Changing China

from MacroScope:

Unlocking the Yuan

Reuters's top news and innovation teams have put together a web site on the yuan and the debate over its revaluation. Particularly worth a look after the weekend's statement by China that it would allow more flexibility in its currency exchange. You can access it here, but it looks like this:

from MacroScope:

Spend Save Man Woman

Far from being lauded as a virtue, China's high savings rate has been blamed for the economic imbalances underlying the global financial crisis. The criticism being that the Chinese spend too little and rely too much on exporting to Western consumers.

The IMF and World Bank have long called for Beijing to ramp up social spending so its citizens will feel less need to save for a rainy day and instead consume more.

But in their intriguingly named paper,  'A Sexually Unbalanced Model of Current Account Imbalances', New York-based researchers Du Qingyuan and Wei Shang-Jin suggest China's gender imbalance could also be a significant factor in the persistence of its high savings rate.

The pair argue that intensifying competition in the Chinese marriage market is causing men -- or indeed parents with sons -- to raise their savings rates to improve their relative allure among a shrinking pool of potential brides.

A draconian one-child policy, coupled with a traditional preference for male offspring and the availability of selective-sex abortion, has left the country of 1.3 billion facing its most serious demographic crisis.

An estimated 119 boys are born per 100 girls and the Chinese Academy of Social Sciences has warned that this could leave more than 24 million Chinese men of marrying age without spouses by 2020.

This anxiety over the worsening marriage prospects for men could explain why Chinese household savings as a share of disposable income has risen from 16 percent in 1990 to 30 percent in 2007.

from Pakistan: Now or Never?:

Brzezinski on U.S.-India, Pakistan, Afghanistan and China

The Real News had an interview last week with former National Security Adviser Zbigniew Brzezinski who talks about how U.S. policy is playing out across Afghanistan, Pakistan, India and China. The second part of the interview covers his support for the mujahideen fighting the Soviets in Afghanistan, but here is what he has to say about Pakistan and the regional dynamics: 

"We are in Afghanistan because we have been there for 8 years, now getting out is easy to say, but by now if we get out, quickly, the question arises, what follows? Is there going to be again a very sort of militant regime in Afghanistan which might tolerate al Qaeda's presence and beyond that is now a new issue, namely the conflict in Afghanistan has come to be connected with the conflict in Pakistan. Pakistan is an important country of 170 million people which has nuclear weapons, nuclear weapons, and delivery systems, delivery systems to the entire region around so we have to think much more responsibly on how to deal with this problem ... "

"We have to find a way of helping Pakistan cope with its problem in Pakistan but also help us cope with our problem in Afghanistan and that raises an extraordinarily complicated question, namely how do we give the Pakistanis the reassurance they want that if we leave Afghanistan there is not a regime in Afghanistan other than the Taliban which is more friendly to India than to Pakistan."

Asked about whether the linchpin of U.S. strategy in the region was based on an alliance between the United States and India:

"Well if it is then I don't understand what the Eurasia strategy is because if that is the alliance, then we are not going to solve the Afghan question and if we don't solve the Afghan question but the conflict continues, how will the relationship between China and Pakistan, which is quite close, be affected by an American-Indian alliance, and what will that do to the prospects for stability on a larger global scale between China and India?"

You can see the full interview here:

http://www.youtube.com/watch?v=bfikRg2jE6o

from Pakistan: Now or Never?:

India, Pakistan and the rise of China

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.”

The Mint newspaper followed up with a editorial calling China "perhaps the gravest external threat" to India's security. "That India is in an unstable neighbourhood is clearer than ever this summer," it said. "But troubles from Pakistan, Sri Lanka or Nepal pale when compared with China."

The increased anxiety has been driven by the end of the war in Sri Lanka, where the government's victory was attributed partly to a supply of Chinese weapons, and where China has been building a new port on the island's southern coast.

"This is part of a broad move by China into the Indian Ocean, which India has traditionally considered its sphere of influence," said British newspaper The Times. Chinese engineers are building another port at Gwadar in Pakistan; roads are being cut or improved through Burma to help trade routes between Yunnan province in China and the Indian Ocean; ties are being improved with island nations such as the Seychelles; surveillance stations are being sited or upgraded on Burmese islands."

