Archive for ‘Economics’

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30/03/2012

* More Chinese investments in India soon

Times of India: “China has committed to facilitating Indian exports into Chinese markets to address the yawning trade imbalance between the two countries. Chinese president Hu Jintao said this to Manmohan Singh in his hour-long meeting with the PM at the end of the BRICS summit on Thursday. This will be Hu’s last summit as Chinese president.

In return, the PM invited Chinese investment in manufacturing and infrastructure projects in India. Chinese companies are kept out of several strategic sectors, but there is a significant change in the Indian government’s approach to Chinese investment.

With the two leaders kicking off a year of friendship celebrations, the overwhelming sense from the meeting was that the two nations are determined to get along, despite many difficulties and differences of outlook. Singh and Hu announced “expanded” foreign office consultations, and launched three new dialogues with China – on West Asia, Central Asia and Africa. India and China pursue markedly different policies in Africa, though with the same stated aims.”

via More Chinese investments in India soon – The Times of India.

Related page:

In the 50s, PM Nehru and PM Chou met and agreed Panchsheel, the five principles of peaceful coexistence. The press coined a phrase Hindi Chini bhai bhai, meaning Indians and Chinese are brothers.  It looked like the slogan was reflecting reality until in the late summer of 1962, due to the long-standing border dispute (legacy of British Raj) Chinese tanks rolled over the Himalyas and reached the oil fields of Assam in the East and also in Ladakh in the west.  Since then matters have thawed. BRIC (and now BRICS) was invented. This news release is good news, at least for India and China.

Posted in China alert, Chindia Alert, Diplomacy, Economics, GeoPolitics, Good news, India alert | Leave a Comment »

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29/03/2012

* BRICS flexing muscle – to set up joint bank, call for dialogue on Iran & Syria

Times of India: “Seeking to reinforce their growing economic heft with diplomatic clout, the BRICS grouping Thursday pitched for a bigger say in global governance institutions, including the UN and the IMF, and told the West that dialogue was the only way to resolve the Iranian nuclear issue and the Syria crisis.

Brazil, Russia, India, China and South Africa, which comprise nearly half the world’s population and a growing share of global GDP, signed two pacts to spur trade in their local currencies. They also agreed to set up a working group for a joint development bank to promote mutual investment in infrastructure.

Prime Minister Manmohan Singh of India and Presidents Hu Jintao China, Dmitry Medvedev Russia, Dilma Rousseff Brazil and Jacob Zuma South Africa ended the fourth BRICS summit by renewing the pitch for reforming global governance institutions and closer coordination on global issues.The five leaders stressed on the restructuring of the world order to accommodate emerging economies and developing countries and for promoting sustained and balanced global economic growth.”

via BRICS to set up joint bank, call for dialogue on Iran & Syria – The Times of India.

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28/03/2012

* Chinese Vice-Premier Li meets Apple CEO

China Daily: “Vice-Premier Li Keqiang said Tuesday that China will strengthen intellectual property rights protection and continue to transform its economy, when meeting CEO of Apple Tim Cook in Beijing.”To be more open to the outside is a condition for China to transform its economic development, expand domestic demands and conduct technological innovation,” Li said.

He said that trade and economic cooperation together are an “important cornerstone” for the cooperative partnership featuring mutual respect and reciprocity that China and the United States are endeavoring to establish.The vice-premier called on multinational companies to expand cooperation with China, actively participate in the development of the western part of China, pay more attention to caring for workers and share development opportunities with the Chinese side.

Cook said Apple will strengthen comprehensive cooperation with the Chinese side and conduct business in a law-abiding and honest manner.”

via Vice-Premier Li meets Apple CEO Tim Cook|Economy|chinadaily.com.cn.

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27/03/2012

* Major Chinese industrial companies profits drop 5.2 pct

Xinhua: “Profits for Chinese chemical producers, automakers and other major industrial companies fell 5.2 percent in the first two months of 2012 from the same period a year earlier, China’s statistical authority said Tuesday.

