Archive for ‘Economics’

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12/11/2013

China vows ‘decisive’ role for markets, results by 2020 | Reuters

China\’s leaders pledged to let markets play a \”decisive\” role in the economy as they unveiled a reform agenda for the next decade on Tuesday, looking to secure new drivers of future growth.

A worker wields a hammer at a demolition site in front of new residential buildings in Hefei, Anhui province, October 19, 2013. REUTERS/Stringer

China aims to achieve \”decisive results\” in its reform push by 2020, with economic changes in focus, the ruling Communist Party said in a communiqué released by state media at the end of a four-day conclave of its 205-member Central Committee.

The self-imposed deadline for progress – rare for Beijing to lay out in such clear terms – together with the creation of a top-level working group and an emphasis on \”top-level design\”, suggest a more decisive reform push by the administration of President Xi Jinping and Premier Li Keqiang than under the previous leadership.

They must unleash new sources of growth as the economy, after three decades of breakneck expansion, begins to sputter, burdened by industrial overcapacity, piles of debt and eroding competitiveness.

\”You should look back in history. When Deng Xiaoping started the reform and opening movement, he actually did something very similar in nature, creating a very powerful working group,\” said Steve Wang, China chief economist with The Reorient Group in Hong Kong.

\”These guys report direct into the power center of the Communist Party. This is definitely not something to be looked at as another layer of bureaucracy, this is something to speed things up, to make things more efficient.\”

The leaders also set up a state committee to improve security as Beijing seeks to tackle growing social unrest and unify the powers of a disparate security apparatus in the face of growing challenges at home and abroad.

While the statement was short on details, which prompted disappointment on social media, it is expected to kick off specific measures by state agencies over the coming years to gradually reduce the role of the state in the economy.

Historically, such third plenary sessions of a newly installed Central Committee have acted as a springboard for key economic reforms, and the follow-up to this meeting will serve as a first test of the new leadership\’s commitment to reform.

via China vows ‘decisive’ role for markets, results by 2020 | Reuters.

Posted in China alert, Economics, Market economy, Reform | Leave a Comment »

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11/11/2013

High-speed railways: Faster than a speeding bullet | The Economist

China’s new rail network, already the world’s longest, will soon stretch considerably farther

THE new high-speed railway line to Urumqi climbs hundreds of metres onto the Tibetan plateau before slicing past the valley where the Dalai Lama was born. It climbs to oxygen-starved altitudes and then descends to the edge of the Gobi desert for a final sprint of several hundred windblown kilometres across a Martian landscape. The line will reach higher than any other bullet-train track in the world and extend what is already by far the world’s longest high-speed rail network by nearly one-fifth compared with its current length. The challenge will be explaining why this particular stretch is necessary.

Record-breaking milestones have become routine in the breathtaking development of high-speed railways in China, known as gaotie. In just five years, since the first one connected Beijing with the nearby port of Tianjin in 2008, high-speed track in service has reached 10,000 kilometres (6,200 miles), more than in all of Europe. The network has expanded to link more than 100 cities. In December the last section was opened on the world’s longest gaotie line, stretching 2,400km from Beijing to Shenzhen, on the border with Hong Kong (see map). The network has confounded some sceptics who believed there would not be enough demand. High-speed trains carry almost 2m people daily, which is about one-third of the total number of rail passengers.

 

Most of China’s gaotie construction has focused on the country’s densely populated east and centre. The Beijing-Shenzhen line, which is due to be extended into Hong Kong by 2015, links half a dozen provinces and 28 cities. In 2009 work began on the section that will connect the north-west of the country, a line that could hardly be more different from those that criss-cross the booming east. It stretches 1,776km from Lanzhou, the capital of the western province of Gansu, to Urumqi, the capital of Xinjiang, an “autonomous region” bordering on Central Asia. Officials put the cost at 144 billion yuan ($24 billion); cheap perhaps compared with the 400-billion-yuan line from Beijing to Shenzhen, but it traverses such a vast stretch of barely inhabited terrain that land and rehousing costs are negligible.

