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East Asia and Pacific

Will China’s economic slowdown affect its reforms?

Bingjie Hu's picture

The latest macroeconomic data released by China’s National Bureau of Statistics (NBS) on April 18 suggest that China’s economic growth has moderated in the first quarter of 2014. GDP growth has decelerated from 7.7 percent (year-over-year) in the last quarter of 2013 to 7.4 percent (year-over-year) in the first quarter of 2014.

On a sequential basis, the quarter-on-quarter seasonally adjusted growth slowed from 1.7 percent in Q4 last year to 1.4 percent in Q1 2014.

The deceleration in the first quarter of this year is in line with World Bank expectations (see our latest East Asia Economic Update) (Figure1).


Figure 1: Official growth data on the demand side reflect subdued export growth and a moderation in investment growth. Consumption led growth in the first quarter of 2014, contributing 5.7 percentage points to growth, followed by investment, contributing 3.1 percentage points. Net exports dragged down growth by 1.4 percentage points.

Many economists speculate that the weakening trend in growth may put more pressure on the government to implement more and stronger growth supportive fiscal and monetary policies, following the stimulus measures unveiled recently that include accelerated expenditures on railway construction and social housing, as well as tax breaks for small businesses.

Thailand: Road safety will never happen by accident

Chanin Manopiniwes's picture

Photo credit: Dennis Thern
Photo credit: Dennis Thern

In Thailand, road accidents cause about one death every hour—but for a country of almost 70 million people, how does it fare compared to other countries?

Well, before we get to answering that; the good news for the country is that, according to Thailand Road Safety Observatory, overall road accidents, fatalities and injuries all fell roughly by a third over the past decade. But as for the bad news, the probability of crash victims becoming fatally wounded or permanently disabled is higher than ever.

However, the real bad news—despite the authorities’ efforts to prevent accidents—is that, according to the World Health Organization’s Global Status Report on Road Safety 2013, Thailand continues to have one of the highest rates in road fatalities. In fact, with 38 deaths per 100,000 inhabitants per year, it ranks third in the world, just behind the African countries of Eritrea and Libya, at 48.4 and 40.5 respectively.

Why should Governments Spend on Sanitation?

Shanta Devarajan's picture

A puzzle:  Sanitation is one of the most productive investments a government can make.  There is now rigorous empirical evidence that improved sanitation systems reduce the incidence of diarrhea among children.  Diarrhea, in turn, harms children’s nutritional status  (by affecting their ability to retain nutrients).  And inadequate nutrition (stunting, etc.) affects children’s cognitive skills, lifetime health and earnings.  In short, the benefits of sanitation investment are huge.  Cost-benefit analyses show rates of return of 17-55 percent, or benefit/cost ratios between 2 and 8.

But if the benefits are so high (relative to costs), why aren’t we seeing massive investments in sanitation?  Why are there 470 million people in East Asia, 600 million in Africa and a billion people in South Asia lacking access to sanitation?  Why are there more cellphones than toilets in Africa?

Can Computers Outperform Humans?

Wolfgang Fengler's picture

The epic battle of man against machine has been fought on many occasions. One of the most memorable encounters was the chess game between IBM’s Deep Blue and Gary Kasparov. Deep Blue was the first computer to beat a reigning chess champion in 1996 (the machine still lost 2 to 4 after six games). A year later, at their “rematch”, the machine won on the overall score: 3.5 to 2.5.

However, it is surprising that, 18 years later, we still have not figured out the ultimate winning strategy in chess. Any game with limited combinations and full disclosure of information must have ‘safe strategies’ and can be ‘solved’ (as has happened with the game checkers in 2007). The solution, in chess, would from what we know today involve strategies whereby the white player would win or the black player would force a draw. Yet no human or super computer to date has managed to solve chess’ mathematical puzzle.  How much more computing power do we need to succeed?

From farm to chopsticks: Improving food safety in China

Garo Batmanian's picture
A challenge for Chinese businesses is to re-capture the vast domestic market owing to the recent food scares that have seriously undermined the domestic brands.

After several high-profile food safety incidents, according to one recent survey, around 64% of Chinese consider food safety as the number one priority that affects their daily lives and requires immediate action by the government.

