Posts Tagged ‘GDP growth’

Xi Jinping’s post-party congress challenges

October 3, 2017

By John Wong
The Straits Times

China’s biggest political event of the year is set for Oct 18 and a key question is how the Communist Party of China plans to build on past success.

The Communist Party of China (CPC) with its membership of 85 million is not just the world’s largest but also one of just a handful of surviving communist parties.

The CPC is due to convene its 19th Congress on Oct 18in Beijing when its 2,300 delegates will gather at the Great Hall of the People to discuss new directions for national policies as well as to endorse the new line-up of China’s highest policymaking body, the Politburo Standing Committee. The climax of the meeting will be marked by President Xi Jinping’s delivery of the political report as the party’s general secretary.

The CPC is 96 years old. It held its first National Congress in Shanghai in July 1921 with only 12 delegates, including Mao Zedong. The meeting was convened by Mr Chen Duxiu, a Marxist academic from Peking University. Mao secured control of the party in 1935 in Zunyi city during the Long March. He was responsible for only the 7th Congress held in Yenan in June 1945.

Today, party congresses take place every five years. The 18th was convened in November 2012 under former president Hu Jintao, and the meeting endorsed Mr Xi as his successor.

Mr Xi has thus been the party boss for five years, having established himself as the “core leader” of China’s current fifth-generation leadership. He has successfully consolidated power through his relentless pursuit of the anti-corruption campaign, his drastic reorganising and reshuffling of China’s military, the People’s Liberation Army, and his promotion of many younger provincial leaders to top central positions. In a sense, he has become China’s dominant leader, much like Deng Xiaoping or even Mao.

As China is a rising superpower, what emerges from this party gathering should also have significant implications for the outside world. In terms of new policy direction, Mr Xi wants the meeting to discuss his strategy of developing China into a xiaokang (moderately affluent) society by 2021, when the CPC will celebrate its 100th anniversary. China has already become a showcase for poverty reduction. Mr Xi has recently drummed up efforts to finish up the task of eliminating all visible poverty in China by 2021.

But all eyes will be on new appointments at the highest echelons of the leadership. What is still left to speculation are the four new faces who will debut at the next meeting of the all-powerful seven-member Politburo Standing Committee. They would join Mr Xi, Premier Li Keqiang and Mr Wang Qishan. If Mr Wang were to retire, then there would be five new faces. This group will not only rule China for the next five years, but their appointments would have already involved sweeping personnel changes across the ranks. This, in turn, can also bring about policy change.

Straits Times Illustration by Miel

Even more significant is the succession issue. It is still not certain if the meeting will follow the tradition of making public Mr Xi’s heir-apparent, ahead of the next congress in 2022 when a handover is due.

Mr Xi has so far not made conscious efforts to groom anyone from the coming sixth-generation leadership to succeed him. If this matter were to be delayed, it would stir fresh speculation that Mr Xi might want to stay on beyond his second term. That would violate the conventional rule of a two-term tenure for the general secretary, as set by Deng. More seriously, it would result in a new pattern of dynamic power relations at the CPC’s top leadership tier – and with that, great political uncertainty.

THE NEXT LAP

Beyond power politics, the greatest challenge for Mr Xi is how he will steer the party and the country forward to the next lap. The CPC is arguably the world’s longest-ruling party. It has managed to stay in power for so long, since 1949, simply because it has been successful in adapting and reinventing itself to changes as well as in developing China into the world’s second-largest economy with the world’s largest foreign exchange reserves. The Soviet communist party collapsed because it had failed in reform and development.

Even more significant is the succession issue… Mr Xi has so far not made conscious efforts to groom anyone from the coming sixth-generation leadership to succeed him. If this matter were to be delayed, it would stir fresh speculation that Mr Xi might want to stay on beyond his second term. John Wong

The CPC started off as a revolutionary party. Under Mao’s able leadership, the CPC won the civil war and established the People’s Republic of China in October 1949. Mao was a great revolutionary leader, but too ideological.

He was good in mobilising people to fight battles. But his strategy of “continuing revolution”, as manifested in his Great Leap Forward and the Cultural Revolution (1966 to 1976), did much to ruin the economy and disrupt society.

After Mao’s death, power was eventually transferred to Deng, who led China on a new path of development following his economic reform and open-door policies. This had not only led to the resurgence of China, but had actually saved the CPC from collapsing like the Soviet communist party.

Deng’s policies of reform and economic development have been immensely successful, primarily because of his pragmatic and flexible policies. His concept of “socialist market economy with Chinese characteristics” is iconoclastic. Thus, he said: “If a capitalist country has a stock market, why can’t a socialist economy also have one?”

