Archive for ‘Chindia Alert’

22/03/2017

Chinese supermarkets pull Brazil meat from shelves as food safety fears grow | Reuters

Some of China’s largest food suppliers have pulled Brazilian beef and poultry from their shelves in the first concrete sign that a deepening scandal over Brazil’s meat processing industry is hitting business in its top export market.

The moves by Sun Art Retail Group (6808.HK), China’s biggest hypermarket chain, and the Chinese arms of global retail giants Wal-Mart Stores Inc (WMT.N) and Metro AG (MEOG.DE) come days after China temporarily suspended Brazilian meat imports.

Safety fears over Brazilian meat have grown since police accused inspectors in the world’s biggest exporter of beef and poultry of taking bribes to allow sales of rotten and salmonella-tainted meats.

A spokeswoman for Sun Art Retail, which operates 400 Chinese hypermarkets, said on Wednesday the chain had removed beef supplied by top Brazilian exporters BRF SA (BRFS3.SA) and JBS SA (JBSS3.SA) from its shelves from Monday. Brazilian beef accounts for less than 10 percent of Sun Art’s beef supply, she said.

Wal-Mart has also removed Brazilian meat products from its stores, said a person familiar with the matter. He declined to be quoted because of the sensitivity of the matter.

Germany’s Metro has withdrawn Brazilian chicken legs and wings from its Chinese stores, said a manager, who declined to be named as he was not allowed to speak to media. The retailer, with 84 stores in China, does not sell Brazilian beef.

While Brazilian officials sought late on Tuesday to reassure consumers that the investigation had revealed only isolated incidents of sanitary problems, the reaction by Chinese retailers suggests that the probe could have far-reaching repercussions for the world’s top meat exporter.

Hong Kong, the second-biggest buyer of Brazilian meat last year, has also issued a ban on imports, following similar steps by Japan, Canada, Mexico and Switzerland.

Source: Chinese supermarkets pull Brazil meat from shelves as food safety fears grow | Reuters

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22/03/2017

Children dead in China school toilet stampede – BBC News

A stampede at a primary school in central China has left two children dead and 20 injured, state media said.Xinhua news agency said students were crowded into a toilet during the morning break in Puyang when others began pushing their way in.

Another report in a Chinese newspaper claimed the toilet’s wall collapsed from the pressure of the crush.All the injured have been taken to hospital, where some are reported to be in a serious condition.

Puyang county’s government told the Associated Press the incident was under investigation, but declined to provide further details.

It happened at the Number Three Experimental Primary School in Puyang county in Henan province on Wednesday morning.

Similar deadly incidents have happened before.Six children died and 25 were injured in a stampede on a school staircase in South West China in 2014.

Source: Children dead in China school toilet stampede – BBC News

17/03/2017

New rules, new dodges: Chinese football clubs are struggling with new curbs on foreign players | The Economist

MUCH grumbling accompanied the start on March 4th of this year’s season of the Chinese Super League (CSL), the uppermost tier of professional football in China. Managers of its 16 clubs have been gnashing their teeth at a change of rules which was suddenly announced just a few weeks before the first matches. Teams are now allowed to field a maximum of three foreigners.The clubs would have preferred more notice. Many of them have only just acquired even more foreign players. All now have at least four, the previous maximum per side in any CSL game. (One of them, a Brazilian called Oscar, is pictured in a CSL match—he was transferred to Shanghai SIPG from Chelsea, an English club, for £60m, or about $75m, in December.)

Last year China spent more than $450m on footballers, the fifth-largest such outlay by any country.

But all this money has not improved the dismal state of Chinese football. The men’s national team ranks 82nd in the world. In October an embarrassing 1-0 defeat to war-torn Syria triggered protests by hundreds of fans in the city of Xi’an where the match was played. Local media say the Chinese Football Association announced its new rules on orders “from above”. They impose a levy on big transfers and demand that one-sixth of clubs’ spending must be on youth training.

Officials have also been trying to curb the buying of stakes in foreign clubs—Chinese investors shelled out about $2bn on them last year. The government says this is part of an economy-wide clampdown on currency outflows. But it also wants to make the point that foreign talent won’t necessarily help China’s. The government has recently scuppered several investment deals. A Chinese consortium bought AC Milan, an Italian club, for $825m in August, but has been unable to move money out of China to complete the purchase.

