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Thursday, November 30, 2006

Fruit and veg gaining value for China

This news was copied from here. agriculture is very important for China who has more than 20% of the world population but only has less than 6% of the world's arable land. China today is basically self-sufficient for the domestic food needs. That's a great achivement. Thanks for the hardworking of Chinese farmers and the preogress in the agricultural technologies.

By Dominique Patton

30/11/2006 - China, producer of half the world's fruit and vegetables, is set to overtake the Netherlands in the next two to three years to become the world’s third biggest fresh produce exporter in value terms, predicts a new report from agriculture specialists at Rabobank.

The country, which exploits low labour costs to become the dominant grower of produce like persimmons, pears and asparagus, exported fruit and vegetables worth US$7.2 billion last year, according to data from Rabobank and the United Nations.

This amounted to 7.19 per cent of the global trade, behind the Netherlands, the US and top exporter Spain.

Increasing volumes of fruit and vegetable exports, particularly to currently small markets like the EU and US, are expected to drive this increase in value, in combination with stronger sales of higher value-added products.

“The proportion of added-value processed and prepared products compared to fresh has been increasing,” said Patrick Vizzone, head of the bank's food and agricultural advisory and research unit for Asia.

And although China has cost advantages over other fruit and vegetable producers in almost all areas - specifically labour, fertilizer and farm costs - some costs are rising quickly and significantly, he warned.

“China has historically been a price maker but costs, and therefore export prices, are rising,” he told

These include land prices, which have increased by a compound annual growth rate of 14 per cent for vegetable growers between 1998 and 2004, more than for any other type of land use including corn, soya and cotton.

These costs have combined with other factors to push up prices for products like berries, seeing a large surge in demand, and apple juice concentrate, which was impacted by a poor crop last year.

Higher prices are evident in exports to Japan where new, even stricter controls on pesticides and contamination have stunted volume growth yet the value of vegetable exports are still up by 6 per cent in the first half of 2006.

Vizzone warned that it is difficult to predict structural price increases in China.

“China is still very competitive but prices have increased, underlining the potential for this trend,” he said.

China's fresh produce sector should also benefit from government policies to boost rural incomes, suggests Vizzone.

The government is really pulling out all the stops to try to help the rural sector. It cut the agricultural tax last year and for the first time in about eight years, the growth of rural incomes is now on a par with urban areas.”

But there will also be rising demand for imports, he said. Rising incomes, particularly in China's growing middle class, will lead to higher spend on fruit in particular.

“Fruit is seen as more of a luxury compared with vegetables, which are a real staple,” said Vizzone.

The biggest fruit exporters to China in 2004 were Thailand, the US and the Philippines, with 29 per cent, 16 per cent and 14 per cent respectively, although Vizzone warns that it is difficult to assess imports with much of the fruit entering through grey channels.

Export data does however show an increasing trend and this is expected to be a real area of opportunity for international markets, fuelled by growth of the retail sector. Wet markets are still the largest channel for fresh produce sales but in major cities, consumers now buy 55 per cent of their fruit from supermarkets.

“Fruit and veg is a destination category for supermarkets and another way for them to grow,” said Vizzone.

Demand from the retail and other developing sectors like foodservice is also creating opportunities for larger fresh produce processors, many of which are international or joint ventures.

“These suppliers have really carved a niche in meeting the strict quality requirements of foodservice,” said Vizzone. “And there are ample more opportunities for foreign companies to participate in the sector both as producers and exporters to the industry. Lots of local companies are looking to partner with foreign firms for knowledge transfer.”

He added that the fruit and vegetable industry is relatively liberalized, allowing for investment for foreign companies.

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Monday, November 27, 2006

China is Expecte to be the Largest Shipbuilding Country

The information came from Research and Markets's report.

Chinas ship completions rank third in the past 10 consecutively years and the shipbuilding capacity also increased from 3.462 million DWT of 2002 to 12 million DWT of 2005. According to us, from 2006 to 2010, the total demand of ships will reach 31 million DWT, and the annual demand will be 6.2 million DWT on average.

