Archive for ‘Economics’

17/02/2017

Soccer Dreams in China’s Rust Belt – China Real Time Report – WSJ

China’s smog-choked northern province of Hebei is no stranger to lofty goals. For one thing, it has to shut down two-thirds of its steel factories by 2020.

Here comes another: becoming a provincial powerhouse in soccer. Perhaps understandably, it has given itself a few decades to do it.

The “Hebei Province’s Soccer Medium-to-Long Term Development Plan (2016-2050)” unveiled Thursday sets out plans for 1,000 “soccer campuses,” 3,000 amateur leagues and at least one club in the Chinese Super League, the country’s highest tier of professional soccer.

Such plans to pursue the “beautiful game,” as soccer is often called, are quite the departure for China. The world’s second-largest economy used to nurture its sport stars the Soviet way, by picking and grooming its talent from an early age. It still harvests most of its medals using this model. But in soccer, Beijing is trying a looser model perfected in the West: shopping for world-class players world-wide and hoping to spot homegrown talent via a grassroots network of soccer programs in local schools.

“By 2050, we must contribute to China’s bid to host the World Cup,” the Hebei Provincial Sports Bureau said.

At media conferences, officials spoke wistfully of “a soccer tourism route” and “a garden of sports,” a somewhat jarring image of Hebei, which currently produces more than twice the annual steel volume of all U.S. mills combined and is home to China’s smoggiest cities.

In its quest to become a leading purveyor of football talent, Hebei already faces some domestic competition. Fujian province, in China’s south, last month said it also has such plans. Earlier this month, so did the aluminum-producing province of Gansu, known more for its deserts than its dazzling dribbles.

More provinces are likely to follow. The central government last year put out a blueprint detailing bigger, broader goals to mint “two to three first-class soccer teams in Asia, that are internationally known.”

President Xi Jinping has a soft spot for the sport, and in 2011 made known his desire for China to both qualify for and host a World Cup tournament and ultimately to win one.

This has proven difficult. Back-to-back losses last fall all but derailed China’s dream of qualifying for the 2018 World Cup. Profligate spending to attract foreign talent led the General Administration of Sport last month to criticize Chinese teams for “burning money” on astronomical recruitment fees and wages, while “neglecting the development of homegrown players.”

Still, Hebei might have an edge. The province, where Mr. Xi spent some time early in his career as a county-level Communist Party official, won government support in a successful bid to host the 2022 Winter Olympics, despite having only a set of somewhat stumpy mountains with sporadic snow.

Some of the province’s residents aren’t exactly hopeful. “The economy is finished,” one of them wrote on the popular microblogging platform Weibo. “And you still have time to focus on soccer?”

Source: Soccer Dreams in China’s Rust Belt – China Real Time Report – WSJ

16/02/2017

India and Russia seek to revive stalled helicopter venture | Reuters

India and Russia are nearing a joint venture to make light helicopters in India, reviving a plan announced by Russian President Vladimir Putin in 2015.

Delhi needs to replace hundreds of ageing utility helicopters deployed along its Himalayan border with China as well as in the disputed Kashmir region.

This means an initial order of 200 Kamov-226 helicopters, of which 140 will be built in India as part of Prime Minister Narendra Modi’s drive to build a domestic defence industrial base and cut imports, is expected to be increased.

And final documents relating to the $1 billion Kamov deal involving Russian Helicopters, Rosoboronexport and India’s state-run Hindustan Aeronautics (HAL) has been submitted to Putin, HAL’s chief T. Suvarna Raju, told reporters on Wednesday.

While India has sealed deals with the United States for 22 Apache attack and 15 heavy lift Chinook helicopters at total cost of about $2.5 billion, plans to buy Russian helicopters and fifth generation fighter aircraft have been dogged by problems.

“There are issues between parties, but these are being tackled,” Sergey Goreslavsky, deputy director general of Rosoboronexport, said at India’s biggest air show in the southern city of Bengaluru.

A team will assess the Indian manufacturing facilities over the next few months. “We are keeping our fingers crossed about launching production this year,” an executive at Russian Helicopters said.

