Leaving Las Vegas: Chinese state railway companies to build US high-speed link from ‘Sin City’ to LA | South China Morning Post

Work on joint venture for 370km high-speed line linking Las Vegas to Los Angeles could start in 2016 and is part of mainland’s pursuit of overseas high-speed rail deals

A consortium of Chinese state rail companies has teamed up with an American company to build a high-speed rail line in the United States, with work possibly starting as early as September 2016.

It is the latest push by Beijing to export its high-speed rail technology and tap lucrative offshore markets.

China Railway International USA and the private rail venture, XpressWest, said in a joint statement on Thursday that they would form a joint venture to accelerate the launch of a high-speed rail linking the western cities of Las Vegas with Los Angeles.

The deal marks the latest attempt in China’s increasingly aggressive pursuit of overseas high-speed rail deals after the country built the world’s longest network in less than a decade.

Beijing recently clinched contracts in Russia, although it has faced hurdles in Mexico and Indonesia because of bureaucratic reversals of decisions in those countries.

XpressWest, a private venture of a Las Vegas-based hotel and casino developer, was given approval in 2011 to build and run the 370km high-speed line, according to its website.

The project has US$100 million in initial capital, the companies said in the statement, released at a government-organised forum before President Xi Jinping’s forthcoming visit to the US. China Railway International USA is owned by a consortium made up of subsidiaries from the mainland state companies China Railway Group, CRRC Corp, China State Construction Engineering Corp and China Railway Signal & Communication Corp.

Gary Wong, an analyst at Guotai Junan Securities, estimated that the XpressWest project was worth US$5 billion, which he said would likely offer the many Chinese companies involved little financial benefit.

However, it was significant as a deal because it would help open the undeveloped US high-speed rail market, Wong added.

“If this opens up the United States market for them, opportunities for future expansion will increase,” Wong said. “And if [their technology] is used in the United States, it will be easier for them to sell to other countries.”



China’s top graft-buster breaks taboo by discussing Communist Party’s ‘legitimacy’ | South China Morning Post

Open discussion by top graft-buster Wang Qishan about the legitimacy of the ruling Communist Party – a topic long deemed unquestionable – has raised the eyebrows of some commentators. Graft-buster Wang Qishan has raised some eyebrows with his comments on the Communist Party's 'legitimacy'. Photo: AFP

“The legitimacy of the Communist Party of China derives from history, and depends on whether it is supported by the will of the people; it is the people’s choice,” Wang said when meeting some 60 overseas attendants of the Party and World Dialogue 2015 in Beijing on Wednesday. ADVERTISING Analysts said the aberration was a step forward but some disagreed with Wang’s interpretation of “legitimacy”.

Zhang Lifan, a Beijing-based commentator, said Wang’s remarks reflected a shift of attitude in the party as a result of intensified social conflicts and increasing pressure from an underperforming economy.

“In the past, the issue was not allowed to be discussed, because the [party] thinks [its rule] is justified unquestionably. As the old saying goes, ‘political power grows out of the barrel of a gun’. They fought their way into the ruling position, instead of being elected into it,” Zhang said. [The Communist Party’s] legitimacy was maintained by relying on economic growth, but now economic growth is facing problemsZHANG LIFAN, COMMENTATOR

“Its legitimacy was maintained by relying on economic growth, but now economic growth is facing problems. In the past people thought [the party] could continue governing and did not have strong opposition to it because they still had money in their pocket. Now the size of their pockets have shrunk,” he said.

Zhang Ming , a political scientist with Renmin University, applauded Wang’s courage, but disagreed with his use of “legitimacy”. “You can’t talk about legitimacy merely from a historical perspective. How to let the people express their approval or disapproval [of the government]? The ballots are the most obvious way,” he said.

Steve Tsang, a senior fellow at the China Policy Institute of the University of Nottingham, said the “legitimacy” Wang mentioned did not mean democratic accountability.

“The will of the people, in China’s political reality, is collected and reorganised into something in line with what the party wants,” he said.

