China opts for low rise in military budget but will still spend lot more than India

BEIJING: China has announced a modest increase of 7 percent in its military budget for this year. But the expected expenditure of $145 billion in 2017 will be over three times the size of India's defence budget for 2017-18.
Beijing's decision to opt for a low increase in military expenditure contrasts sharply with US president Donald Trump's recent announcement that he will push for a 10 percent increase in defence spending. This is seen as a second attempt by Chinese president Xi Jinping to capture the moral high ground since his recent announcement at the World Economic Forum that China would stick to the path of globalization despite protectionist tendencies in the US.
Fu Ying, spokesperson for the 12th National People's Congress (NPC) annual session, rubbed it in at a press conference as she pointed out that China will spend just 1.3 percent of its Gross Domestic Product on defence compared to a decision by NATO countries to invest 2 percent of GDP for the purpose.
"You should ask them what their intentions are," Fu said.
Many military analysts believe China's defence figures do not fully reflect its actual spending because many forms of investments are shown as civil works. They include the $46 billion China Pakistan Economic Corridor, which passes through Pakistan Occupied Kashmir and contains several security aspects. It is also not clear if the recent building of artificial islands in South China Sea is shown as military or civilian expenditure.
India and other neighbors of China have reasons to be worried because a portion of the increase in defence expenditure would go to the navy which is enhancing its capabilities in the South China Sea and the Indian Ocean.
"In order to protect China's territories and overseas interests, China needs two carrier strike groups in the West Pacific Ocean and two in the Indian Ocean. So we need at least five to six aircraft carriers," Yin Zhuo, a rear admiral and a senior researcher at the PLA Navy Equipment Research Center, told the Global Times newspaper.
Analysts said China opted for low spending on military in view of the economic slowdown and the government's need for investing in areas that can boost the economy.
"The fresh raise could be the country's slowest defense budget rise in more than a decade, and mark the second time that defense budget dip to single-digit increase since 2010. In 2009, the figure was about 15%," Xinhua, the official news agency, said.

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Ignoring Indian talent China’s mistake: Global Times

Ignoring Indian talent and attaching too much importance to the workforce from the United States and Europe was China’s mistake, a Chinese daily said on Friday.

However, the editorial in Global Times caustically said it was way cheaper to hire Indians as “the cost of employing an Indian engineer is just half the cost of hiring a Chinese worker.”

The paper said wooing high-tech talent from India would help China in innovation.

Wooing S&T talent

“China has perhaps not been working hard enough to attract science and technology talent from India to work in the country,” the daily said.

“Over the past few years, China witnessed an unprecedented boom in tech jobs as the country became an attractive destination for foreign research and development centres. China has made the mistake of ignoring Indian talent, and instead has attached a greater importance to talent coming from the US and Europe,” it said.

Citing some reports, the paper said: “The cost of employing an Indian engineer is just half the cost of hiring a Chinese worker, which means Indians could see their revenue more than double if they came to work in China.

“However, now some high-tech firms are turning their attention from China to India due to the latter’s relatively low labor costs. Attracting high-tech talent from India could be one of China’s options for maintaining its innovation ability,” it added.

India increasingly attractive

The report cited how an American software firm had shut its research and development team of 300 people unit and set up a unit in India with some 2,000 professionals.

“With a sufficient young talent pool, India is becoming increasingly attractive. China cannot afford to risk a decline in its attractiveness for high-tech investors. The nation is among the third echelon in cutting-edge technology fields and is working to catch up with the U.S. and the result of its efforts will decide whether China will maintain its status as an emerging global economic power,” it said.

China’s talent pool not enough

The report said China’s talent pool was not large and flexible enough to meet the demand for the rapid expansion of innovation capability.

“Some enterprises in Guizhou province provide convenience for Indian talent in terms of housing, insurance and transportation who could enjoy a much better standard of living in [China] than in Bangalore,” it said.

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Mistress-dispelling is a booming business in China

When Wang, a 39-year-old woman from Shanghai, discovered texts on her husband’s phone that suggested he was having an affair with one of his employees, she was distraught but decided to take action.

She searched online for a “mistress dispeller.”

Mistress-dispelling services, increasingly common in China’s larger cities, specialize in ending affairs between married men and their extramarital lovers.

Typically hired by a scorned wife, they coach women on how to save their marriages, while inducing the mistress to disappear. For a fee that can start in the tens of thousands of dollars, they will subtly infiltrate the mistress’s life, winning her friendship and trust in an attempt to break up the affair. The services have emerged as China’s economy has opened up in recent decades, and as extramarital affairs grew more common.

With greater opportunities and incentives to be unfaithful new businesses to combat the cheating have apparently flourished.

Counselling, persuasion

A search on Baidu, a Chinese search engine, yields pages of ads and blogs that link back to mistress-dispelling companies based in cities like Shanghai and Guangzhou. After her own search, Ms. Wang decided to hire Weiqing International Marriage Hospital Emotion Clinic Group, a mistress-dispelling service in Shanghai.

Weiqing eventually ended the affair, she said, by persuading the other woman to take a higher-paying job in another city.

Weiqing said it started helping clients like Wang in 2001 in Shanghai, and has since expanded to 59 cities.

Mistress dispelling typically begins with research on the targeted woman, said Shu Xin, Weiqing’s director. An investigation team — often including a psychotherapist and, to keep on the safe side, a lawyer — analyses her family, friends, education and job before sending in an employee whom Weiqing calls a counsellor.

The counsellor might move into the mistress’s apartment building or start working out at her gym, getting to know her, becoming her confidante and eventually turning her feelings against her partner.

Kang Na, who runs a mistress-dispelling service called the Reunion Co. in the southern city of Shenzhen, said counsellors are chosen for their attractive looks and personality. While the counsellor goes to work, the mistress-dispelling service advises the wife on how to make herself more attractive to her husband. The companies say it typically takes about three months to dispel a mistress. Yu Feng, director of the Chongqing Jialijiawai Marriage and Family Service Center, said his team has dispelled 260 mistresses in the last two years.

