Category: Economics

China’s 19th CPC Congress: Redefining Economic Growth

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Jabin T. Jacob, PhD, Fellow, Institute of Chinese Studies

There are several aspects of the recently concluded 19th Congress of the Communist Party of China (CPC) that are noteworthy for India.

First, CPC General Secretary Xi Jinping has attempted to redefine what acceptable economic growth is in China. The expression ‘contradiction’ is an important one in the Chinese communist lexicon and until the 19th Party Congress, the ‘principal contradiction’ was the one between ‘the ever-growing material and cultural needs of the people and backward social production’ or, in other words, China’s inability to provide for the basic material needs of its people. Following nearly 40 years of economic reforms, this challenge has now been met with China eradicating poverty at the most massive scale and at the quickest pace in human history.

This process has, however, also resulted in rising income inequalities between individuals and between regions in China, and massive environmental damage and health crises across the country. Continue reading “China’s 19th CPC Congress: Redefining Economic Growth” →

China and Globalization: Time for New Beginnings?

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He Fan, Professor of Economics, HSBC School of Business, Beijing, Director of Maritime Silk Road Research Center
Zhu He, Postdoctoral Scholar, Peking University & Assistant Director of Silk Road Research Center
Li Chaohui, Research Assistant, Haitian Silk Road Research Center, HSBC School of Business, Peking University

This article was originally published in the Business Standard as ‘China’s version of globalisation’, 14 October 2017. This is part of a series by Chinese economists facilitated by the ICS. The original text in Chinese follows below the English version.

In the past 40 years, China has achieved sustained high rate of economic growth after the implementation of the policy of reforms and opening up. This has generated worldwide attention for the “Chinese miracle.” In 1980, China’s exports amounted to only 5.9% of GDP and its foreign investment abroad was only just over US$1.6 billion; by 2013, the latter figure had increased to US$290 billion.

China’s integration into the world economy essentially began in the 1990s. Continue reading “China and Globalization: Time for New Beginnings?” →

China Diary: First Impressions

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Monish Tourangbam, PhD, Assistant Professor, Department of Geopolitics and International Relations, Manipal University, Karnataka & South Asian Voices Visiting Fellow, Stimson Center, Washington D.C.

As an academic actively teaching and writing on issues of international relations and geopolitics, visiting the People’s Republic of China (PRC) has always been a priority on my bucket list. So, when an opportunity came to visit the PRC, I embraced it with an open mind, with an intention to listen, observe and learn. A trip spanning less than two weeks is hardly an adequate time to even start scratching the surface of a country that is often associated with opacity. Hence, these are mere first impressions that in no way can be seen as definitive impressions.

One is often struck by the geographical nearness of China to India, and yet the political distance, in terms of a complex adversarial and competitive relationship, and divergent political systems. Continue reading “China Diary: First Impressions” →

Regional Economic Comprehensive Partnership (RCEP): Implications for India and Partner Countries

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Debashis Chakraborty, PhD, Assistant Professor, Indian Institute of Foreign Trade (IIFT), Kolkata*

A version of this article was originally published in Chinese as ‘印度谨慎推进RCEP的理由’ [Yindu jinshen tuijin RCEP de liyou], Diyi Caijing, 27 August 2017. This is part of a series by Indian scholars in China’s top business affairs news portal facilitated by the ICS. The English version follows the Chinese text.

从1991年开始采取外向型发展模式以来，印度始终稳健地推行着自由化进程，以此促进外商直接投资 (FDI)的流入和出口。直到2003年，印度还主要依赖由世贸组织(WTO)主导的旨在促进出口的多边贸易改革，此后的一段时间，印度开始参与一系列的区域贸易协定(Regional Trade Agreements ,RTAs)。

印度最早在2005年和新加坡达成了双边综合经济合作协定(CECA)，此后又陆续在2006年达成了南亚自由贸易协定(South Asian Free Trade Area , SAFTA)，在2010年在商品贸易方面和东盟达成了自由贸易协定(FTA)，与韩国达成了双边综合经济伙伴协定(CEPA)，并在2011年分别与日本和马来西亚达成了双边综合经济伙伴协定(CEPA)以及双边综合经济合作协定(CECA)。印度还参与了多项区域贸易协定谈判，例如，与欧盟的双边贸易投资协定(BTIA)、印度加拿大经济伙伴协定。然而，现如今，印度正处在关于亚洲泛区域性协定——区域全面经济伙伴关系协定(Regional Comprehensive Economic Partnership ,RCEP)的十字路口上。 Continue reading “Regional Economic Comprehensive Partnership (RCEP): Implications for India and Partner Countries” →

Opening Doors Southwards: China’s Increasing Presence in Nepal

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Aakriti Vinayak, Research Intern, Institute of Chinese Studies, Delhi  

China is making its influence keenly felt in Nepal today. China is using different strategies from road connectivity, hydroelectric projects to using soft power as an approach to forge linkages with Nepal. China’s concentrated effort to use soft power diplomacy in Nepal – with heavy investments in religion, education and tourism – has been a success on the high tables and between the government elites, relations have been institutionalised. One sees a prospective future for Nepal where there is an attempt to tilt more and more towards China – on almost every front – economic, cultural and regional. When Nepalese president Bidya Bhandari released the Nepalese edition of the book, Governance of China by Chinese president Xi Jinping, Upendra Gautam the General Secretary of China Nepal Study Centre said that the event befittingly heralds Nepal and China relations into the 21st century kinship where soft power plays a paramount role (Gautam 2016).

