overshot the mark made in china

1 Min ReadThe .38 calibre handgun used by Mark David Chapman to kill John Lennon, December 8, 2005. A bad-tempered French manager of a factory in China overshot the mark at a meeting when he pulled out a pistol and shot the ceiling, state media said on Wednesday. REUTERS/Chip East

BEIJING (Reuters) - A bad-tempered French manager of a factory in China overshot the mark at a meeting when he pulled out a pistol and shot the ceiling, state media said on Wednesday.

The manager, referred to only as Pierre by the China Daily, became enraged over a Chinese woman colleague’s refusal to approve an overtime payment for an assistant, the newspaper said.

“Several employees said the French manager was overbearing and moody and had a very bad temper,” the newspaper said, quoting a reporter for the South Metropolis Daily, who said this was not the first time Pierre had drawn his pistol and fired.

“Any foreigner found in possession of a pistol is liable to be detained and fined, or even deported,” the newspaper quoted a professor with Guangdong Police College as saying.

China’s Central Committee for Financial and Economic Affairs, led by President Xi Jinping,recently promised to“adjust excessive incomes”and to“encourage high-earning people and companies to play a bigger part in paying back to the society,” all in the name of promoting “common prosperity.”

Liu Hui"s π algorithm was invented by Liu Hui (fl. 3rd century), a mathematician of the state of Cao Wei. Before his time, the ratio of the circumference of a circle to its diameter was often taken experimentally as three in China, while Zhang Heng (78–139) rendered it as 3.1724 (from the proportion of the celestial circle to the diameter of the earth, 92/29) or as π

Liu Hui remarked in his commentary to π must be greater than three. He went on to provide a detailed step-by-step description of an iterative algorithm to calculate π to any required accuracy based on bisecting polygons; he calculated π to between 3.141024 and 3.142708 with a 96-gon; he suggested that 3.14 was a good enough approximation, and expressed π as 157/50; he admitted that this number was a bit small. Later he invented an ingenious quick method to improve on it, and obtained π ≈ 3.1416 with only a 96-gon, with an accuracy comparable to that from a 1536-gon. His most important contribution in this area was his simple iterative π algorithm.

"Multiply one side of a hexagon by the radius (of its circumcircle), then multiply this by three, to yield the area of a dodecagon; if we cut a hexagon into a dodecagon, multiply its side by its radius, then again multiply by six, we get the area of a 24-gon; the finer we cut, the smaller the loss with respect to the area of circle, thus with further cut after cut, the area of the resulting polygon will coincide and become one with the circle; there will be no loss".

"Between a polygon and a circle, there is excess radius. Multiply the excess radius by a side of the polygon. The resulting area exceeds the boundary of the circle".

In the diagram d = excess radius. Multiplying d by one side results in oblong ABCD which exceeds the boundary of the circle. If a side of the polygon is small (i.e. there is a very large number of sides), then the excess radius will be small, hence excess area will be small.

"Multiply the side of a polygon by its radius, and the area doubles; hence multiply half the circumference by the radius to yield the area of circle".

When N → ∞, half the circumference of the N-gon approaches a semicircle, thus half a circumference of a circle multiplied by its radius equals the area of the circle. Liu Hui did not explain in detail this deduction. However, it is self-evident by using Liu Hui"s "in-out complement principle" which he provided elsewhere in The Nine Chapters on the Mathematical Art: Cut up a geometric shape into parts, rearrange the parts to form another shape, the area of the two shapes will be identical.

Thus rearranging the six green triangles, three blue triangles and three red triangles into a rectangle with width = 3L, and height R shows that the area of the dodecagon = 3RL.

In general, multiplying half of the circumference of a N-gon by its radius yields the area of a 2N-gon. Liu Hui used this result repetitively in his π algorithm.

From here, there is now a technique to determine m from M, which gives the side length for a polygon with twice the number of edges. Starting with a hexagon, Liu Hui could determine the side length of a dodecagon using this formula. Then continue repetitively to determine the side length of an icositetragon given the side length of a dodecagon. He could do this recursively as many times as necessary. Knowing how to determine the area of these polygons, Liu Hui could then approximate π.

He never took π as the average of the lower limit 3.141024 and upper limit 3.142704. Instead he suggested that 3.14 was a good enough approximation for π, and expressed it as a fraction 157

Liu Hui carried out his calculation with rod calculus, and expressed his results with fractions. However, the iterative nature of Liu Hui"s π algorithm is quite clear:

in which m is the length of one side of the next–order polygon bisected from M. The same calculation is done repeatedly, each step requiring only one addition and one square root extraction.

counting rods. Liu Hui discovered a shortcut by comparing the area differentials of polygons, and found that the proportion of the difference in area of successive order polygons was approximately 1/4.

Liu Hui was quite happy with this result because he had acquired the same result with the calculation for a 1536-gon, obtaining the area of a 3072-gon. This explains four questions:

Why he stopped short at A192 in his presentation of his algorithm. Because he discovered a quick method of improving the accuracy of π, achieving same result of 1536-gon with only 96-gon. After all calculation of square roots was not a simple task with rod calculus. With the quick method, he only needed to perform one more subtraction, one more division (by 3) and one more addition, instead of four more square root extractions.

Why he preferred to calculate π through calculation of areas instead of circumferences of successive polygons, because the quick method required information about the difference in areas of successive polygons.

That famous paragraph began with "A Han dynasty bronze container in the military warehouse of Jin dynasty....". Many scholars, among them Yoshio Mikami and Joseph Needham, believed that the "Han dynasty bronze container" paragraph was the work of Liu Hui and not Zu Chongzhi as other believed, because of the strong correlation of the two methods through area calculation, and because there was not a single word mentioning Zu"s 3.1415926 < π < 3.1415927 result obtained through 12288-gon.