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Dalai Lama “making a fool” of Buddhism: Chinese official

Exiled Tibetan spiritual leader the Dalai Lama is “making a fool” of Tibetan Buddhism with suggestions he may not reincarnate, or reincarnate as something inappropriate, and the faithful are not buying it, a Chinese official wrote on Monday.

China says the Dalai Lama, who fled into exile in India after a failed uprising against Chinese rule in 1959, is a violent separatist. He denies espousing violence and says he only wants genuine autonomy for Tibet.

The animosity between the two sides, and their rivalry for control over Tibetan Buddhism, is at the heart of the debate about reincarnation.

Tibetan Buddhism holds that the soul of a senior lama is reincarnated in the body of a child on his death.

China says the tradition must continue and its officially atheist Communist leaders have the right to approve the Dalai Lama's successor, as a right inherited from China's emperors.

The Nobel Peace Prize-winning monk has suggested his title could end when he dies. China accuses him of betraying, and being disrespectful toward, the Tibetan religion by saying there might be no more reincarnations.

Writing in the state-run Global Times, Zhu Weiqun, chairman of the ethnic and religious affairs committee of the top advisory body to China's parliament, said the Dalai Lama had to respect the religious and historic traditions of reincarnation.

“The Dalai Lama continues to proclaim his reincarnation is a 'purely religious matter' and something only he can decide, but he has no way to compel admiration from the faithful,” wrote Mr. Zhu, known for his hardline stance on Tibet.

“He's been proclaiming he'll reincarnate as a foreigner, as a bee, as a 'mischievous blond girl', or even proposing a living reincarnation or an end to reincarnation,” he added.

“All of this, quite apart from making a fool of Tibetan Buddhism, is completely useless when it comes to extricating him from the difficulty of reincarnation,” wrote Mr. Zhu, who was involved in the past in Beijing's failed efforts to talk to the Dalai Lama's representatives.

Tibetan exiles worried China will appoint its own successor to the 80-year-old leader can point to a precedent.

In 1995, after the Dalai Lama named a boy in Tibet as the reincarnation of the previous Panchen Lama, the second highest figure in Tibetan Buddhism, China put the child under house arrest and installed another.

Mr. Zhu also said China had been successful in getting fewer and fewer foreign leaders to meet the Dalai Lama, because of the anger it draws from the world's second-largest economy.

“Anyone getting ready to offend China must first weigh up the consequences,” he wrote.

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Nepal seals agreement on transit rights through China

Underlining the growing role of China in South Asia, Nepal on Monday secured transit rights through China following an agreement in Beijing between Prime Minister K.P. Sharma Oli and his Chinese counterpart Li Keqiang.

Earlier, China extended a ceremonial welcome to Mr. Oli who held official talks with the Chinese leadership. News reports said Mr. Oli would also conclude agreements on building of multiple train routes connecting Nepal with China’s key production centres.

However, playing down the impact of the agreements between Nepal and China, official sources told The Hindu that the future of the agreements depended on the issue of “economic viability” of the transit facilities and train connectivity projects.

The Ministry of External Affairs, however, refused to issue an official statement immediately, considering that the agreements were between two sovereign countries.

However, officials pointed out that India-Nepal ties could not be compared or curtailed by Nepal’s agreements with China.

“After all, 98 per cent of Nepal’s third country trade goes through India and to the port of Kolkata,” an official pointed out. India at present has two rail lines under construction and three more are being planned to increase Nepal’s trade ties.

During the February visit of Prime Minister Oli to New Delhi, India agreed on giving dedicated access to Nepal to the port of Vizag.

Officials pointed out that in comparison to the Nepal-China agreement, India and Nepal had 25 crossing points, two integrated checkpoints and 2 more checkpoints were under construction.

A challenge for South Asia, says expert

Even as official sources played down the impact of the transit rights through China, Nepal Prime Minister K.P. Sharma Oli clinched in an agreement with his Chinese counterpart Li Keqiang in Beijing on Monday and other proposed agreements for rail connectivity, diplomat and academic Dr. S.D. Muni pointed out that the development represented “a challenge not just for India but for entire South Asia.” However, he cautioned, it should not trigger a panic reaction from India.

Dr. Muni pointed out that China would have to ponder about how it could implement a rail and transit agreement for Nepal without opening up the Tibet region to the world.

“Rail connectivity from Nepal to China will be used by the non-Chinese to travel to China through Tibet. Will China open up Tibet to facilitate connectivity for Nepal?” asked Dr. Muni.

The agreements, however, will take some time before being implemented on the ground and political developments may impact the deals concluded. However, Dr. Muni pointed out that the implementation of the deals would depend on how far China was willing to invest in Nepal considering the economic and political risks associated with the deals. However, as of Monday, Nepal could not seal a vital fuel supply agreement with China which Nepali sources said would also come up for detailed discussion during the seven-day visit of Mr. Oli to China.

Nepali commentator Kanak Mani Dixit, pointed out that the five month-blockade on the Nepal-India border which ended in February, “pushed Nepal to open its northern borders with China for transit trade.”

“Historically, the Himalayas were seen as barrier but now the Himalayas can be a connector between Nepal and China,” said Mr. Dixit, underlining that transit and train agreements will create new dynamics in South Asia.

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China pledges new push against ‘hostile forces’

China’s chief prosecutor said on Sunday that battling “infiltration, subversion and sabotage by hostile forces” is a key priority this year, with terrorists, ethnic separatists and religious extremists all in his crosshairs.

In a speech to the annual session of China’s national legislature, Cao Jianmin also listed combating cybercrime and ensuring national sovereignty in cyberspace as items topping the list of 2016 priorities. Prosecutors will also continue to follow up on cases brought to as part of an almost three-year-old nationwide anti-corruption campaign spearheaded by the ruling Communist Party’s watchdog agency, Cao said.

Although he identified no specific groups or individuals as threats, Beijing has in the past cited a long list of “hostile forces” it accuses of seeking to end communist rule and plunge China into chaos, division and economic ruin.