The executive, who did not want to be named, said the joint venture will be modelled along the lines of Brahmos, the India-Russia entity producing supersonic missiles, which which military analysts say are among the deadliest in their class.

Russia was long the main supplier of military equipment to India, but Delhi has turned to France, Israel and increasingly the United States for supply of hardware in recent years.

U.S. aerospace and defence firms Lockheed Martin and Boeing have both offered to set up production lines in India to make combat planes.

Source: India and Russia seek to revive stalled helicopter venture | Reuters

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15/02/2017

‘Follow one-China policy’: Beijing warns India over Taiwan delegation | This Week In Asia | South China Morning Post

China has lodged a strong complaint with India over a rare visit by a Taiwanese parliamentary delegation, warning New Delhi to follow one-China policy and refrain from any official contacts with Taipei.

Sharply criticising the visit, foreign ministry spokesperson Geng Shung said Beijing had lodged a “solemn representation” with New Delhi to not have any official contact with Taiwan.

Beijing has always opposed any kind of official contact between Taiwan and countries that have diplomatic ties with China, he said.

Why Trump can’t ‘haggle’ over the one-China policy

Geng spoke against any proposal to upgrade India-Taiwan ties, and warned India to be strict about following the one-China policy and be “prudent” about its ties with Taiwan.India has no formal diplomatic relations with Taiwan. The de facto Indian embassy in Taipei is called the India-Taipei Association and the Taiwanese maintain the Taipei Economic Cultural Center in New Delhi.

A three-member parliamentary delegation from Taiwan arrived in India on Monday for a three-day visit. The leader of the delegation, Kuan Bi-Ling, said Taiwan is “totally independent”.

“It (the one-China policy) is a de facto reality…We suffered a lot because of the one-China policy. We have crafted a pragmatic approach in our diplomatic engagement with major countries, including India, despite these difficulties,” Kuan told the Indian media.Hosting an official delegation from Taiwan appears to be a shift in Indian policy. In May last year, India had reportedly backtracked from sending representatives to the swearing-in ceremony of then Taiwanese president-elect Tsai Ing-wen. The visit of the Taiwanese delegation is a possible sign that both countries are attempting to increase political engagement without New Delhi moving away from the one-China policy.No country is exempt from one-China principle, says Beijing

In September 2015, before she became Taiwan’s first woman president, Tsai had spoken about India being in focus for her country to strengthen ties.“Asean and India are poised to become two of the world’s largest economic bodies. Strengthening our overall relations is a natural choice for Taiwan as we diversify our economic and trade ties. In the future, we will form a new task force to actively pursue this policy objective,” Tsai had said in a key speech at the time.

The New Southbound Policy Office, which directly functions under the president, will focus on strengthening all-round ties with Asean and South Asia, particularly India, Taiwanese diplomats had then told the Hindustan Times.

Earlier on Wednesday, nationalistic tabloid Global Times said India is playing with fire and will suffer if it challenges the one-China policy and increases engagement with Taiwan.

How a snub of the one-China policy almost led Beijing and US into war in the 1990s

“At a time when new US President Donald Trump has put the brakes on challenging China over the Taiwan question, agreeing to change course and respecting the one-China policy, India stands out as a provocateur,” it said. “Some Indians view the Taiwan question as an Achilles’ heel of the mainland. India has long wanted to use the Taiwan question, the South China Sea and Dalai Lama issues as bargaining chips in dealing with China,” writer Yu Ning wrote in an opinion piece for the newspaper.

“By challenging China over the Taiwan question, India is playing with fire,” Yu wrote.

The newspaper blamed Tsai for inciting India.“Tsai is exploiting India’s vigilance and strategic suspicions against China. The pro-independence leader came up with the ”new southbound policy” to ramp up trade and economic interactions in Southeast Asia, South Asia and Oceania, in which India is considered “not one of the, but the most” important country…Tsai hopes to put pressure on the mainland by tying India and Taiwan closer.”