“Then [it] uses the powerful propaganda machinery to ensure the people embrace the newly reformulated views as their own.”

Source: China’s top graft-buster breaks taboo by discussing Communist Party’s ‘legitimacy’ | South China Morning Post


Modi Tells Nervous Business Leaders the Global Shakeup Is India’s Time to Shine – India Real Time – WSJ

Prime Minister Narendra Modi called Indian business leaders to his official residence Tuesday to discuss how to bulwark the country as China’s slowdown continues to send shock waves through the global economy.

In the three-hour summit, executives and economists ran through a long-standing wish list that includes investing more in infrastructure, expediting government clearances and lowering capital costs. Some executives suggested an interest-rate cut was overdue from the central bank, and that domestic companies should be given more protection from inexpensive imports.

“We have to be cautious, while we take some bold steps on the economy to increase growth,” Rana Kapoor, chief executive of Yes Bank Ltd., told reporters after leaving the meeting. “At the same time, you have to make sure that India has a soft landing after the severe impact of the yuan devaluation.” There has been a jump in foreign direct investment in India this year. But the executives told Mr. Modi that local companies need to see long-delayed improvements in economic management before they can ramp up capital spending. “Domestic investment is at a standstill, and that’s largely because there is no demand,” said Jyotsna Suri, president of the Federation of Indian Chambers of Commerce and Industry.

Mr. Modi reiterated that the world-wide turbulence is an opportunity to highlight India’s resilient growth, vast domestic market and government policies geared toward promoting investment, Finance Minister Arun Jaitley said.

Source: Modi Tells Nervous Business Leaders the Global Shakeup Is India’s Time to Shine – India Real Time – WSJ


From ‘Made in China’ to ‘Innovate in China’ – International Finance Magazine

In the West, people often opine that Chinese are not innovators but just copiers who can make a product at a cheaper rate. If somebody mentions inventions, like gunpowder and printing press which were invented by the Chinese, the argument often ends up with ‘they have not really followed through with their innovations and have since then made little progress in this department’.

From ‘Made in China’ to ‘Innovate in China’But the Chinese are ready to transform themselves from the factory of the world to the generator of innovation. Companies like Alibaba Group and Xiaomi among others are making a mark in the world.

“I understand that the China market is characterised by some significant weaknesses when compared to a highly mature Silicon Valley, but the investment power and determination of the Chinese government, along with its appetite to transition away from ‘Made in China’ to ‘Innovated in China’ leaves no doubt in my mind that China will become a leader when it comes to building ecosystems for growth of startups and other innovative organisations,” says Lars Lin Villebaek, co-founder of GrowthEnabler.com, a platform for startups. He has 10 years of personal entrepreneurship experience in China.

Last year, China gave birth to a massive 1.9 million new businesses (across all sectors) and saw some record breaking IPOs in the global market.

And unlike the US, which has Silicon Valley and the area around Boston which are known for their startup ecosystems, China has several dozen ‘Silicon Valleys’. “Most of these are in the embryonic stage. Silicon Valley has a long history of success while the Chinese ones are new. The oldest — Zhongquancun in Beijing district — dates back to the ’80s,” says Zhang Chia Hou, China & India analyst and a board member of GrowthEnabler.com and author of http://www.chindia-alert.org.

According to Wan Gang, China’s minister of science and technology, the district last year birthed 49 startups daily. As of March 2015, 129 high-tech zones had been approved by the State Council. These are designated areas in different cities where entrepreneurs are supported by different policies and benefits, such as fast Internet connections, government assistance in funding, and access to talented and educated human resources from nearby universities.

“Zhongquancun is also home to several universities like the prestigious Tsinghua University which churns out PhDs and computer scientists by the thousands. So there is no shortage of people who understand technology and the investment tap is flowing quite readily,” says Erik Roth, an entrepreneur, lecturer, serial innovator and lead for McKinsey & Company’s Global Innovation & Growth Practice.

Apart from Zhongquancun, Shanghai and Chengdu are also home to several startups.

