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  • The local growth hoax ruining China's bigger picture | Business Spectator
    subsidy to industry especially to the secondary sector composed of manufacturing transportation and construction industries which is more capital intensive and therefore pays its workers less than the service sector As the share of labour income in the national income declines so too does the share of household consumption in the national GDP In essence local governments excessive investment in infrastructure contributes to China s structural imbalances problem The current round of state expansion has also intensified the problem of corruption A significant number of corruption cases have been related to infrastructure projects In Henan province for instance four consecutive bureau chiefs of the transportation department have been caught in corruption scandals Additionally government projects and government owned companies have had a strong crowding out effect on private businesses In the past several years infrastructure lending has taken up more than one third sometimes close to one half of the total bank lending This inevitably squeezes the already confined space left for small and medium sized private companies The government is likely to roll out some major plans for reform in the Chinese Communist Party s Third Plenary Meeting of the 18th Congress scheduled for this November Adjustment of central local fiscal relations is likely to be one of them One of the rationales for this is that local governments take part in economic activities especially real estate development because their regular revenues are not enough to pay for their regular expenditures The hope is that by adjusting the central and local shares of revenues and expenditures local governments will retreat from those activities But this is probably just wishful thinking Local officials have a short tenure in a city often limited to three to four years and so it is perfectly rational for them to prop up local growth rates in the quickest way possible which has been through investment especially in real estate To change local government behaviour the root of the problem must be addressed which involves asking why the role of the state has been expanding in China This has to do with the lack of checks and balances in the country s governance structure most significantly the lack of accountability on the part of the officials toward their constituencies In such a system officials are free to pursue the one goal that affects their careers the most that being short term economic growth Real change therefore demands bold political reform to strengthen democratic participation in policy formation This article appeared in the most recent edition of the East Asia Forum Quarterly Leading China where Yao Yang is Director at the China Center for Economic Research and Dean at the National School of Development Peking University Print this page Related articles 10 Jan Korea China jostle for Aust resources 10 Jan China trade balance contracts 10 Jan Volvo Cars sales up in 2013 10 Jan China s Fosun buys Portuguese insurer in privatisation 10 Jan Australia is not the key to China s resource prison More from Business Spectator Technology Adapt or die Commercial The Future of Energy Family Business Alan Kohler s Family Business China China Spectator Please log in or register to post comments Comments on this article Comments Policy Robert Peterson Sun 2013 10 20 03 13 A land and house tax would help I think that this might actually be implemented Phil Clarke Mon 2013 10 21 08 56 A puzzling article The second paragraph seems to rather kowtow to the peculiar way that economic growth is analysed and assessed in Western media and by western experts I would not have thought its methodology particularly appropriate to China Growth in the West tends to be assessed on a simple quantitive level without any real regard to the destination of that wealth As a result a nation where the rich have become stunningly richer and the poor stunningly poorer may well be a nation in which the growth figures appear to be positive Growth of this kind alone does not tell us much rather it seems to be more like an acolyte in the service of the Trickle Down god the Western demon that masquerades as a deity That s one foreign devil the Peoples Republic could well do without Western economics is hag ridden with this mischievous spirit China is perhaps best considered on the basis that the ordinary Chinese citizen especially in the cities is indeed getting to be more prosperous and from what I am hearing from people recently visiting a lot less politically intense It is time however the Western Right s political fantasy of China s progress was put to rest In this fantasy capitalism encouraged in China through the export of western industrial production to Chinese workplaces creates a prosperous middle class that is easier for Western capitalist concerns to deal with The fantasy continues with this middle class getting progressively stronger to the point where it can displace and replace the present communist state and change the words of the national anthem rather like they did in Russia The fantasy anticipates that whilst the process is underway corruption and legitimate enterprise are likely to become sadly confused But it all comes out Right in the end with Western Conservatism and Eastern elitism fusing into a new international Feudal Mandarin class one ring to rule the world one ring to bind them Hallo out there the left leg is the one with bells on it Application of the generally dysfunctional Western economic rules is inappropriate The state is not withering away nor is it likely to The only real part of this article that to me seems to be going anywhere is the last sentence Real change therefore demands bold political reform to strengthen participation in policy formation I d add But it isn t likely to happen not in China where the writer seems to consider it desirable nor in western countries where our Business experts seem to think it isn t The future is not