Those include agents of foreign governments, civil society groups who challenge the party’s absolute authority, religious dissenters such as the underground church and the banned F— APalun Gong meditation sect. Those campaigning for ethnic rights are also frequently cited, including exiled Tibetan leader the Dalai Lama and advocates for the Turkic Muslim Uighur minority from the northwestern region of Xinjiang.

In an accompanying address to the legislature, top judge Zhou Qiang said Chinese courts convicted 1,419 people last year of national security and terrorism crimes that carry potential death sentences. That compares with 712 people sentenced for incitement to separatism, terrorism and related charges in 2014, before last year’s passage of a sweeping new national security law.

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China set to hike military spending

China appears set to substantially hike its defence budget — a move that may have been triggered by the growing tensions in the South China Sea with the U.S., and rising cost of end-of-service payments to troops.

The Hong Kong-based South China Morning Post (SCMP) quoted a source in the People’s Liberation Army (PLA) as saying that the defence budget, expected to be announced by the National People’s Congress (NPC) when it convenes for a legislative session on Saturday, could be hiked by as much as 20 per cent. In case that happens, it would be the sharpest military increase since 2007.

But scaling down the expectations, the state-run Global Times said, quoting Ni Lexiong, a Shanghai-based military analyst, that the 2016 military budget will see an “appropriate” increase to meet national defence needs without putting other countries on high alert. “I think the budget reported in the SCMP might be too high,” Mr. Ni observed.

Analysts cite two factors that may explain the anticipated military spending increase. First, the Chinese armed forces are undergoing a structural change. Nearly 300,000 personnel are expected to leave the armed forces by 2017-end, in tune with the reorganisation of the PLA around newly formed, and leaner, theatre commands.

Consequently, considerable amount of funds are required to meet the end-of-service, and retirement payments during this phase.

Further, growing tensions with the U.S. and Japan in the East and South China Seas are also significant drivers. In January, a U.S. navy missile destroyer — Curtis Wilbur — sailed within 12 nautical miles of the China-controlled Triton islands in the Paracel island chain of the South China Sea, leading to calls within China for additional military preparedness.

Tensions in S. China Sea

The U.S. Navy’s Pacific Command has asserted that it would step up the so-called “freedom of navigation missions” in international waters of the South China Sea — a move that Beijing says is provocative and a challenge to its territorial sovereignty.

Observers say that China can be expected to beef up defensive weaponry in the South China Sea. ImageSat International, a private company, has already taken images showing the deployment of eight missile launchers and a radar system at the China-administered Woody Island, also in the Paracel chain.

Tensions with Japan are also expected to trigger additional deployment of Chinese firepower in the East China Sea, where Beijing and Tokyo have a territorial dispute over Diaoyu Islands, known as the Senkaku in Japan. The friction between the two countries is reflected in the record Japanese defence budget of $41.1 billion this year.

The possibility of the deployment of the U.S. Terminal High Altitude Area Defense (THAAD) anti-missile system, following the North Korean nuclear and ballistic missile technology tests this year, add another dimension, pushing China to adopt counter-measures.

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2.8 million cancer deaths in China in 2015: study

Some 2.8 million Chinese may have died of cancer in 2015 or over 7,500 deaths daily, according to a new study.

“With increasing incidence and mortality, cancer is the leading cause in China and is a major public health problem,” the study in the world’s most populous nation says.

It also estimated that nearly 4.3 million were diagnosed in 2015, with 12,000 new cases daily.

The figures marked a sharp rise in new diagnoses. Figures released in 2013 estimated that there were 3.12 million new diagnoses and over two million deaths in 2012.

The figures in the study are not actual numbers, but are estimates based on data trends from 72 local, population-based cancer registries between 2009 and 2011, which is now available through the NCCRC and represents 6.5 per cent of the total population.

It said lung, stomach, esophageal, liver and colorectal cancers were the most common ones in men, accounting for about two-thirds of all cases.

Breast, lung, stomach, colorectal and esophageal cancers were the most commonly seen cancers among women, the official Xinhua news agency reported, quoting the study.

Chen Wanqing, leading author of the study and director of the NCCRC told China National Radio that though air pollution is an important cause of lung cancer deaths, their accurate correlation must be decided by 10 to 20 years of data analysis.

Noting that smoking accounted for about one quarter of all cancer deaths in China, he said China’s emphasis on smoking control is a good sign to prevent such deaths.

A good trend shown in the report is that mortality rates of cancers have decreased by about 21 per cent for both men and women since 2006.

China should be prepared as the number of cancers deaths will still climb with the arrival of aging population, he said, adding the most important measure would still be on prevention.

The study has been published by the US medical journal ‘CA: A Cancer Journal for Clinicians.’

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Haryana closer to mega deal with China

After concluding a visit to Japan, Haryana Chief Minister Manohar Lal Khattar seeking big ticket foreign investment in the state, knocked on China’s door on Friday, to find himself crowded by Chinese businessmen keen to enter India.

Within hours of a slickly choreographed road show in a top-end Beijing hotel, six MoUs, ranging from smart cities to steel technology were already in the bag. “We are expecting investments from Japan, but more than Japan, there is a greater likelihood for investments from China,”said Mr. Khattar, in a conversation with the resident Indian media in Beijing.

The upbeat mood notwithstanding, the coveted prize — a seven billion dollar investment by China’s Dalian Wanda Group — in an entertainment, theme and industrial park, in the state was still out of grasp. Numerous meetings with the China’s real estate giant, which is also the world’s largest cinema chain operator, had already been held, said Captain Abhimanyu, the Industry Minister of Haryana. Another round of talks with the group was slated later on Friday, holding the prospect of signatures on an exploratory MoU with the Chinese conglomorate.

In case the high-octane interaction helped materialise a deal, it would jump start Chinese investments in India. In turn, it would ignite Prime Minister Narendra Modi’s Make-in-India campaign, whose teething troubles were yet to disappear. The proposed park, covering more than 3000 acres, on the lines of Disney World, is to be established at Kharkhoda, in Haryana’s Sonipat district.