Under former Nepalese prime minister Prachanda, China started using Buddhism as a tool of soft power by Continue reading “Opening Doors Southwards: China’s Increasing Presence in Nepal” →

A China Gazer’s Random Musings – No. 1

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Amb. Kishan S. Rana (retd), Emeritus Fellow, Institute of Chinese Studies, Delhi

There is such a cascade of writing on China that as an oldie, I am attracted by the notion of penning personal reactions, reflections, and observations. Few of us can claim special insights into a country marked by both opacity and paradox. The longer one studies China, deeper is a typical realization that what one understands is a fraction of the things that remain unknown, even unfathomable. I plan to write this column perhaps once a month.

The 19th Party Congress Looms

For an authoritarian regime, China has a remarkable leadership transition system, which has worked smoothly for the past 30 years. Party congresses of the Communist Party of China (CPC) are held every five years. The even numbered Party Congress is when a new General Secretary and his leadership team take over; the country’s key decision-making team is the Standing Committee of the Politburo (it used to number 9, reduced to 7 in 2012). The General Secretary holds office for 10 years. The odd-numbered Congress is the one where appointments are made to the central committee and the full politburo, in preparation for the leadership change five years down the line.

Thus, the 19th CPC which meets in October 2017 is the in-between session when central committee and politburo members are appointed. It is crucial because that team plays the key role in the appointment of the next leader at the 20th Congress.

Recent months have seen sizeable re-shuffle in the top positions in the 31 provinces, Continue reading “A China Gazer’s Random Musings – No. 1” →

How Can China Deal with Pressure to Devalue the Renminbi?

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Zhang Ming, PhD, Director in the international investment research office of the Institute of World Economy and Politics, Chinese Academy of Social Sciences (CASS), Beijing

A version of this article was originally published in the Business Standard as ‘How China can resist devaluation pressure’, 29 July 2017. This is part of a series by Chinese economists facilitated by the ICS.

In July 2005, People’s Bank of China announced it was implementing a managed floating exchange rate system based on market principles and with reference to a basket of currencies.

From the end of June 2005 to the end of July 2015, RMB exchange rate against the US dollar rose to 6.12 from the previous 8.28, appreciating by about 26% (Figure 1). The RMB nominal effective exchange rate (NEER) and real effective exchange rate (REER) indices appreciated by 48% and 57% respectively over the same period (Figure 2).

That the appreciation of the REER of RMB exceeded its NEER indicates that the inflation level in China during this period was higher than the global average. Continue reading “How Can China Deal with Pressure to Devalue the Renminbi?” →

India’s Uncertain Demographic Dividend

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Jayan Jose Thomas, PhD, Associate Professor of Economics, Indian Institute of Technology Delhi and Member, Planning Board, State Government of Kerala

A version of this article was originally published in Chinese as ‘印度不确定的人口红利’ [Yindu bu queding de renkou hongli], Diyi Caijing, 10 July 2017. This is part of a series by Indian scholars in China’s top business affairs news portal facilitated by the ICS. The English version follows below the Chinese text.

普遍的观点认为，印度将受益于所谓的“人口红利”。据世界银行估计，2010年至2030年间，印度15岁至59岁人口将增加至2亿多人。与此同时，包括中国在内的世界大部分发达地区的适龄劳动人口预计将会下降。也就是说，未来几年，印度会为全球劳动力供给的大幅增长贡献力量。

然而，实现人口红利对印度来说并不容易。首先，获得诺贝尔经济学奖的阿马蒂亚·森(Amartya Sen)指出，在卫生和教育领域，印度面临严峻挑战。2010年，印度的婴儿死亡率是每千名47例，而在中国，这个比例已减少到每千名13例。

对印度政策制定者来说的另一个重大挑战，是为新进入劳动力市场的印度人创造就业机会。事实上，大部分年轻劳动力的增长将来自印度最贫穷的地区，主要包括北方邦和比哈尔邦在内的北部和东部地区。 Continue reading “India’s Uncertain Demographic Dividend” →

Artificial Intelligence and China’s Future

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Shruthi Anup Kumar, Research Intern, ICS

The field of artificial intelligence or AI encompasses a number of possibilities. Ranging from autonomous driving systems and language interpretation to facial recognition and military weapons, AI comprises not only the development of a robot that can move, think and talk like a human being but also includes smart programmes that are built to overcome our shortcomings and make the job easier for a human being.

In 2015, China’s central government launched the ‘Made in China 2025’ policy,[1] whereby the shift in focus from mass producing factory goods to developing high tech manufactured products by the year 2025 was announced. The effect of this policy was especially felt in the AI sector which is expected to grow from an industry of 23.9 billion Yuan (as of 2016) to 38 billion Yuan by the year 2018.[2] Continue reading “Artificial Intelligence and China’s Future” →

China’s Technological Success in Manufacturing

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Amitava Banik, BE (E&C), PGDM (Insurance Business)

China has for some time now been holding a position of technological significance in the world. It is a great success story for a country that is still counted among the world’s developing nations. Memories of the time it had been associated with inferior quality products have all but vanished. China has not only been extremely successful in making its products the “new normal” all over the world, but with its investments in cutting edge technologies, infrastructure and skilled manpower, it has started to edge into the hi-tech zone.

It is generally accepted that countries develop in successive stages from an agricultural economy to industrial manufacturing and then to a service-based economy. All major world economies have traversed this path. The transformation in India on the contrary, has been from the agrarian economy to a service economy, virtually jumping over the manufacturing stage. One of the primary reasons put forward by economists for this bypassing of the manufacturing stage in India, is the lack of progress of primary education in the country. Continue reading “China’s Technological Success in Manufacturing” →