Archive for March, 2016


Indians Have the Worst Access to Safe Drinking Water in the World – India Real Time – WSJ

India has the highest number of people in the world without access to safe water, a report released to mark World Water Day showed Tuesday.

The country has 75.8 million people, at least 5% of its 1.25 billion population, without access to clean water, the report by WaterAid, a water and sanitation nonprofit headquartered in London, says.

The majority of those people come from impoverished communities–living on around $4.31 a day–and are forced to collect dirty water from open ponds and rivers or spend most of what they earn buying water from tankers, the report  says.

Source: Indians Have the Worst Access to Safe Drinking Water in the World – India Real Time – WSJ


We’re not gonna take it | The Economist

DELHI found itself under siege last month. Young men blocked roads and canals that feed people and water into the city. They looted, set fires and dragged women out of cars to rape them. The protesters, from a relatively privileged group of land-owning peasants called Jats, were agitating to be included in India’s list of “other backward classes”, which guarantees university places and government jobs.

Faced with dry taps, Narendra Modi’s government was eventually forced to concede to the demand.

This is the fury to which Somini Sengupta refers in the subtitle of her sharply observed study of India’s young, “The End of Karma: Hope and Fury Among India’s Young”. The median age in India is 27. Every month between 2011 and 2030, nearly 1m Indians will turn 18. Those coming of age this month were born well after the country started opening up its markets in 1991; they have spent their formative years in a world of optimism and rapid economic growth. But Ms Sengupta calls India “a democracy that makes promises it has no intention of keeping”. Advertisement

By 2030 the majority of Indians will be of working age. This could be what economists call a “demographic dividend”, creating a high worker-to-dependent ratio—or it could be a time bomb. India is producing nowhere near enough jobs for the tens of millions of young people joining the workforce every year.

The argument running through Ms Sengupta’s book, made of seven richly detailed portraits of young Indians, is both simple and beguiling. For centuries Indians born into wretched circumstances have accepted their lot as karma—punishment for misdeeds in past lives. This belief explains the persistence of the caste system, and the remarkable fact that a country that is home to one in three of the world’s poor has not come apart at the seams. But young people no longer accept karma, argues Ms Sengupta. Ideas of aspiration and free will have entered the Indian consciousness. Young Indians today demand the right to shape their own futures. If fury is in ample supply, so is hope.

Yet at every step the young are thwarted. It starts in the womb. A traditional preference for boys means that India has one of the most skewed sex ratios in the world: 1.13 boys for every girl, second only to China. (The ratio in America is 1.05.) One in three children under five is underweight. Nearly two-thirds of food meant for early-childhood feeding programmes is pilfered. A rare bright spot is education: in 2013, 96% of primary-school-age children were enrolled. But here, too, India fails its young. By the age of ten, only 60% of students can complete work at the level of a five-year-old. More than half cannot subtract.

Source: We’re not gonna take it | The Economist


Deep in a pit | The Economist

COMMUNIST Party give us back our money”, “We want to live, we need to eat!” Such were the slogans daubed on banners that were displayed on March 12th during a protest by thousands of coal miners in the dingy streets of Shuangyashan, a city in Heilongjiang province near the border with Russia.

The demonstrators gathered outside the headquarters of Longmay, the largest mining company in the north-east and Heilongjiang’s biggest state-owned enterprise (SOE). They demanded wages which they said they had not received for at least two months. Some protesters blocked railway lines; others scuffled with police wearing riot gear. Internet censors deleted pictures of the unrest (such as the one shown) as they spread across social media.

The protest was one of the biggest by workers at an SOE for many years. It was an indication of the problems that China’s government will probably face as it seeks to cut excess capacity among SOEs like Longmay and reduce their enormous losses. In February the labour minister, Yin Weimin, said that 1.3m coal workers and 500,000 steel workers could lose their jobs over the next five years.

Other estimates say 3m-5m people may be thrown out of work in these industries as well as in aluminium production and glassmaking. That is far fewer than the tens of millions who lost their jobs during SOE restructuring in the late 1990s. But the economies of some cities, including Shuangyashan, are driven by a handful of large SOEs. In these, downsizing will be traumatic and possibly turbulent.