Total profits for the largest industrial companies, or those with annual revenues above 20 million yuan 3.17 million U.S. dollars, stood at 606 billion yuan during the first two months, the National Bureau of Statistics said in a statement on its website.The data highlighted the impact of the sluggish global economic recovery on Chinese companies, especially state-owned enterprises, as exports have slowed due to waning external demand.

The data also represents a significant drop from a 34.3-percent increase registered in the first two months of 2011.”

via Major Chinese industrial companies profits drop 5.2 pct – Xinhua | English.news.cn.

Is China’s economy heading for a hard landing?  If so, it will exacerbate the recession in developed nations.

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22/03/2012

* China factory activity falters, markets take fright

Reuters: “China’s economic momentum slowed in March as factory activity shrank for a fifth straight month, leaving investors fretting about the risks to global growth and anticipating fresh policy support from Beijing. The HSBC flash purchasing managers index, the earliest indicator of Chinas industrial activity, fell back to 48.1 from February’s four-month high of 49.6. New orders sank to a four-month low, an expected rebound in export orders failed to emerge and new hiring slumped to a two-year low.

“With new export orders sluggish and domestic demand still softening, China’s slow down has yet to finish. This calls for further easing to come from Beijing,” HSBC chief China economist, Qu Hongbin, said in a statement. …

Broad-based weakness in the five key components that generate the headline index level surprised analysts, particularly those who had anticipated a clear cut rebound in factory activity in March after the Lunar New Year disrupted output in the first two months and distorted the data. “This data suggests there’s something more profound at work, that it’s not just a Lunar New Year problem and that it’s not just affecting exports, but domestic demand,” Tim Condon, chief economist and head of Asian research at ING in Singapore, said. …”

via China factory activity falters, markets take fright | Reuters.

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22/03/2012

* Outrage over report that India lost $210bn in coal scam

BBC News: “There was outrage in India’s parliament after a draft report by government auditors estimated India lost $210bn by selling coalfields too cheaply. Opposition politicians accused the government of “looting the country” by selling coalfields to companies without competitive bidding. Private and state companies benefited from the allocations between 2004 and 2010, says a Times of India report. …

… the Times of India, quoting the CAG draft, says the $210bn (£133bn) figure is a “conservative estimate, since it takes into account prices for the lowest grade of coal and not the median grade”.

India is one of the largest producers of coal in the world.

This is just the latest in a series of financial scandals to hit the Congress-led government and the revelations caused such anger among opposition politicians that both houses of parliament had to be temporarily adjourned.”

via BBC News – Outrage over report that India lost $210bn in coal scam.

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22/03/2012

* Fair trade? Diageo to buy top ‘baijiu’ producer; Jaguar Land Rover agrees jv with Chery in China

FT.com: “When it comes to selling things that take years to mature – like premium cognacs or Scotch whiskies – it pays to take the long view. Diageo is taking a very long view on the future of baijiu, otherwise known as Chinese firewater. As a purveyor of Scottish firewater – also known as Johnnie Walker – Paul Walsh, Diageo’s CEO, says he can foresee a day when Chinese white spirit will have as broad a global footprint as Scotch whisky.

To prepare for that day, Diageo said on Tuesday it would shortly launch a mandatory tender offer to spend as much as $1bn buying all remaining shares of Sichuan Shuijingfang, the baijiu company it took control of last year.”

via Diageo: the long view on baijiu | beyondbrics | News and views on emerging markets from the Financial Times – FT.com.

Chery Automobile

Chery Automobile (Photo credit: Wikipedia)

BBC News: “Jaguar Land Rover JLR and Chery Automobile have agreed a joint venture that should pave the way for production of Jaguar and Land Rover cars in China.”

via BBC News – Jaguar Land Rover agrees joint venture with Chery in China.

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21/03/2012

* US exempts 11 states from Iran sanctions; China, India excluded

Reuters: “The United States exempted Japan and 10 EU nations from financial sanctions because they have significantly cut purchases of Iranian oil, but left Iran’s top customers China and India exposed to the possibility of such steps.