According to Villebaek, there are several other factors which will help China achieve the ‘startup capital of the world’ status. There is ample access to funding even for high-risk projects. As long as projects replicate proven business models and products, the financing is usually done very quickly.

Additionally, successful companies like Alibaba, Tencent and Baidu have taken upon themselves to nurture the startup system in the country.

Says Alibaba Group spokeswoman: “Our founders started Alibaba Group to champion small businesses, in the belief that the Internet would level the playing field by enabling smallenterprises to leverage innovation and technology to grow and compete more effectively in the domestic and global economies. Alibaba supports innovative entrepreneurs who are able to create products and services that benefit the end user and society as a whole.”

Also, some Chinese are going for international exposure. “Most of the emerging class of entrepreneurs and venture capitalists, including Alibaba’s founder Jack Ma, studied at leading US universities, and worked for great corporations and investment firms. Most Chinese who can afford it (foreign education) decide to have an experience abroad,” says Christoph Tutsch, founder and CEO of ONPEX, a company which provides white-label cloud-based payment technology.

Tutsch adds that China is going in the right direction and people are educating themselves to achieve their goals. “They are trying to think out of the box for solutions that will help the local problems. Even now, they are many successful tech companies in China that no one has heard of because they are kept in the local market, which is good for self-improvement. In the next few years, we will start hearing of more Alibabas who venture West,” says Tutsch.

Where they need to improve

Historically, the Chinese do not have a culture of risk taking. “In a long time, I have not noticed any disruptive business model from China,” remarks Roth. The educational system in the country will have to focus on research and offer education in entrepreneurship to address the needs of entrepreneurs.

“The young in general are following the old path of secure jobs in government or established industry. But with 1.3 billion people, there are enough youngsters interested in innovation and entrepreneurship for them to be a real force,” says Zhang.

Source: From ‘Made in China’ to ‘Innovate in China’-International Finance Magazine


India ranks low on inclusive growth, development in WEF report – The Hindu

Ranked in the bottom half of the 38 countries that make up our lower middle income bracket. India has been ranked very low, mostly in the bottom half, globally on most of the parameters for inclusive growth and development even as it fares much better internationally when it come to business and political ethics. India’s overall place in the Global Competitiveness Index 2014–2015 rankings is 71 out of 144 countries.

Growth and Development Report is the first inclusive report ever by World Economic Forum that assess countries’ efforts to foster economic growth that raises the living standards of entire societies.In a first of its kind global rankings, across different groups of countries in terms of their per capita income levels, the World Economic Forum (WEF) found that most countries are in fact missing major opportunities to reduce income inequality and same is the case with India. WEF said that the new study, which was conducted over the past two years, seeks to identify the various ways policymakers can drive economic growth and equity at the same time and assesses them on their relative success in implementing these measures. “Our message is unequivocally that leaders must pursue economic strategies that are at the same time pro-growth and pro-labour,” said the Geneva-based think tank known for its economic conclaves held in different parts of the world including in Davos, Switzerland and in India. India has mostly been ranked in the bottom half of the 38 countries that make up our lower middle income bracket.

Particularly disappointing is its position in terms of Fiscal Transfers, where it ranks 37th out of 38. It also ranks very low at 32nd for Tax Code and 36th for social protection. WEF said that another area that policymakers in India would need to prioritise improvement would be ‘Asset building and entrepreneurship’, in particular the Small business ownership, where India ranks bottom among its peers at 38th place. However, India does demonstrate ‘leadership’ in some areas, WEF said, while naming areas like corruption and rent where it comes 8th.

For business and political ethics, India ranks 12th, while it ranks 11th on the Financial intermediation of real economy investment pillar, which suggests that money invested in the economy generally gets directed towards productive uses. WEF said its first Inclusive Growth and Development Report present a new framework for assessing countries’ efforts to foster economic growth that raises the living standards of entire societies. “Around the world, no bigger policy challenge preoccupies political leaders than expanding social participation in the process and benefits of economic growth,” WEF said while releasing the report that covers 112 economies.

