Reuters blog archive
By Edward Chancellor
The author is a financial historian, journalist and investment strategist. The opinions expressed are his own.
Has the impetus for economic reform in China ground to a halt? Many China-watchers think so, citing state banks’ favouritism of state-owned enterprises (SOEs), the continuing monopoly power of state-owned “national champions,” and the effects of the massive fiscal and credit stimulus launched after the 2008 collapse of Lehman Brothers. Nicholas Lardy will have none of this.
In his new book, ”Markets over Mao: The Rise of Private Business in China,” a veteran China economist at the Peterson Institute, argues that the private sector in China continues to grow at the expense of the state-controlled parts of the economy. The data supports his claims. The trouble is that since Chinese national statistics are generally vague and sometimes downright unreliable, they can be used to justify wildly contrasting views of China’s economy.
There is no disagreement that the private sector in China has grown marvellously since economic reforms were initiated in the late 1970s. The markets for labour and the vast majority of inputs have been liberalised. There has been a huge influx of foreign investment. Private firms now account for around two-thirds of China’s economic output and an even greater share of industrial and manufacturing production.
from Ian Bremmer:
In a western democracy like the United States, we assume that the best time for a leader to accomplish something is in the first year of his first term. The election has just ended, the opposition is still scattered, and the legislative mandate is intact. Everybody still talks about Franklin Delano Roosevelt’s first 100 Days for a reason.
In authoritarian governments, like China’s, it’s supposed to be different. Steering such a large bureaucracy takes time, as all the moving pieces catch up with one another. What matters is minimizing risk surrounding the transfer of power, and then engaging in a slow buildup of consensus. And yet, Xi Jinping is proving the conventional wisdom wrong. After just six months at the helm, Xi is already clearly on track to accomplish far more than his predecessor Hu Jintao.
from Global Investing:
Recent wild swings in Japan's financial markets -- stocks, bonds and the yen -- make Japan look almost like an emerging country.
Back in the 19th century, Japan was an emerging country, with its feudal society based largely on farming.
from Financial Regulatory Forum:
NEW DELHI, Aug 23 (Reuters) - With India's main opposition party continuing to object to bills on tax reform and opening up the $150 billion nuclear power market, several reforms proposed by the coalition government may be delayed.
The Congress Party-led coalition government has a slim majority in the lower house of parliament, but not in the upper house. The coalition is also composed of several small and fickle parties who are often suspicious of reforms, making the passage of bills in parliament subject to torturous negotiations.
from Andrew Marshall:
Strong growth and political stability made Indonesia southeast Asia's most attractive investment destination last year, but the outlook is threatened by a struggle between reformers and powerful vested interests.
Top reformer Sri Mulyani Indrawati's decision to quit in May, fed up with the pressure from the political old guard, was a setback. But her successor as finance minister, Agus Martowardojo, is no pushover, so prospects for continuing her work and achieving an investment grade credit rating are strong.