The decision means banks in these countries have been given a six-month reprieve from the threat of being cut off from the U.S. financial system under new sanctions designed to pressure Iran over its nuclear program.

The list did not include China and India, Iran’s top two crude oil importers, nor U.S. allies South Korea and Turkey, which are among the top-10 consumers of Iranian oil.

Japan, China and India combined buy close to half of Iran’s crude exports of 2.6 million barrels a day, providing crucial foreign exchange for the OPEC member.”

via U.S. exempts 11 states from Iran sanctions; China, India exposed | Reuters.

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20/03/2012

* Chinese fuel prices raised by 6.5-7%

China Daily: “China raised fuel prices for the second time this year, hiking gasoline and diesel by 6.5 percent to 7 percent effective on Tuesday, amid rising world crude oil prices and falling domestic inflation. Prices went up by 600 yuan $94.90 a metric ton, the biggest hike since June 2009. The average gasoline price went up 6.5 percent to 9,980 yuan a metric ton, while diesel prices rose 7 percent to 9,130 yuan a metric ton.Both prices are record highs. China, the worlds second-biggest oil user, raised fuel prices for the first time this year by 300 yuan a ton on Feb 8.”

via Fuel prices raised by 6.5-7%|Economy|chinadaily.com.cn.

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16/03/2012

* India: ‘Need for urgent reforms as corruption, civil society activism delay decisions’

The Hindu: “The government on Thursday gave a clarion call for urgent economic reforms while conceding that corruption scandals and compulsions of coalition politics have slowed down the decision-making process, as a result of which it is faced with fiscal slippages in 2011-12.

Making a strong pitch for raising tax resources and higher compliance, the Economic Survey 2011-12, tabled in Parliament on Thursday in tandem with the Reserve Bank in its mid-quarter policy review, expressed serious concern over the deteriorating state of government finances and stressed the need for fiscal consolidation if inflation is to be tamed.

Highlighting inflation and fiscal slippages as among the major challenges confronting the economy, the Survey said a slackening in the pace of reforms and high-profile corruption scandals along with “welcome civil society activism” have led to delay in decision-making by civil servants.

Tabled in the Lok Sabha by Finance Minister Pranab Mukherjee, the Survey said “coalition politics and federal considerations played their roles in holding up economic reforms on several fronts, ranging from diesel and LPG pricing to FDI in retail” and also pointed to the economic slowdown partly resulting from domestic issues “like pressures of democratic politics.”

In concert with the apex bank on the need for fiscal consolidation, the Survey said: “The principal way in which this has to be achieved is by raising tax-GDP ratio and cutting down wasteful expenditures.”

The Survey noted that the dismal economic performance this fiscal should be a “wake-up call” but, at the same time, expressed cautious optimism that the GDP growth in 2012-13 would go up to 7.6 per cent following a moderation in inflation and consequent low interest rates.

“The growth rate of real GDP [is expected] to pick up to 7.6 per cent [plus or minus 0.25 per cent] in 2012-13 and faster beyond that,” the Survey said and noted that economic expansion this fiscal would moderate to a three-year low at 6.9 per cent. Arguing out a case for fiscal consolidation, tax reforms, opening of the multi-brand retail to global chains, freeing of diesel prices and the need for honesty among political leaders and policy-makers, the Survey said that although government’s fiscal deficit was likely to significantly go off the target of 4.6 per cent of GDP this fiscal, it would narrow down to 4.1 per cent in 2012-13 on the strength of a pick-up in economic activities. After tabling the pre-budget document, the Finance Minister said: “It [the Survey] charts economic development and challenges faced during the fiscal year. It is a vital input for the preparation of the budget.”

At a press briefing later during the day, Chief Economic Adviser Kaushik Basu, prime architect of the document, said growth in manufacturing and agriculture sectors were likely to be key drivers in the next fiscal. “There could be one more year of a slight slowing down of investment and saving rates. We expect… rates to pick up handsomely after that,” he said.”

via The Hindu : News / National : ‘Need for urgent reforms as corruption, civil society activism delay decisions’.

Related page: https://chindia-alert.org/political-factors/indian-tensions/

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