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292. Impact of China Slowdown on India
- Author:
- Geetima Das Krishna and Ankit Bhardwaj
- Publication Date:
- 02-2016
- Content Type:
- Working Paper
- Institution:
- Centre for Policy Research, India
- Abstract:
- After three decades of double-digit growth, China is slowing as it is rebalancing its economy from export-driven to less-volatile domestic consumption driven economy. The paper looks at the impact of China slowdown on India through different channels. Even though India is usurping China as the fastest growing major economy in the world, Indian economy being a fifth of the Chinese economy and also less material intensive can hardly substitute for China as a global growth driver. China has emerged as the largest trading partner of India but India’s trade still remains less vulnerable to Chinese slowdown directly as India’s services exports account for as much as 50% of India’s overall exports (merchandise and services). On the other hand, China’s total FDI investment in India has been miniscule $1.2 billion till September 2015 and India’s infrastructure sector, with its massive investment needs, can be the natural destination for Chinese investments. India reaped the indirect benefit of lower commodity prices in terms of narrower CAD, softening inflation, lower interest rate, increased government fiscal bonanza, all of which contributed to greater macro-stability in India. It was also found that a 50bps decline in China’s growth rate is likely to lower India’s growth by 30bp in the short run.
- Topic:
- International Trade and Finance, Bilateral Relations, Economy, Economic Growth, and Regional Integration
- Political Geography:
- China, South Asia, India, and Asia
293. China Dream: Still Coming True?
- Author:
- Alessia Amighini
- Publication Date:
- 07-2016
- Content Type:
- Special Report
- Institution:
- Italian Institute for International Political Studies (ISPI)
- Abstract:
- At a time when the economic transition in China is casting shadows on the weak world recovery, and the country is further increasing military spending at double-digit rates, it is key to assess how far President Xi has gone in fulfilling the “China Dream” of ascendance to cultural, economic and military power. Even more important is to try to figure out what the substance of the “China Dream” is likely to be in the near future. The current risk is that the Chinese people and the Chinese government are dreaming different dreams, and that Xi’s “China Dream” might be more a dream for the country and much less so for the people. China has recently reached a series of symbolic milestones: the Yuan’s inclusion in the IMF’s SDR basket; the new China-led Asian Infrastructure Investment Bank (AIIB); the market economy status by a number of countries. The 2016 Chinese G20 Presidency will provide a timely occasion for China to better define its role in global economic governance. However, progress on reforms is lagging behind expectations and international tensions are on the rise. This volume explores the viability of the China Dream and analyzes its major challenges.
- Topic:
- Governance, Economy, Xi Jinping, Military, and Regional Politics
- Political Geography:
- China and Asia
294. International Experience of and Policy Suggestions on Innovation and Entrepreneurship Oriented Incubators
- Author:
- Pangoal Institution
- Publication Date:
- 05-2015
- Content Type:
- Special Report
- Institution:
- Pangoal Institution
- Abstract:
- In the 2015 government work report, Premier Li Keqiang has mentioned twice the concept of “mass entrepreneurship and innovation”. He stresses that along with greater supplies of public goods and services, these will become the twin engines to drive the development and upgrade of China’s economy. At the same time, innovation is a critical impetus to revolutionize traditional industries and build new economic engine. Innovation and entrepreneurship oriented incubator, as an important carrier of new innovation service platform that meets the need to establish maker space in the network age, has attracted more and more public attention. Since its birth in the late 1950s, innovation and entrepreneurship oriented incubator has been a strong impetus to the economic prosperity of different countries and regions in the world and also plays a prominent role in nurturing small and medium enterprises and creating jobs. As the birthplace of the incubator, the United States has established a relatively mature incubator industry operation mechanism after experiencing the four stages of initial creation, multi-functional development, high-speed growth and innovative transformation. The US has become the global leader in the field of Innovation and entrepreneurship oriented incubator with its innovative incubator model featuring “business accelerator” and “virtual incubator”. Despite its later start than the US in this field, Germany has formed its own shareholding incubator model centered on interest chain and incubator model linked by intermediary service agency as well as international expansion model featuring overseas incubator, which shows a tendency to surpass the US. In France, many incubator models such as the ones funded by the government, the ones comprehensively and the ones established by enterprises have gained fairly good results. Israel, which used to be a small developing country with a low population and poor resource, has now became a developed country with its high-tech industries significantly promoted by incubator.
