Pricing figure warnings

China's producer prices continued to fall in September for the 31st month in a row, winding up 1.8 percent lower than the same period last year and below August's 1.2 percent decrease. China's consumer price index (CPI), a measure of inflation, rose by 1.6 percent in September compared to the same period last year, well below Beijing's official target of 3.5 percent for the rest of the year. Some analysts warn that deflation represents a key risk to China's development, urging policymakers to ease interest rates and cut reserve-ratio requirements.               

Unexpected trade growth

Both China's exports and imports grew at higher than expected levels in September, with exports rising 15.3 percent year on year to $214 billion, and imports expanding 7 percent year on year to $183 billion. The growth may have been due to increased demand from North America and emerging Asian economies. Customs officials expect this momentum to continue to the last quarter of 2014. However, some analysts warned that these figures may not represent China's long-term trade growth prospect. Growth resulting from the launch of Apple's iPhone 6 and reprocessing imports for export through Hong Kong inflate the true worth of China's trade. External demand will continue to be vulnerable to lackluster demand from the euro zone. 

Ensuring 7.5% growth

While China's officials say that the export growth rate in September, which represents the greatest growth rate since early 2013, represents true growth, trade figures have been misleading before. Beijing's aim to meet the 7.5 percent growth target will likely influence local officials. Analysts encourage a skeptical outlook as long-term trends will be more reliable than figures from any given month. China's transition to a more advanced economy will also bring in challenges.

POWER FOR PEACE

One of the key trends in African development in the future will be efforts to increase inter-African integration. As seen during the rapid development of the "Asian Tigers," inter-regional trade is one of the most important steps to advance development in Africa. This was underscored by government officials and business leaders at the Third Africa Infrastructure and Power Forum in Beijing.

Tesfaye Yilma Sabo, Deputy Chief of Mission at the Embassy of Ethiopia in China, said peace and prosperity can grow by expanding access to electricity.

Insightful comments from industry and political leaders peppered the talks, discussions, presentations and workshops held at the annual conference on September 25-26. The key message emerging from the series of meetings was that leaders from the public sector, investment agencies and technology firms must come together to form partnerships in order to expand access to electricity in Africa. At a roundtable on renewable energy map, Stephan Willms of Africa Enablers, an Ethiopia-based organization working to bring affordable alternative energy to Africa, said an estimated $1 in GDP growth is lost for each kwh unutilized.

The participants, recognizing the opportunity in the challenge, were cautiously optimistic. David Humphrey, Global Head of Power and Infrastructure at South Africa's Standard Bank, spoke of the goal of making Africa self-sufficient in power within 15 years.

But though Africa was the new "land of hope," the speakers recognized that challenges would continue to obstruct electricity availability across the continent. Even in more developed South Africa, for example, rolling brownouts - power outages - plague the electricity supply due to the low tariffs fixed by the government. This has reduced investment in the nation's power sector and hampered its development.

Louis van Pletsen, founding partner at Quantum Power, emphasized the role of tariffs, saying low tariffs have effectively killed investment in the power sector in South Africa and its neighboring countries. Neighbors purchase power from South Africa at the latter's subsidized rate, which is gradually eroding their own domestic power sector.

But though low tariffs dramatically constrain investment in the power sector, African governments remain hesitant to increase them, possibly fearing an ensuing public backlash. This issue arose again when Michael Gondwe, Senior Project Manager of the Electricity Supply Corporation of Malawi, presented Malawian projects seeking investment. Asked about the Malawian Government's power tariff - which is below $0.1 per kwh - he said the government was working to make the rates more market-oriented.

Till the African governments succeed in doing that, investors will remain chary: how can they be expected to invest in an industry where governments do not allow profitable rates?