Posts tagged ‘United States’

27/08/2015

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

27/08/2015

India’s Hard-Working Expat Army – The Numbers – WSJ

Compared with expatriates from other countries, expats from India are younger, better-educated, harder-working and much more likely to be male. A new survey of people working far from home by the expat social group InterNations also suggests Indian expats are much more likely to pick a partner from home and less likely to settle in the country in which they currently work. While there is debate about exactly how expats differ from other migrant workers, any definition would have to include many of the millions of Indians who help run companies, build software and erect buildings across the globe. Indians have proven to be the highest ranked group of migrants to the U.S., in terms of education and pay. Indian-born leaders now run everything from Microsoft Corp. to Google Inc.

The InterNations survey of 14,400  self-declared expats living in 64 countries  offers some interesting insights into what India’s world-wide web of non-resident road warriors looks like. Here are a few numbers from the survey.

80% Around 80%, or four out of five, Indian expatriates who responded to the InterNations survey are male. That’s really lopsided. The average for all countries combined in the survey was about 47% male.

36.5 years Indians that took part in the survey were 36.5 years old on average. That is younger to the broader expat populace, which had an average age of 40.9 years. 45.2 hours Indian expats said they worked an average of

45.2 hours a week. While that is probably not enough overtime to get you to the top of Google like Sunder Pichai, it’s 3.2 hours more than the average expat.

92% More than 90% of those surveyed had a college degree or higher. On average only 83% of the world’s expats graduated from university. Data on Indians enrolled in U.S. schools show they are often more likely to go for advanced degrees. The education of globe-trotting Indians is also seen in their language abilities.

Close to half (48%) of the people surveyed said they could speak four or more languages. 9 out of 10 Compared with other expatriates,

Indians were much more likely to pick a partner from home. Around 89% of Indians in the survey said they were with someone from their home country. On average, expatriates around the world are usually more likely not to choose someone from home. Only 43% of those surveyed said they had a partner from their countries of origin.

12% Nearly a quarter of expats say they would consider settling in the country where they are currently working. For Indian expatriate workers, however, the number is just around one in eight.

Source: India’s Hard-Working Expat Army – The Numbers – WSJ

11/08/2015

China Shakes Markets with Yuan Move – China Real Time Report – WSJ

China devalued the yuan by nearly 2% on Tuesday in a surprise move that shook markets around the world and appeared to be a response to sharply weaker exports and plummeting factory prices in a softening economy. The central bank described its action as a new way of setting the daily parity or reference rate – a rate it sets for the currency against the dollar –  to better reflect market rates.  (The markets get a chance to trade the currency around that rate, but not by much. The yuan can go up or down only 2% from that crucial central rate.)

So far this year, the parity rate has hardly budged against the dollar even though the latter has been rising steadily against other currencies. That has made China’s exports more expensive in many markets just as the world’s second largest economy is slowing.  The People’s Bank of China says it will now pay more attention to the market levels when it sets its parity rate. It also called the move a “one-time fix.”

Economists are hotly debating the significance of the move, in part because it seems to be speaking to many different audiences. It will help the struggling export sector, which has stalled amid weak global demand. Exports in July, for example, sank more than 8% and they were down nearly 1% for the first seven months of the year.

At the same time, it was essential for the People’s Bank of China not to alarm domestic and foreign investors to avoid triggering a wave of capital outflows. Investors tend to dump a weakening currency and move their assets into other currencies. Thus, the PBOC said the move was a one-time reform effort to bring the yuan more in line with the markets.

Finally, the central bank may also have had the International Monetary Fund in its sights. The yuan is up for possible inclusion in international agency’s Special Drawing Rights, a basket of currencies that serves as a global reserve. Too big a move might have damaged Beijing’s case that the yuan is a suitable candidate for addition to that basket of currencies, analysts said.

via Economists React: China Shakes Markets with Yuan Move – China Real Time Report – WSJ.

28/07/2015

Delta to buy 3.55 percent stake of China Eastern for $450 million | Reuters

Delta Air Lines Inc (DAL.N) has agreed to buy 3.55 percent of China Eastern Airlines Corp Ltd (600115.SS)(0670.HK), a move that would make it the first U.S. carrier to own part of a Chinese airline.

The deal may prompt Delta’s rivals to beef up partnerships with Chinese carriers in an effort to secure their place in a country that Delta expects to become the biggest market for travel from the United States.

Delta’s purchase challenges rival United Continental Holdings Inc (UAL.N), the leading U.S. airline for service to China. United Chief Executive Jeff Smisek said Thursday during an investor call that the airline would be “keenly interested” in exploring a Chinese joint venture once the United States and China negotiate an Open Skies agreement that would ease air route restrictions.

