Global News Journal

Beyond the World news headlines

from Global Markets Forum Dashboard:

China economic reforms may result in $14.4 trillion GDP, growth at 6 percent – Asia Society report

Sweeping economic reform initiated by China President Xi Jinping in November 2013 marked a turning point for the world's second biggest economy. If implemented fully, China's potential GDP growth can be sustained at 6 percent through 2020. One risk: Falling short of that growth rate could result in growth at half that projection, or worse, leading to a new economic crisis, according to a new study.

Dan Rosen, founding partner, Rhodium Group

Dan Rosen, founding partner, Rhodium Group

Dan Rosen, author of a report for the Asia Society Policy Institute, argues that China's growth model is no longer working. The drivers that contributed to China's post-1978 growth are weakening, with existing investments showing diminished returns and overall total-factor productivity, or TFP, falling. TFP is an economic term that broadly measures efficiency using input factors such as labor and capital. "Demographic dividends propelled China through the 1980s, 1990s, and 2000s, but the labor force is now at its largest and is poised to shrink," he writes.

Yet Rosen said China has not exhausted its growth potential. He forecasts decades of solid growth if President Xi can pull off bold economic reform. No small task.

"We conclude that the overhaul is well conceived and showing movement, and that if fully implemented can sustain growth at 6% through 2020," Rosen told the Global Markets Forum. "Keeping GDP at or above 6% though 2020 delivers a $14.4 trillion Chinese GDP, which supports $10 trillion in two-way financial flows and a Chinese trade deficit thanks to greater imports. That's great for the region and great for the global outlook."

from Africa News blog:

Was South Africa right to deny Dalai Lama a visa?

By Isaac Esipisu

Given that China is South Africa’s biggest trading partner and given the close relationship between Beijing and the ruling African National Congress, it didn’t come as a huge surprise that South Africa was in no hurry to issue a visa to the Dalai Lama.

Tibet’s spiritual leader will end up missing the 80th birthday party of Archbishop Desmond Tutu, a fellow Nobel peace prize winner. He said his application for a visa had not come through on time despite having been made to Pretoria several weeks earlier. (Although South Africa’s government said a visa hadn’t actually been denied, the Dalai Lama’s office said it appeared to find the prospect inconvenient).
Desmond Tutu said the government’s action was a national disgrace and warned the President and ruling party that one day he will start praying for the defeat of the ANC government.

from The Great Debate:

What is the best strategy against Chinese cyberattacks?

By Ian Bremmer
The views expressed are his own.

All eyes should be peeled on China, but not for the reason you think. While the biggest structural risk right now is global rebalancing, especially between China and the U.S., there is another important threat from China: cyberwars. Cyberattacks are one of the biggest fat tails (along with climate and North Korea).

It’s no surprise that the latest Google hack attack came from China. The presumption is that the vast majority of cyber attacks hitting the U.S. are coming from the Chinese government. It’s very hard to know where threats are originating – country-wise and/or person-wise -- because it’s very difficult to go back and figure out the paper trail. But at a minimum, there is an environment in China that tolerates cyber attacks.

from Afghan Journal:

In Pakistan’s Gwadar port, Chinese whispers grow

First, China helped develop Pakistan's Gwadar port from scratch on the Baluchistan coast to take the pressure off the country's main port of Karachi, a few hundred miles to the east. Now Pakistan's defence minister has said that it would like its long-time ally to build a naval base at Gwadar, which sits on the doorstep of Gulf shipping lanes, less than 200 kms from the mouth of the Straits of Hormuz.

China, which provided more than 80 percent of the port's $248 million development cost, has moved quickly to distance itself from Pakistani Defence Minister Ahmad Mukhtar's remarks about a naval base in Gwadar. The foreign ministry said China was not aware of any such proposal.

