Posts Tagged ‘china’
Found this through our horizon scanning colleagues, a book by ANU on China’s new place in a world lurching from crisis to crisis. Makes me think of the unfinished conversations we are having on a China-centered Asia (ChiAsia) and the different flows and how the hell Singapore should be placed on these new flows. Anyway, here’s a brief grab on what the book is about:
The world and China’s place in it have been transformed over the past year. The pressures for change have come from the most severe global financial crisis ever. The crisis has accelerated China’s emergence as a great power. But China and its global partners have yet to think or work through the consequences of its new position for the governance of world affairs. China’s New Place in a World in Crisis discusses and provides in-depth analysis of the following questions. How have China’s growth prospects been affected by the global crisis? How will the crisis and China’s response to it impact China’s major domestic issues, such as industrialisation, urbanisation and the reform of the state-owned sector of the economy? How will the crisis and the international community’s response to it affect the rapidly emerging new international order? What will be China’s, and other major developing countries’, new role? Can China and the world find a way of breaking the nexus between economic growth and environmental sustainability — especially on the issue of climate change?
You can download the entire book here.
The real constraints to growth in Asia may not be ”excessive’ domestic savings per se, but the weakness in financial systems and the related legal and regulatory structure, which cannot efficiently transform savings into loans for education, housing, and private investment and pool social risks through financial instruments such as insurance covering medical care, pensions, and unemployment.
The growth of competitive domestic private banks should be the most important and efficient solution for China’s switch to a new growth engine. The rebalancing progress away from the export-model, however, will not likely be fast or smooth. There is persistent resistance from many vested interest groups which benefit from the old growth model, thus pushing to preserve the status quo. This will take longer than we like, but faster than we think. Patience is a virtue.
James Fallows of Atlantic Monthly at the Aspen Ideas Conference right now, from his blog a snippet on the US not leading at any of the green technology fields.
On energy, a disturbing factlet. (And obviously not the only disturbing observation on the energy-and-climate front.) I heard three people separately observe that when it comes to future sources of “clean” energy, there is not a single field in which U.S. companies are the technical or market leaders. One person gave an informal ranking of the leaders this way:
Solar-powered electricity (ie, photo-voltaic systems): Norway, Japan, China
Solar-thermal systems (for heating water or buildings) Spain the leader in getting systems deployed
Wind power: Holland, Denmark, China
Geothermal power: nobody
Nuclear power (“clean” in the carbon-footprint sense): France, Japan
CCS, “Carbon capture and sequestration” (stripping out CO2 and burying it): Norway, Australia, Canada.
This person said that his list was rough and ready, and that US firms were in a close second place in some fields. But the main point, he said, is that “American firms are acting as if there is not going to be a vital, profitable, globalized clean-tech industry a decade from now, and as if they don’t care about competing in it.” He had some other more hopeful things to say about how sustained investment could help close the gap. But the list itself was news to me.
And from their latest piece here, excellent read on the elusive green economy. Clean energy, like other utilities, will be succeed or fall with consistent government support/inaction. China is now one of the largest players in clean technology because of government support. So is Germany’s solar play. Unlike Internet start-ups with lower funding costs, energy plays require much larger funds to starup that most VCs cannot afford. Government grants are needed, but that would mean choosing winners. Technology, policy and finance will intertwine, who knows when the breakthrough green tech will emerge from this interplay?
The Chinese have realised that inaction on climate change will lead to their own economic undoing. And they are taking action. This is a comprehensive look at everything China is doing to green itself. h/t to Phei Sunn for sending this around.
The full article can be downloaded here. The focus is on energy efficiency, renewable energy, energy grid, auto industry, public transport and others.
Met up with Ian Bremmer of Eurasia. Some notes below.
