Archive for May, 2013

« Older Entries  |   Newer Entries »
19/05/2013

* China owner smashes up his Maserati in service protest

News Asia: “A wealthy Chinese Maserati owner hired four sledgehammer-wielding men to smash up his $420,000 supercar in protest at poor customer service, reports said on Wednesday.

four-sledgehammer-wielding-men-destroy-a-maserati-outside-the-qingdao-convention-center-in-china-on-may-14-2013-4

BEIJING – A wealthy Chinese Maserati owner hired four sledgehammer-wielding men to smash up his $420,000 supercar in protest at poor customer service, reports said Wednesday.

The car owner, identified only by his surname Wang, had the group attack the Maserati Quattroporte at the opening of an auto show in the eastern city of Qingdao in Shandong province, the Qingdao Morning Post said.

Video images showed the men going about their task with gusto, leaving the vehicle with a shattered windscreen and mirrors, the grille broken and dents to the bodywork. It was draped in a banner accusing the Italian manufacturer of poor decision-making.

Wang bought the luxury car in 2011 for 2.6 million yuan, the report said — around 100 times the average income of Chinese urban residents last year.

But problems first arose when he took it back to the dealer for an unspecified repair, with staff charging him for new spare parts despite using used ones, the paper quoted Wang as saying. It later failed to fix a problem with a door and scratched the vehicle, he added.

“I hope foreign luxury car producers acknowledge clearly that Chinese consumers are entitled to get the service that is commensurate with the brand,” Wang said.

Maserati’s China arm said the company and its dealer in Qingdao had responded to the customer’s complaint and it regretted his decision.

“We deeply regret that the customer decided to terminate bilateral talks in such a sudden manner,” it said in a statement read to AFP by an employee.

Qingdao’s authorised Maserati dealer said on China’s Twitter-like Sina Weibo: “We deeply regret that before the two sides could reach a result via negotiation, the vehicle owner… smashed the world famous car in public… to cause a sensation.”

During the dispute “thugs” had disrupted its daily operations and intimidated staff and visitors, it added.

Chinese Internet users were divided over the incident, with some expressing scepticism about the car owner’s motives.

“Is it to defend his rights or just for show? I think it is more of a show — why do you smash your supercar if you just want to seek justice for the change of a 2,400-yuan part?” said one posting.

via China owner smashes up his Maserati in service protest – Channel NewsAsia.

Posted in China alert, Economics, show off, Social & cultural | Leave a Comment »

Tags: , , , , , ,
18/05/2013

* China’s protesters: winning battles?

FT: “Even in China, David sometimes beats Goliath – though it’s sometimes hard to be sure.

This week, residents of Songjiang – a suburb of Shanghai which has gained fame around the world for having over 10,000 dead pigs floating in its water supply – found that though they could not vanquish the porcine invader, they had scared away an intruder from the corporate world. Shanghai Guoxuan High-Tech Power Energy company said it was abandoning plans for a battery factory in Songjiang, after residents protested on the streets and on the internet against it.

In a statement broadcast on local TV, the company said it would return the land allocated by local government and “will not seek any compensation”. It said it was halting its existing operations and pulling out of the area completely.

Residents staged street protests against the plant regularly since late April and more than 10,000 signed a petition against the project with many others voicing their opposition to it on the internet. At least one protester was reported to have been injured by police.

But Chinese citizens know that plants vanquished in one location in China, by “not in my backyard” or “nimby” protests, often pop up in someone else’s backyard. Residents of neighbouring Jinshan, another industrial area on the outskirts of Shanghai, now fear that the plant will end up on their doorstep.

“We already have so many chemical plants. We really cannot tolerate one more battery plant. Shall we protest together?” asks one user on a Jinshan property owner’s online forum.

Ordinary Chinese are less and less ready to pay the environmental price for economic development – or rather, more and more ready to see someone else pay it. This week, up to a thousand people protested in Kunming, in southwest China, the second large demonstration this month against plans to produce paraxylene (PX), a chemical used in making fabrics and plastic bottles, at a plant in the town.