    Original URL path: http://www.businessspectator.com.au/article/2013/10/18/china/local-growth-hoax-ruining-chinas-bigger-picture (2014-01-12)
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  • Yao Yang | Business Spectator
    for European markets Politics Australian Election Federal Budget International News Asia Europe USA National Affairs Latest stories Gagging visas are an attack on democracy The skyrocketing price of a journalist visa for Nauru will limit coverage of Australian prisoners on a vassal state It is an insult to the democratic principles this country stands for Britain will be poorer for Scotland the brave The economic case for Scottish independence is far from settled with doubts hanging over volatile oil prices and uncertainty over future revenues One thing is certain it would be a disaster for Britain Technology NBN Buzz Mobility BYOD Smart Devices Emerging Tech Applications Big Data Cloud Computing Data Management Reviews Social Media Start ups Security Data Security Identity Management Wireless Security Telecommunication Latest stories Google v Facebook Who knows wins The unparalleled Google Analytics service means Google knows more about internet users than anyone else And runner up Facebook must go further to mine precious user insights if it wants to compete Will Twitter s founder strike social gold twice Biz Stone is looking to tap into the selflessness of others with his latest venture Jelly Enterprises But the just launched app will have to quickly shift into something of real value if it s to become a mainstream success Climate Carbon markets Energy markets Renewable energy Resources Solar energy Wind power CleanTech Science Environment Green Deals Policy Politics Smart Energy Latest stories Marking the milestones of 2013 Australia s transition to a clean energy economy took some political blows in 2013 but progress on the ground was heartening with energy efficiency solar and wind all providing tangible proof of their future potential A fifth year of declining power consumption Power consumption fell again in 2013 dipping 2 8 per cent across the National Electricity Market as scheduled renewables rose to 12 per cent of the market Industries Advertising and Marketing Agribusiness Automotive Aviation Construction and Engineering Education Family Business Financial Services Food and Beverages Gaming and Racing Health and Pharmaceuticals HR Industrial relations Information Technology Infrastructure Insurance Manufacturing Media and Digital Resources and Energy Professional Services Property Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu Yao Yang The local growth hoax ruining China s bigger picture Career incentives have led to an explosion in local Chinese government infrastructure spending But resulting structural imbalances are crowding out private sector growth and fuelling corruption by Yao Yang 3 27pm October 18 4 comments Search Markets Global Indices Index Last Chg Chg DOW JONES 16437 05 7 7 S P 500 1842 37 4 2 0 2 NASDAQ 4174 66 18 5 0 4 FTSE 100 6739 94 48 6 0 7 NIKKEI 15912 06 31 7 0 2 Hang Seng 22846 25 58 9 0 3 The Spectators Gas reservation is a pipe dream Keith Orchison 1 min ago A

    Original URL path: http://www.businessspectator.com.au/contributor/yao-yang (2014-01-12)
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  • US debt crisis prompts China rethink | Business Spectator
    yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password AAP A United States debt default could spur China to diversify its multitrillion dollar foreign exchange reserves the world s largest analysts say as Beijing seeks to boost its voice in the global economy A historic default would inevitably lower the value of China s US dollar assets and have a broader impact on its economy the second biggest in the world Chinese officials and state media have already sounded the alarm as the deadline approaches for the divided US Congress to raise the debt ceiling and avoid the financial catastrophe Analysts said the heightened possibility of default is likely to cause China to further diversify its reserves which it is already doing and even trim holdings of US Treasuries but they ruled out Beijing dumping its holdings The bulk of China s foreign exchange reserves which reached a whopping US3 66 trillion A3 85 trillion by the end of last month are held in the greenback If there really is a default the Chinese government will definitely speed up foreign exchange reserve diversification seeking safer bonds of other countries said Liao Qun Hong Kong based economist for Citic Bank International If