In 2005, the cumulative sales revenue of Chinas shipbuilding industry amounted to RMB 110.85 billion, up by 42.6% over the year of 2004, and the profits amounted to RMB 4.29 billion, far more than that of 2004, which was RMB 1.64 billion. The export is also promising and the earnings broke through USD 4 billion in 2005.

China also unveil the new plan for the nation's shipbuilding industry. Source
China has become the world's third-largest shipbuilder in terms of output, following Japan and South Korea. In 2005 China's shipbuilding output was over 12 million deadweight tons (dwt), approximately 17 per cent of the global market.

Also underlined in the plan were product development and technological improvement.

Under the plan, annual output will hit 17 million dwt by 2010.

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Sunday, November 26, 2006

Hydropower stations dot Yangtze River

China continues to build hydropower stations along the upper stream of Yangtze River. After the start of Xiluodu project last year, the construction of the 6-million kw Xiangjiaba hydropower station began this Sunday. Xiluodu station will have 12.6 million kilowatts of capacity.

The section of the Yangtze between Yushu in Qinghai Province and Yibin in Sichuan Province is often called the Jinsha River in China, which means the "Golden Sand River". The China Yangtze River Three Gorges Project Development Corporation has plans to build 22 more hydropower stations on the Yangtze, including two more -- Baihetan and Wudongde hydropower stations -- on the lower reaches of the Jinsha River section.

The feasibility study for the 12 million kw Baihetan hydropower station has been completed and approved by experts. Work has also started on a feasibility study for the Wudongde hydropower station that will have 7 million KW capacity. The construction of these two dams will begin in 2009 and will be finished in 2020.

The above four hydropower stations will have a combined capacity of 38.5 million kw upon completion, but the potential hydroelectric capacity of this 2,300-km section of the Yangtze is estimated at 112 million kw.

The cost of Xiangjiaba hydropower station will reach 43.4 billion yuan (about 5.43 billion U.S. dollars), it will be completed in 2015 and will be able to generate 30.7 billion kw/hour of electricity a year.

Statistics provided by the Chinese Ministry of Water Resources show that Chinese rivers could generate 540 million kw of hydroelectric power capacity. Currently, only one fifth of the total is being exploited, as compared with three fifths in developed nations.

The complete report can be accessed at here.

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China puts huge investment in railroad and expressway systems

1.5 trillion RMB(US$190 billion) investment to improve China's railway system before 2010.Source

China will invest 1.5 trillion (US$190 billion) to increase the nation's rail network to over 90,000 kilometres by 2010.

"We will invest 300 billion yuan (US$38 billion) in railway construction next year," Li Guoyong, transportation director of the National Development and Reform Commission, said yesterday at the China Railway Financing Forum.

The investment, described by Li as "the biggest in China's history," would increase the size of China's rail network by almost 20 per cent.

The 1.5 trillion yuan (US$190 billion) investment includes 250 billion yuan (US$31.6 billion) for vehicle purchasing, over 600 billion yuan (US$76 billion) for railway lines and over 625 billion yuan (US$79 billion) for civil engineering.

China all anounced a US$250-billionplan for the expressway expansion in the next 30 years. This plan does not include other highway systemsSource.

The Chinese government plans to extend the country's expressway network by 85,000 kilometers in the next 30 years at an estimated cost of two trillion yuan (US$250 billion), under a plan drawn up by the Ministry of Communications.

The expressway network plan, accounting for regional, urban and rural development and population distribution, shows the government will spend 390 billion yuan in eastern China, 520 billion yuan in central areas, and 1.09 trillion yuan in western China.

The plan shows the total length of the network will reach 42,000 kilometers by the end of 2007, and 50,000 to 55,000 kilometers by 2010.

According to this report, China will invest 900 billion RMB (US$ 119 billion)in the transport sector this year alone. (Source.)

China's fixed-assets investments in the transport sector are scheduled to reach 938.4 billion yuan (119 billion U.S. dollars) this year, a growth of 18.4 percent year-on-year.

The transport sector invested 612.4 billion yuan (78 billion U.S. dollars) in fixed assets in the first three quarters of this year, up 25.96 percent over a year earlier.