Protestors complained that the environmental impact assessment for the project was suspect, because it was done by one subsidiary of China National Petroleum Corp, the country’s largest oil and gas producer and supplier, while the plant would be operated by another. That is the equivalent of “grandson assessing Grandpa,” said one Weibo user.

Last November, the eastern city of Ningbo suspended a petrochemical project after days of street protests. The year before, big protests against a PX plant in the northeastern city of Dalian forced the city government to suspend it.”

via China’s protesters: winning battles? | beyondbrics.

Related articles

Posted in China alert, Economics, Petition, Politics, public protest | Leave a Comment »

Tags: , , , , , , , ,
18/05/2013

* Mercedes Revamps the S-Class to Lure China’s Wealthy Buyers

BusinessWeek: “Daimler (DAI) Chief Executive Officer Dieter Zetsche was leaning back in the rear seat of a prototype Mercedes-Benz S-Class sedan in 2010 when he realized it didn’t recline far enough. With wealthy consumers accustomed to sumptuous airline seats, he figured Mercedes needed to approach that level of comfort in its flagship model. “Engineers traditionally focus on the driver seat position,” Zetsche says. But “S-Class owners often experience their car from ‘the second row,’ especially in China,” where luxury cars are frequently driven by chauffeurs.

Mercedes Revamps the S-Class to Lure China's Wealthy Buyers

So Zetsche had his designers create a back seat that reclines to a 43.5-degree angle, available as an option on extended-wheelbase versions of the revamped S-Class unveiled on May 15. For back-seat sleeping, the front passenger seat slides forward to add legroom and the backrest recedes into a recess illuminated by ambient lighting. A calf support swivels forward and a heel rest pulls out of the front seat. A hot-stone-massage function in the back part of the rear seat aids relaxation on long drives. There’s even a special air bag to prevent slumbering passengers from sliding under the seat belt during an accident.

Back-seat amenities are critical to reviving the Mercedes brand among well-heeled Chinese buyers, who account for more than half of all S-Class sales worldwide, and those sales are key for Daimler’s bottom line. In the first quarter, Mercedes’s operating profit margin was 3.3 percent vs. 11.1 percent at Audi (VOW) and 9.9 percent at BMW (BMW). Commerzbank estimates the profit margin on the S-Class at 25 percent (vs. 1 percent for the A-Class hatchback), so boosting its sales would have an outsize impact on Mercedes’s earnings.

McKinsey forecasts sales growth of upscale vehicles in China will average 12 percent a year through 2020, outpacing the 8 percent rate for the country’s overall car market. That increase would put sales of high-end autos there ahead of those in the U.S. by 2016 and on par with demand for all of Western Europe by the end of the decade, the consultant said in a March report. Mercedes lost its long-held rank as the No. 1 global luxury brand in 2005. “Mercedes can only become No. 1 [again] if they improve in the biggest market—China,” says Thomas Schiller, an automotive partner at consulting firm Deloitte in Munich. “The S-Class serves as a brand ambassador.”

Zetsche in 2011 announced a goal of overtaking BMW and Volkswagen’s Audi luxury brand in global sales and profit by the end of the decade. But 2013 Mercedes deliveries—441,500 vehicles through April—trail Audi by 61,500 and No. 1 BMW by 70,500.

The S-Class has been the clear leader in luxury sedans since it first hit the market in 1972. The halo effect from the car—which can cost as much as $486,000 in China, due to heavy import levies—also allows Mercedes to generally charge more than rivals for its other cars. “The S-Class stands for luxury, prestige, comfort, and safety,” says August Joas, head of the global automotive practice at consultant Oliver Wyman in Munich. “It’s the absolute flagship model, and a thorn in the flesh of the competition in terms of volume, pricing, and margin.”

That leadership position isn’t unassailable. Last year, Mercedes sold 80,300 S-Class vehicles globally vs. 59,200 for the BMW 7 Series and 38,600 for Audi’s A8. In 2008, S-Class sales were more than double those of the 7 Series and more than four times those of the A8.