Officials have given the project the ponderous name of the Lanxin Railway Second Double-Tracked Line. This is to distinguish it from a conventional line from Lanzhou to Xinjiang (the first syllables of which form the name Lanxin) that was completed in 1962. Oddly, however, it does not follow the same route. Instead of heading north from Lanzhou along the old Silk Road through Gansu, it detours into adjacent Qinghai province on the Tibetan plateau and opts for a far tougher route through the snowy Qilian Mountains before re-entering Gansu 480km later and picking up the old trail into Xinjiang.

via High-speed railways: Faster than a speeding bullet | The Economist.

Posted in China alert, Economics, Transport | 1 Comment »

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09/11/2013

India, Kuwait to take relationship beyond buyer-seller partnership – The Hindu

India and Kuwait on Friday held talks in the areas of investment, trade, and security, and of joint ventures in the energy sector, to take their relationship beyond the present buyer-seller partnership.

Prime Minister Manmohan Singh welcomes his Kuwaiti counterpart, Sheikh Jaber Al-Mubarak Al-Hamad Al- Sabah, at the Rashtrapati Bhavan in New Delhi on Friday. Photo: R.V. Moorthy

Five pacts signed

As Kuwait holds over $350 billionin surplus funds and accounts for 10 per cent of India’s oil imports, talks between Prime Minister Manmohan Singh and his Kuwaiti counterpart Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah centred around these two aspects. As many as five pacts were signed in the presence of the two leaders.

Strategic partnership

In his statement, Dr. Singh said the two leaders discussed the development of a more strategic partnership in the energy sector through long-term supply contracts and the establishment of upstream and downstream joint ventures in the petroleum and petrochemical sectors.

An indication of the importance attached by India to these areas came from separate talks between the Kuwaiti leadership and Union Finance Minister P. Chidambaram and Commerce Minister Anand Sharma, besides a luncheon meeting with leading industrialists.

India has proposed several specific projects for investments by the Kuwait Petroleum Corporation.

Dr. Singh noted that Sheikh Jaber’s response was encouraging.

“I am hopeful that we can translate some of these proposals into concrete symbols of cooperation very soon,” he said.

A delegation of the Kuwait Investment Authority is expected visit India to explore opportunities for investing in the country as part of the $350 billion fund which is growing by $25 billion annually.

India expressed interest in a $100 billion Kuwaiti infrastructure renewal programme.

Security cooperation

The two leaders also discussed security cooperation and agreed to strengthen cooperation in counter-terrorism through institutionalised dialogue and training.

Joint Secretary (Gulf) in the Ministry of External Affairs, Mridul Kumar said, “We thought we will move our relationship from a buyer-seller relationship to a more strategic relationship. Now let us not only buy oil, but look at joint ventures in petrochemical complexes, fertilizers and working together in third countries.”

via India, Kuwait to take relationship beyond buyer-seller partnership – The Hindu.

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09/11/2013

Chinese tourists: Mind your manners | The Economist

IT’S HARD being a Chinese tourist. Reviled for bad behaviour one day and ripped off by everyone from taxi drivers to pickpockets the next, China’s newly minted travelling classes are having a tough year.

In typical fashion, the Chinese government appears intent on regulating away some of that pain. On October 1st China’s tourism industry came under a new set of rules, most intended to curb corruption in domestic travel and ease the burden on guides, groups and tourists travelling within the country. The law includes at least one clause that seems to have been inspired by a series of incidents that have revealed the apparently bad manners of Chinese tourists, on the mainland and overseas.

The number of Chinese travelling at leisure, both domestically and abroad, has grown tremendously in recent years, boosted by rising incomes, a less restrictive passport regime and softer limits on spending. The new tourism law aims to help the tourists themselves, mainly by preventing practices like the forced-march shopping excursions that are often led by ill-paid tour guides. The law also provides helpful advice to the many millions of mainland Chinese who do their pleasure-seeking abroad.

Section 13 advises Chinese tourists to behave themselves wherever they go in the world. The article is a nod to high-profile embarrassments like the one that a teenager caused by carving his mark—“Ding Jinhao was here”—into an ancient wall in the Egyptian ruins at Luxor earlier this year. Chinese tourists have drawn scorn after posting online snapshots of themselves hunting and devouring endangered sea clams in the Paracel islands, and others have produced fake marriage papers at resorts in the Maldives, in order to take advantage of free dinners. (Closer to home, the new law might have given pause to the group of Chinese tourists on Hainan island who inadvertently killed a stranded dolphin by using it as a prop in group portraits.) Spitting, shouting and sloppy bathroom etiquette have made the Chinese look like the world’s rudest new tourists, from London to Taipei and beyond.

