Archive for ‘Economics’

22/05/2014

China’s Bright Food to buy control of Israel’s largest food company | Reuters

China’s Bright Food Group Co Ltd SHMNGA.UL said on Thursday it has signed a preliminary agreement to buy 56 percent of Israel’s largest food company Tnuva from private equity firm ApaxAPAX.UL, extending a string of overseas acquisitions.

bright foods

bright foods (Photo credit: Runs With Scissors)

A spokesman for Bright Food did not disclose how much it has agreed to pay, but Israeli news websites reported late on Wednesday the deal valued all of Tnuva, a specialist dairy produce supplier, at 8.6 billion shekels ($2.5 billion).

When Apax and Israeli investment company Mivtach Shamir Holdings Ltd (MISH.TA) acquired control of Tnuva in 2008, the company was valued at $989 million in total.

“Israel is a country with highly developed agriculture and animal husbandry techniques. Tnuva, as Israel’s largest food company, has a long history and various products and large market share,” the Bright Food spokesman said in a text message sent to Reuters.

Shanghai-based Bright Food has not yet reached an agreement with Israeli investment company Mivtach Shamir Holdings Ltd (MISH.TA), which owns 21 percent of Tnuva, the Calcalist website said. A group of kibbutzim, or cooperative farms, own the rest of Tnuva.

In January Bright Food bought Australian dairy company Mundella Foods. It previously bought Australia’s Manassen Foods, which supplies food brands to Australian retailers, and New Zealand’s Synlait Milk Ltd (SML.NZ).

via China’s Bright Food to buy control of Israel’s largest food company | Reuters.

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21/05/2014

Tibet on track to become global tourist attraction[1]- Chinadaily.com.cn

Tourism increased in the Tibet autonomous region in the first four months of the year, as the region aspires to become a world-class travel destination.

Tibet on track to become global tourist attraction

The region had more than 830,000 tourists from January through April, a year-on-year increase of 23.4 percent, the regional tourism bureau said on Tuesday.

Foreign tourists numbered 20,000, an increase of 10.3 percent, and the number of domestic tourists was 810,000, an increase of 23.8 percent.

Meanwhile, the revenue generated by the tourism industry was 926 million yuan ($148.4 million), an increase of 26.2 percent, it said.

Karral Millar, 62, an Australian tourist, said she had a good time in Tibet.

“It’s wonderful. It’s been three days now. We have visited the Potala Palace and many temples, and we are learning new things about Tibetan Buddhism and history,” Millar said on Tuesday.

Cycling has become a popular way to tour the region in recent years, as many tourists want to have close contact with the natural scenery and culture of Tibet.

“It’s my second time in Tibet. I am absolutely impressed with the natural scenery and unique culture. I feel as if I am at home here,” said Liu Xiaojun, from Hebei province.

“I am also overwhelmed with the hospitality and politeness of the local people,” said Liu, adding that he plans to make a bicycle tour to Zhangmu Port in Tibet’s Xigaze prefecture.

Many businesses near the scenic spots in Lhasa see the coming of summer peak season as a harvest.

“Compared with the same period last year, we had more guests this year. We have 62 rooms, and more than half are booked every day,” said India, 41, a receptionist at the Kyichu Hotel, a Nepalese hotel in Lhasa.

Tibet received more than 12 million tourists from home and abroad lastar.

The region hopes to have 15 million tourists this year.

via Tibet on track to become global tourist attraction[1]- Chinadaily.com.cn.

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21/05/2014

Is China’s Housing Bubble Beginning to Burst? – Businessweek

Earlier this month, financial analysts from Japan-based Nomura Group (NMR) issued a grim report on China’s housing market: “To us, it is no longer a question of ‘if’ but rather ‘how severe’ the property market correction will be,” the report read.

Residential apartment buildings under construction in Qingzhou city, in east China’s Shandong province

Nomura—which has historically been bearish on China, as the Wall Street Journal observes—predicted that a downturn in the housing market, caused by oversupply and shrinking developer financing, could sharply impact China’s economy, perhaps even driving GDP growth to less than 6 percent in 2014.

China’s economy is vulnerable because property investment accounts for anywhere from 16 percent to 20 percent of gross domestic product, according to varying analyses.

via Is China’s Housing Bubble Beginning to Burst? – Businessweek.

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21/05/2014

Does China Pose a Threat to Global Food Security? It Says No – China Real Time Report – WSJ

Twenty years ago, environmental advocate Lester Brown got in hot water with Beijing for writing a book called “Who Will Feed China?”