Liu Hui"s π algorithm was one of his most important contributions to ancient Chinese mathematics. It was based on calculation of N-gon area, in contrast to the Archimedean algorithm based on polygon circumference. With this method Zu Chongzhi obtained the eight-digit result: 3.1415926 < π < 3.1415927, which held the world record for the most accurate value of π for 1200 years; even by 1600 in Europe, the Dutch mathematician Adriaan Anthonisz and his son obtained π value of 3.1415929, accurate only to 7 digits.

Yoshio Mikami said about the work of Zhao Yu Xin:"The sides and consequently the perimeters of these polygons are successively calculated in such a manner as followed by Liu Hui of old", p136, Development of Mathematics in China and Japan

Needham, Joseph (1986). Science and Civilization in China: Volume 3, Mathematics and the Sciences of the Heavens and the Earth. Taipei: Caves Books, Ltd.

From the early 1980s until now China has grown at a pace not matched since the four decades Argentina enjoyed before the First World War. In spite of some fairly goofy attempts a few years ago, however, to characterize China during this period as having followed a set of policies called the “Beijing Consensus”, these decades did not involve a unified set of policies, or a set of related polices, that Beijing implemented consistently. It is far more useful, I would argue, to think about the past 3-4 decades as consisting of four very different periods, the last of which we are, with great difficulty, just starting.

The idea of a Beijing Consensus has probably help to prevent or postpone an understanding of the vulnerabilities in the current growth model and the steps China must take to address these vulnerabilities. Among other things this confusion made China’s nearly four decades of growth seem far more exceptional than it was, and so created the very lazy belief among analysts that there are no historical precedents that can guide us in understanding the strengths and the vulnerabilities of China’s economic trajectory.

Pettis, an expert on China’s economy, is professor of finance at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets.

Before explaining why China’s growth trajectory can best be understood by separating out these different periods I want to re-introduce the idea of social capital, a topic about which I wrote last year. As I use the phrase, social capital is the set of institutions – including the legal framework, the financial system, the nature of corporate governance, political practices and traditions, educational and health levels, the structure of taxes, etc. – that determine the way individuals are given incentives to create value with the tools and infrastructure that they have.

In a country with highly developed social capital, incentive structures are aligned and frictional costs reduced in such a way that agents are rewarded for innovation and productive activity. The higher the level of social capital, the more likely they are to act individually and creatively to exploit current economic conditions and infrastructure to generate productive growth.

It is a hard concept to explain precisely and to quantify, but the idea of differing levels of social capital helps explain why, for example, French entrepreneurs (not to mention Indian, Chinese, Mexican and Nigerian) are more likely to create successful tech startups in the US or the UK than at home, or why it is easier to start a business in Sidney than in Beijing, or why technological innovation is not evenly spread out among countries, even among countries at similar development levels, but rather tends to cluster in a few areas in a few countries where tech entrepreneurs seem to believe that their work is made easier and the rewards greater.

Developed countries are rich because they have higher levels of social capital than backward countries, and not, as is sometimes believed, because they have abundant capital stock. On the contrary, rather than the cause of wealth, abundant capital stock should be, but isn’t always (China may be an example), a consequence of abundant social capital. The resulting higher level of worker productivity makes it easier to justify additional infrastructure that saves the time and labor of productive workers. A high level of capital stock is a “symptom” of wealth, not a cause.

In developed countries, in other words, abundant social capital encourages residents and businesses to use available conditions and infrastructure in the most productive ways possible. Undeveloped countries, on the other hand, are poor because they do not have the often-intangible qualities that allow citizens spontaneously, and without planning, to exploit their economic and infrastructure resources most efficiently and productively.

A developing country needs to implement two sets of policies if it is to succeed in advancing to the developed stage. One set is pretty obvious. These are policies aimed at directly improving the environment under which businesses operate – by giving them the resources they need, such as good infrastructure, capital, and an educated work force.

The second set is much harder to prescribe and is aimed at improving social capital precisely so that individuals and businesses can use these resources efficiently and productively. These reforms involves creating productive incentive structures, robust and efficient legal systems with predictable enforcement, financial systems that allocate capital productively, limited political and elite interference in the wealth-creation process, limited rent seeking, clarity and ease in the ability to create businesses or otherwise create economic value for society, etc. It is perhaps worth noting that in every country, reforms that build social capital are likely to be highly idiosyncratic, and dependent on that country’s particular culture and history, which may explain why grand development theories applied uniformly to different countries never seem to work outside their country of origin.

To understand the challenges that face China today it is necessary to understand how these two sets of policies have very different political economy implications. Because the first set of policies often involves the allocation of resources from the center, it tends to receive tremendous support from a rent-capturing elite, and because these policies benefit the elite, this support tends to be self-reinforcing. The more the policies are implemented, the better for the elite, which in turn increases their power, which creates stronger support for the policies.

The second set of policies are much more difficult to implement because they often or usually require a dismantling of the distortions and frictions that create rent for the elite, thus the undermining the ability of the elite to capture a disproportionate share of the benefits of growth. A financial system that allocates capital efficiently and productively, for example, is not one that allocates capital on the basis of power or access. A fair, clear, and predictable legal system is not one in which some groups are privileged relative to others. If anyone can start a business, the benefits of monopoly or oligopoly are undermined.

The kinds of liberalizing reforms that increase social capital, consequently, are likely to be unpopular with the elites that have benefitted from their absence, unless perhaps the resulting or accompanying surge in wealth or productivity is great enough to allow elites to benefit even as their share of the benefits declines. This might be one reason why, as I discuss in my book, The Volatility Machine, that throughout modern history developing countries often seem to embark on liberalizing economic reforms only during periods of great international liquidity, when money is flowing into risky ventures like high technology, real estate, and developing countries.

