Canada’s VIA Rail Ties Up With China’s Hainan Airlines
VIA Rail’s intermodal partnership tie-up with Hainan Airlines may be just the thing needed to boost VIA’s financial bottom line and help spur Chinese tourism to Canada. VIA is a crown corporation and enjoys a hefty $500+ million subsidy a year from the federal government to service remote areas. Whether it is profitable is another question.
Hainan is an internationally top-rated airline, China’s fourth largest, with over 23 million passengers carried in 2012. Chinese tourists made over 100 million trips overseas last year and now are the biggest spenders abroad. By 2020, Chinese outbound tourism is expected to top 200 million. Canada is well known to many segments of Chinese for its natural beauty and wide open spaces and connecting to a VIA train after landing in Canada (and vice versa) will surely be a big attraction for them.
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VIA Rail Canada (VIA Rail) has signed a partnership with Hainan Airlines, the first to be concluded with a company based in China. As well, for the first time, this partnership will allow an airline company to sell VIA Rail tickets.
Hainan Airlines’ ticket offices and other travel agencies will be able to combine air and rail segments and issue a single electronic ticket with boarding passes for both the flight and train segments. Hainan Airlines passengers from China who are planning train travel in Canada will benefit from the convenience of booking all legs of their journey at once. And vice-versa for VIA Rail passengers who plan to travel to Toronto before flying on to China!
“We are excited about our first partnership with a Chinese airline and our very first partnership of this kind, offering a combined air-rail ticket,” declared Martin R. Landry, Chief Commercial Officer at VIA Rail. “China is the biggest-spending travel market in the world, and Chinese tourism to Canada has been growing over the past few years. Canadians continue to show great interest in visiting China as well, so this collaboration is very exciting.”
According to the Canadian Tourism Commission, visits from China increased 21% in 2010, 22.4% in 2011 and 15.5% in 2012.
– VIA Rail Canada
US Ends Cold War With Cuba
A post last week congratulated Fidel Castro as a laureate of China’s Confucius Prize and called for the end of trade sanctions against Cuba.
To great surprise, the Obama Administration has just decided to establish full diplomatic relations with Cuba and dismantle the sanctions apparatus against the country. The lifting of the trade embargo will be a boon for the economy and Raul Castro’s reform agenda.
The Cuban people have suffered enough!
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President Barack Obama made a dramatic bid Wednesday to end a half-decade Cold War with Cuba.
Declaring a “new chapter” in US relations with Cuba, Obama agreed with Castro to restore full diplomatic relations severed since 1961 and to work to lift a US trade embargo imposed in 1960.
The agreement was capped with a Cold War-like prisoner swap.
A senior US administration official said 53 Cubans regarded by Washington as political prisoners will be released as part of the agreement reached with Havana.
– AFP
China Made 1/3 of Patent Applications in the World: UN WIPO
A post earlier this month cited a Thomson Reuters’ study on world patent filings that concluded China is the undisputed global leader. This week, UN’s World Intellectual Property Organization (WIPO) confirmed China made one third of the world’s patent applications in 2013.
Commenting on this world-transforming phenomenon, WIPO Director General Francis Gurry said, “strategically, the country… is on a journey from ‘made in China’ to ‘created in China’, away from manufacturing to more knowledge intensive industries.”
Thus, despite the long-standing mantra of naysayers that China cannot innovate, this is the inexorable trend. But, this was never in doubt since, with the exception of the 19th and 20th Centuries, China is regaining its reputation as the leading innovator for millennia.
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Some 2.57 million patents were filed last year, an increase of nine percent on 2012 figures. China led the way followed by the US and Japan.
Applications from China grew by 26.4 percent, increasing its global share from almost 28 percent to 32.1 percent in a year, while US applications grew by 5.3 percent.
By contrast Japan saw a decline of 4.2 percent and Europe a fall of 0.4 percent, reflecting their relatively weak economic growth.
Across the world, “global intellectual property filing trends mirror the broader economic picture”, Gurry said.
“The diverging performance of the world economy appears to be leaving its mark on the global innovation landscape.”
Unsurprisingly in this digital age, computer technology remains the fastest growing field and now represents 7.6 percent of the total patents filed.
The other most popular fields are electrical machinery (7.2 percent of applications) followed by measurement (4.7 percent), digital communications (4.5 percent) and medical technology (4.3 percent).
The figures from WIPO also revealed countries’ specialities — Switzerland filed mainly pharmaceutical patents, for example, while in Russia most were to do with food chemistry.
France and Germany filed mainly transport-related patents, while China, South Korea, the United States and Britain filed mainly computer technology patents, according to the latest data available from 2012.
Meanwhile there has been a near quadrupling of applications in energy-related technology such as solar, fuel cell, wind and geothermal energy in the past decade.
While they lag behind China in the number of patent applications, the United States remains the world leader in terms of patents in force with 26 percent of the 9.45 million total, followed by Japan on 19 percent, and China in third place.
– AFP
China Revises Its 2013 GDP Upward by 3% to US$9.6 Trillion
An earlier post this month cited the IMF and other sources that China’s GDP measured by purchasing power parity (PPP) has officially surpassed the US’s, a major milestone on the road to completely eclipsing the US in exchange rate terms which should occur sometime around 2020 or a little later.
With Chinese statisticians raising the country’s 2013 nominal GDP figures by 3% to US$9.6 trillion and projecting 2014 growth to be in the neighbourhood of 7.4%, China’s 2014 nominal GDP should fall in around $10.3 trillion, almost exactly the same threshold achieved by the US in 2000. Supposing a growth rate of around 2.5% for the year, the US should grow to about $17.84 trillion.
