China service sector surges; India's ghosts of the future; What if Australia car manufacturing industry disappears

1 China service sector surges (BBC) China's service sector grew at its fastest pace in a year in October, the latest sign of a recovery in the world's second-largest economy. The non-manufacturing Purchasing Managers' Index (PMI) rose to 56.3 in October from 55.4 in September. The report comes just days after data showed that China's manufacturing PMI rose to an 18-month high October. China's service sector, which includes construction and aviation, accounts for nearly 43% of its overall economy. 

After years of rocketing growth, China saw its pace of growth slow in the first two quarters of this year. There have been concerns that its growth may dip further, not least because of a slowdown in demand for its exports from key markets. However, data released over the past few weeks has helped allay those fears.  

Figures released last month showed that its economy expanded 7.8% in the July-to-September quarter from a year earlier. That is up from the 7.5% growth recorded in the previous three months.  China's President Xi Jinping, who took charge earlier this year amid the slowdown, said he is confident that the country's economy will continue to grow. "The more China is developed, the more the country will open up," he said, adding that it is impossible for China to "shut the door already opened up".

http://www.bbc.co.uk/news/business-24800045

2 India’s ghosts of the future (MJ Akbar in Khaleej Times) During a week when we pondered over the iron man of India, Sardar Patel, and remembered the iron lady, Mrs Indira Gandhi, a question kept flitting through my thoughts. Did the great Sardar dismantle the princely order of the British Raj only so that it might be replaced by a princely order of an Indian Raj?

In theory, democracy provides an egalitarian opportunity base for merit to flourish and mediocrity to wither. A dynastic dispensation imposes entitlement on democracy. If pushed, dynasty seeks relevance through sentimental history. Rahul Gandhi wants legitimacy for his personal ambitions from the assassinations of his grandmother Mrs Indira Gandhi and father Rajiv. Those who milk the past, whether that icon be Mrs Gandhi or Sardar Patel, are missing the bigger point: Young India’s attention is locked into the future.

Confidence in economic growth has snapped. Rising prices and falling incomes are the visible sides of an economy falling south. While their parents feel helpless, the young are beginning to feel hopeless. They want to believe in India, which is why they are so deeply incensed by the betrayal evident in the careless indifference of Dr Manmohan Singh’s United Progressive Alliance (UPA) government. Their anger across the country is palpable to everyone except the occupants of the gilded cages in Delhi Zoo.

Narendra Modi is the flavour of this season not because he is building a statue of Sardar Patel but because he is the outsider who has laid siege to Delhi. He is the voice and beneficiary of this rage. Modi has walked into the void of governance created by the UPA; the space is his to fill to the extent he is able to.

An objective answer lies in the Diwali depression visible in the shops. A recent survey showed that 57 per cent respondents believed this is the worst Diwali in a decade. As for the next six months, 77 per cent thought the economy would remain as bad or get worse. Such a trend might ease, but will not disappear. India is not a happy nation. That should make any ruling party deeply unhappy.

http://khaleejtimes.com/kt-article-display-1.asp?xfile=data/opinion/2013/November/opinion_November5.xml&section=opinion

3 What if Aussie car manufacturing industry disappears (Sam Hall in The Sydney Morning Herald) Killing off car manufacturing in Australia would lead to a $21.5 billion hit to the economy and “heavily impact” regions such as Adelaide and Melbourne, a study commissioned by the Federal Chamber of Automotive Industries has found. Australia’s gross domestic product would also be $7.3 billion smaller – or 0.6 per cent – in today’s dollar terms if the industry were forced to shutdown in 2018.

The study by the Allen Consulting group, which is being used by the FCAI to lobby for continued tax payer support and co-investment from General Motors Holden and Toyota, warns high-tech jobs and skills will be lost and significant foreign investment would be directed overseas. Using economic analysis from the Monash University, the study claims about 33,000 jobs would be lost in Melbourne and a further 6,600 jobs in Adelaide.

The findings come as the industry awaits a crucial interim report by the Productivity Commission, due December 20, which will set the foundations for whether the Coalition commits to ongoing funding assistance beyond 2016. Both Holden and Toyota have reiterated the need for long-term policy settings to be known before they make a decision on their futures next year.

Independent South Australian senator Nick Xenophon said the report laid out the impact of a local car industry shutdown in ‘‘chilling terms’’. ‘‘Make no mistake - while the closure of the car industry would have an impact of earthquake proportions in Adelaide and Melbourne, those tremors would be felt right across the country,’’ he said. He said the $500 million per year automotive subsidies paled in comparison with the federal government’s planned $5.5 billion a year paid parental leave scheme.

http://smh.drive.com.au/motor-news/economy-215b-smaller-without-car-making-20131104-2ww0i.html