there is an acceleration in diversifying there might also be a reduction in holdings of US Treasuries he said China has a reason to do so but of course it would be extremely difficult China is the largest foreign holder of US Treasury bonds with US1 28 trillion closely followed by Japan at US1 14 trillion Any large scale selling of US debt by China would erode the value of its remaining holdings analysts said while few other asset classes anywhere in the world were large enough to park such vast amounts of cash leaving Beijing with few practical alternatives In the longer term Japan may also rebalance its portfolio a tad to diversify away from holding US government debt said Yoshikiyo Shimamine executive chief economist with Dai ichi Research Institute in Tokyo However Tokyo s political dependence on Washington for example in its defence pact mitigates against a sudden switch he added There is no financial instrument that is as highly liquid as US Treasuries he said implying it is difficult to see any major economy abandoning them But China is committed to reducing risk by diversifying its reserves while at the same time shifting investment away from purely financial products to industrial projects However another worry for Beijing is any impact a US debt default would have on the American and global economies China is heavily dependent on exports and foreign investment to maintain momentum in its own economy which expanded 7 7 per cent last year the slowest growth

    Original URL path: http://www.businessspectator.com.au/news/2013/10/17/usa/us-debt-crisis-prompts-china-rethink (2014-01-12)
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  • Japan to remain Asia focus: Bishop | Business Spectator
    progress on the ground was heartening with energy efficiency solar and wind all providing tangible proof of their future potential A fifth year of declining power consumption Power consumption fell again in 2013 dipping 2 8 per cent across the National Electricity Market as scheduled renewables rose to 12 per cent of the market Industries Advertising and Marketing Agribusiness Automotive Aviation Construction and Engineering Education Family Business Financial Services Food and Beverages Gaming and Racing Health and Pharmaceuticals HR Industrial relations Information Technology Infrastructure Insurance Manufacturing Media and Digital Resources and Energy Professional Services Property Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu Japan to remain Asia focus Bishop 16 Oct 2013 2 16 AM Politics International News Asia National Affairs Economy Australian News China Global News Asian Economy Amid efforts to improve China ties Bishop says Japan to remain best friend You must be logged in to read this article Not a member yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password AAP Foreign Minister Julie Bishop says Canberra intends to keep Japan as its best friend in Asia as it works on relations with China The coalition will put economic diplomacy first Ms Bishop told a press conference ahead of her talks with Japanese Foreign Minister Fumio Kishida She said her government recognises Japan and Australia share values and strategic interests including democratic freedoms and positions on regional and global issues Having so much in common it s not surprising that we should describe Japan as our best friend in Asia not only to say it but mean it Ms Bishop said according to Kyodo But that s not to deny that we will continue to work on our relationship with China she said adding that Australia can manage its relations with both countries by being open and frank Japan is Australia s second largest trading partner behind China with A71 billion of trade between the countries in 2012 Ms Bishop says the government will repeal regulations and certain taxes to attract foreign investment noting that Japan is the largest Asian investor in the country After meeting Mr Kishida Ms Bishop said she welcomed the security policies of Japanese Prime Minister Shinzo Abe The Australian government welcomes the direction that the Abe government has taken in terms of having a more normal defence posture and being able to take a constructive role in regional and global security she told the news conference Mr Kishida told the same press conference As the regional security environment becomes increasingly severe Japan hopes to closely co operate

    Original URL path: http://www.businessspectator.com.au/news/2013/10/16/national-affairs/japan-remain-asia-focus-bishop (2014-01-12)
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  • US seeks to reassure on debt crisis | Business Spectator
