Economics
Rising Asia : development challenges, and high stake in global economic recovery
Author: Maria Monica Wihardja, CSIS, Indonesia The Asian Development Bank, along with Indonesian ministries, including the Trade Ministry and the National Development Planning Ministry, this month held a symposium on ‘Asia’s Development Agenda in Regional and International Fora’ and a consultation meeting on ‘Asia 2050.’ These themes are timely; despite its growth miracles, Asia continues to face development challenges, and its stake in the global economic recovery is high. Asia’s success is not pre-ordained, according to Shigeo Katsu, a senior associate of the Centennial Group, at the Asia 2050 meeting. He suggests that the worst possible scenario for Asia by 2050 would see India and China become trapped as middle-income countries with poor institutions and governance, and growing inequality. At the middle level of development, information networks that sustain small economic activities in non-contractual and relation-based societies would no longer be able to support contract enforcements in large economies. Although state institutions are needed, the scale of activity is not yet large enough to justify the cost of establishing them, rendering the formation of contractual and rules-based societies a failure. Moreover, there are political obstacles associated with people who have sunk stakes in the old system, preventing the establishment of a new system. Emil Salim, chairman of Indonesia’s Presidential Board of Advisors, foresees an unbalanced Asia in 2050 between the Asia 8 — India, Indonesia, Japan, Malaysia, China, South Korea, Thailand and Vietnam — and the rest of Asia, as dictated by market-based economies. Growing inequality within the countries — between a highly developed urban-based West Indonesia and an underdeveloped East Indonesia; the rapidly modernised coastal areas of east China and poverty-stricken western-most region of China ; and among Indian States with strikingly diverse poverty rates — is also foreseeable. So, is Asia moving in the wrong direction? Or should Asia look more to an equitable and sustainable trajectory? We also see ‘two faces of Asia’ on elements other than economic growth — the first face consists of Newly Industrialised Economies (including Hong Kong, South Korea, Malaysia, Singapore, Taipei and Thailand) plus China and India, while the second face consists of resource-rich, low-income, and less developed countries as well as the small states of Asia. The ‘Asia’s Development Agenda’ symposium stressed three agendas to bring more equitable development between the two faces of Asia, and within country: AID for Trade, Financial Inclusion, and the Social Safety Net. The critical issues for a rising Asia are institutional issues: social norms and culture — issues that are downplayed by many economists. Kaushik Basu, in his new book, Beyond the Invisible Hand (2010) , argues that social norms and culture are as important as law. This can be easily understood if we accept the fact that human beings are social beings — we react to what others do and most of the things we do are shaped by the cultural and social environment in which we live. ‘Equilibrium differences’ are greater than ‘innate differences.’ This is why Asia’s jewels — China, Indonesia and India — may be trapped in a ‘low equilibrium,’ with poor social attitudes reinforcing people’s behaviour, shackling their rise as market-based countries because of poor institutions, governance and political environments. The threat of a ‘middle-income trap’ is real. One other important issue is the regional and global cooperation required to build a more equitable and sustainable Asia . The foreign policies of China, India and Indonesia have been outward-looking and the stakes are high: India hosted leaders from all five permanent members of the United Nations Security Councils last year; Indonesia will host the first expanded East Asian Summit this year with two new members, Russia and the US, and with a possibility of hosting the G20 Finance Ministerial and Central Bank Governors’ Meeting in 2013; and Chinese President Hu Jintao’s 2011 visit to the U S has set the basis for the coming decades of a bilateral relationship, the stability of which is of global importance. ‘Soft-power’ policies from the region are a priority. Mahendra Siregar, Indonesian deputy Minister of Trade and the Indonesian G20 Sherpa, reminds us that Asia’s outward looking strategies should be geared toward reorienting our focus to how Asia can contribute to the global economic recovery, and not vice versa. Without these elements a ‘rising Asia,’ hidden behind high economic growth figures, will be merely a chimera. Maria Monica Wihardja is a researcher at the Centre for Strategic and International Studies, Indonesia and is a lecturer at the Department of Economics, University of Indonesia. A version of this article was published in The Jakarta Post on 2 February 2010. Obama in Asia Wisdom of an Asia rising Indonesia and the BRICs
The Asian Development Bank, along with Indonesian ministries, including the Trade Ministry and the National Development Planning Ministry, this month held a symposium on ‘Asia’s Development Agenda in Regional and International Fora’ and a consultation meeting on ‘Asia 2050.’ These themes are timely; despite its growth miracles, Asia continues to face development challenges, and its stake in the global economic recovery is high.
