- Israel map evolution
- Kaliningrad/Konigberg Exclave, and Poland/Germany territory changes
- Dafur in Sudan
- Yugslavia disintegration
- Kurdstan problem
- Cyprus problem
- China's port ambitions: Tumen Estuary, Yangshan (island off Shanghai), Dwadar in Pakistan, Sittwe in Myanmar
- Korea War Maps
- Diaoyu
- Dokto
- East China Sea Gad Field Dispute
- Japan's Carnavaral (Seed Island/Tanegashima)
- Kuril Islands dispute
- Myanmar's new capital
- Jewish Oblast in Russian Far East
- Kra isthmus canal plan
- Kashimir dispute
2005-12-30
Introducing a great map blog
This is among the greatest map blog, probably by someone in Taiwan. It is in Chinese, but there are English labels in most of his maps. All of the posts are very interesting, and indeed things I have been thinking about blogging. e.g.,
When will China's GDP overtake the US?
The Economist's View quoted Bloomberg's John Berry that China's Booming Economy Will Never Surpass U.S.. There are a lot of assumption going into how fast the GDP growth in both countries in the next 30-40 years, and other factors such as population and exchange rate.
What I am going to do is look at the historical benchmarking. I feel this is a more accurate measure, as it models the narrowing of gap and increasing difficulty of playing catch up. Below is the chart of OECD nations GDP/cap from 1960 to 2003 (source: demographia), measured in real 2003 PPP converted US$ (PPP so that exchange rate aberration is sort of removed, real so that nominal inflation is adjusted).
China's GDP/cap (in PPP) is about 16% of USA today ($6400 vs $40000), similar to the relative ratio of Korea/US in 1970. It took Korea about 15 years to reach 1/4, and 20 years to reach 1/3 of US level. It is likely to take China the same or longer time given its huge size. Therefore, total GDP of China (in PPP) could be comparable to that of US in 15-20 years, in an optimistic scenario. (There was 9 years of 9-11% growth for Korea from 1960-1990, average CAGR was between 7-8%)
If we assume another big "if", that China will follow Japan's path afterward, i.e. after 15-20 years, China will be at where Japan was at in 1960 relative to US, there will be another 30 years when China joins the developed country pack (70% of US). So the optimistic scenario is that it will around 2055-2065 then. Once China joins the developed country pack, it could follow the path of any of these 14 countries. Whichever path it takes, it will at best reach around 80% of US' GDP/cap. However, no one large/medium country (except small banking havean such as Luxemberg or BVI) has surpassed US at any point of time (*) since 1950 in terms of GDP/cap, and the runners-up are resource rich countries Norway and Canada. It is likely that China will then remain at around 75%-80% of the US level of GDP/cap, like what Japan has been at for the past 20 years.
This is assuming the PPP conversion for Korea/Japan historically and for China today are correct. Alternatively, similar adjustment in exchange rate to converge the PPP gap is assumed during the next 30-50 years.
This is also assuming no major political or economic disruption in the world (not just China, as world recession or war means disruption to China's trading) from now till around 2060. That is why "peaceful development" is the correct, and the only sensible strategy for China. This is also why China cares about a peaceful world environment, and why it has taken great pain in settling border disputes with its neighbors, and is willing to give up its 1.5M sq km claim in dispute with Russian and 90k sq km with India.
Update: (via New Economist) EIU has this forecast, showing China overtake US in PPP terms in total GDP by 2026 already (equality around 2020)
Note (*) Japan did overtake US in the late 1980s briefly in exchange rate GDP per cap, but that was due to a short-lived exchange rate abberation
What I am going to do is look at the historical benchmarking. I feel this is a more accurate measure, as it models the narrowing of gap and increasing difficulty of playing catch up. Below is the chart of OECD nations GDP/cap from 1960 to 2003 (source: demographia), measured in real 2003 PPP converted US$ (PPP so that exchange rate aberration is sort of removed, real so that nominal inflation is adjusted).
