Archive for ‘Economics’

30/05/2013

Chinese wonder why their tourists behave so badly

SCMP: “From faking marriage certificates to getting honeymoon discounts in the Maldives to letting children defecate on the floor of a Taiwan airport, Chinese tourists have recently found themselves at the centre of controversy and anger.

tourists.jpg

Thanks to microblogging sites in China, accounts of tourists behaving badly spread like wildfire across the country, provoking disgust, ire and soul-searching.

While in the past such reports might have been dismissed as attacks on the good nature of Chinese travellers, people in the world’s second-largest economy are starting to ask why their countrymen and women are so badly behaved.

“Objectively speaking, our tourists have relatively low-civilised characters,” said Liu Simin, researcher with the Tourism Research Centre of Chinese Academy of Social Sciences.

“Overseas travel is a new luxury, Chinese who can afford it compare with each other and want to show off,” Liu said. “Many Chinese tourists are just going abroad, and are often inexperienced and unfamiliar with overseas rules and norms.”

When a story broke recently that a 15-year-old Chinese boy had scratched his name into a 3,500-year-old temple in Egypt’s Luxor, the furore was such that questions were even asked about it at a Foreign Ministry news briefing.

“There are more and more Chinese tourists travelling to other countries in recent years,” ministry spokesman Hong Lei said on Monday.

“We hope that this tourism will improve friendship with foreign countries and we also hope that Chinese tourists will abide by local laws and regulations and behave themselves.””

via Chinese wonder why their tourists behave so badly | South China Morning Post.

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30/05/2013

China designates service industry new growth engine

Xinhua: “China will step up efforts to build up its service industry to make it a new engine to power sustainable growth, Premier Li Keqiang said on Wednesday.

CHINA-BEIJING-LI KEQIANG-GLOBAL SERVICES FORUM (CN)

Speaking at a summit during the second Beijing International Fair for Trade in Services, Li stressed the important role of the service industry in job creation and economic upgrading.

“Increasing service supplies and improving service qualities will help unleash huge potential in domestic demand, and thus offer firm support for stable economic growth and structural optimization,” he said.

The latest emphasis on service trade is part of China’s efforts to drive growth in the sector to build an upgraded version of the economy.

In 2012, the service industry accounted for 44.6 percent of gross domestic product (GDP), up 2.7 percentage points from a year earlier but still significantly below the share of 60 percent or more seen in many developed countries.

Li noted the key to spur growth in the area lies in reform and opening-up to remove institutional barriers.

“China will further open up the service industry, and pilot free trade experimental zones to tap development,” he said, adding that the government will seek balanced trade and encourage cross-border investments in the sector.

The premier stressed countries should abide by the win-win principles of rising against protectionism, removing trade barriers, and coordinating efforts to facilitate personnel flows, recognition of qualifications and a setting of standards.

Developed countries should lead the effort to open up their markets, while developing economies should be actively engaged in building the global trade mechanism and standards in the service industry, according to Li.

Under China’s 12th Five-Year Plan (2011-2015), the country aims to bring the sector’s proportion of GDP to 47 percent by 2015 and to make it a strategic focus for the country’s industrial restructuring and upgrading to ease reliance on traditional manufacturing.”

via China designates service industry new growth engine – Xinhua | English.news.cn.

See also: https://chindia-alert.org/2013/04/19/chinas-growth-the-making-of-an-economic-superpower-dr-linda-yueh/

30/05/2013

In China, Big Data Is Becoming Big Business

Business Week: “With 1.3 billion people, a quickly expanding urban economy, and rising rates of Internet and smartphone penetration, China generates an immense amount of data annually. If streams of that data can be appropriately sifted, analyzed, and stored, companies seeking to understand China’s often-fickle consumers could have access to valuable real-time insights—and perhaps early warning to the next big consumer trends.

Shopping drives Beijing's Sanlitun area

At a presentation last week at Peking University’s Guanghua School of Management, China’s premier business school, associate professor of marketing Meng Su predicted: “China will soon become world’s most important data market.” He advised job seekers in China and elsewhere to consider training for a new career path as “data scientists,” which he described as “one of the most valuable jobs in the next 10 years.” Interpreting big data seems poised to become big business.

China’s government has signaled its intention to help domestic enterprises develop the infrastructure necessary to store and analyze “big data”—that is, data sets too large to be handled by traditional database-management tools and software. The current Five Year Plan, which aims to stimulate “higher-quality growth,” names seven strategic “emerging industries,” including next-generation information technology.

Meanwhile, leading Chinese firms, especially Internet companies, have already begun to incorporate big data into their strategies. Jack Ma, founder and then-chief executive officer of China’s e-tail giant Alibaba, declared last fall that the company should focus on three pillars of future business: e-commerce, finance (providing loans to small and medium enterprises in China), and data mining. In January, Alibaba underwent a restructuring that, among other changes, created a data-platform division with about 800 employees, as reported in the Chinese financial magazine, Caixin. The Alibaba Group has just begun to scratch the surface of analyzing the reams of user data generated through its business-to-business e-commerce site and its massive consumer-to-consumer platform, Taobao.com.

Professor Su warned, however, that the hype around big data in China may be a case of too much, too soon: “If everyone is talking about something, there is probably already a bubble,” at least of expectations, he said. “Most Chinese companies don’t own enough data, let alone know how to utilize, analyze, or monetize their data.” In other words, a select number of companies in China that do own large quantities of user-generated data—such as Alibaba and Baidu (BIDU)—hold the cards and may profitably sell that valuable information to other vendors.”

via In China, Big Data Is Becoming Big Business – Businessweek.

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.

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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

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.

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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.

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