The French weekly L’Express recently
carried an article entitled China’s records in the eyes of foreigners.
Rather than commenting editorially, it merely spelt out certain statistics which simply speak for themselves.
Please allow me to summarise some of the findings of the French magazine:
• China has a population of 1.3 billion. One of every five persons on the planet is Chinese.
• It has 20 cities with a population of over five million.
• China’s imports are expected to reach $1 trillion by 2010.
• Shanghai is not only China’s largest city but the GDP of the Shanghai region is equivalent to that of Brazil.
• Since 2000 some 200 million of the rural population have left the countryside and settled in the cities. Another 300 million are expected to do so by the year 2030.
• Foreigners invest about $1billion in China – every week.
• There is one handset made in China of every three sold world-wide.
• In 2003 China sold 10.5 million personal computers. By 2010 China may become the largest PC producer in the world.
• Of every two digital cameras sold worldwide, more than one is made in China.
• By the year 2007 about one third of the global electronic industry will settle in China.
• In 2003 about 20 million Chinese toured overseas. By 2020 the figure may reach 100 million.
• China uses about one quarter of containers used worldwide.
• By 2010 China will become the second largest advertising market in the world, leading Japan and after the US.
• There are 651 TV stations and more than 1,000 radio stations in China.
• Of the global industrial output value, China accounts for about seven per cent. In 20 years this proportion may expand to 25 per cent.
• In 2003, some 2.1 million automobiles were sold in China.
• A new power plant emerges every week in China.
• Wall Mart purchases $15 billion worth of goods from China each year.
• Life insurance in China develops with the fastest speed in the world, recording as it did a 30 per cent growth each year for 10 years. In 2002 the amount of life insurance reached $28 billion.
• (Not surprisingly…) China produces 2.3 billion condoms each year!
• China is the world’s largest producer of aspirin and vitamin C.
Many local politicians have long seen the potential which China offers, both politically and economically, foremost of whom are no doubt former Labour leader Dom Mintoff and President Emeritus Guido de Marco.
There is no doubt that most of the growth in the global economy in the next few years will be concentrated around the twin poles of North America and China.
In effect, China is the Japan of 30 years ago – on a far bigger scale.
Given the size of its domestic market, it is high time that we started thinking strategically about China now.
Our biggest challenge in the coming years is how to capitalise on the growth in China, in a positive sense of the word.
Malta prides itself on being one of the forerunners in establishing diplomatic relations with this friendly and hard-working nation. It is time we tried to translate such good and healthy relations into strong economic links and ties.
Stagflation rears its head again
When I once claimed in Parliament that Malta was experiencing stagflation, former Economic Affairs Minister Prof. Josef Bonnici claimed that I was wrong and completely off-target.
The way things have been developing in recent months shows that Malta is undoubtedly experiencing a new bout of stagflation, what with its low and almost negligible rate of growth as well as the fact that it is experiencing a rate of inflation (2.73 per cent) that is far higher than the EU and Eurozone average of 2.2 per cent.
Although Europe’s rather dismal economic indicators are rather stronger than our own, even Europe is being considered to be on the verge of experiencing stagflation in coming weeks.
As Newsweek recently pointed out, although the word “stagflation” might have a dated, 1970s ring to it, it remains fitting since that was the last time that any major developed nation was struck by this painful combination of low growth and high inflation.
According to Karen Lowry Miller, a handful of economists are beginning to worry that this dreaded spectre is looming once again – this time in Europe.
If stagflation is a threat for Europe, there is no doubt that it is nothing but a reality in Malta.
Revisiting budget 2004
In the coming days, parliament will be discussing the measures linked to the budget 2005 and other related pieces of legislation.
We will have ample opportunity to comment on such measures all in good time.
Meanwhile, it might be opportune to revisit budget 2004 for an idea how off-
target the government happened to be. In all fairness, although the budget was penned and presented by Minister Dalli, it is PM Gonzi’s responsibility that certain targets and target dates have not been met, since he appointed himself Finance Minister for most of 2004.
To cite a few examples:
• The economy was expected to grow by 3.5 per cent. It did not.
• Malta will be joining ERM II at the beginning of 2005. There was not even a mention of this strategic decision in the budget although it is unlikely that government will make a move before the end of the first half of the year.
• The manufacturing sector is transforming itself from the roots. The fact that the Minister concerned is planning to restructure Malta Enterprise anew seems to suggest otherwise.
• Trusts legislation will be approved by Parliament at the beginning of 2004. It was only legislated upon towards the end of the year and will only come into effect by the new year.
• The Lm21m increase in VAT revenue will be entirely channelled to the health sector. Was it?
• The increase in VAT will result in a mere one-off hike in inflation of 1.9 per cent. By November, the inflation rate stood at 2.73 per cent – well above the EU 2.2 per cent average.
• Malta Enterprise will ensure that the Technology Venture Fund will operate effectively. It hardly got off the ground at all!
• The shipyards agreement paved the way for the attainment of viability. Is this really so?
• During 2004 productivity in the shipyards will have reached a level whereby it will cover all expenses as well as 30 per cent of wages and salaries. Can Minister Gatt please confirm whether such a target has been attained?
• Certain social benefits which might have been necessary in the past are longer relevant. This might be the only promise that could be kept in future!
• We need to rationalise the plethora of social benefits. Same as above.
• By mid 2004 the pensions reform should be in place. Comments regarding the White Paper are now being welcomed up to end of March 2005.
These are but 12 examples of what could have gone wrong with budget 2004. I am sure that if we dig deeper we will find much more to ponder about.
A positive development in Libyan-Maltese relations
Maltese and Libyan nationals who visit the two countries regularly must have welcomed most positively the recent end-of-year announcement that while Malta will be providing six-month multiple-entry visas, the Libyan government, although initially offering a three-month multiple-entry visa will, once the necessary legal changes are in place, reciprocate in kind by also extending the period of the multiple-entry visa for Maltese nationals to six months.
This was the agreement which we members of the Foreign and European Affairs Committee reached in principle a few months back in Tripoli at the end of our fruitful visit – an accord, the details of which were spelt out by FEAC chairman Jason Azzopardi at a press conference on our return to the island.
I am not saying so out of any boastfulness but merely to underline the usefulness and result-orientation of the committee on which we all proudly serve, on a bipartisan basis. I also want to highlight the warm responsiveness that the Libyan government and authorities showed towards us on that eventful occasion.
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Leo Brincat is the main opposition spokesman on Foreign Affairs and IT