- Not a unipolar world, nor a bipolar world, but a non polar world. Absence of global leadership in critical issues e.g. climate change that will fester and stagnate. Such issues are unfixable in the absence of a shock to the system, which triggers a reaction to patch it up. Arguably, the accumulation of imbalances in Chimerica was such as issue, allowed to fester until septic shock set in.
- Globalisation increasingly challenged by state capitalism/SWFs. Not so much deglobalisation, but a mixing of public sector/market. The G20 is a menagerie worse than herding cats, because there are some animals in the menagerie that hate cats, and there’ll be more flareups between nations. Ian wrote an article in Foreign Affairs on the four waves of state capitalism in ‘State Capitalism comes of Age‘, worth a good read.
- The China-US relatonship will move from collaboration to intense competition. The US will bear the bulk of the world’s geo-political burden (Afghanistan, Pakistan …) while China will bear the bulk of the world’s geo-economic burden (developing domestic market in switch away from G3 exports). I know Thomas PM Barnett talks often the need for the USA us this as a basis to form a grand bargain with China on this, while prodding China to take on more geo-pol burdens, but … but the military guys don’t talk to the economic guys within their government.
McKinsey’s article ‘China’s green opportunity’ identifies five major categories of energy efficiency and greenhouse gas–abatement opportunities that China could implement between now and 2030. If China pursued them successfully, it could reduce its dependence on imported oil by up to 30 percent more than the 30 percent reduction it currently hopes to achieve. The country could also stabilize coal demand at current levels, substantially reducing the proportion of electric power generated by using this fossil fuel, to 34 percent by 2030, down from 80 percent today. These efforts could enable China to hold its greenhouse gas emissions to roughly eight gigatons by 2030—roughly 10 percent higher than 2005 levels—without hindering growth. This would amount to nothing less than a green revolution in China.
The five categories are green power, green transport, green industry, green buildings and green ecosystem. Go to the full article here for details.
The Economist recently carried a feature on countries buying up farmland overseas to hedge themselves against the new imbalances of the future …. food production and consumption. The OPEC of the grain world are the USA and Canada, accounting for 70% of the world’s production. And demand is increasing in food stressed countries of China, India, N Africa etc. Thomas PM Barnett’s recent article on the unflat world of global food production highlights the intensification of these imbalances. Here are a few quotes.
” Today, the average food product travels roughly 1,500 miles from farm to dinner table. Imagine doubling that journey — or more — by 2030, when the world is projected to consume 50 percent more food than it does today.”
“But here’s where the new rules really kick in: A 21st century dominated by advances in biotechnologies is sure to feature commensurate bioweaponization, including among the weapons wielded by transnational terrorists. As energy production becomes increasingly localized thanks to technology breakthroughs, expect global food transportation systems to become the preeminently vulnerable — and thus preeminently guarded — commodity network on the planet.”
How can we prepare to align ourselves in these new imbalances?
Trendsbüro has released a luxury trend report on China- predicted to be the world’s largest luxury market by 2015. The report breaks down Chinese luxury consumers into four types- Noveau Rich, Understaters, Connoisseurs and Spirituals- based on social background, luxury experience and income level.
h/t to PSFK Shanghai.
Excellent post on the high savings rate of Chinese by M Pettis. Notable excerpt “I would argue that policies aimed at generating high levels of investment and at running trade surpluses must also, by definition, cause high levels of savings. In that sense the policies associated with the so-called Asian development model are policies that implicitly or explicitly cause high savings rate. if this is true, as I have written elsewhere, high Asian savings rates may be threatened in the future by rising savings rates in the US, since in the aggregate consumption and production must balance. The US trade deficits required for the success of high-savings policies in China may no longer exist.”
From Michael Pettis, excellent read, on cheap credit forced on Chinese SOEs and making them go stupid in investing (comparison with US conglomerate of the 70s inflating with cheap credit and then the breakup in the 80s, very Pretty Woman) .. and a rise in trade friction, plus a likely cultural shift into savings for the almighty US consumer. Post-crisis world moves deeper into Chasm.