China - The Next Five Years and Beyond
There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.’
William Shakespeare, in Julius Caesar
12th Five Year Plan for National Economic and Social Development
A survey by the Pew Research Centre last year suggested 87% of Chinese were satisfied with "the way things were going" in their country. Nevertheless, the PEW high rating applies largely to the middle-class in cities. It means 13% of 1.3 billion people, those largely in the poorer provinces, are not so well satisfied. Indeed, back in 2005, Premier Wen Jiabao already said openly to an international audience that China's development is 'Unstable, Unbalanced, Uncoordinated, and Unsustainable.
As the tide is turning in the Middle East, it is opportune that China is unveiling a decisive watershed in her economical and social development for the next five years (2011-15). The new model is very much people-and-environment-focused – controlling rising food and housing prices; providing more jobs, healthcare, education, and social services; fighting corruption; and promoting a less energy-hungry, higher-value-added, less export-dependent, and more consumption-oriented economy with a more moderate growth rate (7%) and a more balanced, sustainable, and equitable society.
You may care to see my live CNBC interview on Balancing China’s Economy – The 12th Five Year Plan (2011-15) at http://www.cnbc.com/id/15840232?video=1828698240&play=1
More details of the Five Year Plan are available on China Daily at http://www.chinadaily.com.cn/china/2011npc/2011-03/06/content_12122579.htm
The Jasmine Revolutions
The test of the pudding of the Five-Year Plan is, of course, in the eating. In particular, in the light of the Jasmine Revolutions sweeping across the Arab world, managing the aspirations of a rapidly-rising, young, internet-enabled and more educated middle-class is likely to present a major challenge. Read The Jasmine Revolutions – why Chinese leaders should be on their toes at http://www.andrewleunginternationalconsultants.com/chinawatch/2011/02/call-me-if-there-is-a-revolution.html
Limits to Growth
During China’s trajectory towards a middle-income or ‘moderately well-off economy’, another looming challenge is the desire of China’s burgeoning middle-class to get a bit more of what most may not want to call the American Dream - more meat, more disposable clothes, cars, and all the trappings of modern urbanization – at a time when equally huge middle-class populations in other BRIC countries and beyond are trying to do the same. It doesn't take a nuclear scientist to realize that at the America per capita consumption of the world's resources, one world would not be enough. A more fundamental, epochal change of lifestyle may be necessary. See From Earthlings to an Ecological Civilization at http://www.andrewleunginternationalconsultants.com/chinawatch/
Inflation and Asset Bubbles
Global inflationary pressures vary but the flood of hot money from a bout of quantitative easing (QEs) in the West is finding its way into emerging markets including China to seek higher yields, feeding inflation and asset bubbles wherever it goes. Curbing inflation and asset bubbles remains at the top of China’s national agenda.
A tour d’horizon Is China overheating? is at http://www.andrewleunginternationalconsultants.com/chinawatch/2011/02/is-china-overheating.html
More thorough analyses can be accessed in my following feature articles published in International Finance of The ANALYST, Journal of the Institute of Chartered Financial Analysts of India (ICFAI) University Press:
(a) China’s Liquidity Management: A Juggling and Balancing Act (January, 2011) at http://www.andrewleunginternationalconsultants.com/files/icfai---the-analyst---chinas-liquidity-management---jan-2011.pdf
(b) China’s Economy at Risk of Overheating (March 2011) at http://www.andrewleunginternationalconsultants.com/files/icfai--chinese-economy-at-risk-of-overheating.pdf
On inflation, you may perhaps wish to check out some of my following live CNBC interviews:
(a) Taming rising prices in China (17.11.2010) at http://www.cnbc.com/id/15840232?video=1647717831&play=1
(b) Inflation: Top Priority for Chinese Policymakers (27.12.2010) at http://www.cnbc.com/id/15840232?video=1712920457&play=1
(c) Controlling Inflation as China Grows (16.2.2011) at
http://www.andrewleunginternationalconsultants.com/chinawatch/2011/02/controlling-inflation-as-china-grows.html
(d) China Market forecast (11.3.2011) at http://www.cnbc.com/id/15840232?video=1837506011&play=1
Currency War, the RMB, and Reserve Currencies
As the West is struggling to come out of the global recession and turn around their anaemic job markets, it has become fashionable to blame RMB undervaluation for loss of competitiveness and jobs. The dollar’s value is being eroded by the Fed turning on the money spigot (QE1/QE2), while other exporting countries have to safeguard their competitiveness by keeping down their own currencies. So a global currency war is in the making. Meanwhile, the status of the dollar as a stable long-term reserve currency is being called into question.
