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22/12/2012

* China opens second railway to Kazakhstan

China’s “go west” policy now extends even further west than its most western province! This is good news for Xinjiang, long deemed by its Muslim residents to be looked down upon and mistreated by the majority Han Chinese, for Chinese migrants who would otherwise have headed east into heavily crowded and over-competitive eastern sea board, and for Kazakhstan and countries beyond. A win-win-win situation, indeed.

Xinhua: “A second cross-border railway between China and Kazakhstan opened Saturday.

The railway is composed of a 292-km section in China and the remaining 293-km section in Kazakhstan. They were joined at the Korgas Pass in Xinjiang Uygur autonomous region.

Contruction of the Chinese side of the railway cost 6 billion yuan (962 million U.S. dollars), railway officials said.

The rail line is expected to ease the burden of the Alataw trade pass, where the first China-central Asia railway traverses. It handles 15.6 million tonnes of train-laden cargo a year.

Industry observers expect the Korgas pass, which now connects China and Kazakhstan by a railway, a highway, and an oil pipeline, to handle 20 million tonnes of cargo a year by 2020 and 35 million tonnes a year by 2030.

The railway launch followed the meet of Chinese Vice Premier Wang Qishan and his Kazakh counterpart Kairat Kelimbetov in Astana earlier this month, vowing to enhance bilateral cooperation in energy, trade, communication and other fields.

Wang suggested enhancing the China-Kazzkhstan interconnection by the rails and a trans-continental highway that links China with Europe.

China and five central Asian countries have been deepening trade and economic cooperations in recent years. The total trade volume between China and central, west, and south Asian countries increased from 25.4 billion U.S. dollars to more than 370 billion, up about 30 percent annually.

In particular, trade between Xinjiang and five central Asian countries reached a historical high of 16.98 billion U.S. dollars last year, according to the customs figures.

Observers said the railway will also help the border city of Korgas become a key logistics hub with a network of highways, railways and pipelines.

Since 2010, the central government has been redoubling the efforts to build Xinjiang into a regional economic center, eyeing its geological closeness to central Asia and the region’s abundant natural resources including oil, coal and natural gas.”

via China opens second railway to Kazakhstan – Xinhua | English.news.cn.

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22/12/2012

* Suzuki to Start Building Gujarat Plant Early 2013

Good news for India.

WSJ: “The local unit of Suzuki Motor Corp.  expects to start building its third factory in India early next year to meet potential growth in demand for its vehicles in the local market and overseas.

R.C. Bhargava, chairman of Maruti Suzuki India Ltd.,  said Friday that car sales in India will likely grow in single digits this financial year and the next due to the current slowdown in Asia’s third-biggest economy, as well as uncertainty over the pricing of diesel fuel and gasoline.

The Gujarat plant will be Maruti’s first outside the northern state of Haryana, where a July 18 riot by about 3,000 workers at its Manesar factory resulted in the death of a senior manager, injured more than 100 people and forced the company to suspend production.

The violence was the worst since the company began producing cars in 1983.

But Maruti executives say the plan to build the new plant in Gujarat isn’t linked to the labor unrest in Manesar.

Gujarat has a long coastline, and the new plant will enable the company to save on logistics costs in shipping its cars overseas, especially to Europe. Maruti exports its cars to more than 125 countries.

“The Gujarat project is going along online. We hope that in the early part of next year, we should at least get the groundbreaking done in Gujarat,” Mr. Bhargava told reporters.

Maruti has acquired 700 acres for the third plant from the Gujarat government. It will initially have an annual capacity of 250,000 cars a year when it opens in the financial year starting April 1, 2015. The capacity could be increased to 2.0 million vehicles a year, Maruti has previously said.

The company is investing a total of 40 billion rupees ($740 million) in Gujarat.”

via Suzuki to Start Building Gujarat Plant Early 2013 – WSJ.com.

Posted in Economics, India alert, Investment in tangibles, joint venture, Manufacturing | Leave a Comment »

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22/12/2012

* Japan’s Abe to send envoy to China to mend ties

Commonsense and geo-politics wins over parochial politics.  Thank goodness.