Labour unrest is rising everywhere as economic growth slows (see chart). Many firms, like Longmay, are reacting to financial distress by paying wages late or not at all. According to China Labour Bulletin, a Hong Kong-based NGO, there were 2,700 strikes last year, twice the number in 2014. In the two months leading up to China’s lunar new-year holiday in early February, there were over 1,000 strikes and protests, 90% of them related to the non-payment of wages. Three days after the protest in Shuangyashan, an almost equally large one began at Tonghua Steel in neighbouring Jilin province, also over wage arrears.

In Shuangyashan (its name, meaning Double Duck Mountains, refers to the shape of two nearby peaks), the authorities have tried to soothe the protesters by giving them overdue pay. Some mine workers say they have now begun receiving their salaries for January, and that they have been assured their pay packets for February will be coming soon. But the government remains nervous of further unrest. On March 15th police were still ubiquitous, on the streets of Shuangyashan as well as outside a nearby mine. In the city centre, a row of women who said the men in their families all worked in mines sat holding placards offering their services as cleaners or house painters. “We have no money to eat. What do they expect us to do?” said one woman angrily before being told by police to stop talking. A man who identified himself as a government official followed your correspondent everywhere.

The protests in Shuangyashan were particularly embarrassing for the party, occurring as they did during the 12-day annual session of China’s parliament, the National People’s Congress (NPC), which ended on March 16th. Every year during the NPC session, officials try even more strenuously than usual to prevent street unrest, lest it tarnish the image of political unity and national prosperity that they want the NPC to project (see article). Party bosses in Heilongjiang will get their knuckles rapped by leaders in Beijing for failing to anticipate this outbreak, which followed months of grumbling among Longmay’s workers about lay-offs and overdue pay. In September, the company said it would shed 100,000 of its 240,000 staff.

Source: Deep in a pit | The Economist


How Modi’s Social Media Skills Earned Him a Spot on Time’s Internet Influencers List – India Real Time – WSJ

Since Narendra Modi took office nearly two years ago, his social media might has helped cultivate his international profile as an Indian prime minister who receives rockstar welcomes at concert venues and sports arenas overseas, shares smiling selfies with other heads of state and boasts among the biggest banks of Twitter followers of world political leaders.

This week, he burnished that image by winning a spot for a second consecutive year on Time magazine’s list of the 30 most influential people on the Internet.

The roundup of online luminaries describes Mr. Modi as an “Internet star,” noting that the prime minister, unlike other world leaders, uses social media to break news and conduct diplomacy. With 18.7 million followers, Mr. Modi ranks second only to President Barack Obama among political leaders.

The magazine’s picks of Internet A-listers also includes U.S. presidential hopeful Donald Trump, who has nearly 7 million Twitter followers, artist Kanye West and the author of the Harry Potter series, J.K. Rowling.

Mr. Modi used Twitter to announce Mr. Obama’s visit to India last year as the guest of honor at India’s Republic Day parade, and signaled a breakthrough in tense relations with neighboring Pakistan by tweeting that India’s foreign secretary would travel to that country. He tweets in several languages, shouting out to other world leaders on their birthdays and congratulating them on election victories.

The digital-savvy leader and his Bharatiya Janata Party’s social media team runs a full-time, data-driven operation. It coins hashtags and uses what one member called “online volunteers”–a digital army to retweet and comment on posts relating to the prime minister and his policies–to keep him trending.

They also use specialized software to study social media behavior and track the ebbs and flows of online sentiment to Mr. Modi’s speeches and actions, funneling their analysis to help craft his message–and to tweak it when traffic turns unfavorable.

Mr. Modi appears to have become a regular on Time’s rankings. Last year, he was on its “100 Most Influential People” list where Mr. Obama called him India’s “reformer-in-chief.”

Source: How Modi’s Social Media Skills Earned Him a Spot on Time’s Internet Influencers List – India Real Time – WSJ


Here comes the modern Chinese consumer – McKinsey & Co

Despite concerns about economic growth, the country’s consumers keep spending. Yet our latest survey reveals changes in what they’re buying and how they’re buying it.

