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Asia Unbound

CFR experts give their take on the cutting-edge issues emerging in Asia today.

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Showing posts for "Economics"

What’s Missing in the China Story?

by Elizabeth C. Economy
Rescue workers wearing chemical protective suits walk at the site of the explosions at the Binhai new district in Tianjin, China, August 14, 2015. Rescuers on Friday pulled one survivor from the wreckage of a warehouse in northeast China's Tianjin that was hit by two massive blasts, a city official told reporters at a briefing. REUTERS/Jason Lee Rescue workers wearing chemical protective suits walk at the site of the explosions at the Binhai new district in Tianjin, China, August 14, 2015. Rescuers on Friday pulled one survivor from the wreckage of a warehouse in northeast China's Tianjin that was hit by two massive blasts, a city official told reporters at a briefing. (Jason Lee/Courtesy Reuters)

Over the past month, there has been a lot of “China drama.” The volatility in the Chinese stock market, the yuan devaluation, and now the Tianjin warehouse explosion have all raised China chatter to a new level of anxiety. Some of the anxiety is understandable. These events have real consequences—above all for the Chinese people. At the urging of the Chinese government, tens of millions of Chinese moved to stake their fortunes not on real estate but on the stock market—the most unfortunate used their real estate as leverage to invest in the market and are now desperate for some good news. The Tianjin warehouse explosion has thus far left 121 Chinese dead, more than seven hundred injured, and over fifty still missing. Globally, the yuan devaluation has triggered a rate rethink by central bankers in Europe and the United States, and the stock market slide has contributed to steep drops in Asian and U.S. markets.

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Friday Asia Update: Top Five Stories for the Week of August 14, 2015

by Guest Blogger for Elizabeth C. Economy
Workers clean a road near the site of the explosions at the Binhai new district, Tianjin, August 13, 2015. Two huge explosions tore through an industrial area where toxic chemicals and gas were stored in the northeast Chinese port city of Tianjin, killing at least forty-four people, including at least a dozen fire fighters, officials and state media said on Thursday. (Jason Lee/Reuters) Workers clean a road near the site of the explosions at the Binhai new district, Tianjin, August 13, 2015. Two huge explosions tore through an industrial area where toxic chemicals and gas were stored in the northeast Chinese port city of Tianjin, killing at least forty-four people, including at least a dozen fire fighters, officials and state media said on Thursday. (Jason Lee/Reuters)

Ashlyn Anderson, Rachel Brown, Lincoln Davidson,  Lauren Dickey, Ariella Rotenberg, and Gabriel Walker look at the top stories in Asia today.

1. China’s central bank allows currency to devalue. The renminbi (RMB) declined by more than 4 percent this week as the People’s Bank of China (PBOC) set the currency’s daily benchmark lower for several days in a row. The drop may help strengthen the domestic economy, which has faltered in recent months; the PBOC’s willingness to allow the currency’s market rate to drop may suggest that the Chinese economy is doing even worse than some indicators suggest, which could spell trouble for countries that rely on China’s commodity imports. Read more »

Challenges and Benefits of South Korea’s Middle Power Aspirations

by Scott A. Snyder
World leaders attend the opening plenary session of the G20 Summit in Seoul on November 12, 2010. (Yonhap Photo/Couresty: Reuters) World leaders attend the opening plenary session of the G20 Summit in Seoul on November 12, 2010. (Yonhap Photo/Couresty: Reuters)

South Koreans have been among the world’s early adopters in globalization over the past two decades, going from outpost to “node” by embracing networks, connectivity, and economic interdependence in startling fashion in a very short period of time. It has been commonplace for most South Koreans to think of themselves as a small country, buffeted by geostrategic factors beyond its control, consigned to its fate as a “shrimp among whales.” This narrative, generally speaking, conforms with the twentieth century historical experience on the Korean peninsula, which witnessed annexation, colonization, subjugation, and a moment of liberation, followed by division, war, and marginalization as an outpost of the Cold War. Outsider impressions of late twentieth century Korea tended to view Koreans as defensive, self-absorbed, xenophobic to varying degrees, and only capable of viewing the outside world through a distinctively “Korean” lens. Read more »

Guest Post: China’s “Back to the Countryside” Policy: A Step Toward Reducing Rural-Urban Disparity

by Guest Blogger for Adam Segal
china rural villages migrants migrant workers migration entrepreneurship small business entrepreneur policy Farmers plant rice seedlings in a field near a residential compound in Shaxi township, Guangdong province March 29, 2015. China's leaders hope to encourage migrant workers to leave cities and return to their home villages to start small businesses. (Stringer/REUTERS)

By Lincoln Davidson

Lincoln Davidson is a research associate for Asia Studies at the Council on Foreign Relations.

Earlier this week, the Chinese government announced a set of policies aimed at encouraging migrants from rural areas to the cities to return to their hometowns and start businesses. The policy guidelines direct local governments to encourage migrant workers (as well as university graduates and discharged soldiers) to take the capital, skills, and experience they’ve acquired in urban areas back to underdeveloped rural areas and engage in entrepreneurship. These policies—think of them as the newest iteration of Deng Xiaoping’s “let some get rich first”—are a solid step towards promoting genuine market-driven development. Read more »

Friday Asia Update: Top Five Stories for the Week of April 17, 2015

by Guest Blogger for Elizabeth C. Economy
Local residents and their supporters celebrate after the Fukui District Court issued an injunction to prevent the restart of two nuclear reactors at Takahama nuclear power plant, in front of the court in Fukui, northwestern Japan, in this photo taken by Kyodo April 14, 2015. (Kyodo/Courtesy: Reuters) Local residents and their supporters celebrate after the Fukui District Court issued an injunction to prevent the restart of two nuclear reactors at Takahama nuclear power plant, in front of the court in Fukui, northwestern Japan, in this photo taken by Kyodo April 14, 2015. (Kyodo/Courtesy: Reuters)

Ashlyn Anderson, Lauren Dickey, Darcie Draudt, William Piekos, and Ariella Rotenberg look at the top stories in Asia today.