China's GDP/cap (in PPP) is about 16% of USA today ($6400 vs $40000), similar to the relative ratio of Korea/US in 1970. It took Korea about 15 years to reach 1/4, and 20 years to reach 1/3 of US level. It is likely to take China the same or longer time given its huge size. Therefore, total GDP of China (in PPP) could be comparable to that of US in 15-20 years, in an optimistic scenario. (There was 9 years of 9-11% growth for Korea from 1960-1990, average CAGR was between 7-8%)
If we assume another big "if", that China will follow Japan's path afterward, i.e. after 15-20 years, China will be at where Japan was at in 1960 relative to US, there will be another 30 years when China joins the developed country pack (70% of US). So the optimistic scenario is that it will around 2055-2065 then. Once China joins the developed country pack, it could follow the path of any of these 14 countries. Whichever path it takes, it will at best reach around 80% of US' GDP/cap. However, no one large/medium country (except small banking havean such as Luxemberg or BVI) has surpassed US at any point of time (*) since 1950 in terms of GDP/cap, and the runners-up are resource rich countries Norway and Canada. It is likely that China will then remain at around 75%-80% of the US level of GDP/cap, like what Japan has been at for the past 20 years.
This is assuming the PPP conversion for Korea/Japan historically and for China today are correct. Alternatively, similar adjustment in exchange rate to converge the PPP gap is assumed during the next 30-50 years.
This is also assuming no major political or economic disruption in the world (not just China, as world recession or war means disruption to China's trading) from now till around 2060. That is why "peaceful development" is the correct, and the only sensible strategy for China. This is also why China cares about a peaceful world environment, and why it has taken great pain in settling border disputes with its neighbors, and is willing to give up its 1.5M sq km claim in dispute with Russian and 90k sq km with India.
Update: (via New Economist) EIU has this forecast, showing China overtake US in PPP terms in total GDP by 2026 already (equality around 2020)
Note (*) Japan did overtake US in the late 1980s briefly in exchange rate GDP per cap, but that was due to a short-lived exchange rate abberation
Labels:
business
2005-12-29
Military expense classification: case study of Japan and US
It was said that China is the only country which does not list its space program, or all the army pension in the military budget. Transparency in budget and 'proper' classification are needed. Apparently China is not the only country which needs more "transparency".
According to this report, Japan's military spending classification is similar to China's. The 'adjustment' by Rand/SIPRI/Pentagon also applies to Japan, e.g. space program, and protection fee payments
Related note: Wu Jianmin, the Dean of Foreign Affair Insititute in China, was interviewed by Xin Jingbao on Japan, Xinjingbao is among the group of liberal media in China (led by Nanfang Weekend), and is recently persecuted by the CCP.
According to this report, Japan's military spending classification is similar to China's. The 'adjustment' by Rand/SIPRI/Pentagon also applies to Japan, e.g. space program, and protection fee payments
- 2006 Official budget: US$41.6bn
- 62.4bn Yen ($0.5bn) on Spy Satellite not included in military budget (related article on Japan's program)
- Question: In US, NASA is not under DoD, NASA budget should also listed separate from defense budget (see below)
- 600bn Yen ($5bn) paid to US for the cost of its bases in Japan, also under a special budget. The US troops are supposed to defend Japan, it is quite natural that this will be paid to Japan's own military if US forces is relocated
- Another undisclosed amount for the relocation from Okinawa bases (to Guam), to be paid by Japan. It was estimated to be about 330bn Yen ($2.9bn), a one-off expense.
- Japan Coast Guard (Maritime Safety Agency 海上保安庁 ) is not under the defense budget (this is probably comparable to China's PAP), total budget for 2005 was 168.7bn Yen ($1.4bn)
- The Coast Guard, similar to the Coast Guard of the US, has been involved in fishering disputes and coastal patrolling activities. It also seeks to spend 350bn yen (over 7 years) to build new fleet (I am not sure if this 50bn yen is already included in the 168.7bn number
- Question: does national guard and coast guard of other countries listed under defense? It appears not. If so, does that mean Rand/Pentagon/IISS have over-estimated China's defense budget?
- $1-1.2bn (i.e. 1/3 of the total cost) contribution to the US Missile Defense System, spread over 6 years starting 2006, so cost for 2006 will be about $0.2bn
- Over 1000bn Yen ($8.5bn) of pension for the JSDF is not listed under the military budget
---
US defense budget, apparently is also defined similar to China's, with space program, national guard, coast guard, separately listed
Perhaps the only adjustment that China needs is to include the Arms Import, which is actually quite transparent itself (China's budget listed them separately mainly because of its forex policy. But that should really be changed.)
