China overtakes US in world trade; Papal bombshell; China's hydro-hegemony; Bhutan to be first organic country

1 China overtakes US in world trade (Phillip Inman in The Guardian) China has become the world's biggest trading nation in goods, ending the post-war dominance of the US, according to official figures. China's customs administration said the combined total for imports and exports in Chinese goods reached $3.87tn in 2012, edging past the $3.82tn trade in goods registered by the US commerce department.

The landmark total for Chinese trade indicates the extent of Beijing's dependence on the rest of the world to generate jobs and income compared with a US economy that remains twice the size, and more self-contained. The US economy is worth $15tn compared with the $7.3tn Chinese economy.

The US not only has a large internal market for goods, but also dominates the trade in services. US total trade amounted to $4.93tn in 2012, according to the US Bureau of Economic Analysis (BEA) with a surplus of $195.3bn. But like most western nations, the US deficit in the trade of goods weighs heavily and is only expected to get larger. The deficit in goods was more than $700bn compared with China's 2012 trade surplus, measured in goods, which totalled $231.1bn.

2 Papal bombshell (Nicole Winfield & Victor L Simpson, AP/San Francisco Chronicle) With a few words in Latin, Pope Benedict XVI did what no pope has done in more than half a millennium, stunning the world by announcing his resignation Monday and leaving the already troubled Catholic Church to replace the leader of its 1 billion followers by Easter.

Not even his closest associates had advance word of the news, a bombshell that he dropped during a routine meeting of Vatican cardinals. And with no clear favorites to succeed him, another surprise likely awaits when the cardinals elect Benedict's successor next month. 

The Feb. 28 resignation allows for a fast-track conclave to elect a new pope, since the traditional nine days of mourning that would follow a pope's death doesn't have to be observed. It also gives the 85-year-old Benedict great sway over the choice of his successor. Though he will not himself vote, he has hand-picked the bulk of the College of Cardinals — the princes of the church who will elect his successor — to guarantee his conservative legacy and ensure an orthodox future for the church.

The resignation may mean that age will become less of a factor when electing a new pope, since candidates may no longer feel compelled to stay for life. As a top aide, Benedict watched from up close as Pope John Paul II suffered publicly from the Parkinson's disease that enfeebled him in the final years of his papacy. Clearly Benedict wanted to avoid the same fate as his advancing age took its toll, though the Vatican insisted the announcement was not prompted by any specific malady.

Since becoming pope in 2005, Benedict has charted a very conservative course for the church. His efforts though, were overshadowed by a worldwide clerical sex abuse scandal, communication gaffes that outraged Jews and Muslims alike and, more recently, a scandal over leaked documents by his own butler. Many of his stated priorities as pope also fell short: He failed to establish relations with China, heal the schism and reunite with the Orthodox Church, or reconcile with a group of breakaway, traditionalist Catholics.

3 China’s hydro-hegemony (Brahma Cehllaney in Khaleej Times) Asia is the world’s most water-stressed continent, a situation compounded by China’s hydro-supremacy in the region. Beijing’s recent decision to build a slew of giant new dams on rivers flowing to other countries is thus set to roil riparian relations.  China — which already boasts more large dams than the rest of the world put together and has unveiled a mammoth $635-billion fresh investment in water infrastructure over the next decade — has emerged as the key obstacle to building institutionalised collaboration on shared water resources in Asia.

In contrast to the bilateral water treaties between many of its neighbours, China rejects the concept of a water-sharing arrangement or joint, rules-based management of common resources. Today, by building mega-dams and reservoirs in its borderlands, China is working to re-engineer the flows of major rivers that are the lifeline of lower riparian states.

Since the last decade, China’s dam building has been moving from dam-saturated internal rivers to international rivers. Most of the new megaprojects designated recently by China’s state council as priority ventures are concentrated in the country’s seismically active southwest, which is largely populated by ethnic minorities. Such dam building is triggering new ethnic tensions over displacement and submergence.

It is China’s dam-building spree at home — reflected in the fact that it boasts half of the 50,000 large dams in the world — that carries the greatest international implications and obstructs the development of an Asian rules-based order. Beijing already has significant financial, trade and political leverage over most of its neighbours. Now, by building an asymmetric control over cross-border flows, it is seeking to have its hand on Asia’s water tap. 

