Archive for September, 2012

« Older Entries  |   Newer Entries »
17/09/2012

* Boots in China pharmaceuticals deal

FT: “Just months after striking a £10bn deal to sell eventually the whole of Alliance Boots, chairman Stefano Pessina has taken a minority stake in a Chinese pharmaceutical wholesaler.

Alliance Boots

Alliance Boots (Photo credit: Wikipedia)

Alliance Boots said on Sunday that it had spent £56m to acquire a 12 per cent holding in Nanjing Pharmaceutical, the fifth largest pharmaceutical wholesaler in China by sales.

It comes hard on the heels of Mr Pessina’s deal in June to initially sell a 45 per cent stake in Alliance Boots to Walgreens, with the option for the US pharmacy chain to buy the whole of Alliance Boots.

Mr Pessina said the latest acquisition would give Alliance Boots “a further presence in China”.

Nanjing Pharmaceutical, which is listed on the Shanghai Stock Exchange, had sales of about £2bn in 2011. Alliance Boots said it had a strong market position in its home province of Jiangsu, operating distribution centres in 12 cities across eight provinces.

Alliance Boots already has a position in China through its joint venture with Guangzhou Pharmaceuticals, the sixth largest pharmaceutical wholesaler in China, which operates in complementary geographies.

“Together they represent more or less 5 per cent of the Chinese market, [which is] not negligible,” said Mr Pessina.

He said Alliance Boots was keen to develop its position in China, because it was a big market, which was likely to consolidate over the coming years. “We must be part of this consolidation process,” said Mr Pessina.

As well as seeking a presence in the US, Mr Pessina has long been keen to build Alliance Boots’s reach in China.”

via Boots in China pharmaceuticals deal – FT.com.

Related articles

Posted in China alert, Economics, FDI | Leave a Comment »

Tags: , , ,
17/09/2012

* For Beijing, expansion is not a big deal, it’s lots of them

The Times: “China’s slowing economy has failed to dent its global ambitions, with an increasingly hungry dragon scouring the globe for higher-value corporate deals, according to new research.

It made 177 outbound acquisitions worth a combined $63.1 billion last year, five times more than in 2005, the study by Mergermarket and Squire Sanders, the law firm, found. Deals are also growing in value, with the planned $15.1 billion takeover of Nexen, the Canadian oil sands explorer, by the state-owned CNOOC set to be China’s biggest-ever foreign acquisition, if it goes ahead.

Next month China will release its third-quarter GDP data, with some economists suggesting that growth could fall below the 7.6 per cent it brushed in the second quarter, despite assurances from Beijing that the economy would stabilise in the second half.

Natural resources and energy, the sectors most critical to China’s future growth, continue to dominate purchases, accounting for almost one in three M&A targets between 2011 and the year to date. Almost all these buyers are state-owned companies making investments at the behest of the Government.

Mao Tong, a Hong Kong-based partner at Squire Sanders, said: “We are seeing companies becoming more interested in making a strategic play, rather than just adding to their portfolio. These are big deals designed to position them in a global context.

“Even if the Chinese economy slows sharply, I think this will continue for a while. China is still the world’s most important manufacturing base, using huge amounts of iron ore, for example.”

China is eager to deploy its $3 trillion of foreign exchange reserves, mainly held in dollars, to counter the gradual depreciation of the currency and put its national wealth to good use. Yet the number of private sector deals is also expected to increase as the Government encourages state-owned banks to step up lending to the corporate sector.Britain is the favoured destination for Chinese dealmaking in Western Europe, accounting for a third of deals and two thirds of all outbound investment to the region, thanks to its reputation for transparency and a large number of Russian and Central Asian resources companies, Mr Mao suggested.

China has shown an increasing taste for European luxury brands, such as Shandong Heavy Industry’s buyout of the Italian yacht group Ferretti this year. Recent British brands going East include Weetabix, bought by the Shanghai dairy group Bright Food, and the $7.8 billion buyout of Northumbrian Water by Cheung Kong Infrastructure, a Hong Kong group chaired by Li Ka-shing.

The Dragon Index, a quarterly measure of China’s overseas direct investment by the private equity firm A Capital, which was released last week, hit an historic high in the second quarter, with ODI said to grow by 67 per cent between April and June on the previous quarter, to $24 billion.

André Loesekrug-Pietri, founder of A Capital, said: “State-owned enterprises remain the dominant force behind China’s ODI, with 90 per cent of the total deal value in the second quarter 2012.”

European companies accounted for 95 per cent of all non-resources deals in the quarter, the figures suggested. China’s share of US deals has slowed this year, owing to the sensitive political climate before the presidential election.”

via For Beijing, expansion is not a big deal, it’s lots of them | The Times.