A vice-premier, Wang Yang, made note of the problem a few months ago, calling on his countrymen to watch their manners when travelling abroad. The new regulations add legal force to his plea.

“Tourists shall respect public order and social morality in tourism activities, respect the local customs, cultural traditions and religious beliefs, take care of tourism resources, protect the ecological environment and respect the norms of civilised tourist behaviours,” as Section 13 instructs.

Although it might be difficult to regulate such sensitive matters by fiat, this kind of nudge can have an impact in China. These few headline-grabbing humiliations, along with an ongoing campaign that mainland visitors face in Hong Kong, have made many relatively seasoned Chinese travellers more careful about the way they comport themselves abroad. In Paris, ever a favourite destination for Chinese tourists and shoppers, polite French-speaking Chinese guides shepherd their flocks through the sites, apologising when any of their charges bumps into others.

via Chinese tourists: Mind your manners | The Economist.

Posted in Affluence, bad behaviour, China alert, Economics, Social & cultural, Tourism, tourist | Leave a Comment »

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09/11/2013

China’s outward investment: The second wave | The Economist

HAS China arrived at its Rockefeller Centre moment? In the late 1980s as Japan’s miracle economy was soaring, the Mitsubishi Estate Company bought the Rockefeller Centre in Manhattan, a landmark complex built by the eponymous oil and banking clan. Alas, Mitsubishi had to sell, at a big loss, after Japan’s asset bubble popped. Now it is Chinese firms that are seeking such trophies in New York.

Fosun International, a Chinese conglomerate, has just agreed to pay $725m for 1 Chase Manhattan Plaza, a skyscraper near Wall Street, commissioned by David Rockefeller and completed in 1961. This follows a recent investment by Greenland, a Chinese state-owned firm, in Atlantic Yards, a big development in Brooklyn. Earlier this year a consortium involving Zhang Xin, a founder of Soho China, a private property giant, bought a stake in the General Motors Building in Manhattan.

It does not necessarily follow that this assault on New York will also end in tears. Whereas Mitsubishi overpaid, the Chinese investors seem to be negotiating reasonable deals. Michael Cohen of Colliers International, a property-services firm, says that although Fosun must modernise the ageing Chase tower, “The price per square foot appears to be a bargain.”

A shift is under way in China’s overseas direct investment (ODI), which is growing fast but is still dwarfed by foreign investment into China (see chart). The first wave largely involved state-owned firms, and was directed at acquiring energy, minerals and land in poor countries. Resource insecurity lingers—witness the 20% stake taken this week by Chinese state firms in Libra, a giant Brazilian offshore oilfield—but it is no longer the driving force. New motives propel the second wave.

China’s government is keen to boost the miserable yields it gets on its overseas investments, argues Thilo Hanemann of Rhodium Group, a consultant. So it is now encouraging state firms to invest in property in prime locations, and in infrastructure and other assets in mature markets. In Britain, they have invested in Thames Water and Heathrow airport. This week the British government said a consortium involving Chinese state firms could build a nuclear-power station in the west of England.

Private firms seeking brands and technology are also playing a big role in this second wave. Geely, a Chinese carmaker, bought Volvo of Sweden. Dongfeng, another Chinese firm, is said to be considering buying a stake in Peugeot-Citroën, an ailing French carmaker. On October 22nd Alibaba, a Chinese e-commerce giant, said it would open a new division in America to invest exclusively in internet start-ups. And Lenovo, a computer-maker, is preparing a bid for Canada’s BlackBerry.

As a result, the share of Chinese ODI going to rich countries has shot up from just a tenth in 2002 to two-thirds last year. Like Japan before it, China could yet experience a crash. But the shift in investment from free-spending state firms seeking resources to frugal private ones chasing markets and innovation is a positive sign.

via China’s outward investment: The second wave | The Economist.

