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From WSJ’s Davos blog:

Standard Chartered PLC remains bullish on the major Asian economies of India and China, encouraged by the policy outlook for the two countries this year, the bank’s Asia chief executive said.

The U.K.-based lender, which focuses almost exclusively on Asia and emerging economies, also sees European rivals retreating from those markets as they are beset with challenges at home, Standard Chartered Asia Chief Executive Jaspal Bindra said in an interview on the sidelines of the World Economic Forum.

In India last year, Standard Chartered confronted a range of challenges including slowing growth, rising interest rates and a depreciating rupee. Revenue from the bank’s India unit fell by 12% in the first half of 2011 and by the “mid-teens” in the third quarter, Group Finance Director Richard Meddings said earlier.

Mr. Bindra blamed higher interest rates. “Interest rates went up almost 400 basis points in a short period, and it is very difficult, if you do wholesale business with the best clients in the country, to pass on a 400 basis point increase at any one time.”

But the central bank’s surprise move to loosen monetary policy this week has sent a “clear signal” that there will be no further rate hikes and the government is shifting its focus to promoting growth, Mr. Bindra said.

The Reserve Bank of India Tuesday held its key lending rate steady for a second straight policy meeting but cut the minimum cash reserve requirement by 0.50 percentage point to ease liquidity.

“The government has for a long time shown a huge preference to manage inflation through monetary policy,” he said. But following the RBI cut, “I think we will see a more balanced approach.”

Mr. Bindra also said that the recent “normalization” of the rupee exchange rate — it is up 6% against the dollar so far this year after declining 15.1% in 2011 — will encourage renewed foreign investment.

In China, Mr. Bindra believes authorities will be successful in guiding the economy to a “soft landing” ahead of a leadership transition at the end of the year.

“The priority for all of 2012 and beyond is going to be ‘how do we keep things stable,’ as they have this transition of power at the top,” he said, adding that not just the top political leadership, but also the leaders of major financial institutions and regulators are all due to be reshuffled. “It is quite a massive-scale change of power.”

As European banks regroup and retreat from Asia, Standard Chartered sees an opening. The trend is especially pronounced in industries including shipping and commodities and in markets like Indonesia and India where dollar liquidity is scarce, he said.

“It gives us an opportunity to scale up market share, and second, it gives us a little bit of pricing advantage.”

– Aaron Back. Follow him on Twitter @AaronBack.

In recent years, China has re-invigorated its support for leading state-owned enterprises in sectors it considers important to “economic security,” explicitly looking to foster globally competitive national champions.

In 2009, China announced that by 2020 it would reduce carbon intensity 40% from 2005 levels.

The government has also focused on foreign trade as a major vehicle for economic growth.

The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.

The disparities between the two sectors have combined to form an economic-cultural-social gap between the rural and urban areas, which is a major division in Chinese society.

The technological level and quality standards of its industry as a whole are still fairly low, notwithstanding a marked change since 2000, spurred in part by foreign investment.

China’s increasing integration with the international economy and its growing efforts to use market forces to govern the domestic allocation of goods have exacerbated this problem.

The growth in both outbound investment from, and inbound investment to, China reflects the nation’s rising economic power and attractiveness as an investment destination.

” Although the figure is already “quite amazing,” the volume is “not large enough” considering China’s economic growth and local companies’ expanding demand for international opportunities, Shen said.

It also aims to sell more than 15 million of the most fuel-efficient vehicles in the world each year by then.

Although China is still a developing country with a relatively low per capita income, it has experienced tremendous economic growth since the late 1970s.

Since the late 1970s, China has decollectivized agriculture, yielding tremendous gains in production.

China is the world’s largest producer of rice and wheat and a major producer of sweet potatoes, sorghum, millet, barley, peanuts, corn, soybeans, and potatoes.

China ranks first in world production of red meat (including beef, veal, mutton, lamb, and pork).

Growing domestic demand beginning in the mid-1990s, however, has forced the nation to import increasing quantities of petroleum.