Source: ‘Follow one-China policy’: Beijing warns India over Taiwan delegation | This Week In Asia | South China Morning Post

15/02/2017

India Breaks Record for Launching Most Satellites From Single Rocket – India Real Time – WSJ

India’s space agency on Wednesday launched a record 104 satellites from a single rocket as it crossed another milestone in its low-cost space-exploration program.

The satellites from seven countries were carried by the Indian Space Research Organization’s Polar Satellite Launch Vehicle on its 38th consecutive successful flight.

The mission reinforces India’s emerging reputation as a reliable and cost-effective option for launching satellites. In 2014, ISRO put a satellite into the orbit of Mars, becoming the first Asian country to reach the red planet at fraction of the cost of a similar launch in U.S. and Europe.

ISRO has now put 226 satellites into orbit, including 180 from foreign nations. The global space industry was estimated to be worth $323 billion in 2015, the latest year for which data are available, according to the Space Foundation, a U.S.-based research group. Commercial space business comprised as much as 76% of the industry.

Rajeswari Pillai Rajagopalan, senior fellow in space-security studies at the Observer Research Foundation, a New Delhi think tank, said the launch was a “showcase of India’s growing capabilities.”

 

Spectators watched the launch of ISRO’s Polar Satellite Launch Vehicle (PSLV-C37) at Sriharikota on Feb. 15, 2017.

“India’s space program has come a long way,” she said.

Ms. Rajagopalan said the trend for sending more small satellites–instead of fewer large ones–will benefit ISRO due to the cost advantages it offers over its American and European competitors. The Space Foundation said nano satellites comprised 48% of launches in 2015

Wednesday’s feat eclipses the record set by Russia in 2014 when it launched 37 satellites in a single mission. A National Aeronautics and Space Administration rocket carried 29 satellites in 2013.

The PSLV rocket blasted off from the Satish Dhawan Space Center at Sriharikota in the southeastern state of Andhra Pradesh at 9.28 a.m. Wednesday local time (10.58 p.m. Tuesday ET).

The ISRO rocket hurtles through the sky after launch from Sriharikota, India, Feb. 15, 2017.

It first released its main cargo, ISRO’s 714 kilogram Cartosat-2 series satellite, which will be used for earth observation. It then released two smaller ISRO satellites, followed by the remaining 101 nano satellites, one each from Israel, Kazakhstan, Netherlands, Switzerland, United Arab Emirates, and 96 from the U.S. As many as 88 of the nano satellites belonged to U.S.-based company Planet Inc.

ISRO’s two smaller satellites are carrying equipment for conducting various experiments.

Indian Prime Minister Narendra Modi tweeted his congratulations. “This remarkable feat by @isro is yet another proud moment for our space scientific community and the nation. India salutes our scientists,” the message said.

Mission Director B. Jayakumar said it was a challenge to “find real estate (on the PSLV rocket) to accommodate all the satellites.” He said a “unique separation sequence” was designed due to the large number of satellites.

ISRO chairman Kiran Kumar Rao, right, held up models of the CARTOSAT-2 and Polar Satellite Launch Vehicle (PSLV-C37) after the launch in Sriharikota, India, Feb. 15, 2017.

ISRO said the satellites went into orbit 506 kilometers from earth, inclined at an angle of 97.46 degrees to the equator–very close to the intended orbit–after a flight of nearly 17 minutes. In the subsequent 12 minutes, all 104 satellites were successfully separated from the rocket in sequence, it said.

After separation, the two solar panels of ISRO’s Cartosat-2 series satellite were deployed and the space agency’s command center in Bangalore took control. In the coming days, the satellite will begin to provide start sending back black and white, and color pictures, ISRO said.

Source: India Breaks Record for Launching Most Satellites From Single Rocket – India Real Time – WSJ

10/02/2017

Banyan: Is India a country or a continent? | The Economist

IN A speech to London’s Constitutional Club in 1931, Winston Churchill poured scorn on the idea of India. “India is a geographical term. It is no more a united nation than the equator,” he spat, a slur that invites such uniform disagreement from Indians as to disprove itself. Less well known, but more worthy of debate, is the previous line of Churchill’s speech: “India is no more a political personality than Europe,” he contended.

