Social development and protection

Time for the PRC to stop buying US Treasuries and start investing in its people

Time for the PRC to stop buying US Treasuries and start investing in its people
The PRC needs to redirect money away from increasing its external reserves and toward spending on education, health care, and affordable housing to improve the well-being of its citizens. The PRC would benefit greatly from an exchange rate regime characterized by a multiple-currency, basket-based reference rate, and a reasonably wide band. Greater exchange rate flexibility would allow more decoupling between PRC and US interest rates, helping the People’s Bank of China (PBOC) to implement monetary policy that is best for the nation. The PRC’s exchange rate interventions to sustain the export-oriented thrust of the economy are not helpful to the nation for several reasons.


Urgent need to restructure Japan’s Electric Power Industry after Fukushima

A TEPCO station in Japan
Austrian economist Joseph Schumpeter argued that the “process of creative destruction,” whereby new industries are created by destroying the old combinations and creating new ones, is essential to drive growth. Japan’s electric power industry finds itself at such an evolutionary crossroads.The Fukushima nuclear disaster offers Japan a chance to pull the plug on the nation’s power monopolies and put in place an energy industry that would be more efficient, innovative, environmentally friendly, and safer. Tokyo Electric Power Company (TEPCO), which owns the Fukushima power plants, is a typical Japanese power monopoly. It supplies electricity to the Tokyo metropolitan area and can flex enormous market muscle as an integrated regional monopoly in the supply of electric power.


Introduction to Asia Pathways

GDP Growth Rate
I am delighted to welcome readers to Asia Pathways, the new blog of the Asian Development Bank Institute (ADBI). Our goal in launching this blog is to present readable and lively analyses of important economic and development issues in the Asia and Pacific region. We hope to encourage debate among policymakers, researchers, practitioners, journalists and other sections of the public who may wish to follow and engage in public policy discourse. ADBI already produces a wide range of analytical material on Asia and the Pacific, ranging from working papers and policy briefs to scholarly books. I encourage readers to visit our website for full details of these.