China and the renminbi matures | Jim O‘Neill at


An excellent take by Jim O’Neill on the framework for People’s Republic of China monetary policy. Should we agree with China replacing Russia on G8…..:

” Many observers have noticed China’s weaker export performance — one cause of the smaller surplus. But the rise in Chinese imports gets less attention. In a new paper for Bruegel, a European think tank, Alessio Terzi and I discuss world trade (which is changing rapidly) and global governance (which isn’t). The paper emphasizes that China’s role as an importer is on the rise. Already, its share of global imports, at roughly 10 percent, is not far short of the U.S. share. The latest data strengthen my belief that by the end of 2015, China may well be the world’s biggest importer of goods and services.

China has successfully moved toward more balanced trade while managing its currency more closely than many would have liked. That ought to command some respect — and the same goes, if you ask me, for the thinking of the Chinese leadership on the pace of reform in domestic finance, and on whether and when the renminbi should be granted a bigger role in global finance. We’ll probably hear more from China on that second issue soon. I think it’s time for the International Monetary Fund to consider including the renminbi as part of the Special Drawing Rights basket. (An updated assessment of the SDR’s role is due by the end of 2015.)

Why not go further? Russia’s actions in Ukraine have prompted the idea that it should be kicked out of the Group of Eight. Maybe that place should be offered to China instead. ”


China and the renminbi matures | Jim O‘Neill at


Energy and the Economic Problem

Energy and the Economic Problem

This editorial from one of the Presidents at Econophysics is well worth reading. Especially for the interested in Science & Technology and its Economic relevance!

” Energy efficiency, not the falling price of solar, has done the heavy lifting when it comes to unlocking the economics of distributed clean energy for the poor. The reduced demand from LEDs brings the size, and therefore cost, of everything down from solar panel to the battery. Imagine if we took this lesson – energy efficiency unlocks distributed energy for the poor – and applied it to rural electrification as a whole? What you might come up with is a novel new approach to mini-grids dubbed by my colleague Stewart Craine of Village Infrastructure Angels ‘Skinny Grids.’ Two of the most pressing basic needs the poor have are for lighting and mobile phone charging (the latter coming from an unprecedented number of electrified mobile phone users – an enormous market opportunity. Serving those needs with yesterday’s technology (the incandescent bulb and even
CFLs) is very tough. So tough it has basically meant the economics to serve these markets with clean energy didn’t work.
Enter the LED. Advances in LED white lighting have revolutionized the amount of power poor households now need. That changes everything from component to system size which has cut costs dramatically. For example, the light supplied by 100W of incandescent bulbs can now be met with just 5W of well designed LED lighting. Since a phone charger takes similar power, we can now provide basic services with 90% less power. What is far less explored is the impact beyond the individual solar home system. That’s because the drop in demand lowers the current in the “poles and wires” that connect households in conventional grids. This enables companies to use much thinner and cheaper wiring. Combined with smaller poles and longer spans, or locally dug underground trenches, the cost per household for reticulated wiring can be vastly reduced via thin-cable designs not previously imagined – our aptly named Skinny Grids. Combine this with innovative 1-2kV transformers that take this lower power and current as core to their design and Skinny Grids could reach households 5-10km from power sources quite cost-effectively. That means they could service many hundreds of households if we ran them from existing off-grid sources of power (think Tower Power) or from the edge of the grid.
In some countries, over 95% of all households are within 5-10km of an off-grid telecom tower or the edge of the grid, and these towers are often grossly under loaded compared to the power demand for the tower (eg. 3kW load compared to 15kW installed capacity). That means the power generation to connect 10-20W of load per household may already exist for the majority of the unelectrified population. Even better, the only investment needed is $1/m of Skinny Grid connections.
Think about that for a minute. All the handwringing about the massive energy investments and grid expansion that’s needed to electrify the world may be obviated (at least in part) by existing power sources that just haven’t been tapped. All of that thanks to the LED light bulb. Many of the entrepreneurs believe that their innovations will boomerang to traditional grids in developed and developing country markets. Skinny grids seem closest to fitting that prediction given that fact that the LED is to the off grid market what the CFL is to those in the on-grid market. The future for highly innovative clean energy deployment may be off the grid. ”

The New South Sea Bubble…..?

This interesting Bloomberg article that I received as an alert, rightly reminded and alerted me to the possible potential conflicting situation regarding Southeast Asia Seas, with its increasing importance on the Global International Trade Landscape. The American Vice-President  Joe Biden does not share the concern of many, and in the recent visit to Singapore he made his demarches on this issue to  Japanese and Singaporean counterparts. We feature here his Bloomberg interview on the subject as well:

Important point is emphasized by Biden on the fact that the USA is a Pacific Power, America isn’t going anywhere and for the most part the success of the region rests on the stewardship of America’s military presence there.

Even if we could make this last point a bit contentious, it is without doubt that the increasing importance of Asia and Southeast Asia in the International Trade arena in general certainly stems in large part from the commitment of the United States to the region, and not just on Diplomatic, political or military fronts, as we could well easily notice the strong economic and corporate presence and interests of American companies of various sorts.

What is most relevant, I suppose in the article is the push of Biden to China to fend off and sign a ‘Code of Conduct‘ for operation on the region’s Seas, which indicates that there’s still the potential for diplomatic and political frictions on the issue. Despite the obvious interest of all parties that there will be a smooth and peaceful resolution of any friction. China, as a major player, and one that will certainly continue to grow in weight and importance, has also major responsibilities in avoiding any conflict or unpleasant difficulties for the free trade that benefits all in the end.

And given the huge yet to be discovered potential of the Southeast Sea….:

‘ China National Offshore Oil Corp. estimates the South China Sea may hold about five times more undiscovered natural gas than the country’s current proved reserves, according to the U.S. Energy Information Administration.

China, the world’s second-biggest economy, rejects U.S. involvement in South China Sea matters. While it has said it wants a code of conduct in the waters, it also seeks to resolve territorial disputes on a bilateral basis. It views the other countries as aggressors, accusing them of breaching a previous agreement on operating in the area.’

….it isn’t hard to see what is at stake.

With stakes that high, agreement is a common sense result.

Last but not least, there’s a reference to North Korea’s nuclear ambitions, that seemed to have escalated the tensions in the region, and the US concern and bid to contain it. As far as China’s views are of concern this is abusive on the part of the US. But  Japan, on its part just wants to be able to regain some military weight, after the heavy restrictions of the World War II defeat, which I see as understandable in a world unpredictable and with danger where we don’t expect! Shivering….Biden tell us that everything will just be economic and diplomatic…..peaceful diplomacy. The world hopes he is right and successful….