Archive for May, 2016

31/05/2016

ONGC Videsh, Azerbaijan’s SOCAR look to jointly sell oil | Reuters

ONGC Videsh has signed a preliminary agreement with the trading arm of Azerbaijan’s state energy company SOCAR to look at jointly marketing crude oil, the company said in a statement on Tuesday.

OVL, the overseas assets acquisition arm of the country’s biggest explorer, Oil and Natural Gas Corp (ONGC), wants to leverage the experience of SOCAR Trading SA in oil marketing, it said.

Reuters had reported about the deal on Monday.

Source: ONGC Videsh, Azerbaijan’s SOCAR look to jointly sell oil | Reuters

Advertisements
31/05/2016

China releases new action plan to tackle soil pollution | Reuters

China aims to curb worsening soil pollution by 2020 and stabilize and improve soil quality by 2030, the cabinet said in an action plan published on Tuesday.

The central government will set up a special fund to tackle soil pollution, as well as a separate fund to help upgrade technology and equipment in the heavy metal sector, the cabinet said in a statement on its website (www.gov.cn).

The government will also continue to eliminate outdated heavy metal capacity, the cabinet said.

Last year, the environment minister said 16 percent of China’s soil exceeded state pollution limits. Treatment costs for heavy metal or chemical contamination are high, and China has struggled to attract private funds for soil remediation.

According to Reuters calculations, the cost of making all of China’s contaminated land fit for crops or livestock would be around 5 trillion yuan ($760 billion), based on average industry estimates of the cost of treating one hectare.

Analysts have estimated the soil remediation market could be worth as much as 1 trillion yuan, but authorities have struggled to determine who should pay for rehabilitating contaminated land. Much of the responsibility for the costs now lies with impoverished local governments.

Researchers with Guohai Securities said earlier this year that there are currently 100 key soil remediation projects under way in China with an estimated total cost of 500 billion yuan. With no natural profit motive to encourage private companies to get involved, the clean-up programs have relied mostly on government funding.

China’s five-year plan published in March said the country would give priority to cleaning up contaminated soil used in agriculture. It promised also to strengthen soil pollution monitoring systems and promote new clean-up technologies.

Lawmakers said during the annual session of parliament in March that the country would introduce legislation to help tackle soil pollution by next year.

Companies involved in the sector include Beijing Orient Landscape and Ecology, Tus-Sound Environmental Resources, Beijing Originwater Technology and Guangxi Bossco Environmental Protection Technology.

($1 = 6.5836 Chinese yuan)

Source: China releases new action plan to tackle soil pollution | Reuters

27/05/2016

Southern comfort | The Economist

MAHATMA GANDHI would not have enjoyed Texfair 2016 in Coimbatore in the southern state of Tamil Nadu. The man hated machines and factories, and promoted Indian independence by urging every household to spin its own cotton yarn. But on display at the textile fair were bobbins, rollers, waste balers, quality-control sensors and much, much more.

Indeed, India is vying with China to be the world’s biggest producer of yarn, with over 45m spindles twirling around the clock. But what is striking about the trade fair is how so much of the modern wizardry on show is made not in better-known industrial centres around the world but in Coimbatore itself, a city of just 1.6m some 500 kilometres (310 miles) south-west of Chennai, the Tamil Nadu capital. In this section Pull the other one Taliban reshuffled Southern comfort Reprints Related topics Bharatiya Janata Party Tamil Nadu Kerala India

The fast-growing city is an inelegant sprawl stretching into groves of coconut palms. It teems with technical institutes, bustling factories and civic spirit. Earnest and ambitious, Coimbatore evokes the American Midwest of a century ago. A regional manufacturers’ group that was founded in 1933 during Gandhi’s homespun campaign has now designed, built and marketed a hand-held, battery-operated cotton picker that it claims is six times more efficient than human fingers.

Gandhi would have been appalled. But the gadget says something about the quiet success of parts of India’s deep south. Mill owners worry that with day wages in Tamil Nadu and neighbouring Kerala to the west now far higher than those in northern India, local cotton may grow uncompetitive. Tea planters in the hills west of Coimbatore are already squeezed. One landowner, in Kerala’s Wayanad region, where silver oaks shade trim ranks of tea bushes, says that his pickers get 300 rupees (about $4.50) a day, nearly three times the wage in Darjeeling in India’s north.