While the liberalizing reforms usually undermine the ability of the elite to capture a disproportionate share of growth, in other words, because the reforms often seem to encourage massive foreign capital inflows, and these push up the price of assets largely controlled by the elite, political opposition to the reforms is weakened. If this is true, by the way, it means that attempts at implementing liberalizing reforms are successful mainly during periods of great global liquidity, and this might have implications for China, especially if over the next few years global central banks begin to withdraw the huge liquidity injections that have underpinned asset bubbles around the world.

With that lengthy preamble, let me return to China’s recent economic history. As I see it, the four periods that characterize China’s long growth spurt can be described this way:

The first liberalizing period. In the late 1970s and early 1980s Beijing forced through a series of liberalizing reforms that I would characterize as aimed at building social capital. By eliminating laws that severely constrained the ability of Chinese to behave productively, these reforms unleashed an explosion of economic activity that generated tremendous wealth creation. It became legal, for example, for Chinese to produce and sell as individuals, not just through the relevant and usually badly managed state-controlled collectives or organizations. A limited number of farmers were allowed to keep anything they produced above some quota, and agricultural yields doubled almost immediately. If a man believed there was a shortage of bricks in his town, he could create a company to manufacture bricks, and China’s hopeless jumble of soaring brick inventories in one part of the province matched by severe brick shortages nearly everywhere else was replaced with a system in which the more efficiently you made and delivered bricks, the richer both you and the country became.

But the implementation of the reforms was not easy. It undermined a very powerful party structure (not to mention the managers of the old state-controlled brick manufacturer) that had been built up over the previous three decades around the ability of its members to constrain and direct economic activity, and so these reforms met with powerful elite resistance. It was only, I would argue, because of the credibility, prestige, and power that Deng Xiaoping and the men around him had, and the loyalty they had built within the PLA, that Beijing was able to overcome elite resistance and successfully implement the reforms. Even in the 1990s, Deng struggled with elite opposition and my understanding is that his famous 1992 Southern Tour was arranged mainly to outflank and defeat provincial opposition to continued economic liberalization.

The “Gershenkron” period. As Chinese productive activity swelled it soon began, however, to run into infrastructure and capacity constraints. This began the second phase of China’s astonishing growth, one characterized by the marshalling of domestic resources to fund an investment boom aimed at creating infrastructure and capacity. Like the many previous examples of investment-driven growth miracles, China embarked on a program to resolve the major constraints identified by Alexander Gershenkron in the 1950s and 1960s as constraining backward economies: a) insufficient savings to fund domestic investment needs, which had to be resolved by policies that constrained consumption growth by constraining household income growth, and b) the widespread failure of the private sector to engage in productive investment, perhaps because of legal uncertainties and their inability to capture many of the externalities associated with these investments, which could be resolved by having the state identify needed investment and controlling and allocating the savings that were generated by resolving the savings constraint.

Because China’s infrastructure was far below its ability to absorb and exploit infrastructure efficiently and productively (its social capital exceeded its physical capital, in other words), it was relatively easy for the central authorities to identify productive investment projects, and as they poured money into these projects, the result was another surge in wealth creation from the early 1990s to the early 2000s. Although all Chinese benefitted from this wealth creation, the new elite benefitted disproportionately, in large part because of the constraints imposed on the growth of household income aimed at generating higher savings. Of course over time these new elites became politically entrenched. This elite today is famously referred to (in China) as the “vested interests”.

Investment overshooting. But China was still an undeveloped economy with “backward” (in Gershenkron’s sense) social, legal, financial and economic institutions that sharply constrained its citizens from achieving the levels of productivity that characterize developed countries. Its social capital was still very low, in some cases perhaps even as a partial consequence of policies that had led to the earlier rapid investment-led growth by allowing elites to control access to cheap capital, land, and subsidies. As investment surged, China’s physical capital converged with its social capital (i.e. its infrastructure more or less converged to its ability to exploit this infrastructure productively), after which additional physical capital was no longer capable, or much less so, of creating real wealth.

Instead, continued rapid increases in investment directed by the controlling elites (especially at the local and municipal levels) created the illusion of rapid growth. Because this growth was backed by even faster growth in debt, however, it was ultimately unsustainable. This period began around the beginning of the last decade, I would argue, and it is the period in which we currently find ourselves.

The second liberalizing period. What China needs now is another set of liberalizing reforms that cause a surge in social capital such that Chinese individuals and businesses have incentives to change their behavior in ways that generate greater productive activity from the same set of assets. These must include changing the legal structure, predictably enforcing business law, changing the way capital is priced and allocated, and other factors that determined the incentives, so that Chinese are more heavily rewarded for activity that increases productivity and penalized, or at least less heavily rewarded, for rent seeking.

But because this means almost by definition undermining the very policies that allow elite rent capturing (preferential access to cheap credit, most importantly), it was always likely to be strongly resisted until debt levels got high enough to create a sense of urgency. This resistance to reform over the past 7-10 years was the origin of the “vested interests” debate.

Most of the reforms proposed during the Third Plenum and championed by President Xi Jinping and Premier Li Keqiang are liberalizing reforms aimed implicitly and even sometimes very explicitly at increasing social capital. In nearly every case – land reform, hukou reform, environmental repair, interest rate liberalization, governance reform in the process of allocating capital, market pricing and elimination of subsidies, privatization, etc – these reforms effectively transfer wealth from the state and the elites to the household sector and to small and medium enterprises. By doing so, they eliminate frictions that constrain productive behavior, but of course this comes at the cost of elite rent-seeking behavior.

Because of rapidly approaching debt constraints China cannot continue what I characterize as the set of “investment overshooting” economic polices for much longer (my instinct suggests perhaps three or four years at most). Under these policies, any growth above some level – and I would argue that GDP growth of anything above 3-4% implies almost automatically that “investment overshooting” policies are still driving growth, at least to some extent – requires an unsustainable increase in debt. Of course the longer this kind of growth continues, the greater the risk that China reaches debt capacity constraints, in which case the country faces a chaotic economic adjustment.