Cooling economic growth, a depreciating currency, and a gyrating stock market are making political and business leaders concerned that China’s economic dream may be ending. Yet Chinese consumers remain upbeat. In fact, consumer confidence has been surprisingly resilient over the past few years as salaries have continued to rise and unemployment has stayed low.


However, our latest survey of Chinese consumers reveals significant change lurks beneath the surface. Reflecting 10,000 in-person interviews with people aged 18 to 56 across 44 cities, our 2016 China consumer report found that the days of broad-based market growth are coming to an end. Consumers are becoming more selective about where they spend their money, shifting from products to services and from mass to premium segments. They are seeking a more balanced life where health, family, and experiences take priority. The popularity of international travel is astounding among Chinese consumers, as is their adoption of trends such as mobile payments. And despite many similarities, consumer behavior can vary significantly among the country’s 22 city clusters.

In short, our latest research suggests we are witnessing the modernization of the Chinese consumer, and that will only make the market more challenging for consumer-goods companies. But for those able to get it right, the rewards may be substantial. In this article, we’ll examine the evolving behavior of Chinese consumers through three lenses: how willing they are to spend, what they are buying, and where they are buying.

How willing they are to spend

When asked about their expectations regarding future income, 55 percent of consumers we interviewed were confident their income would increase significantly over the next five years—just two percentage points lower than in 2012. (By comparison, just 32 percent of consumers in the United States and 30 percent in the United Kingdom agreed with the same statement in 2011.)

That’s not to say that Chinese consumers are unaware of the deteriorating condition of the economy. A growing number are seeking to save and invest, and we found differences in consumer confidence widening at a regional level. While confidence about income growth during the next five years rose to 70 percent in the Xiamen–Fuzhou city cluster, for example, it decreased to as little as 35 percent in Liao Central.

What they are buying

We found that consumers are generally becoming more selective about their spending. They are allocating more of their income to lifestyle services and experiences—over half plan to spend more on leisure and entertainment (the 50 percent surge in box-office receipts in the past year is just one indicator of that trend). At the same time, spending on food and beverages for home consumption is stagnating or even declining.

Chinese consumers are also increasingly trading up from mass products to premium products: we found that 50 percent now seek the best and most expensive offering, a significant increase over previous years. It’s no surprise that the growth of premium segments is outpacing that of the mass and value segments, and foreign brands still hold a leadership position in that premium market. What’s more, a rising proportion of Chinese consumers focus on a few brands, and some are becoming loyal to single brands. The number of consumers willing to switch to a brand outside their “short list” dropped sharply. In apparel, for instance, the number of consumers willing to consider a brand they hadn’t before dropped from about 40 percent in 2012 to just below 30 percent in 2015.

Becoming part of the closed set of the few brands that consumers consider, or even the one brand that consumers prefer, is increasingly challenging. Fewer consumers are open to new brands, and promotions are becoming less effective at encouraging consumers to consider them.

With a few notable exceptions, such as Huawei’s growing share of the premium-smartphone market, Chinese brands have not gained much traction in many premium segments, such as skincare, cars, sports, and fashion. That contrasts starkly with the mass segment of the market, where local brands are winning market share from foreign incumbents by offering a much stronger product proposition.

Where they are buying

Although China is the world’s largest e-commerce market—generating revenue of about 4 trillion renminbi ($615 billion) last year, around the same as Europe and the United States combined—and consumers increasingly purchase online, physical stores remain important. Consumers engage with brands both online and offline, and satisfaction with physical stores remains higher than with online ones. But the gap is narrowing, especially as satisfaction with hypermarkets declines.

One trend that is helping maintain interest in physical stores is “retailtainment.” Two-thirds of Chinese consumers say that shopping is the best way to spend time with family, an increase of 21 percent compared with three years ago. Malls—which combine shopping, dining, and entertainment experiences the entire family can enjoy—have benefited most from this trend, at the expense of big-box retail outlets such as department stores and hypermarkets.

