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28/10/2014

Talks gather pace on sale of Indian patrol vessels to Vietnam | Reuters

Talks are gathering pace on the sale of Indian naval patrol vessels to Vietnam, an Indian official said, the first significant military transfer to Hanoi as it improves its defences in the South China Sea where it is embroiled in a territorial dispute with China.

Vietnam's Prime Minister Nguyen Tan Dung (C) shakes hands with his Indian counterpart Narendra Modi (R) as Dung's wife Tran Thanh Kien looks on during Dung's ceremonial reception at the forecourt of Rashtrapati Bhavan in New Delhi October 28, 2014. REUTERS/Adnan Abidi

The four patrol ships will be provided to Vietnam under a $100 million defence credit line and represent a push by the nationalist government in New Delhi to counter Beijing’s influence in South Asia by deepening ties with old ally Vietnam.

Vietnamese Prime Minister Nguyen Tan Dung held talks with counterpart Narendra Modi on Tuesday, the first meeting since the Indian leader took office in May, promising to turn the country into an economic and military power.

An Indian government official said negotiations for the patrol craft had gathered pace since the credit line was announced last month during the visit of India’s president to Vietnam.

“We expect to see progress on this fairly early as negotiations are continuing between the Vietnamese and our defence suppliers,” the government official involved in discussions said.

Vietnam wants the craft for surveillance off its coast and around its military bases in the Spratly island chain in the South China Sea where it is building a credible naval deterrent to China with Kilo-class submarines from Russia.

Claims by an increasingly assertive China over most of the energy-rich sea have set it directly against U.S. allies Vietnam and the Philippines. Brunei, Taiwan and Malaysia also claim parts of the waters.

Beijing’s placement of an oil rig in disputed waters earlier this year infuriated Vietnam but the coastguard vessels it dispatched to the platform were each time chased off by larger Chinese boats.

Since then, the two sides have sought to repair ties and on Monday, top officials agreed to use an existing border dispute mechanism to find a solution to the territorial dispute.

Dung said Vietnamese defence cooperation with India was the pillar of their strategic partnership.

via Talks gather pace on sale of Indian patrol vessels to Vietnam | Reuters.

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27/10/2014

China considers abolishing death penalty for nine crimes | Reuters

China is considering trimming nine crimes from the list of offences punishable by death, state media said on Monday, as the ruling Communist Party considers broader reforms to the country’s legal system.

Rights groups say China uses capital punishment more than any other country, raising public concern of irreversible miscarriages of justice.

A draft amendment to China’s criminal law, which includes the use of the death penalty, was submitted for initial review to the country’s National People’s Congress, the official Xinhua news agency said.

Crimes that would be exempt from capital punishment under the amendment include “smuggling weapons, ammunition, nuclear materials or counterfeit currencies; counterfeiting currencies; raising funds by means of fraud; and arranging for or forcing another person to engage in prostitution”, Xinhua said.

The crimes of “obstructing a commander or a person on duty from performing his duties” and “fabricating rumors to mislead others during wartime”, are also under review, the news agency said.

Officials had previously said that China would review the application of the death penalty, which applies to 55 offences, including fraud and illegal money-lending.

China guards the number of people executed every year as state secrets.

The San Francisco-based Dui Hua Foundation, which seeks the release of political prisoners in China, estimated that 2,400 people were executed in 2013. By comparison, 39 people were executed in 2013 in the United States, according to the Death Penalty Information Center.

The reduction in death penalty crimes, however, is not expected to greatly reduce the number of executions per year, scholars have said.

The Communist Party, worried about rising social unrest and anger over land grabs, corruption and pollution unveiled legal reforms aimed at improving judicial independence at a key meeting last week.

The Party has stressed that it will remain in overall control of the judiciary, and despite the move to implement legal reforms, few analysts expect significant political change any time soon.

via China considers abolishing death penalty for nine crimes | Reuters.

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26/10/2014

Height discrimination: The rise of China | The Economist

WHEN two security guards in Dalian in north-east China got their first month’s pay packet earlier this year, they questioned why each received different amounts for identical work. The company responded that one man was 5cm (two inches) taller than his peer. Workers over 180cm earn more, they said, because bigger guards make people feel safer.

Stature is often a desirable attribute of guards, but in China height requirements are routinely specified for jobs which seem to have no need of them. To study tourism and hotel management at Huaqiao University in Fujian province, men topping 170cm are favoured, and women over 158cm. A post as a female cleaner in Beijing is advertised to women of at least 162cm. Many companies are less explicit about such demands than they used to be, but candidates often list height (and weight) on their curricula vitae.