Beijing must therefore embark as quickly and forcefully as possible upon what I have characterized as “second liberalizing period” economic policies, which in a sense means a return to the “first liberalizing period” reform style of the 1980s. There is by the way no longer much confusion over what these policies entail. Beijing knows more or less, perhaps a little later than optimal, exactly what must be done, although the sequencing of reforms is more controversial, and the proof that it understands the relevant issues is that the Third Plenum clearly and explicitly addressed the relevant issues head on, proposing at the end exactly the kinds of policies we would have expected if China is to embark on a new set of policies aimed at driving sharp increases in social capital.

The problem for China, of course, and as I think nearly everyone understands, is to implement these liberalizing reforms well before the country starts to bump up against its debt capacity constraints. Xi’s administration must do this against what is likely to be ferocious resistance from those who have benefitted enormously from constraints on Chinese productivity growth, and who consequently stand to lose the most from real reform.

I would argue that this is exactly what President Xi seems to be doing, and why even before he was formally in power he sought to consolidate power, undermine and frighten potential opposition, strengthen his relationship with the military, and unify the country’s policymakers behind the need for reforms. This may also be why PBoC Governor Zhou – who was among the first senior policymakers, I believe, to recognize the urgent need for China to rebalance economic growth away from the current debt-addicted model – seems to be among the key economic decision-makers.

Unless President Xi is successful in consolidating power and control over economic assets, an abundance of historical precedents suggests that he is unlikely to overcome powerful elite resistance. If he is successful – and for now I am cautiously optimistic that he will pull it off – he will be in a position to implement the urgently needed liberalizing reforms that will push China onto its next stage of sustainable productivity growth, in which case he is likely to be hailed as China’s greatest leader since Deng Xiaoping – and for many of the same reasons.

Perhaps not everyone in Beijing understands, however, that this will happen only after a difficult and probably long adjustment period, during which GDP growth rates, although not necessarily household income growth rates, must fall far more than they already have, for reasons I have discussed elsewhere. This matters to the long-term success of China’s reforms, because sharply slowing growth may revive or unify political opposition.

In fact I suspect the reason credit growth in the past year or two has not slowed nearly as sharply as it should, or as sharply as required by the economic analysis implicit in the Third Plenum reform proposals, is precisely because of the expected impact of meaningful credit constraint on GDP growth. Any attempt to rein in credit will sharply reduce GDP growth, and there is of course likely to be a positive correlation between lower growth and a stronger and more unified opposition. Xi must take steps to slow growth, but he might not yet be able to do so.

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Typically, access is provided across an institutional network to a range of IP addresses. This authentication occurs automatically, and it is not possible to sign out of an IP authenticated account.

Choose this option to get remote access when outside your institution. Shibboleth / Open Athens technology is used to provide single sign-on between your institution’s website and Oxford Academic.

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NEW YORK -- Oaktree Capital Management co-founder Howard Marks anticipates more opportunities for the firm"s mainstay business of investing heavily in discounted distressed debt. During the debt crisis of developer China Evergrande Group, he captured two prime assets taken as collateral.

But the Russian invasion of Ukraine has made the future of Chinese investments a bit uncertain. Marks, a co-chairman at Oaktree, stressed in an interview with Nikkei that he is optimistic but warned of disappointing results if Beijing sides with Moscow. He is particularly wary of the possible negative impact on Sino-American relations.

Country overshoot days are published on January 1st of each year. In order to meet this publication deadline, the 2023 country overshoot days were calculated in December 2022 using the 2022 edition of the National Footprint and Biocapacity Accounts, which was the latest edition available at the time. The 2022 edition data stretches from 1961 to 2018. This is due to a three to four-year lag between the latest data-year and the latest edition year as a result of the UN’s reporting process. Additionally, time is needed to assemble the accounts.

Let’s take Swiss Overshoot Day as an example. Its 2023 overshoot day is based on the latest (2018) available results from the 2022 edition of the National Footprint and Biocapacity Accounts:

Not all countries will have an overshoot day. By way of the country overshoot equation above, a country will only have an overshoot day if its Ecological Footprint per person is greater than global biocapacity per person (1.6 gha). Countries with an Ecological Footprint per person that is less than global biocapacity per person (1.6 gha) and which do not have an overshoot day are listed as “none” in the table below. In leap years, we calculate the date based on a 366 day-long year, rather than the usual 365.

China’s prompt withdrawal of its troops and armour from the eastern part of the grey zone around Pangong lake between the Indian and Chinese defined Lines of Actual Control has confirmed the hypothesis advanced in several previous columns on this platform, that its purpose, from the start, was not to nibble Indian territory away in small slices but to force the Modi government to reconfirm India’s commitment to the agreements on Peace and Tranquility in the Border region arrived at in 1993 and 2005.

But, why should China be so intent upon re-establishing a durable peace with India, when this sentiment is clearly not reciprocated by either the Modi government or the Indian populace? The short answer is that China needs the backing of India’s ‘soft power’ to prevent the intensifying struggle for hegemony between it and the United States from spilling over into a war from which no one, least of all China itself, will emerge as a winner.

China also covets deeper economic engagement with India, because, after the end of its Fiscal Stimulus programme, it needs to find new avenues of investment to keep its factories busy and workers employed. India can provide both.

But most defence analysts in India discount these motives and have swallowed the Western view of China as a relentlessly expansionist power bent upon reshaping the international order and establishing its hegemony over the Asia-Pacific, if not the whole world.

However, two books published a year before its May incursion can help us to do get a better view of its motives. The focal point of both is the Belt Road Initiative (BRI),but one looks at China’s motives for establishing it from inside outwards, while the other does the opposite.

Bruno Macaes’ Belt and Road:A Chinese World Ordersuggests that these lie in China’s attempts to avoid the “middle income trap” that, many economists believe, develops when rapidly industrialising, export-led, economies move from the early, low-income phase of their industrialisation to its middle-income phase.