Of the total, 124.2 billion yuan (16 billion U.S. dollars ) went to railway construction and upgrading, up 100 percent, 418.3 billion yuan (53 billion U.S. dollars) went to highway projects, up 12.7 percent, and 43.9 billion yuan to coastal harbor construction, up 37.4 percent.

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India's economy: Too hot to handle

In the year to the second quarter, India's GDP grew by an impressive 8.9%, while China's more up-to-date figures show even more breathtaking growth of 10.4% in the year to the third quarter. But to judge whether an economy is too hot, one needs to compare this expansion in actual demand with potential supply, ie, the sustainable rate of growth. Despite India's growth spurt in recent years, its sustainable pace is still much lower than China's, which puts its economy more at risk of overheating and rising inflation.

China's double-digit growth may look like a danger sign but there are few of the usual troubles. Inflation is only 1.4% and China has a widening current-account surplus, which implies excess supply rather than excess demand. Nor do asset price gains look particularly excessive. Average house prices have risen by less than 6% in the past 12 months. And share prices have gained only 42% in the past four years. Even the expansion of bank credit has slowed to an annual pace of 15%, not much faster than nominal GDP growth.

In contrast, India's economy displays an alarming number of signs that things have gone too far. Consumer-price inflation has risen to almost 7% (see chart), well above Asia's average rate of 2.5%. A recent report by Robert Prior-Wandesforde at HSBC finds many other signs of excess. For example, in a survey of 600 firms by the National Council of Applied Economics Research, an astonishing 96% of firms reported that they were operating close to or above their optimal levels of capacity utilisation—the highest number ever recorded. Firms are also experiencing a serious shortage of skilled labour and wages are rocketing. Companies' total wage costs in the six months to September were 22% higher than a year earlier, compared with an average increase of around 12% in the previous four years.

India's current account has shifted to a forecast deficit of 3% of GDP this year from a surplus of 1.5% in 2003—a classic sign of excess demand. Total bank lending has expanded by 30% over the past year, close to the fastest growth on record.

India's share and housing markets also look bubbly. Draft proposals by the central bank on November 17th to cap banks' exposure to stockmarkets and curb reckless lending only mildly dampened the optimism. Share prices are almost four times their level in early 2003. India's price/earnings ratio of 20 is well above the average of 14 for all Asian emerging markets. House prices have also gone through the roof: Chetan Ahya of Morgan Stanley reckons that prices in big cities have more than doubled in the past two years. Housing loans jumped by 54% in the year to June (the latest figures available) and loans for commercial property were up by 102%.

Indian policymakers seem reluctant to admit that economic growth has exceeded its speed limit over the past three years, let alone slow it. They prefer to bask in the belief that India has become another China, able to keep growing ever faster without inflation rising. Palaniappan Chidambaram, the finance minister, has said the Indian economy will continue to grow by more than 8% in the next few years.

India's trend growth rate has almost certainly increased but it is still nowhere near as high as China's. Mr Prior-Wandesforde estimates that it is now around 6.5%, up from 5% in the late 1980s. But India's recent acceleration largely reflects a cyclical boom, thanks to loose monetary and fiscal policy. The Reserve Bank of India has raised one of its key interest rates by one and a half percentage points to 6% over the past two years, but inflation has risen by more, so real interest rates have fallen and are historically low. This makes the economy more vulnerable to a hard landing.

The complete article can be found here.

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Sunday, November 12, 2006

Ridiculous Indian Media: "Chinese don't trust Indians"

This is about the report from The Times Of India

What I can say is that the only thing is true in the report is the titile: "Chinese don't trust Indians". All others are all false and misleading.

‘‘Such ill-will is rooted in the negative stereotyping of India in Chinese school textbooks," says Brahma Chellaney, professor, strategic studies, Centre for Policy Research. "Not only do the textbooks black out China’s invasion of Tibet and India, they actually paint India as the aggressor. How China distorts history is also evident in the Beijing military museum, which depicts India as the unprovoked aggressor of 1962," for them.

Frankly, Chinese textbooks seldom mention India at all. India is basically forgotten and ignored politically and economically in Chinese media and Chinese education. The reports on Chinese media recently are mostly about India's BPO service industry.

