Archive for ‘Chindia Alert’

31/03/2015

What could happen in China in 2015? | McKinsey & Company

What could happen in China in 2015?

What do you get when you add slower economic growth, greater volatility, and rising competition to more international flights and genuine Chinese innovation? McKinsey director Gordon Orr’s annual predictions.

December 2014 | byGordon Orr

It seemed harder to prepare my “look ahead” this year. On reflection, I believe this is because political and economic leaders in China have clear plans and supporting policies that they are sticking to. You can debate the pace at which actions are being taken, but not really the direction in which the country is traveling. This means a number of the themes I highlighted for this year will remain relevant in 2015:

What could happen in China in 2015?

Author Gordon Orr discusses his China predictions with McKinsey director Nick Leung and principal Yougang Chen.

Improving productivity and efficiency will remain the key to maintaining profitability for many companies, given lower economic growth (overall and at a sector level) and the impact of producer price deflation on multiple sectors.

The impact of technology as it eliminates jobs in services and manufacturing will become even greater (but still not in government).

As a result, the government will keep a sharper focus on net job creation and the quality of those new positions. Companies will hire even more information technologists to keep up in the race to exploit technology better than their competitors.

The push to lower pollution, and now carbon emissions, will lead to even greater investment in domestic solar and wind farms, boosting the global position of Chinese producers.

High-speed-rail construction will continue domestically and increasingly abroad, as Chinese companies become the builder of choice for high-speed rail globally.

Beyond these, there are several additional themes that will be important in 2015. I describe them below.

What else may happen in 2015? – see article:

via What could happen in China in 2015? | McKinsey & Company.

31/03/2015

India’s Billion-Dollar Startups Balloon on Glut of Global Funds – India Real Time – WSJ

Vikram Chopra spent the past three years building an online furniture-shopping site for Indian consumers that was funded mainly by annual capital injections from a German technology incubator.

But during the past few months, investor interest in the site, FabFurnish.com, has soared, said the 32-year-old entrepreneur, who is based in the New Delhi suburb of Gurgaon. Several global venture-capital firms and hedge funds have said they are interested in investing, and Mr. Chopra is now considering another round of funding that would exceed the $20 million raised so far—even though he doesn’t expect FabFurnish to be profitable for another two years and doesn’t yet need the cash.

“A few years ago, everybody wanted to see profitability upfront,” said Mr. Chopra. “Today, it is more like how much money you need to curb the competition [and] kill everyone else.”

Global money is flooding into Indian startups as investors search for a successor to Alibaba Group Holding, the Chinese e-commerce company that raised a record $25 billion in its initial public offering last year.

Venture capitalists sank $4 billion into India last year in some 300 deals—almost twice as much money as they invested in 2013 and 14 times the level of a decade ago, according to Indian data tracker Venture Intelligence.

via India’s Billion-Dollar Startups Balloon on Glut of Global Funds – India Real Time – WSJ.

31/03/2015

China aims to double doctor numbers as cure for healthcare woes | Reuters

China will almost double the number of its general doctors by 2020, trim its public sector and improve technology as it seeks to fix a healthcare system plagued by snarling queues and poor rural services, its main administrative authority has said.

People queue at a hospital in Shanghai, September 2, 2014.  REUTERS/Aly Song

China’s fast-growing healthcare market is a magnet for global drug makers, medical device firms and hospital operators, all looking to take a slice of a healthcare bill expected to hit $1 trillion by 2020, according to McKinsey & Co.

“Healthcare resources overall are insufficient, quality is too low, our structures are badly organized and service systems fragmented. Parts of the public hospital system have also become bloated,” China’s State Council said in a five-year roadmap announced late on Monday.

The roadmap, which laid out targets for healthcare officials nationwide between 2015 and 2020, said Beijing wanted to have two general doctors per thousand people by 2020, close to double the number at the end of 2013, as well as increasing the number of nursing and support staff.

China suffers from a scarcity of doctors – partly caused by low salaries – which has created bottlenecks at popular urban hospitals leading to rising tension between medical practitioners and often frustrated patients.

The roadmap said China would also look to use technology such as mobile devices and online “cloud systems” to meet some of the issues, a potential boost to tech firms like Alibaba Group Holding Ltd and its healthcare subsidiary Alibaba Health Information Technology Ltd.

China should also have digital databases for electronic health records and patient information covering the entire population to some degree by 2020, it said.

Providing access to affordable healthcare is a key platform for President Xi Jinping‘s government. However, recent probes have turned the spotlight on corruption in the sector, while patients often have large out-of-pocket expenses due to low levels of insurance coverage.

The roadmap said China would push forward the development of grassroots healthcare, a fast-growing business segment, while reining in some large public hospitals in urban centers.

The document also suggested further opening to the private sector, where Chinese and international firms have been taking a growing role in running hospitals.

“The role of public health institutions is too big, with the number of beds accounting for around 90 percent of the total,” the State Council said.

via China aims to double doctor numbers as cure for healthcare woes | Reuters.