China’s leading export minerals are tungsten, antimony, tin, magnesium, molybdenum, mercury, manganese, barite, and salt.

Major industrial products are textiles, chemicals, fertilizers, machinery (especially for agriculture), processed foods, iron and steel, building materials, plastics, toys, and electronics.

Brick, tile, cement, and food-processing plants are found in almost every province.

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Davos: StanChart Bullish on China, India

China’s growth rate is slowing but it is still a good investment for a long-term play. Jim McCaughan, CEO of Principal Global Investors, tells Deborah Kan investors should look to the U.S. for the near term.

After keeping its currency tightly linked to the US dollar for years, China in July 2005 revalued its currency by 2 % against the US dollar and moved to an exchange rate system that references a basket of currencies.

In 2006, China announced that by 2010 it would decrease energy intensity 20% from 2005 levels.

China is the world’s fastest-growing major economy, with an average growth rate of 10% for the past 30 years.

Nevertheless, key bottlenecks continue to constrain growth.

The disparities between the two sectors have combined to form an economic-cultural-social gap between the rural and urban areas, which is a major division in Chinese society.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

The market-oriented reforms China has implemented over the past two decades have unleashed individual initiative and entrepreneurship, whilst retaining state domination of the economy.

The ministry made the announcements during a press conference held in Xiamen on the upcoming United Nations Conference on Trade and Development (UNCTAD) World Investment Forum and the 14th China International Fair for Investment and Trade.

In this period the average annual growth rate stood at more than 50 percent.

It also aims to sell more than 15 million of the most fuel-efficient vehicles in the world each year by then.

China’s challenge in the early 21st century will be to balance its highly centralized political system with an increasingly decentralized economic system.

Despite initial gains in farmers’ incomes in the early 1980s, taxes and fees have increasingly made farming an unprofitable occupation, and because the state owns all land farmers have at times been easily evicted when croplands are sought by developers.

Except for the oasis farming in Xinjiang and Qinghai, some irrigated areas in Inner Mongolia and Gansu, and sheltered valleys in Tibet, agricultural production is restricted to the east.

Horses, donkeys, and mules are work animals in the north, while oxen and water buffalo are used for plowing chiefly in the south.

There are also extensive iron-ore deposits; the largest mines are at Anshan and Benxi, in Liaoning province.

There are also deposits of vanadium, magnetite, copper, fluorite, nickel, asbestos, phosphate rock, pyrite, and sulfur.

China’s exploitation of its high-sulfur coal resources has resulted in massive pollution.

Other leading ports are rail termini, such as Lüshun (formerly Port Arthur, the port of Dalian), on the South Manchuria RR; and Qingdao, on the line from Jinan.

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Investor: Take U.S. for Near Term, China for Long Term

Reuters Workers construct a new toll road in Jakarta, Indonesia. JAKARTA – While much of the world struggles with painful austerity measures to stem spreading debt problems, Indonesia needs to splurge a little more, even if that means inflating its debt load.

That was one of the contrarian messages from a presentation Tuesday by Fitch Ratings, the international debt rater that lifted Indonesia’s credit rating above junk for the first time in 14 years last month.  If it wants to accelerate growth, Southeast Asia’s largest economy has to get more aggressive about spending on its infrastructure, said Philip McNicholas, director of Fitch’s sovereign ratings for the Asia-Pacific region. “If its budget deficit does blow out, we would not necessarily view that as unfavorable,” as long as the spending was on things that could put Indonesia on a “high-growth path,” he said. Few countries have experienced the devastation that can come from too much dependence on debt and foreign capital in the way Indonesia did in the 1990s, when the Asian financial crisis sent the country’s economy reeling.

That experience, and the painful rebuilding, has made Indonesia more cautious than most for much of the last decade. Its public debt to gross domestic product ratio (more than 100% for many countries today) came down sharply from around 90% in 2000 to 25% today. As a result, the country has the opposite spending problem now – it spends too little, say some economists. While its growth rate, which has averaged more than 6% in recent years, is stretching its outdated roads, ports and power plants, year after year it fails to meet its spending targets for new infrastructure. In the meantime, its roads are getting more crowded and companies are complaining of costly delays at ports and airports.