4 Bhutan to be first organic country (The Guardian) Bhutan plans to become the first country in the world to turn its agriculture completely organic, banning the sales of pesticides and herbicides and relying on its own animals and farm waste for fertilisers. But rather than accept that this will mean farmers of the small Himalayan kingdom of 1.2 million people will be able to grow less food, the government expects them to be able to grow more – and to export increasing amounts of high quality niche foods to neighbouring India, China and other countries.

The decision to go organic was both practical and philosophical, said Pema Gyamtsho, Bhutan's minister of agriculture and forests. "Ours is a mountainous terrain. When we use chemicals they don't stay where we use them, they impact the water and plants. We say that we need to consider all the environment. Most of our farm practices are traditional farming, so we are largely organic anyway. But we are Buddhists, too, and we believe in living in harmony with nature. Animals have the right to live, we like to see plants happy and insects happy," he said.

"Going organic will take time," he said. "We have set no deadline. We cannot do it tomorrow. Instead we will achieve it region by region and crop by crop." The overwhelmingly agrarian nation, which really only opened its doors to world influences 30 years ago, is now facing many of the development pangs being felt everywhere in rapidly emerging countries. Young people reluctant to live just by farming are migrating to India and elsewhere, there is a population explosion, and there is inevitable pressure for consumerism and cultural change.

In a world looking for new ideas, Bhutan is already called the poster child of sustainable development. More than 95% of the population has clean water and electricity, 80% of the country is forested and, to the envy of many countries, it is carbon neutral and food secure.

Axe falls on EU budget; Britain 2013: Banana republic or first world country?; America's demographic cliff

1 Axe falls on EU budget (Khaleej Times) The axe finally fell on the multi-annual European Union budget. Leaders, in a grand compromise, agreed to reduce the continental budget by three per cent, which would see both commitments and payments go down by roughly 34 billion euros in the next seven years.

This is no small achievement as diverse opinions such as buoying spending to ensuring stringent cuts have been accommodated in a rare manner. Britain is too overwhelmed as it advocated drastic cuts in the EU budget enabling respective countries to keep a bigger pie for their developmental concerns. But on the other hand, France and Italy, who had sought to protect spending, are taken back at the Brussels compromise. So is the case with Germany, which had accepted the prescription as a way to go forward in adversity hoping that it will grant Europe the ability to look after its own affairs. 

But one thing is for sure: the deal proved that member states are more concerned about their domestic politics than worrying for regional integration — an aspect that doesn’t bode well for the very concept of single currency and a unified economic master plan. Nonetheless, the deal made a strong point that trans-European interest is secondary to none, and the leaders have a responsibility to be seen acting in unison.

2 Britain 2013: Banana republic or first world country? (Larry Elliott in The Guardian) It was just a normal week. A bank that is 80% state owned was fined a packet for rigging the financial markets. Supermarket shelves were stripped because the beef in lasagne was horsemeat. A report detailed appalling care and neglect at an NHS trust that resulted in the needless deaths of hundreds of patients.

While all this was going on, Mark Carney, governor of the Bank of England designate, arrived in town to be given the once over by the Treasury select committee. He could have been forgiven for asking whether this was a banana republic rather than a supposed first world country. At least Carney is in the reassuring position of suspecting that the only way is up. After two years of zero growth and half way through a lost decade of falling living standards, expectations are at rock bottom. Not since the late 1970s and early 1980s – a period of high inflation, industrial unrest and rising unemployment – has the national economic mood been so gloomy.

In the short term at least, the pessimism is overdone. There is no hard data as yet, but all the survey evidence suggests Britain will avoid a triple dip recession. Growth will return in the first three months of 2013 and continue for the rest of the year. Underlying activity was just about positive from April to December 2012 once all the special factors are accounted for, and the latest surveys for mortgage demand, manufacturing and services all point to a further modest improvement in early 2013.

3 America’s demographic cliff (Jonathan V Last in The Wall Street Journal) For more than three decades, Chinese women have been subjected to their country's brutal one-child policy. As a result, Chinese women have a fertility rate of 1.54. Here in America, white, college-educated women—a good proxy for the middle class—have a fertility rate of 1.6. America has its very own one-child policy. And we have chosen it for ourselves.

Forget the debt ceiling. Forget the fiscal cliff, the sequestration cliff and the entitlement cliff. Those are all just symptoms. What America really faces is a demographic cliff: The root cause of most of our problems is our declining fertility rate. The fertility rate is the number of children an average woman bears over the course of her life. The replacement rate is 2.1. If the average woman has more children than that, population grows. Fewer, and it contracts. Today, America's total fertility rate is 1.93, according to the latest figures from the Centers for Disease Control and Prevention; it hasn't been above the replacement rate in a sustained way since the early 1970s.

