Archive for ‘Economics’

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15/03/2013

* Beans means bonanza as oil frackers turn demand for guar into gold rush | The Times

The Times: “Just as America’s booming shale gas industry has helped to wean the country off an unhealthy dependence on imported Middle Eastern oil, a new national addiction is emerging — to the Indian guar gum on which the industry depends.

A merchant paints numbers on sacks of guar as a laborer loads them onto a truck at a grain market in Jodhpur, India

Soaring demand for guar from US oil companies — whose apparently insatiable appetite stems from its use in making the drilling fluids used in the process of hydraulic fracturing or “fracking” for shale gas — triggered a 374 per cent surge in Indian exports between January 2011 and January 2012.

With 80 per cent of global production of guar — which means cow feed in Hindi — India has a near monopoly on the bean, a fact that has led to a bonanza for Indian farmers who witnessed a ninefold increase in prices during 2012. “The price increase has been just astronomical,” says Naveen Mathur, commodities analyst at Angel Broking in Mumbai.

For decades, apart from cow feed, powdered guar has been used as a thickener in toothpaste, pet food and ice cream, but global demand has mushroomed in recent years because oil companies such as Halliburton and Schlumberger have required huge quantities for use as a thickening agent in the fluid needed to squeeze shale gas out of rock formations deep underground.

Almost overnight, guar has become India’s biggest agricultural export, shipments of which were worth $4.9 billion between April and January 2012, roughly double the value of the country’s exports of basmati rice and cotton combined.

Like the Texan oil booms of the 19th century, the guar rush is having a similar effect on the desert state of Rajasthan, where most of it is grown and where some farmers have earned more in a single season than the previous ten put together.

Guar beans, which are milled and powdered to produce gum that is eight times more viscous than cornstarch, grows only in rare climatic conditions — arid areas watered by intermittent but heavy monsoon rains.

But the huge surge in prices and exports has prompted some to ask whether the boom can last.

As Indian farmers frantically plant new areas to meet demand, US oil scientists in Houston are desperately trying to come up with synthetic alternatives, such as carbon methyl cellulose, which could rival guar on both price as well as efficacy.

Others are trying to develop new strains of guar that can be grown in different climatic conditions.

So far, they have not managed to do so — and India’s guar boom looks set to continue.

via Beans means bonanza as oil frackers turn demand for guar into gold rush | The Times.

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14/03/2013

* VW ramps up China production to offset weak Europe

Reuters: “Volkswagen, Europe’s biggest carmaker, plans to almost double production capacity in China over the next five years to grab a bigger slice of fast-growing emerging markets and offset declining demand at home.

A logo of Volkswagen is pictured a car dealer in the western city of Hamm January 14, 2013. REUTERS/Ina Fassbender

The German company said on Thursday it aimed to have the capacity to make over 4 million vehicles in China, already its largest market, by 2018.

Volkswagen (VW), which delivered around 9.1 million vehicles in total last year, has said previously it hopes to snatch the global sales crown from Toyota Motor Corp in 2018.

“VW’s future is increasingly being decided in China, Russia, India, the Americas and Southeast Asia,” Chief Executive Martin Winterkorn said as the company published its annual report. “This is where we will generate most of our growth in future.”

Carmakers across the world are relying on emerging markets for growth amid a protracted slump in recession-hit Europe, which if anything has got worse in recent months.

VW said last month, alongside its 2012 results, that growth in group operating profit might stall this year due to weakness in Europe, which would be the first time group earnings have not risen for four years.

In the annual report, which gave details on 2012 results for the first time, the company said operating profit at its main VW brand fell 4.1 percent to 3.64 billion euros last year despite higher sales, reflecting big discounts to lure European buyers.

The VW brand, which provides almost a third of group earnings, also saw western European deliveries drop 11.6 percent in the first two months of this year.

“We have to really put our shoulders to the wheel and give our very best,” Winterkorn said. “The environment is definitely a tough challenge, especially for European car makers.”

Operating profit at VW’s two Chinese joint ventures, in contrast, surged 42 percent last year to 3.7 billion euros.

VW has said previously the ventures would spend almost 10 billion euros ($13 billion) through 2015 on new plants, products and technologies.

The company said on Thursday it would set up a new assembly plant in southern China, adding to the dozen component, engine and production factories it already has in the country.

It also has another three assembly plants and two component facilities starting operation in 2013.