Rather than simply moaning about the new rules, clubs have been devising ways of dodging them. Teams must now field at least one Chinese player under 23 each week. Some coaches simply replace them early in the game with older hands.

Source: New rules, new dodges: Chinese football clubs are struggling with new curbs on foreign players | The Economist

09/03/2017

Schumpeter: Mukesh Ambani has made the business world’s most aggressive bet | The Economist

SOME businesspeople are guided by experts, spreadsheets and crunchy questions. What is your three-year target for market share? Will a project deliver a reasonable return on the capital invested? A few hurl all the forecasts and reports into the bin and surrender to their own hunger to make a mark.

One such figure is Mukesh Ambani, India’s richest man. In September 2016 he placed one of the biggest business bets in the world by launching Jio, a mobile-telecoms network that allows India’s masses to access data on an unprecedented scale. In the past six months it has won 100m customers. Only one other firm on the planet has such an acquisition rate—Facebook. From Kolkata’s slums to the banks of the Ganges, millions of Indians are using social media and streaming videos for the very first time.

To achieve this, Mr Ambani has spent an incredible $25bn on Jio, without making a rupee of profit, terrifying competitors and many investors. The motivation for his gamble probably lies with his turbulent family history. Reliance Industries Limited (RIL), Mr Ambani’s company, was set up by his father, Dhirubhai, in 1957. Born in humble circumstances, Dhirubhai was famous for three things: running rings around officials; creating a fortune for himself and RIL’s army of small shareholders; and his appetite for giant industrial projects. RIL jumped from textiles into oil refining and petrochemicals. Its refinery in Gujarat is one of the world’s largest. It opened in 2000, two years before Dhirubhai died.

Mukesh Ambani and his brother, Anil, took the reins in 2002 and split from each other in 2005, leaving Mukesh in full control of RIL. Since then his record has been patchy. RIL’s shares have lagged India’s stockmarket over the past decade and its return on capital has sagged, halving from 12% to 6%.

Emulating his father, Mr Ambani has rolled the dice on several huge projects. He has invested huge sums to modernise the petrochemicals and refining business. This decision has been a success—it is an excellent operation that makes a return of about 12%. But Mr Ambani’s other investment calls have flopped. In 2010-15 RIL spent $8bn on shale fields in America. Now that oil prices are lower they lose money. The group invested about $10bn in energy fields off India’s east coast; they have produced less gas than hoped for and are worth little. And RIL has spent around $2bn on a retail business that produces only small profits. All told, RIL’s refining and petrochemicals unit accounts for two-fifths of its capital employed but over 100% of operating profits. The other businesses, developed mainly after Mr Ambani took sole charge, swallow a majority of resources but don’t make money.

A lesser man might have lost his nerve, but Mr Ambani has pursued another colossal bet in the form of Jio. He knows telecoms: in 2002 he oversaw the family’s first attempt to build a big mobile-phone business (his brother now owns the struggling operation). The latest effort has been a decade in the making. Step by step, RIL acquired spectrum, worked with handset suppliers and built a “fourth-generation” network. Jio’s offer of free services caused a sensation. A savage price war has ensued. One rival executive reckons Jio is carrying more data than either China Mobile or AT&T, the world’s two most valuable operators.

That underlines the potential of India’s telecoms market. Data usage is low, there are few fixed lines and most people don’t have smartphones. The incumbent firms are heavily indebted, so have limited ability to respond to a price war.

Jio will start charging from April 1st. Yet even assuming it keeps cranking prices up and wins a third of the market, a discounted-cash-flow analysis suggests that it would be worth only two-thirds of the sum that Mr Ambani has spent. To justify that amount Jio would at some point need to earn the same amount of profit that India’s entire telecoms industry made in 2016. In other words, there is no escaping the punishing economics of pouring cash into networks and spectrum. For every customer that Jio might eventually win, it will have invested perhaps $100. Compare that with Facebook or Alibaba, both asset-light internet firms, which have invested about $10 per user.

Jio’s three main mobile competitors have scrambled to respond. Bharti Airtel is buying a smaller rival to try to lower its costs. Vodafone is in talks about merging with Idea Cellular, another operator. Half a dozen or so weaker companies (including the firm now run by Mr Ambani’s brother) will probably disappear. The best hope for Jio is that in the distant future it will be one of three firms left and that a cut-throat industry will evolve into a comfy oligopoly, which is possible.

