of
Click to enlarge – REUTERS/China Daily
Staff take part in a preventive exercise against animal escape in order to enhance its capability of emergency handling at a zoo in Taiyuan, Shanxi province.
China on the move – first steps
The debate is over. After six years of weighing the options, China is now firmly committed to implementing a new growth strategy. At least, that’s the verdict I gleaned from the just-completed annual China Development Forum, long China’s most important dialogue with the outside world.
There were no surprises in the basic thrust of the strategy – a structural shift in China’s investment- and export-led growth model toward a more balanced consumer-based and services-led economy. The transformation reflects both necessity and design.
It is necessary because persistently weak global growth is unlikely to provide the solid external demand for Chinese exports that it once did. But it is also essential, because China’s new leadership seems determined to come to grips with a vast array of internal imbalances that threaten the environment, promote destabilizing income inequality, and exacerbate regional disparities.
The strategic shift is also a deliberate effort by Chinese policymakers to avoid the dreaded “middle-income trap” – a mid-stage slowdown that has ensnared most emerging economies when per capita income nears the $17,000 threshold (in constant international prices). Developing economies that maintain their old growth models for too long fall into it, and China probably will hit the threshold in 3-5 years…
Pic of the Day
Click to enlarge — ChinaFotoPress via Getty Images
Soldiers do morning exercises in Heilongjiang province in the far north-east of China, where the temperature has dropped to -30C.
Satellites put small farms on China’s map of progress
The bare light bulbs, unheated rooms and elderly residents of the whitewashed village of Yangwang in eastern China make it seem an unlikely place for an experiment in cutting-edge satellite technology.
But the tiny village in Anhui Province was home to a pilot project that for the first time mapped farmers’ land, putting Yangwang on the front line of China’s efforts to build a modern agricultural sector that can underpin the country’s food security — a policy priority for the Communist Party.
The mapping is a tedious but crucial task to make farmers feel more secure about their rights so that they become more willing to merge fields into larger-scale farms. It could also help protect them from land grabs by local officials, a leading cause of rural unrest…
China’s annual rural policy document, released last week, calls for farmland titles to be defined nationwide during the next five years. It is a technical challenge that could cost $16 billion…
The satellite mapping will replace current deeds that often rely on descriptions like “Yang’s field borders Wang’s to the east.” Such colloquial formulations make villagers reluctant to remove dirt mounds that separate the plots for fear that they will no longer be able to identify what is theirs.
The mapping information will be compiled in searchable, centralized registries, allowing farmers to confirm what they own and giving officials better land-use information…
The project carries a hidden price tag for Beijing, which subsidizes grain production, fertilizer use and irrigation at an average rate of 150 renminbi per mu. The subsidies are based on area estimates that date from a time when farmers regularly underreported the size of their plots to avoid grain taxes…
Matou Township alone gained 45 percent more registered area with the more accurate mapping, to the delight of township officials and residents hopeful that greater subsidies would follow…
The berms that villagers use to identify their plots could disappear when fields are merged, he said, leaving villagers in need of some other way to prove what is theirs.
Just as China moved the whole nation’s economic culture from the Middle Ages to the 20th Century in a span measured by decades, now they have to change everything from mindset and attitude – adding precise measurement – to enable moving rural incomes in the direction of urban economies. That has already started; but, skipping more centuries with the aid of satellite GPS systems will accelerate the process.
World’s longest high-speed railway debuts in China
The world’s fastest trains ready to roll — Click to enlarge
The world’s longest high-speed rail line, which spans over half of China, began operating on Wednesday, further cementing the country’s high-speed railway development ambitions.
Two trains departed from stations in Beijing and Guangzhou at 9 a.m. and 10 a.m., respectively, to mark the opening of the 2,298-km line.
Running at an average speed of 300 km per hour, the new route cuts travel time between Beijing and Guangzhou from over 20 hours to about eight.
A total of 155 pairs of trains will run on the new line daily and alternative schedules have been made for weekends and peak travel times, according to the Ministry of Railways…
There will still be 183 pairs of trains running daily on the old Beijing-Guangzhou line that runs parallel to the high-speed line, allaying concerns that the new line will increase passengers’ travel costs.