For the Sino-India War in 1962, most of our Chinese even don't know it since it was a very small scale, very short time, the most easy and the least cost war China had since the founding of the PRC in 1949. Without the Internet, few of Chinese should even mention it, let alone Chinese textbooks or military museum. I visited Beijing military museum myself, I cannot remember any items from that war.

Traditionally for the Chinese, India has been the superior culture, the land of Buddha and has nursed an inferiority complex.

This sentence fully shows how arrogant and ignorance so-called Indian experts are. I cannot imagine how could be ordinary Indian people.

China is a land of continous history of 5000 years, China is a nation that has lasted for more than 2000 years. While India could be a country only after the conquerer of Britain. Without Britain, India today could still only be tribes. The Chinese culture is what Chinese feel proud of most.

Both countries fear that if they give away a little, it may be disadvantageous for them.

This is what Indians are thinking. Don't force it on Chinese. In this market economy, China is fully open to Indian companies. But it is India who put a lot of rediculous limit on the business and investments from China. All the world know this. I don't even need to eleaborate it.

There are many more Chinese learning Hindi compared to Indians learning Chinese.

English is mor eofficial in India. I don't know what the return could be if some one invests in learning Hindi. But all we know Chinese is getting hotter and hotter in the world. More than 150,000 international students are studying in China, but only 8000 in India (Refer to "Comparing China and India by Numbers" in my blog).

Indian films are very popular in China unlike Chinese films in India

I know Indian are very proud of Indian movies. But Chinese don't like any of them. I did watch a couple of them in 1970s and 1980s. But I haven't seen any existence of Indian films in China's market since then. Simply put, Indian movies are not to Chinese taste.

62 war. They feel India was responsible for it.

Any people in this world who really know this war will realize India should be resonsible for it. But as I said that war is ignored by Chinese. It cannot cause the mistrust.

"They simply don’t have time to think about secondary powers like India,"

It is not because Chinese don't have time, it is because Chinese never think India can be one of the secondary powers. The only bright point in India is software coding. But Chinese software industry is still bigger. Other than that, the image of India is: dirty, barefoot, slums, bombing, caste, killings in religious conflicts, Maoists' fighting for their basic rights, conflicts with its neighbours........

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Tuesday, November 07, 2006

To race China, first let’s get our feet off the brakes

This could be one of the best analysis from an Indian author. The article came from IndianExpress.

Arun Shourie Posted online:

Tuesday, November 07, 2006 at 0000 hrs Print EmailIndia’s growth story must generate confidence, not complacence. We must learn from China the ability to move on from momentary success or failure, keep the focus on reforms, take a decision and execute it

China’s banking sector has been notorious for its non-recoverable loans — till a few years ago, some estimates had placed these at almost half the total outstandings. By contrast, “non-performing assets” of Indian banks are placed at just about 5 per cent of their outstandings.

That is a difference you would expect us to capitalise on. In practice?

The Industrial and Commercial Bank of China is China’s largest personal bank. It has more than 150 million customers. But its portfolio was so weak that, last year, the Chinese Government had to pump $ 15 billion into the bank to help bring its bad loans to what an expert calls “a controllable level”.

Yet last month, the ICBC raised over twenty two billion dollars through an IPO. This became the largest ever IPO in financial history. Upon listing, the bank’s market capitalisation amounted to $ 143 billion — that is almost twice the market capitalisation of the entire financials universe of India, which is around $ 85 billion. Its market capitalisation makes the ICBC the fifth largest bank in the world.

But there is a more telling index. Guess what the offers for subscription to the IPO amounted to? Over five hundred billion dollars.

And remember, the IPO brings down the government holding in the bank by just 10 per cent. That is, the government retains full and complete control over the bank — even after the IPO, it will have 70 per cent of the bank’s equity.

A typical episode, with so many lessons for us in India:

• The confidence that China has been able to generate in its growth story — even in banking, its weakest sector, it can orchestrate a flood of investment.

• Its ability to take a decision and execute it.

• The funds can now be used for rehabilitation, modernisation, expansion.

By contrast, in India we have been debating whether government holding in our nationalised banks should be reduced for at least ten years. By now, what with everyone having enough power to block every proposal, we have given up even talking about reducing government equity in the nationalised banks. As a result,

• The banks continue to perform well below their potential.

