Because they are used to the US veto in the World Bank and IMF based on US having more than 15% of the votes. China has avoided this anomaly in the rules of AIIB.
Chinese Economics Thread
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AssassinsMace
Lieutenant General
They're spinning. Now they're hiding behind democratic principles of one person/one vote. Which makes people believe the World Bank, the IMF, ADB operate that way. It's just like how people believe under the British, Hong Kong had democracy that China took away. Or how people put the blame on other countries for outsourcing when that's a decision completely 100% of their own countries' corporations. People would rather believe that's the truth. That the power behind it. The alternative is an admission that they live under lies.
solarz
Brigadier
I've just browsed a few more articles that also contain the "veto" headline. Nothing in the content of those articles actually explain how China has an "effective veto", they just say "biggest shareholder = effective veto".
No, it's not. Unless there is a rule at the AIIB that requires 71% approval for any decision, and there is nothing that says there will be, 30% is not a veto. In fact, Chinese sources indicate that AIIB structure is still under deliberation, and that the goal is to achieve unanimity.
It seems like the MSM can get away with printing blatantly false headlines, as long as it's about China.
AssassinsMace
Lieutenant General
It basically comes down to how they don't like how China has the largest say. That's what they spin as a veto. It's no different from Parliament where even the largest bloc may not have a majority but they have to lobby others which may not include everyone to get a vote passed. India has the 2nd largest share so China can lobby them alone and no one else for a majority. They're just trying to manipulate it that everyone but China gets a veto. Like the US can control the EU just by lobbying one country to go against and it all falls apart.
I've read articles that leave out that China is coughing up most of the money. Hiding that fact makes it look like China unfairly has more power than it should under the lie that every country evenly contributes.
I've read articles that leave out that China is coughing up most of the money. Hiding that fact makes it look like China unfairly has more power than it should under the lie that every country evenly contributes.
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Blackstone
Brigadier
Newsweek framed China's 30% as a de facto veto, simply it has the largest block of votes and it's influence extends beyond simply vote shares. My point is the public isn't well served by media organizations framing news for their own agenda, instead of reporting straight news. "Just the facts, ma'am" is uncommon in journalism.
Embracing China's "New Normal"
Why the Economy Is Still on Track
By Hu Angang
It is clear by now that China’s economy is set to slow in the years to come, although economists disagree about how much and for how long. Last year, the country’s GDP growth rate fell to 7.4 percent, the lowest in almost a quarter century, and many expect that figure to drop further in 2015. Plenty of countries struggle to grow at even this pace, but most don’t have to create hundreds of millions of jobs over the next decade, as China will. So understandably, some experts are skeptical about the country’s prospects. They argue that its production-fueled growth model is no longer tenable and warn, as the economist Paul Krugman did in 2013, that the country is “about to hit its Great Wall.” According to this view, the question is not whether the Chinese economy will crash but when.
Such thinking is misguided. China is not nearing the edge of a cliff; it is entering a new stage of development. Chinese President Xi Jinping has called this next phase of growth the “new normal,” a term that Mohamed El-Erian, the former CEO of the global investment firm PIMCO, famously used to describe the West’s painful economic recovery following the 2008 financial crisis. But Xi used the phrase to describe something different: a crucial rebalancing, one in which the country diversifies its economy, embraces a more sustainable level of growth, and distributes the benefits more evenly. The new normal is in its early stages now, but if Beijing manages to sustain it, China’s citizens can count on continued growth and material improvements in their quality of life. The rest of the world, meanwhile, can expect China to become further integrated into the global economy. The Chinese century is not at the beginning of the end; it is at the end of the beginning.
FOLLOWER TO LEADER
Understanding China’s new normal requires some historical context. As a latecomer to the modern economy, China has followed what one could call a “catch-up growth” model, which involves rapid economic growth following years of lagging behind. From 1870 to 1913, for example, the U.S. economy followed precisely this path, growing at an average rate of four percent. Between 1928 and 1939, Russia’s GDP grew at an average rate of 4.6 percent. And from 1950 to 1973, Japan’s economy grew at an average rate of 9.3 percent. Yet none of those countries came close to matching China’s record from 1978 to 2011: an average GDP growth rate of nearly ten percent over 33 years.
