Archive for ‘Chindia Alert’

30/05/2013

Smithfield Foods to be bought by Chinese firm Shuanghui International

Washington Post: “Smithfield Foods, whose signature hams helped make it the world’s largest pork producer, is being bought by a Chinese firm in a deal that marks China’s largest takeover of an American consumer brand.

The $4.7 billion purchase by Shuanghui International touches several sensitive fronts at once — the quick rise of Chinese investment in the United States, China’s troubled record on the environment and the acquisition of Smithfield’s animal gene technology by a country considered to be America’s chief global competitor.

Consumer spending was stronger than first thought, but businesses restocked more slowly and state and local government spending cuts were deeper.

What’s more, the deal puts a major company from a Chinese industry with a history of food-safety problems in charge of a U.S. firm with past environmental problems of its own.

Separately, U.S. government and business officials often complain that China uses strict control of its market of 1.6 billion people to force American companies that want to do business there to surrender intellectual property.

The deal may become a test of U.S. attitudes toward China as it moves through likely reviews by the Justice Department and the Committee on Foreign Investment in the United States.

With no obvious national security concerns stemming from the production of ham, bacon and sausage, Smithfield chief executive C. Larry Pope said he expects approval. He emphasized that the deal wasn’t about bringing Chinese pork products or management standards to the United States but about sending U.S. products and expertise the other way. The deal will leave intact Smithfield’s management, workforce and 70-year presence in Virginia, he said.”

via Smithfield Foods to be bought by Chinese firm Shuanghui International – The Washington Post.

See also:

30/05/2013

Royal Albert Dock set to become London’s third business district under £1bn deal

London 24: “London Mayor Boris Johnson has unveiled details of a £1bn deal to transform London’s historic docklands into the capital’s next business district forging links with China.

View of Royal Albert Docks

The state-of-the-art business district at Royal Albert Dock will act as a platform for financial, high-tech and knowledge driven industries, and will be largest development of its kind in the UK.

It is set to become the third financial district in the capital after the City and Canary Wharf, creating tens of thousands of jobs.

Owned by the Greater London Authority the 35-acre site will be transformed by commercial developer ABP Chinese (Holding) into a gateway for Asian and Chinese business seeking to establish headquarters in Europe, along with other businesses wanting to set up in the capital.

The deal is believed to be worth £6bn to the UK economy, generating £23m in business rates annually and acting as a catalyst for further development in the area.

Mr Johnson said: “For centuries the waterways of east London were the throbbing arteries of UK trade and commerce. This deal symbolises the revival of that great era, continuing the re-invention of this once maligned part of the capital into a 21st century centre of trade and investment.”

The deal is expected to deliver around 20,000 full-time jobs and boost local employment in Newham by 30 per cent.

Mayor of Newham, Sir Robin Wales, said: “The Royal Docks Enterprise Zone offers an unrivalled investment opportunity and this deal further strengthens Newham’s growing reputation as an ideal destination for international business.”

The deal represents one of the first direct investment by a Chinese developer in London’s property market.

Chairman of ABP, Mr Xu, said: “My vision is to develop a world class international business district which will initially target Asian businesses to help them secure a destination in London, which in China is seen as the gateway to both the United Kingdom and the wider European economy. Our plans aim to strengthen trade between east and west, provide new local jobs and deliver benefits for the wider London and UK economy.”

The area will become home to over 3.2 million square feet of high quality work, retail and leisure space, including 2.5 million square feet of prime office space along London’s waterways.”

via Royal Albert Dock set to become London’s third business district under £1bn deal – Politics – London24.

See also: https://chindia-alert.org/2012/02/13/pattern-of-chinese-overseas-investments/

29/05/2013

Amway India snared by law against pyramid schemes

FT: “William Pinckney, chief executive of Amway India, the country’s biggest direct selling consumer goods business by sales, was released on bail on Tuesday evening after his arrest along with two fellow directors. Business leaders have been dismayed by the episode, saying it will damage investment and confidence.

It’s an odd tale that says much about the unpredictability of India’s police forces. What lies beneath is even more perplexing: the way a business regarded as entirely legitimate in the west may be viewed as an illegal pyramid scheme under Indian law.