• Resources that could be raised for development remain untapped — in three years of disinvestment, we raised $ 9 billion by selling just 1.6 per cent of government equity.

• Our reputation as a country that will not eventually be able to carry through on its announcements is reinforced.

The current self-congratulation

Two features always strike me as special to us. One, we are too easily swept off our feet by momentary success, and too easily plunged into dejection by momentary defeat. Two, we rush to appropriate that victory — even when we personally have done nothing to contribute to it; and, with equal alacrity, we rush to distance ourselves from a setback — even when we have in some sense contributed to it. Just take a look at how our commentators declaim when our team wins a cricket match and what they say when the same team loses.

There is much self-congratulation about, and much appropriation of, our growth rates these days. Much of this congratulation is warranted. Our economy is today the second fastest growing economy in the world. (Incidentally, remember how our commentators used to deride us with, and distance themselves from, the “Hindu rate of growth”. Who is accounting for the 8 per cent growth today? The same Hindus! You can bet that those who were calling that “the Hindu rate of growth” will never but never call this “the Hindu rate of growth”!) The achievements of the services sector are well known. The lesser noticed story is about the Indian manufacturing sector: it has been reinvented on the shop floor. You go to the manufacturing plant of a company like Bharat Forge — it is what we used to read about Japan: a “lights-out factory”. The entire process is CAD-CAM: Computer-aided Design, Computer-aided Manufacturing.

This reinvention and the consequential confidence are showing up in the results: Indian companies have acquired close to 250 companies abroad — this year, what with the Tata’s spectacular acquisition of Corus, India is liable to be the largest foreign investor in Britain!

But there is a central point to this growth. The trigger for it has been that because of reforms — of the first two and half years of Narasimha Rao’s government and of the six years of Vajpayee’s government — the dead hand of the state has been lifted from large swathes of our economy. This has created the space for the long-suppressed entrepreneurial and middle class professional classes of India to work more to their potential.

But reforms are not an once-over switch that, once turned on, can be forgotten. Governments have to keep at them. New impediments arise — often, the very developments that reforms have triggered foment new impediments. These have to be removed. The process has to be extended to ever new areas. But look around. What has happened in the last two and half years? Apart from two areas — civil aviation and railways — reforms have come to a complete standstill. In several areas — for instance, the reversion to the administered price mechanism in the petroleum sector — there has been regression. The result is predictable: in little time, entrepreneurs and professionals will reach the edges of the space that has been cleared for them, and be blocked by walls again.

Many things account for the progress China has made — the incredible 49 per cent high investment rate, for instance — contrasted with our 28 per cent; the strictly hire-and-fire/no strikes/no unions/freedom to retrench labour laws, for another: no wonder, the World Economic Forum’s Competitiveness Report for last year, ranked India as 111 out of 117 countries, and China as 26th. But the main factor has been that, unlike us, China has transformed the nature of the Chinese state.

As for reforms, the first thing to remember is that China began them in 1978; we waited till the bankruptcy of 1991/92. That single fact has made such a difference: when things are not changing much, if we fall behind by a few years, we can catch up — the other fellow wouldn’t have got far; but when things are changing rapidly, being late by 14 years makes it almost impossible to catch up.

Second, China has kept at reforms relentlessly — in our case, even since 1992, we have pushed reforms only by fits and starts; and even then, there were more feet on the brakes than on the accelerator. The third difference, of course, is execution: China has actually, and mercilessly, implemented what it decided; we have been halted by our processes — land acquisition, court proceedings, changes of government; and just as much by thoughts of brilliant alternatives — “Why not this way?” — and second thoughts. There is a telling index of this: even after the figures are put on comparable basis, China has been receiving seven times the foreign direct investment that we have been getting; and this, even though in the manufacturing sector, for instance, the ceiling for foreign investment has been 100 per cent for several years now.

We are often carried away by figures of inflows these days. We should remember that in the last five years, only 17 per cent of foreign inflows into India has been in the form of FDI, 83 per cent has been FII inflow. That 17 per cent compares with 68 per cent for other emerging economies.