Low-fertility societies don't innovate because their incentives for consumption tilt overwhelmingly toward health care. They don't invest aggressively because, with the average age skewing higher, capital shifts to preserving and extending life and then begins drawing down. They cannot sustain social-security programs because they don't have enough workers to pay for the retirees. They cannot project power because they lack the money to pay for defense and the military-age manpower to serve in their armed forces.

India growth forecast down to 5%; Wilting of the jasmines; Facebook fatigue; Poison ivory

1 India growth forecast down to 5% (BBC) India has lowered its growth forecast for the second time in two weeks, underlining the challenges it faces in reviving its sluggish economy. The statistical office has forecast growth of 5% for the year to 31 March 2013, based on advanced estimates. Last week, India's central bank had cut its forecast to 5.5% from 5.8%. India's growth has slowed in recent months because of several factors, not least the sharp slowdown in its manufacturing and services sectors.

Rupa Rege Nitsure, chief economist at the Bank of Baroda, said that the revised figure of 5% growth was "more in tune with reality". "The industrial sector downturn has extended beyond anyone's expectation. Exports have been continuously declining, non-food credit growth is slowing while agricultural sector performance has also been sub-optimal," she added.

India's economy grew by 5.3% from a year earlier in the July to September quarter, the slowest pace of expansion in three years. A slowdown in exports and subdued domestic demand have affected the manufacturing and services sectors. Meanwhile, foreign investors have also been wary of entering the country amid a delay in key reforms. That has led to concerns that India's growth rate may slow further in the coming months. 

2 Wilting of the jasmines (Khaleej Times) While the stalemate between the opposition and the Islamist-led government has sharply deteriorated Egypt’s security, the birthplace of the Arab Spring has also plunged into chaos.   Tunisia’s prime minister Hamdi Jebali of  Ennahda party has dissolved the government after vociferous protests broke out following the gunning down of a secular opposition figure Chokri Belaid. 

For the millions responsible for causing the Jasmine Revolution that deposed Ben Ali’s dictatorial regime in 2011, the fruits of the Arab Spring have already soured. Rampant unemployment — the reason why Mohamed Bouazizi immolated himself in 2011 after the police confiscated his unlicensed fruit cart — continues to persist in Tunisia.  Two years after the revolution, economic prospects of the 11 million-strong country remain dismal. 

Frustrated and angry at their destitution, Tunisians have shown an impatience with the political squabbling in the democratic government. In December, when president Marzouki visited Sidi Bouzid, the birthplace of the Tunisian revolution, he was bombarded with tomatoes by angry protestors, who called for his ouster. All that the Tunisians, and even the neighbouring Egyptians, care about at the moment are better economic prospects. And for this, they are willing to throng the streets for as long as it takes.

3 Facebook fatigue (Jenna Wortham in The New York Times) Facebook is the most popular social network in America — roughly two-thirds of adults in the country use it on a regular basis. But that doesn’t mean they don’t get sick of it. A new survey by the Pew Research Centre’s Internet and American Life Project found that 61% of current Facebook users admitted that they had voluntarily taken breaks from the site, for as many as several weeks at a time.

The main reasons for their social media sabbaticals were not having enough time to dedicate to pruning their profiles, an overall decrease in their interest in the site, and the general sentiment that Facebook was a major waste of time. About 4% cited privacy and security concerns as contributing to their departure. Although those users eventually resumed their regular activity, another 20% of Facebook users admitted to deleting their accounts.

Of course, even as some Facebook users pull back on their daily consumption of the service, the vast majority — 92% — of all social network users still maintain a profile on the site. But while more than half said that the site was just as important to them as it was a year ago, only 12% said the site’s significance increased over the last year — indicating the makings of a much larger social media burnout across the site.

4 Poison ivory (Khaleej Times) Africa’s rhinoceros and the elephants are being mercilessly wiped out in hordes by a growing number of illegal poachers. The lucrative demand for ivory in Asia, where it is used in luxury items and traditional medicine, has led to an explosion in wild poaching.  With ivory procuring up to $1000 for a kilogramme in Asian markets and organised crime syndicates involved in ensuring its entry there, the authorities find it difficult to thwart the efforts of ivory poachers lurking in Africa’s jungles.