With 10.6 billion euros in net cash resources, VW is open to making acquisitions, Winterkorn told Reuters in an interview, noting “there are always opportunities one cannot pass up.””

via VW ramps up China production to offset weak Europe | Reuters.

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13/03/2013

* Unsafe bridges get a face-lift nationwide

China Daily: “More than 21,600 hazardous bridges in China have been renovated in the past 12 years, and transportation authorities across the country are attaching more importance to this issue, said the Ministry of Transport.

“Bridge construction and safety is an issue of public concern and one of the key tasks of transport departments across the country,” said a statement published on Tuesday on the ministry’s website.

A total of 43.88 billion yuan ($7.05 billion), including 17 billion yuan from the ministry, was invested in the renovation of 21,610 hazardous bridges from 2001 to 2012, curbing the high incidence of bridge accidents, according to the statement.

By the end of 2011, China had nearly 689,000 bridges, with almost 58,000 being large or ultra-large. The length of these two categories accounts for 51.8 percent of the total length of China’s bridges.

“With some bridges undergoing long-term, overburdened operation, we have been witnessing a high incidence of bridge accidents in our country,” the ministry said.

“Overloaded vehicles or those carrying items, which may damage the road surface, have often been observed, making it increasingly difficult to maintain the safety of bridges.”

A succession of high-profile bridge accidents in recent years has attracted a wave of attention and criticism from the public.”

via Unsafe bridges get a face-lift nationwide |Society |chinadaily.com.cn.

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13/03/2013

* Rains or Not, India Is Falling Short on Drinkable Water

NY Times: “CHERRAPUNJI, India — Almost no place on Earth gets more rain than this small hill town. Nearly 40 feet falls every year — more than 12 times what Seattle gets. Storms often drop more than a foot a day. The monsoon is epic.

Water containers are lined up at a community tap in Cherrapunji. Some people must walk long distances to get water.

But during the dry season from November through March, many in this corner of India struggle to find water. Some are forced to walk long distances to fill jugs in springs or streams. Taps in Shillong, the capital of Meghalaya State, spout water for just a few hours a day. And when it arrives, the water is often not drinkable.

That people in one of the rainiest places on the planet struggle to get potable water is emblematic of the profound water challenges that India faces. Every year, about 600,000 Indian children die because of diarrhea or pneumonia, often caused by toxic water and poor hygiene, according to Unicef.

Half of the water supply in rural areas, where 70 percent of India’s population lives, is routinely contaminated with toxic bacteria. Employment in manufacturing in India has declined in recent years, and a prime reason may be the difficulty companies face getting water.

And India’s water problems are likely to worsen. A report that McKinsey & Company helped to write predicted that India would need to double its water-generation capacity by the year 2030 to meet the demands of its surging population.

A separate analysis concluded that groundwater supplies in many of India’s cities — including Delhi, Mumbai, Hyderabad and Chennai — are declining at such a rapid rate that they may run dry within a few years.

The water situation in Gurgaon, the new mega-city south of Delhi, became so acute last year that a judge ordered a halt to new construction until projects could prove they were using recycled water instead of groundwater.

On Feb. 28, India’s finance minister, Palaniappan Chidambaram, proposed providing $2.8 billion to the Ministry of Drinking Water and Sanitation in the coming fiscal year, a 17 percent increase.

But water experts describe this as very little in a country where more than 100 million people scrounge for water from unimproved sources.

Some water problems stem from India’s difficult geography. Vast parts of the country are arid, and India has just 4 percent of the world’s fresh water shared among 16 percent of its people.

But the country’s struggle to provide water security to the 2.6 million residents of Meghalaya, blessed with more rain than almost any place, shows that the problems are not all environmental.”

via Rains or Not, India Is Falling Short on Drinkable Water – NYTimes.com.

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13/03/2013

* China pulls nearly 6,000 dead pigs from Shanghai river

BBC: “Officials say the number of pig carcasses found in Shanghai‘s Huangpu River has risen to nearly 6,000.

In a statement, Shanghai authorities said that 5,916 dead pigs had been removed from the river by Tuesday.

But they said water from the river was safe, with water quality meeting government-set standards.

It is believed that the pigs may have come from Jiaxing in the neighbouring Zhejiang province, although the cause of their deaths is still not clear.

In a statement, the Shanghai municipal government said that the water in Huangpu River, which is a major source of drinking water for Shanghai, was safe. It also said that no diseased pork had been detected in markets.