Source: India ranks low on inclusive growth, development in WEF report – The Hindu


What if the China Panic Is All Wrong? – China Real Time Report – WSJ

China’s stock-market routs and economic deceleration are widely cited as the major trigger for the latest round of global market volatility. But what if the dominant narrative about China—that the world’s No. 2 economy is on the verge of falling off a cliff—is wrong?

It would mean the global market turmoil hitting equities, commodities and currencies is an overreaction. “We may have seen overshooting,” said Hung Tran, executive managing director of global capital markets at the Institute of International Finance, an industry group representing around 500 of the world’s largest banks, funds and other financial institutions. Even the head of the International Monetary Fund indicated as much earlier this week.

One of the chief problems is that it’s difficult to gauge China’s black-box economy. The country’s true growth is a guessing game given a number of statistical factors. That’s why growth forecasts show a range spanning several percentage points. Lombard Street Research, for example, estimates the economy will only expand by 3.7% this year, nearly half Beijing’s official growth forecast. Even if China’s economy is healthier than many now fear, uncertainty is oxygen for market volatility.

More clarity from Beijing about growth prospects and crisis-management plans would likely prove fruitful. That’s why the U.S. plans to press Chinese officials for greater details on their policy plans at a meeting of finance ministers and central bankers from the Group of 20 largest economies late this week. Here are some of the arguments that might moderate market fears:

• China’s stock market valuation is a bad indicator of Chinese growth. “Investors should not get carried away by the collapse of the Shanghai Composite Index,” warns Melanie Debono from Capital Economics in note to clients, “not least because its performance often bears little relation to that of the economy, primarily due to wild swings in its valuation.” The market run-up in advance of the selloff was out of step with reality, says Nick Lardy, a China expert at the Peterson Institute for International Economics. That’s why he says there’s likely more to come in the Chinese market correction. Even after the rout, “The market was still trading at 39 times earnings. Give me a break, it’s still too high.”

• The devaluation of the renminbi likely isn’t Beijing scrambling to save the economy through competitive devaluation. Beijing’s depreciation was likely more about addressing a key concern for the International Monetary Fund as it considers whether to include the Chinese yuan in its basket of currencies that comprise its lending reserves than it was about reviving economic growth by juicing exports. On Aug. 11, Beijing changed the way it values the yuan, allowing markets to play a greater role in the exchange rate. Market pressure has long been for depreciation, so allowing the currency to be more market-determined would, in the near-term, naturally see the yuan move lower. Against a basket of global currencies, the yuan has appreciated over the last year by nearly 15%, accounting for inflation. That’s despite Beijing intervening for months to prevent the yuan from losing value. “So the fact that the yuan came down 3% to 4% is not going to make much difference,” said Ted Truman, a former top international finance official at the U.S. Treasury and the Federal Reserve.

GDP growth may not be nearly as bad as suspected. Economists such as Clare Howarth at Oxford Economics say that beyond official industrial production figures, data on car and cell phones sales are jacking up the risk that China’s growth stalls. But “critics are really overlooking the fact that the growth model has changed in China,” Lardy says. “The service sector is now the driver of growth. So the fact that industrial growth has slowed down quite a bit does not mean, as it would have meant 10 years ago, that the economy is falling off a cliff.” Based on electricity consumption, “I just don’t see any signs that the Chinese economy is experiencing a hard landing,” says Torsten Sløk, Deutsche Bank’s chief international economist. Joe Hockey, treasurer for an economy that is intimately tied to China, Australia, says market reactions have been overblown. “We’re confident about our understanding of the Chinese economy and we see over time huge opportunities for growth,” Mr. Hockey told the Journal.

• Rather than regressing to policies of old, China’s government has actually been showing signs of moving ahead with market reforms.

Source: What if the China Panic Is All Wrong? – China Real Time Report – WSJ


China military parade commemorates WW2 victory over Japan – BBC News

China has held a lavish parade in Beijing to mark the defeat of Japan in World War Two, showcasing its military might on an unprecedented scale. President Xi Jinping in his opening speech paid tribute to “the Chinese people who unwaveringly fought hard and defeated aggression” from Japan. He also said the People’s Liberation Army would be reduced by 300,000 personnel, but gave no timeframe.