It is Deng’s policies and legacies that have given rise to China’s three decades of dynamic, double-digit economic growth.

In the run-up to a congress, it is quite normal for the party’s general secretary to ritually tighten up ideological control over the party and the state with a lot of Marxist rhetoric.

But Mr Xi seems to be much more serious on the ideological front than his predecessor Mr Hu. Some have argued that Mr Xi, politically very ambitious and already with the make-up of a strong leader like Deng or even Mao, wants to leave his own legacies much as Deng and Mao did. Mr Xi has recently made efforts to redefine his interpretation of Marxism so as to eventually become the Thought Of Xi Jinping, on a par with the Thought Of Mao Zedong and Theory Of Deng Xiaoping.

It is not certain if Mr Xi, having already centralised so much power to himself, will eventually move towards a new kind of authoritarianism. For practical policy formulation, he would do well to take a leaf from Deng’s pragmatism and distance himself from the doctrinaire approach of Mao. He might eventually come to realise the limits of combining the basic tenets of Marxism with the reality of China in this new era.

EXTENDING CPC’S SUCCESS

The preparation for this congress has been ongoing for months. The anticlimax will be when Mr Xi delivers his political report. After that, his new challenges begin: How to build on the party’s past success in reform and economic development?

For the economy, China has chalked up the most impressive growth for over three decades. What is left for Mr Xi is how to manage the economic slowdown amid rapid structural change and macroeconomic rebalancing.

China’s economy formally ended its double-digit high growth in 2012 at 7.7 per cent. Growth has since decelerated gradually in a small fraction of one percentage point a year – last year still registered a reasonably high growth of 6.7 per cent. In fact, growth for the first half of this year had rebounded to 6.9 per cent, the highest in this region.

With an increasingly larger base, the 6.7 per cent growth of last year actually generated more gross domestic product (GDP) than that of 2012, when growth started to come down. Yet, the international media has wrongly and persistently labelled China’s present lower growth as a “big slowdown”.

Ironically, Mr Xi himself was among the first Chinese leaders to openly embrace China’s lower growth as a “new normal”, something he said was “not really so scary”. Initially, China’s economic policymakers extensively used “demand management” (pro-active monetary and fiscal policy) to maintain growth. But that also led to rapid expansion of credit and loans, and hence, the problem of rising debt.

Mr Xi’s economic team under Mr Liu He soon recognised the perils of such debt-fuelled economic growth. Mr Xi then introduced “supply-side” structural reform measures to deleverage debt and to reduce overproduction. In this way, Mr Xi successfully stabilised the economic slowdown momentum. In the meantime, debt has continued to rise to 260 per cent of China’s GDP. But the government treated the rising debt as a long-term issue, to be gradually digested with continuing economic growth.

Mr Xi’s other long-term concerns include how to promote innovation for the emerging new economy. As China’s sources of economic growth have been significantly restructured from manufactured exports to domestic demand along with rising service activities, continuing technological progress will be needed to propel future growth.

Compared with sustaining economic growth, Mr Xi will find his economic reform agenda far more challenging. China has indeed carried out reform in many economic and social areas. As is often the case, the remaining area of reform, or the unfinished business of reform, is usually far more formidable.

This is particularly so for financial sector reform and state-owned enterprise reform, with the two being interrelated. They require much stronger political will.

It seems that when confronted with a problem, Mr Xi’s first reflex action is to resort to the party apparatus, usually by tightening up its control mechanism. Not surprisingly, the party has recently extended its role in the management of all major state-owned enterprises.

China is still a party-state, ruled by the CPC. When it comes to market reform, one need always bear in mind that even though the role of the market has been expanding rapidly, the state is still there and will always be there.

•The writer is a professorial fellow at the East Asian Institute, National University of Singapore.

http://www.straitstimes.com/asia/east-asia/xi-jinpings-post-party-congress-challenges

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Global financial institutions upgrade China’s economic growth forecasts

October 2, 2017

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A bullet train drives in Qinzhou City, south China’s Guangxi Zhuang Autonomous Region, Aug. 1, 2016. China has built one of the world’s most extensive high-speed rail networks in just a few years. It has the world’s longest high-speed rail network, 22,000 km as of the end of 2016, or 60 percent of the world’s total, and the mileage will increase to 45,000 km by 2030. Guangxi joined the networks of high-speed rail in 2013. Photo: Xinhua

Several international financial institutions have upgraded China’s economic growth forecasts to between 6.7 and 6.8 percent for 2017 ahead of the release of China’s economic data for the third quarter, citing driving factors such as the stable expanse of consumption, trade and private investment as the main reasons, domestic news site thepaper.cn said Monday.

