Archive for May, 2013


Urbanisation: Some are more equal than others

The Economist: “FOR many migrants who do not live in factory dormitories, life in the big city looks like the neighbourhood of Shangsha East Village: a maze of alleys framed by illegally constructed apartment buildings in the boomtown of Shenzhen, near Hong Kong. There are at least 200 buildings, many of them ten storeys tall (see picture). They are separated by only a metre or so, hence the name “handshake buildings”—residents of neighbouring blocks can reach out from their windows and high-five.

The buildings are China’s favelas: built illegally on collectively owned rural land. Rents are cheap. An eight-square-metre (86-square-foot) flat costs less than $100 a month. They symbolise both the success of the government’s urbanisation policy and also its chronic failures. China has managed a more orderly system of urbanisation than many developing nations. But it has done so on the cheap. Hundreds of millions of migrants flock to build China’s cities and manufacture the country’s exports. But the cities have done little to reward or welcome them, investing instead in public services and infrastructure for their native residents only. Rural migrants living in the handshake buildings are still second-class citizens, most of whom have no access to urban health care or to the city’s high schools. Their homes could be demolished at any time.

China’s new leaders now say this must change. But it is unclear whether they have the resolve to force through reforms, most of which are costly or opposed by powerful interests, or both. Li Keqiang, the new prime minister, is to host a national conference this year on urbanisation. The agenda may reveal how reformist he really is.

He will have no shortage of suggestions. An unusually public debate has unfolded in think-tanks, on microblogs and in state media about how China should improve the way it handles urbanisation. Some propose that migrants in cities should, as quickly as possible, be given the same rights to services as urban dwellers. Others insist that would-be migrants should first be given the right to sell their rural plot of land to give them a deposit for their new urban life. Still others say the government must allow more private and foreign competition in state-controlled sectors of the economy such as health care, which would expand urban services for all, including migrants. Most agree the central government must bear much more of the cost of public services and give more power to local governments to levy taxes.

Any combination of these options would be likely to raise the income of migrants, help them to integrate into city life and narrow the gap between the wealthy and the poor, which in China is among the widest in the world. Such reforms would also spur on a slowing economy by boosting domestic consumption.

Officials know, too, that the longer reforms are delayed the greater the chances of social unrest. “It is already a little too late,” Chen Xiwen, a senior rural policy official, said last year of providing urban services to migrants. “If we don’t deal with it now, the conflict will grow so great that we won’t be able to proceed.”

Yet Mr Li, the prime minister, would do well to dampen expectations. The problems of migrants and of income inequality are deeply entrenched in two pillars of discriminatory social policy that have stood since the 1950s and must be dealt with before real change can come: the household registration system, or hukou, and the collective ownership of rural land.”

via Urbanisation: Some are more equal than others | The Economist.

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Why India’s identity scheme is groundbreaking

BBC: “In an audacious technological mission, India is building a near foolproof database of personal biometric identities for nearly a billion people, something that has never been attempted anywhere in the world.

A woman getting enrolled in a UID booth in Surat

Poorer Indians who have no proof to offer of their existence will leapfrog into a national online system, another global first, where their identities can be validated anytime anywhere in a few seconds.

“India will outdo the world’s biggest biometric databases including those of the Federal Bureau of Investigation and the US-VISIT visa programme,” says Nandan Nilekani, the technology tycoon who heads the programme popularly called by its acronym UIDAI.

The United States’ visa programme is a biometric database of 120 million.

In comparison, the UIDAI has already registered 200 million members, less than two years after the first enrolment.

By 2014 half of India’s population will have an identity tagged to a random, unique 12-digit number.

As more and more Indians have their fingerprints taken, irises scanned and photographs clicked, UIDAI’s chief technology architect Pramod Varma describes the database structure as a “Google-meets-Facebook” scale out.

The information is stored in a fortress like data centre in Bangalore

With its internet-class open source backbone, the database will accommodate more than 12 billion fingerprints, 2.4 billion iris scans and 1.2 billion photographs.

Even more groundbreaking, once established and stored, a person’s identity can easily be verified and authenticated using a cell phone, smart phone, tablet or any other device hooked to the internet.

