Archive for February, 2012

18/02/2012

# “Ten reasons why India will not and must not become a superpower”

Ramachandra Guha, the renowned Indian historian and author (India after Gandhi),asserts there are ten reasons why India, despite its enormous economic growth, will not become a superpower.

Guha focuses mainly on the internal problems of the ‘unique political experiment’ India. The ten reasons are:

1. Rise of left-wing insurgency in Central and Eastern India (a brutal civil war between the Maoists and the gvernment).

2. Rise of right-wing religious fundamentalism (BJP/RSS).

3. Decline and corruption of the democratic center (particularly the conversion of political parties into family firms).

4. Degradation of public institutions (such as universities, law courts, hospitals, civil services).

5. Growing (spectacular) gap between the rich and the poor.

6. Rapid pace of environmental degradation (air pollution, dead rivers, depletion of groundwater aquifers, disposal of toxic and nuclear waste, etc.).

7. Superficiality of the mainstream media (or “the Indian media’s complicit worship of wealth, celebrity and super-stardom”) and abandonment of commitment to serious environmental reportage.

8. Political fragmentation and the instability engendered by multiparty coalition governments.

9. Unreconciled borderlands (Kashmir, Nagaland and Manipur).

10. Unstable neighborhood (Pakistan, Bangladesh, Nepal and Sri Lanka).

Conclusion: In the words of Guha: “There are too many fault lines in our society to be a superpower. As a historian I say: ‘we are not prepared’, as an Indian citizen I say: ‘we should not even attempt to’. India should adhere to its constitutional ideals, fight national fires, and heal and harmonize.

“Ten reasons why India will not and must not become a superpower”

18/02/2012

* 30% of Indian MPs have criminal charges and every MP under 30 ‘inherited’ seat;

Telegraph, June 2009: “A total of 153 of the 543 politicians elected in the biggest democratic election history have criminal cases pending, including nine ministers, according to a study by two non-governmental organisations, the Association of Democratic Reforms (ADR) and National Election Watch (NEW)

… there is a possibility that some of the charges were brought by political opponents …”

http://www.telegraph.co.uk/news/worldnews/asia/india/5422967/One-third-of-Indian-MPs-have-criminal-charges-filed-against-them.html

Patrick French, in researching for his book  ‘India: A Portrait’, found that every Indian MP under 30 has in effect ‘inherited’ a seat from a family member. Not quite as non-representative as the composition of the Chinese people’s national assembly, but …

17/02/2012

* Death sentence for ex-tycoon fuels debate over private lending, and over capital punishment

China Daily: “Death sentence for ex-tycoon fuels debate over private lending, report Li Jing and He Na in Beijing, and Xu Junqian in Zhejiang.

Wu Ying used to be one of the richest women in China. Today the former billionaire is on death row.

In the eyes of many people, particularly the judge who threw out her appeal last month, Wu is a fraudster who swindled her friends and business partners out of 770 million yuan ($122 million).

Yet, others oppose the sentence and say her case highlights a major issue in China: the reliance among small- and medium-sized enterprises on high-interest loans from private lenders.

From loan sharks and underground banks to pawnshops and auction houses, the private lending chain is huge and diverse, according to economists, who blame the situation largely on the struggles experienced by entrepreneurs in getting startup funds through authorized channels.

After 30 years of ongoing reforms, experts are now adding their voices to calls for China’s financial sector to be opened up even further.”

http://www.chinadaily.com.cn/cndy/2012-02/14/content_14597676.htm

China has reduced the list of crimes for which capital punishment applies from 68 to 55. Even so, many of these are for economic crimes, reminescent of the times (18th century)when European countries would execute or deport these criminals (eg Jean Val Jean of Victor Hugo’s Les Miserables and Mr Micawber of Charles Dickens’ David Copperfield). Crime and punishment is cultural. Hence in some Muslin countries adulterers can be stoned to death (or at least the female partner can).

In my personal opinion it is also a facet of developing human consciousnes: the more ‘enlightened’ a society is the less likely will it favour capital punishment.

17/02/2012

* China resumes rail building

China Daily: “With 3,500 kilometers of new high-speed railways expected to be put into use this year, the length of China’s high-speed railways will exceed 10,000 kilometers, a senior railway official said.

One of the four arteries, the Beijing-Shanghai line, opened in June. The others will connect Beijing and Guangzhou in South China, Beijing and Harbin in Northeast China, and cities on the southeast coast with high-speed railways.”

http://europe.chinadaily.com.cn/china/2012-02/17/content_14631260.htm

The official reason for the delay was funding shortages. That may be so, but another reason was the high profile crash in July 2011 at Wenzhou due to design fault and, possibly, human error. http://www.chinadaily.com.cn/china/2011-12/29/content_14346798.htm

16/02/2012

* Chinese football refs face up to 7 years jail-life for match-fixing

Xinhua: “Four famous Chinese football referees, including former “Golden Whistle” Lu Jun were sentenced to from at least three and a half to most seven years imprisonment for match-fixing after the first trial by the Intermediate People’s Court of Dandong here on Thursday.

Chinese best known referee Lu Jun, who had officiated in the 2002 South Korea/Japan FIFA World Cup and 2000 Sydney Olympic Games, was sentenced to five and a half years imprisonment for taking a total of 810,000 yuan(about 128,657 U.S. dollars) in bribes for fixing seven league matches involving four clubs. Lu was also had personal property worth 100,000 yuan (about 15,880 U.S. dollars) confiscated.

Lu’s three colleagues Huang Junjie, Zhou Weixin and Wan Daxue, were sentenced to seven, three and a half and six years in jail respectively for fixing league matches and even some international friendlies among clubs.

