Archive for October, 2012


* Oh, what a sinking feeling: Toyota misfires with Chinese buyers

Although like other Japanese car makers, Toyota suffered recently due to the anti-Japanese protests and violence (eg burning of Japanese car showrooms), its woes are partly self-inflicted.

Reuters: “The roots of Toyota Motor Corp‘s China troubles run far deeper than the anti-Japan protests that have swept the country, stretching back to the 2008 launch of the Yaris subcompact — a spectacular flop with price-conscious Chinese buyers.

A visitor walks past a Toyota Motor Corp's car displayed behind a sign in both Chinese (L) and Japanese at the company's showroom in Tokyo in this October 18, 2012 file photo. REUTERS-Toru Hanai-Files

The car, a success elsewhere, was meant to help build brand loyalty and send Toyota hurtling towards a still-unattained goal of selling one million vehicles annually in the world’s largest auto market.

However the Yaris missed the mark with China’s traditional higher-end customers as well as its new emerging middle class.

To some company insiders and dealers it epitomizes all that does not appeal to the status-conscious, lacking what the Chinese call ‘daqi’ or ‘road presence’. Next to Nissan Motor Co Ltd’s pricier Tiida, for example, it feels small and lacks oomph.

But for frugal first-time buyers, the Yaris which is priced from 87,000 yuan ($13,900) was a non-starter, costing some 55 percent more than General Motor’s Chevy Sail and putting Toyota at a competitive disadvantage in a must-win market.

via Analysis: Oh, what a sinking feeling: Toyota misfires with Chinese buyers | Reuters.


* Under Chinese, a Greek Port Thrives

If only this phenomenon can be replicated across Greece and other Euro PIGS (Portugal, Italy, Greece, Spain) countries …

New York Times: “The captain gazed from his elegant office overlooking this port on the Aegean Sea and smiled as towering cranes plucked container after container from a giant ship while robotic transport vehicles fanned out to transfer the cargo to smaller vessels bound for the Mediterranean.

The cargo volume here is three times the level it was two years ago, before the captain, Fu Cheng Qiu, was put in charge by his employer, Cosco, a global shipping giant owned by the Chinese government.

In a 2010 deal that put 500 million euros ($647 million) into the coffers of Greece’s cash-starved government, Cosco leased half of the port of Piraeus and quickly converted a business that had languished as a Greek state-run enterprise into a hotbed of productivity.

The other half of the port is still run by Greece. And the fact that its business lags behind Cosco’s is emblematic of the entrenched labor rules and relatively high wages — for those lucky enough to still have jobs — that have stifled the country’s economic growth.

“Everyone here knows that you must be hard-working,” said Captain Fu, under whose watch the Chinese-run side of the port has lured new clients, high-volume traffic and bigger ships.

In many ways, the top-to-bottom overhaul that Cosco is imposing on Piraeus is what Greece as a whole must aspire to if it is ever to restore competitiveness to its recession-sapped economy, make a dent in its 24 percent unemployment rate and avoid being dependent on its European neighbors for years to come.

As the Greek government contemplates shedding state-owned assets to help pay down staggering debts, it might be tempting to consider leasing or even selling the rest of the port to China. But if the Cosco example is representative, the trade-offs — mainly a sharp reduction in labor costs and job protection rules — might be ones many Greeks would be loath to accept.

“Unionized labor will push back to keep the protection it has enjoyed,” said Vassilis Antoniades, the chief executive of Boston Consulting Group in Greece. But the Cosco investment, he said, “shows that under private management, Greek companies can be globally competitive.”

Captain Fu, for his part, says Greece has much to learn from companies like his.

“The Chinese want to make money with work,” he said. In his view, too many Europeans have pursued a comfortable, protected existence since the end of World War II. “They wanted a good life, more holidays and less work,” he said. “And they spent money before they had it. Now they have many debts.”