The information is stored in a fortress-like data centre in Bangalore with a triple layer of security, and travels in highly encrypted packets.

Many of the radical ideas for UIDAI’s technology have come from the talent the project has drawn from the Indian diaspora – tech entrepreneurs like Bala Parthasarathy of HP-acquired photo service, Snapfish and Silicon Valley returnees like Srikanth Nadhamuni, formerly with Intel.

Mr Nilekani himself co-founded and built the multi-billion dollar outsourcing company Infosys before being drafted by the government to head the project.

The programme has studied global best practices in biometric identity databases.

Unlike the United States’ social security number, which is guessable and China’s, which adds the date of birth, India’s 12-digit identity number is randomly generated.

The United States’ visa database does not factor in iris scans while India has included them to provide a greater degree of accuracy.

India’s telecom revolution leapfrogged over several stages of technology in the past decade-and-a-half to great success. Similarly, the massive UIDAI will vault over older technologies.

“By starting on a clean slate and reconfiguring the structure, we have opened up a whole new set of possibilities,” says Mr Nilekani.

The project will stay abreast of the latest in biometrics, cloud computing and connectivity.

Pilot projects using the unique number have begun in parts of India

Costs though have been kept low, first, by adopting an open policy in selecting devices and software and encouraging multiple private vendors.

Second, the project is technology-neutral, not locking in to any particular hardware or software.

If the technology architecture is unique, so is its accuracy in validating identities.

“The combination of 10-finger biometrics, two-iris scans and photograph establishes the identity of a person with over 99.5% accuracy,” says Krishnakumar Natarajan, CEO of Bangalore-based tech outsourcing firm MindTree, which is one of the firms building applications for the project.

The best of the biometric databases in the world have a single de-duplication check, to ensure that every person is identified and tagged only once.”

via BBC News – Why India’s identity scheme is groundbreaking.


Chinese wonder why their tourists behave so badly

SCMP: “From faking marriage certificates to getting honeymoon discounts in the Maldives to letting children defecate on the floor of a Taiwan airport, Chinese tourists have recently found themselves at the centre of controversy and anger.


Thanks to microblogging sites in China, accounts of tourists behaving badly spread like wildfire across the country, provoking disgust, ire and soul-searching.

While in the past such reports might have been dismissed as attacks on the good nature of Chinese travellers, people in the world’s second-largest economy are starting to ask why their countrymen and women are so badly behaved.

“Objectively speaking, our tourists have relatively low-civilised characters,” said Liu Simin, researcher with the Tourism Research Centre of Chinese Academy of Social Sciences.

“Overseas travel is a new luxury, Chinese who can afford it compare with each other and want to show off,” Liu said. “Many Chinese tourists are just going abroad, and are often inexperienced and unfamiliar with overseas rules and norms.”

When a story broke recently that a 15-year-old Chinese boy had scratched his name into a 3,500-year-old temple in Egypt’s Luxor, the furore was such that questions were even asked about it at a Foreign Ministry news briefing.

“There are more and more Chinese tourists travelling to other countries in recent years,” ministry spokesman Hong Lei said on Monday.

“We hope that this tourism will improve friendship with foreign countries and we also hope that Chinese tourists will abide by local laws and regulations and behave themselves.””

via Chinese wonder why their tourists behave so badly | South China Morning Post.

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China designates service industry new growth engine

Xinhua: “China will step up efforts to build up its service industry to make it a new engine to power sustainable growth, Premier Li Keqiang said on Wednesday.


Speaking at a summit during the second Beijing International Fair for Trade in Services, Li stressed the important role of the service industry in job creation and economic upgrading.

“Increasing service supplies and improving service qualities will help unleash huge potential in domestic demand, and thus offer firm support for stable economic growth and structural optimization,” he said.

The latest emphasis on service trade is part of China’s efforts to drive growth in the sector to build an upgraded version of the economy.

In 2012, the service industry accounted for 44.6 percent of gross domestic product (GDP), up 2.7 percentage points from a year earlier but still significantly below the share of 60 percent or more seen in many developed countries.

