Publication in Economics, Politics and Public Policy in East Asia and the Pacific

China’s energy intensity target: On-track or off?

Author: Stephen Howes, ANU

Recent media reporting suggests good progress by China in relation to its target of reducing the energy intensity of its economy (energy consumed over output produced) by 20 per cent by 2010 relative to 2005.

With China’s announcement in the run-up to Copenhagen of a 2020 target to reduce emissions intensity (carbon dioxide emissions over output produced) by 40-45 per cent over 2005 levels, this 2010 energy intensity target has assumed greater prominence. Read more…

Whaling a small issue in relations between Australia and Japan

Author: Joel Rathus, Meiji and Adelaide Universities

There appears to be a perception gap between Australia and Japan over the significance of whaling to the overall relationship – and it needs to be closed. In various media, Australian writers have identified the whaling issue as problem of great significance. By contrast, in the Japanese media the whaling issue is not seen as serious (see top 30), and has not been linked to the state of the bilateral relationship overall.

What, then, is the Japanese attitude towards the dispute around whaling?

Read more…

The appreciation of the yuan: A compromise solution

Author: Ronald I. McKinnon, Stanford University

A compromise solution involving the appreciation of the yuan is possible. But the following basic points must be observed.

It is not possible for China to remove capital controls and expect a large outflow of private capital to offset its trade surplus (making a further buildup of official exchange reserves unnecessary) unless the yuan-dollar rate is expected to remain stable into the indefinite future. Otherwise, private Chinese investors would be loath to acquire dollar assets, as there would be a good chance that they would depreciate in terms of renminbi (yuan). Read more…

Japan: Hatoyama is the problem with his government

Author: Tobias Harris, MIT

Watching the shambles that the Hatoyama government has become, I went back into the archives and found the post I wrote on the occasion of Hatoyama Yukio’s being selected as DPJ president in May 2009.

Called ‘The DPJ bets on Hatoyama,’ I stressed the risk associated with choosing Hatoyama to succeed Ozawa Ichiro, noting in particular Hatoyama’s history of indecisive leadership, poor decision-making skills, and over-reliance on those around him for guidance. Read more…

Burma’s National League for Democracy: A fateful choice?

Author: Trevor Wilson, ANU

There is widespread speculation that Burma’s National League for Democracy (NLD) will shortly decide against registering for Burma’s 2010 elections under the heavily unbalanced election law promulgated by Burma’s military regime in early March. NLD members are reportedly divided on whether the party should participate in the elections, presumably fearing that the party stands little chance with its leader Aung San Suu Kyi under house arrest (as she was during Burma’s previous elections, which the NLD ‘won’).

Most observers acknowledge the disadvantageous environment in which these elections will be held rather than examining the consequences of the NLD non-participation, which are potentially very serious. Read more…

Regionalism in Asia: Why we should stick with existing structures

Author: Ezra Vogel, Harvard University

The past half century has been a period of largely fruitful regional cooperation in the East Asia region. Some believe that a new grouping of states would further facilitate regional cooperation. I disagree, and believe that existing forums offer the best opportunity for leaders in the Asia-Pacific to work together in solving regional and global problems.

An important key to successful regional organisation is making good use of what some of the individual countries have to contribute. The strong points of some of the leading countries that can promote the region are thus detailed below. Read more…

Rio Tinto trial shines harsh spotlight on Chinese criminal justice

Author: Stanley Lubman, Berkeley

While the facts of the alleged conduct of four employees of the British-Australian company Rio Tinto Ltd. who were on trial this week for taking bribes and infringing trade secrets are obscure, the trial starkly exhibits some key characteristics of Chinese criminal justice.

It demonstrates the usual limits on the ability of defense lawyers to fully represent their clients, a disturbing lack of transparency, and the impact of political influences on the proceedings and the outcome. Read more…

Stern Hu’s trial and its legal and economic implications – Weekly editorial

Author: Peter Drysdale

Today the determinations are to be handed down in the Shanghai trial of Stern Hu and his colleagues from Rio Tinto on charges of bribery and theft of commercial secrets. The case has attracted a huge amount of interest, both in Australia and internationally, because of what it might reveal about the relationship between the state, the law and the market in China. This interest exists independently of the decision as to whether the defendants (Stern Hu, Wang Yong, Ge Minqiang and Liu Caikui) are judged guilty or innocent in this particular case under Chinese law, and is justified by more strategic concerns.

China is already the second largest economy and trader in the world. Read more…

The Chinese legal system and the Stern Hu case

Author: Vivienne Bath, University of Sydney

The trial of Stern Hu and his colleagues in the First Intermediate Shanghai People’s Court has now concluded, and the verdict will apparently be handed down today (2pm Monday 29 March, Shanghai time). The case has attracted a great deal of attention in Australia and internationally. However, many questions about the details and conduct of the case remain unanswered.