Greece’s troika of foreign lenders — the International Monetary Fund, the European Central Bank and the European Commission — has made similar arguments. Among other things, they are urging Prime Minister Antonis Samaras to end blanket protections for workers and unions and to require Greece itself to operate more like a productive modern business.

Besides the $647 million that put half of the port of Piraeus into Chinese hands, the Greek government is receiving more income from taxes as a result of the port’s pickup in business.

Other than a handful of Chinese managers, moreover, Cosco’s operation is providing around 1,000 jobs to Greek workers — compared with the 800 or so who work the dock that is still under Greek management.

On Cosco’s portion of the port, cargo traffic has more than doubled over the last year, to 1.05 million containers. And while profit margins are still razor thin — $6.47 million last year on sales of $94.2 million — that is mainly because the Chinese company is putting a lot of its money back into the port.

Cosco is spending more than $388 million to modernize its dock to handle up to 3.7 million containers in the next year, which would make it one of the world’s 10 largest ports. Beyond that, workers are also laying the foundations for a second Cosco pier.

The Greek-run side of the port, which endured a series of debilitating worker strikes in the three years before Cosco came to town, has been forced by the Chinese competition to seek its own path to modernization. Still, only about a third of its business consists of cargo handling; the rest is made up of more lucrative passenger traffic.

For years, the container terminal was a profitable operation. But Harilaos N. Psaraftis, a professor of maritime transport at the School of Naval Architecture and Marine Engineering in Athens, said it was inefficient “because worker relations were very cumbersome.”

The salaries of some workers reached $181,000 a year with overtime; Cosco is typically paying less than $23,300. On the Greek side of the port, union rules required that nine people work a gantry crane; Cosco uses a crew of four.

“It was just crazy,” recalled Mr. Psaraftis, who was the chief executive of the port from 1996 to 2002. “I told them, ‘If you keep this up, this thing will be privatized.’ But they didn’t listen.”

Since Cosco arrived, “competition has forced us to take initiatives to find better ways of working,” said Stavros Hatzakos, the general director of Piraeus Port Authority, which runs the Greek operation. “Employees think twice about strikes and labor action now,” he said. And the ones still on the job have taken salary reductions as part of the across-the-board wage cuts of 20 percent or more that the government has placed on public employees.

On the other side of the chain-link fence that separates the Chinese and Greek operations, Captain Fu said he would love for Cosco to run all of Piraeus if the government put it up for sale. That expansion would cement Chinese dominance of one of the most strategic shipping gateways to Southern Europe and the Balkans.

Such a move, though, might meet stiff opposition from Greek unions and officials at the Piraeus Port Authority, who criticize Cosco’s approach to labor.”


* Manmohan expands cabinet with new faces

New brooms sweep clean.  Will this new government be any less prone to corruption than previous governments?

The Hindu: “Seven Cabinet ministers, including new faces such as K. Rehman Khan and Chandresh Kumari, and 15 Ministers of State were sworn—in on Sunday as Prime Minister Manmohan Singh expanded his Council of Ministers.

President Pranab Mukherjee, Vice President Hamid Ansari and Prime Minister Manmohan Singh with newly sworn-in ministers at Rashtrapati Bhavan in New Delhi on Sunday. Photo: S. Subramanium

Five Ministers of State —— Dinsha Patel, M.M. Pallam Raju, Harish Rawat, Ajay Maken and Ashwani Kumar —— were promoted to Cabinet rank.

Congress spokesperson Manish Tewari and actor—turned—politician Chiranjeevi were brought in as Ministers of State with independent charge, while Shashi Tharoor made a comeback as Minister of State after over two years.

12 new Ministers of State were sworn—in. They are Tariq Anwar (Maharashtra), K Suresh (Kerala), A H Khan Chowdhry, Adhir Ranjan Chowdhry and Deepa Dasmunshi, (West Bengal), S Satyanarayana, K Jayasuyraprakash Reddy, P Balram Naik, and Killi Kriparani (Andhra Pradesh).