See Will any 'regional' currency substitute the USD as a reserve currency?, a reprint of my commentary on the McKinsey Quarterly Executive Panel, an online platform, at http://www.andrewleunginternationalconsultants.com/publications/2010/12/will-any-regional-currency-substitute-the-usd-as-a-reserve-currency.html
My full-length research note - Currency War and the Future of the RMB: Monetary Policy, Imbalances, and the global Reserve Currency System is at
http://www.andrewleunginternationalconsultants.com/files/currency-war-and-the-rmb.pdf
The global context
There is little doubt that China is at the Heart of Asia’s Story – see my CNBC interview at http://www.cnbc.com/id/15840232/?video=1677181480&play=1
Nevertheless, everything and everywhere are now interconnected. To see how I and some others predict where this year's global economic and political risks will be and why they matter, visit Risk Roundup 2011 in McKinsey Quarterly, January 2011 at https://www.mckinseyquarterly.com/Risk_roundup_2011_2731#LettersToTheEditors
For an overview of some of the key global challenges in the coming decades, you may wish to have a look at eleven of them, which I have outlined in Welcome to the Brave New World of the 21st Century at http://www.andrewleunginternationalconsultants.com/chinawatch/2011/02/welcome-to-the-brave-new-world-of-the-21st-century.html
There is a popular perception that the BRIC countries should do well in the coming decades. Read How the BRIC and EAGLE countries could grow to dominate the world by 2050 in my responses to an invitation by The ANALYST, Journal of the Institute of Chartered Financial Analysts of India (ICFAI) University Press. They are accessible at
http://www.andrewleunginternationalconsultants.com/files/icfai-questionaire-on-bric.pdf
International relations
(a) Myanmar’s election: Return to civilian rule?, a live TV interview on Inside Story with Aljazeera English at http://english.aljazeera.net/programmes/insidestory/2010/11/201011912435628233.html
(b) China –Vatican dispute , a live interview with Aljazeera English at http://www.andrewleunginternationalconsultants.com/chinawatch/2010/11/china-vatican-dispute.html
(c) Premier Wen Jiabao’s visit to India, a live TV panel discussion with Times of India (Times Now) (Parts 1 & 2) at http://www.andrewleunginternationalconsultants.com/chinawatch/2010/12/premier-wen-jiabaos-visit-to-india.html
(d) Grand Chinese Design? , a live TV debate with Times of India (Times Now) on Indian perception of China conspiracy theories (3 Parts) at http://www.andrewleunginternationalconsultants.com/chinawatch/2011/02/grand-chinese-design-.html
(e) South Korea begins live fire exercises, a live CNBC TV interview on inflation in China and South Korea military exercises at http://www.cnbc.com/id/15840232?video=1704349592&play=1
(f) Behind and Beyond Hu’s visit to the United States, an analysis at http://www.andrewleunginternationalconsultants.com/chinawatch/2011/01/behind-and-beyond-hus-visit-to-the-us.html
(g) Empire – The new arms race, a commentary on Aljazeera English’s TV expose with an international expert panel at http://www.andrewleunginternationalconsultants.com/new/2011/03/empire-the-new-arms-race.html
Science and Technology
Check out New York Times article and video Light at the end of the tunnel of affordable off-grid power for the world's rural poor? at http://www.andrewleunginternationalconsultants.com/new/2010/12/a-new-york-times-elisabeth-rosenthal-reports-form-rural-kenya-where-cheap-chinese-solar-panels-are-providing-decentral.html This may offer some ideas applicable to poverty-stricken areas in China and other parts of the developing world.