Reuters: “Japan’s next Prime Minister Shinzo Abe plans to send senior ruling party member Masahiko Koumura as an envoy to China as early as next month in a bid to repair ties between Asia’s two largest economies, the Nikkei business daily said.

Shinzo Abe, Japan's incoming Prime Minister and the leader of Liberal Democratic Party (LDP), attends a meeting at the LDP headquarters in Tokyo December 21, 2012. REUTERS/Toru Hanai

Abe, a hardliner who has questioned claims by China and others that Japan’s army forced woman from occupied territories into prostitution during World War II, wants to bolster relations with his nation’s biggest neighbor after anti-Japanese protests there this year, the paper reported, without saying where it obtained the information.

Komura will carry a letter from Abe for China’s leaders, the Nikkei said. Komura is a former foreign minister who served as Abe’s defense minister during his first administration in 2007. As head of the Japan-China Friendship Paliamentarians’ Union, the lawmaker is known for his strong ties with China.

During campaigning for the general election that returned his Liberal Democratic Party to power after three years, Abe pledged to take a tough line with China in the dispute over islands in the East China Sea islands, called Senkaku in Japan and Diaoyu in China.

A Chinese boycott of Japanese cars, electronic gadgets and other products earlier this year, however, hurt Japanese companies, while violent anti-Japanese protests damaged some businesses.”

via Japan’s Abe to send envoy to China to mend ties: Nikkei | Reuters.

See also: https://chindia-alert.org/2012/10/05/diaoyu-islands-dispute-hammers-japanese-car-sales-in-china/

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22/12/2012

* TATAY RIVER, Cambodia: China is top dam builder, going where others won’t

Miami Herald: “Up a sweeping jungle valley in a remote corner of Cambodia, Chinese engineers and workers are raising a 100-meter- (330-foot-) high dam over the protests of villagers and activists. Only Chinese companies are willing to tame the Tatay and other rivers of Koh Kong province, one of Southeast Asia’s last great wilderness areas.

It’s a scenario that is hardly unique. China’s giant state enterprises and banks have completed, are working on or are proposing some 300 dams from Algeria to Myanmar.

Poor countries contend the dams are crucial to bringing electricity to tens of millions who live without it and boosting living standards. Environmental activists and other opponents counter that China, the world’s No. 1 dam builder, is willing and able to go where most Western companies, the World Bank and others won’t tread any more because of environmental, social, political or financing concerns.

“China is the one financier able to provide money for projects that don’t meet international standards,” said Ian Baird, an assistant professor of geography at the University of Wisconsin who has worked in Southeast Asia for decades. “You go to China if you want to have them financed.”

The consequence, critics say, is a rollback to an era of ill-conceived, destructive mega-dams that many thought had passed. The most recent trend is to dam entire rivers with a cascade of barriers, as China’s state-owned Sinohydro has proposed on Colombia’s Magdalene River and the Nam Ou in Laos, where contracts for seven dams have been signed.

Viewed by some in the developing world as essential icons of progress, dams in countries as far apart as Ecuador, Myanmar and Zambia have spearheaded or reinforced China’s rising economic might around the world. They are tied to or put up in tandem with other infrastructure projects and businesses, and power generation equipment ranks as China’s second-largest export earner after electrical machinery and equipment.

In energy-starved Cambodia, trade with China has risen to 19 percent of GDP from 10 percent five years ago, according to an Associated Press analysis of International Monetary Fund data.

The year-old $280 million Kamchay Dam in Cambodia’s Kampot province was the largest ever foreign investment when approved as well as a political flag-carrier for Beijing. It has been hailed by both governments as a “symbol of close Chinese-Cambodian ties.”

Cambodia’s electricity demand grew more than 16 percent a year from 2002 to 2011, with shortfalls largely met through costly oil imports, said Bun Narith, a deputy director general in the Ministry of Industry, Mines and Energy. Only 14 percent of rural homes have electricity, one of the lowest levels in Southeast Asia.