Asia’s success is not pre-ordained, according to Shigeo Katsu, a senior associate of the Centennial Group, at the Asia 2050 meeting. He suggests that the worst possible scenario for Asia by 2050 would see India and China become trapped as middle-income countries with poor institutions and governance, and growing inequality. At the middle level of development, information networks that sustain small economic activities in non-contractual and relation-based societies would no longer be able to support contract enforcements in large economies.
Although state institutions are needed, the scale of activity is not yet large enough to justify the cost of establishing them, rendering the formation of contractual and rules-based societies a failure. Moreover, there are political obstacles associated with people who have sunk stakes in the old system, preventing the establishment of a new system.
Emil Salim, chairman of Indonesia’s Presidential Board of Advisors, foresees an unbalanced Asia in 2050 between the Asia 8 — India, Indonesia, Japan, Malaysia, China, South Korea, Thailand and Vietnam — and the rest of Asia, as dictated by market-based economies. Growing inequality within the countries — between a highly developed urban-based West Indonesia and an underdeveloped East Indonesia; the rapidly modernised coastal areas of east China and poverty-stricken western-most region of China; and among Indian States with strikingly diverse poverty rates — is also foreseeable. So, is Asia moving in the wrong direction? Or should Asia look more to an equitable and sustainable trajectory?
We also see ‘two faces of Asia’ on elements other than economic growth — the first face consists of Newly Industrialised Economies (including Hong Kong, South Korea, Malaysia, Singapore, Taipei and Thailand) plus China and India, while the second face consists of resource-rich, low-income, and less developed countries as well as the small states of Asia. The ‘Asia’s Development Agenda’ symposium stressed three agendas to bring more equitable development between the two faces of Asia, and within country: AID for Trade, Financial Inclusion, and the Social Safety Net.
The critical issues for a rising Asia are institutional issues: social norms and culture — issues that are downplayed by many economists. Kaushik Basu, in his new book, Beyond the Invisible Hand (2010), argues that social norms and culture are as important as law. This can be easily understood if we accept the fact that human beings are social beings — we react to what others do and most of the things we do are shaped by the cultural and social environment in which we live. ‘Equilibrium differences’ are greater than ‘innate differences.’ This is why Asia’s jewels — China, Indonesia and India — may be trapped in a ‘low equilibrium,’ with poor social attitudes reinforcing people’s behaviour, shackling their rise as market-based countries because of poor institutions, governance and political environments. The threat of a ‘middle-income trap’ is real.
One other important issue is the regional and global cooperation required to build a more equitable and sustainable Asia. The foreign policies of China, India and Indonesia have been outward-looking and the stakes are high: India hosted leaders from all five permanent members of the United Nations Security Councils last year; Indonesia will host the first expanded East Asian Summit this year with two new members, Russia and the US, and with a possibility of hosting the G20 Finance Ministerial and Central Bank Governors’ Meeting in 2013; and Chinese President Hu Jintao’s 2011 visit to the US has set the basis for the coming decades of a bilateral relationship, the stability of which is of global importance. ‘Soft-power’ policies from the region are a priority. Mahendra Siregar, Indonesian deputy Minister of Trade and the Indonesian G20 Sherpa, reminds us that Asia’s outward looking strategies should be geared toward reorienting our focus to how Asia can contribute to the global economic recovery, and not vice versa.
Without these elements a ‘rising Asia,’ hidden behind high economic growth figures, will be merely a chimera.