China was displeased with the suggestion in his book that the country’s growing population and water scarcity could drastically burden the world’s food resources. Beijing publicly criticized the author – then began a series of reforms including improving farming techniques and adopting a national policy of self-sufficiency in grain consumption that vindicated Mr. Brown’s arguments. It paved the way for a gradual rapprochement with the American, now 80.

Détente is over.

On Wednesday, China’s agriculture ministry issued a statement again criticizing Mr. Brown. It took umbrage with an essay he wrote titled “Can the World Feed China?” a riff on his earlier book. The essay details Mr. Brown’s concerns that rising domestic pressures on food consumption could result in spiking food prices and political unrest as China joins in a global “scramble for food.”

It isn’t clear why Mr. Brown was singled out for criticism; many analysts have in one form or other also articulated these trends, though arguably not as directly or pungently. But the move underscores how increasingly sensitive China is to the growing impression that it can’t feed itself and that its acquisitions of global food assets are posing a risk to food security for the rest of the world. China has been keen in recent years to head off any impression that it’s on a global grab for natural resources.

Mr. Brown wasn’t immediately available for comment.

The government is unhappy with the notion it’s being blamed for sharpening global competition for food. Mr. Brown’s essay said China’s rising grain imports  mean “it is competing directly with scores of other grain-importing countries.” He also warned that China’s purchase last year of U.S. pork producer Smithfield Foods “was really a pork security move.” So too, he said, was China’s deal with Ukraine to provide $3 billion in loans in exchange for corn. “Such moves by China exemplify the new geopolitics of food scarcity that affects us all,” he wrote.

Not likely, ministry spokesman Bi Meijia said in the government’s statement. Mr. Bi said 97% of China’s grain consumption comes from its own output, not imports.

“On the issue of food security, China not only does not pose a threat to the world, but makes a contribution to global food security,” he said. China intends to continue its existing policies, he said.

Mr. Bi said rising grain imports aren’t due to domestic shortages, but because global prices are lower than domestic prices. The ministry also pointed out that imports accounted for just 2.6% of domestic grain production volume in 2013, and just 4% of global output.

via Does China Pose a Threat to Global Food Security? It Says No – China Real Time Report – WSJ.

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19/05/2014

The Twin Deficits That Threaten Modi’s India – Businessweek

For Narendra Modi, getting elected as prime minister of India is the easy part. Now comes dealing with the twin deficits—in the national budget and in foreign trade—that endanger the world’s largest democracy.

Opposition leader and India's next prime minister Narendra Modi greets supporters during a visit to seek his mother's blessings in Gandhinagar, the western Indian state of Gujarat on May 16

Overnight poll results show that Modi’s opposition Bharatiya Janata Party and its allies scored the biggest Indian election win in 30 years. “Voters tired of sluggish economic growth and corruption handed a historic defeat to the Gandhi dynasty that has dominated politics since the country’s founding,” Bloomberg News reported today.

In April, the International Monetary Fund issued a 66-page report on India that highlighted the challenges facing India. The report notes that India is not the only Group of 20 country with high budget deficits, nor is it the only one with high trade deficits. What’s unusual is that it’s high in both.

Despite notable progress in shrinking both deficits, India remains vulnerable to a crisis of confidence among global investors, the IMF report says. Advanced economies are vulnerable to rapid fiscal deterioration, the report says, when they have debt-to-GDP ratios above 80 percent of GDP and persistent deficits in the current account, the broadest measure of trade in goods and services. Emerging economies such as India’s are vulnerable even at lower debt levels, the report says, citing work by Harvard economists Kenneth Rogoff and Carmen Reinhart.

via The Twin Deficits That Threaten Modi’s India – Businessweek.

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19/05/2014

Modi’s Next Move – India Real Time – WSJ

The simplest way to understand the enormity of the Bharatiya Janata Party’s victory Friday in India’s election is to place it in historical context.

For the first time since 1984, India’s voters have given a single party rather than a ragtag coalition a majority in Parliament. The BJP won 282 seats, 10 more than the 272 needed to reach the halfway mark in the 543-seat lower house of Parliament. The BJP-led National Democratic Alliance coalition snagged 336 seats.

For the first time ever, India’s traditionally left-leaning politics has moved decisively to the right. Even when it won more seats than the left-of-center Congress Party in three elections in the late 1990s, the BJP always lagged its rival in share of the popular vote. This time the BJP snagged nearly one third of the national vote, while Congress claimed less than a fifth. The BJP also made inroads into southern and eastern India, outside its traditional strongholds in the north and west.

The rightward swing is all the more notable because incoming Prime Minister Narendra Modi belongs to the conservative wing of India’s conservative party. Unlike the last BJP prime minister, Atal Bihari Vajpayee (1998-2004), Mr. Modi cut his teeth in politics battling Congress when it briefly suspended democracy in the mid-1970s, not admiring Jawaharlal Nehru’s parliamentary eloquence in defense of socialist policies in the 1950s.