The personalities of both India and Europe have changed a great deal since 1931. But in explaining India to outsiders, Banyan often finds it helpful to compare it to the European Union (EU) rather than to the United States. Neither parallel does India justice, of course. The frequent comparisons to America can imbue India with a false cohesion. The less common comparison to the EU suggests a false disunity. But if the two parallels are judiciously combined, the falsities may help to cancel each other out.

One obvious example is Indian politics. This month voters took part in elections for the state legislatures of Punjab and Goa. As is often the case, turnout was higher than in India’s national election in 2014. In comparison with the United States, where races for national office, especially the presidency, overshadow state-level contests, that is a puzzle. In comparison with the EU, where elections in member states command far more attention than races for the European Parliament, it seems less strange.

The composition of India’s legislature also looks more like Strasbourg’s multicoloured mosaic than Washington’s two-tone Congress. The Lok Sabha, India’s lower house, seats as many as 35 parties. With the exception of the Bharatiya Janata Party and Congress, few of them have influence beyond one or two states. If America is the benchmark, the obvious question is why India’s voters have failed to coalesce around rival nationwide philosophies of government. But if the template is Europe, the fragmentation is easier to grasp. Few of Europe’s parties could appeal across national lines, however compelling their policies.

Another example is language. India’s constitution lists 22 “scheduled” languages. An American might wonder how it copes. But the EU, with 24 official languages, is even more polyglot. India’s national anthem had to be translated into Hindi from the original Bengali. But the EU’s anthem has no official lyrics, so as to leave open the question of what tongue to sing them in. Pick any two Indians at random, and the chance that they share the same mother tongue is less than 20%, according to data compiled by Romain Wacziarg of the University of California, Los Angeles, and his colleagues. But for the EU as a whole, according to Banyan’s calculations, the odds are less than 10%. Linguistically, then, India is neither as unified as the United States nor as divided as the EU.

National welding

The author of India’s anthem, Rabindranath Tagore, also saw value in comparing his country to both Europe and America. Like India, the United States faced the problem of “welding together into one body various races”. This challenge set both countries apart from Europe, which, Tagore felt, could take its racial unity for granted. Indeed, he saw Europe as one people divided into many states, unlike India’s many peoples “packed into one geographical receptacle”.

The gap between India’s many peoples remains large. The GDP per person of Bihar, India’s poorest state, is only a fifth of Haryana’s and little more than a tenth of Goa’s. That is a much bigger income gap than between Mississippi and Massachusetts, but comparable to the gulf between Bulgaria and Belgium.These gaps have motivated increasing numbers of Indians to move from one part of their geographical receptacle to another. The government’s latest economic survey, written by Arvind Subramanian, its chief economic adviser, calculates that interstate migration nearly doubled between the 1990s and the 2000s, yielding a migrant population of over 55m in 2011 (roughly 4.5% of India’s population). That may fall well short of American mobility, but compares favourably with the EU, where 13.6m citizens (2.7% of the total population) live in another member state.

The movement of goods tells a similar tale. In India, unlike America, state prerogatives often trump the imperatives of interstate commerce. Trade is distorted by a patchwork of local levies, which the central government is keen to replace with a new goods and services tax. The familiar sight of lorries queuing at state borders suggests an economy that is hopelessly fragmented. But again, the benchmark matters. Drawing on new data, Mr Subramanian shows that trade among India’s states is now equivalent to about 54% of GDP, rather higher than many suspected. That is low compared with America (78%), but impressive compared with the EU (20%).

Net trade is even more dramatic. India’s single market and currency allow some states to run enormous trade deficits with others. Four run deficits in excess of 20% of local output. That is far greater than the euro area has been able to sustain.

