Changing China

Giant on the move

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from Global Investing:

Slow and steady wins the race: Malkiel

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Investment guru Burton Malkiel, author of A Random Walk Down Wall Street, has revealed at a briefing that Chinese equities form the largest part of his personal satellite portfolio, although the core remains in low-cost index funds.

Malkiel, in town to beat the drum for Vanguard's index funds, argued that China will be the biggest economy in the world in 20 years' time, but most investors are underweight the emerging giant. "I'm a real expert on China - I've been there five times," he joked, but made the serious point that most investors have a home bias.

"In general, people are inadequately diversified," he said. "When people ask me how much international diversification they should have, I say: A lot more!" He conceded that asset class diversification had not been much help last year when markets collapsed in a great unwinding, but added that gold and US Treasuries had provided some relief.

Malkiel believes investors would do much better if they didn't try to time the market - because they invariably get it wrong.

from India Insight:

Xinjiang – the spreading arc of instability

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China's troubled Xinjiang region shares borders with eight countries, which is perhaps one reason President Hu Jintao dropped out of the G8 summit to head home, underscoring the seriousness of the situation and the need to quickly bring the vast oil-rich region under control.

Xinjiang touches Russia, Pakistan, Afghanistan, India, Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, besides the Tibet Autonomous Region.

from MacroScope:

Why the BRICS like Africa

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There is little doubt that the BRICs -- Brazil, Russia, India and China -- have become big players in Africa. According to Standard Bank of South Africa, BRIC trade with the continent has snowballed from just $16 billion in 2000 to $157 billion last year. That is a 33 percent compounded annual growth rate.

What is behind this? At one level, the BRICs, as they grow, are clearly recognising commercial and strategic opportunities in Africa. But Standard Bank reckons other, more individual, drivers are also at play.

from India Insight:

India, China leaders move to ease new strains in ties

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While Indian Prime Minister Manmohan Singh's meeting with Pakistani President Asif Ali Zardari in Russia captured all the attention,  Singh's talks with Chinese President Hu Jintao may turn out to be just as important in easing off renewed pressure on the complex relationship between the world's rising powers.

India said this month it will bolster its defences on the unsettled China border, deploying up to 50,000 troops and its most latest Su-30 fighter aircraft at a base in the northeast.

from Pakistan: Now or Never?:

More churning in South Asia : India bolsters defences on China border

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Power play in South Asia is always a delicate dance and anything that happens between India and China will likely play itself out across the region, not the least in Pakistan, Beijing's all weather friend.

And things are starting to move on the India-China front. We carried a report this weekabout India's plan to increase troop levels and build more airstrips in the remote state of Arunachal Pradesh, a territory disputed by China.  New Delhi planned to deploy two army divisions, the report quoted Arunachal governor J.J. Singh as saying.

From Canada, looking back

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I first visited China in June 1997.  It was eight years after the Tiananmen crackdown, weeks before the Hong Kong Handover back to China marking the end of British rule, and over a decade before the 2008 Summer Olympics. It was a family trip — my parents were looking forward to a college reunion with classmates they hadn’t seen in decades and I had just finished my second year of university. I was looking forward to finally seeing the place I’d heard so much about.

Born and raised in Canada, I grew up listening to stories of the past — lessons in history, humanity, tragedy and survival. And like many children of immigrant families, there is a constant search for a balance and a place between the different worlds that shape our identity.

“Is this an anonymous interview?”

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I spent a year working at a university in China in 2002. With the anniversary of the Tiananmen crackdown looming, I wanted to solicit some thoughts from my former students. Unusually — but perhaps not surprisingly in retrospect — I did not hear back. I did hear from friends who are currently studying abroad. The following views are from one 27-year-old originally from Fujian province, who came two years ago to do a Master’s degree in Canada. Anonymity was requested.

Caption: Undergraduates stand in front of a Chinese national flag after three minutes of mourning for Sichuan earthquake victims at Fudan University in Shanghai May 12, 2009. REUTERS/Aly Song

Tightening screws on Tiananmen

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Security on Beijing’s Tiananmen Square is always tight.
 
But I knew that today it was going to be particularly so when, upon emerging from the subway station, I was faced with three police vans and literally hundreds of security personnel, all on guard against any kind of disturbance ahead of the 20th anniversary of 1989′s bloody crackdown on pro-democracy demonstrators in Beijing.
 
Nervously I made my way to one of the square’s entrances, wondering if I would even be allowed to enter.
 
I put my bag on the X-ray machine, was briefly frisked by police with metal detectors, and cleared to go on my way.
 
The square was full of tourists, as usual. What was different was the hordes of uniformed police, military police and plainclothes security every few metres.
 
The plainclothes officers were painfully obvious, shuffling awkwardly in T-shirts and tracksuit bottoms, their crew cut hairstyles and poorly hidden walkie-talkies distinguishing them from ordinary visitors. They were also all carrying the same brand of bottled water.
 
Everytime I tried talking to someone, a police officer or one of the guards began hovering behind me. Finally I was able to chat with a trinket seller, who, talking in a low voice, complained
that the security was ruining her business.
 
“June 4 is tomorrow,” she said simply.
 
At that point one of the crew-cut men marched over and told the lady to stop talking to me.
 
By this stage. I had had enough and began heading back towards the subway station, passing on my way a foreign television crew. A policeman was telling them in no uncertain terms that they could not film in the square.
 
I felt lucky that nobody had stopped me. I’m sure the police knew I was there though, and why I had gone.

Photo caption: Chinese security personnel try to stop pictures from being taken as they check the documents of the photographer at Beijing’s Tiananmen Square on June 3, 2009. Chinese security forces blanketed Tiananmen Square on Wednesday ahead of the 20th anniversary of the June 4 crackdown on pro-democracy protesters. REUTERS/Reinhard Krause

from Pakistan: Now or Never?:

India, Pakistan and the rise of China

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India has been fretting for months that it could be pushed into the background by the United States' economic dependence on China and by the renewed focus on Pakistan by President Barack Obama's administration.  That anxiety appears to have increased lately -- perhaps because the end of the country's lengthy election campaign has opened up space to think more about the external environment -- and is focusing on China.

In an interview with the Hindustan Times, Indian Air Chief Marshal Fali Homi Major said China posed a greater threat than Pakistan.  “China is a totally different ballgame compared to Pakistan,” he was quoted as saying. “We know very little about the actual capabilities of China, their combat edge or how professional their military is … they are certainly a greater threat.”

from The Great Debate:

Time for China to act on foreign listings

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wei_gu_debate-- Wei Gu is a Reuters columnist. The opinions expressed are her own --

China has talked about plans to allow foreign companies to float on its domestic stock markets for at least a decade, but that's all there has been: talk.

Now would be a good time to convert some of that talk into action. Beijing has been struggling with its own investment strategies: the state gets feeble returns on the U.S. Treasury bonds it owns, and its equity stakes in foreign financial firms are well under water.

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