Congress itself has been reduced to a rump. The 44 seats it won is less than half of its previous low of 114 seats in 1999. Congress has proved naysayers wrong before by bouncing back. Still, for the first time talk of the possible extinction of a party that has ruled India for all but 13 years since independence in 1947 seems plausible. And the two main communist parties, which have traditionally wielded influence both inside and outside Parliament and helped set the tone for much anti-capitalist and anti-Western discourse, have been reduced to a footnote. Together they hold a meager 10 seats.

via Modi’s Next Move – India Real Time – WSJ.

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17/05/2014

India’s Modi gets hero’s welcome as he brings new era to New Delhi | Reuters

Hundreds of Indians thronged the leafy streets of New Delhi on Saturday to greet Narendra Modi‘s triumphant march into the capital after he decimated the Nehru-Gandhi dynasty and the ruling Congress party in the biggest election victory the country has seen in 30 years.

Hindu nationalist Narendra Modi, the prime ministerial candidate for India's Bharatiya Janata Party (BJP), gestures towards his supporters from his car during a road show upon his arrival at the airport in New Delhi May 17, 2014. REUTERS/Adnan Abidi

Modi leaned far out of his car, waving a victory sign to jubilant supporters, in a drive from the airport to the headquarters of his Bharatiya Janata Party (BJP) in the center of town.

A Hindu nationalist who critics fear will be divisive and autocratic, Modi toned down religious issues in his pitch to India’s 815 million voters and won the world’s biggest ever election with promises of economic development for all.

The three-times chief minister of the western state of Gujarat is an outsider to Delhi’s power circle. The low-caste son of a tea stall-owner, his rise to power signals the end of an era dominated by the descendants of India’s first prime minister, independence hero Jawaharlal Nehru.

“Four to five generations have been wasted since 1952, this victory has been achieved after that,” Modi said, in a jibe at the Nehru-Gandhi family and the Congress it dominates.

Describing himself as a “worker”, he hailed grass-roots campaigners who showered him with pink rose petals as he arrived at party headquarters. There he met other party leaders and was expected to start discussions about forming a cabinet. Modi will not formally take office until after Tuesday, the party said.

Modi has given India its first parliamentary majority after 25 years of coalition governments, with his party winning more than six times the seats garnered by Congress.

With almost all 543 seats declared by Saturday morning, Modi’s BJP looked set to win 282 seats, 10 more than the majority required to rule. With its allied parties, it was heading for a comfortable tally of around 337 – the clearest result since the 1984 assassination of prime minister Indira Gandhi propelled her son Rajiv to office.

During the campaign Modi was explicit about wanting to end the dominance of the Nehru-Gandhi family on Indian politics. He may have achieved the goal, with Congress reduced to just 44 seats, less than half of its previous worst showing.

Modi’s landslide win gives him ample room to advance reforms started 23 years ago by current Prime Minister Manmohan Singh but which have stalled in recent years.

Despite his party’s pasting, 81-year-old Singh was magnanimous in his final address to the nation on Saturday, wishing the incoming government success. Later, he tendered his resignation.

“I am confident about the future of India,” he said in his televised message. “I firmly believe that the emergence of India as a major powerhouse of the evolving global economy is an idea whose time has come.”

Unlike Singh and his predecessors, Modi will not have to deal with unruly partners to implement reform. That could usher in profound economic changes, with some supporters imagining him as India’s answer to former British leader Margaret Thatcher.

via India’s Modi gets hero’s welcome as he brings new era to New Delhi | Reuters.

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16/05/2014

China to build new hi-tech power network to help fight pollution | South China Morning Post

China will build the world’s largest high-power electricity transmission network as part of the country’s efforts to battle smog and pollution.

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The State Grid Corporation of China – the world’s largest state-owned utilities company – said on its website that the central government would soon approve plans for the construction of 12 power lines connecting the energy-rich interior with heavily industrialised coastal areas. The initial investment is estimated to be at least 210 billion yuan (HK$264 billion).

The 12 projects include eight ultra-high-voltage (UHV) lines, which offer distinct advantages over conventional power lines by transmitting electricity over significantly longer distances with far greater efficiency. Energy losses from UHV power lines are five to six times lower than the conventional ones, studies show.

Despite some concerns about the project – especially the vulnerability of such a broad network to system-wide failures – the emerging technology is being hailed as an ultimately far cleaner, more efficient way to deliver electricity across the country.