It may not sound like much, but it is also more than the average Indian earns. And as a whole, GDP per person in Tamil Nadu and Kerala is 68% and 41% higher respectively than the national average of $1,390 a year. With the south’s booming new industries, better education and higher wages contrasted with declining industries in the north and east, India is undergoing a shift a bit like the American one from the rustbelt to the sunbelt in the 1980s. Kerala shares in this new industrialisation less than Tamil Nadu, but that is balanced by another source of prosperity: remittances from abroad. As many as one in ten of Kerala’s 35m people work in the rich Arab countries of the Persian Gulf. Their remittances boost local incomes, property prices and demand for better schools. Kerala, under leftist governments for the past six decades, already has India’s best state education and its highest literacy rate. Its school district has again topped nationwide exams for 17-year-olds, followed by Chennai region, covering the rest of southern India.

Yet India’s deep south has not transmuted growing prosperity into greater political clout. It remains largely aloof from broader political trends, including a slugging match between the Bharatiya Janata Party (BJP), in office nationally under Narendra Modi, the prime minister, and Congress, the once-dominant centre-left party that worships Gandhi. In elections across four Indian states that wrapped up on May 19th, attention elsewhere focused largely on the fortunes of those two parties. The BJP’s capture from Congress of Assam in the north-east was seen as a big boost for Mr Modi. Congress’s failure to take any state was seen as a sign of decay.

Source: Southern comfort | The Economist

27/05/2016

India Inc shows growth spreading by end of Modi’s sophomore year | Reuters

Indian companies are posting their best earnings results since Prime Minister Narendra Modi swept to power two years ago, giving the clearest sign yet that India’s fast, but patchy, economic growth is becoming more broad-based.

Though headline growth figures make India one of the world’s fastest growing economies, weak private investment and low capacity utilization rates have painted a less rosy picture.

Going by India Inc’s surge in profit growth in the first three months of the year, however, the outlook really does seem to be brightening, as benefits feed through from lower interest rates and government spending in infrastructure and defense.

On Tuesday, India will release gross domestic product data for the January-March quarter. Year-on-year growth of 7.5 percent is forecast by a Reuters survey economists, slightly faster than the previous quarter’s 7.3 percent.

“Macro indicators are suggesting that at the ground level the economy is gaining momentum,” said Dhiraj Sachdev, a fund manager at HSBC Asset Management in Mumbai.

“That has also been validated in terms of better corporate earnings in many of the sectors.”

Operating profits for 289 companies that have reported results so far leapt 25.5 percent year-on-year in the March quarter, compared with 1.7 percent growth in the previous quarter, according to Thomson Reuters data.

It is Indian firms’ best showing since the April-June quarter in 2014.

Put alongside the 6.8 percent decline in earnings that data provider Factset reckons companies in the S&P 500 suffered during the same quarter, India’s corporates have some things going in their favor.

India’s broader National Stock Exchange share index .NSEI has surged around 17 percent from a near 2-year low on Feb. 29, outperforming a 7 percent gain by the Asia-Pacific MSCI index excluding Japan .MIAPJ0000PUS.

This week, Morgan Stanley upgraded Indian equities to “overweight” from “equalweight” citing rising dividends, and prospects of a simpler country-wide sales tax, lower interest rates and benign monsoon among its reasons.

Source: India Inc shows growth spreading by end of Modi’s sophomore year | Reuters

27/05/2016

Why It Could Be a While Before Apple Can Open Stores in India – India Real Time – WSJ

India’s finance ministry has rejected a government-panel recommendation to exempt Apple Inc. from local sourcing requirements, two government officials said, in a decision that could effectively block the technology company’s plan to open its own retail stores in the country.

“We are sticking to the old policy,“ said one of the officials. “We want local sourcing for job creation. You can’t have a situation where people view India only as a market. Let them start doing some manufacturing here.”

An Apple spokeswoman didn’t immediately respond to a request for comment.

India is a crucial market for Apple as it holds huge sales potential. Like China, which for years fueled the Cupertino, Calif., company’s growth, India is a large, developing economy in which more people can afford its high-end gadgets every year.

India wants to use the company’s interest in its market to attract investment and create the manufacturing facilities and jobs the country needs to sustain long-term growth.

Source: Why It Could Be a While Before Apple Can Open Stores in India – India Real Time – WSJ

27/05/2016

What Can Be Learned From China’s Monetary Past – China Real Time Report – WSJ

China’s decline as a great power in the 19th century wasn’t the fault of imperialism and opium. It was bad monetary policy, after all.

English: Qing emperor Jiaqing

English: Qing emperor Jiaqing (Photo credit: Wikipedia)

So says Werner Burger, a numismatic historian and Sinologist who has published a detailed history of money in the Qing Dynasty, entitled “Ch’ing Cash.” Mr. Burger has spent his professional life tracking down details of nearly every coin minted in China over three centuries. After three decades of making official requests, it wasn’t until 1996 that Beijing granted him access to the previous century’s imperial mint reports, the modern equivalent to central bank money supply statistics.