However, the news has been met with scepticism by some users on weibo, China’s Twitter equivalent, where the hashtag “Huangpu River dead pigs” has emerged.

“Cadres and officials, we are willing to provide for you, but please don’t let us die from poisoning. Otherwise who will serve you? Please think twice,” said netizen Shi Liqin.

“This river’s colour is about the same as excrement, even if there weren’t dead pigs you couldn’t drink it,” said another, with the username Yuzhou Duelist.

The general mood is of concern, rather than outrage or panic, reports the BBC’s John Sudworth in Shanghai, as the Chinese public are well used to food scandals, such as the use of oil scraped from sewers for cooking, and plasticiser found in baby formula.”

via BBC News – China pulls nearly 6,000 dead pigs from Shanghai river.

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12/03/2013

* Africa told to view China as competitor

CNN: “Africa must shake off its romantic view of China and accept Beijing is a competitor as much as a partner and capable of the same exploitative practices as the old colonial powers, Nigeria’s central bank governor has warned.

As manufacturing in Africa slows, Nigeria's central bank governor cautions against exploitative forms of trade with China.

Reflecting the shifting views of a growing number of senior African officials who fear the continent’s anaemic industrial sector is being battered by cheap Chinese imports, Lamido Sanusi cautions that Africa is “opening itself up to a new form of imperialism”.

“China takes from us primary goods and sells us manufactured ones. This was also the essence of colonialism,” he writes in the Financial Times. His remarks are among the most trenchant yet by a serving African official about the continent’s ties with the world’s second largest economy.

Trade between China and Africa was worth more than $200bn in 2012, 20 times what it was in 2000 when Beijing committed to a policy of accelerated engagement. It has been a period of strong growth partly thanks to Asian demand for African resources . But a boom in commodities, services and consumer spending has coincided with the relative decline of African manufacturing from 12.8 per cent to 10.5 per cent of regional GDP, according to UN figures.”

via Africa told to view China as competitor – CNN.com.

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11/03/2013

* Yuan Flows a More Freely as China Relaxes Controls

WSJ: “The use of China’s yuan abroad is rising as Beijing slowly loosens its grip and allows a wider group of investors to buy the nation’s currency, stocks and bonds.

The offshore yuan in Hong Kong, where the currency is freely traded, is near the highest in a month partly because investors are taking advantage of a slight relaxation in rules on its capital markets. Last week, Beijing allowed Hong Kong units of Chinese banks and insurers, as well as Hong Kong-registered financial institutions, to invest in China’s stocks and bonds for the first time with yuan raised offshore.”

via Yuan Flows a More Freely as China Relaxes Controls – WSJ.com.

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11/03/2013

* Toy Maker Brings K’Nex Production Back to U.S.

Yet another example of manufacturing returning to the West.

WSJ: “As every American child knows, toys come from the North Pole or—more likely—China. But K’Nex Brands LP, a family-owned company in this Philadelphia suburb, is trying to prove they can still be made in America.

image

Over the past few years, K’Nex has brought most of the production of its plastic building toys back to its factory in Hatfield from subcontractors in China. To make that possible, the company has redesigned some of the toys and even handed over to kids a bit of the assembly formerly performed by hand in China.

“In the long term, it’s much better for us to manufacture here,” says Joel Glickman, chairman of K’Nex and its manufacturing affiliate, Rodon Group. The two companies have combined sales of more than $100 million, making them small players compared with American rivals Hasbro Inc. HAS +1.49% and Mattel Inc., MAT +0.41% neither of which has announced plans to shift production to the U.S.

By moving production closer to U.S. retailers, K’Nex said it can react faster to the fickle shifts in toy demand and deliver hot-selling items to stores faster. It also has greater control over quality and materials, often a crucial safety issue for toys. And as wages and transport costs rise in China, the advantages of producing there for the U.S. market are waning.

But K’Nex has found it impossible so far to produce 100% U.S.-made toys, the firm’s goal. The K’Nex experience shows both the attractions of “reshoring” production and the difficulties of making that happen in a country whose manufacturing infrastructure has atrophied.