The number of cars on Indonesia’s roads has jumped from around 15 per kilometer at the turn of the century to more than 40 today, Fitch said. Including two-wheelers, the number of vehicles has tripled to 150 per kilometer. It isn’t often that a cautious rating agency tells a country to stop worrying about debt, but Indonesia needs to live a little, said Mr. McNicholas. “It’s a pretty rare situation outside of the higher-rated countries,” he said.

Read the original here:
Fitch: Indonesia Has Spending Problem

As if the reputation of China’s economic data wasn’t shaky enough already, an odd bureaucratic tug of war is casting new doubt on one of the country’s more closely watched indicators.

China’s official Purchasing Managers Index (PMI), a gauge of the nation’s manufacturing activity, has been jointly released by the National Bureau of Statistics and an industry association called the China Federation of Logistics and Purchasing (CFLP) since 2005. Now, however, each body is trying to claim the data for itself.

The dispute originated with a statement posted on the Bureau of Statistics website on January 6 (in Chinese) saying it was the bureau that conducted the manager surveys that underpin the index conducted by the bureau. According to the statement, the CFLP merely published the survey under the authorization of the bureau.

The statement also quoted Pan Jiancheng, deputy director of the bureau’s China Economic Monitoring & Analysis Center, as saying the bureau planned to integrate all economic climate surveys and publish them as a group because “whoever conducts the survey should be the one to publish it.”

Three days later, the federation said in a statement on its own website (in Chinese) that PMI would not be part of the official climate surveys to be published by the statistics bureau.

“Somebody from the Bureau of Statistics is unhappy that we are doing such a good job with the PMI and decided to get tricky,” Cai Jin, deputy director of the CFLP, told the Shanghai-based Oriental Morning Post this week (in Chinese). “This has very negative influence on China’s PMI data.”

CFLP said in its statement that it submitted a request to establish the index in 2004 and that the NBS said it supported the proposal but asked the federation can make use of bureau’s existing enterprise survey resources to avoid redundancy. “Our federation is responsible for the release, analysis and interpretation of the survey,” CFLP said in its statement, adding that it is common practice for independent organizations to publish PMI to ensure objectivity.

According to its website, the CLFP, which claims to have thousands of purchasing manager members, is the only purchasing industry association approved by the State Council, China’s cabinet.

In the days since the Bureau of Statistics published its statement, Mr. Cai said, financial institutions and news media have pelting the CLFP with questions, expressing concern that the bureau might manipulate PMI based on other macroeconomic data.

“That’s why we have to clear things out,” Oriental Morning Post quoted Mr. Cai as saying.

China’s Purchasing Managers Index rose to 50.3 in December compared with 49.0 in November, indicating an increase in manufacturing activity. The rise came after HSBC Holdings PLC’s survey of purchasing managers showed manufacturing activity contracting in December, though at a more moderate pace than in the previous month.

The HSBC PMI has showed contractions in manufacturing in all but one of the past six months, painting a significantly less optimistic picture than the Chinese government’s competing PMI. Analysts say the HSBC PMI has been weaker because it surveys more purchasing managers from smaller firms, which have had difficulty accessing loans from banks.

– Liyan Qi

Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment.

In 2009, the global economic downturn reduced foreign demand for Chinese exports for the first time in many years.

China is the world’s fastest-growing major economy, with an average growth rate of 10% for the past 30 years.

Available energy is insufficient to run at fully installed industrial capacity, and the transport system is inadequate to move sufficient quantities of such critical items as coal.

Agricultural output has been vulnerable to the effects of weather, while industry has been more directly influenced by the government.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

China’s ongoing economic transformation has had a profound impact not only on China but on the world.

Both forums will start on Tuesday.

But “this is just a beginning.

It also aims to sell more than 15 million of the most fuel-efficient vehicles in the world each year by then.

Although China is still a developing country with a relatively low per capita income, it has experienced tremendous economic growth since the late 1970s.