RIL’s share price has gone nowhere for years but excitement about Jio’s 100m new customers has helped it bounce over the past month. Still, the scale of the investment illustrates the risks that shareholders face at a firm that is controlled by one man. Even if Jio eventually gushes cash it is not clear if RIL will pay bigger dividends, or if Mr Ambani will instead pursue another grand project. As investors wait, however, many more of India’s 1.3bn consumers will gain—not only from low prices, but a welcome splurge on the nation’s telecom infrastructure.

Defiance from Reliance
And what of Mr Ambani? Perhaps he hopes to get his money back by turning Jio into an internet firm that offers payment services and content, not just connectivity. China’s Tencent, which owns WeChat, a messaging service, has successfully diversified into games and banking. Still, no telecoms firm has managed this feat and it is hard to see how RIL’s clannish culture can become a hotbed of innovation. More likely, Mr Ambani, aged 59, just doesn’t care what all the spreadsheets point to. Sitting atop his skyscraper, overlooking teeming Mumbai, where some 5m new Jio customers are surfing the web at high speed for peanuts, he can at last say that he has changed India. When you are Dhirubhai’s son, that is probably enough.

Source: Schumpeter: Mukesh Ambani has made the business world’s most aggressive bet | The Economist

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08/03/2017

The partition of India: “Viceroy’s House” is an antidote to colonial triumphalism | The Economist

THE fetishisation of British Imperialism is inescapable. Last December, Theresa May cited the East India Company as an example of Britain’s historical trading prowess. Contestants on a recent season of “The Apprentice”, an entrepreneurial reality show, created batches of “Colony Gin”; Marks & Spencer, a retailer, included an “Empire Pie” as part of its Gastropub collection. This nostalgia is borne out by a YouGov poll from 2016, which found that 44% of respondents are proud of Britain’s colonial history.

Those colonised, though, see the empire rather differently. A charge sheet of Britain’s efforts in India—and every territory colonised can produce an equivalent—might list partition, the man-made Bengal famine in 1943 (which resulted in an estimated 3m deaths), the wretched labour system of indenture and the looting of state wealth. Partition alone resulted in 1m deaths and created 15m refugees in a matter of weeks; Hindus and Sikhs fled their homes in what was the become the Muslim state of Pakistan, while Muslims in India took flight in the opposite direction.

“Viceroy’s House”, a new film written and directed by Gurinder Chadha, seeks to document Britain’s role in partition and the cleaving of the Punjab region. In the final months of the Raj, Lord Mountbatten (Hugh Bonneville) arrives to oversee the transfer of power to Hind Swaraj (Indian Home Rule), and reconcile the demands of independence leaders such as Mahatma Gandhi and Jawaharlal Nehru with those of Muhammad Ali Jinnah. Sir Cyril Radcliffe (Simon Callow)—who had never set foot in India before—is drafted in to assess how 175,000 square miles, home to 88m people, should be split. Ms Chadha carefully balances high politics with its impact on ordinary citizens; relations between Hindu, Sikh and Muslim staff become tense as the prospect of annexing India’s Muslim-majority regions emerges.

The film is good in exposing the Machiavellian motives behind this rushed decision, as well as the gut-wrenching suffering that followed (the house, which “makes Buckingham Palace look like a bungalow”, becomes a camp for the displaced). It is not perfect, however. “Viceroy’s House” absolves everyone—Lord Mountbatten, the British, Hindus, Sikhs, Muslims—of blame for the suffering. Some critics have complained that it does not give any attention to the Indian independence struggle, or catalogue the horrors of British rule. These are deserving of films in their own right; Ms Chadha’s decision to focus her lens solely on how partition unfolded is a wise one.

With millions of people involved in the story of partition, “Viceroy’s House” was always going to be a tricky undertaking, likely to be deemed unsatisfactory by many. Ms Chadha tells the story of this multifaceted moment in the region’s history through the lens of one building, framing it as the tale of “the people’s partition” rather than dealing in factionalism and blame. She has subverted the period-drama genre—how many period dramas close on a shot of a desperate refugee camp?—to produce something akin to a “Dummy’s Guide to partition”.