State Grid claims UHV power lines can reduce the density of PM2.5 smog particles, which are considered most dangerous to human health, by 4-5 per cent in central and eastern regions and cut coal consumption by 200 million tonnes a year.

via China to build new hi-tech power network to help fight pollution | South China Morning Post.

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14/05/2014

How Small U.S. Businesses Can Court Customers in China – Businessweek

Question: What are Chinese consumers looking for in an online shopping experience? What would you describe as the main reason websites aimed at Chinese consumers fail?

How Small U.S. Businesses Can Court Customers in China

Answer: News about Chinese tech companies making their way to Wall Street has been raising awareness about the vast potential Chinese market for U.S. small businesses. China is definitely interested in American-made goods. Here are some steps you can take to make sure your website is appealing to these new customers.

First, as I discussed recently, you need a website in Chinese. Make sure the site is created by a native Mandarin speaker who can convey the culture of your brand without a clunky verbatim translation that will fall flat, says James Chan, president of Asia Marketing & Management.

The main obstacle to selling online in China is the pervasive fear of being cheated or of buying a pirated product. “You need to find the best way of making a Chinese customer in front of a computer comfortable with the fact that you really have a brick-and-mortar company on American soil,” Chan says.

Pictures are a must: an exterior shot of your office or shop, a map showing your location, and pictures of you and your staff. A video of you talking about your business and its history (include Chinese subtitles) and giving a tour of your premises will go a long way. “Some companies ship orders with a certificate that says, ‘This product is made in America,’” Chan says. “Others will wrap the product in their city’s American newspaper for that day. Anything that authenticates you will help.”

Your site should also feature lots of good pictures of your products. “Use different angles, show different colors, and give detailed written descriptions as well,” advises Stanley Chao, managing director of All In Consulting, and author of Selling to China: A Guide to Doing Business in China for Small- and Medium-Sized Companies (2012). “Seeing is believing for the Chinese.”

Anything you can think of that would allow a wary Chinese customer to feel comfortable with your company will help: Your mailing address, your e-mail address, your telephone number. It will cost some money, but if you can, hire a customer service representative who speaks Chinese and can answer telephone queries or at least provide online chat support. “Also, always include 100 percent-guaranteed refunds, or even an added incentive where they get a small credit for the inconvenience of returning something they did not like,” Chao advises.

The piracy problem has prompted Chinese shopping sites such as Taobao.com to institute multilayered customer rating systems for every product, Chan says. You most likely cannot replicate that, but you can include comments on your site—in Mandarin and English—from your Chinese customers. “If others successfully bought your products, then [Chinese customers will think] maybe you are trustworthy.”

Being a small business will put you at a disadvantage in the minds of most Chinese consumers, Chan says, so if your company has any connection to a celebrity or an iconic American brand—such as a major corporation that buys your products, sells them in its retail outlets, or uses your services—trumpet that connection on your site, with pictures, if possible. “Maybe you make a food product that has been served at the White House, or your shoes were worn by an American celebrity,” he suggests. That will appeal to some shoppers in China. “Just make sure you’re being truthful,” Chan says.

Company websites fail in China for the same reasons they fail in the U.S.: They’re done on the cheap, so they are marred by misspellings, ugly design, bad photos, and technical glitches. “I’ve noticed that successful sites are updated frequently, so users want to come back to check for new information, special deals, or more products. This also shows that the site is active, it’s busy, and there are real people behind it,” Chao says.

The bottom line: Take care of your Chinese customers, and they will recommend your company to their friends, show off your products proudly, and visit your store when they’re vacationing in the U.S. When they do, get pictures and put them on your website, Chan says: “If you can build a history in China, where there are millions of people buying and selling online, you’ll win big business there.”

via How Small U.S. Businesses Can Court Customers in China – Businessweek.

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14/05/2014

China’s Young Migrant Workers Earn More, Send Less Home – Businessweek

China’s younger migrant workers are better educated, spend more, save less, and prefer living in China’s bigger cities. They make up close to one-half of the migrant workforce, according to a survey released Monday by China’s National Bureau of Statistics.

A migrant worker in Beijing

Those from the younger generation, born after 1980—or balinghou (literally, “80 after”)—number 125 million, or 46.6 percent of China’s 269 million migrant workers. One-third have a high school education or higher; that’s 19.2 percentage points more than the older generation, the survey shows.

Unlike their parents, they aren’t inclined to scrimp devotedly in order to send  hard-earned kuai back to the countryside. The average younger migrant worker remitted 12,802 yuan ($2,054) to a hometown in rural China; that’s about 30 percent less than older workers did.

via China’s Young Migrant Workers Earn More, Send Less Home – Businessweek.

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