His conclusion: The Jiaqing Emperor, By letting the fakes infiltrate the economy, the Jiaqing emperor and his successors allowed the effective exchange rate for standard brass Chinese coins to swell from the official rate of 1000 per unit of silver to as high as 2500. Soldiers wages were effectively halved, giving them little incentive to fight the various battles against Western colonizers.

Mr. Burger refutes the notion that China’s trade with the United Kingdom, which for a time involved China sending silver to the U.K. in exchange for opium, was responsible for the debasement. He said the amount of silver sent abroad didn’t affect the exchange rate, noting a mid-century period of three decades when China actually experienced silver inflows.

Amid such currency instability, “all attempts at economic reforms and progress were bound to fail. China had no chance to catch up with the rest of the world and so lost a whole century to corruption and greedy officials,” says Mr. Burger.

For investors who want to learn from China’s past mistakes, the two volume history will cost a pretty penny: $800.

Source: What Can Be Learned From China’s Monetary Past – China Real Time Report – WSJ

27/05/2016

Foxconn replaces ‘60,000 factory workers with robots’ – BBC News

If manufacturers like Foxconn and high street companies like McDonald’s and, no doubt soon, offices too start replacing humans with robots, where will it all end? Where will all the ‘surplus’ people find jobs and pay.  And, eventually, who will be able to afford the iPhones, the hamburgers and so forth?  Won’t it be self-defeating in the long run for the employers with no customers or, at best, not enough customers to keep all the robots occupied and earning their keep.

“One factory has “reduced employee strength from 110,000 to 50,000 thanks to the introduction of robots”, a government official told the South China Morning Post.

Xu Yulian, head of publicity for the Kunshan region, added: “More companies are likely to follow suit.”

China is investing heavily in a robot workforce.

In a statement to the BBC, Foxconn Technology Group confirmed that it was automating “many of the manufacturing tasks associated with our operations” but denied that it meant long-term job losses.

“We are applying robotics engineering and other innovative manufacturing technologies to replace repetitive tasks previously done by employees, and through training, also enable our employees to focus on higher value-added elements in the manufacturing process, such as research and development, process control and quality control.

“We will continue to harness automation and manpower in our manufacturing operations, and we expect to maintain our significant workforce in China.”

Since September 2014, 505 factories across Dongguan, in the Guangdong province, have invested 4.2bn yuan (£430m) in robots, aiming to replace thousands of workers.

Kunshan, Jiangsu province, is a manufacturing hub for the electronics industry.

Economists have issued dire warnings about how automation will affect the job market, with one report, from consultants Deloitte in partnership with Oxford University, suggesting that 35% of jobs were at risk over the next 20 years.

Former McDonald’s chief executive Ed Rensi recently told the US’s Fox Business programme a minimum-wage increase to $15 an hour would make companies consider robot workers.

“It’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who is inefficient, making $15 an hour bagging French fries,” he said.”

Source: Foxconn replaces ‘60,000 factory workers with robots’ – BBC News

25/05/2016

China to replace direct coal combustion with electricity in new plan | Reuters

China will reduce the amount of coal burned directly in industrial furnaces and residential heating systems in order to tackle a major source of smog, the country’s energy regulator said on Wednesday.

The National Energy Administration (NEA) said in a joint announcement with other government bodies that around 700 million to 800 million tonnes of coal is burned directly in China every year, much of it in the countryside, where access to electricity is limited.

Directly burned coal amounts to about 20 percent of China’s total coal consumption volume, much higher than the 5 percent rate in Europe and the United States.

China will aim to replace direct burning with electricity, including renewable power as well as ultra-low emission coal-fired generators, the NEA said.

China currently relies on coal for around 64 percent of its total primary energy needs and for three-quarters of its total power generation. Emissions from the direct combustion of coal are around five times higher than those from coal-fired power plants, which are subject to strict anti-pollution regulations.

During the 2016-2020 period, China plans to raise electricity’s share of the country’s overall energy mix to 27 percent, up about 1.5 percentage points from now and raising total power consumption by around 450 billion kilowatt-hours a year, the NEA said.

Experts have estimated that China will need an additional 600 GW of coal-fired power capacity over the 2015-2030 period in order to replace direct coal combustion.