- Topic:
- Development, Entrepreneurship, Economy, and Innovation
- Political Geography:
- China and Asia
295. Channelling household savings to productive uses through the capital markets
- Author:
- Geetima Das Krishna, Vardhana Pawaskar, and Ankit Bhardwaj
- Publication Date:
- 11-2015
- Content Type:
- Working Paper
- Institution:
- Centre for Policy Research, India
- Abstract:
- Savings provides the means for investments. Typically, investments are primarily funded through domestic savings and the rest through foreign capital inflows. Domestic savings are from three sources -- households, private and public sector. Household savings form the largest part of total savings. As domestic savings contributes the most to capital formation, it can also be a limiting factor to investments. The paper deals with changing pattern of Household savings, its shift away from capital (financial) markets towards unproductive assets like gold and possibilities of channelization household savings to investment rather than speculative assets. The paper looks at the current policy incentives in terms of tax to boost capital market investment and whether it has served the purpose of long term capital formation. The current savings environment indicates a high proportion being in physical rather than financial assets. Within financial assets derivatives are preferred over the cash equity. We propose that an investment of incentive structure should support a pyramid where the small investors would hold maximum in the less risky assets and reduce the holdings as they move towards risky assets. Our paper is organized as, section (2) studies trends in current macro-economic scenario in terms of the savings; section (3), deals with, the capital formation and share of capital markets in terms of raising new capital. In section (4), we look at the current investment pattern in Indian capital markets and the incentives provides to boost trading in the equity and derivative products. Section (5) we give our proposal on the layered approach to investment architecture. Finally, section (6) concludes the paper.
- Topic:
- Finance, Economy, Capital Flows, and Investment
- Political Geography:
- South Asia, India, and Asia
296. Exclusion, Informality, and Predation in the Cities of Delhi
- Author:
- Cities of Delhi Team
- Publication Date:
- 08-2015
- Content Type:
- Working Paper
- Institution:
- Centre for Policy Research, India
- Abstract:
- Delhi is India’s richest city and as the capital of the nation has long enjoyed favourable treatment from the Centre. As the home to the country’s national bureaucracies, it also benefits from a large base of secure, well-paid, government jobs. Over the last decade the city has grown at an average real rate of 10 percent, and has benefitted from a dramatic increase in large-scale infrastructure development. Yet, despite these advantages, Delhi is a deeply divided city marked by layers of social exclusion. In the modern imaginary, the city represents the promise of freedom and opportunity. It marks a social space that is less constrained by traditional identities and one in which greater social interaction and density support economic dynamism. If development must, as Amartya Sen has so influentially argued, be based on strengthening basic capabilities, then the city can surely be a privileged site of capability-enhancement. Indeed, the migrants who flood the city often come in search of better livelihoods, education, health, and basic services. But as any resident of Delhi knows, the quality of such services varies dramatically across neighbourhoods, and the part of the city one lives in significantly impacts one’s ability to take full advantage of what the city has to offer. The Cities of Delhi (CoD) project starts with the simple recognition that India’s capital is marked by different settlement types, defined by diverse degrees of formality, legality, and tenure, which taken together produce a highly differentiated pattern of access to basic services. This report provides an overview of the findings from CoD. It builds directly on the place, process, and institution reports available at citiesofdelhi.cprindia.org, but in no way substitutes for these reports, all of which stand on their own as original empirical contributions. This overview is instead a synthesis, an effort to tie together the findings from the reports, to paint a broad picture of patterns of unequal access to basic services in the city and to provide an analysis of how these patterns of inequality are linked to structures and practices of governance.
- Topic:
- Development, Urbanization, Inequality, Economy, and Capital Flows
- Political Geography:
- South Asia, India, and Asia
297. North Korea: The Myth of Maxed-Out Sanctions
- Author:
- Joshua Stanton
- Publication Date:
- 01-2015
- Content Type:
- Journal Article
- Journal:
- Fletcher Security Review
- Institution:
- The Fletcher School, Tufts University
- Abstract:
- On December 19, 2014, President Obama publicly blamed North Korea for the cyberattack against Sony Pictures and for the subsequent cyberterrorism against the American people, and promised to "respond proportionally." Almost immediately thereafter, one could hear a familiar narrative repeated, typified by New York Times correspondent David Sanger, who wrote that "North Korea is under so many sanctions already that adding more seems futile." One could have heard similar arguments in 2006, after North Korea's first nuclear test, and in 2013, after its third nuclear test. A variation of this argument is that “Washington … can do little ... without the cooperation of China.” For years, journalists have quoted “experts” who insisted that U.S. sanctions options against North Korea were exhausted and had failed as an instrument of policy. As a matter of both fact and law, however, that is false; it even suggests that these experts have not read and understood the sanctions authorities. Why does this view persist, then? Some scholars may accept and propagate it because they oppose sanctions as a matter of policy. Others have simply ceased to question a myth that has entered the received wisdom. A true understanding of the potential effectiveness of sanctions first requires an understanding of what these sanctions are, what they are not, and how they work. This article will first summarize the sanctions authorities – U.N. Security Council resolutions, and the U.S. sanctions that should be an important part of the effective enforcement of the measures that the U.N. Security Council has adopted. It will also explain the role of the Treasury Department in regulating the international financial system, and the power this gives the United States to isolate the North Korean government from that system. It will explain which U.S. and U.N. sanctions against North Korea have succeeded and failed, and why. Finally, it will explain what current U.S. national sanctions do, and what they do not do. Only after one understands how little the current sanctions do – and how much they could do – can one begin to understand how to strengthen them into an effective part of a coherent foreign policy...