Lalchand Kataria (Rajasthan), Ranee Narah (Assam) and Ninong Ering (Arunachal Pradesh) are the others who were sworn—in as MoS.”

via The Hindu : News / National : Manmohan expands cabinet with new faces.


* Will ensure proper electricity supply: Power minister Jyotiraditya Scindia

Will the new minister be able to deliver? We shall see.

Times of India: “Newly appointed power minister Jyotiraditya Scindia today said that his priorities will be to ensure proper electricity supply in the country.

Scindia, a young Congress MP from Madhya Pradesh, has been appointed as minister of state (independent charge) for power.

“Priorities will be to ensure that there is proper electric supply. Both the government and private electric companies work in tandem for the united goal of country’s progress,” Scindia told PTI.

He takes over the reins of the Power Ministry at a time when the sector is grappling with acute fuel shortages besides environmental hurdles, which are also hurting electricity generation in the country.

“I will also try to ensure coordination with coal and environment ministries,” Scindia said.

“As the UPA government vision, I will try to make sure that the remote areas of the country gets power supply. I will try to ensure growth in the sector,” he noted.

via Will ensure proper electricity supply: Power minister Jyotiraditya Scindia – The Times of India.

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* Protests Against Expansion of China Chemical Plant Turn Violent

The Chinese public are increasingly taking to the streets when environmental and other disturbing issues seem to be intractable. Initial police response is almost invariably violent. But, as has happened so often before, with social media and the internet and camera phones, it is becoming harder and harder for the authorities to assert their physical power as they used to. Not only do these incidents gain national coverage but, as this article shows, often they get international press as well. Something the central authorities do not welcome at all.

NY Times: “A week of protests against the planned expansion of a petrochemical plant in the port city of Ningbo turned violent on Friday and Saturday when demonstrators attacked police cars and tossed bricks and water bottles at officers, according to accounts from participants posted on the Internet.

The protesters, who witnesses said numbered in the thousands, were opposing the expansion of a state-run Sinopec plant, which is already one of the nation’s largest refineries. Local residents, citing environmental concerns, have been demanding that the government move the plant from Ningbo, a prosperous city of 3.4 million in Zhejiang Province, not far from Shanghai.

The clashes come at a delicate time for the government, as it prepares for a once-a-decade change in leadership that is scheduled to begin on Nov. 8 during a weeklong series of meetings in Beijing. Public concerns about industrial pollution have become a problem for the governing Communist Party, which often backs economic growth over public concerns about environmental degradation.

In recent years, educated urbanites have harnessed social media to stage street protests against the construction or expansion of factories, mines and refineries. Although such demonstrations are illegal and organizers face arrest, they sometimes have the desired effect.

In July, officials in Shifang, a city in China’s southwest Sichuan Province, canceled plans for a huge copper smelter after tens of thousands of residents joined protests that turned violent. In September 2011, a solar energy company in Jiaxing, near Shanghai, was closed after demonstrators cited noxious chemicals used in the manufacturing process. And in August of that year, officials in Dalian, in northeastern China, said a petrochemical plant would be closed and relocated after at least 12,000 people took to the streets.

In a statement, the Zhenhai district government condemned those it blamed for organizing sit-ins and blocking roads in Ningbo but insisted that public sentiment would be taken into consideration before the start of construction. “Detailed information will be published when environmental reviews are implemented, and public opinions on the project will be heeded,” the statement said.

Residents have expressed concern about the refinery’s production of ethylene and paraxylene, known as PX, a toxic petrochemical used in plastics, paints and cleaning solvents. The demonstrations, which began on Monday when 200 farmers blocked a road near the district government’s office, according to the state media, grew larger on Friday, reportedly after student organizers issued calls through social media outlets.

Photographs of the weekend demonstrations, many taken by cellphone, appeared to show riot police officers swinging batons as they chased protesters or beat those who had fallen to the ground. Censors worked quickly to delete images and witnesses’ accounts posted on Sina Weibo, China’s popular microblogging service. The Information Center for Human Rights and Democracy, an organization based in Hong Kong, said 10 people were injured after the police fired tear gas and moved to break up the protests, which took place in Tianyi Square in downtown Ningbo.