Yet even as a superficial primer, “Viceroy’s House” fills a gap in Britain’s collective consciousness and cultural memory. In the canon of modern British films about India, partition features in “Gandhi” (1982) and “Midnight’s Children” (2012) but gets scant treatment elsewhere. “Viceroy’s House” stands out from these offerings as a British film narrated with heart, soul and profound sadness by a Punjabi film-maker with a personal investment in the story: the closing credits reveal that Ms Chadha’s grandmother lost a child to starvation while fleeing to India.

It will be hard for some to maintain a sense of nostalgia and triumphalism for Britain’s empire after watching “Viceroy’s House”: Ms Chadha intersperses the drama with Pathé news footage of communal violence and Churchill’s dejected newscasts explaining the collapse of law and order. The film has ensured that partition, which is rarely taught in British high schools, has a place in the nation’s shared public culture again. Too right. Partition is as much a part of modern Britain—home to 700,000 Indian and Pakistani Punjabis, many of whom are the children, grandchildren and great-grandchildren of partition—as butter chicken, saag paneer, naan, bhangra and Bollywood.

Source: The partition of India: “Viceroy’s House” is an antidote to colonial triumphalism | The Economist

28/02/2017

Are motorbikes a barometer of India’s economy? – BBC News

India’s latest economic growth numbers are expected to reflect the impact that the sudden withdrawal of currency notes in November had on the country.

So how has the economy been doing? Sales of two-wheelers are among the best indicators.

Source: Are motorbikes a barometer of India’s economy? – BBC News

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28/02/2017

US-China relations: Trump meets senior official Yang Jiechi – BBC News

State Councillor Yang Jiechi is the first senior Chinese official to meet Mr Trump since his inauguration.

Mr Yang also discussed security matters with the new US national security adviser, HR McMaster, and Jared Kushner, the president’s son-in-law.

It follows tensions over trade and security between the two countries.

On 9 February Mr Trump spoke to Chinese President Xi Jinping by telephone.

In that call he agreed to honour the “One China” policy, backing away from previous threats to recognise the government of Taiwan, which China regards as a breakaway province.In December Mr Trump, as president-elect, had spoken on the phone to the president of Taiwan – a break in protocol which angered Beijing.

In his visit on Monday, Mr Yang also met Vice-President Mike Pence and strategist Steve Bannon, Chinese state media reported.White House press secretary Sean Spicer told reporters that Mr Yang then “had an opportunity to say hi to the president”.

The talks with the Chinese delegation covered “shared interests of national security”, Mr Spicer said.

In January, China’s foreign ministry warned Washington against challenging Beijing’s sovereignty in parts of the South China Sea.

It came after Mr Spicer said the US would “make sure we protect our interests there”.

Barack Obama’s administration refused to take sides in the dispute.

Source: US-China relations: Trump meets senior official Yang Jiechi – BBC News

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28/02/2017

India’s annual economic growth slows to 7 percent in December quarter | Reuters

India’s annual economic growth slowed to 7.0 percent in the three months through December from a revised 7.4 percent expansion in the previous quarter, government data showed on Tuesday.

Analysts polled by Reuters had forecast 6.4 percent growth for the October-December period.

The central statistics office also retained the growth forecast for the fiscal year ending in March 2017 at 7.1 percent.

Source: India’s annual economic growth slows to 7 percent in December quarter | Reuters

28/02/2017

China voices disquiet over new EU anti-dumping move on steel | Reuters

China expressed concerns on Tuesday over what it said was increasing protectionism after European Union regulators imposed new duties on steel imports from the world’s biggest producer.

The European Commission is seeking to protect EU steelmakers while avoiding tensions with Beijing, which it sees as a possible ally against protectionism and climate change.It imposed definitive anti-dumping duties of between 65.1 percent and 73.7 percent on imports of heavy plate non-alloy or other alloy steel from China on Tuesday, confirming provisional tariffs set in October.

This prompted a statement from China’s Commerce Ministry calling on Europe to treat Chinese companies “fairly and impartially”, adding it was ready to strengthen communication with the EU to tackle issues in the industry.

The companies named in the Commission’s ruling included Nanjing Iron & Steel Co Ltd, Minmetals Yingkou Medium Plate Co Ltd, Wuyang Iron and Steel Co Ltd [WYIAS.UL] and Wuyang New Heavy & Wide Steel Plate Co Ltd.

The EU executive said it acted after an investigation found Chinese companies to be heavily dumping their products on the EU market by selling them at well below half of the price on the producers’ home market.