See also: https://chindia-alert.org/2012/02/13/pattern-of-chinese-overseas-investments/

Related articles

Posted in China alert, Economics, Foreign acquisition, Intellectual Property Rights, Investment in tangibles, Natural resources | Leave a Comment »

Tags: , , , , ,
17/09/2012

* Foshan driver jailed in toddler hit-and-run case

BBC News: “A man who knocked down a toddler in a hit-and-run case that caused outrage in China has been jailed for three-and-a-half years, state media say.

Hu Jun hit two-year-old Wang Yue on 13 October last year in the southern city of Foshan and drove off.

Security camera footage showed 18 pedestrians and cyclists failing to stop as they passed the little girl lying in the road.

A woman finally came to her aid but the girl died in hospital a few days later.

The report, by Xinhua news agency, said Hu was convicted of “involuntary homicide” by a Foshan court.

He thought he had hit something but did not stop to check, the agency said, citing a court statement.

He received a lenient sentence because he surrendered himself to police and paid part of the toddler’s medical expenses, it said.

The accident prompted a public outcry about morality in the country and a discussion about why those who passed by did not stop to help.

The rubbish collector who did help the little girl, Chen Xianmei, was later named a “national role model”.

The BBC’s John Sudworth in Shanghai says a spate of cases in which injured people sued their rescuers is said to have led to people in China being too frightened to intervene.

But some commentators wonder whether China’s rapid development and urbanisation has undermined old moral certainties, suggesting that new legislation is, at best, only part of the solution, he adds.”

via BBC News – Foshan driver jailed in toddler hit-and-run case.

Related articles

Posted in China alert, Morality, public protest, Social & cultural, social media | Leave a Comment »

Tags: , ,
17/09/2012

* United States to File W.T.O. Case Against China Over Cars

NY Times: “The Obama administration plans to file a broad trade case at the World Trade Organization in Geneva on Monday accusing China of unfairly subsidizing its exports of autos and auto parts, a senior administration official said late Sunday, in a move with clear political implications for the presidential elections less than two months away.

The W.T.O. case accuses China of providing at least $1 billion worth of subsidies from 2009 to 2011 for exports of autos and auto parts. While China exports virtually no fully assembled cars to the United States, it has rapidly expanded exports to developing countries, and those exports compete to some extent with cars exported or designed in the United States.

President Obama plans to announce the move on Monday during a visit to Ohio, one of the most important of the battleground states and a place where the president is trying to capitalize on his bailout of the auto industry. A poll by NBC News, The Wall Street Journal and Marist College last week showed Mr. Obama building a significant lead in Ohio.”

via United States to File W.T.O. Case Against China Over Cars – NYTimes.com.

Posted in China alert, Economics, exports, Trade | 1 Comment »

Tags: , , , ,
15/09/2012

* Thousands protest against Japan’s ‘island purchase’

China Daily: “Protests against Japanese government’s move to “purchase” and “nationalize” the Diaoyu Islands continued outside the Japanese Embassy in Beijing on Friday.

Plain-clothes police officers instruct demonstrators to move during a protest outside the Japanese embassy in Beijing September 14, 2012. REUTERS-David Gray

Protesters started to gather in front of the embassy compound in the morning. By 6 pm, more than 5,000 people including wheel-chaired elderly and kids had taken part in the protests.

Police told the protesters in advance to be rational in their protests.

Also on Friday, about 100 people protested against Japan in Tengchong, a city in the southwestern province of Yunnan, while attending a public memorial for soldiers killed during the anti-Japanese war in the 1940s.

The protestors waved China’s national flags and shouted slogans including “Do not forget national humiliation, safeguard sovereignty, and Diaoyu Islands are China’s territory.”

During the anti-Japanese war, Japanese forces occupied Tengchong for two years and committed appalling crimes there.

via Thousands protest against Japan’s ‘island purchase’ |Politics |chinadaily.com.cn.

Related articles

Posted in China alert, GeoPolitics, Politics, Territorial dispute | Leave a Comment »

Tags: , , , , , , , ,
15/09/2012

* Coalgate: Supreme Court issues notice to Centre over coal block allocations

The Times of India: “The Supreme Court has issued notice to the Centre on coal block allocations and has asked the govt what action it proposes to take against illegal allotments and those allottees who breached the contract.

The apex court has asked the coal secretary to file affidavit answering 6 questions on a PIL seeking cancellation of all 194 coal mine blocks under controversy.

The apex court’s posers to the government includes —

Why competitive bidding process was not followed for allocation of coal blocks?

What were the guidelines for allocation of coal blocks and whether there was any deviation during actual allocation?