    scheduled renewables rose to 12 per cent of the market Industries Advertising and Marketing Agribusiness Automotive Aviation Construction and Engineering Education Family Business Financial Services Food and Beverages Gaming and Racing Health and Pharmaceuticals HR Industrial relations Information Technology Infrastructure Insurance Manufacturing Media and Digital Resources and Energy Professional Services Property Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu US seeks to reassure on debt crisis 11 Oct 2013 12 11 AM Politics International News Asia USA Economy Global News Asian Economy US Economy US default risk dominates Asian summit after China expresses concerns You must be logged in to read this article Not a member yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password AAP The United States sought to reassure Asian leaders gathered for an annual summit on Thursday that Washington would resolve its political stalemate after China voiced concern over a possible US debt default The spectre of a calamitous default has emerged as a major issue at the Asian summit in Brunei held in the absence of President Barack Obama after he was forced to stay home due to the US government shutdown With Asian countries like China sitting atop a mountain of Treasury bonds Chinese Premier Li Keqiang expressed Beijing s concern about Washington s debt ceiling problem Li conveyed that message in talks with Obama s stand in US Secretary of State John Kerry late Wednesday in Brunei China s official Xinhua news agency reported A US official travelling with Kerry confirmed Thursday that the debt ceiling was discussed but downplayed Beijing s concerns saying Li had vowed continued investment in the world s largest economy Secretary Kerry made clear that this is a moment in Washington politics and reaffirmed the president s commitment to resolving the issue the official told reporters They also agreed that the United States has one of the strongest economies in the world and that they have a shared interest in continuing the close economic working relationship China held US1 277 trillion A1 36 trillion in US debt as of July according to Treasury Department figures Kerry and Li joined 16 other world leaders in Brunei on Thursday for the East Asia Summit the climax of nearly a week of top level meetings which began in Bali at the Asia Pacific Economic Cooperation forum s annual gathering As he did in Bali Kerry sought to assure Asian leaders in Brunei that Obama s no show did not signal wavering US interest to the region He stressed Washington s continued commitment to the region and

    Original URL path: http://www.businessspectator.com.au/news/2013/10/11/us-economy/us-seeks-reassure-debt-crisis (2014-01-12)
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  • Japan is Aust's best friend: Abbott | Business Spectator
    Property Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu Japan is Aust s best friend Abbott 9 Oct 2013 11 45 PM 1 Politics International News Asia National Affairs PM invites Abe to address Australian parliament plans Japan trip next year You must be logged in to read this article Not a member yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password AAP Tony Abbott has described Japan as Australia s best friend in Asia while also extending an invitation for Prime Minister Shinzo Abe to make a historic address to the parliament Stressing the importance of the strategic partnership between the two nations Mr Abbott also expressed support for Japan s determination to make an increased contribution to international peace and security As far as I m concerned Japan is Australia s best friend in Asia and we want to keep it a very strong friendship Mr Abbott told Mr Abe before the talks were closed to the media Mr Abbott will visit Japan in the first half of next year in what represents a recalibration of Australia s foreign policy focus after criticism of former prime minister Kevin Rudd for his decision to visit China instead of Japan in his first major overseas trip in 2008 It s understood Mr Abbott also expressed support for Japan making an increased contribution to international peace and security and that the time had come for Japan to be a normal country operating under the same rules that other nations operate Mr Abbott told Mr Abe that he hoped the Japanese prime minister would visit Australia at an early opportunity It would be the first state visit to Australia by a Japanese leader in 11 years Mr Abe told Mr Abbott he also wanted to reinvigorate the relationship I myself attach importance to the relationship with your country a country which shares basic values and strategic interests with Japan Mr Abe said By working hand in hand with you Prime Minister Abbott I would like to elevate our strategic partnership and bring this relationship to a new phase Mr Abe s address before a joint sitting of the parliament would be the first by a Japanese prime minister with Mr Abbott s invitation extending one previously offered to Mr Abe by former prime minister John Howard Mr Abe had been set to address the parliament in September 2007 but was forced to cancel his visit amid political upheaval at home He resigned as prime minister on September 12 2007 the day after the address was scheduled but

    Original URL path: http://www.businessspectator.com.au/news/2013/10/9/national-affairs/japan-austs-best-friend-abbott (2014-01-12)
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  • US Asian focus failing: report | Business Spectator