---- DoD budget is $419bn, (426 if including discretionary outlays)
- Veteran affiars, housing and urban development: $91bn
- NASA budget: $17bn, (not all should be counted as defense, similarly for China)
- DHA budget: $32bn, of which $7bn for coast guard (I am not sure where National Guard falls in)
- Dept of Veteran Affairs: $33bn (discretionary), plus $38bn mandatory outlays. and $46 Guaranteed Vet Mome Loans
- Current Military, $558B:Military Personnel $109B, Operation and Maintenance $154B, Procurement $81B, Research and Development $68B, Construction $7B, Family Housing $4B, Retired Pay $46B, DoE Nuclear Weapons $17B, NASA (50%) $8B, International Security $8B, Homeland Sec. (50%) $16B, Ex. Off. Pres. $78, Misc. $4B, “Allowance for Anticipated Supplemental” (Iraq) $25B
- UNBUDGETTED: $85B (est.):Most of the spending for the wars in Iraq and Afghanistan is not included in the President’s Budget but the Administration has announced it will seek this money as supplemental appropriations later in year as it has in the past two years
- Past Military, $384B: Veterans’ Benefits $70B; Interest on National Debt (80% estimated to be created by military spending) $314B
Perhaps the only adjustment that China needs is to include the Arms Import, which is actually quite transparent itself (China's budget listed them separately mainly because of its forex policy. But that should really be changed.)
Related note: Wu Jianmin, the Dean of Foreign Affair Insititute in China, was interviewed by Xin Jingbao on Japan, Xinjingbao is among the group of liberal media in China (led by Nanfang Weekend), and is recently persecuted by the CCP.
- "We need to distinguish the right wing from the general public in Japan, the right does not represent all Japanese, we cannot oppose all Japan people because we oppose the right. Regarding Sino-Japanese relationship, we still need to have confidence. From a long term perspective, friendship for generations suit the interests of the two people. President Hu said, it is win-win if China and Japan are in peace, lose-lose if we are in fight."
- "We need to question the notion that Japan needs to choose between China and US as its strategic partner. Sino-US and Sino-Japan relationships have stand-alone solutions...The mutual benefit between China and US is greater than the differences, [similarly for Japan and China]. They are both evolving and developing. Do you really have to choose one over another?"
- "Some said we need to be tough on Japan, as it only yields to the strong. This is misled. Being tough on any nation will not work, it won't work even on a child...[I believe] the solution lies in developing mutual interests and hope [for interaction/trust/relationship] between the 2 peoples"
China population (ii) - historic changes
China's population has been between 15-60M most of the time in history, until late Ming dynasty. Whenever there is a war, the population decreases significantly, but peak population has seldomly passed 60M for the 2000 years before late Ming. Below is a chart (source), please remember the following caveats when reading it
- The statistics are mostly done when war is over or during peace, so a few deep trough (during wars) may be missing in this chart, when there were no stats available. The dynasty beginning number is indicative of the damage of the war preceding the change in dynasty
- Lost of populations in war include war dead, famine, migration of people and hiding (in mountains - esp in beginning of Qing)
- Major civil war causes change of dynasty, and population decrease of 1/2 to 2/3. However, the numbers in the beginning of a dynasty is often under-stated as people were moving around and the stats were incomplete (so the real impact might not be as bad)
- Since there were small changes in geographic boundary, the population stats were not entirely comparable (but it is probably 80-90% correct)
- Because Chinese dynasties tax on land size, headcount and household numbers, it is likely that the total populations are understated due to tax evasion (some scholar estimated that popluation reached 100m around late Song, so official stats could be 30-40% below real figures)
- A major trick of concealing population is not include serf and slave. Yuan's real population is above the same as South Song/Jin. However, Yuan's numbers were relatively more accurate because it cracked down on cheating of the rich people
- There was an estimate for Xia (2000-3000BC) population of 13.35M
- Official population passed 100M around 1720, 200M in 1764, 300M around 1790, 400M around 1834, due mainly to higher food yield, with introduction of new world plants such as corn, potatos, etc.