A few examples of China leapfrogging in science and technology:
(a) China's new Cloud Computing City at http://www.computerworld.com/s/article/9208398/China_building_a_city_for_cloud_computing
(b) China's Godson Chip Roadmap at http://nextbigfuture.com/2011/02/china-godson-chip-roadmap-and-15-other.html
(c) Next generation of fast nuclear reactors at http://analysis.nuclearenergyinsider.com/industry-insight/china-experimental-fast-reactor-ready-connect
Miscellaneous
On a lighter note, you may wish to view
(a) The Stanley Ho saga at http://www.andrewleunginternationalconsultants.com/new/2011/01/the-stanley-ho-saga.html
(b) Talk Show by Joe Wong at the US Annual Radio and TV Correspondents Dinner at http://v.youku.com/v_show/id_XMTY3ODc1OTgw.html
China Business Electives for a Transformed World in the 21st century
To take on the challenges and opportunities of a transformed world with a Rising China in the 21st century, I have updated my syllabuses of proprietary modular electives for business schools and corporate in-house training at http://www.andrewleunginternationalconsultants.com/new/2010/12/up-to-date-china-business-electives-for-the-21st-century.html They may serve to enrich the curricula of business schools wishing to stay ahead of a changing world.
Web-links
Virtually all of the above links can be found on my website www.andrewleunginternationalconsultants.com under Publications, CHINAwatch or What is New.
A collection of web-links to some of the most frequently used China media websites as well as a number of research sites on China may be accessed under China Links on my website at http://www.andrewleunginternationalconsultants.com/all/chinalinks.html
You may therefore find it convenient to save my website on your computer, laptop, Blackberry or I-phone for viewing of any articles at your leisure or as a China resource.
Cheer up and Chill out
If you are in the mood for some motivational inspiration, you may enjoy http://www.andrewleunginternationalconsultants.com/new/2010/10/cheer-up-and-chill-out.html
Andrew
www.andrewleunginternationalconsultants.com
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.’
William Shakespeare, in Julius Caesar
12th Five Year Plan for National Economic and Social Development
A survey by the Pew Research Centre last year suggested 87% of Chinese were satisfied with "the way things were going" in their country. Nevertheless, the PEW high rating applies largely to the middle-class in cities. It means 13% of 1.3 billion people, those largely in the poorer provinces, are not so well satisfied. Indeed, back in 2005, Premier Wen Jiabao already said openly to an international audience that China's development is 'Unstable, Unbalanced, Uncoordinated, and Unsustainable.
As the tide is turning in the Middle East, it is opportune that China is unveiling a decisive watershed in her economical and social development for the next five years (2011-15). The new model is very much people-and-environment-focused – controlling rising food and housing prices; providing more jobs, healthcare, education, and social services; fighting corruption; and promoting a less energy-hungry, higher-value-added, less export-dependent, and more consumption-oriented economy with a more moderate growth rate (7%) and a more balanced, sustainable, and equitable society.
You may care to see my live CNBC interview on Balancing China’s Economy – The 12th Five Year Plan (2011-15) at http://www.cnbc.com/id/15840232?video=1828698240&play=1
More details of the Five Year Plan are available on China Daily at http://www.chinadaily.com.cn/china/2011npc/2011-03/06/content_12122579.htm
The Jasmine Revolutions
The test of the pudding of the Five-Year Plan is, of course, in the eating. In particular, in the light of the Jasmine Revolutions sweeping across the Arab world, managing the aspirations of a rapidly-rising, young, internet-enabled and more educated middle-class is likely to present a major challenge. Read The Jasmine Revolutions – why Chinese leaders should be on their toes at http://www.andrewleunginternationalconsultants.com/chinawatch/2011/02/call-me-if-there-is-a-revolution.html
Limits to Growth
During China’s trajectory towards a middle-income or ‘moderately well-off economy’, another looming challenge is the desire of China’s burgeoning middle-class to get a bit more of what most may not want to call the American Dream - more meat, more disposable clothes, cars, and all the trappings of modern urbanization – at a time when equally huge middle-class populations in other BRIC countries and beyond are trying to do the same. It doesn't take a nuclear scientist to realize that at the America per capita consumption of the world's resources, one world would not be enough. A more fundamental, epochal change of lifestyle may be necessary. See From Earthlings to an Ecological Civilization at http://www.andrewleunginternationalconsultants.com/chinawatch/
Inflation and Asset Bubbles
Global inflationary pressures vary but the flood of hot money from a bout of quantitative easing (QEs) in the West is finding its way into emerging markets including China to seek higher yields, feeding inflation and asset bubbles wherever it goes. Curbing inflation and asset bubbles remains at the top of China’s national agenda.