Amway India, a wholly owned subsidiary of Amway Corporation of the US, has 1.5m agents across the country who distribute products on commission by selling door to door and who help recruit more agents like themselves. The company had revenues of Rs21.3bn ($380m) in 2011.

Amway is far from the only player. India’s direct selling industry employs some 6m people, 70 per cent of whom are women, according to the Federation of Indian Chambers of Commerce and Industry.

This week’s arrests were triggered by complaints from agents in the southern state of Kerala. They were angry after making losses on products they bought from Amway before securing customers. But Sudeep Sengupta, an Amway spokesperson, said the police were making this a case of “money circulation”, as defined under the Prize Chits & Money Circulation Scheme (Banning) Act of 1978.

The law is designed to deal with what in the west are known as pyramid schemes – fraudulent investment vehicles in which returns are paid to initial investors from the funds generated by later ones. In India, these can take the form of “chit funds” – popular and often legitimate schemes in which groups of people club together to buy products collectively, for instance, or to save money on a regular basis. But chit funds can go wrong, as demonstrated by a scandal that erupted this month in West Bengal after agents of several funds who lost money committed suicide.

Direct selling companies can fall foul of the law if their sales agents are paid for recruiting new agents (as well as earning commission for making sales). This, the thinking goes, brings them into the scope of the law because no real wealth is created in the recruiting process and the system must implode as the pool of new recruits dries up.

However, Amway and others insist that they pay their agents only when they make sales, not for getting new sales agents on board.

“We enroll distributors who are all meant to retail products. The growth of the network is not compensated for,” Sengupta told beyondbrics. “The growth of the network is only meant to expand the depth of the market and never meant as a model for compensation.”

One problem facing Amway and others is that there is no legislation that recognises direct selling as a specific type of commerce in India. The Indian Direct Selling Association, the industry’s self-regulatory body, is asking the government to change that.”

via Amway India snared by law against pyramid schemes | beyondbrics.

29/05/2013

China to issue new plan for air pollution control

China Daily: “China to issue new plan for air pollution control

A national plan for air pollution control could be outlined as early as this week, said 21cbh.com, a professional financial news website Tuesday.

The outline will target the reduction of air pollution on a national scale by establishing clear standards of air quality in different regions.

Coal plants, motor vehicles and dust that produce fine particulate matter will be the focus of strict control in the outline initiated by the Ministry of Environmental Protection, according to multiple sources who told the news website.

The overall plan has undergone multiple revisions and will be submitted to the State Council, China’s cabinet, for review by the end of this month, the Shanghai Securities News quoted Yang Tiesheng, deputy director of the energy saving department under the Ministry of Industry and Information Technology, as saying on May 22.

The specific measures put forward by the plan include stipulating the declining rates of atmospheric pollutants such as PM2.5 (particles smaller than 2.5 microns in diameter), sulfur dioxide, nitrogen oxide in cities, the reduction of coal consumption throughout the country, as well as the promotion of using clean energy such as natural gas, while banning coal-fired power plants in cities and minimizing heavy-polluting vehicles.

The Yangtze River Delta region and the Pearl River Delta region will be the key areas of the new air pollution prevention campaign.

Roughly one million heavy-polluting vehicles, popularly known as “yellow label cars”, will be prohibited from driving on roads in Beijing, Tianjin municipality and Hebei province, which would reduce half of the PM2.5 by vehicle emissions alone, said one environmental expert as quoted by the news website.

The outline stipulates that air quality must “make substantial progress” in the upcoming five years rather than the next 20 years, a standard previously adhered to by big cities such as Beijing, according to a source from the National Development and Reform Commission, China’s economic planning body.

Grade II air quality stipulates the average concentration of PM2.5 over a 21 hour period should be between 35 to 75 milligrams per cubic meters, according to the latest standard made by the Ministry of Environmental Protection in 2012.”

via China to issue new plan for air pollution control |Politics |chinadaily.com.cn.