- Virtually no growth between 1840 to 1900, when western powers invaded China and Taiping Rebellion took away 20-30M lives
- From 1900-1947 the growth was slow, from 430M to 460M, with a peak of 470M around 1928 when civil war lessened but then the Japanese invasion took 20-30M lives
Labels:
population
2005-12-25
Why building a dam would keep Khabarovsk's water supply clean
China has built a new dam on Fuyuan waterway, a small pathway south of Heixiazi Island and a by-pass before Heilongjiang (Amur) and Ussuri River 'formally' meet.
As illustrated in the map below. The yellow stroke is where the dam is located. Heilongjiang is polluted when the tributary Songhua River merges upstream (from west), But Ussuri River is clean (flows from SW). After the dam is built, Heilongjiang water would not meet Ussuri water until point B, the water between points A and B will remain clean, which is where Russians water supply source is.
The building of the dam is suggested by the Russians, according to some report. Fuyan water is very shallow (0.9m at tis deepest, 0.3-0.4m on average).
Meanwhile, there is also rumour that the Russians worry about the dam building will dry up the Fuyuan waterway and hence connecting Heixiazi will Chinese side of the bank. The rumour is unfounded, as we can see form the map, the western portion of Heixiazi belongs to China upon recent border negotiation and both sides of the Fuyuan waterway will be inside China border. (The actual hand-over will happen in 1-2 years)
Some history of the border dispute: in 1929 USSR took Heixiazi and Yinlong Islands, plus a number of other border territories from China. In 1964, both sides agreed on principle that demarcation would be based on shipping route, which means China would get back both islands. However, no formal treaty has been signed and the relationship between the two countries deterirated. Negotiation in recent years results in current compromise, where China would get about 174 sq km (about 50%) out of a total of 350 sq km. In addition, China will have the nagivation right to go through the other sides of Heixiazi to connect sail from Heilong Jiang to Ussuri Jiang.
Related note: I expect the Kurils dispute between Russia and Japan might end up with a similar deal.
The map above is at the NE tip of China, see the insert (lower right corner, and a small rectangle in the larger map above) of the map below for its location.
As illustrated in the map below. The yellow stroke is where the dam is located. Heilongjiang is polluted when the tributary Songhua River merges upstream (from west), But Ussuri River is clean (flows from SW). After the dam is built, Heilongjiang water would not meet Ussuri water until point B, the water between points A and B will remain clean, which is where Russians water supply source is.
The building of the dam is suggested by the Russians, according to some report. Fuyan water is very shallow (0.9m at tis deepest, 0.3-0.4m on average).Meanwhile, there is also rumour that the Russians worry about the dam building will dry up the Fuyuan waterway and hence connecting Heixiazi will Chinese side of the bank. The rumour is unfounded, as we can see form the map, the western portion of Heixiazi belongs to China upon recent border negotiation and both sides of the Fuyuan waterway will be inside China border. (The actual hand-over will happen in 1-2 years)
Some history of the border dispute: in 1929 USSR took Heixiazi and Yinlong Islands, plus a number of other border territories from China. In 1964, both sides agreed on principle that demarcation would be based on shipping route, which means China would get back both islands. However, no formal treaty has been signed and the relationship between the two countries deterirated. Negotiation in recent years results in current compromise, where China would get about 174 sq km (about 50%) out of a total of 350 sq km. In addition, China will have the nagivation right to go through the other sides of Heixiazi to connect sail from Heilong Jiang to Ussuri Jiang.
Related note: I expect the Kurils dispute between Russia and Japan might end up with a similar deal.
The map above is at the NE tip of China, see the insert (lower right corner, and a small rectangle in the larger map above) of the map below for its location.
Labels:
geography
2005-12-24
World FDI map
Here is a map of Foreign Direct Investment flow of the world, in 1980 and 1998. While China's attention is impressive, it is still lower than that of the Western Europe and US. But China is probably among the top if one measures FDI/GDP.
Lee Kuan Yew on India
Atanu Dey of India Economy blog has a very insightful series on Lee Kuan Yew's recent lecture, Nehruism and India's economic development (part 1 and part 2 of Part 3, the lecture).
Plenty of comparison between China and India, and also about the various explanation for the difference in performance, e.g., the myth of blaming democracy. Well, when there are problems in China, we see similar scapegoating as well. I wish there are more people like Atanu Dey in the sino-blogosphere. Criticism are abundant but constructive criticism and suggestion are not often seen here.