The BRI, the China-Pakistan Economic Corridor (CPEC), and its ports in and around the Indian Ocean are not therefore offensive but defensive projects, designed to safeguard the international trade that is the source of its growing wealth.

By contrast, Bertil Lintner’s book, The Costliest Pearl: China’s Struggle for the Indian Ocean,examines the tectonic shocks that China’s growing involvement with the littoral states of the Indian ocean under the banner of the BRI is giving to the settled structure of power in the region.

Both books throw much-needed light on China’s motives, but do so from polar opposite directions. 2013 is the pivotal year in both books because it is the year in which the concerns of the West about China’s growing hegemonistic ambitions began to take concrete shape.

Belt and Road: A Chinese World Order (L) by Bruno Macaes’ and The Costliest Pearl: China’s Struggle for the Indian Ocean(R) by Bertil Lintner. Illustration: The Wire/Penguin Viking/Context.

Early in that year, Xi Jinping became the President of China. In the same year, he announced the creation of a Belt and Road, Maritime Silk Road that involved building a string of ports in the Indian Ocean. 2013 was also the year in which the first Chinese nuclear submarine entered the Indian ocean, and when China decided to lease a tract of land in Djibouti and build a naval base there, to support its anti-piracy task force in the Arabian Sea.

The base was built in a record period of two years and became operational in 2016. Since then a Chinese anti-piracy task force has been paying about 10 visits to the port every year but has kept a low profile. Chinese submarines have also made seven more such sorties till 2018, and visited Sri Lanka and Gwadar in Pakistan on two of those occasions.

Today there are seven such ports/container terminals being constructed, or on the drawing boards, in the immediate vicinity of India: two in Malaysia, one each in Myanmar and Bangladesh (Chittagong). Two in Sri Lanka (Hambantota and a container terminal at Colombo) and one in the Maldives on Gan island in the far south.

In addition, China has taken up four ports and container terminal construction projects in the Red Sea, and six more down the East coast of Africa in addition to Djibouti, through Kenya and Tanzania to Mozambique and Madagascar. In all, therefore China is now involved in 18 major port and railway construction projects around the Indian Ocean.

What brought about this sudden change in 2013? Lintner is content to give a one-sentence answer: It is China’s overweening desire to “bolster its geo-strategic influence” in the region. This is an uncritical acceptance of what Germany, France and the US (but not the UK) have categorically declared the BRI to be.  Xi Jinping’s lineage — his being the son of a Long March General — fits neatly into the formers’  construction of him as a new Mao Zedong.

Bruno Macaes’ answer is more fine-grained: the BRI, according to him, has been born out of China’s need to safeguard, and expand, the structure of trade relations that it has built since the 1990s, and upon which its internal stability and prosperity now rests. This need has become especially acute since China’s growth began to slacken in 2011. Macaes attributes this to its having, in per capita income terms,  entered the “middle income trap”.

The middle-income trap is the stage of growth in which rising labour costs start pushing export-led economies out of the most labour intensive sections of the global production chain and forcing them into entering the more technology-intensive middle sections where technology becomes a more and more important component of the final product.

The BRI is an attempt to create the infrastructure that China will need in order to move progressively up this chain of production. His chapter on this issue gives the best insight into Chinese thought upon the evolution of its role in the 21st century world, that I have read.

In his analysis, Macaes implies China became fully aware of the middle-income trap only when wage rates rose by 12% a year from 2009 till 2013. This is what trigged the attempt to move up the production chain, which is at the base of the BRI.

His explanation resolves several of the anomalies that the hawks in the strategic analysis community are unable to explain above all its universality of focus: even the 24 projects in the Indian Ocean and the Red sea mentioned earlier, and the three giant railway networks it is building across Central Asia are only a part of the Chinese global outreach, for there are another 60 port and rail/road projects spread across Latin America, Europe and the Mediterranean, of which five are in the USA.

But Macaes’ analysis is incomplete because it does not explain the timing of Xi Jinping’s announcement of the One Belt One Road initiative, (as the BRI was originally called), and his hurry to make it only months after coming to power.

China did not descend into the middle-income trap suddenly, and it certainly was not taken by surprise. As far back as 2002, it had forged a Framework Agreement on Comprehensive Economic Cooperation between the Association for Southeast Asian Nations (ASEAN) and the Peoples Republic of China. Through 15 subsequent refinements, it had hammered out a free trade agreement whose purpose was to source components for their manufactured exports from the cheapest source.

How far this strategy broke the middle-income trap can be judged from the trade data for the first quarter of 2020. In this quarter, it was ASEAN, not the US or the European Union, which became China’s largest trading partner. What is more significant, while its trade with ASEAN as a whole grew by 6%, its trade with Vietnam and Indonesia within ASEAN grew by 24% and 13% respectively. China’s imports from ASEAN, therefore, include products that incorporate cheap labour and those that incorporate sophisticated technology.

The timing of Xi’s announcement was dictated by the fact that when he came to power, China was in the midst of a crisis such as few countries have had to face in recent times:  The Communist party had reached the nadir of its standing with the Chinese people. Coming on top of almost two decades to gradually rising public disenchantment, the Bo Xilai affair had severely damaged its image.

As a result, the Party was about to lose its Mandate from Heaven. As if that was not enough, the economy was in a shambles. Hu Jintao and Wen Jiabao’s 4.3 trillion Yuan fiscal stimulus to counter the impact of the global recession of 2008 had gone completely out of control. In the 27 months of the stimulus from October 2008 till December 2010, the country invested not 4.3 trillion but 24.5 trillion yuan – more than 3 trillion dollars.

China’s production of steel soared to 683 million tonnes in 2011, 45% of the entire world’s output. Newly constructed steel plants had to be moth-balled because there was no demand. The producers resorted to dumping steel on the world market at throwaway prices, incurring the US’ wrath. Under severe US pressure, the Central government cut back 290 million tonnes of this capacity.