This ascent has helped China’s economy approach, and perhaps even surpass, that of the United States. In terms of purchasing power parity, a measure economists use for cross-country comparisons, China’s GDP surpassed that of the United States in 2010 or 2014, depending on whether one relies on historical statistics from the Maddison Project or data from the World Bank’s International Comparison Program. Yet if one relies on the World Bank Atlas method, China’s economy won’t likely outgrow the United States’ until 2019. And China’s GDP still trails that of the United States if calculated using current U.S. dollars. But the best method for comparing the two economies objectively is power generation, since it is physical and quantifiable. It also closely tracks modernization; without electricity, after all, or at least without a lot of it, one can’t run factories or build skyscrapers, which is exactly what China has been doing. In 1900, China generated 0.01 percent of the power the United States did. That figure rose to 1.2 percent in 1950 and 34 percent in 2000, with China surpassing the United States in 2011. In this respect, China has caught up.
China’s rise has also brought massive benefits to the country’s population, although here there is obviously much more to be done. With a population more than four times as large as that of its closest economic competitor, China won’t likely match even half the United States’ GDP per capita until around 2030. To be sure, the country has made major strides in other areas. Its average life expectancy (around 76 years) is nearing the United States’ (around 79 years). Educational levels in the two countries are comparable. And measured by the Gini coefficient, economic inequality in China may now be lower than it is in the United States. Yet since 1979, most of the windfall from China’s rise has accrued mainly to those who live in urban or coastal areas. Realizing Beijing’s ultimate development goal—“common development and common prosperity”—will require not only more sustainable growth but also more evenly distributed gains.
SLOWER BUT STEADIER
To a certain extent, China’s latest slowdown was inevitable. Three decades of breakneck growth have left China with an economy that is simply massive, making marginal increases in size all the more difficult. Even measured using current exchange rates, Chinese GDP exceeded $10 trillion in 2014, which means that growing by ten percent would amount to adding $1 trillion to the economy after one year, a sum greater than the entire GDP of Saudi Arabia, which is among the world’s largest economies. Growth on this scale was bound to become unsustainable at some point. It essentially requires an unlimited supply of energy and puts enormous stress on the environment. China already emits more carbon into the atmosphere than the United States and the EU combined, and its emissions are still increasing.
Given all this, China has little choice but to pare back. Although a seven percent growth rate is still high in comparison to most economies of the world, it will reduce China’s demand for basic inputs, whether coal or clean water, to more manageable levels. It will also allow China to finally address its contribution to global climate change, in part by making good on the U.S.-China Joint Announcement on Climate Change, a 2014 agreement that requires China to begin reducing its carbon emissions by no later than 2030. Thanks to slower growth and a host of new energy-conservation policies, China will likely reach that target well ahead of time.
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The more integrated China’s economy becomes, the more it will act as a global stabilizer, just as it did following the 2008 financial crisis. It was Beijing’s aggressive stimulus plan that arguably contributed the most to the global recovery after the crisis hit. By ensuring that China kept its growth rate at over nine percent, Beijing helped turn negative global growth positive. China will continue to serve this role moving forward, but it will also act through more formal channels, mainly international financial institutions, such as the World Bank and the International Monetary Fund, to reform the international financial order in ways that benefit developing countries.
REUTERS / ED JONES / POOL
Xi Jinping at the Great Hall of the People in Beijing, December 2012.
As China increases its economic lead, it will inevitably be called on to assume greater global responsibilities. But in many ways, Beijing is already stepping up, knowing full well that the success of China’s next stage of development depends as much on the wider world as it does on China itself. China can’t thrive without a balanced, rules-based global order, and so the country will continue to advocate for the liberalization of trade, the end of protectionism everywhere, regional cooperation, and a system of global governance more representative of developing countries. The new normal, in this sense, is about building a China strong enough not only to hold its own but also to help others.
Blackstone
Brigadier
Hollywood does very well in China, and recent releases have made truckloads of money. A story on China's foreign film blackouts say only Chinese movies are shown from mid-June to end of July, in order to promote domestic films. Are CCP officials making a mistake? It seems to me the best way to innovate and improve your own products is to compete in the marketplace, with your customers as final arbiters. If they prefer your competitors' products, then you need to improve your goods and build a better mouse trap. Artificial barriers isn't the way to go, with the exception of protecting infant industries and giving them time to become competitive.
China Box Office: 'Jurassic World' Grabs $100M As Blackout Looms
China Box Office: 'Jurassic World' Grabs $100M As Blackout Looms
Equation
Lieutenant General
Does Hollywood corporation "artificial barriers" show Chinese made films?