Mr. Khattar’s visit is part of a growing decentralisation of Sino-Indian ties, where Indian states and Chinese provinces were imparting considerable influence on foreign policy. The Chief Minister’s visit was facilitated by the international department of the Communist Party of China (CPC), which had signed a unique agreement with the Ministry of External Affairs (MEA) to set up a mechanism that would help chief ministers and other functionaries to visit China. Last year, the party had hosted Chandrababu Naidu, the Chief Minister of Andhra Pradesh in China.

Indian officials say that a new symbiotic economic relationship is beginning to take shape, where China’s excess manufacturing capacity, including in the real-estate arena dovetailed with the industrial demands of India’s ‘Make-in-India’ campaign.

Mr. Khattar said that under a new enterprise policy 2015, a target investment of Rs. 2 lakh crore, drawn from foreign and domestic sources, had been set. That would generate 4 lakh skilled jobs – a politically significant number, in a relatively small state. Unveiling the state’s ambitious plans, he said that Haryana was targeting an annual GDP growth of 8 per cent, which could be achieved through a special focus on the relatively less developed western Haryana.

Hissar, he observed, would soon have an airport — a step which could help establish an eco-system for the development of the region.

The Chief Minister revealed that a dedicated call centre in Japanese language to facilitate investments from Tokyo had also been established. A similar exercise to encourage the flow of Chinese investments was now being actively considered. He added that those officers who achieved a certain level of proficiency in the two languages would be posted on three month stints in China and Japan to hone their language skills.

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Tax elite to reduce inequality: Thomas Piketty

French economist Thomas Piketty says he hopes the Indian elite will pay more taxes on wealth and income, as the country’s tax-to-GDP ratio of less than 11 per cent is insufficient to meet its challenges of inequalities. The aim should be to evolve the ratio towards 30-50 per cent, as in the U.S. and west European countries.

“India has zero wealth tax… I hope the Indian elite will behave much more responsibly [in paying more taxes] than the western elite did in the 20th century,” he told The Hindu in an interview.

Drawing a comparison with China, the author of the best-seller Capital in the Twenty-First Century said: “The Chinese Communist Party has been much more successful than the democratic and parliamentary Indian elites in mobilising significant resources to finance a strategy of social investment and public services.” India’s public health system has a budget of barely 0.5 per cent of GDP, compared with almost 3 per cent in China.

His observations follow new research — based on the World Bank’s poverty data — that show the burden of cutting global inequality now rests largely on India as China has been successful in doing it. At the same time, the Modi government has announced its intention of reducing the rate of taxation of corporate incomes to 25 per cent (with corresponding withdrawals of exemptions), which is lower than in rich countries.



‘Rich must open their wallets more to remove inequalities’

Mr. Piketty, whose book transformed the understanding of the history of wealth and its distribution, said for India to meet its huge challenges of inequalities the elite would have to start paying more taxes.

The current tax-to-GDP ratio — of between 10 per cent and 11 per cent — is insufficient for meeting India’s huge challenges of inequalities, the French economist said. The aim should be to evolve the ratio toward the 30 per cent to 50 per cent levels now seen in the U.S. and some of the West European countries.

“I hope Indian elite will behave much more responsibly than the western elite did in the 20th century…. True reforms are yet to come in the public funding of the education system and improvement in the transparency in the tax collection system has not happened yet,” Mr. Piketty said in an exclusive interview to The Hindu on Thursday. He was in Delhi to deliver a lecture on Inequality and Capitalism.

Communist China has fared better than India at collecting taxes from the elite which is evident from the stark difference in the public spending between the two countries for instance, on health, he said. The public health system in India has a budget of less than one per cent of GDP as compared with almost three per cent in China. “The Chinese Communist Party has been much more successful than the democratic and parliamentary Indian elites in mobilising resources to finance social investment and public services.”

Mr. Piketty’s documentation of the evolution of income and wealth over the past 300 years in the rich countries shows that from about 1914 to the 1970s there was an historical outlier in which both income inequality and the stock of wealth (relative to GDP) fell dramatically.

This was on account of the political shocks and because of an increase in tax rates in the rich countries in response to the world wars. Since the 1970s both wealth and income gaps were rising toward their pre-20th-century norms, he said. Between 1980 and 2007, 70 per cent of the addition to gross domestic product, especially in the rich countries, went to the top 10 per cent of the “elite” population. In contrast, the per capita incomes rose just about 1.5 per cent a year.

Top 10 per cent

“Income and wealth concentration in India today is probably very high by international and historical standards. It is probably close to Brazil and South Africa (top 10 per cent income share = 50-60 percent of total income) than to U.S. (top income share = 45-50 per cent of total income) or Europe (top 10 per cent income share = 30-35 per cent).”

One of the factors that explain this concentration of wealth is that inherited wealth and invested capital — in the stock market, in real estate — will grow faster than income. Inequality, however, needs not just economic but also social and political strategies, he said. “It’s a matter of policies and institutions.”

In India, the preferential admission policies of caste-based quota and reservation systems in education, he said, in the long-run should be gradually transformed into rules founded on universal social criteria such as parental income or place of residence. “

Mr. Piketty said he was eagerly waiting for the socio economic caste census of 2011 and could not understand why a country that passed a law for right to information would delay releasing the findings of the census: “India passed the right to information act in 2005, right... That was ten years ago... What’s the point of doing the census and not releasing the data.”

India is “unique” as far as transparency is concerned.

“India used to publish income tax statistics but discontinued in 2000 after publishing for decades… transparency is a problem in every country but only in India it is falling.”

In the absence of data it is not possible to show the evolution of wealth in India as a result of which “we could be vastly underestimating inequality.” The data is needed to limit the concentration of wealth, fight corruption and assess the efficacy of India’s tax policy choices.

Surge in CEO incomes

The sharp surge in the incomes of top CEOs in rich countries cannot all be explained by increased productivity for which there is no evidence at all, he said. It can, however, be explained by falling taxation rates and issues of corporate governance.