“We have no choice,” Bun Narith said. “Hydropower is the priority, and the Chinese have the initiative and capability, both financial and technical.”

The 20 hydro dams built, being constructed or under study in Cambodia, the bulk of them by the Chinese, would lift Cambodia out of literal darkness and make it energy self-sufficient, he said. “We should have a win-win policy, a balance between environment and energy. After all, electricity is also a basic human need.””

via TATAY RIVER, Cambodia: China is top dam builder, going where others won’t – World Wires – MiamiHerald.com.

 

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22/12/2012

* PM2.5 air pollutants causing more deaths than estimated, study says

Once again China is showing that it is not complacent about the nature of its environment. And often after such a study, money will be made available to rectify the situation.

SCMP: “The health risks of microscopic air pollutants have been grossly underestimated on the mainland, with nearly 8,600 premature deaths expected this year in four major cities, a study has revealed.

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And premature deaths are “just a tiny fraction” of the adverse health impacts of tiny airborne particles, less than 2.5 microns in diameter, known as fine particle matter 2.5 (PM2.5).

The startling findings were included in a report by Greenpeace East Asia and Peking University’s school of public health which, for the first time, focused on PM2.5 health hazards in urban areas.

Environmentalists have hailed the study, released yesterday, as ground-breaking, with data linking poor air quality to deadly diseases.

Noting that the World Bank once put the number of premature deaths on the mainland as a result of air pollution at more than 200,000, Professor Pan Xiaochuan, of Peking University, said the study focused on a single pollutant and had not taken into account the long-term health impact of PM2.5, which could be far more dangerous.

The study’s estimation of combined economic losses caused by premature deaths, put at 6.8 billion yuan (HK$8.34 billion), was also likely to be far lower than the real figure owing to limited access to official statistics, he added.

Fine particles have long been known to pose greater health risks than more than a dozen other air pollutants. They damage lung tissue and the cardiovascular system, cause lung cancer and other deadly diseases, and lead to a higher mortality rate.

Based on official mortality figures in 2010 and limited PM2.5 monitoring data in Beijing, Shanghai, Guangzhou and Xian, mostly from environment-related research institutes, the study showed a more than 10 per cent rise in premature deaths caused by PM2.5 pollution in the four cities over the past two years.

More than two-thirds of the 8,572 premature deaths this year caused by the microscopic pollutant occurred in Beijing and Shanghai. Although Beijing’s air pollution problem was worse, Shanghai saw the most deaths linked to PM2.5 – 3,317.”

via PM2.5 air pollutants causing more deaths than estimated, study says | South China Morning Post.

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22/12/2012

* Land grabs are main cause of mainland protests, experts say

If the new Chinese leadership is serious about improving the lives of its citizens and removing reasons to distrust the Party, this is one area it should concentrate on rather than reducing banquets and other ostentatious spending by officials and senior soldiers. The former affects people directly, the latter only peripherally.  Though eventually both must change.

SCMP: “Land seizures, pollution and labour disputes have been the three main causes of tens of thousands of mass protests in recent years, according to a top think-tank.

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In its 2013 Social Development Blue Book, released on Tuesday, the Chinese Academy of Social Sciences said the mainland was experiencing frequent social conflict because “social contradictions were diverse and complex”.

It said there had been more than 100,000 “mass incidents” – the central government’s term for large protests involving more than 100 people – every year in recent years.

Professor Chen Guangjing, editor of this year’s book, said that disputes over land grabs accounted for about half of “mass incidents”, while pollution and labour disputes were responsible for 30 per cent. Other kinds of disputes accounted for the remaining 20 per cent.

“Of the tens of thousands of incidents of rural unrest that occur each year in China, the vast majority of them result from land confiscations and home demolitions for development,” Chen told a news conference in Beijing yesterday.

Late last year, about 1,000 villagers from Wukan, Guangdong, rioted and overthrew corrupt local leaders who had profited from illegal sales of village land.

Chen said environmental concerns were also becoming a main cause of social unrest, as evidenced by a series of grass-roots demonstrations over polluting projects.

More than 20,000 people rallied in Xiamen, Fujian province, in June 2007 to protest against plans to build a chemical plant in the city.