China’s economic growth stood at 6.9 percent in the first half of this year, according to data released by the National Bureau of Statistics.

Thanks to the current situation of China’s economy, many global organizations have shown optimism toward the country’s economic development in 2017.

JP Morgan Chase & Co and Nomura Securities have upgraded their estimates for China’s 2017 economic growth to 6.8 percent from 6.7 percent, the report said.

Meanwhile, Asian Development Bank has upgraded China’s GDP growth rate estimates for 2017 from 6.5 percent to 6.7 percent, read the report, which noted that Standard Chartered Bank and Citibank have also changed their forecasts from 6.6 percent to 6.8 percent.

Stable expanse of consumption, services, private investment as well as imports and exports have provided support to China’s economic development this year and have also lead the increase in forecasts by these institutions, thepaper.cn report said.

China’s economy should continue on a sound growth momentum in the third quarter, although some uncertain factors still persist in the global markets such as protectionism, Zhang Yansheng, chief research fellow at the China Center for International Economic Exchanges, was quoted as saying in the report.

Currently, the core change of China’s economy is structural differentiation and provinces across the countries have achieved early results during the supply-side reform, such as East China’s Zhejiang Province, Southwest China’s Sichuan Province and Southwest China’s Chongqing Municipality, Zhang said.

http://www.globaltimes.cn/content/1068988.shtml

 

British economy grows 0.3% in second quarter — Mired in the “slow growth lane”

September 29, 2017

AFP

© AFP | The British economy is getting used to life in the slow growth lane
LONDON (AFP) – Britain’s economy expanded 0.3 percent in the second quarter, unrevised official data showed Friday, as analysts said it was mired in the “slow growth lane” after last year’s Brexit vote.

Gross domestic product growth for the first quarter, or April-June period, was however upgraded to 0.3 percent from 0.2 percent previously, the Office for National Statistics added in a statement.

The second-quarter reading was in line with market expectations for no change in the growth rate.

Howard Archer, chief economic advisor at the EY ITEM Club research group, noted that the “UK remained stuck in slow growth lane in second quarter”.

He also forecast that the economy would see uninspiring growth for the foreseeable future, as consumer spending is pegged back by high inflation.

“We suspect that the economy will continue to see lacklustre growth over the fourth quarter of 2017 and the early months of 2018.

“The squeeze on consumers will remain appreciable in the near-term and could very well deepen in the fourth quarter as consumer price inflation likely to briefly rise above 3.0 percent and earnings growth remains muted.”

British inflation has risen sharply in recent months as a Brexit-hit pound raises import costs.

The Consumer Prices Index (CPI) 12-month rate jumped to 2.9 percent in August compared to 2.6 percent in July, recent data showed.

The Bank of England’s chief task is to use monetary policy as a tool to keep the annual inflation rate close to a 2.0-percent target level.

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Mark Carney, Governor of the Bank of England

Trump Will Get His Tax Cuts, Vast Majority of Economists Say

August 14, 2017

Bloomberg News

By Rich Miller and Catarina Saraiva

August 14, 2017, 4:00 AM EDT
  • Yet survey suggests the impact on economy will be limited
  • Fed seen raising interest rates, which may blunt stimulus

Rep. Brady Says on Track to Deliver Tax Bill This Year

The pros who make their living forecasting the economy overwhelmingly expect President Donald Trump and his fellow Republicans to push through tax cuts in time for next year’s congressional elections. They just don’t think that the reductions will do all that much to help the economy in 2018.

That’s the message from the latest Bloomberg monthly poll of economists, taken Aug. 4 to Aug. 9. Of 38 respondents, 29 expect Congress to pass tax-cut legislation by November 2018. The policy changes though are only expected to add 0.2 percentage point to the pace of gross domestic product expansion in 2018, according to the median figure from analysts penciling in an impact.

The Bloomberg survey forecasts growth in 2018 to be only slightly higher than this year — 2.3 percent versus 2.1 percent, according to median projections from a broader pool of 71 economists. What’s more, analysts see the economy losing momentum in 2019, with expansion falling back to 2 percent, contrasting with the Trump administration’s forecast of a further pickup.

“I think they’ll do something and it will probably be somewhat stimulative in the short run,” said High Frequency Economics Chief U.S. Economist Jim O’Sullivan, referring to Trump and Congress. “I don’t expect a huge impact from it.”

Cuts to individual and corporate rates would fall short of what GOP leaders and the Trump administration have promised — a once-in-a-generation permanent overhaul of the U.S. tax code, similar to what happened in 1986 under former President Ronald Reagan. If Republicans use a budget procedure for a tax bill to bypass Democratic opposition in the Senate, cuts would have to expire if they add to the long-term federal deficit.