India’s divisions hamper it in its dealings with other nations. Its diplomacy has a reputation for parochialism and mal-coordination—an elephantine inability to “dance”. But perhaps it is not given enough slack. Compared with the EU, India’s foreign policy is positively twinkle-toed. India, lest it be forgotten, is as populous as 150 other countries combined. By encompassing all of these people in a single political entity, it dramatically reduces the complexity of global governance—even if it does not always feel like that. Had the republic not succeeded in refuting Churchill, had it disintegrated into multiple sovereign states, the world’s negotiating tables might have needed to accommodate dozens of additional quarrelling players. When the Americans want to talk to India, they know whom to call—however frustrating the conversation sometimes proves to be.

Source: Banyan: Is India a country or a continent? | The Economist

03/02/2017

In Punjab, jobless youth take a chance with anti-establishment party AAP | Reuters

Twenty seven-year-old Rupinder Kaur Ruby is a political novice but her message is clear: jobs for young people.

Grabbing the microphone, the law student tells a few hundred supporters in a dusty village square in the northwest Indian state of Punjab that the ruling parties have failed them.

“Punjab is not in a good place. And the youth are the most affected. They want to fight back,” she said, raising her fist to cheers, as the crowd covered her in garlands before heading off to canvass for votes in a state election on Saturday.

Ruby is one of several inexperienced candidates her Aam Aadmi (Common Man) Party is fielding to tap anger among an increasingly aspirational but frustrated youth, and to challenge Prime Minister Narendra Modi as his party heads into five state polls over the next month starting with Punjab.

A strong showing by AAP, which won a handful of seats in Punjab in the 2014 general election and governs the city-state of Delhi, would serve as a mid-term warning for the still-popular Modi as the economy fails to fulfil expectations.

The young in Punjab have been hit hardest by factory shutdowns, amid allegations that corruption has hastened the economic decline of a relatively rich state of 28 million people bordering Pakistan.

Unemployment tops voter concerns there, according to a recent poll, and young people are less and less willing to work their parents’ fields in the state known as India’s “bread basket”.

GENERATIONAL SHIFT

Most recent opinion polls show Congress, India’s main opposition party, in the lead in Punjab, ahead of AAP which has been criticised by rivals for failing to flesh out how it would boost employment were it to come to power.

But Ruby’s party is most popular among the young, reflecting a generational shift in India that poses a problem for Modi as newer parties seek to capitalise on the lack of jobs.

Nearly two-thirds of India’s 1.3 billion people are under 35 – a demographic “bulge” that will create the world’s largest working-age population before 2050.

Despite average annual economic growth of 6.5 percent between 1991 and 2013, India added less than half the jobs needed to absorb new entrants into the workforce.

The incumbent Shiromani Akali Dal (SAD) party that rules Punjab alongside Modi’s Bharatiya Janata Party, and Congress, have governed the state alternately for decades with a focus on Sikhism, the state’s dominant religion, and farm subsidies.

Those priorities resonate less among the young, and now all the main parties are promising free smartphones and 2,500 rupees ($37) a month for the unemployed.

“The other parties are all the same,” said 30-year-old Jaskaran Sharma, who works as a truck driver in the Middle East and was helping with Ruby’s campaign in between jobs.

“She is energetic, and young people understand the system,” he told Reuters in the village of Teona.

Punjab’s official unemployment rate in 2015/16, at 6 percent, was above the national average of 5 percent, according to the Labour Bureau, although economists say the figures do not reflect the true picture.

Levels of underemployment are higher; only 17 percent of Punjab’s population earns a regular wage.

VOLUNTEERSAAP, which scored surprise wins in local elections in Delhi in 2013 and 2015 on a broad anti-corruption platform, is led by 48-year-old Arvind Kejriwal, a former tax inspector who hopes to expand into other regions by channelling anger over unemployment.

AAP workers like Ruby, daughter of a local government retiree, have built young teams to fan out across villages and campaign door-to-door.

“We depend on our volunteers. This is a ground-up campaign,” she told Reuters over tea and biscuits, while young men snapped photos with her.

Ruby has the lowest declared wealth, at 175,000 rupees ($2,600), of any candidate in the state, according to reports. The 10 poorest candidates are from AAP, although the party has also chosen several well-off politicians as candidates.