The height premium is most pronounced for women, according to a study from Huazhong University of Science and Technology. It found that each centimetre above the mean adds 1.5-2.2% to a woman’s salary, particularly among middle- and high-wage earners. A group at China University of Political Science and Law is working on a draft law against employment discrimination for height and other physical characteristics.

Ever more Chinese are rising above such constraints, however. A 45-year-old man in China today is around 5cm taller than 30 years ago, according to the RAND Corporation, a think-tank. Soldiers are growing too tall for the diminutive tanks favoured by the People’s Liberation Army; in 2010 the government raised by 10cm the height under which children in China travel free on trains (a rare scheme that benefits the small).

Greater heights mostly reflect greater incomes. Richer people tend to eat more and live in cleaner, better homes. Meat consumption per person has increased more than fourfold since 1980. Infant mortality is less than a tenth of what it was 60 years ago. Household size has also helped. Historically people from big families have been shorter (not just in China) because food supplies must stretch further. In China the birth rate fell sharply from the 1970s nationwide.

But there are differences across the country which partly reflect the uneven benefits of the economic boom. Eighteen-year-olds from the richest cities are on average 7-8cm taller than those from the poorest ones. The height gap between prosperous and impoverished rural areas is similar. Southerners have long been shorter than northerners. Although the difference between rural and urban heights has narrowed since 1975, other discrepancies persist. The World Health Organisation says around 20% of children in poor rural areas are “stunted”, a common indicator of chronic malnutrition. This compares with 2.5% of city children. Employers’ preference for high and mighty staff exacerbates that inequality. It is time they grew up.

via Height discrimination: The rise of China | The Economist.

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26/10/2014

Electricity: Generational shift | The Economist

MUCH of what China has achieved in the past three decades—its impressive economic growth, the rise of its global stature and the considerable improvement of living standards for hundreds of millions of people—is attributable to one decision: ditching the Maoist model of central-planning that had shackled the economy. Yet some important industries have yet to embrace the market. Power generation is one. As China struggles to reconcile its soaring energy demand with its need to clean up an increasingly toxic environment, reform is becoming more urgent.

China knows it must reduce its reliance on dirty coal and increase its use of (more expensive) renewable energy. Of the new power-generating capacity that China built last year, renewables such as wind and solar power for the first time accounted for more than the share made up of fossil fuels and nuclear energy.

China wants to satisfy the surging electricity demands of its increasingly urban population and to keep its industries running smoothly. It does both reasonably well and blackouts are rare. But officials fret about how grumpy—and vocal—people are becoming about the poisonous air that envelops so many Chinese cities. (An annual international marathon race, pictured above, took place in Beijing on October 19th in air that was nearly 14 times more polluted than the safety limit recommended by the World Health Organisation.) China is aware that its standing abroad will partly depend on its efforts to limit carbon emissions. This will involve weaning itself off coal, which supplies nearly 80% of its energy.

Progress is being hampered by a largely unreformed power industry dominated by large state-owned enterprises (SOEs) which operate under a mix of rigid planning, secrecy and poor regulation. Power suppliers have too little incentive to compete on price, efficiency or greenness. Two international NGOs, the World Wildlife Fund and the Energy Transition Research Institute, describe the SOEs that control all transmission and distribution and most non-renewable generation as “unregulated corporate monopolies”. Their bosses are usually appointed by the central government, but they often ally with regional leaders to resist oversight by a variety of largely toothless regulators.

One problem is China’s system for “dispatch”; that is, determining which power sources will supply electricity to the grid at any given time. A report by the Regulatory Assistance Project (RAP), an American NGO, notes that in most countries dispatch decisions are made in order to minimise costs (including environmental ones). In China regulations would appear to encourage a similar approach: grid-operators are supposed to give priority to electricity supplied by more efficient and greener producers. In practice, grid-operators are more inclined to help coal-fired plants recoup the cost of their investments. Both sides are members of a cosy club of energy-related SOEs. Even if the grid-operators were to try to stick to the rules, they would struggle. Coal plants can easily conceal how much they waste and pollute.

Generators of wind and solar energy thus find themselves handicapped by more than just the high cost of their technologies. Much of China’s most cleanly produced energy is wasted. For wind power, rates of “curtailment”, or energy generated but not taken up by the grid, have improved in recent years as grid systems have become better able to cope with the technical challenge of handling such unsteady sources of power. But the rate still stands at about 10% nationwide. In Britain it was less than 2% between 2011 and 2013.