The Chinese government is taking these concerns very seriously and has launched important reforms in its system of food control. It promulgated a new Food Safety Law in 2009, and created a new food safety authority in 2013 to deal with these issues. These reforms are now rolling out to provincial and local levels. These reforms will eventually affect more than one million state officials, restructure more than a dozen government ministries, and revise more than 5,000 regulations. The reforms will result in a complete overhaul of the food control system and introduction of new global best practice policies for food safety.

Bold Steps for China’s Cities

Sri Mulyani Indrawati's picture
Also available in: العربية  Español


Photo courtesy of Li Wenyong

 

In 2030, more than 300 million Chinese are expected to have moved into cities. By then, 70 percent will live in urban settings. Given China’s size, it will mean that one in six urban dwellers worldwide will be Chinese. The challenges coming with that demographic shift are already visible and well known, in China and beyond.

Urbanization is a global trend. So when we think about new approaches to urbanization here in China, we believe that they are of value for other countries facing similar issues. In other words, China’s success in urbanization could pave the way for global rethinking on how cities can be built to be healthy, efficient, and successful.

Ask what a mayor can do for you

Maryse Pierre-Louis's picture


For the first time in history, more than half the human population lives in cities, and the vast majority of these people are poor. In Africa and Asia, the urban population is expected to increase between 30-50% between 2000 and 2020. This shift has led to a range of new public health problems, among them road traffic safety. Road crashes are the number 1 killer among those aged 15-29, and the 8th leading cause of death worldwide. The deadly impact from accidents is aggravated by pollution from vehicles, which now contributes to six of the top 10 causes of death globally.

Indonesia’s investment in flux

Alex Sienaert's picture

Can Indonesia’s economy move from a situation of investment in flux to an investment influx? This is one of the questions posed by the World Bank’s March 2014 edition of the Indonesia Economic Quarterly.

Why is Indonesia’s investment growth in flux? First, there has been a slowdown in fixed investment, due to lower terms of trade and tighter external financing conditions. This has helped narrow Indonesia’s external imbalances.

Second, while foreign direct investment—an important source of investment financing—has remained solid so far, the rapid growth of FDI inflows seen in recent years shows signs of plateauing.

Third, Indonesia remains reliant on external financing from portfolio investment inflows. These have surged in recent months, but they can be volatile.

Finally, recent policy developments have increased regulatory uncertainties. Add to that the usual difficulty of predicting policy ahead of elections, which may impact on investment of all kinds.

Given uncertain prospects for global investment flows to major emerging market economies like Indonesia, the good news is that Indonesia’s external balances are adjusting. The current account deficit shrank significantly in the fourth quarter of 2013, to $4.0 billion, or 2% of GDP. This is a welcome reduction from the record high of $10.0 billion in the second quarter of 2013—that’s 4.4% of GDP. The stock market rallied, gaining 9% in local currency terms, bond yields fell, and the Rupiah climbed back by 7% against the USD, year-to-date, recouping some of last year’s significant losses. Banking and portfolio inflows also rose in the final quarter of 2013*.

But some caution is warranted. The adjustment has been narrowly based on tighter monetary policy and currency depreciation over the second half of 2013, and slower investment growth. Indonesia remains vulnerable to a renewed deterioration of global market conditions.

A Portal to Greater South/South Cooperation

Richard Record's picture

 Kingdom of LesothoHere at the World Bank we put great effort into facilitating South-South exchanges. But the truth is that developing tangible results and sustainable partnerships are still tremendous challenges. That’s why when a genuine, substantive example of South-South cooperation comes along—as is the case with the new Lesotho Trade Portal (LTP)—this effort should rightly be praised.

The LTP—billed as “the first trade portal in Africa”—was developed through a bilateral agreement between the Kingdom of Lesotho and the government of Lao People’s Democratic Republic, with the assistance of the World Bank Group. The LTP is a single, online source for all trade-related laws, regulations, and procedures for importing and exporting. It was officially launched on March 26, 2014, immediately establishing a new standard in Africa for communication with traders.
 

In China, Innovation in Water Rights Leads to Real Water Savings

Liping Jiang's picture

Also available in: 中文

China’s most arid regions are facing an increasingly serious water crisis, and local water policies often aggravate the problem. In such climates, growth in the agricultural sector has come with high environmental costs.

With the help of new technologies that measure real water consumption in agriculture, governments are designing innovative water rights systems that actually save water. Based on results from two successful pilots, the World Bank Group is partnering with China to tap into science to transform water management in agriculture at the national level.


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