The judge convicted Huang Junjie of taking 1,480,000 yuan and 100,000 Hongkong dollars (about 247,975 U.S. dollars) in 21 cases. Huang was also confiscated personal assets worth 200,000 yuan (about 31,760 U.S. dollars).”

http://news.xinhuanet.com/english/china/2012-02/16/c_131414053.htm

This news – together with one recently about food contamination and cadmium pollutions and so forth –  is an indication that China is tightening up its stance on corruption.

14/02/2012

* Leader-in-waiting makes four-point proposal on US visit

Abbreviated from Xinhua: “Visiting Chinese Vice President Xi Jinping here on Monday called on the U.S. side not to let its presidential elections negatively affect the development of Sino-U.S. ties, during a meeting with several former senior U.S. officials.

Xi made a four-point proposal on how to enhance the Sino-U.S. relationship.

Firstly, he said, the two sides should regard history as a mirror.

Secondly, he said both sides should adopt a long-term perspective.

Thirdly, he said, the two sides should respect each other and build mutual trust.

Fourthly, the two sides should achieve mutual benefits and win-win results, he said.

“We should deal with friction and differences in bilateral economic and trade cooperation in the spirit of seeking mutual benefits and win-win results through a positive and constructive way,” Xi said.”

http://news.xinhuanet.com/english/china/2012-02/14/c_131409436.htm

13/02/2012

# Pattern of Chinese overseas investments – August 2012 update

There are five kinds of Chinese overseas investments (or at least JVs) – which are not mutually exclusive – in rough order of priority:

– Natural resources: oil and gas (Sinopec, Cnooc and PetroChina have all been very active in several continents, including North America – Nexen, Canada), coal, steel, minerals (incl Australia’s Sundance), even arable land (parts of Africa and South America) – which serve an obvious need.

– Infrastructure and other tangibles: manufacturing plants (Putzmeister), oil refineries (INEOS’ Grangemouth (Scotland) and Lavéra (France), utilities (Redes Energeticas Nacionais, Energias de Portugal, Thames Water; Brazilian electricity grid), office blocks (Canary Wharf, London), housing in the US; Spanish construction company; all sorts in parts of Africa and the Caribbeans (sports stadium, holiday resorts, roads, ports, etc) – which are ‘safer’ than holdings of US or Euro bonds and provides relatively predictable yields; they often also provide technology transfer at no additional cost.

– Technology: esp new and innovative (UK’s Centre for Integrated Photonics); geothermal energy (Iceland); Saab (to Chinese-Swedish JV); Hawker light aircraft (US); A123 Battery (US) – which builds for the future.

– Brands: especially luxury brands like yachts (Ferretti), high fashion (Cerruti, Sonia Rykiel), essentials (Weetabix, Putzmeister); soccer (inter Milan) – which reduces the outflow of currency and increases the inflow as the population gains affluence and demand for luxury goods continue to expand. But also other brands such as Saab.

– Financial houses, esp owners/managers of funds (BlackRock) – which are not as ‘safe’ as resources and tangibles, but much safer that Euro and $ bonds.

Sources:

13/02/2012

* Reverse outsourcing?

Rock Centre with MSN: “Some jobs that were outsourced to China are returning to the United States. At Lincolnton Furniture in North Carolina, owner Bruce Cochrane has reopened a once-shuttered factory and is proud to announce that his company’s wood furniture is, once again, made in America. His company has created more than 100 new jobs.

Harold Sirkin of the Boston Consulting Group projects that the shift from manufacturing in China back to the U.S., commonly referred to as ‘reverse outsourcing’ or ‘insourcing,’ will have a major impact on employment.

“Our projections are, when you take the manufacturing jobs and then the service jobs that get created alongside those, that we will add two to three million jobs to the U.S. workforce,” Sirkin told NBC’s Harry Smith in an interview broadcast Monday night on Rock Center with Brian Williams.

The news provides hope for some Americans that jobs they thought were lost forever might be making the round trip back to the United States.”

http://rockcenter.msnbc.msn.com/_news/2012/01/31/10278345-reverse-outsourcing-could-create-up-to-3-million-new-jobs-in-us

In the UK, River Island has increased it’s UK sourced products as have John Lewis and M&S and several others. The combination of wage inflation in China (and to a lesser degree in India) and the depressed state of the UK economy, combined with cost of logistics is tilting the balance to reverse outsourcing. In addition, local manufacturers are often more amenable to short run contracts, whereas global contracts tend to be based on a whole fashion season.

from The Times, Monday 13 February.

12/02/2012

* Panda diplomacy strikes again – for Canada

Huff Post: “Canada’s Prime Minister Stephen Harper wrapped up a visit to China aimed at boosting oil sales by announcing Saturday that Beijing will lend two of the country’s prized giant pandas to Canadian zoos.

Harper visited a zoo in the southwestern city of Chongqing to say that the Chinese government is loaning the panda pair to Canada for the next 10 years, Harper’s press secretary Carl Vallee said.

The pandas are expected to arrive in Canada early next year and will go to the Toronto and Calgary zoos for five years each. The giant panda is unique to China and is regularly sent abroad as a sign of warm diplomatic relations or to mark breakthroughs in ties.”

http://www.huffingtonpost.com/2012/02/11/canada-pandas-china_n_1270742.html

11/02/2012

* India acting contrary

Within weeks, India has taken actions that could be interpreted as re-asserting its non-aligned status:

– Sending a large trade delegation to Iran

– Telling Britain that it’s aid is not needed

– Supporting un-elected Maldives regime

– Buying French fighter rather than Euro-fighter.

As there are no national elections imminent, it is not clear to which audience India is playing.

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