- Topic:
- Science and Technology, United Nations, Sanctions, Cybersecurity, and Economy
- Political Geography:
- Asia, North Korea, North America, and United States of America
298. The Strategic Duel over Taiwan
- Author:
- Ian Easton
- Publication Date:
- 09-2015
- Content Type:
- Journal Article
- Journal:
- Fletcher Security Review
- Institution:
- The Fletcher School, Tufts University
- Abstract:
- The United States and the People’s Republic of China (PRC) are firmly entrenched in what will be a long and intense strategic competition for dominance over the Pacific Rim. American strategists Andrew Marshall, Robert Kaplan, and Aaron Friedberg began foretelling of this great power struggle over a decade ago.[1]. They recognized before anyone else that there are strong forces underpinning the U.S.-China rivalry. The two countries’ political systems and national interests stand in fundamental opposition. This is why, despite Washington’s reluctance to officially admit it, strategic competition between the U.S. and the PRC is unavoidable. The United States, while an imperfect democracy, is an inspiration to people everywhere who yearn for the freedom and dignity that comes from having a representative government, independent legal system, and market economy. In the PRC, on the other hand, power is monopolized by the Chinese Communist Party (CCP), a political organization that is directly responsible for more human suffering than possibly any other regime past or present, anywhere in the world.[2] Numerous State Department reports detail the past and continuing human rights violations occurring under the watch of the CCP.[3] For all its much ballyhooed economic reforms, China’s economy is still largely controlled by massive state-owned corporations, making it a mercantilist country, not a capitalist one.[4] Much of Beijing’s economic power ultimately stems from its remarkable ability to lure foreign business elites with promises of access to its huge market. Once the hook is set, China pockets their investments, steals their intellectual property, and undercuts their market competitiveness.[5] Yet it is not the PRC’s unsavory political or economic practices that will ensure sustained U.S.-China competition over the coming decades, although future American presidents, like Barack Obama, will undoubtedly be tempted to paper over ideological differences for expedience sake. Rather, Beijing’s insecure and aggressive nature is at the root of the problem. In recent years, China has stoked maritime tensions with Japan and the Philippines, both treaty allies of the United States; provoked border clashes with India, a democratic nation and American security partner; and enabled nuclear missile proliferation amongst its friends: North Korea, Pakistan, and Iran.[6] Track records tell a compelling story. The PRC’s track record indicates that a growing number of geostrategic issues could eventually result in a clash between the United States and China...
- Topic:
- Security, Military Strategy, Economy, and Grand Strategy
- Political Geography:
- China, Taiwan, Asia, and United States of America
299. Rethinking Monetary and Financial Policies in China
- Author:
- Il Houng Lee, Murtaza Syed, and Da Young Yang
- Publication Date:
- 09-2014
- Content Type:
- Working Paper
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- There is partial consensus that the size of money―or liquidity―in China should be large reflecting the high savings rate. Even so, with a sense of a liquidity overhang from the recent monetary expansion, many caution against expanding liquidity further lest it translate into a property bubble. Instead, they argue for ways to speed up the circulation of liquidity―in other words to raise velocity―to stimulate the real economy. The recent growth of the non-banking system adds to these concerns, and has been criticized as falling short of promoting effective financial intermediation. Some even claim that the monetary authorities may be losing control over the growth of key monetary aggregates. Against this background, this paper reviews recent monetary developments in China and considers how monetary aggregates and the financial system may have to change to support the rebalancing of the economy.
- Topic:
- Monetary Policy, Finance, and Economy
- Political Geography:
- China and Asia
300. The Senkaku/Diaoyu Islands Territorial Dispute between Japan and China : Between the Materialization of the ‘China Threat’ and Japan ‘Reversing the Outcome of World War II’?
- Author:
- Reinhard Drifte
- Publication Date:
- 05-2013
- Content Type:
- Journal Article
- Journal:
- Revista UNISCI/UNISCI Journal
- Institution:
- Unidad de investigación sobre seguridad y cooperación (UNISCI)
- Abstract:
- The territorial dispute between Japan and China over the sovereignty of the Senkaku/Diaoyu Islands is framed by economic interests, domestic circumstances, national identity issues, requirements of international law and historical grievances. The article provides an analysis of these issues which are indicative of the bilateral relationship in general. The analysis of the 1972-2010 period traces the reasons for the erosion of the implicit agreement in 1972 and 1978 between the two countries to shelve the territorial dispute, using Constructivist as well as Realist approaches. The second part contains a case study of the 2010 and the 2012/13 Senkaku incidents, the latter and most serious one started by Ishihara Shintaro, the right-wing Governor of Tokyo, when he declared in April 2012 his intention to have his local government buy some of the contested islands from its private owner which prompted the national government of Prime Minister Noda to buy them instead. The ensuing Chinese reaction has led to a crisis in the bilateral relationship which has political, military and economic implications of considerable importance for the future of Japan and China but also for the stability of the whole East Asian region.
- Topic:
- Territorial Disputes, Economy, and Law of the Sea
- Political Geography:
- Japan, China, Asia, and East China