Li noted the key to spur growth in the area lies in reform and opening-up to remove institutional barriers.

“China will further open up the service industry, and pilot free trade experimental zones to tap development,” he said, adding that the government will seek balanced trade and encourage cross-border investments in the sector.

The premier stressed countries should abide by the win-win principles of rising against protectionism, removing trade barriers, and coordinating efforts to facilitate personnel flows, recognition of qualifications and a setting of standards.

Developed countries should lead the effort to open up their markets, while developing economies should be actively engaged in building the global trade mechanism and standards in the service industry, according to Li.

Under China’s 12th Five-Year Plan (2011-2015), the country aims to bring the sector’s proportion of GDP to 47 percent by 2015 and to make it a strategic focus for the country’s industrial restructuring and upgrading to ease reliance on traditional manufacturing.”

via China designates service industry new growth engine – Xinhua |

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In China, Big Data Is Becoming Big Business

Business Week: “With 1.3 billion people, a quickly expanding urban economy, and rising rates of Internet and smartphone penetration, China generates an immense amount of data annually. If streams of that data can be appropriately sifted, analyzed, and stored, companies seeking to understand China’s often-fickle consumers could have access to valuable real-time insights—and perhaps early warning to the next big consumer trends.

Shopping drives Beijing's Sanlitun area

At a presentation last week at Peking University’s Guanghua School of Management, China’s premier business school, associate professor of marketing Meng Su predicted: “China will soon become world’s most important data market.” He advised job seekers in China and elsewhere to consider training for a new career path as “data scientists,” which he described as “one of the most valuable jobs in the next 10 years.” Interpreting big data seems poised to become big business.

China’s government has signaled its intention to help domestic enterprises develop the infrastructure necessary to store and analyze “big data”—that is, data sets too large to be handled by traditional database-management tools and software. The current Five Year Plan, which aims to stimulate “higher-quality growth,” names seven strategic “emerging industries,” including next-generation information technology.

Meanwhile, leading Chinese firms, especially Internet companies, have already begun to incorporate big data into their strategies. Jack Ma, founder and then-chief executive officer of China’s e-tail giant Alibaba, declared last fall that the company should focus on three pillars of future business: e-commerce, finance (providing loans to small and medium enterprises in China), and data mining. In January, Alibaba underwent a restructuring that, among other changes, created a data-platform division with about 800 employees, as reported in the Chinese financial magazine, Caixin. The Alibaba Group has just begun to scratch the surface of analyzing the reams of user data generated through its business-to-business e-commerce site and its massive consumer-to-consumer platform,

Professor Su warned, however, that the hype around big data in China may be a case of too much, too soon: “If everyone is talking about something, there is probably already a bubble,” at least of expectations, he said. “Most Chinese companies don’t own enough data, let alone know how to utilize, analyze, or monetize their data.” In other words, a select number of companies in China that do own large quantities of user-generated data—such as Alibaba and Baidu (BIDU)—hold the cards and may profitably sell that valuable information to other vendors.”

via In China, Big Data Is Becoming Big Business – Businessweek.


Smithfield Foods to be bought by Chinese firm Shuanghui International

Washington Post: “Smithfield Foods, whose signature hams helped make it the world’s largest pork producer, is being bought by a Chinese firm in a deal that marks China’s largest takeover of an American consumer brand.

The $4.7 billion purchase by Shuanghui International touches several sensitive fronts at once — the quick rise of Chinese investment in the United States, China’s troubled record on the environment and the acquisition of Smithfield’s animal gene technology by a country considered to be America’s chief global competitor.

Consumer spending was stronger than first thought, but businesses restocked more slowly and state and local government spending cuts were deeper.

What’s more, the deal puts a major company from a Chinese industry with a history of food-safety problems in charge of a U.S. firm with past environmental problems of its own.

Separately, U.S. government and business officials often complain that China uses strict control of its market of 1.6 billion people to force American companies that want to do business there to surrender intellectual property.

The deal may become a test of U.S. attitudes toward China as it moves through likely reviews by the Justice Department and the Committee on Foreign Investment in the United States.