Why so many politicians and their relatives figure among the alleged irregular allottees?

Whether the guidelines for allocation overlooked the safety mechanism to render the allotments as largesse in favour of private parties?

Whether govt’s objective in coal block allocation has been achieved through the present mode of allocation, which was faulted by the CAG?

The apex court has asked the coal secretary to file a response in 8 weeks.

Turning down the Centre’s plea that the court should not go into the issue as it is being looked into by a Parliamentary committee, the apex court said “these are different exercises.”

A bench of justices R M Lodha and A R Dave said the petition raised serious questions and “it requires explanation from the government”.”

via Coalgate: Supreme Court issues notice to Centre over coal block allocations – The Times of India.

See also: https://chindia-alert.org/2012/09/07/india-parliament-ends-in-deadlock/

Posted in corruption, Economics, Illegal practices, India alert, Inequalities, Justice, Nepotism, Politics, Rule of law | Leave a Comment »

Tags: , , , , ,
15/09/2012

* Home Depot closes stores as it shifts focus

Home Depot closes stores as it shifts focusChina Daily: “Home Depot Inc, the largest home-improvement retailer in the United States, said it is closing its remaining seven big box stores in China as it shifts its focus to specialty and online outlets in the world’s second-largest economy.

The move will affect about 850 employees, and the company will record an after-tax charge of about $160 million, or 10 cents per diluted share, in the third quarter, it said in a statement issued on Thursday.

Employees of Home Depot gather outside the company’s Xi’an store on Friday as the home-improvement retailer declared that it will close all its seven stores in China. [Photo/China Daily]

“Closing stores is always a difficult decision,” said Frank Blake, the company’s chairman and CEO. “We’ve learned a great deal over the last six years in China, and our new approach leverages that experience.”

The company said it will keep its two recently launched specialty outlets – a paint and flooring store and a home decoration shop – in Tianjin.

It is also in talks with several Chinese e-commerce websites to explore selling its products online, it said, a combination believed to be more adequate to Chinese customers’ needs and shopping preferences.

The Atlanta-based seller of building materials and home-improvement products will also keep its R&D team in China, as well as the 170 workers in its sourcing offices in Shanghai and Shenzhen, the statement said.

Home Depot has 2,249 retail stores in operation globally. Excluding the charges related to the store closures, Home Depot expects its fiscal 2012 diluted earnings per share to rise 19 percent to $2.95 for the year.

The company’s success story in the global market did not translate well in China, where the do-it-yourself home decoration-retailing concept has failed to inspire Chinese homeowners, industry analysts said.

The US company acquired a local peer, The Home Way, in 2006 and took over its 12 outlets in China. However, it has closed five outlets since 2009. The company has also replaced three top executives since its establishment in the country, a move that did not alter its sales decline.

Though specialized home-improvement retail is an upcoming trend, Home Depot arrived in China too early, at a time when the country’s decoration culture and consumption behaviors were not ready for the concept, said Chen Lei, a retail analyst at China Galaxy Securities. Despite the construction boom, the low labor costs made the DIY decoration concept irrelevant, he said.

Chinese homeowners rarely paint houses or lay out wooden floors themselves. Rather, they prefer to hire decoration companies, which often find products with more competitive prices from local building material stores, Chen said.

In addition, the company’s strengths in the United States, including its lower prices due to its global sourcing channels, have been diluted in China.

“You can always find local brands that are cheaper, and consumers in various regions have very different preferences,” Chen said. “Winning the market through a price war is not going to work for a foreign retailer in China.””

via Home Depot closes stores as it shifts focus |Companies |chinadaily.com.cn.

Posted in Affluence, China alert, Construction, Economics, Housing, Retail | Leave a Comment »

Tags: , , , , , , ,
14/09/2012

* India opens retail to global supermarkets

BBC News: “India’s government has once again cleared a controversial plan to open up its lucrative retail sector to global supermarket chains.

Last year, the government suspended a similar plan after fierce opposition from its allies and political rivals.

International firms such as Walmart and Tesco will now be able to buy up to a 51% stake in multi-brand retailers.

Analysts say the government has reintroduced the measure in an effort to revive a flagging economy.

Prime Minister Manmohan Singh is reported to have told cabinet colleagues that “the time for big bang reform has come; we have to go down fighting”.

Strong opposition

The decision was one of several key reforms announced by the government. It also approved a plan to allow foreign airlines to buy 49% stakes in local carriers, in the hope that this will boost the country’s troubled aviation sector.

The decision to open up India’s lucrative retail sector to international supermarket chains has come as a major surprise. It was among a slew of key economic reforms announced by the government and is seen as vital to reviving the country’s slowing economy.