Atanu listed incompetent bureaucracy as one of India's problem. I am sure I can just name as many incompetent and corrupted bureaucrats in China. I suspect there is more behind the apparent incompetence and bigotry in these government decisions, in all countries, i.e. an intertwined web of interest parties that is hard to break. Example, China's coal mines.
It would be interested to hear what Atanu has to say about China's problems. The two countries have both made some progress and encountered a different set of obstacles. The road ahead is full of challenges for both. Learning from China's mistake in its manufacture-centric development model may help India better prepared for its future development; and the same applies to China when it turns its attention to the service industry.
I am of the opinion that China did not choose manufacturing and India did not choose service consciously as its path to grow. It is the natural selection of free market that did the job. China has a reasonably educated cheap workforce and India an English literate one. The buyer and sellers were matched and evovled by Darwin, not by Deng or Jiang or Nehru's successors. However, what these politician could do (and should do, or have done right) is to create a fair and efficienct envirnment for such econmic darwinism to happen.
Plenty of comparison between China and India, and also about the various explanation for the difference in performance, e.g., the myth of blaming democracy. Well, when there are problems in China, we see similar scapegoating as well. I wish there are more people like Atanu Dey in the sino-blogosphere. Criticism are abundant but constructive criticism and suggestion are not often seen here.
Atanu listed incompetent bureaucracy as one of India's problem. I am sure I can just name as many incompetent and corrupted bureaucrats in China. I suspect there is more behind the apparent incompetence and bigotry in these government decisions, in all countries, i.e. an intertwined web of interest parties that is hard to break. Example, China's coal mines.
It would be interested to hear what Atanu has to say about China's problems. The two countries have both made some progress and encountered a different set of obstacles. The road ahead is full of challenges for both. Learning from China's mistake in its manufacture-centric development model may help India better prepared for its future development; and the same applies to China when it turns its attention to the service industry.
- "Just as China is learning from India to improve its performance in the IT sector, so India must emulate China’s success in attracting FDIs and the jobs they create in manufacturing. It can do this by building infrastructure and educating and raising the skill levels of its workers...The right strategy for India is to walk on two legs: traditional labour intensive industry and modern IT. Both legs need strengthening through further reforms ….”
I am of the opinion that China did not choose manufacturing and India did not choose service consciously as its path to grow. It is the natural selection of free market that did the job. China has a reasonably educated cheap workforce and India an English literate one. The buyer and sellers were matched and evovled by Darwin, not by Deng or Jiang or Nehru's successors. However, what these politician could do (and should do, or have done right) is to create a fair and efficienct envirnment for such econmic darwinism to happen.
2005-12-23
Peaceful development
As "China Vows Peaceful Use Of Its Power", a "Hawkish China general will step down", and "Major General Zhu Chenghu received an 'administrative demerit' ".
Beijing knows that action is needed to prove its claims to peaceful development. And it is showing the world its determination. It is hardly a co-incidence that the 3 pieces of news reach the international press at the same time, especially that of Major General Zhu, who is the grandson (some said nephew) of Red Army Commander Zhu De.
-
Major General Zhu Chenghu received an ''administrative demerit" recently from the National Defense University, which bars him from promotion for one year, said the sources, who requested anonymity.
''He misspoke. But the punishment could not be too harsh or we would be seen as too weak towards the United States," one source said.
An administrative demerit is the second lightest punishment on a scale of one to five, but still potentially damaging to his career. The lightest is an administrative warning, while the heaviest is expulsion.
''His chances for promotion in the future are extremely slim," another source said.
The Defense Ministry declined to comment.
In July, Zhu told a group of visiting Hong Kong-based reporters China would have no choice but to resort to nuclear weapons in the event of a US attack over democratic Taiwan, which Beijing has claimed as its own since their split at the end of the Chinese civil war in 1949.
Beijing knows that action is needed to prove its claims to peaceful development. And it is showing the world its determination. It is hardly a co-incidence that the 3 pieces of news reach the international press at the same time, especially that of Major General Zhu, who is the grandson (some said nephew) of Red Army Commander Zhu De.
