Zhang Ming, PhD, Director in the international investment research office of the Institute of World Economy and Politics, Chinese Academy of Social Sciences (CASS), Beijing
A version of this article was originally published in the Business Standard as ‘How China can resist devaluation pressure’, 29 July 2017. This is part of a series by Chinese economists facilitated by the ICS.
In July 2005, People’s Bank of China announced it was implementing a managed floating exchange rate system based on market principles and with reference to a basket of currencies.
From the end of June 2005 to the end of July 2015, RMB exchange rate against the US dollar rose to 6.12 from the previous 8.28, appreciating by about 26% (Figure 1). The RMB nominal effective exchange rate (NEER) and real effective exchange rate (REER) indices appreciated by 48% and 57% respectively over the same period (Figure 2).
That the appreciation of the REER of RMB exceeded its NEER indicates that the inflation level in China during this period was higher than the global average. Continue reading “How Can China Deal with Pressure to Devalue the Renminbi?”
Jayan Jose Thomas, PhD, Associate Professor of Economics, Indian Institute of Technology Delhi and Member, Planning Board, State Government of Kerala
A version of this article was originally published in Chinese as ‘印度不确定的人口红利’ [Yindu bu queding de renkou hongli], Diyi Caijing, 10 July 2017. This is part of a series by Indian scholars in China’s top business affairs news portal facilitated by the ICS. The English version follows below the Chinese text.
对印度政策制定者来说的另一个重大挑战，是为新进入劳动力市场的印度人创造就业机会。事实上，大部分年轻劳动力的增长将来自印度最贫穷的地区，主要包括北方邦和比哈尔邦在内的北部和东部地区。 Continue reading “India’s Uncertain Demographic Dividend”
Shruthi Anup Kumar, Research Intern, ICS
The field of artificial intelligence or AI encompasses a number of possibilities. Ranging from autonomous driving systems and language interpretation to facial recognition and military weapons, AI comprises not only the development of a robot that can move, think and talk like a human being but also includes smart programmes that are built to overcome our shortcomings and make the job easier for a human being.
In 2015, China’s central government launched the ‘Made in China 2025’ policy, whereby the shift in focus from mass producing factory goods to developing high tech manufactured products by the year 2025 was announced. The effect of this policy was especially felt in the AI sector which is expected to grow from an industry of 23.9 billion Yuan (as of 2016) to 38 billion Yuan by the year 2018. Continue reading “Artificial Intelligence and China’s Future”
Amitava Banik, BE (E&C), PGDM (Insurance Business)
China has for some time now been holding a position of technological significance in the world. It is a great success story for a country that is still counted among the world’s developing nations. Memories of the time it had been associated with inferior quality products have all but vanished. China has not only been extremely successful in making its products the “new normal” all over the world, but with its investments in cutting edge technologies, infrastructure and skilled manpower, it has started to edge into the hi-tech zone.
It is generally accepted that countries develop in successive stages from an agricultural economy to industrial manufacturing and then to a service-based economy. All major world economies have traversed this path. The transformation in India on the contrary, has been from the agrarian economy to a service economy, virtually jumping over the manufacturing stage. One of the primary reasons put forward by economists for this bypassing of the manufacturing stage in India, is the lack of progress of primary education in the country. Continue reading “China’s Technological Success in Manufacturing”
Sacchidananda Mukherjee, PhD, Associate Professor, National Institute of Public Finance and Policy, New Delhi
A version of this article was originally published in Chinese as ‘商品和服务税对在印经商的影响’ [Shangpin he fuwu shui (GST) dui Yin jingshang de yingxiang], Diyi Caijing, 15 May 2015. This is part of a series by Indian scholars in China’s top business affairs news portal facilitated by the ICS. The English version follows below the Chinese text.
在经历漫长的等待之后，印度终将于2017年7月1日起推出商品和服务税（GST)，实现统一税制。在四项法案（Central GST、Integrated GST、Union Territory GST、GST Compensation to States）通过印度两院批准后，将会形成GST征税行政框架以及执行规则。
预计GST改革委员会将于2017年5月为各商品指定税率。不同社会经济阶层所需承担的不同税负在很大程度上取决于细致划分下不同税率的商品与服务。目前，委员会已确定了四层税率结构（5％、12％、18％和28％），预计委员会还将公布一份简短的，包含了部分基础商品及服务的豁免清单。而对于低质货物（如烟草制品、汽水）及对环境有害的物质（如煤炭），除了征收最高税率外，还有征收额外的GST补偿税。由补偿税组成的税收收入将用于补偿邦政府在新税制实施头5年面临的税收损失。此外，委员会还明确了针对不同类别商品设定的相应的最高GST补偿税率，如对槟榔、豪车分别征收135%、15%的税，对每吨煤征收400卢比。不过具体到各不同商品的GST补偿税尚未明确。因进项税可抵免GST补偿税，因此不会产生针对补偿税的阶梯税率。 Continue reading “GST and Doing Business in India”
Alka Acharya, ICS Honorary Fellow and Professor, Centre for East Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi
There appears to be a world of difference between the images presented by India-China economic and commercial ties on the one hand and the politico-strategic on the other. Interactions and exchanges with representatives from both these domains are markedly different in tone and tenor—the former focus on the opportunities, openings, benefits and profits while the latter dwell more on the dangers, threats, challenges and disputes.
Prima facie, they appear to be working at different levels, according to their own—somewhat different—logic and rationale, and it does not look like they will converge any time soon in a more composite picture of this most critical of relationships in the world today. The political understanding at the highest level, which is committed to building a strategic and cooperative—and now more promisingly ‘developmental’—partnership, struggles with deep suspicion that runs through practically our entire strategic discourse. On the other hand, economic engagements have become the most dynamic and transformative aspects of the India-China relationship today. But this has to contend with the structural mismatch between the manufacturing strengths and industrial capacity of the two economies—and therefore, unsurprisingly, perceived by and large as a situation that works only to China’s advantage. The controversial and contentious political issues and the angry exchanges understandably garner greater attention.
And yet we must ask ourselves as to whether that is all there is to the overall picture. Continue reading “Economic Ties with China: India Needs to Look Beyond Politics”
Ashok K. Kantha, Director, ICS and former Indian ambassador to China
The Silk Road Economic Belt and the 21st Century Maritime Silk Road, launched in late 2013, is the signature project of Chinese President Xi Jinping. Now re-designated as the Belt and Road Initiative (BRI), it is one of the most ambitious programmes ever rolled out by any government. The Belt and Road Forum being held in Beijing on May 14-15 showcases its achievements to 28 foreign heads of state and government, as also delegations from other countries. No official participation from India has been announced so far. Backed by huge resources, BRI has acquired overarching importance in foreign policy and domestic domains of China. As it has Xi’s personal imprimatur, a wide range of ongoing projects and activities have been folded into the grand narrative of the BRI, with its contours still evolving. Continue reading “Explaining China’s Belt and Road Initiative”