Lining up suppliers has been a complicated chore in the U.S., where toy-making skills have faded. China, by contrast, has a vast, efficient network of suppliers and skilled labor. “In China, you can go over with just a drawing and say, ‘I need a million of these,'” says Michael Araten, chief executive of K’nex. That helps account for a huge U.S. deficit in the toy trade. In 2012, U.S. imports of toys, games and sporting goods, mostly from China, totaled $33.5 billion, or about three times U.S. exports of such items.”

via Toy Maker Brings K’Nex Production Back to U.S. – WSJ.com.

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09/03/2013

* Some Chinese Seek a Divorce to Avoid Real Estate Tax

NYT: “When the Chinese government announced new curbs on property prices this month, homeowners bombarded social networking sites with complaints. They formed long lines at property bureaus to register to sell their homes before the restrictions went into effect.

And some couples went even further: they filed for divorce.

Divorce filings shot up here and in other big cities across China this past week after rumors spread that one way to avoid the new 20 percent tax on profits from housing sales was to separate from a spouse, at least on paper.

The surge in divorce filings is the latest indication of how volatile an issue real estate has become in China in the past decade and how resistant people are to additional taxes.

Worried that housing prices are spiraling out of control and threatening social stability, the central government regularly rolls out measures aimed at damping demand and weeding out speculators.

Then home buyers, sellers, property developers and even local governments — which are typically heavily dependent on land sales for income — try to find ways to get around the restrictions.

“They always do this,” said Du Jinsong, a property analyst in Hong Kong for Credit Suisse. “When they implement new measures, people are always trying to circumvent the rules.”

China’s housing market has been one of the prime engines of economic growth in the past decade, and recently a sharp upturn in prices has reignited fears about inequality and a housing bubble.

On March 1, just days before the opening of China’s annual legislative session, the powerful State Council, which is led by Prime Minister Wen Jiabao, announced a series of new property measures that analysts say unsettled the housing market.

In its statement, the State Council, or cabinet, said that local governments should strictly enforce an earlier rule that ordered people selling a secondary home to pay a 20 percent tax on the profit.

Almost immediately, housing administration bureaus and real estate trading centers in big cities were flooded with people hoping to sell their apartments before the restrictions took effect. (Most local governments have not yet announced a deadline.)”

via Some Chinese Seek a Divorce to Avoid Real Estate Tax – NYTimes.com.

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09/03/2013

* Work-Life Balance a Challenge for Indian Women

WSJ: “Yes, the number of women opting for MBAs in India is increasing. And yes, India Inc. is consistently working to hire more women, who are young, ambitious and increasingly qualified.

But can these women strike a good work-life balance?

Even though India Inc. has been encouraging a greater number of women in the workplace, that number is still low. A new study by Grant Thornton, a global accounting and advisory firm, shows that on average, women make up only 15% of the workforce in Indian companies. Globally, this figure stood at 35%. Today, only 1.8% of CEOs in India are women.

How to enhance the role of women in India Inc. was a question addressed by many of the businesswomen who gathered in New Delhi’s Habitat Center on Women’s Day, Friday.

Sunita Cherian, vice president of human resources at Wipro, speaking on the sidelines of the event, said that her company tries to meet the changing priorities of their women employees depending on their stages of life.

For instance, the company is more flexible on working hours for women after they get married, says Ms. Cherian. Wipro Ltd. is also determined to persuade women to stay in their job, even if they may be tempted to quit and rely on their partners’ incomes instead.

“This is the stage where a woman might feel that a dual-income is not a necessity,” she says.

Ms. Cherian, who has spent 17 years working at Wipro Ltd., believes that her “ambition was fuelled” by the fact that she stepped into the right organization and the right family after marriage.

Srimati Shivashankar, who is in charge of promoting greater gender diversity at HCL Technologies, says she had to work harder than others as she was climbing the corporate ladder. Cracking stereotypes like “think director, think male” was not easy, says Ms. Shivashankar.

Striking a good work-life balance is much more important for women than for men. A new global research by Accenture, a consulting firm, found that around 70% of female respondents in India said that work-life balance was key to their definition of “success” in their career, while only 40% of men felt that.

The study also found that the difficulty of balancing life and work is a key reason why women in India leave their jobs. While 24% of Indian men surveyed said they quit their jobs because of long or inflexible working hours, for women that figure was 48%.

via Work-Life Balance a Challenge for Indian Women – India Real Time – WSJ.

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Posted in Economics, employment, Gender imbalance, Gender issues, higher education, India alert, Politics, Technology, Women's rights | 3 Comments »

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