But even without the Sri Lankan trigger, Indian analysts have suggested that India may no longer enjoy the favoured position that developed under former president George W. Bush, when Washington forged close ties with Delhi, in part as a counterweight to China.  Facing the twin challenges of financial crisis and a military stalemate in Afghanistan, the Obama administration is dependent on India's two main rivals -- China to pay for American debt and Pakistan to help it defeat the Taliban.

‘Swine’ flu in world pig center

By Niu Shuping and Ken Wills

Nevermind that the H1N1 “swine” flu, which has killed more than 150 people in Mexico, is not directly caused by pigs and has so far not led to any outbreaks among pigs.

Nevermind that the World Health Organization has ruled out any risk of infection to humans from eating pork.

Nevermind that the influenza-A virus contains DNA from avian and human as well as swine H1N1 viruses, but unfortunately (for the pork industry) has been tagged as “swine flu” by global health authorities and therefore by the media. 

The net result is that, amid the confusion and potential risks of appearing unprepared, at least six countries have decided to panic over pigs, imposing import bans on live pigs and pork products from Mexico and the United States.

Indeed, the country with the largest pig population in the world — China — is going full-bore on a perceived threat to the domestic pig industry.

China’s quaratine authority took immediate action by banning pork imports from Mexico as well as 3 states in the United States, vowing to destroy any pigs that arrived at its borders. On Tuesday, in a meeting hosted by Premier Wen Jiabao, China’s cabinet worked out an 8-point flu prevention strategy, including one to strengthen inspection to detect any outbreaks of swine flu among pigs and to strictly supervise trade of live pigs as well as some pig breeding areas.

from Global News Journal:

North Korean Revolutionary Tunes Sink to Bottom of the Sea

                                              By Jon Herskovitz

North Korea says somewhere up in the sky, a satellite it launched at the weekend is beaming to earth two revolutionary paeans: "Song of General Kim Il-sung" for the founder of the reclusive state and "Song of General Kim Jong-il," for the son who succeeded him when he died.

U.S. and South Korean officials said the North Korean rockets did not send anything into space and all pieces of the rocket crashed into the sea, including the claimed satellite, which might have been North Korea's oversized attempt to replicate an iPod.

The North Korean report was a a bit of a blast from the past because North Korea made a similar claim in 1998 that it had sent a satellite into orbit playing the exact same two songs.

There is far more to North Korea's hit parade of songs than the two homilies it said were aboard its rocket. This is a country where soldiers sing, farmers sing, the hundreds of thousand gather in the centre of the capital Pyongyang to dance in special days and a refined teenage girl always has her accordion ready to play a tune.

from Pakistan: Now or Never?:

In Afghanistan, China extends its reach

Afghanistan sits on one of the largest mineral deposits in the region, the country's mines minister told Reuters in an interview this month.

And the Chinese are already there, braving the Taliban upsurge and a slowing economy at home to invest in the vast Aynak copper field south of Kabul, reputed to hold one of the largest deposits of the metal in the world.

In what is the biggest foreign investment in Afghanistan, China  last year committed  nearly $2.9 billion to develop the Aynak field including the infrastructure  that must be built with it such as a power station to run the operation and a railroad to haul the tons of copper it hopes to extract.

Despite Afghanistan's deteriorating security including in Logar province which is where the Aynak reserves are located and which serves as one of the gateways  to Kabul,  China has said it will carry out the project, the Afghan mines minister Mohammad Ibrahim Adel said.

China Metallurgical Group,  the state-run firm which won the 30-year concesssion along with Jiangxi Copper Co, has already begun paving a dirt road near the mine, according to a report by McClatchy Newspapers this month. Interestingly, the report notes that the U.S. military, which has set up bases in the Logar area to strangle Taliban infiltration into Kabul, has ended up indirectly "providing security that will enable China to exploit one of the world's largest unexploited deposits of copper, earn tens of billions of dollars and feed its voracious appetite for raw materials."