For months the decision has been held up by political gridlock, especially because it was opposed by the government’s own allies. But it now appears the government has decided to bite the bullet, especially as its own credibility – and that of Manmohan Singh – is at an all-time low following a series of financial scandals.

Much will now depend on Mr Singh’s ability to keep his disparate coalition together, as opposition to these measures is expected to be fierce.

Many will see this as a final throw of the dice, not just to revive the economy and boost confidence among investors but also ahead of the national elections due in 2014.

It also follows Thursday’s dramatic 14% rise in the price of diesel, which is heavily subsidised in India.

The government was forced to back down on retail reform after the cabinet first undertook to open up the retail sector last November.

The move had been strongly opposed by tens of thousands of small businesses and cornershops who fear they will be put out of business.

But this latest move has already been welcomed by economists who say it will transform the way Indians shop and will boost the economy.

The opposition Bharatiya Janata Party and the Communists labelled it a “betrayal of democracy”.

via BBC News – India opens retail to global supermarkets.

Related articles

Posted in Economics, India alert | 3 Comments »

Tags: , , , , , , , ,
07/09/2012

* Indian Caste affirmative action – controversy

Reuters: “Passions are running high in parliament and the stakes are huge. The contentious issue of reservation is back to haunt Indian politics and it may well decide who runs the next government in the world’s largest democracy. Sparks were seen flying in the upper house on Wednesday when two MPs from rival parties came to blows during the tabling of a bill to amend the Constitution, providing for reservations in promotions at work for backward castes.

Photo

The issue, however, is nothing new. Reservation is a recurring theme in India’s democracy. And Prime Minister Manmohan Singh’s embattled government seems to be returning to identity politics at a time when it is badly cornered, thanks to a string of corruption scandals, a ballooning fiscal deficit and low investor sentiment.

The move comes after the Supreme Court in April struck down former Uttar Pradesh chief minister Mayawati’s policy of a promotion quota in government service.

It also comes at a time India is seeing something of an upsurge in communal tensions that seem to have been stoked by political parties — witness the Bodo-Muslim violence in the northeast, which the BJP has linked to illegal immigration, a favourite fallback of politicians around the world when they are short on ideas and achievements. At the other end of the country, in Tamil Nadu, Chief Minister J Jayalalithaa has been stirring sentiment against Sri Lankans.

While affirmative action is recognised in several countries and even gender quotas for woman have been debated in Europe, the multiplicity of religious, cultural, caste and class identities in the world’s second most populous country make it a complex issue.

Reservation in jobs and educational institutions for the underprivileged in a country where the caste system reduced millions to the status of untouchables for centuries is much needed. And almost all opposition to reservation comes from the so-called higher castes who believe it isn’t fair to them.

A promotion quota is, however, a different ball game. After getting a job, shouldn’t all employees be given an equal opportunity to learn, prove themselves and move high up the organisational ladder? As it is, the practice of promoting employees on the basis of seniority — the case with almost all government service promotions — is an archaic idea. Add to it the reservation in promotions and it becomes a heady cocktail of low productivity and mismanagement.”

via India Insight.

Related articles

Posted in India alert, Politics | 1 Comment »

Tags: , , , , , , ,
07/09/2012

* India parliament ends in deadlock

BBC News: “The latest session of India’s parliament has ended without resolving deadlock which paralysed it for days.

The Gevra coal mine in the central Indian state of Chhattisgarh

The impasse was caused by an uproar over alleged corruption in the allocation of coalfield concessions.

The opposition BJP wants the government to cancel the awards and hold an independent probe.

Earlier this week, police raided companies which allegedly misrepresented facts prior to being awarded coalfield concessions.

State auditors say India lost $33bn (£20bn) awarding coalfields at below market rates in the years up to 2009.

The auditors’ report does not mention Prime Minister Manmohan Singh, but BJP leaders say he must step down because he had direct responsibility for the coal ministry when most of the awards were made.

Mr Singh denies any wrongdoing and has refused to resign.

Parliament was deadlocked for 13 of the 20 days of the monsoon session which concluded on Friday without much business being done.

Some 30 bills were due to be considered and passed during the session, but very little legislative work was done.

“This session is likely to be remembered for the work that was not done,” the chairman of the upper house, Hamid Ansari, said.”

via BBC News – India parliament ends in deadlock.

Related articles

Posted in India alert, Politics | 1 Comment »

Tags: , , , , , , , ,
« Older Entries  |   Newer Entries »
CCChang

Law of Unintended Consequences

continuously updated blog about China & India

ChiaHou's Book Reviews

continuously updated blog about China & India

What's wrong with the world; and its economy

continuously updated blog about China & India