With no obvious national security concerns stemming from the production of ham, bacon and sausage, Smithfield chief executive C. Larry Pope said he expects approval. He emphasized that the deal wasn’t about bringing Chinese pork products or management standards to the United States but about sending U.S. products and expertise the other way. The deal will leave intact Smithfield’s management, workforce and 70-year presence in Virginia, he said.”

via Smithfield Foods to be bought by Chinese firm Shuanghui International – The Washington Post.

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Royal Albert Dock set to become London’s third business district under £1bn deal

London 24: “London Mayor Boris Johnson has unveiled details of a £1bn deal to transform London’s historic docklands into the capital’s next business district forging links with China.

View of Royal Albert Docks

The state-of-the-art business district at Royal Albert Dock will act as a platform for financial, high-tech and knowledge driven industries, and will be largest development of its kind in the UK.

It is set to become the third financial district in the capital after the City and Canary Wharf, creating tens of thousands of jobs.

Owned by the Greater London Authority the 35-acre site will be transformed by commercial developer ABP Chinese (Holding) into a gateway for Asian and Chinese business seeking to establish headquarters in Europe, along with other businesses wanting to set up in the capital.

The deal is believed to be worth £6bn to the UK economy, generating £23m in business rates annually and acting as a catalyst for further development in the area.

Mr Johnson said: “For centuries the waterways of east London were the throbbing arteries of UK trade and commerce. This deal symbolises the revival of that great era, continuing the re-invention of this once maligned part of the capital into a 21st century centre of trade and investment.”

The deal is expected to deliver around 20,000 full-time jobs and boost local employment in Newham by 30 per cent.

Mayor of Newham, Sir Robin Wales, said: “The Royal Docks Enterprise Zone offers an unrivalled investment opportunity and this deal further strengthens Newham’s growing reputation as an ideal destination for international business.”

The deal represents one of the first direct investment by a Chinese developer in London’s property market.

Chairman of ABP, Mr Xu, said: “My vision is to develop a world class international business district which will initially target Asian businesses to help them secure a destination in London, which in China is seen as the gateway to both the United Kingdom and the wider European economy. Our plans aim to strengthen trade between east and west, provide new local jobs and deliver benefits for the wider London and UK economy.”

The area will become home to over 3.2 million square feet of high quality work, retail and leisure space, including 2.5 million square feet of prime office space along London’s waterways.”

via Royal Albert Dock set to become London’s third business district under £1bn deal – Politics – London24.

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Amway India snared by law against pyramid schemes

FT: “William Pinckney, chief executive of Amway India, the country’s biggest direct selling consumer goods business by sales, was released on bail on Tuesday evening after his arrest along with two fellow directors. Business leaders have been dismayed by the episode, saying it will damage investment and confidence.

It’s an odd tale that says much about the unpredictability of India’s police forces. What lies beneath is even more perplexing: the way a business regarded as entirely legitimate in the west may be viewed as an illegal pyramid scheme under Indian law.

Amway India, a wholly owned subsidiary of Amway Corporation of the US, has 1.5m agents across the country who distribute products on commission by selling door to door and who help recruit more agents like themselves. The company had revenues of Rs21.3bn ($380m) in 2011.

Amway is far from the only player. India’s direct selling industry employs some 6m people, 70 per cent of whom are women, according to the Federation of Indian Chambers of Commerce and Industry.

This week’s arrests were triggered by complaints from agents in the southern state of Kerala. They were angry after making losses on products they bought from Amway before securing customers. But Sudeep Sengupta, an Amway spokesperson, said the police were making this a case of “money circulation”, as defined under the Prize Chits & Money Circulation Scheme (Banning) Act of 1978.

The law is designed to deal with what in the west are known as pyramid schemes – fraudulent investment vehicles in which returns are paid to initial investors from the funds generated by later ones. In India, these can take the form of “chit funds” – popular and often legitimate schemes in which groups of people club together to buy products collectively, for instance, or to save money on a regular basis. But chit funds can go wrong, as demonstrated by a scandal that erupted this month in West Bengal after agents of several funds who lost money committed suicide.