In a series of online posts on Saturday, Chen Yaojun, a local lawyer, described how the police had quickly tackled and dragged away protesters who dared to chant slogans. He said he, too, was arrested after he tried to protect a young student who was being beaten by the police. After he was dragged into a police van, Mr. Chen said, he talked to a young policeman who expressed regret for the rough handling of the protesters. “We have no choice,” the officer told him.”

via Protests Against Expansion of China Chemical Plant Turn Violent –

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* Chinese Premier’s Family Disputes Article on Riches

It will come as no surprise to Chinese citizens that Mr Wen and his family are very rich. They expect it of their leaders. It has always been thus. What will surprise many of them is the enormous scale of the wealth. This then will raise the thought as to whether other leaders are also enjoying such largesse which – at the end of the day – comes from the pockets of the hard working citizens.

NY Times: “Two lawyers who said they represented the family of Prime Minister Wen Jiabao of China have issued a statement disputing aspects of a New York Times article about the family’s wealth, a rare instance of a powerful Chinese political family responding directly to a foreign media report.

The statement, published in The South China Morning Post on Sunday, said, “The so-called ‘hidden riches’ of Wen Jiabao’s family members in The New York Times’s report” did not exist.

After criticizing several points in the article, the statement hinted at the possibility of future legal action. “We will continue to make clarifications regarding untrue reports by The New York Times, and reserve the right to hold it legally responsible,” the statement said.

The statement reported in The Post, a Hong Kong newspaper, has not been obtained directly by The Times.

The statement was not a sweeping denial of the article. The statement acknowledged that some family members were active in business and that they “are responsible for all their own business activities.”

While the statement disputed that Mr. Wen’s mother had held assets, it did not address the calculation in the article that the family had controlled assets worth at least $2.7 billion.”

via Chinese Premier’s Family Disputes Article on Riches –


* Rahul Gandhi MIA

It is becoming clear to any innocent bystander that Rahul Gandhi is not interested in taking a leading role in Indian national politics. But will he be able to resist the urging from his Grandmother and the Congress |Party?  Only time will  tell.

WSJ: “The question has swirled around New Delhi for months: Is Rahul Gandhi, scion of India’s most powerful political family, finally poised to take on a major role in running the country’s government?

The answer, apparently, is no. India announced a leadership reshuffle on Sunday that brought several new faces into ministerial positions, but Mr. Gandhi wasn’t among them.

The 42-year-old, a descendant of three past prime ministers, is a general secretary in the ruling Congress party. He has long been viewed as a prime-minister-in-waiting and is widely seen as the face of the Congress party as national elections approach in 2014.

But political analysts say Mr. Gandhi may be running out of time to make himself a credible candidate by showing voters he’s willing to take on real governing duties. “If you’re projected as a prime minister candidate and you don’t take responsibility, that doesn’t say a lot about you,” said Pradip Datta, a political science professor at Delhi University. “It can be interpreted that you don’t want responsibility.””

via Rahul Gandhi MIA – India Real Time – WSJ.

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* Reading Between the Lines on Chinese Judicial Reform

Another day, another set of reforms. It’s as if China is catching up with itself.

Reuters: “Of the many broken institutions in China calling out to be fixed as Beijing prepares to welcome a new generation of leaders, the country’s judicial system is among the most important. In an era of improved communication and increasing public scrutiny, the consistently poor performance of China’s courts, which are controlled by the Communist Party, threaten to seriously undermine the party’s legitimacy. The question is whether China’s leaders would ever consider loosening their grip on the judicial system enough to solve the problems that plague it.

A recent government white paper on judicial reform hints that they might. Released earlier this month by the Information Office of China’s State Council (China’s cabinet), the 20-page document is devoted mostly to declaring that various institutions within the judicial system have been improved and that they are continuing to improve. But it begins and ends in ways that suggest new perspectives.