26/03/2015

India Takes Top Spot In Producing Wealthy Households – India Real Time – WSJ

India’s affluent-household club is growing quickly.

Over the next five years, the number of such households–meaning those with financial assets of $100,000 to $2 million –is expected to jump 10-fold, to 4.9 million, according to an Economist Intelligence Unit study. In percentage terms, India ranked first among the 32 nations covered in the report.

By that same year,  the total financial assets in these households should reach $879 billion, driven by significant “economic reforms, attention to infrastructure, a stable political outlook and positive investor sentiment,” according to the report.

via Report: India Takes Top Spot In Producing Wealthy Households – India Real Time – WSJ.

26/03/2015

Ford aims to triple exports from India with $1 bln plant | Reuters

Ford Motor Co(F.N) has invested $1 billion in a new plant in western India which will help the automaker triple exports from the country, chief executive Mark Fields told reporters on Thursday.

A Ford logo is seen during preparations for the 2014 LA Auto Show in Los Angeles, California November 18, 2014. REUTERS/Lucy Nicholson/Files

Ford plans to make India an export hub for compact cars such as the EcoSport, a sub-four meter sports utility vehicle, and the newly launched compact sedan, Ford Figo Aspire, the first car to be produced at the new facility.

The new manufacturing facility in Gujarat will nearly double the company’s installed production capacity in the country to 610,000 engines and 440,000 vehicles a year, Fields said at the launch of the new facility.

via Ford aims to triple exports from India with $1 bln plant | Reuters.

26/03/2015

Britain launches Europe’s first yuan money-market fund | Reuters

Britain deepened its financial links with China on Wednesday with the launch of Europe’s first yuan-denominated money market fund, which allows investors to get direct exposure to China’s interbank lending market.

100 Yuan notes are seen in this illustration picture in Beijing November 5, 2013. REUTERS/Jason Lee

The exchange-traded fund from China Construction Bank International (601939.SS), China’s second largest bank, is listed on the London Stock Exchange and can be traded in sterling, euros and yuan, Britain’s government said.

London has been keen to attract Chinese banks and encourage offshore trade in the yuan to bolster its position as the world’s main centre for foreign exchange trading.

Last year Britain became the first Western government to issue a yuan-denominated bond. On Tuesday the finance ministry’s chief economist said he viewed the yuan’s possible inclusion in the International Monetary Fund‘s currency basket as a “very live” issue.

“The launch of this (fund) will provide further opportunities for British and other global investors to invest directly into China,” said Andrea Leadsom, a junior British finance minister.

via Britain launches Europe’s first yuan money-market fund | Reuters.

26/03/2015

Hainan Airlines to buy 30 Boeing 787-9 jets, worth $7.7 billion by list price | Reuters

Hainan Airlines Co Ltd (600221.SS), China’s fourth-largest carrier, said on Wednesday it plans to order 30 Boeing Co (BA.N) B787-9 jets as it seeks to expand international routes to tap into growing demand for overseas travel from China.

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013.  REUTERS/Jim Young

The order would be the biggest this year for the jet, worth $7.7 billion (5 billion pounds) according to list prices. It would also boost the aircraft maker’s 787 programme backlog to 855 planes.

China’s airline passengers are increasingly looking beyond the mainland for travel opportunities. In 2014, Chinese travellers made more than 100 million trips overseas in a year for the first time, up sharply from 8.4 million in 1998, official data show.

Hainan Airlines added two long-haul routes to North America and Western Europe last year and plans major international expansion this year, Cai Zhiquan, a brand manager told Reuters. On Thursday. it reported net profit jumped 20 percent in 2014 to 2.59 billion yuan ($417 million).

“We’ll be flying from major hubs in China to second- or third-tier cities overseas,” said Cai. “At the same time, we’ll also open up more routes from inland Chinese cities to major hub cities elsewhere.”

via Hainan Airlines to buy 30 Boeing 787-9 jets, worth $7.7 billion by list price | Reuters.

24/03/2015

China says it agrees with India to maintain border peace | Reuters

China and India have agreed to maintain peace and tranquillity along their Himalayan border while they work on resolving a long-festering boundary dispute, China’s foreign ministry said after talks in New Delhi.

China's State Councilor Yang Jiechi (L) and India's National Security Advisor Ajit Doval shake hands during a photo opportunity before their meeting in New Delhi March 23, 2015. REUTERS/Stringer

The talks are aimed at fixing a dispute over the border that divides Asia’s largest nations, part of a push to make progress on the festering row before Prime Minister Narendra Modi visits China.

China’s foreign ministry said in a statement released on Monday both countries would build on the results of previous negotiations and push forward in “the correct direction”.

“Both sides reiterated the appropriate management and control of the dispute and joint maintenance of the peace and tranquillity of the border region before the border issue is resolved,” the ministry said.

As major neighbours and developing countries, the development of relations is good for both peoples as well as for regional and global peace and development, it said.