See also: https://chindia-alert.org/economic-factors/greening-of-china/

29/05/2013

Indian PM meets Japanese Emperor, discusses bilateral ties

Times of India: “Prime Minister Manmohan Singh on Wednesday called on Japanese Emperor Akihito and discussed bilateral ties and issues of mutual interest.

Singh accompanied by his wife Gursharan Kaur met the Emperor and the Empress of Japan at the luncheon at Imperial Palace ahead of his meeting with Prime Minister Shinzo Abe.

Emperor Akihito and Empress Michiko of Japan.

Emperor Akihito and Empress Michiko of Japan. (Photo credit: Wikipedia)

Singh, who is on a three-day visit to Japan to strengthen bilateral strategic ties, yesterday said India sees Japan as a “natural and indispensable partner” in its quest for stability and peace in Asia.

Noting that India and Japan are among the major actors in this region, he said, “It is our responsibility to foster a climate of peace, stability and cooperation and to lay an enduring foundation for security and prosperity”.

“India’s relations with Japan are important not only for our economic development, but also because we see Japan as a natural and indispensable partner in our quest for stability and peace in the vast region in Asia that is washed by the Pacific and Indian Oceans,” he said.

“Our relationship with Japan has been at the heart of our Look East Policy,” Singh said.”

via PM meets Japanese Emperor, discusses bilateral ties – The Times of India.

29/05/2013

Settlers in Xinjiang: Circling the wagons

The Economist: “In a region plagued by ethnic strife, the growth of immigrant-dominated settlements is adding to the tension

MANY hours’ drive along what was once the southern Silk Road, through a featureless desert landscape punctuated by swirling dust-devils and occasional gnarled trees, a curious sight eventually confronts the traveller: row upon row of apartment blocks with vivid red roofs, as if a piece of Shanghai suburbia has been planted in the wilderness (see picture). Following the military-style nomenclature of immigrant settlements in China’s far west, it calls itself 38th Regiment. It is home to thousands of people, in a spot where just a few years ago there was nothing but sand.

The town is the latest addition to a vast network of such communities in the Xinjiang Uighur Autonomous Region, China’s biggest province by land area and also its most ethnically troubled. Neighbouring Tibet has long been roiled by ethnic tension, too, but rarely has it witnessed the kind of violence that has troubled Xinjiang: a low-level insurgency involving ethnic Uighurs whose Muslim faith and Central Asian culture and language set them apart from the Han Chinese who dominate places like 38th Regiment. On April 23rd, 21 people were killed near Kashgar during an encounter between police and alleged separatists. An explosion of inter-ethnic violence in 2009 in the regional capital, Urumqi, that left nearly 200 dead, by official reckoning, exacerbated the divide. The expansion of the settlement network is deepening it further.

To use its full name, the 38th Regiment of the 2nd Agricultural Division is part of the Xinjiang Production and Construction Corps. This state-run organisation, usually referred to as the bingtuan (Chinese for a military corps) controls an area twice the size of Taiwan, broken into numerous parts scattered around the province (see map). A few bits are city-sized. Most are more like towns or villages. Of their total population of more than 2.6m people, 86% are ethnically Han Chinese. In Xinjiang as a whole, in contrast, Han officially make up just over 40% of the 22m inhabitants. The rest are Uighurs and a few other ethnic groups.”

via Settlers in Xinjiang: Circling the wagons | The Economist.

29/05/2013

A Premium Milk Brand for India’s Elite

WSJ: “India’s rich and elite like their premium services, from hopping on private jets to receiving Dior goods at their doorstep. But the simple things apply, too.

A premium milk labeled Pride of Cows counts among its consumers the cricketer Sachin Tendulkar, industrialist Mukesh Ambani’s family and Bollywood actor Hrithik Roshan, according to Parag Milk Foods Private Ltd.

Parag Milk Foods, the founder of Gowardhan dairies, launched the Pride of Cows milk in July 2011, initially marketing it as a “by invitation or reference only product” to select celebrities and industrialists.

According to a 2011 survey by the Food Safety and Standards Authority of India, 70% of the milk consumed in the country is adulterated.