The government launched pilot reforms in five provinces in 2007 to encourage more efficient dispatch, but they achieved little and have not been expanded. Max Dupuy of RAP’s Beijing office says the scheme met opposition because of its failure to compensate coal-fired plants for the revenue share lost to clean producers.

via Electricity: Generational shift | The Economist.

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26/10/2014

Wal-Mart Struggles to Crack Retail Market in India – Businessweek

As Indians celebrate the Hindu festival of Diwali, executives at Wal-Mart India don’t have much reason to cheer. The company is still waiting for its big breakthrough in India, a market it has been trying to crack at least since 2007. That’s when the American retailer teamed up with one of the top businessmen in the country, Sunil Mittal, to open wholesale stores in India. If all had gone well, that partnership with Bharti Enterprises was supposed to have led to consumer-facing stores, too.

A Wal-Mart store on the outskirts of Chandigarh, Punjab, India, on June 10

When then-Prime Minister Manmohan Singh in 2012 eased restrictions on foreign ownership in retail, Wal-Mart Stores (WMT) executives saw an opportunity in the world’s second-largest country. In September 2012, a Wal-Mart executive told Bloomberg News the two sides were in talks and retail stores were less than two years away.

Those discussions didn’t end well. Wal-Mart and Bharti Enterprises went their separate ways last year, dissolving the joint venture in October 2013. Wal-Mart bought out Bharti and took full control of the 20 members-only, cash-and-carry stores in India. After that, the company largely kept its India plans on hold: It’s been two years since Wal-Mart added new wholesale stores in India.

via Wal-Mart Struggles to Crack Retail Market in India – Businessweek.

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26/10/2014

China GDP Growth of Just 4 percent is possible – Businessweek

China reported on Tuesday that its economic growth fell to a five-year low. But one forecaster says that’s just the beginning. This week the Conference Board issued a 75-page white paper predicting that China’s annual growth will dip below 4 percent in the next decade. Its title: The Long Soft Fall in Chinese Growth.

I met on Monday with the report’s authors, David Hoffman and Andrew Polk, and asked why they’re so pessimistic on China. They said it’s a straightforward projection of recent slowdowns in the growth of capital investment, labor productivity, and the quantity and quality of the labor force.

It’s the optimists who need to defend their case, according to Hoffman, because the only way to project continued 7 percent growth for China is to project major output-enhancing economic reforms. “We just don’t think that will happen,” says Hoffman, who manages the Conference Board China Center for Economics and Business in Beijing.

via China GDP Growth of Just 4 percent is possible – Businessweek.

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26/10/2014

China’s Rising Wages and the ‘Made in USA’ Revival – Businessweek

It wasn’t long ago that China was the cheapest place on earth to make just about anything. When China joined the World Trade Organization in 2001, the average hourly manufacturing wage in the Yangtze River Delta was 82¢ an hour. Oil was $20 a barrel, so no matter where you were ultimately selling your Chinese-made goods, it didn’t cost much to get it there.

A technician prepares a VIPturbo Modem at the SRT Wireless satellite communications manufacturing plant in Davie, Florida on Aug. 18

China’s still cheap, but it’s nowhere near the deal it was just a few years ago. Workers in the Yangtze make almost $5 an hour today, and oil costs about $85 a barrel. Suddenly the benefits of making things in China aren’t so apparent, especially if you’re selling those things to consumers in the U.S. A new survey by Boston Consulting Group found that 16 percent of American manufacturing executives say they’re already bringing production back home from China. That’s up from 13 percent a year ago. Twenty percent said they would consider doing so in the near future.

American manufacturing’s increased competitiveness against China is a story that’s been told for a few years now, giving rise to the term “reshoring.” But it’s not just China that the U.S. is gaining against. For companies making goods for sale in the U.S., Mexico has long been the place to go—and that’s slipping, too. The BCG survey shows that the U.S. has passed Mexico as the place where companies are most likely to build a new plant to make things to sell in the U.S.

via China’s Rising Wages and the ‘Made in USA’ Revival – Businessweek.

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26/10/2014

Frustrated Multinationals Look to Trim China-Based Staff – Businessweek

Slightly less than half of European companies operating in China plan to expand their mainland-based workforce in the next year—down from 61 percent in 2012, according to a recent survey by the European Chamber of Commerce. A quarter of these entities are looking for other ways to trim costs in China, and 51 percent believe doing business in China “has become more difficult” over the past few years.