A tour d’horizon Is China overheating? is at http://www.andrewleunginternationalconsultants.com/chinawatch/2011/02/is-china-overheating.html
More thorough analyses can be accessed in my following feature articles published in International Finance of The ANALYST, Journal of the Institute of Chartered Financial Analysts of India (ICFAI) University Press:
(a) China’s Liquidity Management: A Juggling and Balancing Act (January, 2011) at http://www.andrewleunginternationalconsultants.com/files/icfai---the-analyst---chinas-liquidity-management---jan-2011.pdf
(b) China’s Economy at Risk of Overheating (March 2011) at http://www.andrewleunginternationalconsultants.com/files/icfai--chinese-economy-at-risk-of-overheating.pdf
On inflation, you may perhaps wish to check out some of my following live CNBC interviews:
(a) Taming rising prices in China (17.11.2010) at http://www.cnbc.com/id/15840232?video=1647717831&play=1
(b) Inflation: Top Priority for Chinese Policymakers (27.12.2010) at http://www.cnbc.com/id/15840232?video=1712920457&play=1
(c) Controlling Inflation as China Grows (16.2.2011) at
http://www.andrewleunginternationalconsultants.com/chinawatch/2011/02/controlling-inflation-as-china-grows.html
(d) China Market forecast (11.3.2011) at http://www.cnbc.com/id/15840232?video=1837506011&play=1
Currency War, the RMB, and Reserve Currencies
As the West is struggling to come out of the global recession and turn around their anaemic job markets, it has become fashionable to blame RMB undervaluation for loss of competitiveness and jobs. The dollar’s value is being eroded by the Fed turning on the money spigot (QE1/QE2), while other exporting countries have to safeguard their competitiveness by keeping down their own currencies. So a global currency war is in the making. Meanwhile, the status of the dollar as a stable long-term reserve currency is being called into question.
See Will any 'regional' currency substitute the USD as a reserve currency?, a reprint of my commentary on the McKinsey Quarterly Executive Panel, an online platform, at http://www.andrewleunginternationalconsultants.com/publications/2010/12/will-any-regional-currency-substitute-the-usd-as-a-reserve-currency.html
My full-length research note - Currency War and the Future of the RMB: Monetary Policy, Imbalances, and the global Reserve Currency System is at
http://www.andrewleunginternationalconsultants.com/files/currency-war-and-the-rmb.pdf
The global context
There is little doubt that China is at the Heart of Asia’s Story – see my CNBC interview at http://www.cnbc.com/id/15840232/?video=1677181480&play=1
Nevertheless, everything and everywhere are now interconnected. To see how I and some others predict where this year's global economic and political risks will be and why they matter, visit Risk Roundup 2011 in McKinsey Quarterly, January 2011 at https://www.mckinseyquarterly.com/Risk_roundup_2011_2731#LettersToTheEditors
For an overview of some of the key global challenges in the coming decades, you may wish to have a look at eleven of them, which I have outlined in Welcome to the Brave New World of the 21st Century at http://www.andrewleunginternationalconsultants.com/chinawatch/2011/02/welcome-to-the-brave-new-world-of-the-21st-century.html
There is a popular perception that the BRIC countries should do well in the coming decades. Read How the BRIC and EAGLE countries could grow to dominate the world by 2050 in my responses to an invitation by The ANALYST, Journal of the Institute of Chartered Financial Analysts of India (ICFAI) University Press. They are accessible at
http://www.andrewleunginternationalconsultants.com/files/icfai-questionaire-on-bric.pdf
International relations
(a) Myanmar’s election: Return to civilian rule?, a live TV interview on Inside Story with Aljazeera English at http://english.aljazeera.net/programmes/insidestory/2010/11/201011912435628233.html