Agriculture is by far the leading occupation, involving over 50% of the population, although extensive rough, high terrain and large arid areas – especially in the west and north – limit cultivation to only about 10% of the land surface.

Except for the oasis farming in Xinjiang and Qinghai, some irrigated areas in Inner Mongolia and Gansu, and sheltered valleys in Tibet, agricultural production is restricted to the east.

China ranks first in world production of red meat (including beef, veal, mutton, lamb, and pork).

Oil fields discovered in the 1960s and after made China a net exporter, and by the early 1990s, China was the world’s fifth-ranked oil producer.

China is among the world’s four top producers of antimony, magnesium, tin, tungsten, and zinc, and ranks second (after the United States) in the production of salt, sixth in gold, and eighth in lead ore.

China also has extensive hydroelectric energy potential, notably in Yunnan, W Sichuan, and E Tibet, although hydroelectric power accounts for only 5% of the country’s total energy production.

There are railroads to North Korea, Russia, Mongolia, and Vietnam, and road connections to Pakistan, India, Nepal, and Myanmar.

Excerpt from:
China’s Stats Bureau in Odd Ownership Spat Over Important Index

By Stanley Lubman

The recent Wukan protest has faded from the media, but one issue continues to percolate in its wake: the role of Chinese law, which some protesters invoked.

Two Chinese intellectuals have since spoken up about the need to strengthen the rule of law around property rights and, more importantly, about the need for a “paradigm shift” in the way officials think about rights and handle related disputes.

Some of the Wukan protesters were indeed conscious of their rights, as evidenced by one villager’s exclamation that “we must use the weapons provided by the legal system to fight corruption to the end.” Another protestor said he was confident that the central government would assist villagers who had lost land due to the corrupt actions of local officials because “the country is ruled by law.”

The protest was resolved, not by law, but by the administrative actions of provincial Party officials. It’s possible that the village officials responsible for the land transaction that sparked the protests will be accused of corruption, tried and punished, but even that legal process, if it occurs, would likely be a fait accompli following a prior Party decision on their punishment.

The protests nevertheless prompted some interesting commentary on Chinese legal issues, including from economist Hu Deping, the son of former CCP General Secretary Hu Yaobang.

In a commentary posted to a forum discussing a People Daily’s editorial on Wukan, Hu observes that rural land is often treated as if it belongs to the state rather than by collectives as provided by law — an erroneous conviction that helps justify forced demolitions. Disregard for rural collective rights, he writes, “is enough to change the character of reform.” In a single powerful sentence – all the more powerful because it comes from a princeling — he declares his hope “that the Wukan incident can push society into establishing a system that takes democracy and the rule of law as its foundation.” He ends with the hope that similar issues will be solved “using rule of law and negotiations.”

A lengthier and even more provocative commentary was posted to the same forum by Wu Si, editor of the party history magazine Yanhuang Chunqiu.

In analyzing the protests, Wu contrasts two “modes of thought” that appeared in Wukan. One was a hostile “us-versus-them” mentality that assumed a zero-sum conflict. Wu argues that such thinking is common in situations like Wukan’s owing in part to the failure of the courts, which are generally reluctant to take up cases involving land and “the political regime.” He notes that the Party Secretary of Shanwei, the prefectural city in which the village of Wukan is located, was ready to blame outsiders and the media for deepening the conflict.

Wu’s second “mode of thought,” which he proposes as an alternative approach to social conflict, is the ”civil rights mode of thinking,” or rule of law. This, he argues, should be the only basis for the government’s approach, and ought to lead to decision by an independent court without the government being “disturbed” by administrative agencies. He goes on to note that the provincial working group that eventually negotiated an end to the process promoted five principles for resolving the crisis, two of which were “total transparency” and “rule of law.” Wu argues the weakness of China’s courts makes the involvement of administrative working groups necessary. That, in turn, invites administrative interference. In the future, he writes, there must be “independent court rulings” and constitutional government.

