Author: Aidan Foster-Carter, Leeds University

The past month saw both Chairman and Premier Kim doing something almost unheard of in Pyongyang. Apparently they both said sorry, although some reports got the two muddled up.

On February 1, Rodong Sinmun, daily paper of the ruling Workers’ Party of Korea (WPK), reported Kim Jong-il as lamenting his failure to fulfil his late father Kim Il-sung’s pledge, to which he had also alluded shortly before on January 9, that all North Koreans would eat rice and meat soup (everyday fare for even the poorest South Korean, be it noted). Read the rest of this entry »

Author: Suman Bery, NCAER

Investors reacted with a yawn to Friday’s budget presentation by Indian Finance Minister Pranab Mukherjee—the Mumbai market closed almost flat on the day. That was less an endorsement of the government’s reform agenda and more a sigh of relief that the Minister was prepared to reduce the fiscal deficit after two years of a major expansion.

Mr. Mukherjee mostly accepted the recent recommendations of the 13th Finance Commission, a government committee that by law recommends reforms to the president. Read the rest of this entry »

Authors: Mathew Joseph and Karan Singh, ICRIER

The sharp fall in US domestic consumption after the financial crisis has to be offset by a rise in net exports. For the US economy to recover then, the dollar must depreciate against the Chinese yuan. This devaluation is proving to be difficult, as the Chinese are resisting a yuan appreciation through massive intervention in the currency markets. The disastrous effects on the Japanese economy of the G7-managed appreciation of the yen in the mid-eighties have made the Chinese wary of a sharp appreciation in the yuan.

But while much focus is put on the US dollar’s depreciation against the yuan, what about the US dollar’s depreciation against the rupee?
Read the rest of this entry »

Author: Andrew Kipnis, ANU

A household survey I undertook in China in 2005 and 2006 revealed that all of the families surveyed wanted their child to attend university.The sample included a representative number of students from wealthy and relatively impoverished families and of students with above- and below-average academic records. Most of the people I spoke to were shocked that I could even ask such a question. ‘Of course’, or ‘Doesn’t everybody want that?’ were common replies.

The educational desire revealed by this survey is an important social fact about contemporary China. It influences household and national economic priorities, strategies for political legitimation, birth rates, ethnic relations between Han and non-Han groups, gender and family relations and much more. Read the rest of this entry »

Author: Kam Wing Chan, University of Washington

Yes it’s true – hukou (household registration) reform is again back in vogue in China’s ‘post-crisis’ conversations. Premier Wen Jiabao has been talking about it and, unusually the catch phrase has also been placed in the first ‘Central Document’ of 2010. Following the lead of these two sources, hundreds of newspaper articles and commentaries have opined on it in the last few weeks. On March 1, 13 big-city newspapers from 11 provinces in China also made a rare joint appeal for accelerating reform of the hukou system in a co-signed editorial. In sum, the issue is firmly in the spotlight, and hopes have been raised for some real hukou reform.

The hukou system is a big deal in the People’s Republic.  For the past 52 years, the system has served to segregate the rural and the urban populations, initially in geographical terms, but more fundamentally, in social, economic and political terms. Read the rest of this entry »

Author: Bradley O. Babson, NCNK

Politics and economics are deeply entwined in North Korea. Thus, interpretation of the intentions and implications of North Korean actions must be assessed through both lenses. As it tries to address economic development and security challenges, North Korea has to find a way to make internal changes that will yield results while maintaining political control and regime legitimacy.

At the same time, Pyongyang has to improve its external relations in ways that enhance its economy and security, but this will require more openness and commitment to compliance with international norms. Read the rest of this entry »

Authors: Jagdish Bhagwati and Arvind Panagariya, Columbia University

Lagging employment recovery and continuing high levels of unemployment have marked the macroeconomic scenario in the United States. So it is natural that the United States, which chaired the G20 meeting in Pittsburgh, would use its privileged position as the host to invite the US secretary of labour, a well-known union activist, to convene a meeting of the employment and labour ministers on the jobs situation prior to the next G20 heads of state meeting in Canada.

The macroeconomic aspects of the labour situation are indeed a proper focus of such a meeting. Read the rest of this entry »

Author: Xiao Geng, Brookings Institution

Recent debate has focused on how to increase US exports and savings and increase Chinese imports and consumption in order to correct the trade imbalance between the US and China. In America in particular, focus has been placed on Chinese exchange rate policy. American leaders would like the RMB to appreciate significantly and quickly. They hope that this would lead to an increase in US exports and employment.

