Author: Peter Drysdale

The global financial crisis has seen China’s star shining ever more brightly in the international economic firmament. But with heightened concerns about inflation and moves to rein in the loose monetary policy which, together with a massive fiscal stimulus, had seen growth in China surge through 2009, will all that change?

As Yiping Huang cautioned last week, worries about the housing market and signs of an asset bubble were likely to encourage the Chinese monetary authorities to go into reverse, having recently removed preferential treatment for housing investment. India is the other emerging economy that has sailed fairly smoothly through the global financial crisis, with a 7.9 per cent growth rate in the third quarter of 2009. Read more…

Raghbendra Jha, ANU

Indian policymakers pride themselves on the fact that the Indian economy was able to pull out of the Global Financial Crisis (GFC) relatively unscathed, with real GDP growth rate falling to 6.7 per cent in 2008-09 as compared to the 9 per cent in 2007-08 and expected to rise above 7 per cent in 2009-10. At the onset of the GFC, many commentators had expected a collapse of growth, with some even predicting a return to the sluggish growth of the mid to late 1990s.

Thankfully, the Indian economy proved the predictors of doom wrong. Read more…

Author: James Boyers, ANU

Just after the swearing-in of the new Administrator of USAID, Dr Rajiv Shah, and on the eve of her aborted trip to Asia and Australia, US Secretary of State Hilary Clinton, delivered an address at the Petersen Institute for International Economics, outlining the Obama administration’s approach to international development. In her opening remarks, Secretary Clinton described the provision of aid and development assistance ‘as central to advancing American interests and solving global problems as diplomacy and defence.’ The goal of development, articulated by Secretary Clinton, is to advance global security, improve America’s security, and project American values and leadership in the world.

In order to achieve these goals, Secretary Clinton outlined six ‘steps’ being taken by the administration. Read more…

Author: Gary Hawke, NZIER

New Zealand marked time in 2009, with the government conserving its political capital but achieved little.

Much of the agenda was international rather than domestic. This was most obvious in the area of climate change. New Zealand shares the international policy issue of identifying a suitable response to a risk assessment and choice of appropriate insurance policy, but there was also much emotional nonsense. Read more…

Author: James Fallows

I have not yet been able to reach my friends in China to discuss the story of Google’s threatened withdrawal from China, so for now I am judging the Google response strictly by what the company has posted on its ‘Official Blog,’ here, and my observations from dealing with Google-China officials while overseas. Therefore this will epitomise the Web-age reaction to a breaking news story, in that it will be a first imperfect assessment, subject to revision as new facts come in.

This development is significant for Google, and while it is only marginally significant for developments inside China, it is potentially very significant for China’s relations with the rest of the world. Read more…

Author: Mohamed Ariff, MIER and University of Malaya

Amid relief that the worst is over, serious concerns remain over even the sustainability, let alone the robustness, of the world’s economic recovery. There is no suggestion that the recent economic statistics lack credibility, but there are worries in the minds of many that these data tend to gloss over the cracks underneath.

The year just past has turned out to be not as bad as feared. Read more…

Author: Hammaad Qayyum Khan, ANU

During the last two years of ‘democratic’ rule, Pakistan has experienced a whirlwind of challenges, with signs of more to come. Everything in Pakistani has an air of uncertainty attached to it − be it cricket or domestic and foreign policy. Democracy in Pakistan has experienced many different forms and taken on many different meanings, a product of the vagaries of political failure and shifting international alliance relations.

Eight years into the Pakistan’s alliance with the U.S., the so-called ‘frontline state’ of the war on terror continues to battle for its image. Read more…

Author: Michael Cucek

A viewer of television news in Japan has long enjoyed a wide variety of news programs, with six large terrestrial networks competing with one another for viewers. Competition encouraged a mild but sincere form of specialisation, with particular news organisations framing the facts in a manner pleasing to a particular constituency.

Since formation in September of a Democratic Party of Japan-dominated government, a strange phenomenon has made itself manifest. On any given night one can flip back and forth between the Fuji TV and Nippon TV networks and find the two newscasts nearly identical. The clothing and the sets change but the editorial stance, the rumors, even the vocabulary, are nearly indistinguishable. Read more…

Author: Aurelia George Mulgan, UNSW@ADFA

In the 2003 Lower House election, the DPJ, led by Kan Naoto, compiled an election manifesto that promised to create a system of direct payments to farmers. This matched the broad trend in government agricultural policy away from price supports to direct income subsidies to farmers.