First Half

The administration is betting that a mixture of corporate and individual tax cuts, along with other tax code changes, will eventually help lift annual economic growth to 3 percent, from the 2.1 percent average rate of the last eight years. In the first half of 2017, coinciding with Trump’s first six months in office, output rose at a 1.9 percent annual pace.

In order to win passage of a sweeping tax plan, the administration is holding a weekly, all-hands-on-deck meeting to coordinate strategy between the president and his allies, according to White House officials. The intensive discussions contrast with the at times haphazard approach the administration took in its failed attempt to repeal former President Barack Obama’s health-care law.

White House officials have said they’re still committed to a permanent tax revamp, and the plan is to start hearings and a markup of a tax bill after Labor Day so a version can get through the House in October and the Senate in November. Trump and Senate Majority Leader Mitch McConnell have sparred in recent days over the amount of time needed to pass complicated legislation, such as repealing and replacing Obamacare.

Trump officials see their policies accelerating GDP growth to 2.7 percent in 2019, on its way to 3 percent within the following two years. Economists beg to differ.

“The type of stimulus being talked about is temporary,” said Nariman Behravesh, chief economist at consultants IHS Inc. “It won’t deliver a sustained increase in growth.”

Texas Representative Kevin Brady, the Republican chairman of the House Ways and Means Committee, said Friday that Congress is on track to deliver a tax bill to Trump in 2017. Brady, in a Bloomberg Television interview, acknowledged the goal is “aggressive” but said there’s “urgency” in terms of the economy and U.S. competitiveness.

Fed Action

As the administration aims to add fuel to the economy, the Federal Reserve is expected to be withdrawing it, according to the poll. Economists forecast that the central bank will raise interest rates once more this year and three times in 2018, each time by a quarter percentage point.

That’s in line with Fed policy makers’ own projections but significantly below levels implied in financial markets.

“To keep the economy on a sustainable path of growth, we need to gradually reduce the monetary stimulus put in place during the recession and recovery,” San Francisco Fed President John Williams said in an Aug. 2 speech in Las Vegas. “If we delay too long, the economy will eventually overheat, causing inflation or other imbalances to emerge.”

Policy makers last increased borrowing costs in June, when they boosted the target range for the inter-bank federal funds rate to a range of 1 percent to 1.25 percent.

https://www.bloomberg.com/news/articles/2017-08-14/trump-will-get-his-tax-cuts-vast-majority-of-economists-believe

North Korea 2016 Economic Growth at 17-Year High Despite Sanctions

July 21, 2017

By REUTERS

JULY 21, 2017, 12:51 A.M. E.D.T.

SEOUL — North Korea’s economy grew at its fastest pace in 17 years in 2016, South Korea’s central bank said on Friday, despite the isolated country facing international sanctions aimed at curbing its defiant pursuit of nuclear weapons.

Gross domestic product (GDP) in North Korea last year rose 3.9 percent from the previous year when the economy contracted due to a drought and low commodity prices, the Bank of Korea said. The expansion, driven by mining and energy, marked the biggest rise since a 6.1 percent gain in 1999.

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Photo by Chung Sung-Jun/Getty Images

North Korea, which counts China as its biggest trading partner, also boosted exports by 4.6 percent, the most since an 11.8 percent jump in 2013.

Still, the isolated state’s per capita gross national income

in 2016 was just 1.5 million won (876.68 pounds), less than 5 percent of the comparable number in South Korea.

North Korea does not publish economic data. The Bank of Korea has released GDP data on North Korea every year since 1991 based on information from government agencies including South Korea’s Ministry of Unification and the National Intelligence Service. The estimate is widely used by international organisations and researchers.

North Korea has been under U.N. sanctions since 2006 over its ballistic missile and nuclear programmes and the Security Council has ratcheted up the measures in response to five nuclear tests and two long-range missile launches.

The robust economic growth may partly be due to the North’s active nuclear and missile development programme, as the manufacture of components is included when calculating GDP growth, according to a BOK official.

The official, who declined to be identified, added North Korea had boosted its electricity production in 2016 but could not confirm whether this was linked to missile manufacturing.

In February, China banned all imports of coal from its reclusive neighbour, cutting off its most important export. China is also restricting the flow of oil into the North.

The United States is mulling new sanctions on Chinese firms and bank doing business with Pyongyang on top of trying to get China and Russia to back a new U.N. Security Council resolution imposing stiffer sanctions on North Korea following its latest missile test.

 The US sanctioned the China’s Bank of Dandong which “acts as a conduit for illicit North Korean financial activity, is a foreign bank of primary money laundering concern.”