Direct selling companies can fall foul of the law if their sales agents are paid for recruiting new agents (as well as earning commission for making sales). This, the thinking goes, brings them into the scope of the law because no real wealth is created in the recruiting process and the system must implode as the pool of new recruits dries up.

However, Amway and others insist that they pay their agents only when they make sales, not for getting new sales agents on board.

“We enroll distributors who are all meant to retail products. The growth of the network is not compensated for,” Sengupta told beyondbrics. “The growth of the network is only meant to expand the depth of the market and never meant as a model for compensation.”

One problem facing Amway and others is that there is no legislation that recognises direct selling as a specific type of commerce in India. The Indian Direct Selling Association, the industry’s self-regulatory body, is asking the government to change that.”

via Amway India snared by law against pyramid schemes | beyondbrics.


China to issue new plan for air pollution control

China Daily: “China to issue new plan for air pollution control

A national plan for air pollution control could be outlined as early as this week, said, a professional financial news website Tuesday.

The outline will target the reduction of air pollution on a national scale by establishing clear standards of air quality in different regions.

Coal plants, motor vehicles and dust that produce fine particulate matter will be the focus of strict control in the outline initiated by the Ministry of Environmental Protection, according to multiple sources who told the news website.

The overall plan has undergone multiple revisions and will be submitted to the State Council, China’s cabinet, for review by the end of this month, the Shanghai Securities News quoted Yang Tiesheng, deputy director of the energy saving department under the Ministry of Industry and Information Technology, as saying on May 22.

The specific measures put forward by the plan include stipulating the declining rates of atmospheric pollutants such as PM2.5 (particles smaller than 2.5 microns in diameter), sulfur dioxide, nitrogen oxide in cities, the reduction of coal consumption throughout the country, as well as the promotion of using clean energy such as natural gas, while banning coal-fired power plants in cities and minimizing heavy-polluting vehicles.

The Yangtze River Delta region and the Pearl River Delta region will be the key areas of the new air pollution prevention campaign.

Roughly one million heavy-polluting vehicles, popularly known as “yellow label cars”, will be prohibited from driving on roads in Beijing, Tianjin municipality and Hebei province, which would reduce half of the PM2.5 by vehicle emissions alone, said one environmental expert as quoted by the news website.

The outline stipulates that air quality must “make substantial progress” in the upcoming five years rather than the next 20 years, a standard previously adhered to by big cities such as Beijing, according to a source from the National Development and Reform Commission, China’s economic planning body.

Grade II air quality stipulates the average concentration of PM2.5 over a 21 hour period should be between 35 to 75 milligrams per cubic meters, according to the latest standard made by the Ministry of Environmental Protection in 2012.”

via China to issue new plan for air pollution control |Politics |

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Indian PM meets Japanese Emperor, discusses bilateral ties

Times of India: “Prime Minister Manmohan Singh on Wednesday called on Japanese Emperor Akihito and discussed bilateral ties and issues of mutual interest.

Singh accompanied by his wife Gursharan Kaur met the Emperor and the Empress of Japan at the luncheon at Imperial Palace ahead of his meeting with Prime Minister Shinzo Abe.

Emperor Akihito and Empress Michiko of Japan.

Emperor Akihito and Empress Michiko of Japan. (Photo credit: Wikipedia)

Singh, who is on a three-day visit to Japan to strengthen bilateral strategic ties, yesterday said India sees Japan as a “natural and indispensable partner” in its quest for stability and peace in Asia.

Noting that India and Japan are among the major actors in this region, he said, “It is our responsibility to foster a climate of peace, stability and cooperation and to lay an enduring foundation for security and prosperity”.

“India’s relations with Japan are important not only for our economic development, but also because we see Japan as a natural and indispensable partner in our quest for stability and peace in the vast region in Asia that is washed by the Pacific and Indian Oceans,” he said.

“Our relationship with Japan has been at the heart of our Look East Policy,” Singh said.”

via PM meets Japanese Emperor, discusses bilateral ties – The Times of India.

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