    gold twice Biz Stone is looking to tap into the selflessness of others with his latest venture Jelly Enterprises But the just launched app will have to quickly shift into something of real value if it s to become a mainstream success Climate Carbon markets Energy markets Renewable energy Resources Solar energy Wind power CleanTech Science Environment Green Deals Policy Politics Smart Energy Latest stories Marking the milestones of 2013 Australia s transition to a clean energy economy took some political blows in 2013 but progress on the ground was heartening with energy efficiency solar and wind all providing tangible proof of their future potential A fifth year of declining power consumption Power consumption fell again in 2013 dipping 2 8 per cent across the National Electricity Market as scheduled renewables rose to 12 per cent of the market Industries Advertising and Marketing Agribusiness Automotive Aviation Construction and Engineering Education Family Business Financial Services Food and Beverages Gaming and Racing Health and Pharmaceuticals HR Industrial relations Information Technology Infrastructure Insurance Manufacturing Media and Digital Resources and Energy Professional Services Property Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu US Asian focus failing report 9 Oct 2013 7 32 AM Politics International News Asia USA Obama s pledge to build Asian ties failing state department report You must be logged in to read this article Not a member yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password A report by the Inspector General of the United States State Department has claimed that the US government is failing to back a stated pledge by US President Barack Obama to pivot the country s focus to Asia according to The Australian The report argues that the stated goal has not resulted in any increased foreign aid or diplomatic funding nor has it resulted in a more considered approach to diplomacy in the region citing the US decision to send marines to Darwin that angered China Enhanced engagement with the Asia Pacific region is likely to be a durable foreign policy priority for this and future administrations it is essential that the Bureau of East Asian and Pacific Affairs be staffed accordingly the Inspector General s report written in September said according to The Australian Over the last three years the Bureau of East Asian and Pacific Affairs has made strengthening and shaping Asia s regional institutions a top priority but the bureau is inadequately staffed and not well structured to achieve this objective effectively Print this page Related articles 08 Jan Lessons in liberalism from New York s

    Original URL path: http://www.businessspectator.com.au/news/2013/10/9/usa/us-asian-focus-failing-report (2014-01-12)
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  • US, China clash at APEC summit | Business Spectator
    a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password AAP The United States stepped up efforts to shore up its economic clout in the Asia Pacific at a regional leaders summit in Indonesia on Tuesday as an increasingly bold China voiced concern The Asia Pacific Economic Cooperation APEC event at a five star resort on the tropical island of Bali was aimed at breaking down trade barriers among all 21 member economies In closing comments to the leaders following two days of talks Indonesian President Susilo Bambang Yudhoyono said the summit had achieved goals that focused on sustainable development I am pleased to say that our summit went on successfully and was indeed very productive Yudhoyono said But clashing agendas by the United States and China overshadowed the gathering of leaders as well as preceding meetings by their trade chiefs US President Barack Obama had to pull out of the APEC summit because of the deepening political and financial crisis in Washington an absence that renewed concerns about his commitment to the region But filling in for Obama Secretary of State John Kerry pressed on with an intense lobbying effort to secure agreement on a far reaching free trade pact grouping 12 APEC nations Significantly the pact excludes China while Indonesia Southeast Asia s largest economy has stayed out We need modern rules for a changing road rules that keep pace with the speed of today s markets Kerry said in a speech to APEC business leaders on Monday that was in large part a hard sell for the planned Trans Pacific Partnership Kerry convened a meeting of leaders of the 11 other nations involved in the TPP on Tuesday afternoon after the APEC summit finished in a bid to hit an against the odds deadline set by Obama for a deal by the end of this year The United States has championed the TPP as setting gold standards to deal with complex changes to the 21st century economy such as how to police cloud computing and patents But China and even some developing nations included in the TPP have expressed concern that it will lay down trade rules mainly benefiting the richest countries and most powerful firms China will commit itself to building a trans Pacific regional cooperation framework that benefits all parties Chinese President Xi Jinping said in a speech following Kerry s at the APEC business forum Xi s comments were interpreted in China s state run media on Tuesday as direct criticism of the TPP The Trans Pacific Partnership featuring confidential talks and the highest free trade standard beyond mere lower tariffs is widely considered a new step for the US to dominate the economy in the Asia Pacific region the China Daily newspaper said in a front page report on Xi s speech Indonesia also signalled its irritation at the US focus on TPP at the APEC

    Original URL path: http://www.businessspectator.com.au/news/2013/10/9/international-news/us-china-clash-apec-summit (2014-01-12)
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