Archive for November, 2012


* China-backed payment processor to accelerate global expansion

Visa and Mastercard beware!

Reuters: “China’s state-backed electronic payment services giant, China UnionPay, launched an international arm tasked with speeding its expansion overseas, heating up competition with rivals such as Visa Inc (V.N) and Mastercard Inc (MA.N).

The logo of the China UnionPay is seen at a bank in Taiyuan, Shanxi province July 20, 2012. REUTERS/Stringer (CHINA - Tags: BUSINESS)

The move underscores UnionPay’s growing global ambitions, and follows a World Trade Organisation (WTO) ruling that China discriminates against foreign card companies by favoring UnionPay in the home market.

UnionPay, China’s dominant payment card supplier, is looking to expand the number of shops and outlets overseas that will accept its cards and also grow the number of partner banks issuing UnionPay-branded cards. The move would increase its business, assist inbound and outbound travelers and is also aimed at promoting the use of the yuan as a global currency.

“UnionPay’s internationalism provides convenience to Chinese residents and companies going overseas. Also it provides a new payment option for overseas residents and companies,” Liu Shiyu, deputy governor of the People’s Bank of China, said at the opening ceremony of UnionPay’s unit.”

via China-backed payment processor to accelerate global expansion | Reuters.


* Tibetan students protest, as four more self-immolations reported

China needs to rethink its policy on Tibet. The issue of autonomy is not going to go away. Unlike the Muslim Uighurs, who are mainly domiciled in Xinjiang, Tibetans reside in large numbers in at least four provinces of which Tibet is only the main one.

BBC: “A crowd of Tibetan students has protested in Qinghai province, activists say, as four more self-immolations were reported.

A man taking a photograph in front of a screen displaying propaganda about China's Tibet Autonomous Region in Beijing, 12 November 2012

Reports said more than 1,000 students took part in the protest, which was reportedly provoked by the contents of a book.

Twenty students were in hospital, media reports and activist groups said.

The four self-immolations, meanwhile, occurred in Gansu, Sichuan and Qinghai provinces on Sunday and Monday.

Foreign media are banned from Tibetan regions, making reports of protests and self-immolations hard to verify independently. Chinese state media reports some of the protests and burnings but not all.

The student protest took place on Monday in Gonghe county in Qinghai province, London-based Free Tibet said.”

via BBC News – Tibetan students protest, as four more self-immolations reported.


* China Looks to Increase India Investments

If India allows China to invest in its under-developed infrastructure, then it will be a truly win-win situation.

WSJ: “China, already India’s largest trading partner, is looking to increase its Indian direct investment, taking a page from the playbook of other East Asian nations such as Japan and South Korea.

Zhang Ping, chairman of China’s National Development Reforms Commission, a key policymaking body, was in the Indian capital this week to hold a China-India strategic economic dialog, focused on increasing investments in each other’s countries. He was accompanied by around 200 representatives from government and corporations.

China’s official news agency Xinhua quoted Mr. Ping as saying China would “push forward cooperation in infrastructure including railway, power, telecommunications” with India.

“Economic co-operation between India and China is of relatively recent vintage and still has great potential to develop further,” said Montek Singh Ahluwalia, deputy chairman of India’s Planning Commission. He said China’s co-operation could be valuable in bridging India’s “enormous infrastructure deficit.”

Infrastructure is a particularly attractive sector for many foreign direct investors: India expects to spend $1 trillion on infrastructure over the next five years.”

via China Looks to Increase India Investments – China Real Time Report – WSJ.


* China considers easing family planning rules

Given that it takes years or even decades for population policies to make a difference, China better get on with any changes; and never mind being gradual about it.

Reuters: “China is considering changes to its one-child policy, a former family planning official said, with government advisory bodies drafting proposals in the face of a rapidly ageing society in the world’s most populous nation.

Proposed changes would allow for urban couples to have a second child, even if one of the parents is themselves not an only child, the China Daily cited Zhang Weiqing, the former head of the National Population and Family Planning Commission, as saying on Wednesday.

Under current rules, urban couples are permitted a second child if both parents do not have siblings. Looser restrictions on rural couples means many have more than one child.

Population scholars have cited mounting demographic challenges in their calls for reform of the strict policy, introduced in 1979 to limit births in China, which now has 1.34 billion people.

Zhang said the commission and other population research institutes have submitted policy recommendations to the government.

Zhang, who serves on China’s congressional advisory body, said any changes if adopted would be gradual.

via China considers easing family planning rules | Reuters.


* China to tighten laws on land grabs in rural stability push

The new leadership is already taking steps to improve conditions for the rural population of China. That is assuming local authorities take heed of central edicts.

Reuters: “China’s cabinet vowed on Wednesday to tighten laws on the expropriation of farmland, warning that the problem risked fuelling rural unrest and undermining the country’s food security.

“Rural land has been expropriated too much and too fast as industrialization and urbanization accelerate,” state news agency Xinhua reported, summing up a meeting of the State Council.