Wu traces the “us-versus-them mentality” to the historical emphasis placed by the CCP on class warfare. He argues that shifting the emphasis to other CCP principles — serving the people and putting the people first — would expand political rights and economic freedom and lead to a prosperous society that would be “relatively stable” and “harmonious” as well. Wu concludes by urging the property rights must be clarified, village elections improved and laws enforced.

Wu offers no sure path to attain the goal he advocates, but his conclusion is most dramatic: “To solve problems with civil rights and the rule of law in mind, there must be a paradigm shift for cadres,” who need to change the way the way they “mediate crises.” In solving social conflicts, he writes, new ways of thought “will open a new road” for Chinese society.

Invocation of the rule of law has been a ritual for some years in China, but it is usually only activists and law reformers who are willing to suggest it is an entirely distinctive approach to ordering society. The call for a “paradigm” change in a party magazine suggests something more radical than the usual slogans and formulas.

Some Western observers, including this writer, have tried to incorporate into their analyses of Chinese law the idea of “legal culture” — the way people in a society, from top to bottom, think about where law comes from, its aims and its methods. That is what Wu Si touches on when he suggests that cadres rethink about how they address social conflict. He is proposing that in practice they consciously place a much greater reliance on law and on legal institutions, which could become “a force for reform” leading to “systemic changes.”

Wu also suggests that Guangdong and Shanwei might initiate reforms. In recent years, a number of important reforms have been initiated locally. Among them is the 2003 adoption in Guangzhou of an open government law, which preceded adoption of a similar law by the central government. Even more important was the adoption by Sichuan Province of China’s first provincial-level administrative procedure law in 2008, followed by Shandong’s adoption of a similar law that became effective on January 1, 2012. There is hope that these two laws will also eventually provide a model for reform of existing national legislation.

If thoughtful reflections like those discussed here inspire local reforms, the Wukan villagers will deserve credit for having struck a chord that could continue to resound.

Stanley Lubman, a long-time specialist on Chinese law, is a Distinguished Lecturer in Residence at the University of California, Berkeley, School of Law and is the author of “Bird in a Cage: Legal Reform in China After Mao,” (Stanford University Press, 1999).

China’s economy during the past 30 years has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy.

One demographic consequence of the “one child” policy is that China is now one of the most rapidly aging countries in the world.

The country’s per capita income was at $6,567 (IMF, 98th) in 2009.

The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.

Its mineral resources are probably among the richest in the world but are only partially developed.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

By the early 1990s these subsidies began to be eliminated, in large part due to China’s admission into the World Trade Organization (WTO) in 2001, which carried with it requirements for further economic liberalization and deregulation.

The growth in both outbound investment from, and inbound investment to, China reflects the nation’s rising economic power and attractiveness as an investment destination.

“China is now the fifth largest investing nation worldwide, and the largest among the developing nations,” said Shen Danyang, vice-director of the ministry’s press department.

China is aiming to be the world’s largest new energy vehicle market by 2020 with 5 million cars.

In large part as a result of economic liberalization policies, the GDP quadrupled between 1978 and 1998, and foreign investment soared during the 1990s.

Even with these improvements, agriculture accounts for only 20% of the nation’s gross national product.

In terms of cash crops, China ranks first in cotton and tobacco and is an important producer of oilseeds, silk, tea, ramie, jute, hemp, sugarcane, and sugar beets.

Sheep, cattle, and goats are the most common types of livestock.

Coal is the most abundant mineral (China ranks first in coal production); high-quality, easily mined coal is found throughout the country, but especially in the north and northeast.

China is among the world’s four top producers of antimony, magnesium, tin, tungsten, and zinc, and ranks second (after the United States) in the production of salt, sixth in gold, and eighth in lead ore.

China’s exploitation of its high-sulfur coal resources has resulted in massive pollution.

After the 1960s, the emphasis was on regional self-sufficiency, and many factories sprang up in rural areas.

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The Wukan Protests and the Rule of Law

Every year on Dec. 31, a number of cities stand out as being the hottest spots to ring in the New Year: New York, London, Sydney and Tokyo. Now Beijing wants to join that list too—and hopes doing so will help boost tourism to the city.