Bloomberg News

In its preface, the white paper tasks the judicial system to meet a high standard. “The judicial system is a major component of the political system, while judicial impartiality is a significant guarantee of social justice,” it says. adding that “due to the development of the socialist market economy, the comprehensive implementation of the rule of law, and the increasing demands of the public for justice, China’s judicial system urgently needs to be reformed, improve and developed.” The conclusion likewise makes a relatively bold statement, saying judicial reform “is regarded as an important part of China’s political system reform.”

The white paper is also interesting for what it doesn’t say.

Unlike previous Chinese government white papers on law, the Communist Party (CPC) is never mentioned in the latest document. Previous white papers on legal issues published in 2008 and 2011 both emphasized that reform is to be carried out “under the leadership of the CPC.”   This newest document instead celebrates the accomplishments of “China” not the CPC, while also invoking judicial reform as “an important part of China’s political system reform.”  Where did the party go and what does its omission signify?

Also missing from the white paper is in any direct attack on the problems that need to be addressed, other than a vague reference to “defects and rigidity” in the judicial system.  Nothing is said about core problems, such as the lack of judicial independence or the legal culture of police, judges and prosecutors that lingers from the Maoist period and fosters widespread disregard of laws already in effect.”

via Reading Between the Lines on Chinese Judicial Reform – China Real Time Report – WSJ.

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* China adopts mental health law to curb forced treatment

Reform and improvements keep coming.  Is it because of the decennial leadership change or is it due to genuine concern for the people; or maybe it’s a bit of both.

Reuters: “China adopted a law on Friday to protect for the first time the rights of the mentally ill after years of accusations that psychiatric hospitals are used to lock up people against their will and silence dissidents.

Human rights advocates called the hard-fought for law, which has been debated for more than two decades, significant, even though they say it still falls short of international standards as it allows for involuntary commitment without judicial review.

The law will “curb abuses regarding compulsory mental health treatment and protect citizens from undergoing unnecessary treatment or illegal hospitalization”, the Xinhua state news agency said.

“We welcome it because having a law is better than not having one,” Nicholas Bequelin, a researcher at Human Rights Watch, a New York-based advocacy group, told Reuters.

“The most important thing that this law does is it will allow civil society to step in to monitor and press for improvement in the management of mental health in China, including … pushing for greater transparency and progressive curtailment of police rights.”

Activists have long argued that authorities force people they consider troublemakers into psychiatric hospitals without providing any evidence of their supposed crimes.

The tactic has been used to silence dissidents, whistle-blowers and petitioners. More recently, it has been used by people against relatives during family disputes.

State media has reported on people being locked up in psychiatric hospitals against their will.

Chen Guoming, a former gold store owner, was forced into an asylum in 2011 by his wife and locked up for 56 days after refusing to lend money to his wife’s family, Xinhua said.

The new law bans mental health examinations of a citizen against his or her own will, Xinhua said.”

via China adopts mental health law to curb forced treatment | Reuters.

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* Australia PM Julia Gillard outlines Asia manifesto

Australia faces the reality of the 21st Century. Others are bound to follow.

BBC: “Australian PM Julia Gillard has outlined a major foreign policy plan aimed at improving Asian ties.

A government white paper sets out 25 national objectives to be met by 2025, with targets ranging from improving trade links to teaching more Mandarin.

Mrs Gillard said she wanted to refocus Australia away from Europe’s “old countries” towards its near neighbours – particularly China and India.

The plan is detailed in a 312-page paper, Australia in the Asian Century.

With Asia on track to become home to most of the world’s middle class in the next 20 years, this was a moment in history to grasp, said Mrs Gillard during the release of the white paper at Sydney’s Lowy Institute.

“The scale and pace of Asia’s rise is staggering, and there are significant opportunities and challenges for all Australians,” she said.

“It is not enough to rely on luck – our future will be determined by the choices we make and how we engage with the region we live in.””

via BBC News – Australia PM Julia Gillard outlines Asia manifesto.

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