Consumers also reinforce family ties through travel: 74 percent of consumers say it helps them to better connect with family, and 45 percent of international trips were taken with family in 2015, compared with 39 percent in 2012. More than 70 million Chinese consumers traveled overseas in 2015, making 1.5 trips on average, and shopping is integral to this experience. Some 80 percent of consumers have made overseas purchases, and nearly 30 percent actually base their choice of a travel destination on shopping opportunities. Among international travelers, around half of their watch and handbag purchases are made overseas, while apparel and cosmetics are the most frequently purchased categories.

Overall, Chinese consumers are adopting new products, services, and retail experiences at rates unseen in developed markets. To take one example, mobile-payment penetration in China went from zero in 2011 to 25 percent of the population in 2015. At the same time, there are still differences in how Chinese consumers in various regions spend. While new highways, high-speed-rail links, and mobile Internet access have strengthened connectivity between neighboring clusters over the past few years, we found that differences across the country’s 22 geographic clusters1have grown even more pronounced. For instance, 35 percent of consumers in the Shanghai city cluster have purchased apparel online in the past six months, compared with just 4 percent of consumers in the Chengdu city cluster.

The Chinese consumer is evolving. Gone are the days of indiscriminate spending on products. The focus is shifting to prioritizing premium products and living a more balanced, healthy, and family-centric life. Understanding and responding to these changes in spending habits will be decisive in determining the companies that win or lose, whether international or domestic competitors. And while scale, speed, and simplicity proved advantageous in the past 15 to 20 years, the changing shape of Chinese consumption seems sure to topple some giants of the past and elevate new champions. Which will your company be?



China lays out its vision to become a tech power | Reuters

China aims to become a world leader in advanced industries such as semiconductors and in the next generation of chip materials, robotics, aviation equipment and satellites, the government said in its blueprint for development between 2016 and 2020.

In its new draft five-year development plan unveiled on Saturday, Beijing also said it aims to use the internet to bolster a slowing economy and make the country a cyber power.

China aims to boost its R&D spending to 2.5 percent of gross domestic product for the five-year period, compared with 2.1 percent of GDP in 2011-to-2015.

Innovation is the primary driving force for the country’s development, Premier Li Keqiang said in a speech at the start of the annual full session of parliament.

China is hoping to marry its tech sector’s nimbleness and ability to gather and process mountains of data to make other, traditional areas of the economy more advanced and efficient, with an eye to shoring up its slowing economy and helping transition to a growth model that is driven more by services and consumption than by exports and investment.

This policy, known as “Internet Plus”, also applies to government, health care and education.

As technology has come to permeate every layer of Chinese business and society, controlling technology and using technology to exert control have become key priorities for the government.

China will implement its “cyber power strategy”, the five-year plan said, underscoring the weight Beijing gives to controlling the Internet, both for domestic national security and the aim of becoming a powerful voice in international governance of the web. China aims to increase Internet control capabilities, set up a network security review system, strengthen cyberspace control and promote a multilateral, democratic and transparent international Internet governance system, according to the plan.

Source: China lays out its vision to become a tech power | Reuters


The Limits of Growth: Economic Headwinds Inform China’s Latest Military Budget – China Real Time Report – WSJ

With an official defense budget increase of 7.6% to 954 billion yuan ($147 billion) announced today, Beijing’s quest to restore China’s historic “greatness” and to attain international status as a military power commensurate with its economic standing continues.

Yet with GDP growth slowing and social and demographic headwinds mounting, Chinese leaders face increasingly difficult tradeoffs concerning how to allocate government largesse.

With Beijing’s 2016 official defense budget, it is clear that even military spending is not immune to China’s economic and fiscal realities. Advance reports that this year’s official budget would entail an increase of as much as 20% proved significantly off-the-mark. So, what’s in a number? Nothing short of this: Beijing’s latest defense spending figure provides further evidence that it is determined to avoid succumbing to Soviet-style military overextension – yet it remains committed to enhancing capabilities to further its priorities, especially vis-à-vis contested island and maritime claims in the East and South China Seas.

Make no mistake: drawing on the world’s second-largest (and growing) economy, the People’s Liberation Army (PLA) is increasingly well-endowed and capable of asserting China’s regional interests. Even as GDP growth continues to slow, President Xi Jinping appears determined to order, and fund, ambitious military modernization and PLA reforms. The PLA is now far-and-away the world’s second best-resourced military and, unlike the globally-distributed and -deployed U.S. military, is focused overwhelmingly on its immediate neighborhood.