One reason for the falloff was Mercedes’s decision in 2006 to maintain separate China sales organizations for locally made vehicles, such as the smaller C-Class sedan, and imported cars like the S-Class. That pitted Mercedes models against one another and led to price-cutting: S-Class discounts shot up to an unprecedented 25 percent in 2012. Daimler finished recombining its sales operations this year; in February, Nicholas Speeks, CEO of Mercedes-Benz China, lashed out at the brand’s Chinese dealers for missing already-lowered sales targets. “These sales figures can be reached by call-center employees,” Speeks wrote in a February letter to dealers that was obtained by Bloomberg. He accused the brand’s sales partners in China of “slack work and a neglect in the ambition to develop the Mercedes-Benz brand.””

via Mercedes Revamps the S-Class to Lure China’s Wealthy Buyers – Businessweek.

Posted in Affluence, Economics, luxury brand | Leave a Comment »

Tags: , , , , , , , ,
18/05/2013

* China gives environmental approval to country’s biggest hydro dam

Reuters: “China’s environment ministry has given the go-ahead for the construction of what will become the country’s tallest hydroelectric dam despite acknowledging it will have an impact on plants and rare fish.

Dadu River, China

The dam, with a height of 314 meters (1,030 feet), will serve the Shuangjiangkou hydropower project on the Dadu River in southwestern Sichuan province.

To be built over 10 years by a subsidiary of state power firm Guodian Group, it is expected to cost 24.68 billion yuan ($4.02 billion) in investment.

The ministry, in a statement issued late on Tuesday, said an environmental impact assessment had acknowledged that the project would have a negative impact on rare fish and flora and affect protected local nature reserves.

Developers, it said, had pledged to take “counter-measures” to mitigate the effects. The project still requires the formal go-ahead from the State Council, China’s cabinet.

China aims to raise the share of non-fossil fuels in its energy mix to 15 percent by 2020, up from 9.4 percent in 2011. Hydropower is expected to make the biggest contribution.

It has vowed to speed up construction of dams in the 2011-2015 period after slowing it down following the completion of the controversial Three Gorges project in 2006.

The Three Gorges Dam, which serves the world’s biggest hydropower station on the Yangtze river, measures 185 meters.

The 300-m Nurek dam in Tajikistan in Central Asia is the world’s highest, though other taller dams are now under construction. China’s tallest dam now, at 292 meters, is the Xiaowan Dam on the Lancang River, also known as the Mekong.

On completion, the Sichuan project will have a total installed capacity of 20 gigawatts (GW), with annual power generation to exceed 7 billion kilowatt-hours (kWh).

The government said this year that hydropower capacity was expected to reach 290 GW by 2015, up from 220 GW at the end of 2010. It also said it would begin building a controversial project on the undeveloped Nu River in Yunnan province.

Guodian was one of a number of state-owned firms criticized by China’s national audit office last week for starting work on projects not yet been approved by the central government. The office said by the end of 2011, the company had invested nearly 30 billion yuan in 21 unapproved projects.

The Huaneng Group, China’s biggest power company, was also criticized for launching construction of the Huangdeng hydropower plant before receiving the government’s go-ahead.”

via China gives environmental approval to country’s biggest hydro dam | Reuters.

Posted in carbon emission, China alert, Economics, Electricity | 1 Comment »

Tags: , , ,
16/05/2013

* China in innovation challenge to Europe

FT: “Europe’s business leaders fear its industry will fall behind China in technological innovation within a decade as the economic crisis undermines one of the continent’s competitive advantages.

More than two-thirds of business leaders surveyed by Accenture, the consultancy, on behalf of BusinessEurope, the business lobby group, said China would reach or pull ahead of Europe in innovation by 2023.

Weak demand caused by Europe’s economic crisis has sent industrial production into decline, while corporate reluctance to delve into cash reserves is holding back new investment, training and R&D.

Rising unemployment threatens labour flexibility and Europe’s ability to maintain a highly skilled workforce. Fewer than half of those surveyed said Europe’s workforce remained a competitive advantage for industry.

European policy makers are determined to reverse industry’s decline. The European Commission last year proposed by 2020 to raise industry’s share of EU gross domestic product from 15.6 per cent to 20 per cent.