On March 18 2009, Qin Gang, a spokesman for the Chinese Foreign Ministry, reportedly said that the case should not be politicised or negatively affect Australia-China relations, as it was an ‘individual business case’. The way in which the Chinese authorities have handled the case, however, suggests that the investigation and trial involve more than purely legal issues. Read more…

China’s bad bet against America

Author: Joseph Nye, CSIS and Harvard

China-US relations are, once again, in a downswing. China objected to President Barack Obama’s receiving the Dalai Lama in the White House, as well as to the administration’s arms sales to Taiwan. There was ample precedent for both decisions, but some Chinese leaders expected Obama to be more sensitive to what China sees as its ‘core interests’ in national unity.

Things were not supposed to turn out this way. A year ago, the Obama administration made major efforts to reach out to China. Secretary of State Hillary Clinton referred to ‘being in the same boat’, and that China and the United States would ‘rise and fall together.’ Read more…

Reforming housing for the poor in the Philippines

Author: Marife Ballesteros, PIDS

The enactment in the nineties of the Urban Development and Housing Act (UDHA) of 1992 and the Comprehensive Shelter Finance Act (CISFA) of 1994, two pro-poor housing legislations, greatly changed the Philippines’ policy on housing the poor. From a highly centralised and heavily subsidised policy, the government moved to a market-oriented and participatory approach to housing. Despite these reforms, the problems with UDHA and CISFA have not delivered housing on the scale or of the quality that is required.

The National Shelter Program (NSP), which regulates housing production, regulation and financing, is the Philippines’ banner program for low-income housing provision. Read more…

Sport and security – India’s year of living dangerously

Author: Sandy Gordon, ANU

India is a rising economic star and also wants to be a world venue for major sporting events. But violent jihadi groups have a strong incentive to undermine that image. As a result, New Delhi’s Dhyan Chand National Stadium, with its glistening new astro-turf, was in complete lockdown for the opening of the Hockey World Cup. Security was so tight that the President of the Federation of International Hockey, Leandro Negre, was stopped and searched. Players were confined to their hotels when not playing or training and were heavily escorted between venues. As it transpired, the two weeks of competition went without a hitch from the security point of view.

The Hockey World Cup was a test run for the Commonwealth Games, scheduled for 3-14 October, again in New Delhi. Read more…

Japan’s bureaucracy strikes back

Author: Aurelia George Mulgan, UNSW@ADFA

Japan’s Public Prosecutors Office (PPO), especially the Special Investigation Department (SID) of the Tokyo District PPO, takes pride in its vigorous pursuit of politicians taking bribes, especially from construction firms. In the past, its gaze has fallen almost exclusively on Liberal Democratic Party (LDP) politicians, whom it has pursued without fear or favour. In the last year or so, it has switched its gaze, and begun going after the two most prominent Democratic Party of Japan (DPJ) politicians, Secretary-General Ozawa and Prime Minister Hatoyama, and their political secretaries, with an alacrity that has given rise to some speculation that its actions might have been politically motivated.

Providing evidence to support such allegations is almost as difficult as finding concrete evidence that Ozawa, Hatoyama and their faithful servants have committed offences under Japanese law. Read more…

India finds Russia a good friend to count on

Author: Mahendra Ved

Two summits in three months is unusual, even considering the strategic ties India and Russia have nurtured for over five decades.

On March 12, Prime Minister Vladimir Putin visited India for the fifth time, with the previous four having been whilst he was President. Prime Minister Manmohan Singh was also in Moscow last December as part of what has become an annual dialogue taking place each winter. Since 2000, Putin has either visited Singh or received him in Moscow. In 2000, he told then defence minister George Fernandes: ‘Please tell your people, I am India’s best friend.’ Read more…

Increasing FDI in India: Does the Budget go far enough?

Author: Pravakar Sahoo, IEG

India and China not only survived the financial crisis — over the course of the financial crisis their economies grew. This is the perfect time for India to attract much needed non-debt creating capital flows through foreign direct investment (FDI). The Indian Budget for 2010-11 has rightly proposed to simplify the FDI regime, maintaining FDI flows particularly by recognising ownership and control issues and liberalising the pricing and payment system for technology transfers, trademarks, and brand name and royalty payments. More importantly, the budget shows an intention to introduce user-friendly regulations and guidelines for FDI.

But while India is macro-economically well placed to attract FDI inflows, merely showing an intention to introduce user-friendly regulations without addressing the core regulatory, institutional and policy issues affecting FDI may not be enough to attract the huge amounts of FDI the country needs. Read more…