Source: The Limits of Growth: Economic Headwinds Inform China’s Latest Military Budget – China Real Time Report – WSJ



China Sets Economic Growth Target of 6.5% to 7% for 2016 – China Real Time Report – WSJ

China has set an economic growth target of between 6.5% and 7% for 2016 and an average of at least 6.5% over the next five years, goals that acknowledge slowing momentum in the world’s second-largest economy but which still could be difficult to reach.

As WSJ’s Mark Magnier reports:

By adopting a range for the first time in two decades, China has given itself more flexibility in a system where hitting goals set far in advance, regardless of conditions on the ground, remains politically important.

The targets released here on Saturday at the opening of the National People’s Congress, China’s annual parliament, weren’t a surprise given that senior officials from President Xi Jinping on down had flagged them in recent months.

But they underscore that the government continues to prioritize stability, as output in the world’s second-largest economy downshifts faster than expected.

Last year, China’s economy grew 6.9%, its slowest pace in 25 years, compared with the 2015 target of about 7%. This year could bring a new quarter-century low, as traditional growth engines continue to lose traction.

Source: China Sets Economic Growth Target of 6.5% to 7% for 2016 – China Real Time Report – WSJ


A look back at the 25 goals of 2015|Government|

Amazing achievement.  How many countries declare goals in such clear numerical form and then exceed 23, meet 1, and fail on only 1 out of 25!

A look back at the 25 goals of 2015

1 Revitalize more than 212.4 billion yuan in central finance fund stock. Fulfillment: 237 billion yuan revitalized.

2 Investment within central budget increased to 477.6 billion yuan. Fulfillment: Investment of 521.1 billion yuan.

3 Railway investment to exceed 800 billion yuan. Fulfillment: Investment of 823.8 billion yuan was completed.

4 Utilize more than 8,000 km of newly built rail. Fulfillment: Newly built rail of 9,531 km was put into use.

5 Start construction of 27 major hydro projects. Fulfillment: Construction of 28 initiated.

6 Cancel all non-administrative approvals. Fulfillment: 453 items were cancelled or adjusted.

7 Cut items limiting foreign investment by half. Fulfillment: 41 of 79 items were deleted.

8 Keep grain yields above 550 million tons and increase deep-plough land by 13.33 million hectares. Fulfillment: Grain yields reached 621 million tons, Deep-plough land increased by 13.648 million hectares.

9 Construct or reconstruct 200,000 km of highways in rural areas. Fulfillment: Rural areas saw 251,000 km of newly constructed or reconstructed highways.

10 Build bridges to replace sliding-chairs to cross remote mountainous areas in the West. Fulfillment: All 288 projects have started construction.

11 Ensure that the more than 200,000 people in the country with no access to electricity get access. Fulfillment: 238,000 got access to electricity.

12 Provide safe drinking water to 60 million rural people. Fulfillment: 64.336 million rural people got access.

13 Eliminate all the 1.162 million heavy-emission vehicles with yellow stickers put into operation before the end of 2005. Fulfillment: 1.26 million such vehicles were eliminated.

14 Reduce energy use and carbon dioxide emissions by 3.1 percent or more. Fulfillment: Energy use was reduced by 5.6 percent, while carbon dioxide emissions were cut by 6.6 percent.

15 Cut chemical oxygen demand emissions by 2 percent, ammonia emissions by 2 percent, sulfur dioxide emissions by 3 percent and nitrogen oxide emissions by 5 percent. Fulfillment: Chemical oxygen demand emissions were cut by 3.1 percent, ammonia emissions by 3.6 percent, sulfur dioxide emissions by 5.8 percent and nitrogen oxide emissions by 10.9 percent.

16 Return 667,000 hectares of farmland to forest and grassland. Fulfillment: 667,000 hectares of farmland were returned.

17 Plant 6 million hectares of forests. Fulfillment: 6.3245 million hectares were planted.

18 Build 7.4 million units in government-subsidized housing projects, renovate 5.8 million units in shanty-towns and 4.32 million dilapidated houses in rural areas. Fulfillment: 7.83 million units in government-subsidized housing projects were built, 6.01 million units were renovated in shanty-towns and 4.68 million dilapidated houses in rural areas.