“It not only affects stability in the countryside but also threatens grain security.”

More reforms need to be put in place and a better legal system set up to resolve the problem, including stricter regulation on farmland expropriation, Xinhua said.

The meeting passed a draft law amendment altering rules on how to compensate farmers whose “collectively owned” land is expropriated, the news agency said, without providing details.

“The government must make efforts to beef up support for farmers and place rural development in a more important position,” it added.

While the comments on land seizures do not break new policy ground, they do underscore government jitters about rural discontent as President Hu Jintao prepares to hand over the running of the country to his successor, Vice President Xi Jinping, named Communist Party head this month.

Farmers in China do not directly own most of their fields. Instead, most rural land is owned collectively by a village, and farmers get leases that last for decades.

In theory, the villagers can collectively decide whether to apply to sell off or develop land. In practice, however, state officials usually decide. And hoping to win investment, revenues and pay-offs, they often override the wishes of farmers.

The number of “mass incidents” of unrest recorded by the e government grew from 8,700 in 1993 to about 90,000 in 2010, according to several government-backed studies. Some estimates are higher, and the government has not released official data for recent years.

Conflict over land requisitions accounted for more than 65 percent of rural “mass incidents”, the China Economic Times reported this year, citing survey data.”

via China to tighten laws on land grabs in rural stability push | Reuters.


* Starbucks Plays to Local Chinese Tastes

WSJ: “After nearly 14 years of working to persuade China to buy into its foreign coffee culture, Starbucks Corp is aiming to become more Chinese as it plans a rapid expansion in the country.image

Belinda Wong, president of Starbucks China, said in an interview that Starbucks aims to roll out 800 new stores in the next three years to add to its existing fleet of 700. Over that period it will increase the number of employees to more than 30,000 from the current 12,000.

The company aims to capture a larger market by going more local and applying its cultural insights, Ms. Wong said. For instance, whereas kiosk-sized stores work well in the U.S., where office workers grab bacon-gouda sandwiches to go in the morning on the way to work, Starbucks has learned that Chinese consumers value space and couches on which to relax in the afternoons.

The coffee company is adding some stores that are nearly 3,800 square feet and can seat consumers who come with groups of friends and business partners. Starbucks also has discovered that Chinese tastes for coffee go only so far. It plans to introduce new Chinese-inspired flavors, building on existing favorites like red bean frappuccinos.

Localization is a critical factor in the success or failure of foreign companies in China. Yum Brands Inc has thrived in China by adding fried shrimp and soy milk, among many other Chinese items, to its KFC outlets and fresh seafood bacon pizza and Thai-style fried rice to its Pizza Huts.

Businesses that have failed to grasp the local culture, importing alien models, have fallen out of favor. In September, Home Depot Inc closed all seven of its remaining big-box stores in China after years of losses, having discovered that the do-it-yourself home improvement model doesn’t work well in a do-it-for-me Chinese culture. Best Buy Co closed its nine China outlets in February 2011 after discovering consumers needed washing machines, not espresso makers or stereos.”

via Starbucks Plays to Local Chinese Tastes –


* GSK Invests in India, Nigeria

WSJ: “GlaxoSmithKline  said Monday it plans to increase its stakes in its Indian and Nigerian units at a cost of more than $1 billion as the pharmaceuticals company targets consumers in fast-growing markets.

GSK, the U.K.’s largest drug maker by sales, plans to buy an additional 31.8% stake in GSK Consumer Healthcare Ltd. for approximately $940 million, taking its ownership in the Indian unit to a maximum 75% allowed under Indian ownership rules. The deal is in part a bet on Horlicks, a malted milk bedtime drink regarded as old-fashioned in the U.K. which is seeing rising sales in the former British colony.

Like many drug companies, GlaxoSmithKline is expanding its consumer health-care business as many of its best-selling prescription drugs lose protection from cheaper copies while also expanding into faster growing markets as its main U.S. and western European businesses face slowing sales. European sales fell 9% in the third quarter of 2012, largely due to price pressure from European governments.

At the same time, some consumer-goods companies are expanding into health-care products, a market buoyed by an aging population which continues to spend on vitamins and minerals to improve well-being. Reckitt Benckiser Group  last week signed a $1.4 billion deal to acquire U.S. vitamin maker Schiff Nutrition International Inc.,  outbidding German pharmaceutical company Bayer .”

via GSK Invests in India, Nigeria –


* Go West – says China’s western leaders

If Western China replicates the growth of Eastern China in the next two decades, the good news is that poorer half of the Chinese population will catch up with the richer half. The bad news is that there will be even more pollution and demand on earth’s increasingly scarce resources. as they say “you cannot make omelets without breaking eggs”.

