On China’s Transition to a more Productive Economy; Health Benefits of a Plant-based diet – Final Part:

From: aditya rana
Date: Sat, Sep 10, 2016 at 1:03 PM
Subject: On China’s Transition to a more Productive Economy; Health Benefits of a Plant-based diet – Final Part:
To:

Hi!,

The China hard landing risk factor has receded somewhat from the forefront of global markets, but what are the underlying themes which are likely to drive Chinese growth in the coming decades? The McKinsey Global institute came out with a fascinating report recently titled “Capturing China’s $5 trillion productivity opportunity” which lays out the critical issues which need to be dealt with to capture the significant potential opportunity for China going forward (http://www.mckinsey.com/global-themes/employment-and-growth/capturing-chinas-5-trillion-productivity-opportunity). To summarise:

-The investment-led growth which has driven the extraordinary growth of the Chinese economy over the last three decades has allowed China to become an upper-middle-income nation (as per the World Bank). However, there are now some clear signs of stress in that model of growth.

-2015 was a year of turmoil for China with GDP growth falling to a 25-year low, corporate debt spiraling upwards, foreign exchange reserves falling by $500 billion and the stock market dropping by 50% from its summer high. Returns of China’s top-performing companies are at par with those of top US companies, but a large segment (bottom 50%) of poorly performing companies is pulling down the average. 80% of economic profit comes from the financial sector which is a clear sign of a distorted economy.

-The key for China’s economy going forward is to shift from an investment-led model to a productivity-led model, which could generate an additional $5.6 trillion of GDP by 2030 with household income rising by $5.1 trillion (see chart below).

-China has the capacity to transition this key shift to a productivity-led model: 1) ample fiscal and monetary resources financed by sovereign debt and as well as utilizing the vast ($18.6 trillion) amount of state-owned assets; 2) China has a vibrant private sector earning three times the returns of state-owned companies; 3) 116 million strong middle-class households (earning income of at least $21,000 per year), rising from just 2 million in 2000. With labour productivity at only 15-20% of developed country levels, China has a large potential opportunity to capture.

-Pursuing a productivity-led approach would create more sustainable jobs and support the growth of the middle-class, allowing China to achieve advanced economy status. This approach would require investment to be refocused on areas which have the capacity to raise productivity and create jobs, and away from weaker sectors which are dragging down profitability, and allowing them to fail.

-This shift in focus has an immediate urgency – the longerChina relies on debt to boost growth the higher the risks of a hard landing. The current estimated nonperforming loan ratio is closer to 7% rather than the official 1.7%, and could rise to 15% if no progress is made towards reducing exposure to underperforming companies. This scenario would require as much as $1.3 trillion of bank equity in 2019, or $310 per year of delay. While this would not lead to a systemic banking crisis given the ample resources of the government, it would create a liquidity crunch for corporations and negatively impact consumer and investor confidence which would lead to a significant slowdown in growth.

-Additionally, the investment-led growth (which has been channeled into infrastructure and urbanization) has reached its capacity with China’s current infrastructure stock at over 70% of GDP which is about the world average. With urbanization slowing from a growth rate of 2-3% a year to 1%, the big driver of economic growth in the past will fade away. Lastly, this model has lead to a rise in inequality with the top 20% of the households now controlling about 50% of the economy.

-The five main areas to increase productivity by 2030 are:

-1) Catering better to the middle class would create $6 trillion more of consumption.

-2) Increase the creation of new business through digitization.

-3)Raising innovation to move up the value chain, especially in R&D intensive sectors, where profits are only one-third of global leaders.

-4)Improving efficiency of businesses through lean techniques and higher energy efficiency, delivering a 15-30% productivity boost.

-5)Improving competitiveness by strengthening global connections , raising productivity by 10-15%.

-All this would require opening up more areas to competition, enabling corporate restructuring, developing capital markets further, raising skill levels of workers and encouraging labour mobility. In addition, the government would need to manage conflicts amongst various stakeholders and shift incentives which currently favour only GDP growth .

-An interesting and important analysis which highlights the critical importance of rebalancing of the Chinese economy. Looking at the macro picture, a post from the IMF (see below) shows encouraging signs on this front though the pace of credit growth remains a concern.

Consumers growing in importance“Until 2011, this reduction in the external imbalance was reflected in a growing internal imbalance as the investment to GDP ratio rose to even higher levels, reflecting the strong fiscal stimulus (see chart below). Since 2012, however, internal rebalancing from investment to consumption has made headway, with a notable acceleration in 2015—consumption is now contributing more than two thirds of GDP growth.”