In 2016, China accounted for 92.5 percent of all North Korean trade, according to data from the Korea Trade-Investment Promotion Agency (KOTRA) on Friday.

The Bank of Korea official declined to comment on how the Chinese coal ban and tightened international sanctions since last year would affect North Korea’s economy in 2017. The United Nations’ food agency said on Thursday North Korea is facing severe food shortages due to the worst drought since 2001.

FRACTION OF S.KOREA ECONOMY

North Korea’s 2016 GDP in real terms stood at 32.0 trillion won ($28.50 billion), according to the Bank of Korea data – a fraction of South Korea’s 1,508.3 trillion won ($1.34 trillion).

Mining and manufacturing make up the biggest portion of North Korea’s industry, accounting last year for 33.2 percent of the sector.

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Overall exports from North Korea, excluding trade with South Korea, rose 4.6 percent last year to $2.82 billion thanks to shipments of fishery products, which soared 74.0 percent, the South’s central bank said.

North Korea imports rose 4.8 percent to $3.73 billion, led by plant products and textiles.

Although trade between the two Koreas plunged 87.7 percent last year due to a shutdown of a joint industrial zone the North shared with the South just north of the border, the North’s headline trade numbers were barely affected, the data showed.

The Kaesong Industrial Zone was shut down early last year after the North tested a long-range rocket in February defying U.N. sanctions.

(Additional reporting by Jane Chung; Editing by Soyoung Kim and Raju Gopalakrishnan)

Related:

  (Dumping?)

 (June 9, 2017)

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 (Wall Street Journal) — Includes “North Korea’s Nuclear Push Is Just One Piece of a Nationwide Building Boom” (New York Times)

 

South China Sea, Update — China Air Forces Exercises, Indonesia Makes its Claim

July 17, 2017

BEIJING — Jul 17, 2017, 2:55 AM ET

By CHRISTOPHER BODEEN, ASSOCIATED PRESS

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Philippine Trade Secretary Ramon Lopez

A look at recent developments in the South China Sea, where China is pitted against smaller neighbors in multiple disputes over islands, coral reefs and lagoons in waters crucial for global commerce and rich in fish and potential oil and gas reserves:

———

EDITOR’S NOTE: This is a weekly look at the latest developments in the South China Sea, the location of several territorial conflicts that have raised tensions in the region.

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INDONESIA RENAMES PART OF SOUTH CHINA SEA TO SECURE EXCLUSIVE ECONOMIC ZONE

Indonesia has named waters in its exclusive economic zone that overlap with China’s expansive claim to the South China Sea as the North Natuna Sea, an assertion of sovereignty that has angered Beijing.

The decision announced Friday by the Ministry of Maritime Affairs has been in the works since mid-2016 and was vital to law enforcement at sea and securing Indonesia’s exclusive economic zone, said Arif Havas Oegroseno, the deputy minister for maritime sovereignty.

He said the name would reduce confusion and is already used by the oil and gas industry for the waters.

A Chinese foreign ministry spokesman said at a regular news briefing that the “so-called change of name makes no sense at all.”

“We hope the relevant countries can work with China for the shared goal and jointly uphold the current hard-won sound situation in the South China Sea,” he said.

China claims most of the South China Sea, putting it in dispute with many Southeast Asian nations, and has carried out extensive land reclamation and construction on reefs and atolls to bolster its claims.

Indonesia doesn’t have a territorial dispute with China, but Beijing’s nine-dash line, which signifies its claims, overlaps with Indonesia’s internationally recognized exclusive economic zone extending from the Natuna islands.

“The map of Indonesia has clear coordinates, dates and data, and the government would not negotiate with other nations that make unconventional claims … including those who insist on a map of nine broken lines,” Oegroseno said.

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A YEAR AFTER HAGUE ARBITRATION RULING, CHINA REMAINS DEFIANT

Filipino officials behind an arbitration case in which the Philippines won a resounding victory over China last year are expressing alarm that Beijing continues to defy the decision, in what they are calling a setback to the rule of law.

Last week, they urged President Rodrigo Duterte, who has indefinitely set aside the decision that invalidated China’s sweeping historic claims in the South China Sea, to explore diplomatic and legal means by which to pressure China into complying.

Duterte has promised to take up the arbitration ruling with China before his six-year term ends in 2022, but is also courting China as an economic partner and possible security ally. His administration says his pragmatic outreach has calmed tensions, revived dialogue and reaped pledges of huge Chinese investments and other benefits.