Author: Maria Monica Wihardja, CSIS, Indonesia Maria Monica Wihardja is a researcher at the Centre for Strategic and International Studies, Indonesia and is a lecturer at the Department of Economics, University of Indonesia.
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The chimera of rising Asia
Business
BRICS: China Classifies Crypto as Property and Prohibits Business Ownership
China’s Shanghai court ruled cryptocurrencies are property, boosting optimism in the crypto industry while maintaining a ban on business transactions. This may signal a shift in future regulations.
China’s Ruling on Cryptocurrency
In a pivotal decision for the nation and its BRICS alliance, China has officially classified cryptocurrency as property while maintaining prohibitions against business transactions involving digital assets. A notable ruling from the Shanghai Songjiant People’s Court affirmed cryptocurrencies as property, sparking optimism within the crypto industry regarding future regulations.
Implications for the Crypto Industry
As cryptocurrencies gain significance globally, the Chinese ruling is viewed as a potential-positive shift amidst ongoing restrictions. While individuals can hold virtual currency, businesses remain barred from engaging in investment transactions or issuing tokens independently. This decision has generated anticipation for more accommodating regulations in the future.
Future Prospects for Cryptocurrency in China
Experts like Max Keiser believe this ruling indicates China’s growing acknowledgment of Bitcoin’s influence. As BRICS nations explore increased cryptocurrency utilization in trade, this legal shift could enhance market demand and lead to greater acceptance of cryptocurrencies as a legitimate asset class, setting the stage for potential developments in 2025.
Source : BRICS: China Rules Crypto as Property, Bars Business Holdings
Business
Wegovy: The Popular Weight-Loss Drug Now Available in China
Novo Nordisk launched Wegovy in China after approval, competing with Eli Lilly’s upcoming weight-loss drug. The treatment, costing 1,400 yuan, targets obesity but has potential side effects and isn’t covered by healthcare.
Wegovy Launch in China
Novo Nordisk recently launched its weight-loss drug, Wegovy, in China after obtaining approval from local health authorities in June. The introduction of Wegovy is expected to increase competition with Eli Lilly, which has also received approval for its weight-loss treatment, although it has not yet been released in China’s significant pharmaceutical market.
Cost and Accessibility
In China, a set of four Wegovy injections will be priced at 1,400 yuan (approximately $194), significantly lower than the drug’s U.S. price. However, patients will need to pay the full amount out of pocket since Wegovy is not yet covered by the national healthcare insurance plan.
Benefits and Side Effects
Research indicates that Wegovy can help users lose over 10% of their body weight. The drug contains semaglutide, which assists with appetite control and satiety. While Wegovy has been gaining traction globally, it may cause side effects like nausea. Concerns have emerged about its misuse among individuals who are not obese, prompting medical professionals to remain vigilant.
Source : Popular weight-loss drug Wegovy goes on sale in China
Business
China’s Golden Rooster Film Festival Kicks Off in Xiamen – Thailand Business News
The 2024 China Golden Rooster and Hundred Flowers Film Festival began in Xiamen on Nov 13, featuring awards, cultural projects worth 31.63 billion yuan, and fostering international film collaborations.
2024 China Golden Rooster and Hundred Flowers Film Festival Opens
The 2024 China Golden Rooster and Hundred Flowers Film Festival commenced in Xiamen, Fujian province, on November 13. This prestigious event showcases the top film awards in China and spans four days, concluding with the China Golden Rooster Awards ceremony on November 16.
The festival features various film exhibitions, including the Golden Rooster Mainland Film Section and the Golden Rooster International Film Section. These showcases aim to highlight the achievements of Chinese-language films and foster global cultural exchanges within the film industry.
On the festival’s opening day, a significant milestone was reached with the signing of 175 cultural and film projects, valued at 31.63 billion yuan ($4.36 billion). Additionally, the International Film and Television Copyright Service Platform was launched, furthering the globalization of Chinese film and television properties.
Source : China’s Golden Rooster film festival opens in Xiamen – Thailand Business News