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China

Reducing risk from natural disasters takes partnerships, teamwork

Zoe Elena Trohanis's picture

Image credit: simonpocock at Flickr under a Creative Commons license.
If you want to know what movies are being shown on flights across the Pacific, ask me or my World Bank colleagues in the East Asia and Pacific region's Disaster Risk Management team. We have been passing one another by plane for the past month and a half. Responsible for coordinating disaster risk management efforts and activities for the region, we are a busy group, no doubt about it.

I have been in China for the past few weeks supporting the country team to appraise a package of support to China for recovery efforts following the May 12, 2008 Wenchuan Earthquake. One colleague participated in the recent Global Facility for Disaster Reduction and Recovery Consultative Group meetings in Copenhagen, Denmark and is now in Jakarta, Indonesia working with field staff, the country’s government, and partners on mainstreaming risk reduction into development programs. Another colleague of mine just returned from the Philippines and Vietnam, where she was stranded by flooding in Hanoi. In fact, she had to wade through knee-deep water when leaving a meeting at the Ministry of Finance. Of course, this represents just part of the team, since we work with a broader network of staff based in country offices who manage country-level programs and projects.

Sustaining growth: China’s need for a new growth model

David Dollar's picture

China’s big stimulus plan will help keep the economy growing at a healthy rate, though 2009 will be a rough year with probably the slowest growth in nearly 20 years. While China applies stimulus to deal with the immediate downturn, it would be good to be thinking ahead. China needs a new growth model, and it should evaluate its possible spending plans both in terms of immediate stimulus and in terms of contribution to this new growth model.

China needs a new growth model because after the global downturn comes to an end, exports will never again play the same role as they have in the past two decades. I would argue that the four basic principles that account for the Chinese miracle since 1978 remain valid, each of which needs some tweaking in the new environment.

In time of economic crisis, influential thinkers contemplate future

David Dollar's picture

The World Economic Forum, billed as the largest-ever brainstorming on the global agenda, drew about 700 people to Dubai in early November. Image credit: worldeconomicforum at Flickr under a Creative Commons license.
Seven hundred self-styled “smart people” got together in Dubai on Nov. 7-9 under the auspices of the World Economic Forum for what was billed as the largest-ever brainstorming on the global agenda -- that is, the priorities for global action. The event had been planned for a long time, but the deepening global financial and economic crisis naturally colored the discussions. I was part of the trade facilitation group -- under Harvard professor Robert Lawrence -- which worked closely with the trade policy group under Ernesto Zedillo, director of Yale University’s Center for the Study of Globalization. The most fun was the unstructured morning in which we could interact as we chose with any of the 66 other groups. I spent time with the groups working on the future of China, climate change, and growth and development. The official summary is on the WEF website, but I took away three main points from the interesting weekend.

It is striking how well the global trade system is working, even as the global financial system spirals into crisis. This is not to say that global trade is immune from the crisis, far from it. Trade finance has contracted sharply and the World Bank projects that total global trade in 2009 will decline for the first time since 1982. But what is striking is that global trade has a well-defined set of rules and an institution (the World Trade Organization) to oversee them. Global finance, on the other hand, does not have a well-defined set of rules and regulations. Until now, the system of global trade continued to work well.

China's stimulus plan also aims to improve quality of life

David Dollar's picture
China’s stimulus package, announced this week, focuses on more than just building up the industrial and export capacity. Some investments will also be in housing, schools, and health facilities.

China announced a massive stimulus package of 4 trillion Yuan (US$570 billion) this week, to aid its ailing economy. The move was quickly welcomed by World Bank President Robert Zoellick: "China is well positioned given its current account surplus and budget position to have fiscal expansion," said the World Bank chief at a news conference. "I am delighted that China decided not only to undertake these steps, but to announce it before the G20 summit," he added.

Basically, I think that the package is very good. It is not as big as it looks at first glance, but then the economy is not as bad as many people think. Real retail sales for October came in at 17 percent growth rate, down trivially from 18 percent in September. Exports in October were up 19.2 percent over the year before. There is definitely evidence of a slowing economy, but nothing too dramatic has happened so far. Worrying signs, such as a sharp drop in growth of electricity demand in October, suggest that heavy industry is slowing. And imports for processing have slowed to a 2-3 percent growth rate, indicating that processing exports will slow down sharply. We have said for some time that China needed to be ready with a stimulus package toward the end of 2008 as global conditions would likely lead to a slowdown, and that time has come. I see the current move as precautionary, in light of some worrisome signals, rather than as reactive to a highly deteriorated situation (as suggested in some of the Western press coverage).

Anxiety and hope in Guangdong, China

David Dollar's picture

A large number of export-oriented processing firms have already closed in Guangdong, the heart of China’s export machine. Image credit: lylevincent at Flickr under a Creative Commons license.
I visited the Pearl River Delta in Guangdong this week, the heart of China’s export machine. A large number of export-oriented processing firms have already closed in Guangdong in sectors such as toys and footwear. Of course, firms close all the time in market economies, while others start up. This churning is part of the normal cycle in a market economy and is one of the key sources of productivity growth. Less productive firms die off while the successful new firms have especially rapid productivity growth. As the global economic crisis hits China, it is hard to keep track in real time of the balance of closings and openings.

Entrepreneurs and local officials here are certainly aware that demand for China’s exports has dropped sharply, and they wonder when the global economy will pick up again. Still, at the same time I was impressed at how many see this as an opportunity for China to pursue its rebalancing agenda. These discussions took place at a workshop in Jiangmen on Investment Climate, Innovation, and Industrial Transfer. The phrase “industrial transfer” refers to the fact that the most labor-intensive activities are moving away from the highly successful coastal cities, either to inland China, or other countries (Vietnam, Bangladesh) with lower wages.

China ideas marketplace uses entrepreneurial spirit to tackle social issues

David Dollar's picture

A woman explains a project to restore education in the part of Gansu, China, hit by last May's earthquake. Grassroots civil society organizations proposed innovative project ideas this week addressing development issues at the China Development Marketplace.


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