Yet Chinese leaders regard pressures to appreciate and protectionist measures from the US as unfair, and as detrimental to China’s development. They place emphasis upon structural and institutional reform in order to increase Chinese consumption and to bring about more efficient domestic investment. Read the rest of this entry »

Author: Ligang Song, ANU

China has succeeded in moving up the ladder of development through rapid growth in just three decades. The pace of China’s growth is not what is unique — Korea, Singapore and other economies in East Asia grew as fast in the 1970s and 1980s. What is unprecedented historically is its scale. The size of China’s population, market and geography, and the dynamism that flowed from economic reform and transformation are what define its impact on the rest of the world. Despite a still relatively low per capita income, the sheer size of the Chinese economy has made China a significant player in world production, consumption, trade and increasingly international finance and the environment.

The dynamics unleashed by Deng’s reform, the opening up policies and institutional changes have propelled continuous capital accumulation, productivity gains, trade and income growth on a scale the world has never seen before. Read the rest of this entry »

Author: Sadiq Ahmed, PRI

Despite solid development performance since independence, Bangladesh’s per capita income remains low by global standards. Nevertheless, there have been encouraging signs; poverty has come down from over 70 per cent in the early 1970s to around 40 per cent in 2005.

However, a look at the spatial distribution of development progress shows significant disparity between leading and lagging regions of Bangladesh. Read the rest of this entry »

Author: Luke Hurst, ANU

There has been a change in ideological sentiment on China’s involvement in Africa. The paradigm shift has been led by Zambian economist Dambisa Moyo’s bestseller, Dead Aid, which gave voice to the possibility of a development model defined by diligent business practices as opposed to the traditional Western model which is driven by foreign aid. If managed prudently the Sino- African relationship could prove to be an empowering change for several African governments and provide the foundation for the continent to take its place as a partner in the global economy.

For China, Africa is an excellent complement to its resource and market-seeking global agenda. Since 2000 China-Africa trade has grown at an average annual rate of 33.5 per cent. Read the rest of this entry »

Guest Author: Sun Tianfu

In December 2009 Chen Guowei, Supervisor on the Enterprise Supervision Board of the State Asset Supervision and Administration Commission (SASAC), spawned a major debate  about reformation of the salt monopoly in China. He stated at a Salt Reform meeting that reform of China’s salt monopoly system needs to be sped up in order to break the state’s monopoly, even though the China Salt Industry Corporation is strongly opposed to this market reform. Chen then went on to directly attack China Salt’s monopoly over the production and circulation of salt.

Chen had proposed reformation of the salt monopoly as early as 2004. In 2005, he presided over a reform of the industry in Guangdong, which was eventually frustrated due to the proliferation of private salt. Read the rest of this entry »

Author: Ran Tao, Renmin University

‘Hukou reform’ is now becoming a catchphrase in the Chinese media and in China’s policy making circles. Chinese Premier Wen Jiabao, in an exclusive interview with the Xinhua News Agency on December 27, 2009, said that China will steadily advance the reform of its decades-long household registration system in order to ensure migrant workers have the same rights as city dwellers.

The importance attached to hukou reform is also reflected in the Chinese Communist Party’s ‘No. 1 Central Committee Document’, promulgated at the end of January 2010. Read the rest of this entry »

Author: Peter Drysdale

This week we publish the fourth issue of East Asia Forum Quarterly (EAFQ) (volume 2 Issue 1). EAFQ is published online and in hard copy by ANU E Press four times a year on a theme of major importance to the Asian region. You can support EAF by subscribing to EAFQ for A$30.00 annually.

As Richard Rigby says in the lead essay posted this week, the word ‘challenge . . . carries a heavy burden of nuance’. It can convey a sense of threat. But challenges can also be an inspiration, an offer of hope. Challenges always pose questions –often difficult ones, as Rigby also suggests. Read the rest of this entry »

Author: Richard Rigby, ANU

Challenge is a word that carries a heavy burden of nuance: it can convey a sense of threat, it can be an inspiration, it poses questions – often difficult ones – and it can also be double-edged, in that the challenge frequently applies as much to the alleged challenger as it does to those on the receiving end. Where China is concerned, the word is appropriate in every sense; but an important part of the challenge is precisely to decide which aspect is of the greatest importance. Only having done this can we attempt to frame policies, or at least provide the best possible advice to the policymakers, which will enable us to meet the challenge that today’s — and tomorrow’s — China poses to us, and to itself.

If there is a single word that should be applied to China, whether speaking of its international impact or its domestic situation, it should be ‘complexity’. Read the rest of this entry »