Africa’s elephant population has dropped to the middle six figures — roughly half of what it was during the 1970s — according to recent Newsweek report.  More than 11,000 elephants have been killed by ivory poachers in Gabon since 2004 and roughly 10,000 of these beasts are eliminated annually just in Tanzania.  The rhinoceros population is under an even greater threat, with roughly 26,000 left in the entire continent.

This situation is rather dismal, and reflects the flipside of globalisation in Africa. When the Chinese started investing heavily Africa, many were quick to criticise this as new imperialism intended to deplete the continent of its treasure trove of mineral wealth and energy. But it’s not just the platinum and natural gas and iron ore that the foreigners are interested in; they are also keen to exploit Africa’s rich wildlife.   Hapless victims of cold profiteering, the continent’s animals also now come with hefty price tags.

India banks feel the heat; Why some kids can handle the pressure; Fewer marriages in South Africa

1 India banks feel the heat (Kunal Kumar Kundu in The Wall Street Journal) Indian banks’ non-performing assets are on the rise. The sector is feeling the effects of slowing economic growth, a tight monetary policy regime, and the stalling of big-ticket investments. At the end of last financial year, gross non-performing assets in the Indian banking system were close to 3% (of gross advance), the highest in six years, Reserve Bank of India data show. The trend has worsened this year.

As of Sept. 30, the gross non-performing assets of Indian banks rose by nearly 46% (530 billion rupees, or roughly $10 billion) from a year earlier, says a study by NPA resource.com. Gross advances – total advances made by the banking sector – grew by less than 16% in the same period. If non-performing assets rise faster than advances, the profitability of banks declines.

Fitch Ratings has warned that the gross non-performing assets of the Indian banking system will be as high as 4.2% of advances this financial year. That would be the highest since 2004-05, when the ratio stood at 5.2%. Rising non-performing assets lead to higher provisioning requirements for banks. This impacts banks’ profitability and also their capital adequacy ratio, restricting their ability to grow.

As of Dec. 31, the total amount of loans (on a cumulative basis) restructured by Indian banks under the corporate debt restructuring mechanism was 2.12 trillion rupees, an increase of 245.84 billion rupees from the start of October. For banks, restructuring leads to increased cost of credit as they need to set aside a higher percentage of the original loan amount.

2 Why some kids can handle the pressure (Po Bronson & Ashley Merryman in The New York Times) Never before has the pressure to perform on high-stakes tests been so intense or meant so much for a child’s academic future. As more school districts strive for accountability, standardized tests have proliferated. The pressure to do well on achievement tests for college is filtering its way down to lower grades, so that even third graders feel as if they are on trial.

Students get the message that class work isn’t what counts, and that the standardized exam is the truer measure. Sure, you did your homework and wrote a great history report — but this test is going to find out how smart you really are. Critics argue that all this test-taking is churning out sleep-deprived, overworked, miserable children.

But some children actually do better under competitive, stressful circumstances. An emerging field of research — and a pioneering study from Taiwan — has begun to offer some clues. Like any kind of human behavior, our response to competitive pressure is derived from a complex set of factors — how we were raised, our skills and experience, the hormones that we marinated in as fetuses. 

There is also a genetic component: One particular gene, referred to as the COMT gene, could to a large degree explain why one child is more prone to be a worrier, while another may be unflappable, or in the memorable phrasing of David Goldman, a geneticist at the National Institutes of Health, more of a warrior.

3 Marriages drop in South Africa (Sowetan) Lifestyle changes among South Africans have contributed to fewer marriages, particularly customary marriages, the SA Institute of Race Relations said.  Between 2003 and 2010, the number of civil as well as customary marriages registered every year declined by 8%, said researcher Thuthukani Ndebele.

Using figures from Stats SA, Ndebele said the decline in customary marriages was considerably more pronounced than that of civil marriages. "Customary marriages dropped by 42% from 17,283 registered in 2003 to 9,996 in 2010. Civil marriages decreased by 4% from 178,689 to 170,826."

He said the lifestyle choices among black people, such as getting married at a "later stage" and cohabitation outside of marriage, now had less stigma attached to them. "It's not that people are not getting married at all, but for example in urban areas there is a lot of cohabitation...," said Ndebele. He said the number of households was going up while the average household size was shrinking, which suggested that more people preferred to live on their own or with their unmarried partners.