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China posts slowest economic growth in 25 years

For the first time in 25 years, China’s economy grew at its slowest pace at 6.9 per cent in 2015, sparking global concerns over the health of the world’s second largest economy and its impact on investors as the Communist giant embarked on painful economic reforms.

The growth rate, released by China’s the National Bureau of Statistics (NBS) today, moderated to 6.8 per cent for the fourth quarter, the lowest quarterly rate since the global financial crisis in 2009, and 6.9 per cent for 2015.

The 6.9 per cent growth rate is the slowest in the country since the 3.8 per cent in 1990, a year after the bloody Tiananmen Square crackdown rocked the country and isolated it internationally.

Chinese Premier Li Keqiang last year had said that the Chinese government targeted an annual economic growth of around seven per cent for 2015.

As per the new data, China’s Gross Domestic Product (GDP) reached 67.67 trillion yuan (about $ 10.3 trillion) in 2015, with the service sector accounting for 50.5 per cent, the first time the ratio exceeded 50 per cent overtaking the manufacturing, the NBS said.

Analysts said if the economy slips below 6.8 per cent the government may have to opt for a stimulus package which it is trying to avoid. The slowdown has already destabilised China’s stock market last year which also had negative effect in the world markets.

China had worst stock market crashes last year which wiped out about $ 3.2 trillion of capital, prompting government initiate investigation. Since then the market experienced severe volatility. Over 20 million small investors who lost heavily in the fluctuations deserted the market.

After experiencing rapid growth for more than a decade, China’s economy has experienced a painful slowdown in the last two years.

Since last year the government has also been vocal about the slowdown saying that the Chinese economy has entered a “new normal” in view of the transition from a state-led investment and manufacturing growth to one more dependent on services and consumption.

Some argue that China’s focus on creating an economy driven by consumption is misplaced. They say as the country attempts to re balance its economy, it should focus on productivity in order to sustain high growth.

“While higher consumption can support growth in the short run, there is little in economic theory that emphasizes the expenditure side of GDP as a driver of growth,” BBC quoted HSBC’s John Zhu as saying in a note.

China is the biggest market for goods produced by some nations. With the Chinese buying fewer goods or commodities, it’s dragging down those countries’ economies and commodity prices.

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China posts slowest economic growth in 25 years

For the first time in 25 years, China’s economy grew at its slowest pace at 6.9 per cent in 2015, sparking global concerns over the health of the world’s second largest economy and its impact on investors as the Communist giant embarked on painful economic reforms.

The growth rate, released by China’s the National Bureau of Statistics (NBS) today, moderated to 6.8 per cent for the fourth quarter, the lowest quarterly rate since the global financial crisis in 2009, and 6.9 per cent for 2015.

The 6.9 per cent growth rate is the slowest in the country since the 3.8 per cent in 1990, a year after the bloody Tienanmen Square crackdown rocked the country and isolated it internationally.

Chinese Premier Li Keqiang last year had said that the Chinese government targeted an annual economic growth of around seven per cent for 2015.

As per the new data, China’s Gross Domestic Product (GDP) reached 67.67 trillion yuan (about $ 10.3 trillion) in 2015, with the service sector accounting for 50.5 per cent, the first time the ratio exceeded 50 per cent overtaking the manufacturing, the NBS said.

Analysts said if the economy slips below 6.8 per cent the government may have to opt for a stimulus package which it is trying to avoid. The slowdown has already destabilized China’s stock market last year which also had negative effect in the world markets.

China had worst stock market crashes last year which wiped out about $ 3.2 trillion of capital, prompting government initiate investigation. Since then the market experienced severe volatility. Over 20 million small investors who lost heavily in the fluctuations deserted the market.

After experiencing rapid growth for more than a decade, China’s economy has experienced a painful slowdown in the last two years.

Since last year the government has also been vocal about the slowdown saying that the Chinese economy has entered a “new normal” in view of the transition from a state-led investment and manufacturing growth to one more dependent on services and consumption.

Some argue that China’s focus on creating an economy driven by consumption is misplaced. They say as the country attempts to re balance its economy, it should focus on productivity in order to sustain high growth.

“While higher consumption can support growth in the short run, there is little in economic theory that emphasizes the expenditure side of GDP as a driver of growth,” BBC quoted HSBC’s John Zhu as saying in a note.

China is the biggest market for goods produced by some nations. With the Chinese buying fewer goods or commodities, it’s dragging down those countries’ economies and commodity prices.

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U.S. lifts sanctions; Iran comes in from the cold

The United States on Saturday removed a wide range of sanctions against Iran after International Atomic Energy Agency (IAEA) confirmed that Tehran has met its commitments to roll back its nuclear programme, under an agreement with China, France, Russia, the United Kingdom, the U.S and Germany on July 14, 2015.

Minutes after Secretary of State John Kerry, after a meeting with Iranian Foreign Minister Javad Zarif, announced in Vienna that the deal has come into force, a White House official described the development as “historic” and an “inflection point in Iran’s relations with the world since concerns developed about the peaceful nature of its nuclear programme.”

Entire world is safer: Kerry

“Today... the United States, our friends and allies in the Middle East, and the entire world are safer because the threat of the nuclear weapon has been reduced,” Mr. Kerry said.

The U.S has only removed secondary sanctions that restrict the dealings of other countries with Iran. Primary sanctions that bar U.S citizens and companies from business with Iran will remain.

Iran stands to benefit immensely

However, the removal of restrictions on its oil, petrochemicals, banking, natural gas and port sectors will hugely benefit Iran and allow it to reenter the global market. As an instant relief, Iran will be able to access the huge amount of cash it has accumulated overseas from restricted oil sales during the sanctions.

Most of this money is sitting in China, India, Japan, South Korea and Turkey.

$100-150 billion for Iran

Commentators have estimated a windfall of $100-150 billion for Iran, but a U.S treasury official, briefing on condition of anonymity said the removal of sanctions will unlock only an estimated $50 billion. “Iran is likely to continue to keep it abroad to keep its own currency stable,” the official said.