UNsensational? Five more years of Ban Ki-moon

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- U.S. Senators Joseph Lieberman and John Kerry look on as U.N. chief Ban Ki-moon addresses reporters in Washington. REUTERS/Molley Riley

U.S. Senators Joe Lieberman and John Kerry look on as U.N. chief Ban Ki-moon addresses reporters in Washington. REUTERS/Molley Riley

It’s hard to find a delegate to the United Nations who despises U.N. Secretary-General Ban Ki-moon. But it’s even harder to find someone who thinks he has the gravitas and charisma of his Nobel Peace Prize-winning predecessor Kofi Annan, who invoked the wrath of the previous U.S. administration when he called the 2003 invasion of Iraq “illegal.” As one senior Western official, who declined to be identified, said about Ban: “It’s not as if he’s lightning in a bottle, but we can live with him.”

from Tales from the Trail:

Panda diplomacy: the remix

USAThe latest chapter in the long story of panda diplomacy was written at Washington's National Zoo, where the Chinese government agreed to lengthen the "loan" of popular panda pair Mei Xiang and Tian Tian for another five years. Actually, the loan is conditioned on whether they produce a new heir or heiress to the cuteness of panda-dom in the next two years;  one or both could be exchanged for more fecund substitutes.

They have a good track record: Washington native Tai Shan, born in 2005, headed back to China last year.

from Reuters Investigates:

Vietnam’s Capitalist Roaders

A woman dressed in the traditional Vietnamese "ao dai"costume serves tea to Prime Minister Nguyen Tan Dung (front R) during the opening ceremony of the 11th Party Congress in Hanoi January 12, 2011

VIETNAM-CONGRESS/

Vietnam's ruling communists  opened an eight-day party congress on Wednesday with a candid  admission the fast-growing economy had become unstable, as  delegates began the process of reshuffling leaders and  charting new policies. 
   As leaders sang the national anthem to begin the  five-yearly event, streets in the chilly capital Hanoi were  festooned with red and yellow banners, some bearing the iconic  hammer and sickle. Propaganda posters bore the smiling  likeness of revolutionary leader Ho Chi Minh or of proud,  uniformed workers. 
   The economic backdrop is less festive. Inflation surged to  a 22-month high in December, the government is struggling to  bring down a hefty fiscal deficit, the currency has been  depreciating for three years and the trade deficit remains  stubbornly high.  

from Pakistan: Now or Never?:

China’s South Asia tour: win-win meets zero sum

wenJust over a year ago, President Barack Obama suggested during a visit to Beijing that China and the United States could cooperate on bringing stability to Afghanistan and Pakistan.  As I wrote at the time, China — Islamabad’s most loyal partner — was an obvious country to turn to for help in working out how to deal with Pakistan.  Its economy would be the first to gain from greater regional stability which opened up trade routes and improved its access to energy supplies. And it also shared some of Washington’s concerns about Islamist militancy, particularly if this were to spread unrest in its Muslim Xinjiang region.

The big question was whether the suggestion would fall foul of the zero sum game thinking which has bedevilled relations between India, Pakistan and China for nearly 50 years.  India was defeated by China in a border war in 1962 and since then has regarded it as its main military threat. Pakistan has built close ties with China to offset what it sees as its own main military threat from its much larger neighbour India. China in turn has been able to use its relationship with Pakistan to clip India's wings and curb any ambitions it has at regional hegemony.

Perilous predictions for 2011

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Afghan Boy

It’s the season to be merry – and to make forecasts about next year. Across the finance industry fine minds spend December crafting outlooks and extrapolations about how the world will fare, in the hope of a decent return over the next 12 months and avoiding the bear traps that will swallow an investment. The banks, strategic advisories and political risk consultants trumpet their analytical prowess, of course, but are also meeting a natural human need to peer into the future. We all want guidance to take the sting out of living in an uncertain world.

Nowhere is prediction more fraught with peril than in politics and world affairs. The success rate is in inverse proportion to the costs that unexpected acts in the real world can impose on the investor. So despite the difficulty of providing a reliable guide to the future there are huge incentives to try to chart the way ahead. Here’s  Control Risks, a risk consultancy firm, on its view of 2011, while competitor Eurasia reveals in early January, as does the World Economic Forum. Nomura has a list of 10 political challenges to prosperity that range from the prospect of gridlock in US domestic politics to brinksmanship on the Korean peninsula.

from Reuters Investigates:

China’s rebalancing act puts consumer to the fore

consumerWal-Mart, the world's largest retailer, now has 189 stories in China, according to its website. Soon it will have many more.  The U.S. chain has announced plans to open a series of "compact hypermarkets", using a bare-bones model developed in Latin America, the Financial Times said.

Wal-Mart stores are a bit different than the one's you might find in, say, Little Rock Arkansas. They sell live toads and turtles for one thing, The Economist reported. But they also sell the appliances, gadgets, and housewares that Wal-Mart stores merchandise everywhere.

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