“We cannot continue to let our industry relocate outside Europe,” said Antonio Tajani, vice-president of the European Commission.

European companies remain leaders in sectors ranging from automotive to aerospace, engineering to pharmaceuticals, and two-thirds of surveyed business leaders said European industry was still competitive internationally.

But some Chinese companies such as Huawei, the telecoms equipment maker, are drawing level in innovation capability and gaining share in Europe. Some 61 per cent of those surveyed said they feared Europe would struggle to recover from its economic crisis for at least three years.

Some 90 per cent of German business leaders said Europe’s industry was competitive compared with only half of business leaders in Spain.

The Accenture study identified two areas to support growth: rebuilding Europe’s skills base and reinvigorating industry’s access to finance, including better access to capital markets and venture capital funding for start-ups.

Although Europe is mired in recession, there remain opportunities in areas ranging from low-carbon technology and smart grid networks to biotechnology and advanced manufacturing.

“The China machine is definitely going to invest a lot of money in technology innovation over the next 10 years . . . [But] there’s a sense that if we get our act together Europe can remain successful in manufacturing,” said Mark Spelman, strategy chief at Accenture.

“Just because there is zero growth across Europe doesn’t mean there are not segments of good growth within that . . . So it’s about how you place bets in an intelligent way.

To address the innovation deficit, business leaders want to see more public funding for R&D, reduced tax for R&D and capital investment and improved financing conditions.

European executives raised a variety of other worries ranging from the cost of energy to labour costs.

A majority of respondents were pessimistic that European industry would be cost-competitive in energy compared with markets such as the US, Russia and China in three years’ time.

US industry is enjoying cheap energy courtesy of discoveries of shale gas that permit new investment in gas-intensive industry, such as petrochemicals.

In contrast, Europe remains dependent on more expensive Russian gas, and costly regulation and investments in renewable energy are adding to the burden.”

via China in innovation challenge to Europe – FT.com.

See also: https://chindia-alert.org/prognosis/how-well-will-china-and-india-innovate/

Posted in China alert, Economics, innovation, patents | Leave a Comment »

Tags: , , , , ,
16/05/2013

* India: Patents and precedents

FT: “Pharmaceutical companies fear that the battle raging in India over patents will inspire other countries to change their laws

Meena, a 45-year-old New Delhi widow with a 10-year-old son, was diagnosed with potentially fatal blood cancer in 2010. To control it, her doctors prescribed an Indian*- made generic version of Novartis’ leukaemia drug.

But her body stopped responding to it and Meena was advised to switch to a more expensive drug, Sprycel, a second-line cancer drug made by Bristol-Myers Squibb. Sprycel costs Rs160,000 ($2,900) per month, far out of reach for a woman living on her late husband’s Rs17,000 monthly pension.

A solution appeared to be at hand last May when Natco, an Indian generic drugs company, started selling its own version of Sprycel for Rs9,000 a month. A charity helped Meena to buy it.

But Meena’s ability to obtain potentially lifesaving medicine became tied up in a dispute pitting the interests of the world’s largest drugmakers – who spend $70bn annually developing drugs – and generic manufacturers in the developing world.

BMS, the US drugs group with revenues of $17.6bn in 2012, accused Natco of patent infringement, prompting the India’s Supreme Court to order the Indian drugmaker to stop making the medicine until a final verdict was reached. While some patients stocked up before the generic disappeared, Meena could only afford a few bottles.

The BMS “access programme” for the poor offered to sell her Sprycel for Rs15,000 per month – a big discount on the market price but still more than she can afford. Friends have chipped in to buy her a month’s supply but she is distraught about the future. “I don’t see a ray of hope,” she says. “Even if I use all my resources, I can only afford it for two months. It’s not sustainable.”

It is this struggle of educated, middle-class patients to obtain cutting-edge medicine that has led to a showdown between India and western pharmaceutical companies over the patents and prices of lifesaving drugs.