Chabahar port, IPI gas pipeline

The removal of sanctions will tremendously help India’s plans in Iran, which are many and include the Chabahar port, an Indian Oil petrochemical plant and the proposed Iran–Pakistan–India (IPI) gas pipeline.

India’s oil imports from Iran have been restricted by the sanctions and the recent forward movement on Chabahar port was accommodated within the exemption granted for projects exclusively serving commerce with Afghanistan.

“With the lifting of the sanctions, the scope of India-Iranian cooperation, including the scope of the Chabahar port, can be expanded,” an Indian diplomat said.

U.S. has to keep anti-Iran allies happy

The Obama administration officials were upbeat on Saturday about the “diplomatic success” with a country with which it has no diplomatic relations. “Iran has made unprecedented concessions,” a senior official said.

But the administration has the tough task ahead, of keeping anti-Iran allies in West Asia such as Saudi Arabia and Israel happy and countering domestic criticism by the Republicans that it is going soft on Iran.

Jon B. Alterman, Director, Middle East Programme, at the Centre for Strategic and International Studies in Washington, said: “U.S allies in the region fear that the U.S. focus on the nuclear threat distracts the United States from the array of other threats that Iran poses to the region. The U.S will have to reassure Saudi and UAE and others that that is not the case.”

Long way to go for normal U.S.-Iran diplomacy

Mr. Alterman also believes that the possibility of U.S and Iran entering into normal diplomatic relations is “very far off.” “There are still many reasons each side is distrustful of the other.” He said, Iran wanted to be treated like a normal country, while other countries want Iran to behave like a normal country. “This is a step in that direction but the onus is on Iran to prove that its behavior fits into international norms. That is still a long journey.”

For the consumption of allies in the region and foes at home, the Obama administration insists that the deal is only about stopping Iran’s nuclear ambitions.

No relationship perspective: Kirby

“The Iran deal was never about defining or improving our relationship with Iran. It was about cutting off their pathways to a nuclear bomb, and it will do that. So nobody is looking at this from a relationship perspective,” State Department spokesperson John Kirby said hours before the implementation of the deal. The U.S has also made it clear that it continues to treat Iran as a state-sponsor of terrorism, and punitive actions prescribed for promoting terrorism, human rights violations and missile tests will continue. A U.S official said on Saturday that new sanctions for a ballistic missile test by Iran recently “will be forthcoming at an appropriate time.”

Resolving other issues

At the same time, administration and U.S allies in West Asia are aware of the potential this holds for the U.S in dealing with a host of other issues in the region. “The nuclear talks have opened up the possibility of resolving other issues also. We now have established strong diplomatic channels. The Secretary and Iranian Foreign Minister worked closely on the release of U.S sailors earlier this week, and we used the same channels to secure the release of U.S prisoners from Iran,” one of the officials who briefed on background said.

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Afghan peace talks: Pakistan warns against preconditions

Delegates from Afghanistan, Pakistan, China and the United States held talks on Monday to resurrect a stalled Afghan peace process and end nearly 15 years of bloodshed, even as fighting with Taliban insurgents intensifies.

Senior officials from the four countries are meeting in the Pakistani capital, Islamabad, to launch a process they hope will lead to negotiations with Taliban insurgents, who are fighting to re-impose their strict brand of Islamist rule and are not expected at Monday’s talks.

The Pakistani Prime Minister’s foreign affairs adviser, Sartaj Aziz, opened the meeting, saying the primary goal should be to convince the Taliban to come to the table and consider giving up violence. “It is therefore important that preconditions are not attached to the start of the negotiation process. This, we argue, will be counterproductive,” he said.

“The threat of use of military action against irreconcilables cannot precede the offer of talks to all the groups.”

Afghan Deputy Foreign Minister Hekmat Karzai and Pakistani Foreign Secretary Aizaz Chaudhry were joined by Richard Olson, the U.S. special representative for Afghanistan and Pakistan and General Anthony Rock, the top U.S. defence representative in Pakistan, as well as China's special envoy on Afghanistan affairs, Deng Xijun.

Renewed peace efforts come amid spiralling violence in Afghanistan, with last year one of the bloodiest on record following the withdrawal of most foreign troops at the end of 2014.

In recent months the Taliban have won territory in the southern province of Helmand, briefly captured the northern city of Kunduz and launched a series of suicide bombs in the capital, underlining how hard Afghan government forces are finding it fighting on their own.

Peace efforts last year stalled after the Taliban announced that their founder, Mullah Mohammad Omar, had been dead for two years, throwing the militant group into disarray as rival factions fought for supremacy.

Taliban undecided

The Taliban, who were ousted in 2001, remain split on whether to take part in talks. Taliban leader Mullah Akhtar Mansour's faction has shown signs of warming to the idea of eventually joining peace talks, and other groups are considering negotiating, senior members of the movement said last week.

But a splinter group headed by Mullah Mohammad Rasool Akhund, which rejects Mansour’s authority, has dismissed any talks where a mediating role is played by Pakistan, which observers say holds significant sway among Taliban commanders holed up near its border with Afghanistan, or the United States or China.

“We have a very clear-cut stance about peace talks: all the foreign occupying forces would need to be withdrawn,” Mullah Abdul Manan Niazi, Rasool’s deputy, told Reuters on Monday. “The issue is between the Afghans and only the Afghans can resolve it. We would not allow any third force to mediate between us.”

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First body recovered from China landslide, 81 still missing

Rescuers pulled one body from the debris on Tuesday and said 81 people were still missing two days after a man-made mountain of excavated soil and construction waste crashed into an industrial park in China’s manufacturing center of Shenzhen.

The official Xinhua News Agency said rescuers retrieved one body in the early hours of Tuesday. It’s the first reported death from the disaster.

The official China News Service said the number of the missing people went down to 81, from previous day’s 85, but did not explain how.

Authorities said the landslide buried or damaged 33 buildings in the industrial park in Shenzhen, a city near Hong Kong that makes products ranging from cellphones to cars that are sold around the world.