Atlanta-based Delta said it will invest $450 million in China Eastern’s Hong Kong-traded stock, which has nearly tripled over the past 12 months even as broader Chinese stock indexes have plunged.

Delta said it will get an “observer” seat on China Eastern’s board. The move may pave the way for Delta and China Eastern to seek approval to coordinate pricing and flight capacity.

However, larger tie-ups with antitrust immunity cannot happen until an Open Skies agreement is in place, which could take years. Currently, governments specify which airlines can fly which routes, and how often.

Chinese carriers have been “launching far too much capacity across the Pacific,” industry consultant Robert Mann said. “Everybody is looking for a stronger form of joint-venture partnership for the day when China and the U.S. have Open Skies.”

For now, Delta and China Eastern say they will invest in services so travelers have a seamless experience on the airlines, which share flight codes on 80 routes including subsidiary Shanghai Airlines. The partnership will grow Delta’s foothold in China Eastern’s Shanghai hub, a key market for business travel.

The transaction is subject to approval by each company’s board.

Delta is investing in foreign carriers, taking small stakes in one airline in Mexico and one in Brazil. It also owns 49 percent of Virgin Atlantic Airways Ltd (VA.O) and has used its position to shift the UK carrier’s routes to Delta’s advantage.

via Delta to buy 3.55 percent stake of China Eastern for $450 million | Reuters.

21/07/2015

Indian Companies Invest Billions, Create Thousands of Jobs in the U.S. – The Numbers – WSJ

As India attempts to thaw its business environment and attract the interest of foreign companies, a hundred Indian firms have together made investments worth more than $15 billion in America, according to the findings of a new survey by the Confederation of Indian Industries and audit firm Grant Thornton International Ltd.

The findings, which were released in a report titled “Indian Roots, American Soil” on Tuesday, suggest that Indian companies in the U.S., most operating in the information-technology sector, have created thousands of jobs there and show a growing interest in hiring more American workers in the next few years.

Indian outsourcing companies in the U.S. have in recent months been criticized for depending too much on foreign staff — H1-B visa holders – instead of hiring locals.

The 100 Indian companies surveyed are spread across all 50 U.S. states, the report said. Here are the main numbers from the report.

91,000

The survey says Indian firms have created more than 91,000 jobs in the U.S., most of them concentrated in New Jersey, where they have hired over 9,000 people. In California, more than 8,000 people work for Indian companies.

$15.3 billion

The total value of tangible investments – for example in real estate or equipment — made in the U.S. by the surveyed companies. Texas has received the largest amount — almost $3.85 billion from 17 Indian companies, most in the information-technology and telecom sectors. The report didn’t give a timeframe for these investments.

40%

The percentage of surveyed companies that do information-technology business is 40%. The report also highlights the emergence of Indian companies in the pharmaceutical and manufacturing sectors, which each accounted for 14% of the firms surveyed.

84%

That’s the proportion of companies in the survey that plan to make more investments in the U.S. in the next five years. California, New Jersey, New York and Texas are the “most promising states for expected future investment,” the report said.

90%

The forecast for hiring local U.S. employees is also encouraging, the survey reveals. Almost 90% of the companies responded positively when asked if they foresaw hiring locally in the coming five years.

via Indian Companies Invest Billions, Create Thousands of Jobs in the U.S. – The Numbers – WSJ.

13/07/2015

China says 75 percent of cities failed to meet air standards in June | Reuters

Nearly 75 percent of China’s big cities failed to meet air quality standards in June, the environment ministry said on Monday, an improvement over the same month last year, as the country continues to wage “war on pollution.”

General view of downtown Shanghai on a hazy night January 25, 2015. REUTERS/Aly Song

Nineteen cities met air quality standards every day, the Ministry of Environmental Protection said in a statement on its website (www.mep.gov.cn), compared to five at the same time last year.

Air quality in the capital Beijing was subpar on almost 60 percent of the days in June and saw levels of PM2.5 – particulate matter with a diameter of 2.5 micrometers that can penetrate deep into the lungs – rise 11 percent compared to the same period last year.

Amid growing public disquiet about smog and other environmental risks, China said last year it would “declare war on pollution” and it has started to eliminate substandard industrial capacity and reduce coal consumption.

Last year, nearly 90 percent of China’s 74 big cities failed to meet air quality standards.

The state standard is 35 micrograms of PM2.5 per cubic meter, but the government does not expect to bring the national average down to that level before 2030.

In April, the vice minister for environmental protection announced a two-year inspection campaign to root out fake air quality data and accused some local governments of manipulating the data to meet national standards.

via China says 75 percent of cities failed to meet air standards in June | Reuters.