“Both sides ought to work together to push for practical cooperation in all areas, and further increase coordination on global and international issues.”

The talks are the first since Modi took office. The nationalist Indian prime minister is keen to resolve a dispute that has clouded rapidly expanding commercial links. Any progress would throw a positive light on his expected visit to Beijing in May.

However, there is no simple solution to a conflict that largely dates back to British colonial decisions about Tibet.

The disagreement over the 3,500-km (2,175-mile) border led to a brief war in 1962 and involves large swaths of remote territory.

China claims more than 90,000 sq km (35,000 sq miles) disputed by New Delhi in the eastern sector of the Himalayas. Much of that forms the Indian state of Arunachal Pradesh, which China calls South Tibet.

India says China occupies 38,000 square km (14,600 sq miles) of its territory on the Aksai Chin plateau in the west.

In September, the two armies faced off in the Ladakh sector in the western Himalayas just as Chinese President Xi Jinping was visiting India for the first summit talks with Modi.

via China says it agrees with India to maintain border peace | Reuters.

23/03/2015

India and China Talk About Their Disputed Border – India Real Time – WSJ

Indian and Chinese officials are meeting in New Delhi this week for talks on a border dispute that has for decades strained relations between the neighbors — the first such negotiations since Indian Prime Minister Narendra Modi took office last year.

The two Asian countries are separated by a nearly 2,200-mile border whose exact location is a subject of bitter dispute. China claims India’s northeastern state of Arunachal Pradesh, which it calls southern Tibet. India claims a Chinese-controlled region it calls Aksai Chin as part of its northernmost state of Jammu and Kashmir.

India periodically accuses Chinese troops of “transgressions” across the two countries’ ill-defined boundary, known as the Line of Actual Control. Officials on both sides say such incidents are likely to continue – and perhaps escalate as India further develops its border lands – until the boundary is properly marked and settled.

The dispute cast a shadow over Chinese President Xi Jinping’s visit to India last year – and on Mr. Modi’s efforts to improve relations with China. As Mr. Xi held his first official talks with Mr. Modi in September last year, their countries’ armies were locked in a tense face-off in the Himalayan region of Ladakh. Roughly 1,000 troops were called in on both sides, making it the biggest border confrontation between the two nations in decades.

Such episodes have interfered with the two countries’ efforts to deepen commercial relations as India seeks foreign investment to modernize its infrastructure. Mr. Modi is scheduled to visit China in May as part of those efforts.

Talks this week between China’s representative on the boundary question, Yang Jiechi, and India’s national security advisor, Ajit Doval, are aimed at giving momentum to the border talks.

Indian analysts say China may be more willing to negotiate given Mr. Modi’s steps to strengthen India’s ties with the United States. Mr. Modi visited the White House last year and U.S. President Barack Obama traveled to India to review a symbolically important military parade in January, signaling a willingness on India’s part to move closer to Washington.

But, Indian officials said, it won’t be easy. “It is an incredibly difficult problem if you look at the amount of real estate at stake and the length of the border,” said a senior official at the foreign ministry, who declined to be named.  The Indian government’s approach, the official said, is “let’s not let it drift.”

via India and China Talk About Their Disputed Border – India Real Time – WSJ.

22/03/2015

Chinese capital shuts third coal-fired plant in war on smog | Reuters

China’s smog-hit capital Beijing has shut down the third of its four coal-fired power plants as part of its campaign to cut pollution, with the final one scheduled to close next year, the official Xinhua news agency said on Friday.

A security personnel walks near Tiananmen Gate on a heavily hazy day in Beijing October 24, 2014.  REUTERS/Jason Lee

In 2013, the city promised in its clean air action plan to bring annual coal consumption down to less than 10 million tonnes by 2017, a reduction of 13 million tonnes in just four years.

It said it would shut down all four of its coal-fired power plants within four years, a move that would cut annual coal consumption by around 9 million tonnes.

Officials also plan to reduce coal combustion in heating systems and industrial facilities, partly by switching to natural gas and by relocating some factories out of the city, and to phase out coal consumption completely by 2020.

A 400-megawatt facility owned by the Guohua Electric Power Co. Ltd was shut on Friday and replaced with a gas-fired plant. It followed the closure of a 93-year-old power station run by Beijing Jingneng Power on Thursday.

It shut its first coal-fired plant, the 600-MW Gaojing facility owned by the China Datang Corporation, last July.

Average levels of hazardous airborne particles known as PM2.5 stood at 85.9 micrograms per cubic meters in 2014, down 4 percent compared with the previous year, but still far higher than the national air quality standard of 35 micrograms.

Beijing plans to bring readings down to 60 by 2017, the municipal environmental bureau said earlier this year.

Only eight of the 74 Chinese cities monitored by the Ministry of Environmental Protection met smog standards in 2014. Seven of the 10 worst-performing cities were in the province of Hebei, which surrounds Beijing.

via Chinese capital shuts third coal-fired plant in war on smog | Reuters.

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