The project was subsequently relocated and the Xiamen backdown sparked similar protests in several mainland cities.

The major cause of labour disputes was salary arrears. There over 120 protests that involved more than 100 workers each in the first eight months of this year.

Chen said courts and labour arbitration tribunals had dealt with 479,000 back-pay cases in the first nine months of this year.

The book says 120 million mainlanders are living under the poverty line – with per capita annual disposable income of less than 2,300 yuan (HK$2,830). The government last year raised the poverty line from the previous level of 1,200 yuan, set in 2008.

Professor Li Peilin, the blue book’s editor-in-chief, said household income growth had lagged far behind gross domestic product growth over the past decade.”

via Land grabs are main cause of mainland protests, experts say | South China Morning Post.

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20/12/2012

* TCS to create 16,500 jobs in West Bengal

Indian IT firm expands in Indian state.

Times of India: “Tata Consultancy Services said its Rs 1,350 crore software development campus in West Bengal will be functional by the end of 2014-15 and will employ 16,500 IT and BPO professionals.

TCS to create 16,500 jobs in West Bengal

“Our growing presence in Kolkata continues to be of strategic importance for our overall business growth.

“We remain committed to working in close collaboration with all stakeholders in the state to help development of local talent and provide our customers with world-class IT solutions from this location,” TCS Chief Financial Officer & Executive Director S Mahalingam said.

The first phase of construction will be completed in the first quarter of 2014, while the second phase by the fourth quarter of the year.

“In the first phase 7,000 seats will be ready with the remaining 9,500 seats being completed in second phase,” Tata Consultancy Services (TCS) said in a statement.

Once completed, the campus that is being constructed with an investment of about Rs 1,350 crore will house over 16,500 seats, it added.”

via TCS to create 16,500 jobs in West Bengal – The Times of India.

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20/12/2012

* Amid China tensions, Southeast Asia looks to India

ASEAN nations turning to India to counter-balance China’s aggressive position on territorial disputes.

Reuters: “Southeast Asian leaders are expected to lay out a vision for closer cooperation with India on security and the economy at a high-level gathering in New Delhi at a time of tension with China in the potentially oil- and gas-rich South China Sea.

ASEANIndian flagThe meeting is a ceremonial summit to mark 20 years of cooperation with India and will not include detailed negotiations on regional issues, India’s Foreign Minister Salman Khurshid told Reuters.

But ministry officials said the leaders would also produce a statement which is expected to reiterate a commitment to freedom of navigation, a hot issue because of territorial conflicts in the South China Sea.

Some ASEAN countries contest claims by China in the waters, making it the biggest potential flashpoint in the region. The United States has called for calm, but some are also looking to India, the other regional heavyweight, to get involved.

“They want India to play a larger role. Those concerns are only increasing given the uncertain situation that is emerging,” said C. Raja Mohan, a strategic affairs expert at the Observer Research Foundation think-tank.

For India, improved relations with Southeast Asia will give it entry into one of the fastest-growing economic regions in the world and a source of raw materials needed for its own growth.

Poor there are poor transport links between India and the nations to its southeast, and constraints like India’s tiny diplomatic corps – similar in size to New Zealand’s – mean India trails China in relations with the region.

Trade between India and the 10-member ASEAN was up to $80 billion last year compared with $47 billion in 2008. An agreement on free trade in services and investment could be signed at the New Delhi meeting.

But India’s role in the region is dwarfed by that of China, which enjoyed trade worth a record $363 billion with ASEAN countries in 2011 in an already established free trade area.

“What we need is far greater connectivity,” Khurshid said in an interview with Reuters, mentioning roads, railways and flights as areas needing work. He described a 10-year plan to double the number of diplomats to reflect India’s global ambitions.”

via Amid China tensions, Southeast Asia looks to India | Reuters.

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20/12/2012

* Land acquisition bill deferred till Budget session

The poor landowners in India have to wait a bit longer.

The Hindu: “The controversial Land Acquisition Bill is set for further delay as its consideration was deferred on Tuesday by the Lok Sabha till the next session bowing to the wishes of Opposition members.