Source: China to replace direct coal combustion with electricity in new plan | Reuters

24/05/2016

Unholy woes | The Economist

AT THE dawn of time Lord Vishnu made gods and demons join in churning the milky oceans to extract an elixir of eternal life. After cheating the demons of their share, Vishnu spilled four drops of the precious nectar. Where they fell sprang up sacred rivers whose waters wash away sins, now sites for mass Hindu pilgrimages called Kumbh Mela.

For a lunar month every 12 years it falls to Ujjain, a town in the central Indian state of Madhya Pradesh, to host the Kumbh Mela by the revered Shipra, whose waters meander north into the mighty Ganges and eventually eastward to the Bay of Bengal. By the time the full moon reappears on May 21st tens of millions of bathers, among them thousands of bearded ascetics known as sadhus (pictured), will have worshipped on Ujjain’s teeming riverbanks.

What few are aware of is that the water is no longer the Shipra’s. Urbanisation, rising demand and two years of severe drought have shrivelled the sacred river. Its natural state at this time of year, before the monsoon, would be a dismal sequence of puddles dirtied by industrial and human waste. But the government of Madhya Pradesh, determined to preserve the pilgrimage, has built a massive pipeline diverting into the Shipra the abundant waters of the Narmada river, which spills westward into the Arabian Sea. Giant pumps are sucking some 5,000 litres a second from a canal fed by the Narmada, lifting it by 350 metres and carrying it nearly 50 kilometres to pour into the Shipra’s headwaters. To ensure clean water for the festival, the Shipra’s smaller tributaries have been blocked or diverted, and purifying ozone is being injected into the reconstituted waters in Ujjain itself.

The pilgrims and merchants of Ujjain are happy. But down in the Narmada valley there is little cheer. “They are wasting water on sadhus…while our farms go dry,” says Rameshwar Sitole, a farmer in the hamlet of Kithud. Since March the canal, which feeds his 2.5 hectares of maize and okra along with the farms of 12 other hamlets, has been bone dry. Mr Sitole’s crops have withered and died: a loss, he reckons, of some 50,000 rupees ($750). The government insists the water will return once Ujjain’s pilgrimage ends, but he is not so sure. “They turn it on when we protest, and then take it away again,” Mr Sitole shrugs. Meanwhile, over the hills, industrial users near Ujjain are lobbying loudly to exploit the fancy new water sources.

Poor monsoons are not unusual, but the back-to-back shortfalls, linked to the El Niño effect, which India has experienced in the past two years are very rare. Ten out of 29 states, with a population of some 330m, have been badly hit, with the worst-affected areas in the centre of the country. India is suffering its gravest water shortage since independence, says Himanshu Thakkar, a water expert in Delhi, the capital. Every day brings news of exhausted rivers and wells, destitute farmers migrating to the cities or even committing suicide, water trains being dispatched to parched regions—and of leopards venturing into towns in search of a drink.

The central government has responded with make-work programmes for afflicted areas, emergency shipments of water, and many promises. In February Narendra Modi, the prime minister, pledged to double farm incomes by 2022. Other ministers speak of massive irrigation projects, and have dusted off an ambitious water-diversion scheme for parched regions that is priced at $165 billion and involves no fewer than 37 links between rivers. Most links would be via canals—some 15,000km of artificial waterways in all.

Source: Unholy woes | The Economist

24/05/2016

China’s Middle Class Vents Over Growing List of Grievances – China Real Time Report – WSJ

The death here of a 29-year-old man in police custody—a new father and graduate of a prestigious Chinese university—has exposed growing anxieties in the country’s growing middle class, already shaken by a decelerating economy and a disparate series of high-profile incidents threatening their sense of stability.

As WSJ’s Te-Ping Chen reports:

Other wide-ranging targets of recent social-media attention include a violent string of attacks on doctors by embittered patients and their families, a demand that apartment owners in eastern China pay extra to secure the land on which their apartments were already built, confusing changes in college-entrance standards, and fatal chemical explosions wiping out homes.

Such disruptions have come as reminders that rising incomes or better education don’t automatically shield China’s expanding middle-class ranks from danger, whether physical or economic, in a society where the law can be arbitrarily enforced and justice is sometimes brutal.

“There’s a gap between expectation and reality,” said He Yunfeng, who heads Shanghai Normal University’s Institute of Knowledge and Value Sciences. “These kinds of incidents concentrated together have created a kind of panic.” Some critics have begun joking that the Chinese term for middle class— zhongchanjieji—would be better depicted by the term zhongcanjieji, or the “tragic middle class.”

Source: China’s Middle Class Vents Over Growing List of Grievances – China Real Time Report – WSJ

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