Labels:
politic
Implications of China's GDP revision
China's GDP is 16.8% higher than previous estimate. Almost all western academic praise this as a long due revision. While there is still considerable error in the new number, and in fact, any statistics of such a large scale (and can be announced before the calendar year actually ends) need to be viewed only as an reference number, a major bug is fixed.
The fundamental message remains unchanged.
The fundamental message remains unchanged.
- China is a large economy, ranked #6 in 2004, between France and Italy (Ranks: USA, Japan, Germany, UK, France), and can catch up with Germany and Japan in the next decade of two. But it is still a developing country, with GDP/cap under $2000, 1/20 that of USA.
- Since the change of methodology does not change the growth number significantly (what has missed in 2004 was also missed in 2003), the trends (growth numbers) are still correct. i.e. the growth would be 9.0% or 10.0%, instead of 9.4%, depending on how much the missed 'service sector' has grown.
- The survey also confirms some long-held suspicions about China's economic make-up: that its service sector is bigger than the one-third of GDP suggested by the old figures (the new data show more than 40%)
- that consumption is also higher and that investment and savings as a proportion of GDP are lower. This lot of figures look more sustainable than the old lot. But they are still only a best guess at the truth. And, at a sixth the size of America's, China's economy still has a bit of catching-up to do
I would also add a couple more, the trade surplus as a percentage of GDP is smaller than previously thought, so is the forex reserve/GDP number, or saving/income rate. In particular, my export market share needs to be recalculated.
With the service % now at 40.3%, China's color code is change to the same as India's, although India still leads by about 9-10 percentage points.
Labels:
economic
2005-12-20
China's military spending
First, I am of the opinion that everyone should spend less on its military, and that includes China.
China's official defense spending in 2004 was $25.4bn, by including factors such as PAP, space program and more weapon imports, RAND estimated the range to be $31-38bn (2003 figure, average=$34.5bn), SIPRI $35.4bn. China's GDP was $1933bn in 2004 (old number was $1650bn) according to most recent annoucement. So China's defense spending was 1.3%-1.8% of its GDP according to various estimates.
But here I have not considered one well published (but not neccessarily accurate) source, the Pentagon, estimated China's spending to be $67.49bn, based on PPP adjusted conversion into US$. Because much of China's military spending is for importing weapon from Russia, using hard currency, everyone (including RAND, SIPRI, armscontrolwonk) have rejected the PPP proxy. Pentagon, for its own agenda of securing more fund form the Congress, is the only body that stubbornly insists on the misleading PPP. Anyway, let's see how that translates in % GDP. This is from CIA's country profile for China
China's official defense spending in 2004 was $25.4bn, by including factors such as PAP, space program and more weapon imports, RAND estimated the range to be $31-38bn (2003 figure, average=$34.5bn), SIPRI $35.4bn. China's GDP was $1933bn in 2004 (old number was $1650bn) according to most recent annoucement. So China's defense spending was 1.3%-1.8% of its GDP according to various estimates.
But here I have not considered one well published (but not neccessarily accurate) source, the Pentagon, estimated China's spending to be $67.49bn, based on PPP adjusted conversion into US$. Because much of China's military spending is for importing weapon from Russia, using hard currency, everyone (including RAND, SIPRI, armscontrolwonk) have rejected the PPP proxy. Pentagon, for its own agenda of securing more fund form the Congress, is the only body that stubbornly insists on the misleading PPP. Anyway, let's see how that translates in % GDP. This is from CIA's country profile for China
- GDP (PPP): $7.262 trillion (2004 est.)
- Military expenditures - dollar figure: $67.49 billion (2004)
- From the same CIA site, there is a conflicting (derived) number. It said China's "military expenditures - percent of GDP: 4.3% (2004)". This is based on a wrong calculation of dividing a PPP-adjusted number by an exchange rate valued GDP (about $1.65tn). To compare 2 numbers, you need to get the units right. What CIA/Pentagon did was like saying I am taller than Yao Ming because I am 6 feet tall and Yao is only 2.29m.
My problm with CIA's site, while it is handy, is that it also lacks some important information. e.g. if a PPP adjusted value is quoted, I should at least know what ratio it used. US State Dept or DoE use exchange rate GDP, which is a source I use more often now (worldbank and EIU are better source, but they do not have detailed demography or geography data).
update: great insight from Strategic Unit
Labels:
politic
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