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09/11/2013

The Skyscraper Hater Behind the Year’s Best Skyscraper – Businessweek

The Council on Tall Buildings and Urban Habitat chose the best skyscraper of 2012 last night: Beijing’s CCTV building, the headquarters of the Chinese Central Television designed by Rem Koolhaas and his Office for Metropolitan Architecture.

The China Central Television (CCTV) Headquarters in Beijing

It is one of the more unusual designs ever to have been built, on any scale, with two 44-story towers linked by a 13-story connecting bridge that takes a 90-degree turn. While the locals have likened it to a big pair of boxer shorts and a woman on her knees, it strikes this writer as a tower that started out ready to soar, thought better of it, took a turn, and plunged back into the ground.

The CCTV building is the product of an architect who not many years ago pronounced his interest in destroying the entire notion of the skyscraper, protesting the normally vertical and incrementally higher designs of his colleagues. “When I published my last book, Content, in 2003, one chapter was called ‘Kill the Skyscraper,’” said Koolhaas in a statement from the Council on Tall Buildings. “Basically it was an expression of disappointment at the way the skyscraper typology was used and applied. I didn’t think there was a lot of creative life left in skyscrapers. Therefore, I tried to launch a campaign against the skyscraper in its more uninspired form.”

via The Skyscraper Hater Behind the Year’s Best Skyscraper – Businessweek.

Posted in China alert, Construction, Economics | 2 Comments »

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09/11/2013

Big Money Behind Chinese Soccer Strategy – China Real Time Report – WSJ

If money can buy success in the world of sport, then in China, it matters greatly to whom it belongs.

As China stands on the cusp of its first taste of international soccer success, with Guangzhou Evergrande taking on FC Seoul in the final of the Asian Champions League on Saturday night, it’s clear that without huge sums of money, this may never have been possible. And not just any money, but real estate money.

As preparations took place outside Tianhe Stadium in Guangzhou’s business district on Saturday morning, the clout and wealth of the local team’s owner, Evergrande Real Estate Group, was plain to see. Rows of trucks bearing the name “Evergrande Music” lined up outside the stadium in preparation for huge post-match bash. With a two-goal advantage after a 2-2 draw in Seoul last month (away goals count for more), Evergrande are the favorites to win Saturday night’s match.

Guangzhou-based Evergrande is owned by Xu Jiayin, who according to the latest Hurun Report rich list has a net worth of $7.7 billion. He also has political clout, as a member of the country’s top advisory body, the Chinese People’s Political Consultative Conference.

He bought the disgraced Guangzhou Pharmaceutical club in 2010 for 100 million yuan ($16.4 million), after the team was relegated over a match-fixing scandal dating back to 2006. After that, he signed China’s national team captain Zheng Zhi, as well as three players from South America.

“There will be no chance for a state-owned company to compete against private real estate money,” said sports columnist Yan Qiang.

China’s real estate developers may not necessarily be the biggest or most profitable companies in the country, especially compared to state-owned behemoths. But the industry is a source of some of the more colorful and freewheeling businesspeople — a number of whom are willing to take risks on sports teams for the prestige they bring.

In the 2013 Chinese Super League season, state-backed Shandong Luneng Taishan placed second but lagged far behind Evergrande in points. Beijing Guoan, backed by state-owned conglomerate Citic Group, placed third. Real estate money came into play for Guizhou Renhe which ranked fourth. The team received large sums of money from developer Renhe Commercial Holdings Co. Ltd. in 2010, after the team, which was then based in Shaanxi province, flirted with relegation to the second division.

Other teams in the Super League propped up by real estate interests include Guangzhou R&F, which finished 6th this year and Hangzhou Greentown, which finished 12th.

via Big Money Behind Chinese Soccer Strategy – China Real Time Report – WSJ.

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08/11/2013

Why banking mints the most women CEOs in India – Economic Times

As Arundhati Bhattacharya gets set to take charge as the chairperson of the country\’s largest bank State Bank of India (SBI), she looks likely to join the steadily expanding club of women currently holding the top job in Indian banks.

