Week 9: Post your Blog Entries as Comments to my Main Post Each Week

WITHOUT BLOG FOR MID-TERM WEEKEND.

Post by Sunday at midnight, by November 1.

1. Mark Whitaker

2. Issues of China and India in the world global recession show it is hardly all the world; AND SOMETHING about bottom billion North Korea potentially opening its minerals for a 'development strategy' (hmm....)

3. Korea barely escaped two quarters of removal of economic expansion with a slight (.1%) expansion for the second one after a huge fall in the first one. Thus 'officially' by Korean standards it avoided a recession. I have read that Korea is the one country in the OECD that has a huge portion of its GNP involved in international trade. I think it was around 25%. In boldface, note the scales of China and India below for their trade dynamics. I thought it was worth posting because these countries house a huge portion of the populations that statistically are on the bottom billion still, even though their countries are rapidly growing economically (at least in some areas--we'll talk about their regional disparities later in the course).

As for N. Korea's strategy, well, what would Terry Lynn Karl have to say about that? Or Collier?


No Recession in Chindia
Ryan Cole, Contributing Editor, Taipan Publishing Group
Monday, October 05, 2009
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As earnings season approaches, the debate on Wall Street is reaching a crescendo. Was the drama of last year a mere blip in a larger bull market, or is the run-up from March through September a sucker’s rally within a new, secular bear?

While the answer to this question is important for all business worldwide, there is one corner of the globe that isn’t as concerned with the conclusion. In both China and India – along with other developing markets – the recession hasn’t hurt GDP growth, despite falling exports. China’s GDP is expanding at a 7.9% clip, according to the latest numbers, and India’s GDP is right behind, at 6.1%.

“We have reached a tipping point in global economic affairs,” Stephen King, the chief economist at HSBC, told London’s The Guardian. “While there are some encouraging signs of recovery in the developed world, the real economic action is taking place elsewhere.”

According to a recent study released by the World Bank, the economic crisis of 2008 has only hastened the shift of power from west to east. No longer will America be the sole engine of growth and spending – and no longer will the dollar be the world’s de facto reserve currency.

John Hawksworth, head of macro-economics at PriceWaterhouseCoopers, spoke to The Guardian on this subject: “The dollar, the euro and the renminbi will form a basket of currencies. The world will be different. The recession has accelerated that process.”

When speaking to the paper, Robert Zoellick, head of the World Bank, said, “There will certainly be a larger role for emerging powers, there will be multipolar sources of growth, there will be more south-south trade among developing countries.”

Indeed, according to the World Bank, regardless of how soon developed countries exit the recession, the majority of economic growth for the foreseeable future will come from the developing world – and not just the famous BRIC nations. South America, Africa, and smaller Asian nations are expected to contribute nearly as much to growth.

Perhaps the greatest representation of this shift is the recent demotion of the G-7 as the world’s economic governing body, in favor of the G-20 – a body that includes emerging markets like the BRIC nations. An economic forum without China and India no longer seemed reasonable.

In a surprise move, at the summit in Pittsburgh two weeks ago, the G-20 moved close to passing new rules, expanding the voting powers of emerging markets at the International Monetary Fund.

Meanwhile, one of the biggest topics of debate in Asia isn’t when the “worldwide” recession will end, but rather which economy will emerge strongest, China or India. The argument goes, while China has outpaced India for years, the Middle Kingdom is more dependent upon exports and imports – about 80% of China’s GDP is tied up in world trade. India, by contrast, has around half of GDP coming from intranational trade, and thus is less affected by the economies of the west.

As soon as 2010, India’s growth rate may pass China.

Even with their extraordinary growth, neither India’s nor China’s economy will approach the size of America for many years to come. Both countries, however, will continue to play increasingly large roles in economic policy, and the economic health of the world.

Whether the recession ends tomorrow, in two years, or ended already – the macro-economic view shows India and China taking over as the economic engines of the world.

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http://www.taipanpublishinggroup.com/news-1005092.html

2.

China eyes N Korea’s mineral wealth

By Christian Oliver in Seoul

Published: October 6 2009 17:33 | Last updated: October 6 2009 17:33

Wen Jiabao, China’s premier, can hail his visit to North Korea as a bit of a diplomatic coup. Now the question is whether there is an economic dividend too.

After bear hugs with Kim Jong-il and co-operation deals, Mr Wen engin­eered the geopolitical compromise he wanted, with the North Korean leader on Tuesday announcing he might re­turn to inter­national talks on dismantling his nuclear weapons programme if he gets the kudos of direct talks with the US first.
EDITOR’S CHOICE
In depth: North Korea - Jun-04
In depth: China - Jul-28
N Korea ready to resume talks - Oct-06
N Korea’s Kim meets China’s premier - Oct-05

Mr Kim’s announcement did not guarantee fresh six-party talks between Beijing, Seoul, Moscow, Tokyo, Pyongyang and Washington but restored political goodwill.

Yet if resource-hungry China hopes revived camaraderie will also grant it a large bite of North Korea’s massive untapped mineral wealth, analysts and diplomats warn, Beijing could be sorely disappointed.

North Korea’s mineral wealth is receiving close scrutiny, with South Kor­ea’s government this week valuing reserves at $6,000bn (€4,070bn, £3,670bn). Encouraged by data on metals, Goldman Sachs last month predicted the economy of a unified Korea could rival Japan’s by 2050.

Until the 1970s North Kor­ea was the wealthier half of the peninsula. Under communism it has supplied gold to the international bullion market. But poor technology and limited funds have in effect trapped most mineral re­serves, potential investors say.

Trade with China is growing, reaching $2.8bn last year from about $2bn in 2007. But military authorities in North Korea are perceived as hostile to the changes in society and infrastructure that foreign investment could bring.

“If the North opens its mineral resources to foreign countries, that is tantamount to taking a military, social and political gamble, jeopardising their security,” said Lim Eul-chul, of Seoul’s Institute of Far Eastern Studies.

A South Korean diplomat closely involved with nuc­lear talks doubted Pyong­yang would allow China to make big investments inside its border. “They cannot permit that kind of influence,” he said.

Although they were long communist allies, North Korea and China have a mutual mistrust, partly tied to territorial claims.

Still, limited foreign investment in the sector is not impossible. Colin McAskill, executive chairman of Koryo Asia, says he has signed a letter of intent and memorandum of understanding to invest in North Korean metals and argues his model would not interfere with sovereignty issues that concern Pyongyang.

Switzerland’s Quintermina has posted reports on its website saying it is looking to extract magnesite in North Korea.

Chinese investors are believed to have some metals interests and are also involved in coal mining.

“The Chinese companies that have tried to do business in North Korea complain a lot that the regulations change frequently and that the power supply is erratic,” said a Chinese academic in Beijing.

Additional reporting by Kang Buseong in Seoul and Geoff Dyer in Beijing

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http://www.ft.com/cms/s/0/7d3f6ee4-b294-11de-b7d2-00144feab49a,dwp_uuid=9511df10-6d6b-11da-a4df-0000779e2340.html