Western drugmakers fear India will inspire other emerging markets to challenge their patents. They have accused India of trampling on their intellectual property rights after a series of decisions overriding, revoking or refusing patents on cancer and hepatitis C drugs from Bayer, Pfizer, Roche and Novartis. The companies are also irate that New Delhi is considering compulsory licenses for another three patented cancer drugs, including Sprycel, and Roche’s breast cancer drug Hercepterin.

At a recent US Congressional hearing, Roy Waldron, Pfizer’s chief intellectual property officer, complained that New Delhi had “routinely flouted trade rules to bolster the Indian generics industry”.

Indian generics executives and patients activists say the reality is more nuanced. They argue that India’s courts are trying to balance drug companies’ intellectual property rights against the need for affordable medicine for 1.2bn Indians. India’s public healthcare system has virtually collapsed, with Indians paying 60 per cent of their healthcare costs from their own pockets.

This stand-off is taking place within the framework of a new patent law crafted to preserve India’s manoeuvring room to keep medicines affordable at home – and protect its exports of drugs abroad.

“The portrayal is that India doesn’t respect intellectual property rights but the reality is that it is balanced,” says Leena Menghaney, a lawyer with Médecins Sans Frontières, the humanitarian organisation. “The decisions that go in favour of the MNCs [multinational corporations] never get reported and decisions against them always hit the headlines.”

D.G. Shah, secretary-general of the Indian Pharmaceutical Alliance, which represents India’s biggest generics firms, rejects suggestions of protectionism for domestic companies.

via India: Patents and precedents – FT.com.

Posted in Economics, Health, India alert, Intellectual Property Rights, Pharma | Leave a Comment »

Tags: , , , , ,
16/05/2013

* Pupil commissars quit jobs as Tiger Mothers put exams first

From The Times, 16 May, 2013: “China’s Tiger Mothers are driving a revolutionary shift in attitudes towards primary school cadres — the system that applies rigid communist-style structure to the jobs of child blackboard-wiper, hand cleanliness checker and window-opener.

Battle Hymn of the Tiger Mother

Battle Hymn of the Tiger Mother (Photo credit: Wikipedia)

For many years parents fought to secure the coveted positions for their children — feverishly lobbying and bribing teachers to grant responsibilities that would look good on a university application form.

The most hotly desired cadre positions for 11-year-old Chinese children have traditionally included Sport Commissary (organising games), Cultural Commissary (organising class performances) and Labour Commissary (organising classroom tidy-up operations).

But, according to teachers in the southern province of Guangdong, priorities have changed. As increasing numbers of Chinese parents thrust their children into the country’s ferocious educational arms race, the new emphasis is on exam performance, not Communist Party play-acting.

The effect of this, one teacher in the city of Guangzhou told Chinese media, has been a scramble by parents to unravel their previous machinations and release their children from onerous duties. Once liberated from their tasks, runs the Tiger Mother theory, children will claw back precious minutes that can be spent instead on exam revision.

After bullying teachers to give cadre positions to their children, parents are cravenly avoiding any part in the resignations.

“When their children were in second grade [seven years old], the parents made every possible attempt to get me to arrange cadre titles for them. Now those same kids are in fifth grade [11 years old], they put the same effort into resigning those titles,” said a teacher called Deng.

“Dear Miss Deng. Thank you for giving me so many opportunities, which have tempered me very well and greatly helped my personal development . . . I would like to step aside to give the same opportunities to other students and therefore tender my resignation,” read one of the letters.

She says she has received so many resignation letters from child cadres that she now faces a shortfall of “soldiers” prepared to sacrifice their exam performance for the dizzy heights of classroom officialdom.

One parent of a child in Guangzhou told reporters: “When my daughter first went to primary school, we would always push her to run for every cadre position, even if it was just the job of closing the doors. But she will have middle school entrance exams in a year. Being student cadre doesn’t help the exam, so now we mobilise her to study.””

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

Tags: , , , , , , , ,
15/05/2013

* Rotavirus: India unveils cheap Rotavac diarrhoea vaccine

Pharmaceuticals is one of India‘s advanced industries.

BBC: “Scientists in India have unveiled a new low-cost vaccine against a deadly virus that kills about half a million children around the world each year.File photo of Indian children suffering from diarrhoea

Rotavirus causes dehydration and severe diarrhoea and spreads through contaminated hands and surfaces and is rampant in Asia and Africa.