“The Commission has responded forcefully and quickly to unfair competition, while at the same time ensuring that the rights of all interested parties have been protected,” the Commission said in a statement.

Eurofer, which represents the European steel sector, said the Commission had found clear evidence of dumping.”Tens of thousands of steel jobs have been lost in Europe over the past few years, and dumping, particularly demonstrably from China, has been one of the causes,” it said in a statement.

The EU has strengthened its policy against what it considers unfair competition for its steel industry, and said its new approach had allowed it to decide on trade sanctions more quickly than in the past.

It said on Tuesday it has 41 anti-dumping and anti-subsidy measures in place, 18 of which are on products from China.Also on Tuesday, Europe’s second highest court backed anti-dumping and anti-subsidy duties imposed by the EU nearly four years ago on imports of Chinese solar panels.

Source: China voices disquiet over new EU anti-dumping move on steel | Reuters

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28/02/2017

Building Binge: ADB Calls for More Infrastructure Across Asia – China Real Time Report – WSJ

BEIJING–Asia needs at least $1.5 trillion of roads, bridges and other infrastructure annually between now and 2030 to maintain its growth momentum, a doubling of earlier projections, according to the Asian Development Bank.

In a report released Tuesday, the Manila-based development bank said the tab would run even higher if climate change is factored in: Upgrading power plants, transport systems and other facilities would boost regional investment by another $241 billion annually among some 45 Asia and Pacific countries.

Infrastructure has gained favor as a way to boost flagging growth following the 2009 global financial crisis. U.S. President Donald Trump has vowed to spend $1 trillion over a 10-year period rebuilding U.S. roads and bridges. China spent 15.2 trillion yuan [$2.2 trillion] in infrastructure fixed-asset investment in 2016 alone. The world’s second-biggest economy is promoting its infrastructure-led growth model, creating the Beijing-led Asian Infrastructure Investment Bank, which touts itself as a more efficient alternative to the likes of the World Bank and ADB.

Countries that fail to invest in infrastructure may see economic growth pinched by bottlenecks and lackluster job-creation. The ADB’s current projections represent a doubling of the $750 billion in annual infrastructure requirements the bank forecast in 2009 for the 2010-2020 period. The Asia-Pacific region currently invests around $880 billion annually in infrastructure, according to ADB.Governments currently pay around 92% of the cost of infrastructure in the region, the bank estimates in its report. Boosting spending levels, it said, is going to require tax, regulatory and institutional changes to draw in the private sector.

“Governments can get more bang out of their infrastructure investment,” said ADB economist Rana Hasan. Mr. Hasan acknowledged that the Asian region is unlikely to spend the full $1.7 trillion annually, but said the ADB hopes its recommendations can bring governments closer to those levels. “They need to make it more attractive for the private sector,” he said.

Of the estimated $26 trillion in projects required between 2016 and 2030 to bolster economic output, alleviate poverty and respond to climate change, $14.7 trillion is needed for the power sector, $8.4 trillion for transport, $2.3 trillion for telecommunications and $800 billion for water and sanitation projects, the report said.While acknowledging the need for better and more infrastructure, some economists caution that corruption and politics can significantly undercut the economic benefits of big building initiatives.

“Most developing countries could use more infrastructure. But the problem is not a lack of demand. It’s a lack of credibility,” said Guanghua School of Management professor Michael Pettis. “If your debt gets too high, you start running into debt-servicing problems, defaults and other problems.”China has relied on infrastructure investment as a form of economic stimulus since the global financial crisis in 2009. Since then, local government debt, much of it to fund infrastructure, has risen by two-thirds, according to Standard & Poor’s Financial Services LLC. That debt stood at more than 41% of economic output in 2015, according to Bank of America Merrill Lynch.Beijing has also struggled to attract private investors. Though it has strongly promoted public-private partnerships, some have stumbled during implementation, many due to mismatched expectations of private companies and the state sector.

More favorable reviews have been given to China’s ambitious plans to modernize the ancient Silk Road trade routes. Known as “One Belt, One Road,” the program envisions a network of ports, bridges, rail lines, industrial parks and telecommunication links linking China to the rest of Asia, Europe and points beyond.

The large sums have caught the attention of foreign engineering and equipment companies such as Caterpillar, ABB Group and Vermeer Corp., which are hoping for a slice of future projects.

Source: Building Binge: ADB Calls for More Infrastructure Across Asia – China Real Time Report – WSJ

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