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WHERE ARE THE BOUNDARIES FOR ECONOMIC GROWTH IN CHINA?

With global population projected to rise to 9.6 billion by 2050, the pressure on natural systems that provide food, energy, water, and other resources necessary for human life is a major strategic challenge for business and society. China, with its large population and rapid economic development, is a big piece of the puzzle.

As part of the Opening Conference of the Yale Center Beijing, Sir Peter Crane, dean of the Yale School of Forestry & Environmental Studies, moderated a panel on the challenges of economic growth in the face of environmental limits.

Marian Chertow ’81, associate professor of industrial environmental management at Yale FES, outlined nine planetary boundaries for the physical systems that sustain human life; they include land use, fresh water, climate change, and chemical pollution. “We, as a planet, are over limits in two areas. First is the rate of biodiversity loss for species, and the second is chemical buildup from cycling nitrogen,” Chertow explained. She added that we are also approaching a third boundary: the concentration on CO2 in the atmosphere, a critical driver of climate change.

Zhang Xinsheng, former vice minister of education for China, president of the International Union for Conservation of Nature, and executive chairman of Eco-Forum Global, highlighted the fact that China’s development has been uniquely successful in bringing hundreds of millions of people out of poverty. “Unfortunately, in terms of economic and urbanization growth, it is the same as the rest of the world,” Zhang said. “That is, first pollution, then cure. First development, then environmental care and protection.”

Zhang cautioned that countries that have failed more often because of environmental causes than political ones. “For China, a major way of dealing with that is a comprehensive policy,” he said. Zhang described the policy as a shift from a commercial focus to an ecocivilization where environment, economic, cultural, social, and political development work together toward long-term sustainability. Zhang sees that including a low-carbon, circular economy that emphasizes sustainable consumer consumption.

Chertow explained a key reason why what happens in China ripples across the global economy. The country has 20% of the world’s population but just 7% of the world’s fresh water resources and 9% of the arable land. While this has meant greater efficiency in China in its water use and agricultural production, the country’s demand for resources shapes global commodities prices and development patterns. “Basic resource endowments bring countries and companies to different starting points and strategic directions. Pressure on planetary boundaries reminds us of the inevitable need to work together.”

China’s scale means that even impressively large efforts may not have transformative impact. Xizhou Zhou, director of the China energy practice of the consulting company IHS CERA, said that China has installed 39% of the wind power built in the world over the last five years. At the same time, he noted, that accounts for only 15% of the new power production in the country. “Clean energy alone is not going to be enough to meet the demand challenge,” he said.

More than one panelist emphasized that solutions won’t come from China alone. Zhou said that over 50% of China’s power is used for industrial production. That figure is 28% globally and 18% in the U.S. If China transforms to a service economy without seeing a global shift toward sustainability, other countries will take over as industrial producers and there won’t be a reduction in the pressure on the planet’s natural systems.

Zhou explained the need for rethinking core approaches. “The cleanest form of energy is not using energy at all,” he said. “That means we have to have fundamental changes in the way we consume, the way we build cities, and the way we organize businesses and communities so that we can lower the energy trajectory of many countries.” There is a positive side to such radical change, he noted: “That, for business, is a huge opportunity.”

Source: Yale Insights
Published by: YALE SCHOOL OF MANGEMENT

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World Bank- China Economic Update – October 2014

Recently this week, the World Bank released the bi-annual Economic Update for China, here’s the spotlights of the report:

  • Growth in China continued to slow in 2014, reflecting policy steps to put economic growth on a more sustainable footing.
  • Policy efforts to tighten credit growth, reduce excess capacity, internalize the cost of industrial pollution, and harden budget constraints of local governments accelerated in 2014.
  • Targeted support measures and the recovery of external demand have limited the growth slowdown, but pressures from the weak housing market remain a significant drag on domestic economic activity.
  • The real estate sector, an important engine of growth of recent years, continues to adjust to policies to tighten credit and reduce supply mismatches.
  • The growth forecast for 2014 has been revised downward to 7.4 percent, still meeting the government’s indicative growth target of about 7.5 percent.
  • For 2015–16 average growth is expected to ease to slightly above 7 percent as policy efforts to place the economy on a more sustainable growth path are likely to intensify.
  • The government’s indicative growth number for 2015 will signal the priority that the authorities put on growth and reforms.
  • The current emphasis on meeting short-term growth targets will make it more challenging to implement the policies necessary to shift growth to a more sustainable medium-term path.
  • In an uncertain global economic environment, China’s sizable policy buffers could be reserved to maintain overall macroeconomic stability in case of unexpected domestic or external economic shocks.
  • China’s key medium-term policy challenge remains implementing reforms that support China’s next transformation toward more efficient, equitable, and sustainable growth.
  • A comprehensive reform plan was introduced to put China’s public finances on a more stable footing.
  • Revisions in the budget law provide far greater transparency and accountability for local government debt management.
  • Reform plans were announced to make gradual adjustments to the hukou system to integrate migrants into urban life.
  • Implementing reforms can accelerate China’s economic growth potential, but it will not reverse a moderation of growth over the next decade.
  • Without policy action, the slowdown in China’s potential growth in the medium term could be more severe.

Source: China Economic Update

Special Topic: An Update of China’s Fiscal and Tax Reforms

October 2014

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HSBC Flash China Manufacturing PMI™ October figures

Slowest expansion of output in five months

The HSBC China Manufacturing PMI, improved to 50.4 in the flash reading for October, up from 50.2 in September. Domestic as well as external demand showed some signs of slowing although both remained in expansion territory. Disinflationary pressures intensified, as both the input and output price indices declines futher. Meanwhile both employment and inventory indices improved. While the manufacturing sector likely stabilized in October, the economy continues to show signs of insufficient effective demand. This warrants further policy easing and we expect more easing measures on both the monetary as well as fiscal fronts in the months ahead.

china pmi oct pmi 2 pmi 3 pmi 4

Source: HSBC Purchasing Managers’ Index™ Press Release

Embargoed until: 09:45 (Beijing), 23 October 2014

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Zhuhai important Sights

Sometimes when travelling abroad, there are several difficulties when is time to find the best sights to look around, in C2W we care about it that’s why we made this map in order to easy your stay when visiting our Global HQ in Zhuhai, China.

 

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China data show slowing, but markets cheer the numbers

Chinese economic data out Tuesday showed slowing, but stocks mostly improved as some of the numbers were better than expected. Third quarter gross domestic product rose 7.3% compared to the year-earlier period, easing from 7.5% growth in the second quarter but slightly besting a 7.2% rate predicted in a Wall Street Journal survey of economists. September industrial output saw a bigger beat, rising 8% from a year earlier to rebound from August’s 6.9% growth and surpass a 7.5% increase tipped in separate Reuters and Wall Street Journal polls. September retail sales slowed from August, however, rising 11.6% from a year earlier, compared to the previous month’s 11.9% increase. Reuters had tipped a 11.7% gain. Fixed-asset investment, a gauge of contruction activity reported on a year-to-date basis, was up 16.1% in the January-September period, just below a 16.2% prediction in the Wall Street Journal survey. Following the numbers, Hong Kong’s Hang Seng Index HSI, +0.56% was up 0.5%, improving on a 0.3% ahead of the data. The Australian dollar AUDUSD, +0.18% often sensitive to economic news from Australia’s top trading partner, rose to 88.03 U.S. cents from 87.75 U.S. cents, while the S&P/ASX 200 XJO, +0.25% was up 0.2% in Sydney, compared to a 0.1% gain pre-data. The Shanghai Composite Index SHCOMP, +0.13% however, held to a 0.1% advance.

market figures 21 oct

Source: Market Watch

Published by: Michael Kitchen

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