India says clinical trials show the new vaccine, Rotavac, can save the lives of thousands of children annually.

An Indian manufacturer said the vaccine would cost 54 rupees ($1; £0.65).

International pharmaceutical companies GlaxoSmithKline and Merck produce similar vaccines but each dose costs around 1,000 rupees.

“This is an important scientific breakthrough against rotavirus infections, the most severe and lethal cause of childhood diarrhoea, responsible for approximately 100,000 deaths of small children in India each year,” India’s Department of Biotechnology official K Vijay Raghavan said.

“The clinical results indicate that the vaccine, if licensed, could save the lives of thousands of children each year in India,” he added.

Rotavac will be made by Hyderabad-based Bharat Biotech. The company said it could mass-produce tens of millions of doses after clearance is given, expected in eight or nine months.”

via BBC News – Rotavirus: India unveils cheap Rotavac diarrhoea vaccine.

See also – https://chindia-alert.org/economic-factors/indias-services/

Posted in Economics, India alert, innovation | Leave a Comment »

Tags: , , , , ,
15/05/2013

* After ATM heist, India’s IT sector again in unwelcome spotlight

Reuters: “A breach of security at two payment card processing companies in India that led to heists at cash machines around the world has reopened questions on the risks of outsourcing sensitive financial services to the Asian nation.

The EnStage Inc. office is seen in the southern Indian city of Bangalore in this May 12, 2013 file photo. REUTERS/Stringer/Files

Global banks that ship work to be processed in India, either in-house or to big IT services vendors, were already under pressure to step up oversight of back-office functions after a series of scandals last year.

Last week, U.S. prosecutors said a global criminal gang stole $45 million from two Middle Eastern banks by breaking into the two card processing companies based in India and raising the balances and withdrawal limits.

“India is exposed in two ways: The threat that the same theft could happen in India and the fact that the outsourcing industry will also get affected,” said Arpinder Singh, partner and national director for fraud investigation and dispute services at consultancy Ernst & Young.

The episode is reopening debate on banks sending work requiring a high degree of confidentiality to offshore locations.

“It is the weakest link,” said Shane Shook, an expert with U.S. cyber-security firm Cylance Inc who has helped financial firms conduct investigations into some major cyber crimes.

“I think the lesson is they need to pull back on what they’ve outsourced. When you’re giving a third party, the outsourced entity, the ability to access credit limits or cash limits of the consumers you’re managing the finances for, you’re giving up control that is your fundamental responsibility.”

India’s $108 billion IT services industry is the world’s favored destination for outsourcing. Over 40 percent of exports by the industry are support services for the global financial sector, ranging from investment bank back-office functions to research, risk-management and processing of insurance claims.”

via After ATM heist, India’s IT sector again in unwelcome spotlight | Reuters.

Related articles

Posted in corruption, Crime, Economics, Illegal practices, India alert | Leave a Comment »

Tags: , , , , , ,
15/05/2013

* Premier promises administrative streamlining to create jobs

Li Keqiang 李克强

Li Keqiang 李克强 (Photo credit: Wikipedia)

Xinhua: “Chinese Premier Li Keqiang has called for reducing administrative barriers for launching businesses to create more job opportunities.

On a nationwide tele-conference held on Monday about the functional transformation of the institutions under the State Council, or the cabinet, Li said China faces a tough employment situation due to the tempered economic growth in the past few months this year.

The country will expect a record 6.99 million college graduates this year, Li said, adding that it is an important task to help them get employed.

Efforts should be made to vigorously develop medium-sized, small and micro businesses by canceling unnecessary administrative approvals, as state-owned enterprises and institutions have limited capacity in providing employment opportunities.

Li said that the government should also make efforts to lower the threshold for people to seek employment or start businesses.”

via Premier promises administrative streamlining to create jobs – Xinhua | English.news.cn.

See also: https://chindia-alert.org/2013/05/15/job-prospects-grim-for-chinas-7m-fresh-grads/

Posted in China alert, Economics, employment | Leave a 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