The difference

We should temper our self-congratulation by reflecting on the difference that these factors have made. An excellent study by Steve Roach, Chetan Ahya and their colleagues at Morgan Stanley, points out that, as recently as 25 years ago, the per capita incomes of China and India were about equal. Today, China’s per capita income is two and a half to three times that of India. During this period, China’s average growth rate has been 9.5 per cent. Ours, 5.8 per cent. Its GDP has grown in this period by 7.5 times. Ours by 4.5 times. Its economy is now close to three times ours.

Its exports have grown to 41 times what they were — they are now close to $ 850 billion. Ours to 13 times — they are $ 155 billion. Our foreign exchange reserves are $ 160 billion — a great achievement compared to where they had fallen in early 1992. But China’s are one thousand billion dollars — and we shall soon see the clout that these give it. Compared to our total reserves of $ 160 billion, China added to its reserves last year more than $ 250 billion. Its trade surplus with the US alone exceeds $ 100 billion a year.

China’s achievements in health and education have put an even greater distance between the two countries — in China, one of every 32 children born dies in the first five years; in India, one in every 12. In India, 45 per cent of children under 5 are estimated to be undernourished; in China, 8 per cent. Gross enrollment ratio is estimated to be more or less the same in both countries — but the drop out rate in India is 21 per cent, in China it is 1 per cent.

Last year China is estimated to have spent $ 201 billion on infrastructure. We spent $ 28 billion — that is, one-seventh of China. We spent about $ 6 billion on roads last year; China spent about $ 68 billion. And that is just the difference in expenditure — as for execution, the Indian Express has been reporting how the actual implementation of the programme has been mauled here. The costs of this difference are manifest: we produce around 565 billion kWh of electricity; China produces close to 2.3 trillion kWh. Our industry has to pay double of what Chinese factories pay for power; for ferrying freight by railways, our industry pays three times what Chinese factories pay.

The same pattern mars every sphere. We are the second largest producers of cement — a fine achievement. But against our production of 142 million tons, China produces 1.06 billion tons. We produce 43 million tons of steel, a great leap compared to how things used to be in the socialist era. And in Tisco we have the least-cost producer of steel in the world. But China produces over 450 million tons...

Nor is the difference confined to manufacturing and infrastructure. Arthur Kroeber, who has watched India and China for twenty years, points out that agricultural yields in China have been much higher than those in India, and that the difference in absolute terms between them has been growing. In 1980, China grew 4100 kg of rice per hectare; India, 2000. In 2005, China grew 6300 kg, India 3000 kg. The difference in yields had increased from 2100 kg to 3300 kg per hectare. For wheat the comparable figures were 1900 kg versus 1400 kg in 1980; and 4200 kg versus 2700 kg in 2005. For seed cotton, 1700 kg versus 500 kg in 1980; and 3200 kg versus 800 kg in 2005. For vegetables, 14500 kg versus 8300 kg in 1980; and 19300 kg versus 11300 kg in 2005.

By no means is the race over

Of course, the race is not done. On the one hand, we have just begun to exploit our potential. On the other, China, like other societies, has many problems — what with a displaced, “floating population” of 120 to 140 million; environmental degradation to such an extent that the effects of their coal burning reach far-away California; extreme water shortages — government spokesmen announce that this is afflicting 600 cities and that in 100 of them it is now “acute”; a near-breakdown of the health and educational infrastructure in the rural areas; growing regional disparities; corruption as endemic as it is in India; the lingering inefficient governmental enterprises; the inefficiencies of much of their industry — their steel mills use 15 to 30 per cent more energy and 2.5 times more water than mills in developed countries, their dust emissions are 10 times higher...

But we should remember three things. One, we have several of the same problems, and, the fact that China has problems is not going to solve ours. Two, China has shown that when it directs its attention to a problem it does something about it: so, when the new Plan announces that it will focus on reducing income disparities between rural and urban China, between coastal areas and the inner provinces; on improving efficiencies in the economy; and on instituting more environmentally friendly methods of production — when their Plan announces these goals, the likelihood is that the country will advance towards them. Nor will it be prudent to wait, Micawber-like, in the belief that something will turn up — that China will be drowned by its problems.