“Despite its friendlier face, we do not see restraint in China’s militarization and unlawful activity in the West Philippine Sea,” said former Foreign Secretary Albert del Rosario, who spearheaded moves to bring the Philippines’ disputes with China to international arbitration in 2013. He cited China’s moves to fortify its seven man-made islands in the Spratly group with missile defense systems.

Supreme Court Justice Antonio Carpio said China is reneging on its treaty obligation because it ratified the United Nations Convention on the Law of the Sea under which the arbitration decision was based.

China last week marked the anniversary of the ruling with the relatively mild language it has adopted toward the Philippines in recent months. “With the joint efforts by China and the Philippines over the past year, the dispute has been brought back to the peaceful settlement through dialogue and consolation, and bilateral ties have improved overall,” spokesman Geng Shuang said.

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PHILIPPINES SEES TRADE BENEFITS IN LOW-KEY APPROACH TO DISPUTES WITH CHINA

Philippine Trade Minister Ramon Lopez has predicted faster growth of economic ties with China following Manila’s decision to effectively shelve their territorial disputes.

Lopez said in an interview with Hong Kong’s South China Morning Post last week that the Philippines’ “realistic and practical” approach to those controversies would encourage Chinese trade and investment and help the country meet its ambitious economic growth target of 7-8 percent over the coming five years.

“I credit it to the wisdom of (Philippine President Rodrigo Duterte) to really be more realistic and practical, to consider the positive points of having a relationship with China renewed,” Lopez told the newspaper.

“He has mentioned in many of his statements that, ‘Why fight China when we can set aside the differences and focus on areas of cooperation, focus on how China and the Philippines can help in mutual growth?'” Lopez said.

Exports of Philippine bananas and mangos to China and Hong Kong grew by 34 percent in the first five months of this year following the lifting of Chinese restrictions, he said, much higher than the 14 percent rate for the rest of the world.

Lopez said he also backed allowing Chinese to visit for a week visa-free as a further boost to business ties.

“If you want to explore business opportunities and therefore you want to visit the Philippines and meet the people, that is something we can look at,” he said.

The Philippines has become “much safer” to do business in since Duterte launched his bloody war on drug dealers and addicts, with the crime rate dropping 53 percent over the past year, Lopez said. Some 5,000 suspects have died so far in the campaign, and human rights group have called for an independent investigation into Duterte’s possible role in the violence.

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Associated Press writers Niniek Karmini in Jakarta, Indonesia, and Jim Gomez in Manila, Philippines, contributed to this report.

Related:

 (Contains links to several more related articles)

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Dominance of the South China Sea, the Malacca Strait and the Indian Ocean would solidify China’s One Belt One Road project
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The international arbitration court in the Hague said on July 12, 2016, that China’s “nine dash line” (what Bill Hayton calls the U-shaped line) was not recognized under international law — making the Vietnamese and Philippine claims on South China Sea islands valid and lawful.
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China’s aircraft carrier Liaoning at Hong Kong
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 (Contains links to information about Vietnam’s renewed efforts to extract oil and gas from the sea bed)

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Americans Feel Good About the Economy, Not So Good About Trump

July 17, 2017

By John McCormick
Bloomberg

July 17, 2017, 4:00 AM EDT
  • Just 40 percent approve of president’s performance in office
  • Narrow majority expect stock market to be higher by year’s end
Traders pass in front of an American flag displayed outside of the New York Stock Exchange (NYSE) in New York.

 Photographer: Michael Nagle/Bloomberg

Almost six months into Donald Trump’s presidency, Americans are feeling fairly optimistic about their jobs, the strength of the U.S. economy, and their own fortunes. That should be welcome news for the president, except for one thing: The public’s confidence largely appears to be in spite of Trump, not because of him.

The latest Bloomberg National Poll shows 58 percent of Americans believe they’re moving closer to realizing their own career and financial aspirations, tied for the highest recorded in the poll since the question was first asked in February 2013.

A majority expect the U.S. stock market to be higher by the end of this year, while 30 percent anticipate a decline. Yet they don’t necessarily think Trump deserves credit for rising markets and falling unemployment.

Just 40 percent of Americans approve of the job he is doing in the White House, and 55 percent now view him unfavorably, up 12 points since December. Sixty-one percent say the nation is headed down the wrong path, also up 12 points since December.

Trump scored his best numbers on his handling of the economy, but even there the news for him isn’t great. Less than half of Americans — 46 percent — approve of Trump’s performance on the economy; 44 percent disapprove. He gets slightly better marks for job creation, with 47 percent approving.

“If you take the president’s scores out of this poll, you see a nation increasingly happy about the economy,” said pollster J. Ann Selzer, who oversaw the survey. “When Trump’s name is mentioned, the clouds gather.”