19 Create more than 10 million jobs in urban areas. Fulfillment: 13.12 million jobs were created in urban areas.

20 Raise standard of financial assistance for basic medical insurance of urban residents to 380 yuan per person per year. Fulfillment: Average standard has been raised to 446 yuan.

21 Raise standard of financial assistance for the new rural cooperative medical system to 380 yuan per person per year. Raise standard of financial assistance for per capita funding for basic public health services to 40 yuan. Carry out pilot projects for public hospital reform in 100 cities at and above prefecture level. Fulfillment: Standard of financial assistance for the new rural cooperative medical system was raised to 390. 24 yuan per person per year. Standard of financial assistance for per capita funding for basic public health services reached 42 yuan. Pilot projects for public hospital reform were carried out in 100 cities at and above prefecture level.

22 The registered urban unemployment rate should not exceed 4.5 percent. Fulfillment: Registered urban unemployment rate was 4.05 percent

23 Cut the rural poor population by at least 10 million. Fulfilled.

24 Employment opportunities for 7.49 million college graduates. Fulfillment: The employment situation was the same as the previous year.

25 Increase imports and exports by 6 percent. Failed to meet the goal: Import and export volumes in 2015 were $3.95864 trillion, down 8 percent. Exports decreased by 2.9 percent, still making China the best performer in major economies. China is still the world’s biggest trading power and export power.

Source: A look back at the 25 goals of 2015|Government|


Indians Are Among the Most Satisfied at Work, Says a Study. Here’s Why – India Real Time – WSJ

Indians are among the most highly stimulated and satisfied at work, a new report claims.

Some 28% of workers in the South Asian nation reported being highly engaged and fulfilled in the office, a full 15% above the global average, in a survey of workers in 17 countries conducted by Ipsos for furniture and workspace systems company Steelcase Inc.

Other nations with the largest proportions of satisfied workers were Mexico, at 22%, the UAE and South Africa, where around one in five people described themselves in that way and Saudi Arabia, with 18%.

American offices came sixth. About 14% of those surveyed there reported being highly engaged and satisfied at work.

Only 4% of Indian workers were highly dissatisfied and disengaged, compared with 11% on average globally.

Indians also provided the second-highest average score, of 7.4, when they rated their quality of life at work out of 10. Only Mexico scored higher with 7.5.

The authors of the report said the secret to the happiness of Indian workers could be to do with the fact the country’s employers haven’t yet embraced open-plan work spaces and also a result of  the hectic pace of life outside the office walls.

Only 14% of the offices the employees worked in were open plan. Meanwhile, 70% of the workers surveyed sat in a private or shared private office at work.

“Culturally, having a workspace of one’s own, even if it is compact and modest, is a signal of belonging and importance, which may explain the overall high degree of workplace satisfaction,” the report said.

In densely populated countries like India, the workplace can be a haven, the report said.

Indians are much more likely to say, for instance, that their work environment allows them to feel relaxed and calm. A total of 73% agreed with that in the survey, much higher than most other countries, the report said.

Workers in Indian offices are also likely to have access to shared spaces like meeting rooms, cafeterias and canteens. They also have the most access to sport or exercise facilities.

Indians’ enthusiasm about their office spaces might be relative. The most highly engaged employees came from emerging economies, the report said.

“Many Indian employees’ expectations may be shaped by their comparatively modest living conditions,” the report said.

And they are more likely to say that they work remotely–55% said they sometimes work away from the office, and 20% said they did so every day.

They also believed that their employer took a genuine interest in employees, with 79% agreeing with the statement.

All of this might reflect employers’ efforts to keep their workers happy, the report said. “In India’s highly competitive and fluid job market, providing a desirable workplace can be a powerful strategy for attracting, retaining and engaging the talent that can help an organization thrive,” the report said.

Source: Indians Are Among the Most Satisfied at Work, Says a Study. Here’s Why – India Real Time – WSJ

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