Much of the steel produced had gone into construction. As a result, by June 2014, there was 544 million square metres of unsold private housing space, almost half again as much as the space that had been sold till then, in earlier years.

A similar scramble had taken place in the power sector. In the five years from 2009 till 2013, China added 300,000 MW to its coal-based generating capacity, when there was no power shortage in the country. As a result, existing power plants had to reduce their capacity utilisation to below 50% to accommodate the new ones.

When the stimulus finally petered out China’s huge heavy-machine building sector, it found itself virtually without orders. As a consequence, the local governments that owned or partly financed them found themselves not only short of revenue but forced to lay off workers. In China, this is a far more serious issue than in market economies because it strikes at the roots of the legitimacy of the Communist party— at its Mandate from Heaven.

According to China’s National Bureau of Statistics, employment fell by 80 million after the end of the fiscal stimulus. But the number may be higher because a large proportion of its millions of migrant workers also did not get letters of re-employment. One of the  BRI’s main purposes has been therefore to provide the infrastructure projects that could keep these enterprises working and their workers employed.

Its second purpose has been to bring some discipline into China’s investment both at home and abroad. The fiscal stimulus had overshot its mark ruinously because two-thirds of this investment was made by the provincial and prefectural parastatals, with loans obtained from the second tier of banks that had come up after the banking liberalisation of 1998 to 2006, and over which the Central government had little control.

For instance, 190 out of the 290 million tonnes of steel output that China had to cut back had not been authorised by the National Reforms and Development Commission. Xi Jinping was determined to make sure that this did not happen again. That was one of the reasons for his bringing all new projects abroad under the umbrella of the BRI. Only the projects sanctioned by the NRDC could avail of the financial and other assistance that the state was prepared to provide.

Prem Shankar Jha is a Delhi-based former journalist and editor. He is the author of Managed Chaos: The Fragility of the Chinese Miracle, and Crouching Dragon, Hidden Tiger—Can China and India Dominate the West.

Players are not typically expected to take a particularly long time over shots in professional snooker, but Zhou simply could not settle on a decision when in a tricky spot during the final in Belfast.

Zhou, who is not renowned for being a slow player on the World Snooker Tour, saw the shot clock tick past two minutes as he visibly sweated over a tough call at the table, having established a lead of 61-17 and a 2-1 advantage in frames.Welsh Open

"You need to decide," he implored the 24-year-old after the two-minute mark. For context, Mark Selby once famously took six minutes and 13 seconds to play a shot so two minutes is not even close to the longest ever seen.

Scullion repeated the warning to the Chinese player, who then swiftly rushed to take the shot. As it happened, he pulled off a perfectly good safety shot with the cue ball finding its way to baulk.

Eurosport experts Ronnie O"Sullivan and Jimmy White made it clear later in the studio that they were not overly impressed with the referee"s decision to intervene.

It was not the first refereeing controversy of the tournament, as White can speak to, while O"Sullivan also knows about being frustrated by officials.

In the fourth frame of White’s second-round match against Luca Brecel, which he lost 4-0, referee Ben Williams wrongly called which ball The Whirlwind was going for.

Williams laughed at the situation, which White was not at all happy about, so he gesticulated at the official - seemingly waving a finger at the referee - and was given a warning for his actions.

The pair shook hands after the match but White told Williams to “look at the video” footage. White missed his next shot and went on to lose the frame as his run in Belfast came to an end in the last 64. He later shared his side of the story.

“What I was frustrated about is, I’m 3-0 down, this guy [Brecel] is potting balls, I’m trying my best. We’re playing a serious match, this is not an exhibition match. This is not a fun situation. I’m one of the lucky ones. It could be one of the guys out there who is playing for their mortgage.

“All of a sudden I’ve come on the brown in the middle and he’s said ‘blue’. I looked at him and said ‘no, brown’ and he starts laughing. All he’s got to do is turn around and say, ‘Ok, sorry brown’ and we get on with the game.

“But then he thinks I’ve given a gesture which he now realises I didn’t. I’ve got no problem with him. But this is a snooker match, I’m trying as hard as I can to win. I’m one of the lucky ones so financially it doesn’t make a difference to me.”

The Home Nations series is back with the Northern Ireland Open and it is live and exclusive on discovery+. You can also watch Seventh Heaven, a two-part show about Ronnie O’Sullivan’s historic World Championship win last season, on demand now.Welsh Open

The host then started to backtrack telling listeners: "You can"t accuse me of xenophobia. I have a car from South Korea. I have the coolest car ever."

The station issued a statement on Thursday saying: "It is the character of this show and also of the presenter to express his opinion clearly, openly and unvarnished."

A German radio presenter equating the South Korean band BTS with Covid-19, a virus which has killed 2.5M+ & devastated the lives of hundreds of millions, reflects the *age-old* anti-Asian sentiment called “yellow peril.” Anti-Asian racism is a global, historic & systemic issue.— Min Jin Lee (@minjinlee11) February 26, 2021

In his statement, Mr Matuschik said: "I have thought a lot in the past few hours and I understand and accept that I could have racially insulted many of you, especially the Asian community, with my words.

A United Nations report found that there were 1,800 racist incidents against Asian Americans in the US between March and May 2020. It linked the attacks and other incidents to the coronavirus outbreak.