In nearly every measure of his performance, the poll indicates that Trump’s tumultuous presidency is not wearing well with the public. A 56 percent majority say they’re more pessimistic about Trump because of his statements and actions since the election. That’s a huge swing since December when 55 percent said his statements and actions made them more optimistic about him.

Read the poll questions and methodology here.

The public has grown more skeptical that Trump will deliver on some of his most ambitious campaign promises. Two-thirds don’t think he’ll succeed in building a wall along the Mexican border during his first term. More than half say he won’t be able to revive the coal industry.

A majority — 54 percent — believe Trump will manage to create trade deals more beneficial to the U.S., but that’s down from 66 percent in December. There’s division on whether he’ll be able to bring a substantial number of jobs back to America, or significantly reform the tax code.

And despite his assurances that he and congressional Republicans will repeal Obamacare and replace it with a “beautiful” new health care bill, 64 percent of Americans say they disapprove of his handling of the issue. That’s especially significant because health care topped unemployment, terrorism and immigration as the issue poll respondents chose as the most important challenge facing the nation right now.

There are at least two areas where Americans say they believe Trump will deliver: Almost two-thirds say he will make significant cuts in government regulation, though it’s not clear whether most think that’s a good or bad thing. Likewise, 53 percent believe he will succeed in deporting millions of immigrants living in the U.S. illegally.

The public is also skeptical about Trump’s abilities as a world leader, with 58 percent saying they disapprove of the way he handles relations with other countries and 46 percent disappointed in his actions on trade agreements.

Americans are more pessimistic about foreign policy than they were in December. Fifty-five percent now say they expect dealings with Germany to get worse during the next four years, up 22 points. The share of poll respondents who anticipate worsening relations with the U.K., Mexico, Cuba and Russia also increased by double digits.

The public is also wary of Trump’s motives in his negotiations with other countries. Just 24 percent said they were “very confident” that Trump puts the nation’s interests ahead of his businesses or family when dealing with foreign leaders.

Americans have plenty of other worries about the world. Majorities believe it’s realistic that terrorists will launch a major attack on U.S. soil (68 percent) and that North Korea will launch a nuclear weapon aimed at the U.S. (55 percent).

Trump has called the expanding investigations into possible connections between his presidential campaign and Russia a “witch hunt.” But the public isn’t necessarily taking his side. Since the president’s decision to oust former FBI Director James Comey, the Federal Bureau of Investigation’s standing has improved. It’s now viewed favorably by 68 percent, up 10 points since December. Comey is viewed positively by 43 percent, while 36 percent see him negatively.

Meanwhile, most Americans don’t share the president’s apparent soft spot for Vladimir Putin: 65 percent view the Russian president negatively — and 53 percent say it’s realistic to think Russian hacking will disrupt future U.S. elections.

There is one notable bright spot for Trump. Though views of the White House as an institution are at the lowest level ever recorded by the poll — with 48 percent now viewing it unfavorably, up 21 points since December — Trump’s voters are still sticking with him. Among those who cast ballots for him, 89 percent still say he’s doing a good job.

The telephone poll of 1,001 American adults has a margin of error of plus or minus 3.1 percentage points, higher among subgroups. It was conducted July 8-12 by Iowa-based Selzer & Co.

https://www.bloomberg.com/news/articles/2017-07-17/americans-feel-good-about-the-economy-not-so-good-about-trump-j57v0var

China’s economy slows in second quarter

July 15, 2017

AFP

© AFP / by Allison JACKSON | The world’s second-largest economy seeks stability in the face of a darkening global outlook

BEIJING (AFP) – China’s economy lost momentum in the second quarter, a survey shows, as Beijing’s efforts to curb risky lending and investment took a toll on the Asian powerhouse.

The world’s second-largest economy expanded by 6.8 percent in the April-June period, compared with a year ago, according to the median forecast of 12 analysts polled by AFP.

That follows a better-than-expected increase of 6.9 percent in the first three months of the year.

The estimate comes ahead of the official release on Monday of China’s closely-watched GDP growth data for the second quarter.

Debt-fuelled investment in infrastructure and real estate has underpinned China’s growth for years but warnings of a potential financial crisis have spurred Beijing to clamp down.

In the latest alert, Fitch Ratings on Friday said China’s growing debt could trigger “economic and financial shocks” even as it maintained its A-plus rating on the country.

That follows Moody’s decision in May to downgrade China for the first time in almost three decades on concerns over its ballooning credit and slowing growth.

Tighter restrictions on property purchases and bank lending will continue to weigh on the economy in the months ahead, said Larry Hu, head of China economics at Macquarie Group.