Parag Milk Foods Chairman Devendra Shah says the Pride of Cows brand functions by the rule that “happy cows give better milk.” At its Bhagyalaxmi Dairy farm in Pune, around 3,500 Holstien Friesan cows are pampered with music, showers and specially designed nutritional meals, Mr. Shah says. “The result is milk full of love and high nutritional values.”

Parag Milk says it breeds its cows with imported bull semen from North America. Feed is tailor-made for cows of different ages, and the menu is changed regularly to include fresh seasonal crops and specials.

“This way we have complete control over the breed, feed and health of our cows, which in turn leads to complete control over the quality of milk,” said Mr. Shah.

“We have implemented ‘cow comfort’ technology, wherein our cows have soft rubber mats to lie on, streaming music, air-coolers to keep them cool, automated scrubbers to clean them and regular preventive healthcare checks,” added Edmund Piper, a U.K. national who was hired as the farm’s manager four years ago.

Parag Milk Foods signed up celebrities like writer Shobha De as Pride of Cows brand ambassadors, while it can count industrialist Raj Kundra, co-owner of the Rajasthan Royals cricket team, as a fan.

“Being a British-born Indian, I’ve always missed the milk from the UK. I can’t tell you how happy I was to sample this milk – it’s world class. I can finally start drinking milk and enjoying my cereal,” says an endorsement by Mr. Kundra on the Pride of Cows website.

Pride of Cows isn’t available in shops; it’s only delivered – in insulated boxes with ice bags — on subscription. It costs 75 rupees ($1.35) a liter, making it an expensive alternative to other milk, which generally costs around 35 rupees to 50 rupees in the markets. Nestlé milk is among the other brands available in India, costing 62 rupees a liter.”

via A Premium Milk Brand for India’s Elite – India Real Time – WSJ.

Tags: , , ,
29/05/2013

When blue becomes the new white

FT: “My maid and her husband, a driver, have scrimped and saved and crammed themselves into a tiny flat in Shanghai for decades with one goal in mind: to give their only son a crack at the “Chinese dream”.

Newly graduated Chinese students gather for a convocation ceremony at the University of Science and Technology in Hefei in east China's Anhui province

Now those decades of deprivation have reached their climax as the cherished child of these hard-working people graduates from university and takes his first job: as a construction worker. And he counts himself lucky to have a job.

Small wonder that Xi Jinping, the Chinese leader, has recently been out gladhanding graduates who are facing one of the toughest job markets since the Communist party stopped giving them careers by fiat. For, like obesity and diabetes, a glut of unemployed graduates seems to be one of the unintended side-effects of economic development in China.

Sound familiar? Many readers of the Financial Times will know what it is like to have an unemployed graduate in the family – or to have been one themselves. Maybe job shortages are just part of the human condition, one that now affects the Chinese like the rest of humanity. (When I graduated from university in 1980, media jobs were so thin on the ground that I ended up teaching at a university in Ghana that had no books, few lights and little running water – landing a job without a flushing toilet was presumably not part of my parents’ university plan for me.)

Mr Xi pointed out on his jobs-fair visit that – like all the other flaws of capitalism – the scourge of graduate unemployment these days is global. But it would be hard to find people who have suffered more to take their place among the ranks of the white-collar unemployed than the Chinese.

This week alone, millions of students across the country will be skipping sleep, baths and online war games to study, while millions of parents take up to a year off work to cook, clean and nag them round the clock. Millions will pass next week’s dreaded college entrance exam (or gaokao) – only to end up unemployed or wearing a hard hat.

Increasing numbers are wondering if it’s all worth it, and are coming up with alternatives that range from the tragic to the downright postmodern. A Chinese newspaper reported this month that a fed-up teenager in central China hired a hit man to kill his father and older sister because – he said – they put too much pressure on him to study. And after this year’s three-day May Day public holiday, a 15-year-old boy in eastern China jumped to his death because he did not finish his holiday homework. Another teen in the same town rose at 4am to finish homework but was found hanging from the staircase before he got to school.