A second-class seat on the new high-speed line costs $138 while a sleeper on the old line sells for around half that amount…
With the opening of the Beijing-Guangzhou high-speed line, China now has more than 9,300 km of high-speed rails in operation.
The new line is one of four north-south lines expected to serve as a backbone for the country’s planned high-speed railway network, which also features four east-west lines…
Research by the Development Research Center of the State Council showed that the Beijing-Zhengzhou section of the new high-speed line will add $44 billion to the country’s GDP by 2030…
The full operation of the Beijing-Guangzhou high-speed railway will accelerate China’s urbanization progress, as it will help large cities to better perform their role as central cities, boost the development of medium-sized cities along the route and foster the birth and development of new small cities and towns, said Sun Shuli, a chief engineer responsible for designing sections of the new line.
I’m a fan of any kind of railroad that runs quiet and reasonably fast. Our own shiny new railroad connecting north/south in central New Mexico is quiet, on time, and not especially fast. Though it has a roadbed capable of high speeds.
I sort of knew the opening run of the bullet trains was happening, yesterday [US time], from mentions on the news on CCTV9; but, wasn’t paying close attention. It was a kick when I switched to the channel mid-afternoon and realized I was watching a live feed of the train setting forth from Beijing’s central RR station. Cameras along the track and inside the engine and passenger cars showed the kind of excitement I know I would have felt to be on such a trip.
Obama and his administration have a clear idea of the benefits of high-speed rail to our economy and logistics in general. Congress and conservatives owned pretty much lock, stock and barrel by motor freight and fossil fuel industries couldn’t care less. I doubt if we’ll see any success at repairing existing infrastructure much less upgrades to our rail network – in this century.
Russia set to halt imports of U.S. beef, pork
U.S. pork and beef exports to Russia could come to a halt on Saturday following Moscow’s requirement that the meat be tested and certified free of the feed additive ractopamine…
The move could jeopardize the more than $500 million a year in exports of U.S. beef and pork to Russia…
The United States asked Russia, the sixth-largest market for U.S. beef and pork, to suspend the requirement even as it warned domestic meat companies that Moscow might reject their pork shipments that contained ractopamine and stop buying pork from processing plants that produced pork with the drug.
Ractopamine is used as a feed additive to make meat leaner, but countries such as China have banned its use despite scientific evidence that it is safe…
The U.S. Meat Export Federation told its members by email that since the U.S. Department of Agriculture had no testing and certification program in place for ractopamine, the Russian requirement could effectively halt U.S. pork and beef exports to the country by Saturday…
The USDA’s Food Safety and Inspection Service, in a note posted on its website on Friday afternoon, said: “Exporters are cautioned that Russia may reject U.S. pork shipments and delist producing establishments if ractopamine residues are detected in exported product.”
FSIS also said at the moment it was not requiring meat companies for documentation attesting their pork was free of ractopamine before issuing its export certification.
Are there requirements for measuring ractopamine sold for consumption to Americans, eh?
Analysts said the Russian move was linked to the Senate’s passage of the trade bill and blah, blah, blah…
Tyson Foods…a leading U.S. meat company, and agriculture powerhouse Cargill…declined to comment on how a halt in exports would impact them, but both noted the U.S. and Russian governments were in discussions.
Yes, there are 100 countries including the European Union rejecting pork with ractopamine residues. Mother Jones wrote a delightful article in February when Taiwan rejected US shipments – entitled “US Pushes the World to Import Our Dodgy Meat” – and if you’d like some delightful midnight snack reading matter, try this report from the USDA describing the symptoms of some pigs tested with the stuff.
How long can you hold out against construction?
REUTERS/China Daily
A car stops beside a house in the middle of a newly built road in Wenling, Zhejiang province, China…An elderly couple refused to sign an agreement to allow their house to be demolished. They say that compensation offered is not enough to cover rebuilding costs, according to local media. Their house is the only building left standing on a road which is paved through their village.
The Reuters photographer says they reached an acceptable price a few days later. They surely drove the road-building crew crazy. 
Holler at your Congress-critter to support Bernie Sanders' bill to 