13/07/2015

Tales of the unexpected | The Economist

WEIJIA is a typical Chinese seven-year-old. He loves riding his bike and anything to do with cars; he is a badminton fanatic and has lessons twice a week. In a few months’ time, however, he will become rather less typical. He will have a brother or sister—something most urban Chinese children lack.

His parents are taking advantage of a relaxation in November 2013 of the country’s strict family-planning rules. Couples are now allowed to have a second baby if one parent is an only child. After more than 35 years of often brutal enforcement of the one-child-per-couple policy, some had expected a mini baby-boom to follow. The National Health and Family Planning Commission estimated that the new rules would allow 11m more couples to have a second child (there were already exemptions for some). It thought that 2m of them would try in the first year. But by the end of 2014 fewer than 1.1m people had applied for the necessary permit.

 

That worries the government, which has tweaked the rules not out of sympathy for lonely only children or for parents who want a spare heir, but because of a population crunch. The country is ageing rapidly. In 2012 its labour pool shrank for the first time in 50 years. In the largest cities the fertility rate—meaning the number of children an average woman is likely to have during her lifetime—is among the lowest in the world, at around one. For the country as a whole it is less than 1.6—far below the level of 2.1 needed to keep the population steady (see chart).

The one-child policy did not curb Chinese fertility as much as its boosters imagine. By the time it was introduced in 1979, the fertility rate had already fallen to 2.8 from 5.8 in under a decade, thanks to usually less coercive efforts to encourage fewer births. Ruthless enforcement of the new policy resulted in widespread forced abortions and infanticide. It inflicted misery on parents who wanted larger families. But its overall impact on births was limited. In most countries, rising affluence has led to fewer babies. India’s fertility rate fell steadily over the same period without such formal policies, even though its economy did not grow nearly as fast as China’s. In wealthy South Korea the birth rate has fallen to 1.3 children per woman, down from six in 1960.

China’s authorities have now changed tack, from relentlessly proclaiming the virtues of having only one child to encouraging eligible couples to “procreate legally”. But they should not be surprised that this is failing to achieve the desired effect.

Since the 1980s rural families whose first child was a girl have been allowed to try for another. More recently, couples who are both single children have been allowed to have a second. Yet the uptake has been low. Academics, including Cai Yong of the University of North Carolina, Chapel Hill, conducted a study in 2007-10 in the coastal province of Jiangsu. They found that among 2,500 urban and rural women they surveyed who were entitled to have a second child, only 6.5% did so. Ethnic minorities (nearly a tenth of the population), have long been allowed to have two or more. But on average each ethnic-minority woman bears only about 1.5 children, according to a census in 2010.

Mr Cai believes that rising incomes have been a big cause of shrinking family size. “Development is the best contraceptive,” he says. Births would have plummeted even without the one-child policy, he reckons, though not as fast or as low. Families worry about the expense of having babies: good education and health care are increasingly pricey. A study by Credit Suisse in 2013 found that couples typically spend over 22,500 yuan ($3,600) a year to raise a child to the age of 18. That is more than three-quarters of the average annual disposable income per person of urban households. A government report in 2015 said that in the first five years of a child’s life, city parents spend twice as much as rural ones, even before the high cost of urban housing is included—particularly near the best schools (see article).

Chinese families want their offspring not only to get a good education, but also to gain an edge in the global jobs market. Hence Weijia’s parents spend nearly 15% of their annual income just on classes for him, including weekly English lessons. Over half of children under six take extra classes in addition to those at kindergarten, according to IResearch, a Chinese market-research company.

Grandparents help to reduce the cost of child care (they often live with their grown-up children). But since people marry and have children later than they used to, the age of live-in grandparents is rising too; fewer are sprightly enough to deal with two children. It has become so common in China to have only one child that society is no longer geared to handle multiple offspring: hotel rooms for two children cannot be booked online (parents must call); play vehicles in parks seat two adults and one youngster; toothbrush-holders in family bathrooms often have space for just three brushes.

Decades of propaganda about the benefits of single children have changed the way parents think, says Wang Feng of the University of California, Irvine. A belief that China has too many people is widely shared, as is a conviction that the country would have been far worse off without the one-child policy. Many Chinese are surprisingly willing to blame the country’s terrible traffic and its air and water pollution on overpopulation, rather than bad planning. Having just one child still has the whiff of the patriotic about it.

The government’s next step may be to allow all couples to have two children. There is much speculation that the country’s parliament will approve this next year. Family-planning bureaucrats still fret about what might happen if restrictions were to be lifted. But the same factors of cost and hassle will continue to suppress the birth rate, regardless of how fast the policy is adjusted. Growing numbers of young Chinese people now prefer not to marry or have children at all.

via Tales of the unexpected | The Economist.