1. Japan court blocks reopening of nuclear reactors. A Japanese district court issued orders for two nuclear reactors in western Fukui prefecture to stay offline, rejecting regulators’ safety approval of the planned restart later this year. The court criticized the Nuclear Regulation Authority’s lax safety standards, particularly in the wake of the March 2011 Fukushima crisis. Kansai Electric, the operators of the reactors in Fukui, plan to file a protest asking the court to reverse its decision. With all forty-eight commercial reactors in Japan still offline, the decision may further delay Prime Minister Shinzo Abe’s plans to restart nuclear reactors. Abe has said the shutdown damages the struggling Japanese economy, forcing Japan to import expensive fossil fuels to compensate for the existing energy deficit. Read more »

Thailand’s Teflon Economy Finally Seems to Be Cracking

by Joshua Kurlantzick
thailand-tourism-campaign Performers take part in a parade during the "2015 Discover Thainess" campaign, an event held to promote tourism, in Bangkok on January 14, 2015. (Chaiwat Subprasom /Courtesy: Reuters)

For nearly fifteen years in the 2000s and early 2010s, Thailand’s economy, once one of the fastest-growing in the world, survived the effects of near-constant political turmoil, natural disasters, and worries about the country’s future in the wake of a looming royal succession. Even after the massive floods in the monsoon season of 2011 that destroyed much of the industrial estates north of Bangkok, home to auto parts, disk drive, and other key manufacturing plants, Thailand’s economy rebounded strongly. Read more »

IMF Worried About Bangladesh’s Growth

by Alyssa Ayres
Women work at Goldtex Limited garment factory inside the Dhaka Export Processing Zone (DEPZ) in Savar on April 11, 2013 (Andrew Biraj/Courtesy: Reuters). Women work at Goldtex Limited garment factory inside the Dhaka Export Processing Zone (DEPZ) in Savar on April 11, 2013 (Andrew Biraj/Courtesy: Reuters).

Bangladesh has been wracked by political protests over the past two years. Paradoxically, despite the country’s dysfunctional politics, its economy has done well. Last year, the all-important garment sector defied the odds and actually grew around 14 percent between July 2013 and May 2014. This insulation of the economy from the country’s toxic politics may be coming to an end, however. Since early January, the opposition Bangladesh Nationalist Party (BNP) has led street protests (hartals) along with transportation blockades. For the last two months, the daily strikes and protests have continued, keeping the country at a low boil, and resulting in the death of more than 120 people. Read more »

The Indian Budget: Cautious But Resolute

by Alyssa Ayres
A staff member (L) passes a pen to Indian Finance Minister Arun Jaitley before making the final touches to the federal budget 2015/16 in New Delhi on February 27, 2015 (Adnan Abidi/Courtesy: Reuters). A staff member (L) passes a pen to Indian Finance Minister Arun Jaitley before making the final touches to the federal budget 2015/16 in New Delhi on February 27, 2015 (Adnan Abidi/Courtesy: Reuters).

In a country whose media exists in a perpetual fever-pitch of excitement, a consensus has formed around the first full-year budget of the Narendra Modi government presented on February 28, 2015: No big bang reforms. For those who have not been following this closely, here are the highlights, along with links to primary sources for further reading. Read more »

Deglobalization Remains a Powerful Trend

by Joshua Kurlantzick
U.S. President Barack Obama (C) meets with the leaders of the Trans-Pacific Partnership (TPP) countries in Beijing November 10, 2014. Leaders have gathered in Beijing for the Asia Pacific Economic Cooperation (APEC) summit. Obama will also travel to Myanmar and Australia during his week-long trip to Asia. REUTERS/Kevin Lamarque (CHINA - Tags: POLITICS BUSINESS) U.S. President Barack Obama (C) meets with the leaders of the Trans-Pacific Partnership (TPP) countries in Beijing on November 10, 2014 (Kevin Lamarque/Courtesy Reuters).

During a seemingly successful trip to Asia last November, U.S. President Barack Obama announced several breakthroughs. Among them was a promise that the United States and Asian nations would proceed toward the Trans-Pacific Partnership (TPP) free trade deal. Obama and Chinese President Xi Jinping also announced a new climate deal, the first between the two powers, which will commit both the United States and China to significant emissions cuts over the next two decades. Read more »

Where to Look for the Next Jack Ma?

by Yanzhong Huang
Alibaba Group Executive Chairman Jack Ma delivers a keynote speech during the Cross-Strait CEO Summit in Taipei, December 15, 2014. (Pichi Chuang/ Courtesy: Reuters). Alibaba Group Executive Chairman Jack Ma delivers a keynote speech during the Cross-Strait CEO Summit in Taipei, December 15, 2014. (Pichi Chuang/ Courtesy: Reuters).

Where to look for the next Jack Ma? This is a trillion dollar question. According to a document released by the State Council (China’s cabinet) last October, by 2020 the size of China’s health service industry—which covers medical care, pharmaceutical products, healthcare products, medical devices, and health management—would reach 8 trillion RMB (or $1.3 trillion), up from less than 1.7 trillion RMB in 2012. This would mean an annual growth rate of 21 percent between 2012 and 2020. Read more »