Deindustrialization: speedy transition: “China has made substantial progress on switching from industry to services. The speed of its transition is in line with international experience (see chart below)”.

Credit: China’s Achilles’ heel : “But, critically, progress has lagged on reducing reliance on credit. For example, credit intensity, the amount of new lending provided for each additional unit of output, has more than doubled since the global financial crisis (see chart below).”

Pollution and inequality: on the high side : “While the energy intensity of output has fallen, air pollution remained very high in cities. Similarly, income inequality remains very high, though labour’s share of GDP is rising (see chart below).”

Falling savings ;“With population ageing and the envisaged strengthening of social safety nets, household savings are expected to fall gradually and consumption to rise. This is good, as it will allow investment to moderate while keeping the current account balance broadly stable. The importance of the services sector will likely continue to increase, helping reduce environmental pressure and increase labour’s share in national income.”

Health Benefits of a Plant-based diet – Final Part:

-To follow-up on Part IV which summarized the macronutrients in plants (from the Permanente Journal – a US based peer-reviewed journal of medical science, social science in medicine, and medical humanities), Part V (the final section) summarises the micronutrients in plants.

-All nutrients, with the exception of vitamin B12 and possibly vitamin D, which is ideally sourced from the skin’s exposure to the sun’s ultraviolet rays, can be found in plants. They are also packaged together with thousands of powerful disease-fighting nutrients that work synergistically to support optimal health.

Vitamin B12 is the only nutrient not directly available from plants. This is because vitamin B12 is synthesized by microorganisms, bacteria, fungi, and algae, but not by plants or animals. Animals consume these microorganisms along with their food, which is why this vitamin can be found in their meat, organs, and byproducts (eggs and dairy). Vitamin B12 deficiency can lead to irreversible neurologic disorders, gastrointestinal problems, and anemia.

-The body can store vitamin B12 for approximately three to five years, but after that, with no repletion or with inability to absorb, deficiency symptoms may present. Because of this lag time and because serum tests for B12 levels can be skewed by other variables, irreversible damage may occur before a deficiency is caught.

-In a vegan diet, vitamin B12 can be found in fortified plant milks, cereals, or nutritional yeast. However, these are not dependable means of achieving B12 requirements. Although there are claims that certain types of food can provide B12, the vitamin is not usually biologically active. These inactive forms act as B12 analogues, attaching to B12 receptors, preventing absorption of the functional version, and thereby promoting deficiency. The most reliable method of avoiding deficiency for vegans or anyone else at risk is to take a B12 supplement.

-Because the body can absorb only approximately 1.5 µg to 2.0 µg at a time, it is ideal to supplement with a dose greater than the RDA to ensure adequate intake. Plant-based nutrition experts recommend a total weekly dose of 2000 µg to 2500 µg. This can be split into daily doses or into 2 to 3 doses of 1000 µg each per week to help enhance absorption. Because vitamin B12 is water soluble, toxicity is rare.

Vitamin D is also known as the “sunshine vitamin” because it is the only nutrient that is acquired from the sun. Although human bodies evolved to produce vitamin D via the sun, there appears to be a worldwide epidemic of deficiency. Vitamin D is not widely available from the food supply. Sources of preformed vitamin D include fish liver oil, oily fish, liver, and in smaller doses, meat and egg yolk—foods that also contain high concentrations of saturated fat, cholesterol, and other less-than-ideal components.

-Vitamin D from sunshine and animal sources is in the form of vitamin D3. A second form vitamin D2, is found in plant sources. Dietary supplements may contain either D2 or D3, both of which can be effective at optimizing blood levels. The Institute of Medicine has concluded that adequate serum 25-hydroxyvitamin D levels are ≥ 50 nmol/L (≥ 20 ng/mL).

-If patients have suboptimal levels, emphasizing food sources (especially fortified plant milks) as well as supplements may be helpful. Dosing may be tricky because of variable responses in individuals and differences in types of vitamin D formulas. Of note, although both of the 2 forms of vitamin D are effective at raising serum D levels in small doses (4000 IU or less).

Calcium is the most abundant mineral in the human body. A mere 1% of the body’s calcium circulates in the blood and tissues; 99% is stored in the bones and teeth. Calcium is a nutrient of concern for the general population with respect to bone mineral optimization during the lifespan. However, because bone metabolism is multifactorial and complex, it is important to emphasize consumption of ample sources of calcium as well as vitamins K and B12, fluoride, magnesium, phosphorus, and potassium; to maintain serum vitamin D levels; and to ensure consistent exercise. Throughout the lifespan, dietary recommendations for adequate intake of calcium fluctuate.