(b) China –Vatican dispute , a live interview with Aljazeera English at http://www.andrewleunginternationalconsultants.com/chinawatch/2010/11/china-vatican-dispute.html
(c) Premier Wen Jiabao’s visit to India, a live TV panel discussion with Times of India (Times Now) (Parts 1 & 2) at http://www.andrewleunginternationalconsultants.com/chinawatch/2010/12/premier-wen-jiabaos-visit-to-india.html
(d) Grand Chinese Design? , a live TV debate with Times of India (Times Now) on Indian perception of China conspiracy theories (3 Parts) at http://www.andrewleunginternationalconsultants.com/chinawatch/2011/02/grand-chinese-design-.html
(e) South Korea begins live fire exercises, a live CNBC TV interview on inflation in China and South Korea military exercises at http://www.cnbc.com/id/15840232?video=1704349592&play=1
(f) Behind and Beyond Hu’s visit to the United States, an analysis at http://www.andrewleunginternationalconsultants.com/chinawatch/2011/01/behind-and-beyond-hus-visit-to-the-us.html
(g) Empire – The new arms race, a commentary on Aljazeera English’s TV expose with an international expert panel at http://www.andrewleunginternationalconsultants.com/new/2011/03/empire-the-new-arms-race.html
Science and Technology
Check out New York Times article and video Light at the end of the tunnel of affordable off-grid power for the world's rural poor? at http://www.andrewleunginternationalconsultants.com/new/2010/12/a-new-york-times-elisabeth-rosenthal-reports-form-rural-kenya-where-cheap-chinese-solar-panels-are-providing-decentral.html This may offer some ideas applicable to poverty-stricken areas in China and other parts of the developing world.
A few examples of China leapfrogging in science and technology:
(a) China's new Cloud Computing City at http://www.computerworld.com/s/article/9208398/China_building_a_city_for_cloud_computing
(b) China's Godson Chip Roadmap at http://nextbigfuture.com/2011/02/china-godson-chip-roadmap-and-15-other.html
(c) Next generation of fast nuclear reactors at http://analysis.nuclearenergyinsider.com/industry-insight/china-experimental-fast-reactor-ready-connect
Miscellaneous
On a lighter note, you may wish to view
(a) The Stanley Ho saga at http://www.andrewleunginternationalconsultants.com/new/2011/01/the-stanley-ho-saga.html
(b) Talk Show by Joe Wong at the US Annual Radio and TV Correspondents Dinner at http://v.youku.com/v_show/id_XMTY3ODc1OTgw.html
China Business Electives for a Transformed World in the 21st century
To take on the challenges and opportunities of a transformed world with a Rising China in the 21st century, I have updated my syllabuses of proprietary modular electives for business schools and corporate in-house training at http://www.andrewleunginternationalconsultants.com/new/2010/12/up-to-date-china-business-electives-for-the-21st-century.html They may serve to enrich the curricula of business schools wishing to stay ahead of a changing world.
Web-links
Virtually all of the above links can be found on my website www.andrewleunginternationalconsultants.com under Publications, CHINAwatch or What is New.
A collection of web-links to some of the most frequently used China media websites as well as a number of research sites on China may be accessed under China Links on my website at http://www.andrewleunginternationalconsultants.com/all/chinalinks.html
You may therefore find it convenient to save my website on your computer, laptop, Blackberry or I-phone for viewing of any articles at your leisure or as a China resource.
Cheer up and Chill out
If you are in the mood for some motivational inspiration, you may enjoy http://www.andrewleunginternationalconsultants.com/new/2010/10/cheer-up-and-chill-out.html
Andrew
www.andrewleunginternationalconsultants.com
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