On the other hand, measured by PPP, China’s GDP for last year would be $18.13 trillion as opposed to $17.6 trillion and projecting the same rate of growth for this year, China’s 2014 PPP GDP may top $19.47 trillion.
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China on Tuesday raised its official estimate of last year’s gross domestic product, possibly moving closer to passing the United States as the biggest economy.
Last year’s official GDP value will be raised by 3 percent following a regular economic census, the director of the National Bureau of Statistics, Ma Jiantang, said at a news conference.
Ma gave no details but based on previously reported data, the increase would make 2013’s GDP about $9.6 trillion or just under two-thirds of U.S. output of $16.8 trillion.
China’s growth fell to a five-year low of 7.3 percent last quarter. The economy grew 7.7 percent in 2013 though that figure is likely to change after the revision of the year’s GDP estimate.
Analysts expect the ruling Communist Party to cut next year’s growth target to 7 percent. But that still is more than double the 3 percent forecast by the International Monetary Fund for the U.S.
China is forecast to become the biggest economy as early as 2020, though its income per person would be much lower than developed nations such as the U.S.
In 2009, the government raised its estimate of 2007 growth from an already high 11.9 percent to 13 percent. That meant China moved ahead of Germany as the third-largest economy behind the U.S. and Japan.
In 2010, China passed Japan as the second-biggest economy.
– AP
And You Wonder Why China Formed Its Own Multilateral Banks
There is one prime reason why China is frustrated with US-led multilateral financial institutions – the inability or reluctance on the part of the Republican dominated US Congress to ratify the International Monetary Fund’s (IMF) 2010 Quota and Governance Reforms. Ironically, the reforms were driven through by the Americans whose obstructionism now forces the IMF board to explore a “Plan B” for “alternative options”.
Building on the 2008 reforms, the current package which must be accepted by 3/5 of members that have 85% of total voting power would have resulted in a major realignment of quota shares in favour of emerging economies and developing countries (EMDCs). Needless to say, currently, the US dominates with 16.75% of votes followed by Japan (6.23%), Germany (5.81%) and France and the UK (each with 4.29%). China leads the BRICS countries with 3.81%, then Russia (2.39%), India (2.34%), Brazil (1.72%) and South Africa (0.77%).
Apart from doubling the quotas of special drawing rights (SPR) to worth some US$737 billion, the 14th General Review of Quotas would have shifted 6% of quotas from over-represented to under-presented countries, lifting all but one of the BRICS into the 10 largest shareholders with China rising to no.3. But, obviously, in the backdrop of Western sanctions imposed on Russia over the Ukraine crisis, any reform that would benefit Russia could not possibly be contemplated by the US and its allies.
In a statement on the US inaction, IMF Managing Director Christine Lagarde expressed her deep regret: “The IMF’s membership has been calling on and was expecting the US to approve the IMF’s (reforms) by year end. I have expressed my disappointment to the US authorities and hope that they continue to work toward speedy ratification.” This represents the second time this year the US has refrained from approving, dampening the prospects of its passing in the first half of next year.
Chinese foreign ministry spokesman Hong Lei also sounded China’s dissatisfaction: “China is deeply disappointed by the US parliament’s failure to make the IMF 2010 funding and governance reform spending legislation…Implementing (the reform) is crucial for maintaining the credibility, effectiveness, and legality of the IMF.”
But, it’s not only the IMF that needs urgent reform, the World Bank (WB) and its sister institution the Asian Development Bank (ADB) require significant realignment as well. Among the multilateral financial and monetary institutions created after WWII, the IMF is ordinarily lead by a European, the WB by an American (currently Jim Yong Kim), and the ADB by a Japanese (Takehiko Nakao).
In 2010, voting power in the WB was revised somewhat to better reflect the interests of EMDCs but the West and Japan still dominate: US (15.85% down from 16.36%), Japan (6.84% down from 7.85%), Germany (4% down from 4.48%), France and England (both 3.75% down from 4.3%) and Canada (down to 2.43%). The BRICS had China with 4.42% up from 2.78%, India with 2.91% up from 2.78%, Russia roughly at par at 2.77%, Brazil up to 2.24% from 2.07%, and South Africa down from 0.85% to 0.76%.
As of last year, the top ten voting power countries in the ADB were: the EU (15.718%), Japan (12.835%), the US (12.747%), China (5.474%), India (5.384%), Australia (4.946%), Canada (4.5%), Indonesia (4.437%), South Korea (4.345%), Germany (3.773%), and Malaysia (2.486%). The top three regions/countries alone account for 41.3% of the total vote. Adding in Australia, Canada and Germany, the voting power of Western countries equals 54.519% assuring the passing of Western agendas.
Given the size of its economy that should top US$9.9 trillion by year end using exchange rate terms (the IMF already has China eclipsing the US in 2014 using purchasing power parity (PPP) @ US$17.6 trillion to $17.4 trillion), it is no wonder China and other EMDCs demand a bigger say and role in the governance and loaning practices of these institutions.
In my next post, I’ll focus on the new multilateral banks and funds that China has conceived and set up over the past year at the behest of President Xi Jinping: the BRICS New Development Bank, the BRICS Contingent Reserve Fund, The Asian Infrastructure Investment Bank, and the land-based and maritime Silk Road funds. Chinese explanations to the contrary notwithstanding, most analysts perceive these institutions and funds to be rivals of US-led counterparts.