Residents blamed the government while officials cited human error, with one ministry saying, “The pile was too big, the pile was too steep.”

The landslide on Sunday covered an area of 380,000 square meters (450,000 square yards) with silt 10 meters (33 feet) deep, authorities said. At least 16 people were hospitalized, including children, Xinhua said.

The Shenzhen government said seven trapped people had been rescued.

The landslide is the fourth major disaster to strike China in a year following a deadly New Year’s Eve stampede in Shanghai, the capsizing of a cruise ship in the Yangtze River and a massive explosion at a chemicals warehouse in Tianjin on the coast near Beijing.

In Sunday’s landslide, the Ministry of Land and Resources said a steep man-made mountain of dirt, cement chunks and other construction waste had been piled up against a 100-meter (330-foot) high hill over the past two years.

“The pile was too big, the pile was too steep, leading to instability and collapse,” the ministry said, adding that the original, natural hill remained intact.

Some residents blamed government negligence.

“If the government had taken proper measures in the first place, we would not have had this problem,” said Chen Chengli. Chen’s neighbor, Yi Jimin, said the disaster wasn’t an act of nature.

“Heavy rains and a collapse of a mountain are natural disasters, but this wasn’t a natural disaster, this was man-made,” Yi said.

Aerial photos from the microblog of the Public Security Ministry’s Fire fighting Bureau showed the area awash in a sea of red mud, with buildings either knocked on their side or collapsed entirely.

Posts on the microblog said the mud had filled many of the buildings, adding the chances of survival were “extremely small.”

Cellphone camera video of the disaster on state broadcaster CCTV showed a massive wall of debris slamming into the buildings and sending up huge plumes of dust.

A man who runs a store selling cigarettes and alcohol less than a kilometer (a half mile) from the site said local residents had known that the pile of soil was dangerous and feared something bad would happen.

“We heard a sound like an explosion and then all we saw was smoke,” said the man, who gave only his surname, Dong. “We knew what had happened immediately.”

The damaged buildings included 14 factories, two office buildings, one cafeteria, three dormitories and 13 sheds or workshops, Shenzhen Deputy Mayor Liu Qingsheng told a news conference.

The Shenzhen government said 600 people had been relocated.

Nearly 3,000 people were involved in the rescue efforts, aided by 151 cranes, backhoes and other construction equipment, along with rescue dogs and specialized life-detecting equipment.

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China summons U.S. envoy, protests arms sales to Taiwan

China on Thursday said it had summoned U.S. Ambassador to strongly protest America’s massive $1.83 billion weapons sales, including two warships, to Taiwan and has warned that it will take “new measures” including sanctions against the U.S. firms involved in such business.

Vice Foreign Minister Zheng Zeguang on Wednesday summoned Kaye Lee, Charge d’affaires of the U.S. Embassy in China, and conveyed the protest to the U.S. over its arms sale to Taiwan.

Mr. Zheng made the statement shortly after the U.S. administration announced a $1.83-billion arms sale package for Taiwan to beef up its defences.

Range of military equipment

The agreement includes two frigates, anti-tank missiles, TOW 2B anti-tank missiles, AAV-7 Amphibious Assault Vehicles and a range of other military equipment.

“Taiwan is an inalienable part of China’s territory. China strongly opposes the U.S. arms sale to Taiwan,” Mr. Zheng said.

“Harms Chinese sovereignty”

“The arms sale severely goes against international law and the basic norms of international relations, severely goes against the principles in the three China-U.S. joint communiques and severely harms China’s sovereignty and security interests,” he said.

“To safeguard our national interests, China has decided to take necessary measures, including imposing sanctions against the companies involved in the arms sale,” Mr. Zheng said.

“No one can shake our will”

“No one can shake the firm will of the Chinese government and people to defend their national sovereignty and territorial integrity, and to oppose foreign interference,” Mr. Zheng told the U.S. envoy.

“China urges the U.S. to abide by the clear commitment it has made in the three joint communiques, revoke the arms sale plan, and stop military contact with Taiwan, so as to avoid bringing further damage to China-U.S. relations and bilateral cooperation in major areas,” Mr. Zheng said.

China routinely protests about arms sales to Pakistan.

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Govt. announces incentives for shipbuilding industry

The government announced additional income tax incentives for the domestic shipbuilding industry in a bid to help Indian shipbuilders remain afloat at a time when the global industry is going through an extended slump.

The new tax incentives include an exemption of all raw materials and parts used in the manufacture of ships, vessels, and tugs from customs and central excise duties, according to a statement from the Ministry of Finance. The sops will make the industry more competitive globally, Dhananjay Datar, CFO and Executive Director, ABG Shipyard told The Hindu.

“The shipbuilding industry worldwide is not doing well. For example, China had at a point 45 very large shipyards, now there are only eight. The rest have all been closed down. One of their biggest has gone bankrupt. Similarly, in Korea, they have a lot of large shipyards such as Hyundai and Samsung. Their combined loss for the first six months of this financial year was $6.5 billion,” Mr. Datar said. The slump started about eight years ago.
India has a small percentage of the global market share and other countries actively back the shipyards by making sure they get the necessary loans and capital, he said.

Recently, the government realised that the state-owned shipyards do not have the required capacity for the government’s defence orders, leading to large delays in delivery, Mr. Datar said. So, it gave licenses to three private shipyards — ABG, Pipapav, and L&T — for defence construction.

The government notification did away with the requirement stating that only vessels manufactured in custom-bounded warehouses were eligible for customs and excise duty exemptions. These exemptions will now be subject to actual user conditions, a move that is will make shipbuilding more efficient going forwards, Mr. Datar said.

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China tells others not to 'stir up trouble' in S. China Sea

China on Sunday told other countries not to “deliberately stir up trouble” in the disputed South China Sea, while insisting it has no intention of militarizing the strategically vital area even though it has increased construction activities there.

Deputy Foreign Minister Liu Zhenmin reiterated China’s position that its construction of artificial islands in the sea was designed to “provide public service” to the region by helping ships and fishermen and disaster relief efforts. This also includes military facilities to protect the islands and reefs, which are located far from mainland China, he said.