01/07/2015

Foreign Brands Losing Luster in China – China Real Time Report – WSJ

Move over Western brands, Chinese companies are taking over.

China’s 1.34 billion-plus consumers are filling their shopping baskets with Chinese-branded toothpaste, laundry detergent, juice, cookies and more, according to a new study from consultancy Bain & Co.

Local Chinese companies have become more competitive and are leveraging their strength in smaller cities, where growth rates are higher than in top cities like Beijing and Shanghai, according to the study, which looked at the shopping habits of 40,000 consumers.

The result is that foreign brands are losing market share in large consumer goods categories–such as personal care, home care and packaged foods– all across China, from its biggest to smallest cities, Bain said. And sales growth, which is dwindling as China’s economy slows, is going primarily to Chinese companies, such as fabric-softener maker Guangzhou Liby Enterprise and juicer Tian Di No. 1 Beverage, it said.

While that’s good news for Chinese brands, it’s nothing to cheer about for global companies, which have been banking on Chinese shoppers to boost their sales. China’s economy is also slowing, meaning that the days of easy money in China are over and tireless boardroom references to “China’s emerging middle class” as the saving grace may soon be put to rest.

Some companies, like Best Buy Co. and Home Depot Inc., have either exited or are rethinking their goals in China. Best Buy Co. sold all its remaining stores in China last year, citing online competition.

But there’s still growth for many foreign brands. Foreign makers of beer, chewing gum and hair conditioner are still gaining traction and market share from Chinese companies, according to Bain.

Below are charts from Bain & Co and Kantar Worldpanel showing how Chinese companies are standing up against foreign rivals at retail and in consumer products.

via Foreign Brands Losing Luster in China – China Real Time Report – WSJ.

25/06/2015

China says economic losses from drug abuse hit $81 billion a year | Reuters

China on Wednesday gave its first-ever assessment of the scourge of drug abuse, saying it caused annual economic losses of 500 billion yuan ($80.54 billion) and as many as 49,000 deaths last year.

China has intensified a crackdown on drugs as the rise of a new urban class with greater disposable income has fueled a surge in the numbers of drug addicts.

In its fight on drug abuse, the government arrested a string of celebrities, including the son of Hong Kong kungfu movie star Jackie Chan. Jaycee Chan, 32, was released in February, after serving a six-month jail sentence on drug charges.

China has more than 14 million drug users, Liu Yuejin, assistant minister of public security, told a news conference.

“The direct economic losses caused by drug use in the entire country have hit 500 billion yuan annually,” Liu said.

Drug abuse had killed at least 49,000 registered users by the end of 2014 and fueled a rise in crimes such as murder, abduction and rape, Liu added.

China’s share of synthetic drug users eclipsed heroin users for the first time last year, according to an annual report on the drug situation.

By the end of 2014, China had about 1.2 million users of methamphetamine, up almost 41 percent from a year earlier.

Two major overseas drug sources for China are southeast Asia’s “Golden Triangle,” where the borders of Myanmar, Thailand and Laos meet, and south Asia’s “Golden Crescent“, which includes Afghanistan and Pakistan, Liu said.

Heroin and methamphetamine are being smuggled into China’s southwestern province of Yunnan and region of Guangxi, which both border Southeast Asia, Liu added.

To fight this situation, China was strengthening law enforcement cooperation with Afghanistan, Pakistan, Myanmar and other countries, he said.

via China says economic losses from drug abuse hit $81 billion a year | Reuters.

18/06/2015

China military says two more top officers probed for graft | Reuters

China’s Defense Ministry said on Tuesday that two more former senior officers were being investigated for corruption, as part of a sweeping campaign against graft which has already felled dozens of senior people.

In a brief statement, the ministry said that Kou Tie, former commander of the Heilongjiang military region in northern China, had been put under investigation last November for suspected “serious discipline violations”. He was handed over to military prosecutors last month.

The other officer was named as Liu Zhanqi, a former communications division commander for the paramilitary People’s Armed Police, also suspected of “serious discipline violations”, common wording for corruption. He was handed to military prosecutors last month as well.

The ministry gave no further details. Neither case had been reported before.

Weeding out graft in the military is a top goal of President Xi Jinping, chairman of the Central Military Commission, which controls China’s 2.3 million-strong armed forces.

Serving and retired Chinese military officers have said military graft is so pervasive it could undermine China’s ability to wage war, and dozens of senior officers have been taken down.

The anti-graft drive in the military comes as Xi steps up efforts to modernize forces that are projecting power across the disputed waters of the East and South China Seas, though China has not fought a war in decades.

via China military says two more top officers probed for graft | Reuters.

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