And if not many people show up to the party? Well, that’s part of the plan, too.

The city is unveiling its first-ever western New Year’s extravaganza, rolling out a digital light show surrounding one of the city’s most renowned cultural icons–the Temple of Heaven, where Chinese emperors in centuries past went to pray for good harvests.

As midnight approaches, digital lights will transform part of the temple grounds into a giant, skyward-facing analog clock. Hundreds of local students will ride stationary green bikes that have been placed facing the temple and will light up—an intended salute to the importance of environmental protection. Meanwhile, LED lights will shoot colored beams into the sky and a countdown of the final seconds left in 2011 will be projected onto the temple itself, a triple-tiered gable structure built in the early 1400’s, creating 3-D visual effects.

But there will be one major difference between Beijing’s attempt and other hyped international celebrations, such as New York’s famed ball-dropping and the ringing chimes coming from Big Ben in London.  Unlike Times Square, where one million people flock each New Year’s Eve, according to the Times Square Alliance, Beijing’s festivities won’t be open to the public.

“The park isn’t big enough to hold that many people,” said Sun Weijia, the vice chairman of Beijing Municipal Commission of Tourism Development and one of the event’s organizers. Organizers have, however, contacted travel agencies to extend invitations to more than 500 foreign tourists who will be in the city, and journalists have also received invitations, Mr. Sun said, predicting a total audience of more than 3,000 people.

The goal of the event is not to draw big crowds to one site but to serve as an advertisement to the world’s tourists, Mr. Sun said, adding that the city gained global attention in the run-up to the Olympics and that the spotlight has since faded.

“Some zones [at the event] won’t have an audience,” he said, adding, “we designed them especially for television broadcasts.”

Some might point out that China is home to one of the world’s largest public squares, a space that dwarfs Times Square and could fit many more people.

But China’s leaders have long opposed big public gatherings, especially at Tiananmen Square. The image of thousands of students rallying for democratic rights in 1989 remains a fresh threat in the minds of many officials. In this upcoming year of leadership transition, the focus will be on stability.

China’s masses will have to watch the celebration from their televisions at home. Events will be broadcast by those lucky enough to invited to the Temple of Heaven — camera crews and other media types who can broadcast the show across the nation and to the rest of the world.

Beijing’s New Year’s bash will differ from those in many cities in another respect, too: a lack of fireworks. Fireworks of the tube-launched, explosive variety are by no means rare on the streets of Beijing, and their public use can be a substantial fire hazard in the period around Chinese New Year (which will fall in late January in 2012).

But the Beijing government’s countdown won’t have any. “Beijing doesn’t allow the use of fireworks, especially in imperial parks,” Mr. Sun said.

–Laurie Burkitt and Owen Fletcher; follow Laurie at @lburkitt and follow Owen at @owenfletcher.

In recent years, China has re-invigorated its support for leading state-owned enterprises in sectors it considers important to “economic security,” explicitly looking to foster globally competitive national champions.

The Chinese government faces numerous economic development challenges, including:
(a) reducing its high domestic savings rate and correspondingly low domestic demand through increased corporate transfers and a strengthened social safety net;
(b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and
(d) containing environmental damage and social strife related to the economy’s rapid transformation.

The People’s Republic of China is the world’s second largest economy after the United States by both nominal GDP ($5 trillion in 2009) and by purchasing power parity ($8.77 trillion in 2009).

Some economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector and that the extent at which China is dependent on exports is exaggerated.

The two most important sectors of the economy have traditionally been agriculture and industry, which together employ more than 70 percent of the labor force and produce more than 60 percent of GDP.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

China’s increasing integration with the international economy and its growing efforts to use market forces to govern the domestic allocation of goods have exacerbated this problem.

China now ranks as the fifth largest global investor in outbound direct investment (ODI) with a total volume of $56.5 billion, compared to a ranking of 12th in 2008, the Ministry of Commerce said on Sunday.