Two years later, in the 2005 Lower House election, the DPJ, under Okada Katsuya, offered a ¥1 trillion direct payment system to all farm households marketing agricultural products. It also extended this offer to farm households in hill and mountainous areas and those whose agricultural production activities served environmental protection functions. Read more…

Author: Tobias Harris, MIT

Foreign Minister Okada Katsuya has arrived in Hawaii for a Tuesday morning meeting with US Secretary of State Hillary Clinton. Following weeks of bilateral acrimony, the two will discuss negotiations to strengthen bilateral cooperation on the occasion of the fiftieth anniversary of the US-Japan mutual security treaty, signed fifty years ago this month.

For the moment it appears that the US will — not without displeasure — set Futenma aside while a defence ministry team considers possible alternatives for building a replacement facility at Henoko Bay. In advance of her meeting with Okada, Clinton said, echoing a recent New York Times op-ed by Joseph Nye (more on this in a moment), that the alliance is more important than Futenma, and that she and Okada will discuss ways to improve cooperation instead of dwelling on the contentious base issue. Read more…

Author: Siow Yue Chia, Singapore Institute of International Affairs

The story on Singapore in 2009 has been that of a vulnerable small and open economy overcoming the fallout from the global financial crisis with sound economic and financial fundamentals, good governance and a timely stimulus package.

The exposure of Singaporean financial institutions to failed and distressed institutions in the US and Europe was not significant and did not pose any systemic risks to Singapore’s economy, as local financial institutions were well capitalised and remained resilient. Read more…

Author: Tobias Harris, MIT

In a press conference at LDP headquarters Tuesday, Masuzoe Yoichi, the upper house member and former cabinet minister who is one of a handful of politicians respected by the public, said that while he will try to do what he can within the LDP, he said that his ultimate aim is a political realignment — and that he would not rule out any possibilities, including leaving the LDP to form his own party.

In the meantime, he is, in the best LDP tradition, forming a study group that will no doubt serve as a focal point for his reform movement. Read more…

Author: James Lister, Korea Economic Institute

Free elections are not part of North Korea’s political fabric, but Kim Jong-Il and his advisors are undoubtedly aware that the regime’s legitimacy will be challenged if it fails to meet its promise of achieving a strong and prosperous nation by 2012, particularly if it faces a leadership transition. The November 30 announcement of currency reform, entailing redenomination of the North Korean won such that 100 old won = 1 new won, appears to be a gamble that it can achieve that objective in an ideologically acceptable manner. It is a huge bet.

As clarified and adjusted over the course of the subsequent weeks (according to press reports, as official announcements remain lacking) the measures required residents to exchange old won for new won currency up to a limit of 500,000 old won per individual—equivalent to US$200 or less at unofficial market rates. Read more…

Author: Peter Drysdale

The Chinese economy is leading the rest of the East Asian, if not the world, economy out of the global financial crisis. The strong performance of Australia and Korea through the crisis, and the recent signs of recovery from the sharpest drop in Japan’s GDP for over half a century, all owe something to how well China has come through the crisis.

In this week’s lead, Yiping Huang chances his arm on what the fortunes of the Chinese economy might be over the coming year. Like Huang, a number of analysts of the Chinese economy who have contributed to the commentary on this site over the past year and a half, foretold the rapid rebound. There were two main reasons for this. The first, which Huang cites, was the Chinese government’s ability to mobilise resources from a strong fiscal base and direct them to a massive stimulus program. Read more…

Author: Yiping Huang, Peking University and ANU

As the year 2009 fades into the distance in the rear view mirror, the Chinese economy has entered into unknown territory in 2010. Investors are universally far more upbeat than one year ago. Policymakers talk busily about adjusting economic structure as the new top policy priority, seeing no risk in achieving above 8 per cent growth.

For some, China’s ability to achieve strong growth amid global recession was the biggest surprise of 2009. To me, it was not. The Chinese government’s abilities in mobilising resources have strengthened, not weakened, significantly during the past decade. If the government really believed that 8 per cent growth was critical, then that would happen. Read more…