Three, the massive growth that China has already secured gives it formidable power. So, instead of drawing comfort from the fact that China too has problems, we should reflect on what the strength that it has acquired through this growth implies for us.

A good example is Gandhiji’s reaction to that scurrilous book, Katherine Mayo’s Mother India. Gandhiji nailed her exaggerations and falsehoods. But his advice was, “No foreigner should read it, but every Indian should.” For, it was liable to mislead the foreigner. As for Indians, we would see through the eyes of a critical foreigner what we are apt to ignore as it is so familiar.

The same goes for China’s growth. China should think about the problems that confront it. We should emulate the reasons for its successes:

• Focus
• Sustained pursuit of goals
• Execution
And reflect on the power which that growth gives China.

(To be concluded)

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Monday, November 06, 2006

China-Africa Summit

48 out of the 53 heads of state in Africa paticipated China-Africa Forum summit in this month. This simply show the tight connection between China and African countries and China's popularity among African leaders and people.

China began to assist African countries since 1960s. China built hospitals, stadiums, railroads and other infrostructure projects, sent agricultural and medical export teams to this area that was colonized and almost abandoned by the west world. China's assistance was based on political or ideological reasons. But today, the conomical reasons are more important.

According to the World Bank, China is poised to become the continent’s biggest lender, having pledged more than $8bn this year alone.

Almost every country is getting its share. Ghana said yesterday that it was close to finalising a $600m deal for a 400-megawatt hydroelectric dam. Gabon recently signed a $3bn iron ore deal with a Chinese consortium, which will help to construct a railway and container port. Last week Zambia was promised investment of $200m for a smelter to produce 150,000 tonnes of copper. Mozambique has $2.6bn for a hydroelectric dam. Since the start of the year Egypt has seen its trade with China surge by 47.6% to reach nearly $2bn. Chinese investors and state agencies have spent billions on road-building in Kenya, a hydroelectric dam in Ghana and a mobile phone network in Ethiopia.

The biggest deals have been energy-related. Squeezed out of much of the Middle East by the United States, China now gets a third of its oil from Africa. The main suppliers have reaped the rewards. Angola has a $3bn line of credit from China. Nigeria recently sold a stake in an oil and gas field for $2.3bn - China’s largest overseas acquisition yet. More deals are on the way. This weekend’s summit is expected to wrap up with a new package of aid and trade.

But China is not just buying resources, it is selling a model of development. While the west focuses on political freedoms and universal rights, Beijing says the priority should be on improving living standards and national independence. The superiority of this approach, it argues, has been proved by success in lifting hundreds of millions of people out of poverty.Source

China-Africa trade has been on fast track.
Last year, trade between China and Africa totaled $39.8 billion, up more than one-third from the year before. Unlike the West, China applies no import fees on products from 28 African countries.Source

The projected China-Africa trade will across US$50 billion this year and will be doubled to more than US$100 billion in 2010.

China has cancelled 10.9 billion yuan ($1.4 billion) worth of African debts. US$3 billion in preferential loans and US$2 billion in preferential buyer's credits African countries were anounced during the summit, and the aid to Africa will be doubled by 2009.

US$1.9 billion investment deals were signed during the summit. It included a US$938 million aluminum plant in Egypt, US$300 million highway renovation in Nigeria, US$30 million telecommunication project in Ghana, US$60 million textile business in Sudan, US$200 million copper project in Zambia, US$55 million cement factory in Cape Verde and a mining contract worth US$230 million with South Africa.

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Thursday, November 02, 2006

China to build satellite navigation system

China has started to build its own satellite navigation system, called Compass.

The planned network, also referred to as Beidou in Chinese, entails the launching of five geostationary Earth orbit (GEO) and 30 medium Earth orbit (MEO) satellites, informed sources said here Thursday.

China plans to launch two Compass navigation satellites at the beginning of next year. The system is expected to cover China and parts of neighbouring countries by 2008 before being developed into a global constellation, according to the sources.

The system will provide two navigation services. The Open Service is designed to provide users with positioning accuracy within 10 meters, velocity accuracy with 0.2 meter per second and timing accuracy within 50 nanoseconds.

The Authorized Service will offer "safer" positioning, velocity, timing communications for authorized users.

More details can be found here.

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