Last year was the eighth consecutive year that the nation’s ODI had grown.

China is aiming to be the world’s largest new energy vehicle market by 2020 with 5 million cars.

In large part as a result of economic liberalization policies, the GDP quadrupled between 1978 and 1998, and foreign investment soared during the 1990s.

Even with these improvements, agriculture accounts for only 20% of the nation’s gross national product.

Except for the oasis farming in Xinjiang and Qinghai, some irrigated areas in Inner Mongolia and Gansu, and sheltered valleys in Tibet, agricultural production is restricted to the east.

Horses, donkeys, and mules are work animals in the north, while oxen and water buffalo are used for plowing chiefly in the south.

Coal is the most abundant mineral (China ranks first in coal production); high-quality, easily mined coal is found throughout the country, but especially in the north and northeast.

China’s leading export minerals are tungsten, antimony, tin, magnesium, molybdenum, mercury, manganese, barite, and salt.

China also has extensive hydroelectric energy potential, notably in Yunnan, W Sichuan, and E Tibet, although hydroelectric power accounts for only 5% of the country’s total energy production.

The iron and steel industry is organized around several major centers (including Anshan, one of the world’s largest), but thousands of small iron and steel plants have also been established throughout the country.

See the article here:
No Crowds for China’s New Year

A list of what The Wall Street Journal’s reporters in China are reading and watching online. (NOTE: WSJ has not verified items in the ‘News’ section and doesn’t vouch for their accuracy.)

News:

* The former CCTV official blamed for a deadly and costly fire almost three years ago gets more years added to his term. (Xinhua)

* China plans new taxes on vehicles (China Daily)

* China should reduce reliance on overseas credit-rating companies by pushing its own, PBOC Gov. Zhou Xiaochuan said. (Bloomberg)

* Sudan’s unrest represents a minefield for oil-thirsty Beijing. (Washington Post)

Analysis and Commentary:

* Mao’s past mistakes show the need for an open government. (Global Times. Yes, that Global Times.)

* China is too big to support continued heady growth through exports, Gordon Chang argues. (Forbes)

* The Wukan revolt: A harbinger of things to come? (New York Times)

Just Because

Marilyn Monroe plans an appearance in Harbin. (Xinhua)

The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.

The government vowed to continue reforming the economy and emphasized the need to increase domestic consumption in order to make China less dependent on foreign exports for GDP growth in the future.

China has emphasized raising personal income and consumption and introducing new management systems to help increase productivity.

Some economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector and that the extent at which China is dependent on exports is exaggerated.

Its mineral resources are probably among the richest in the world but are only partially developed.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

By the early 1990s these subsidies began to be eliminated, in large part due to China’s admission into the World Trade Organization (WTO) in 2001, which carried with it requirements for further economic liberalization and deregulation.

The ministry made the announcements during a press conference held in Xiamen on the upcoming United Nations Conference on Trade and Development (UNCTAD) World Investment Forum and the 14th China International Fair for Investment and Trade.

“China is now the fifth largest investing nation worldwide, and the largest among the developing nations,” said Shen Danyang, vice-director of the ministry’s press department.

China is expected to have 200 million cars on the road by 2020, increasing pressure on energy security and the environment, government officials said yesterday.

In large part as a result of economic liberalization policies, the GDP quadrupled between 1978 and 1998, and foreign investment soared during the 1990s.

Despite initial gains in farmers’ incomes in the early 1980s, taxes and fees have increasingly made farming an unprofitable occupation, and because the state owns all land farmers have at times been easily evicted when croplands are sought by developers.

In terms of cash crops, China ranks first in cotton and tobacco and is an important producer of oilseeds, silk, tea, ramie, jute, hemp, sugarcane, and sugar beets.

Sheep, cattle, and goats are the most common types of livestock.

China is one of the world’s major mineral-producing countries.

China is among the world’s four top producers of antimony, magnesium, tin, tungsten, and zinc, and ranks second (after the United States) in the production of salt, sixth in gold, and eighth in lead ore.