By the year 2020, America is outsourcing virtually all its manufacturing, most of it to China. We depend on them for almost everything we buy and sell; without them, our economy would collapse. That dependence threatens to become fatal when economic war is declared on America by a hostile Chinese government and all products "Made in China" suddenly disappear, cut off at their source. Seattle-based systems engineer Jack Conway fi nds himself the point man for America"s response to China"s embargo. His new position puts him and the woman he loves in extreme danger, as they become the targets of hired hit men in a deadly game of industrial espionage and international intrigue. These ruthless killers will stop at nothing to protect the Chinese agenda. Meanwhile, America faces its greatest challenge since World War II: the revival of the nation"s moribund factories and industries. MADE IN CHINA is an informed look at America"s reaction to economic embattlement; it is also a love story, as two people discover how far they will go not only to protect their country, but to preserve their relationship and the life they hope to share. As America outsources more and more work to foreign soil, Reutlinger gives us a frightening glimpse into the future toward which we may be headed.

Instead of instantly pricing all publicly known information according to the efficient market hypothesis, investors may be influenced by emotional biases such as greed or fear, resulting in stock price overshooting phenomena such as stock price overbought (oversold). Furthermore, we argue that stock price overshooting may not be beneficial to investors. Investors buying stocks with overbought phenomena (i.e., buying stocks at rising prices due to investors" optimistic sentiment likely triggered by further rising higher prices expected) may suffer losses; similarly, investors selling stocks with oversold phenomena (i.e., selling stocks at falling prices due to investors" pessimistic sentiment likely expecting further falling share prices) may suffer losses (Al Janabi et al., 2019). Furthermore, stakeholders and even insiders may profit from such phenomena by selling at an overestimated price or buying at an underestimated price (Cao et al., 2021; Clarke, 2022; Xiao et al., 2022).

Since the number of tourists from Mainland China increased significantly between 2009 and 2015, share prices have risen (e.g., stock price overbought phenomenon), stock price volatility has increased, and the trading volume of tourism and hospitality stocks in Taiwan has increased. Following that, we observed that some of these companies may manipulate their stock prices in order to profit from the occurrence of stock price overbought phenomena, resulting in increased stock price volatility and falling share prices after selling shares at overbought prices as measured by technical indicators such as SOI and RSI (Day et al., 2022; Kamalov, 2020; Ni et al., 2022; Pramudya and Ichsani, 2020).

The phenomena observed above serve as the primary motivation in this study. As a result, we investigate whether the ownership structure of tourism and hospitality companies listed on the Taiwan Stock Exchange (TWSE) influences stock price overreaction manipulation, as share price overshooting frequently occurs for these firms after Chinese authorities relax restrictions on tourists visiting Taiwan.

In addition, given that ownership structure plays an important role in corporate governance (Jiang and Kim, 2020; Kyere and Ausloos, 2021), the theoretical framework for corporate governance is primarily based on agency theory (Amis et al., 2020; Kyere and Ausloos, 2021) to protect investors (Garca Sanchez and Meca, 2018). As a result, corporate governance cannot be overemphasized by any relevant parties (e.g., enterprises, authorities, and investors) today in order to protect the interests of investors.

Furthermore, stock price overshooting can be detected using a variety of technical indicators, including stochastic oscillator indicators (SOI) and the relative strength index (RSI). Thus, we investigate whether overbought (oversold) phenomena defined by SOI and RSI as our proxies, abbreviated as OB-SOI (OS-SOI) and OB-RSI (OS-RSI), all of which are defined in detail in Table 2, occur frequently or rarely in tourism and hospitality firms. Furthermore, the higher the values for these proxies, the greater the overshooting phenomenon experienced by TWSE-listed tourism and hospitality firms. As a result, we are curious about how the function of the ownership structure affects these proxies. Because stocks of tourism and hospitality firms listed on the TWSE exhibit stock price overshooting phenomena more frequently than large-cap stocks, we investigate whether stock price overshooting phenomena as measured by technical indicators, SOI and RSI, for Taiwan hospitality and tourism firms are influenced by the function of ownership structure for such firms. In other words, we attempt to link whether stock price overshooting phenomena are related to corporate governance, which is likely beneficial for selecting tourism firms focusing on the tourism business rather than stock price manipulation, which appears to be rarely explored in relevant studies.

In terms of Taiwan"s tourism and hospitality industry, we argue that it is one of the most forward-thinking industries because Taiwan, which is located on the western edge of the Pacific Ocean, has 9 national parks and 13 national scenic areas to preserve Taiwan"s best natural ecological environment and cultural sites. Taiwan had a record tourist footfall of 11.1 million in 2018, according to the Taiwan Tourism Bureau, and the industry"s growth rate of 3.1% was higher than the Taiwanese economy"s. Moreover, an increase in both overseas tourists to Taiwan (i.e., inbound tourism), particularly Chinese tourists, and Taiwanese tourists visiting other countries would benefit the tourism and hospitality enterprises (i.e., outbound tourism). The number of visitors to Taiwan reaches 10.44 million in 2015, according to Table 1 of the Taiwan Tourism Bureau report, while the number of outbound tourists from Taiwan rises to 13.18 million.

Moreover, the tourism and hospitality industry has great prospects in the Asia Pacific region (Singh, 1997), with potential economic values (Chan et al., 2012; Hassan, 2000; Helgadóttir and Sigurardóttir, 2008; Koh and Kwok, 2017; Lee et al., 2017), and its economic value may not be less than other industries in many countries (Cranmer et al., 2020; Eeckels et al., 2012; Kontogeorgopoulos, 1998; Sugden, 2007). Many countries regard it as a star industry in the twenty-first century. As a result, the TWSE-listed tourism and hospitality firms serve as our investigated targets because we find that share price overreaction occurs frequently for the stocks of such firms, which may be due to an increase in tourists visiting Taiwan from China following the resolution of political tensions after 2008. Furthermore, because share price informativeness, such as stock price overreaction, can be influenced by the function of ownership structure, we investigate whether our new overreaction proxies would be influenced by the ownership structure of such companies in this study.