-Excellent plant sources of calcium include leafy green vegetables—especially bok choy, broccoli, napa cabbage, collard greens, dandelion greens, kale, turnip greens, and watercress—as well as fortified plant milks, calcium-set tofu, dried figs, sesame seeds and tahini, tempeh, almonds and almond butter, oranges, sweet potatoes, and beans. 


-Iron is one of the most abundant metals on Earth and yet iron deficiency is one of the most common and widespread nutritional deficiencies. It is the most common deficiency in the world and is a public health problem across the globe. It is particularly prevalent in women of childbearing age, pregnant women, infants, children, teenage girls, and anyone experiencing bleeding, such as people with ulcers, inflamed intestines , or heavy menstruation. Iron-deficiency anemia is no more common in vegetarians than in non-vegetarians.

-Because plant-sourced iron is nonheme iron, which is susceptible to compounds that inhibit and enhance its absorption, the recommendation for vegans and vegetarians is to aim for slightly more iron than nonvegetarians. Fortunately, this is easy to do with the wide array of iron-rich food choices in the plant kingdom. Leafy greens and legumes are excellent sources of iron and a multitude of other nutrients, so it is advantageous to include these foods often. Other good choices include soy products, dark chocolate, blackstrap molasses, sesame seeds, tahini, pumpkin seeds, sunflower seeds, raisins, prunes, and cashews.

-Iron absorption may be diminished in the presence of phytates, tannic acids from tea, calcium in dairy, fiber, polyphenols in coffee and cocoa, and certain spices (eg, turmeric, coriander, chilies, and tamarind). To minimize this, separate iron-rich foods from these nutrients as much as possible. One of the best tips for optimizing iron absorption is to eat iron-rich foods in combination with foods high in vitamin C and organic acids. This improves solubility, thereby facilitating absorption.

-Iodine: Dietary sources of the trace mineral iodine are unreliable and fluctuate geographically because of varying soil qualities. It is crucial for vegans to be mindful of consuming a source of iodine to avoid thyroid issues. Sources of iodine include iodized salt and sea vegetables. One half-teaspoon of iodized salt provides the daily recommended 150-µg dose. Also, iodine levels in sea vegetables fluctuate dramatically, with some (especially dulse and nori) containing safe amounts and others (such as kelp) harboring toxic doses. Hijiki, also spelled hiziki, should be avoided owing to its excessive arsenic levels. A preexisting iodine deficiency, a selenium deficiency, or high intake of goitrogens (antinutrients found in cruciferous vegetables, soy products, flaxseeds, millet, peanuts, peaches, pears, pine nuts, spinach, sweet potatoes, and strawberries) can interfere with iodine absorption. There is no need to avoid goitrogenic foods as long as iodine intake is sufficient. If a patient does not enjoy sea vegetables or is minimizing intake of salt, an iodine supplement may be warranted.

Selenium is a potent antioxidant that protects against cellular damage and also plays a role in thyroid hormone regulation, reproduction, and DNA synthesis. Brazil nuts are an especially rich source of selenium in the plant kingdom. Although selenium content varies depending on the source, an average ounce (approximately 6 to 8 nuts) can provide 777% of the RDA. When accessible, one Brazil nut a day is an ideal way of meeting selenium recommendations. Other plant sources include whole grains, legumes, vegetables, seeds, and other nuts.

Zinc supports immune function and wound healing; synthesis of protein and DNA; and growth and development throughout pregnancy, childhood, and adolescence. Because of the presence of phytates, bioavailability of zinc from plants is lower than from animal products. Zinc deficiency may be difficult to detect in blood tests but can show up clinically as delayed wound healing, growth retardation, hair loss, diminished immunity, suppressed appetite, taste abnormalities, or skin or eye lesions. Consider advising patients to aim for 50% or greater than the RDA of zinc daily by including legumes, cashews and other nuts, seeds, soy products, and whole grains. Preparation methods such as soaking, sprouting, leavening, and fermenting will improve absorption. Table 2 below provides a convenient chart highlighting excellent sources of notable nutrients.

-Here’s to incorporating a varied whole food plant-based diet (plus a Vitamin B12 supplement) which will provide you with all the necessary macro and micro nutrients.

Regards,


Aditya

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