“We expect GDP growth to trend down in the second half of 2017 on slowing property sales and tight liquidity,” he said.

The economy is likely to face further headwinds as consumption also comes under pressure from slowing income growth, said Fan Zhang, senior China economist at RHB Bank.

UBS chief China economist Tao Wang said “higher funding costs due to supervisory tightening” will impact fixed-asset investment — which measures spending on real estate, roads and bridges.

But a sharp slowdown in the second half is unlikely as policymakers prepare for an important Communist Party congress later this year that will likely make President Xi Jinping the most powerful leader in a generation.

“It is therefore highly probable that authorities will use the resources and policy tools at their disposal to ensure a positive economic outcome,” Citibank said.

The government has trimmed its 2017 GDP growth target to around 6.5 percent, after it expanded by 6.7 percent in 2016 — its slowest rate in more than a quarter of a century.

Despite growing concerns about China’s financial risks, Premier Li Keqiang said last month that the country could reach this year’s economic growth targets.

Last quarter’s growth momentum had continued into the current one, he said, noting that traditional economic indicators such as power generation and consumption, and new business orders had increased “significantly”.

by Allison JACKSON

Fitch keeps China’s ‘A+’ rating but warns over debt

July 14, 2017

AFP

© AFP | Debt-fuelled investment in infrastructure and property has underpinned China’s rapid growth, but there are concerns that years of freewheeling credit could lead to a financial crisis with global implications

BEIJING (AFP) – Fitch Ratings warned Friday that China’s growing debt could trigger “economic and financial shocks”, but said it will maintain the country’s A-plus rating with a stable outlook despite its concerns.The announcement follows Moody’s shock decision in May to downgrade the world’s second-largest economy for the first time in almost three decades on concerns over its ballooning credit and slowing growth.

While China’s external finances were robust and near-term growth prospects “favourable”, Fitch said “large and rising debt levels” in its non-financial sector were a significant risk.

“Overall leverage in the context of continued adherence to ambitious GDP growth targets raises the potential for economic and financial shocks,” it added.

Debt-fuelled investment in infrastructure and property has underpinned China’s rapid growth, but there are widespread concerns that years of freewheeling credit could lead to a financial crisis with global implications.

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Beijing has been clamping down on bank lending and real estate purchases but those efforts are complicated by the government’s determination to meet its full-year growth target of around 6.5 percent.

That compares with last year’s pace of 6.7 percent, which was the slowest in around a quarter of a century.

Premier Li Keqiang said last month that China could meet the target.

In a positive sign for China, capital outflows have “fallen sharply” since early this year and the current account — a key gauge of the economy’s health — remains in surplus.

But Fitch said tighter monetary conditions could lead to slower growth next year of 5.9 percent.

“Macro-prudential regulations and tighter credit conditions will, in Fitch’s forecasts, result in a slowdown in the housing sector and investment spending,” it said.

Related:

 — MAY 24, 2017

Vietnam GDP growth surges in second quarter

June 29, 2017

AFP

© AFP | Communist Vietnam, of which Ho Chi Minh was a pivotal figure, has enjoyed a reputation as one of the best performing economies in Southeast Asia in recent years, with growth hitting more than six percent over the past two years, though the 2016 figures were down from the previous year.

HANOI (AFP) – Vietnam’s economy bounced back in the second quarter posting a 6.17 percent growth rate, according to official figures Thursday, a boost driven by gains in the industrial and services sectors.The export-driven economy saw growth slow last year as the country struggled to recover from a major drought and mass fish kill along its central coast.

Growth in the first three months of this year hit a three-year low of 5.15 percent thanks to a slump in exports from Samsung, the country’s leading investor.

But GDP growth rates from April to June jumped to 6.17 percent, according to the General Statistics Office (GSO).

The surge was driven by growth in the industrial and services sectors, though the mining sector dragged growth slightly, the office said.

GSO general director Nguyen Bich Lam said the surge between quarter one and two was the biggest jump since 2011, according to state-controlled Vietnamnet news site.

Analysts were buoyed by the bounceback and predicted strong growth ahead — even if the official growth target of 6.7 percent is not met.

“The latest numbers are very positive… I think Vietnam can manage about 6.5 percent growth this year,” said Luong Hoang from Viet Capital Securities.

Communist Vietnam has enjoyed a reputation as one of the best performing economies in Southeast Asia in recent years, with growth hitting more than six percent over the past two years, though the 2016 figures were down from the previous year.

Overall growth for the first half of 2017 is at 5.73 percent, up from the same period last year as exports surged 18.9 percent compared to the first half of 2016.

Growth has been mostly driven by exports of cheaply made goods, from Nike shoes to smartphones.