“The youth are looking for change, and for that they are going to take a risk with AAP,” said Ashutosh Kumar, a professor of political science at Panjab University.

The ruling party, led by the wealthy Badal family, still commands support among older generations and better-off farmers, while Congress is attracting voters who see AAP as inexperienced.

Sitting outside the office of his SAD party in the Badal heartland of Lambi, landlord farmer Bagga Singh said Kejriwal was a “traitor” who had fooled people.

The protest vote boosting AAP would peter out, he predicted, because the Badals had established skill centres, curbed corruption and job creation would soon pick up.

Still, he acknowledged more needed to be done.

“Young people don’t want to work in agriculture. The margins are down and they don’t want the hard work,” the bearded 70-year-old said, wearing a pink Sikh turban. “They want to sit in an air conditioned office.”

($1 = 67.4900 Indian rupees)

Source: In Punjab, jobless youth take a chance with anti-establishment party AAP | Reuters

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03/02/2017

Apple Is Set to Make in India, State Official Says – India Real Time – WSJ

In a potential boost to Prime Minister Narendra Modi’s “Make in India” initiative, tech giant Apple Inc. is nearing a deal with Taiwanese contract manufacturer Wistron Corp. to start making products in the southern state of Karnataka, a senior state official said.

“The contractual agreement between the two companies is on the verge of being signed,” the Karnataka government official who has direct knowledge of the matter said.

The first phase of assembling iPhones will likely start as early as the end of March, and further expansion is expected over the next two to six months, the official said.An Apple spokeswoman said the company has nothing to share beyond a statement it made last week, which said: “We appreciate the constructive and open dialogue we’ve had with [the] government about further expanding our local operations.”

A Wistron spokeswoman declined to comment. The company has a factory in the southern Indian city of Bangalore where it makes smartphone components, and has sought permission from the state authorities to expand the facility with additional power supply and fire-fighting facilities, the official said.

“What we are given to understand is that Apple is awaiting a final word from the government of India regarding tax and tariff concessions sought by the company, before signing up the contractual agreement,” the official said.

Making goods such as the iPhone locally may help the Cupertino, Calif., company to open its own stores in India, in turn building its brand in a country where it has less than a 5% share of a booming smartphone market.

Karnataka’s Information and Technology minister, Priyank Kharge, welcomed Apple’s proposal to consider Bangalore, also known as Bengaluru, as the location for potential manufacturing.

“Apple’s intentions to manufacture in Bengaluru will foster cutting edge technology ecosystem and supply chain development in the state, which are critical for India to compete globally,” Mr. Kharge said in a statement Thursday.Apple is looking to ramp up revenues in India as sales stagnate in China, long an engine of growth. India should soon overtake the U.S. as the world’s second-largest smartphone market after China. Smartphone shipments in India grew 18% last year, compared with just 3% globally, according to Counterpoint Research.

Apple Chief Executive Tim Cook in a call with analysts this week confirmed the company is “in discussions” to open retail stores in the country, and said Apple intends to “invest significantly in the country and believe it’s a great place to be.” (http://blogs.wsj.com/indiarealtime/2017/02/01/what-tim-cook-said-about-apples-big-plans-for-india/)

Last week, a team of executives led by Priya Balasubramaniam, an Apple vice president, met with senior Indian government officials in New Delhi as well as state officials in Karnataka to discuss the firm’s proposals. (https://www.wsj.com/articles/apple-nears-deal-to-manufacture-products-in-india-1485340934)

Under Mr. Modi, India has been eager to attract foreign investment and create the manufacturing facilities and jobs the country needs to sustain long-term growth.

Source: Apple Is Set to Make in India, State Official Says – India Real Time – WSJ

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01/02/2017

India Budget 2017: Promise to boost rural spending – BBC News

India’s government has unveiled its annual budget, with promises to boost rural spending and pull more people out of poverty.

It comes months after the controversial withdrawal of high value banknotes which caused chaos in the economy, hurting farmers and the poor most.