Soldiers of China's People's Liberation Army (PLA) march at the beginning of the military parade marking the 70th anniversary of the end of World War Two, in Beijing, China, 3 September 2015

China’s growing military power is being keenly watched amid regional tensions. China has several territorial disputes with neighbours in the South China Sea, as well as with Japan in the East China Sea. Ahead of the parade, the US said five Chinese ships had been spotted in the Bering Sea off Alaska for the first time. China’s People’s Liberation Army (PLA) is the world’s largest military, with 2.3 million members. China also has the second biggest defence budget after the US.

Source: China military parade commemorates WW2 victory over Japan – BBC News


The Successful Indian Tech Companies You’ve Probably Never Heard Of – India Real Time – WSJ

The lofty valuations of India’s consumer-focused startups like Flipkart and Snapdeal have gotten a lot of limelight lately, but the country’s up and coming software product technology firms are also growing rapidly, says iSpirit Foundation, a Bangalore-based technology lobby group.

An index capturing the 30 most-valuable Indian software product-makers has risen by 28% in eight months since Oct. 30, a report released by iSpirit, which puts together the index, said Thursday. These companies, as estimated by iSpirit, were worth a total of $10 billion at the end of June. “There has been an acceleration since 2010 in the pace of creation of B2B (business-to-business) companies,” the report said.

More In Technology The Successful Indian Tech Companies You’ve Probably Never Heard Of Are You Addicted to the Internet? Take the Test Internet Addiction: How to Help Protect Your Children 5 Things to Know about Foxconn’s Ambitions in India Uber to Invest $1 Billion in India Indian techies and venture capitalists often rue that though Indians occupy top positions in global tech companies like Microsoft Corp.MSFT +3.55% and Oracle ORCL +2.05% Corp, the country hasn’t produced a major software firm up to the caliber of these multinationals.

In December, a Silicon Valley-based entrepreneurship trade body, the Indus Entrepreneurs, launched a program to help grow a select number of Indian product companies to become worth a billion dollars or more each. To help garner attention for software-product makers, iSpirit created its index last year. For this, it considered more than 300 Indian companies that make and sell software or provide applications that support other businesses. The index doesn’t include technology outsourcing firms like Infosys Ltd.500209.BY +3.56% and Tata Consultancy Services Ltd.532540.BY -0.08%, or consumer-oriented technology companies, like Flipkart and ANI Technologies Pvt Ltd.-owned Ola, a taxi-hailing application, which use technology to sell products to individuals. Companies included are firms like Bangalore-based InMobi Technology Services Pvt. Ltd., which competes with Google Inc.GOOGL +2.69% and Facebook Inc.FB +2.96% globally to provide a mobile advertising platform, and Delhi-based Wingify Software Pvt. Ltd, which analyses web-user data to enable companies to create more effective webpages.

Other companies are Capillary Technologies, which creates software that helps retailers manage customer data and counts shoemaker Nike NKE +1.91% and Pizza Hut among its customers, and Druva Software Pvt. Ltd., which provides data backup and other services to companies like Dell Inc. The index also has a few companies which have been around for more than two decades, such as Delhi-based Newgen Software Technologies Ltd, and accounting software-maker Tally Solutions Pvt. Ltd.