The largest completed project, Gezhouba Dam, on the Chang (Yangtze) River, opened in 1981; the Three Gorges Dam, the world’s largest engineering project, on the lower Chang, is scheduled for completion in 2009.
Beginning in the late 1970s, changes in economic policy, including decentralization of control and the creation of special economic zones to attract foreign investment, led to considerable industrial growth, especially in light industries that produce consumer goods.

The iron and steel industry is organized around several major centers (including Anshan, one of the world’s largest), but thousands of small iron and steel plants have also been established throughout the country.

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China Watch: CCTV Sentence, Car Taxes Planned, Marilyn Monroe at Harbin

A list of what The Wall Street Journal’s reporters in China are reading and watching online. (NOTE: WSJ has not verified items in the ‘News’ section and doesn’t vouch for their accuracy.)

News:

* A city in western China seeks to banish the veil to “dilute religious consciousness” (Reuters)

* The first satellite photo of China’s aircraft carrier (MSNBC)

* And the world’s top financial center is… (GlobalPost)

* Strategic candor from a former ambassador (Economist)

* High hopes arrives with China’s new securities regulator (Caixin)

* Guangzhou moves to legalize street hawking (The Nanfang)

Analysis and Commentary:

* Kam Wing Chan on what geography has to say about the China infrastructure bubble (East Asia Forum)

Just Because:

* The challenges of being an olfactory discriminator in China (China Daily)

*  ”Tiger Mother” Amy Chua’s got nothing on China’s “Wolf Dad” (NPR)

In recent years, China has re-invigorated its support for leading state-owned enterprises in sectors it considers important to “economic security,” explicitly looking to foster globally competitive national champions.

The Chinese government faces numerous economic development challenges, including:
(a) reducing its high domestic savings rate and correspondingly low domestic demand through increased corporate transfers and a strengthened social safety net;
(b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and
(d) containing environmental damage and social strife related to the economy’s rapid transformation.

China has emphasized raising personal income and consumption and introducing new management systems to help increase productivity.

Some economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector and that the extent at which China is dependent on exports is exaggerated.

The disparities between the two sectors have combined to form an economic-cultural-social gap between the rural and urban areas, which is a major division in Chinese society.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

The market-oriented reforms China has implemented over the past two decades have unleashed individual initiative and entrepreneurship, whilst retaining state domination of the economy.

The growth in both outbound investment from, and inbound investment to, China reflects the nation’s rising economic power and attractiveness as an investment destination.

In 2009, global ODI volume reached $1.1 trillion, and China contributed about 5.1 percent of the total.

China reiterated the nation’s goals for the next decade – increasing market share of pure-electric and plug-in electric autos, building world-competitive auto makers and parts manufacturers in the energy-efficient auto sector as well as raising fuel-efficiency to world levels.

In large part as a result of economic liberalization policies, the GDP quadrupled between 1978 and 1998, and foreign investment soared during the 1990s.

Even with these improvements, agriculture accounts for only 20% of the nation’s gross national product.

China is the world’s largest producer of rice and wheat and a major producer of sweet potatoes, sorghum, millet, barley, peanuts, corn, soybeans, and potatoes.

Fish and pork supply most of the animal protein in the Chinese diet.

Offshore exploration has become important to meeting domestic needs; massive deposits off the coasts are believed to exceed all the world’s known oil reserves.

There are large deposits of uranium in the northwest, especially in Xinjiang; there are also mines in Jiangxi and Guangdong provs.

The largest completed project, Gezhouba Dam, on the Chang (Yangtze) River, opened in 1981; the Three Gorges Dam, the world’s largest engineering project, on the lower Chang, is scheduled for completion in 2009.
Beginning in the late 1970s, changes in economic policy, including decentralization of control and the creation of special economic zones to attract foreign investment, led to considerable industrial growth, especially in light industries that produce consumer goods.

Great inland cities include Beijing and the river ports of Nanjing, Chongqing, and Wuhan.

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China Watch: Banning the Veil, Aircraft Carrier Photographed, Meet ‘Wolf Dad’