Farmers, adivasis, dalits and other communities, whose lives are being impacted by the indiscriminate and blanket use of Land Acquisition Act 1894, on a dharna in New Delhi on Aug. 22, 2012. A file photo: V.Sudershan.

Parliamentary Affairs Minister Kamal Nath said the Bill will be taken up for consideration as the first measure in the budget session.

His statement came following pleas by BJP member Rajnath Singh, Mulayam Singh Yadav (SP), Basudeb Acharia (CPI-M) and Saugata Roy (TMC) for more time to discuss the provisions of the Bill which will have a wide ranging impact on farmers and industries.

The Bill provides for a fair compensation to land owners in both rural and urban areas with the stipulation that consent of 80 per cent of the people for acquiring land for private industry is necessary.

Despite Sonia Gandhi-led National Advisory Council pushing for the law for long, the Bill has been hanging fire for sometime. It was referred to a GoM in the wake of differences in the Cabinet over certain provisions in the Bill, which has been described by Rural Development Minister Jairam Ramesh as a balanced one.

The Land Acquisition, Rehabilitation and Resettlement Bill, 2011 was introduced in Parliament in September last year and was referred to a Parliamentary Standing Committee which submitted its recommendations in May.”

via The Hindu : News / National : Land acquisition bill deferred till Budget session.

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20/12/2012

* Foxconn Workers Say, ‘Keep Our Overtime’

An unintended consequence of enforcing ‘fair’ worker treatment – reduced income for migrant workers more than willing to work excessive overtime!

WSJ: “Nets to catch would-be jumpers still sag ominously from Hon Hai Precision Industry Co.’s  buildings.

But two years after a spate of suicides at the Apple Inc.  supplier’s campus here, workers are more concerned about another measure designed to protect them: limits on overtime.

Hon Hai in March said it would change its workplace practices after an audit by a U.S.-based nonprofit worker-safety group found widespread breaches of Chinese law and Apple policies at three plants, including the excessive use of overtime. Hon Hai responded by pledging that it would bring its overtime policies into alignment with Chinese law by next year, allowing workers to work no more than nine hours of overtime a week. The Taiwan-based company, also known as Foxconn, pledged to improve health and safety conditions at its campuses across China as well.

But more than 15 workers on the Shenzhen campus said in interviews that they work more than the legal limit of nine overtime hours a week. A majority said they work 10 to 15 overtime hours and would prefer more, having left their distant homes to make money in this southern Chinese boomtown on the border of Hong Kong.

“I think a lot of the more experienced people from the technology production lines will leave” if the policy to limit overtime goes into effect, said a worker who asked to be identified only by his surname, Ma. “We don’t know how much our salary will go up. But after being here three years, I don’t have much incentive to stay, since my wage probably won’t rise much.”

Mr. Ma, who earned roughly 3,400 yuan ($540) a month including overtime when he arrived three years ago, said he now earns about 5,000 yuan. To make extra money, the 26-year-old buys used car parts cheaply on an e-commerce website and then resells them.

Basic pay at the Shenzhen Longhua plant is 2,200 yuan, before overtime.

Keeping Mr. Ma and its 1.5 million other Chinese workers satisfied, while manufacturing complex, time-sensitive consumer electronics profitably is becoming more challenging for Hon Hai. The company’s labor costs will rise by roughly $1.4 billion when the new labor policies roll out next year, according to a Bernstein Research estimate. Hon Hai’s operating profit margin had declined since the second quarter of 2010 because of rising wages. The figure rose to 3.4% in this year’s third quarter from 2.2% a year earlier as the company raised what it charged customers, analysts said.

Hon Hai isn’t alone in facing such challenges. Employee protests over working conditions and the willingness of staff to change employer for more pay have forced electronics manufacturers to raise wages throughout China. Hon Hai and other companies have moved some operations to countries such as Vietnam and Mexico, where costs for labor or transportation to end markets are lower.”

via Foxconn Workers Say, ‘Keep Our Overtime’ – WSJ.com.

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