China Daily Mail

Chinese development has always been a tale of two nations. There is the China we read about in the news, a booming 21st century metropolis primed to dominate the world economy and finance the expansion of the Communist Party. But there is also an under-developed rural and Western China, where GDP per capita is practically at 3rd world levels, infrastructure is scarce and growth is nothing spectacular. Statistics released by the Chinese government reveal the per capita net income of rural residents to be just 6,977 Yuan in 2011 (roughly £700 GBP / $1120 USD). Future growth will stem from moving growth into the West of China, and then dispersing it among the rural areas.

Chinese development in major cities is beginning to slow down, prices are rising rapidly with increased growth and international competitiveness is decreasing. The sun is setting on the Eastern Chinese growth spurt…

View original post 656 more words


* The end of the “ASEAN way”

Extracted from Al Jazeera Blogs: “The long-time journalists in this region have joked that it didn’t really matter if they missed out on covering ASEAN summits as nothing ever really happened at them anyway.: ”

The ten-member regional organisation composed of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, The Philippines, Thailand, Singapore, and Vietnam was seen as a bit of a toothless mouse … ineffective, irrelevant, and a trifle useless.

All pomp and ceremony at the best of times – with very little substance. It’s been termed a “loose grouping” with nothing legally binding it together.

The one pronouncement from ASEAN with any kind of general recall was its members’ agreement of “non-interference” in each other’s affairs – which meant that for the most part, there were no condemnations of, or sanctions against, or even reactions to alleged human rights violations amongst them from anyone in the group.

It was the “ASEAN way” to be non-confrontational, put on a united front… and pretty much sweep things under the carpet. Which is likely why most thought the group a “lame” body.

Everything hinged on members’ consensus… and for many years, the only underlying consensus appeared to be making sure everyone played nice, and kept the house clean and presentable at all times. There was to be no “rocking the boat”, as it were.

But if one thing is clear after this series of recently concluded summits in Phnom Penh (ASEAN + Australia, China, India, Japan, New Zealand, Russia, South Korea, and the US) it’s that ASEAN is changing.

But it’s precisely because Cambodia, a nation with deep ties to China, tried to “stifle” that issue that things didn’t quite go as it had planned.

The Philippines, one of the countries embroiled in an increasingly tense dispute with China over overlapping maritime claims, spoke out in public contradiction of Cambodia’s statement that ASEAN members had “agreed” to not “internationalise” the territorial disputes.

“There was no consensus,” Philippine President Benigno Aquino said after the Cambodian leader finished his declaration. And that was only the beginning.

Possibly emboldened by the presence of Obama, (and the seven other non-ASEAN leaders), Aquino took the opportunity to basically “internationalise” the matter by speaking about the need for a “multi-lateral” resolution.

One that involves all those with a stake in the disputed areas’ maintaining its freedom of navigation and over-flight, including the US. A position several other countries agreed with.

And just like that, the subject that wasn’t supposed to be discussed hijacked the discussions. Much of this happened behind closed doors, but there was no way it was going to remain there… whether ASEAN liked it or not.

Cambodian Prime Minister Hun Sen delivered his usual stage-managed, loquacious statement in an attempt to conclude the summits on a “positive” and “graceful” note… but he refused to answer questions (of which there were many!) ostensibly because he was tired and feeling “emotional” about the passing of Cambodia’s former king last month.

But never mind Hun Sen’s neat summary. The media rush, (referred to by one journalist as similar to a dangerous bar-room brawl), to get to the Chinese and Philippine delegates as they exited and looked to make side-line statements taking pot-shots at each other (without directly pointing fingers of course), said more about the region’s state of affairs than can be tidied up and swept under the carpet.

This time around, ASEAN may have found itself with little other choice than to do something more substantial.

via The end of the “ASEAN way” – Al Jazeera Blogs.


* Palestine envoy says Beijing backs U.N. entry

China backs Palestine. It usually refrains from taking sides in territorial and sovereignty disputes and prefers to be neutral. Is this a policy change? Or another sign of a proactive Foreign Ministry?

Reuters: “Palestinian President Mahmoud Abbas‘ envoy to China said on Friday that Beijing backs their United Nations membership bid, a day after France indicated it would support a diplomatic upgrade for Palestine.

Chinese Foreign Minister Yang Jiechi (R) shakes hands with Bassam Al-Salhi, envoy of Palestinian President Mahmoud Abbas, at China's foreign ministry in Beijing November 23, 2012. REUTERS/China Daily

Bassam al-Salhi, in China on a three-day trip to discuss tensions in Gaza, echoed earlier calls from China’s Foreign Ministry that Beijing would support Palestinian statehood and its entry into the United Nations.

“They (China) support the Palestinian right for ending occupation and building a Palestinian state ..and support the bid of the Palestinian membership in the United Nations,” Salhi told Reuters in an interview after meeting Chinese Foreign Minister Yang Jiechi.

China’s official Xinhua new agency quoted Yang as saying China “supports Palestine’s entry into the United Nations and other international organizations and understands, respects and backs Palestine’s bid for the U.N. observer status”.”

via Palestine envoy says Beijing backs U.N. entry | Reuters.

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