Bhattacharya will be the latest entrant, joining the likes of Chanda Kochhar, MD and CEO of ICICI Bank; Shikha Sharma, MD and CEO, Axis Bank; Naina Lal Kidwai, country head, HSBC; Kaku Nakhate, president and country head (India), Bank of America Merrill Lynch, Vijayalakshmi Iyer, CMD, Bank of India; Archana Bhargava, CMD, United Bank of India and Shubhalakshmi Panse, CMD of Allahabad Bank.

via Why banking mints the most women CEOs in India – Economic Times.

Posted in Banking, Economics, Gender imbalance, Gender issues, India alert, Social & cultural, Women's rights | 1 Comment »

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08/11/2013

Chinese Back to Buying Japanese Cars as Territorial Tensions Ease – Businessweek

A year ago, Honda Motor (HMC) salesman Liu Hao had one of China’s most hopeless jobs: persuading local consumers to purchase Japanese cars. After a territorial dispute over uninhabited islands in the East China Sea flared up in late summer of 2012, Chinese protesters took to the streets to denounce their Asian neighbor, overturning Japanese autos and attacking Japanese factories and restaurants. The unrest had a chilling effect on Japanese auto sales in China. Amid angry talk of boycotts, Honda sales fell more than 50 percent in October of last year and continued to drop well into 2013.

Burned cars at a Toyota dealership after they were set on fire by anti-Japan protesters in Qingdao, China, in November 2012

Today the two nations are still arguing about the islands, controlled by Japan and claimed by China, but tensions have eased, and customers are in the mood to buy Japanese products again. On a recent November afternoon, about 20 people crowded into a Honda showroom in central Beijing, checking out the new Jade sedan, launched in September for the Chinese market. Local buyers “trust the good reputation and engine of Honda,” says salesman Liu, 31. Besides, he says, fighting between China and Japan “would destroy the world, so there won’t actually be a war.”

Honda’s sales in China jumped 212 percent in October from the same period the year before, following a 118 percent increase in September. One potential customer is Mr. Song, a 28-year-old banker who won’t give his full name. He’s buying a Honda Civic and isn’t worried that a revival of anti-Japanese sentiment might endanger his vehicle. Given public revulsion at official corruption reported by the state media, he says, drivers of cars with government license tags “should be more worried about citizen anger and the danger of having cars smashed” than Honda drivers in Beijing.

via Chinese Back to Buying Japanese Cars as Territorial Tensions Ease – Businessweek.

Posted in China alert, Economics, Good news, Neighbour conflict, Politics, Territorial dispute | Leave a Comment »

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08/11/2013

China to loan Pacific island nations $1 billion | Reuters

Having woo-ed all the large countries, China is now wooing the smaller ones too.  See – https://chindia-alert.org/2012/12/31/question-who-did-china-woo-in-2012/ (We have been tracking China’s wooing in 2013 and will post the list in early 2014).

“China will provide a concessionary loan of up to $1 billion to Pacific island nations to support construction projects, state media on Friday cited Vice Premier Wang Yang as saying, a part of the world where Beijing and Taiwan compete for influence.

Political map of Oceania

Political map of Oceania (Photo credit: Wikipedia)

Wang made the announcement at a forum with Pacific island nations in the southern Chinese city of Guangzhou, the official Xinhua news agency reported. It provided no other details on the loan.

China will also build medical facilities in the region and send medical teams as well as invest in green energy projects, Xinhua cited Wang as saying.

The meeting was attended by representatives from Micronesia, Samoa, Papua New Guinea, Vanuatu, the Cook Islands, Tonga, Niue and Fiji, the news agency added.

The Pacific has traditionally been a site of competition for diplomatic recognition between China and Taiwan, the self-ruled island China claims as its own.

In the region, Taiwan maintains formal ties with Kiribati, Nauru, Palau, the Marshall Islands, the Solomon Islands and Tuvalu. Taiwan has also supported development projects and provided loans.

However, China and Taiwan have maintained an unofficial diplomatic truce and not tried to court each other\’s allies in the developing world since they signed a series of landmark trade and economic deals in 2008, ushering in improved ties.”

via China to loan Pacific island nations $1 billion | Reuters.

Posted in China alert, Economics, GeoPolitics, Politics | Leave a Comment »

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