The overwork doesn’t stop with gaokao: just this month Chinese newspapers reported that two twenty-somethings in southern China dropped dead after taking on too much overtime – and such stories are not uncommon. Xinhua, the state news agency, said this week that 40 college graduates were found sharing one 130-square-metre room in Beijing while looking for jobs – living like the construction workers that they may be lucky to become.

So more and more students are opting instead for that most un-Chinese of solutions: time off the treadmill – or what the rest of the world knows as a “gap year”. Li Shangcong, a top student at his high school and vice-president of the student union, decided to skip gaokao altogether and cycle to the Cannes Film Festival – via Siberia. He never made it to France, having been deported by Russian immigration for an expired visa.

When his parents spluttered about the need to make something of himself, he said what teenagers around the world have been known to say in such circumstances: that he is attending the university of life and they should get off his back. He is currently on another trip to Russia.

Shi Zheying at least had her father onside: she skipped the high school entrance exam to “travel 10,000 miles rather than read 10,000 books first” – with her dad. The phrase immediately became popular among China’s “netizens”. Her grandparents, themselves teachers, were force-tutoring her at night, refusing to accept examination results that placed her as low as 16th in her class. After she decided to quit school, she was placed fifth.

China is not the land of “turn on, tune in, drop out” quite yet. But it’s a far cry from a world where terminal overwork is the only option.”

via When blue becomes the new white – FT.com.

29/05/2013

China’s spurned mistresses can’t be relied on to bust graft

(Reuters) – “China must not rely on whistle-blowing mistresses to expose corrupt officials, China’s top newspaper said on Wednesday, after a string of such incidents has led to some people hailing the girlfriends as graft-busters.

Liu Tienan, then deputy chairman of China's National Development and Reform Commission (NDRC), attends a news conference in Beijing in this February 27, 2009 file photograph. REUTERS/Stringer/Files

President Xi Jinping has singled out corruption as a threat to the Communist Party’s survival, and the keeping of mistresses in lavish apartments, which breaks party rules, has come to represent to many people the excesses of power in China.

In a recent high-profile case, Liu Tienan, once the deputy chief of China’s top planning agency, was sacked after his mistress told a journalist that Liu had helped defraud banks of $200 million, state media reported.

But the People’s Daily, the ruling Communist Party’s official newspaper, questioned the woman’s motives and said China could not rely on such people to fight corruption.”

via China’s spurned mistresses can’t be relied on to bust graft: paper | Reuters.

28/05/2013

* China Building Beachhead in Europe With $5 Billion Belarus City

Business Week: “China is building an entire city in the forests near the Belarusian capital Minsk to create a manufacturing springboard between the European Union and Russia.

China Building Beachhead in Europe With $5 Billion Belarus City

Belarusian President Aleksandr Lukashenko allotted an area 40 percent larger than Manhattan around Minsk’s international airport for the $5 billion development, which will include enough housing to accommodate 155,000 people, according to Chinese and Belarusian officials.

Lukashenko, who’s led his former Soviet state of 9.5 million for two decades, is turning to China to help revive a $60 billion economy that’s needed $6.5 billion of bailouts from the International Monetary Fund and Russia since 2009. The hub will put Chinese exporters within 170 miles of EU members Poland and Lithuania and give them tax-free entry into Russia and Kazakhstan, which share a customs union. It will also let them draw from a workforce that’s 99.6 percent literate and makes $560 a month on average, half the Polish wage.

“This is a unique project,” Gong Jianwei, China’s ambassador to Belarus, said on state television May 17, after the project won regulatory approval. “Nobody will be able to build anything like this industrial park anywhere else in Europe anymore. The infrastructure is so powerful.”

The “modern city on the Eurasian continent,” as it’s called in marketing documents, will be built around the M1 highway that links Moscow and Berlin via Belarus and Poland. A speed-rail network will tie the airport to the center of the city, which will be powered by a $10 billion nuclear plant, Belarus’s first, which Russia agreed to finance and build by 2018. The first stage of the park is scheduled to be completed by 2020, with the second stage taking another 10 years.”

via China Building Beachhead in Europe With $5 Billion Belarus City – Businessweek.

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