China has operated in the shadows in Afghanistan, compared with Pakistan, India and Iran which  are engaged in a much more public battle for influence there.

China assured of first place in medals table

There’s been a lively discussion, here and elsewhere, about which version of the medals table is a better way of ranking countries’ achievements at the Olympics.

Reuters goes with the “gold standard”, if you like, which has put China out in front almost from the start. Other, mainly American outlets go with the “total number of medals” tally that puts the U.S. on top.

It’s been interesting to hear so many different points of view, and suggestions for different, weighted systems of formatting the table (see the original piece here).

A lot of people like the idea of different points for gold, silver and bronze, while I’ve enjoyed the notion of combining that weighting system with a per capita bias. That was suggested to me by Greg Stutchbury, a colleague from New Zealand, and it worked out that top of the medals table would be New Zealand. Strange, that.

Still, we’re sticking with the gold standard and on that basis I can tell you that China are now assured of first place. Greg has done the maths and as of this morning the U.S. can no longer catch the hosts. There are still enough medals up for grabs, but the U.S. are not in contention in enough of the events to make up the ground (see the table to the right of this page for the up-to-date tally).

So congratulations China. It is a mighty achievement, given that they did not win a single Olympic gold medal until 1984. It just shows what a massive population and absolute dedication to a goal can achieve.

PHOTO: Zhang Yining of China kisses her gold medal after defeating compatriot Wang Nan in the women’s singles table tennis final at the Beijing 2008 Olympic Games August 22, 2008. REUTERS/Joe Chan

Michael Phelps — a modest American hero

If anyone at this Games could be forgiven for being a little bit conceited, a touch arrogant or slightly dismissive of his opponents then it surely would be Michael Phelps. Six races, six gold medals, six world records — it must be hard to keep your feet on the ground.

The reality is that having watched Phelps close-up this week, both poolside and in the press conference room, there isn’t the slightest whiff of arrogance about him. Even when provoked, by a reporter’s question about doping for example, he remains calm and respectful giving a sensible answer.

More importantly he remains respectful to his fellow athletes, in his own, rather reserved way.

I asked Hungarian Laszlo Cseh, who has finished behind Phelps on three occasions in these Games, what Phelps had said to him after the race and he smiled, “He just said ‘good race’.”

The 12-time gold medallist has celebrated his triumphs in a restrained manner — no whooping, no tears, no dancing poolside — just that one, genuine, roar of delight after the thrilling 4×100 relay win.

Asked about becoming the most decorated Olympian of all time, Phelps said that sounded “pretty neat”. That was refreshing because it managed to avoid sounding arrogant or falsely modest.

Phelps’s demeanour does reflect a culture of swimming that tends to discourage excessive bravado. The competitors spend a lot of time in training camps together and compete against each other in the annual world championships and the familiarity breeds respect.

Day two at the Olympics

Michael Phelps smashed his own world record in the 400m individual medley to set off on what could be a record-breaking gold medal trail on day two of real action at the 2008 Olympics.

That was early in the morning and it took until late at night before we had a story that even came close to matching it, with the United States overcoming a slightly unconvincing start to beat China by an emphatic 101-70.

Along the way we had Stephanie Rice, one half of Australian swimming’s glam couple, matching Phelps with a world record and a gold medal in the women’s 400m individual medley.

They were fantastic tales, and there were many others, but I think my favourite today came in the shooting, where despite the ongoing strife between their two countries, Georgian Nino Salukvadze hugged Russian rival Natalia Paderina after they took bronze and silver respectively in the 10-metre air pistol.

There was also a classic bright about a name change that brought a great deal of good fortune for Thailand weightlifter Prapawadee Jaroenrattanatarakoon. What’s in a name? 31 letters and a whole lot of luck, in this case. 

I didn’t spot any golden quotes today but there was a decent piece of trivia. Did you know that South Korea’s women have won every women’s Olympic archery gold medal since 1984? They secured their sixth consecutive one on Sunday, beating China 224-215.

I’ll be back on the blog after a short break for sleep. In the mean time, please check out the latest edition of our podcast. I promise you, it’s by far the best yet and well worth checking out. That Linden bloke is a star. Here it is.