The workshop of Bernard Controls, a French business that manufactures electric components in Beijing

Business isn’t typically bad—61 percent said their China operations were profitable—but it’s less spectacular than in past years. That’s due in part to China’s economic slowdown, in part to real and perceived hostility against foreign companies in China, and in part to problems or layoffs in their home offices.

American companies expressed similar concerns in a recent survey by the U.S. Chamber of Commerce. Fully 60 percent of U.S. businesses said they felt “less welcome” in China than in the previous year. Anticorruption and pricing probes in wide-ranging industries have seemingly singled out foreign companies, from Microsoft (MSFT) to Abbott Laboratories (ABT), as targets. Almost half of those surveyed said they thought the pattern of harassment was deliberate.

via Frustrated Multinationals Look to Trim China-Based Staff – Businessweek.

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26/10/2014

Three major nations absent as China launches World Bank rival in Asia | Reuters

Australia, Indonesia and South Korea skipped the launch of a China-backed Asian infrastructure bank on Friday as the United States said it had concerns about the new rival to Western-dominated multilateral lenders.

China's President Xi Jinping (R) meets with the guests at the Asian Infrastructure Investment Bank launch ceremony at the Great Hall of the People in Beijing October 24, 2014. REUTERS/Takaki Yajima/Pool

China’s $50 billion Asian Infrastructure Investment Bank(AIIB) is seen as a challenge to the World Bank and Asian Development Bank, both of which count Washington and its allies as their biggest financial backers.

China, which is keen to extend its influence and soft power in the region, has limited voting rights in these existing banks despite being the world’s second-largest economy.

The AIIB, launched in Beijing at a ceremony attended by Chinese finance minister Lou Jiwei and delegates from 21 countries including India, Thailand and Malaysia, aims to give project loans to developing nations. China is set to be its largest shareholder with a stake of up to 50 percent.

Indonesia was not present and neither were South Korea and Australia, according to a pool report.

Japan, China’s main rival in Asia and which dominates the $175 billion Asian Development Bank along with the United States, was also not present, but it was not expected to be.

Media reports said U.S. Secretary of State John Kerry put pressure on Australia to stay out of the AIIB.

However, State Department spokeswoman Jen Psaki said: “Secretary Kerry has made clear directly to the Chinese as well as to other partners that we ‎welcome the idea of an infrastructure bank for Asia but we strongly urge that it meet international standards of governance and transparency.

“We have concerns about the ambiguous nature of the AIIB proposal as it currently stands, that we have also expressed publicly.”

In a speech to delegates after the inauguration, Chinese President Xi Jinping said the new bank would use the best practices of the World Bank and the Asian Development Bank.

“For the AIIB, its operation needs to follow multilateral rules and procedures,” Xi said. “We have also to learn from the World Bank and the Asian Development Bank and other existing multilateral development institutions in their good practices and useful experiences.”

via Three major nations absent as China launches World Bank rival in Asia | Reuters.

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22/10/2014

Google’s Big Plans for Low-Cost Android One Phones in India – Businessweek

With the Indian smartphone market booming, Xiaomi has made a splash with its weekly flash sales on Flipkart, an Indian rival to Amazon.com (AMZN). When the Chinese smartphone brand conducted another of its sales on Tuesday, over 300,000 people registered to buy some 90,000 of its Redmi 1S phones priced at 5,999 rupees (or $98). In last week’s sale, the Xiaomi phones sold out in four seconds.

The Spice Android One Dream Uno smartphone

Xiaomi isn’t the only foreign company looking to take advantage of consumer demand for inexpensive alternatives to the iPhone (AAPL). The company with perhaps the most ambitious plan is Google (GOOG), which last month made India the first market for its new Android One smartphone operating system. Google teamed up with local brands Micromax, Karbonn, and Spice, all of which have recently introduced smartphones priced around 6,000 rupees.

India particularly needs better low-cost phones, argues Caesar Sengupta, Google’s vice president of product development in Singapore and head of the Android One project. India’s mobile operators don’t offer the sort of generous subsidies that consumers in the U.S. and other markets take for granted. ”In the U.S., when you buy an iPhone, it costs $600 to $700 but you get a subsidy, so to a consumer it feels you are buying a $200 phone,” Sengupta says. In India, the cost to the consumer is much closer to the actual cost of the hardware.

via Google’s Big Plans for Low-Cost Android One Phones in India – Businessweek.

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