The Great Debate UK
Decades of mistrust haven't stopped China and India's trade from tripling in the past five years. Now China wants to restart free trade talks when Premier Wen Jiabao visits New Delhi later this week. India has long resisted such an agreement. Yet more open trade should leave both sides winners.
Since the two countries warred over a border dispute in 1962, China and India have had a fractious relationship. But on some issues they agree. India helped China stop an agreement over climate change in Copenhagen that both felt was too soft on rich countries. Chinese and Indian state-owned firms have bid together for oil and gas assets.
While both have benefited from foreign trade, closer union may sound like an unequal bargain. India's trade deficit with China rose to $16 billion in 2007-2008 from $1 billion in 2001-2002, and freer trade might push it wider. China's cheap currency gives it an edge, despite Indian tariffs on many goods. But in the longer term, India could be a big beneficiary too. Despite the widening deficit, India's exports to China have been growing. Indian exports to China surged by 75 percent in the first quarter of 2010, year on year, led by textiles and precious metals. China's cheaply produced goods pose little threat to India's thriving services sector, while in categories like pharmaceuticals, India remains significantly ahead.
Moreover, India looks due to take over some of China's manufacturing lead. Wages in China have been rising rapidly. India's workforce could step into the gap: the country's GDP per capita is a quarter of China's, its median age ten years younger, and its unemployment rate double that of its trade partner. Cheap Chinese power equipment and infrastructure should help India build modern factories, at relatively low cost. Undoing deep mistrust will take time. Indians may worry that China will attempt to keep both low and high end manufacturing, particularly given its reluctance to let the currency appreciate. India may not be prepared to sell more of what China really wants, like iron ore. Free trade between the emerging superpowers is a distant goal, but still one worth pushing for.
from Reuters Investigates:
Wal-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.
from James Saft:
From Dublin to Paris to Budapest to inside those brown UPS trucks delivering holiday packages, it has been a tough few weeks for savers and retirees.
Moves by the Irish, French and Hungarian governments, and by the famous delivery company, showed that in the post-crisis world retirees, present and future, will be paying much of the price and taking on more of the risk.
from The Great Debate:
-The opinions expressed are the author's own-
Are economists the world over using an outdated tool to measure economic progress?
The question, long debated, is worth pondering again at a time when two economic giants, the United States and China, are sparring over trade, currency exchange rates and their roles in the global economy.
from The Great Debate:
In 1987, UK Prime Minister Margaret Thatcher whipped up a firestorm of criticism from her opponents on the left when she told a magazine reporter that "there is no such thing as society", only individual men and women, and families.
The interpretation of those comments remains fiercely controversial. From the context it is not certain the prime minister was clear what she was trying to say.
from India Insight:
India is globalising, but not the way much of the world wants.
That rather contradictory thought nagged at me one morning during the chaotic Commonwealth Games here in New Delhi.
On the road to the media venue's gate, I trudged past a squatter's family living in a tarpaulin. The mother was helping her son pee on my left. Rubbish, the smelly, sickly kind, lay to my right. My shoes sunk in mud from an unfinished pavement.
from Chrystia Freeland:
"There is no other policy tool available [besides quantitative easing],"' Laura Tyson, a former chairwoman of the Council of Economic Advisors, said at this morning's Reuters/YouTube live debate on how to fix the economy. Tyson argues that additional Fed purchases of long-term bonds is the most viable way to energize the U.S. economy since a new fiscal stimulus bill is unlikely to pass Congress:
She appears alongside Glenn Hubbard, another former CEA chairman, who maintains the Fed will spend another $1 trillion to lower rates by 20 basis points. "We can't inflate our way to prosperity," he said.
from The Great Debate:
"It's like the American dream in reverse." That's how President Barack Obama, ten days after taking office last year, described the plight of Americans hit by the faltering economy. His catchy description fell short -- the dream has turned into a nightmare for tens of millions.
So much so that an opinion poll this week showed that 43 percent of those surveyed thought that "the American Dream" is a thing of the past. It "once held true" but no longer does. Only half the country believes the dream "still exists," according to the poll, commissioned by ABC News and Yahoo against a background of dismal statistics on growing poverty, inequality, unemployment, and Americans without health insurance.
-Laurence Copeland is professor of finance at Cardiff University Business School. The opinions expressed are his own and do not constitute investment advice. -
The unemployed and the terminal insomniacs who have nothing better to do than read my blogs will know that I have long been gloomy about most of the Western economies. How can you fail to be pessimistic when the world economy is still dominated by the U.S. – a basket case, becoming weaker every day, with a political class too blind or too scared to admit in public the obvious fact that the country cannot carry on living beyond its means?
from The Great Debate:
Europe's long summer holiday still has a week to run but this year's reentry will bring with it evidence that very little progress has been made on the issues that threaten to rend the currency union and upend the global economy.
Despite waving the stress-test magic wand over its banks in late July the same problems continue to grow unchecked: a euro zone periphery that can't compete, may not be able to pay its debts and so may bring down with them the very banks that have been pronounced healthy.