Since 2013, China has accelerated the creation of new outposts by piling sand atop reefs and atolls, and then adding buildings, ports and airstrips big enough to handle bombers and fighter jets activities seen as an attempt to change the territorial status quo by changing the geography.

“One should never link the military facilities with efforts to militarize the South China Sea,” Mr. Liu said. “This is a false argument. It is a consistent Chinese position to firmly oppose the militarization of the South China Sea.”

Other countries “should not deliberately stir up trouble but contribute to the peace and stability of the region,” he said.

Although Mr. Liu’s statement broke no new ground China has said this in various ways before the setting for his remarks was significant- an Asian summit also attended by President Barack Obama, whose administration has backed the Philippines and other Southeast Asian countries who have long-standing disputes with China in the South China Sea.

Mr. Liu’s comments also serve to send a notice to China’s rivals in the region that it will not back down from its position on the resource-rich sea, irrespective of pressure from the United States. While it opposes any U.S. military incursion, China sees its own military presence there as justifiable.

Mr. Liu is at the summit accompanying Chinese Premier Li Keqiang.

At a separate news conference, Mr. Obama said the issue was a “key topic” at the summit of 18 countries that included China, as well as at a separate summit he had with leaders of 10 Southeast Asian countries.

“Many leaders spoke about the need to uphold international principles, including the freedom of navigation, and overflight and the peaceful resolution of disputes,” Mr. Obama said.

“My fellow leaders from Japan, Australia and the Philippines have reaffirmed that our treaty alliances remained the foundation of regional security. The United States is boosting our support for the Philippines maritime capabilities and those of our regional partners,” Mr. Obama said. The other claimants in Southeast Asia are Malaysia, Vietnam and Brunei.

The U.S. and others have called on Beijing to halt the construction, saying they are destabilizing an increasingly militarized region. Washington angered China by sending a warship inside a 12-nautical-mile (22—km) territorial limit around Subi Reef in the Spratly Islands archipelago, where China and the Philippines have competing claims.

Mr. Liu called the USS Larsen’s voyage last month a “political provocation.”

“Is this a trend of militarization that calls for our alert?” Mr. Liu asked. “We hope regional countries and those outside the region will make positive and constructive contribution to our efforts to maintain peace and stability in the South China Sea. Don’t look for trouble.”

With the waterway a crucial trade passage, he said freedom of navigation and peace and security of the area are crucial to China’s economic expansion.

Mr. Liu denied allegations that China is waiting to complete its construction activities in the sea before agreeing to a binding code of conduct, in a move to tie the hands of its rival claimants.

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BRICS can give shape to G20: Modi

Prime Minister Narendra Modi on Sunday strongly condemned the dreadful acts of terrorism in Paris and expressed deepest sympathy and support to Russia for the loss of life in Sinai. He spoke of the need for a united global effort to combat terrorism has never been more urgent and called for making this a priority for BRICS – Brazil, Russia, India, China and South Africa - nations.

Ankara and Beirut are also reminders of terror's growing spread and impact, Mr. Modi said in his opening address at a BRICS nations leaders meeting hosted by Russian President Vladimir Putin, here in Antalya, ahead of the G20 Leaders Summit that starts later this afternoon.

“The entire humanity must stand together as one against terrorism,” Mr. Modi said at the meeting that is being seen as a signal from the BRICS nations to the developed countries of their rising significance in global matters.

There was a time when the logic of BRICS and its lasting capacity were being questioned, Mr. Modi said. “We have provided proof of the relevance and value of BRICS through our actions…and, this has come at a time of huge global challenges”.

The New Development Bank, the Currency Reserve Arrangement, Strategy for BRICS Economic Cooperation are clear evidence of the BRICS’ vision and resolve, said Mr. Modi. “Together, we can also give shape to G20.”

The meeting was also attended by Chinese President Xi Jinping, President of South Africa Jacob Zuma and President of Brazil Dilma Rousseff.

Speaking of India’s imminent assumption of the chairmanship of BRICS from 1st February, 2016, the Prime Minister said: “India attaches the highest importance to BRICS”.

The theme of India's BRICS Chairmanship will be “Building Responsive, Inclusive and Collective Solutions” or 'BRICS'.

Mr. Modi also assured China of India’s support during its presidency of G20. China is set to take over the rotating presidency of the G20 starting in December 2015.

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Saina storms into China Open final

Another stupendous performance saw defending champion Saina Nehwal enter the women’s singles final of the $700,000 China Open Superseries Premier with a victory over local girl and former World Champion Yihan Wang here on Saturday.

The top seed needed just 42 minutes to ease past the former World No.1 Chinese 21-13, 21-18 at the Haixia Olympic Sports Centre. This is Saina’s third consecutive victory against the reigning Asian Games gold medallist, all coming in 2015, bettering her record to 4-9.

Also, this is World No.2 Saina’s fifth final of the year. She won two at the India Open Super Series and India Grand Prix Gold but lost the All-England and World Championships final to World No.1 Carolina Marin of Spain.

In the summit clash, the Hyderabadi will take on another Chinese, reigning Olympic champion Li Xuerui, who has a domineering 9-2 record against Saina, also having won the last five encounters between them. Saina’s last victory against Xuerui came in 2012 but this year Saina has been a force to reckon with.

The 25-year-old Saina was easily the superior player on court against Yihan. Her agility, movement, speed and shots just could not be matched by the Olympic silver medallist. Eventually, Saina clinched 42 of the 73 points played in the match.

The top seeded Indian was by far the better player in the first game though Yihan kept at her heels. But from 14-13, Saina kept taking points to earn as many as seven straight points to kitty the game.

Yihan came out with a much stronger challenge in the second game, fighting for each point. She upped her game at the net and won many more points than in the first game.

Saina was put under pressure by her opponent and the Chinese crowd who was behind her but she kept her nerve to lose only one point from 17-all to pocket the game and enter the final.

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