This research may contribute to the body of knowledge in the following ways. To begin, different from other proxies of firm performance, such as return on asset (ROA), return on equity (ROE), and Tobin"s q that are released quarterly or annually, our proxies would be updated as soon as share prices were released. Because our new proxies for TWSE-listed tourism and hospitality firms are being updated quickly, we may be able to gauge the function of ownership structure quickly. Second, contrary to our perception, we reveal that stock price overbought phenomena may be manipulated by some tourism and hospitality firms, as revealed by directors and managers declining their shareholdings in these firms, implying that these tourism and hospitality firms may have corporate governance issues (i.e. likely focusing on stock price manipulation instead of their tourism business).

The rest of this paper is organized as below. The literature review is surveyed in Section 2. Section 3 introduces the data and methodology adopted. The empirical results and analyses are shown in Section 4. Section 5 provides empirical results with robustness concerns. Concluding remarks are presented in Section 6.

The accuracy of China’s official growth statistics is once again in question. Last week, at the annual “two sessions” conference, Premier Li Keqiang announced that China would reduce its 2019 target for GDP growth to between 6 and 6.5 percent—previously, it was “around 6.5 percent.” That same week, a group of Chinese economists published a paper with the Brookings Institution concluding that China’s official nominal growth rates from 2008 to 2016 were being overstated by as much as 1.7 percent.

The four economists, mostly from the Chinese University of Hong Kong, are the latest in a long line of skeptics from both the West and mainland China. Indeed, controversy has surrounded China’s GDP figures since the late 1990s, when Chinese policymakers guaranteed GDP growth rates of around 8 percent—an impossibility given the turmoil in the region that weighed heavily on export growth, job creation, and energy utilization. In 2007, Li, then party secretary for Liaoning, even admitted to U.S. diplomats that China’s GDP number was “man-made” and “for reference only.” He relied instead on alternative figures, such as electricity consumption, railway freight, and bank loans—what became the aptly named “Li Keqiang index.” More recently, in December 2018, the Renmin University economics professor Xiang Songzuo publicly disclosed that some Chinese government research groups had found that last year’s growth, reported to be 6.6 percent, was actually 1.67 percent, or even negative.

There are three main reasons for the skepticism. First, the quality of national GDP data has historically been compromised by inflation in the provincial data. Since economic performance is a prerequisite for promotion, local officials have long sought to overstate their output levels. Unsurprisingly, the sum of provincial GDP data vastly exceeds measures for national GDP, and provincial data on investment and economic output tend to be the most exaggerated.

Data doctoring has been particularly pronounced in the northeastern industrial rust belt provinces of Heilongjiang, Jilin, and Liaoning. Liaoning, by far the most egregious data falsifier and the province where Li was formerly party secretary, was publicly denounced by the central government—a first for the party—in 2014. The National Audit Office reported that one Liaoning county inflated annual fiscal revenues by 127 percent. The province’s leadership, including the provincial chief, were made an example of and imprisoned over a separate vote-buying scandal. And now, after over a decade of adjusting local GDP data downward, the National Bureau of Statistics (NBS), China’s central statistics bureau, is assuming control of regional data collection from local bureaus starting this year.

A second reason for skepticism is the approach that NBS statisticians use to calculate China’s GDP. China’s national accounting uses the value-added production method (the sum of net output of the agriculture, industry, and services sectors), which is a throwback to the Soviet Material Product System it inherited from the Soviet Union, when China was more of a centrally planned economy. By contrast, most developed economies, including the United States, use the expenditure method (the sum of consumption, gross capital formation, and net exports). In short, whereas China’s GDP accounting continues to focus on what the economy produces, the United States and others focus on what it consumes. The production approach seems oddly out of place now that the Chinese economy has been rebalanced to center on consumption and services.

Given China’s data black box, it is impossible to know whether its growth figures are overstated, understated (especially in the services sector), or completely falsified.

Given China’s data black box, it is impossible to know whether its growth figures are overstated, understated(especially in the services sector), or completely falsified.

And that begs the question of why Li would have bothered to downgrade this year’s GDP projections at all. To put his move in historical perspective, this is the second time he has opted for a ranged target (the last time was in 2016, when the target was between 6.5 and 7 percent). The only other premier to do so was Li Peng in 1995. It is likely that the downgrade—and the greater flexibility implied by a ranged target—is an indication that the Chinese Communist Party is trying to clean up its act when it comes to its GDP calculations while seeking to gradually manage growth expectations down. This balancing act brings to mind the late 1990s, when Premier Zhu Rongji publicly cracked down on the “wind of falsification and embellishment” from local government bureaus while the government opted to cut the 1999 growth target from 8 percent to 7 percent.

So why have a target at all? The answer is that the ghost of Deng Xiaoping, paramount leader and architect of China’s economic opening, hangs over all officials in Zhongnanhai,the CCP headquarters. Embedded in the CCP’s DNA is Deng’s call for a “moderately prosperous society” (xiaokang) by 2021, the centenary of the Communist Party’s establishment in China. Deng set the tradition of seeking to double GDP every decade, which was continued by his successors, Jiang Zemin and Hu Jintao, who pledged the doubling of 2010 GDP and per capita income by 2020.

Xi enshrined that mandate in the 13th Five-Year Plan, meant to cover 2016 to 2020. But even so, Xi has focused party rhetoric increasingly around inclusive and high-quality growth rather than on hard targets.

After the 19th Party Congress in October 2017, which was widely read as a mark of Xi’s consolidation of power within the party, his administration stated that the party would not set new doubling targets after 2020. And given that the party has overshot its growth targets in the past few years, it has leeway to go below 6.5 percent this year and next year and still meet the old doubling target.

Validity of numbers aside, from a Western perspective, the GDP target is still an important form of political signaling. As the China expert Michael Pettis describes it, “reported GDP in China is no longer a measure of economic growth, but rather a measure of political intention.” Pettis characterizes China’s GDP as a systems input rather than an output. Within this framework, a softening in the GDP target should be read as an indicator of the political capital the party is willing to expend to tackle major structural issues, including the country’s vast debt, glut of investment, crowding out