These software companies have also caught the eye of international investors in recent years. “There’s a consistent amount of capital going in…I wouldn’t say it’s a flood,” said Dev Khare, managing director of Lightspeed India Partners Advisors LLP, a venture-capital firm. Mr. Khare volunteers with iSpirit and helped put together the report on technology firms. In rupee terms, the 30 most-valuable companies as estimated by iSpirit were worth 655 billion rupees ($10 billion) at the end of June, versus 375 billion rupees at the end of October. The composition of the index has changed, to include some companies whose valuations have grown rapidly since the fall. To be sure, these valuations pale in comparison to that of Indian consumer companies. Flipkart alone was valued at $15 billion in May following a round of capital raising, up from $10 billion in December. Mr. Khare said that though consumer-focused tech companies have gotten a larger share of investor capital in recent years, historically, both consumer and software-product companies have provided good returns to investors. Many of the new Indian software companies are creating products for the tech consumer companies, such as software to manage customers who buy online, or software to manage logistics. Two-thirds of the 30 companies in the iSpirit index are based in India, while others are domiciled in Singapore and Silicon Valley. Most of the companies sell their products to clients globally. “As the conditions become more favorable, more capital will flow into these companies as well,” said Mr. Khare.

Source: The Successful Indian Tech Companies You’ve Probably Never Heard Of – India Real Time – WSJ


Fewer crimes to be subject to death penalty|Society|chinadaily.com.cn

China’s top legislature has adopted an amendment to the Criminal Law removing the death penalty for nine crimes and limiting the ability of those convicted of corruption from continually seeking reduced sentences. The revisions, passed by the Standing Committee of the National People’s Congress on Saturday, will take effect on Nov 1.

Crimes that will no longer subject to the death penalty include: ・ smuggling weapons, ammunition, nuclear materials or counterfeit currency; ・ counterfeiting money and fraudently raising funds; ・ arranging for or forcing another person to engage in prostitution; ・ obstructing military personnel from performing their duties; ・ fabricating rumors to mislead others during wartime. When the law takes effect, the number of crimes subject to capital punishment will be reduced to 46.

Since the late 1990s, there has been a consistent move to reduce the use of the death penalty and gradually reduce the number of capital crimes, said Lang Sheng, deputy head of the Law Committee of the NPC Standing Committee. Lang said the decision to abolish the death penalty in the nine crimes was made after thorough research. “After deliberation on the sentencing of the nine crimes, we found the death penalty was rarely applied,” he said. In other cases, few crimes of that type were prosecuted. The revision reflects the changing views of society and the legal community, Lang said.

The legislature also sought to restrict the ability of people convicted of corruption to repeatedly seek reduced sentences. Currently, those who are convicted of serious corruption offenses might receive a death sentence with a two-year reprieve. During the suspended death sentence period, felons typically apply for sentence reductions, often leading to sentences of life imprisonment. The law allows them, thereafter, to appeal for further reductions-commutation of their sentences, parole or non-prison sentences. The amendment changes that, allowing the courts to decline further sentence reductions. “Courts will be allowed to pass a sentence of life imprisonment without the possibility of commutation or parole in corruption cases,” the Law Committee said in a report to the NPC.

The amendment to the Criminal Law also changed rape laws so that sex with girls under 14, whether consensual or not, is rape. The change comes amid public outrage over recent offenders who were charged with lesser crimes in such cases.

Source: Fewer crimes to be subject to death penalty|Society|chinadaily.com.cn


Why India Stands to Benefit From China Slowdown and Global Reaction – India Real Time – WSJ

India’s economy has been insulated from the turmoil in emerging markets by a long-standing handicap: It isn’t an export powerhouse. For years, growth in India has been fueled more by domestic demand—not, as in China, by manufacturing goods for sale abroad. Now India’s resilient consumer spending is an advantage as demand decelerates almost everywhere else. It is luring companies to produce in India and, the government hopes, can help spark a belated industrial revolution in the country of 1.2 billion.

Jayant Sinha, India’s minister of state for finance, said this week the Chinese slowdown and its world-wide fallout could provide a chance for India to “take the baton of global growth.” Mumbai’s benchmark stock index ended Wednesday down 1.2%, having slid 8.5% in total since the People’s Bank of China moved to devalue the yuan on Aug. 11. The rupee has lost 3.4% since then. India hasn’t been rattled as badly as Brazil, Russia or South Africa. Its international reserves are ample, and it isn’t highly dependent on foreign capital to fund imports.

Source: Why India Stands to Benefit From China Slowdown and Global Reaction – India Real Time – WSJ


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