Finance Minister Arun Jaitley allocated funds to bring more irrigation, roads, electricity and sanitation to villages.

Farmers would also have more access to credit, he said.

The government also plans to spend a record $7.09bn (£5.69bn) on a scheme which guarantees every rural household 100 days of work each year.

Overall rural and farm spending would be increased by 24% as part of the government’s plan to double farm incomes over five years, Mr Jaitley added.

Tax plan

The finance minister also revealed plans to halve income tax rates for people earning between 250,000 rupees to 500,000 rupees ($3700; £2945 to $7,400; £5888) annually, which Mr Jaitley said should also encourage more people to pay tax.

“The present burden of taxation is mainly on the taxpayer and the salaried employees who are showing their income correctly,” he told parliament.

“Therefore post-demonetisation, there is a legitimate expectation of this class of people to reduce their burden of taxation. Also an argument is made that if nominal rate of taxation is kept at a lower slab, more people will prefer to come in the tax rate.”It is not clear how many people the move would impact, but India has a long-running problem of collecting income tax.

In 2013, the latest year for which data is available, only 2% of Indians completed a tax return and only 1% paid tax.

Other proposals announced in the budget speech included:Cutting tax rates on small and medium-sized companies

Banning cash transactions for sums above 300,000 rupees ($4440; £3533)

Political funding reforms including a cap on the cash donated to a political party by a single source

Nothing for foreign investors: Analysis by Shilpa Kannan, BBC News, Delhi

Arun Jaitley had to do a balancing act between the need to stimulate India’s growth and ensuring that the country’s spending is under control.

But I’ve been at an event run by one of India’s biggest business groups, the CII, and the mood is one of general disappointment.

The finance minister had promised to gradually bring down corporation tax from 30% to 25% – but he didn’t do it last year and it didn’t happen this year either.

Many here are saying there was nothing in for foreign or domestic investors. They fear a flee of money from India.

‘Bright spot’

India’s economy is expected to grow by 6.5% in the year to March 2017, down from 7.6% the previous financial year, a key economic report revealed ahead of the budget.

However, the country was a “bright spot” in the world economy, Mr Jaitley said, adding that the impact on growth from the government’s cash crackdown would wear off soon.

He said the currency ban was a “a bold and decisive measure” and would leaded to larger GDP, more tax revenues and a cleaner economy.

The dramatic move to scrap 500 ($7.60) and 1,000 rupee notes was intended to crack down on corruption and so-called black money or illegal cash holdings.

But the Economic Survey, released on Tuesday and written by the government’s chief economic adviser, admitted the rupee withdrawal had been bad for economy. in the short term.

Source: India Budget 2017: Promise to boost rural spending – BBC News

24/01/2017

Xi Jinping portrays China as a rock of stability | The Economist

DELEGATES at the World Economic Forum in the Swiss resort of Davos often treat politicians as rock stars. But the fawning reception given to China’s leader, Xi Jinping, on January 17th was extraordinary.

He was the first Chinese president to attend the annual gathering of the world’s business and political elite. Even an overflow room was packed when he delivered, in his usual dour manner, a speech laced with literary references—rendered through bulky headsets into equally monotone translations. Mr Xi said little that was new, but the audience lapped it up anyway. Here, at a time of global uncertainty and anxiety for capitalists, was the world’s most powerful communist presenting himself as a champion of globalisation and open markets.

Mr Xi (pictured, next to a panda ice-sculpture) did not mention Donald Trump by name, nor even America, but his message was clear. “No one will emerge as a winner in a trade war,” he said, in a swipe at Mr Trump who has threatened, among other mercantilist acts, to slap heavy tariffs on Chinese goods. Mr Xi likened protectionism to “locking oneself in a dark room”, a phrase that delegates repeated with delight. His words seemed comforting to many of them after a year of political surprises, not least in America and Britain. Mr Xi quoted from Dickens to describe a “world of contradictions”, as he put it. “It was the best of times, it was the worst of times,” he said. Many foreign businesses complain about what they regard as a rise of protectionism in China, too—but no one could accuse Mr Xi of being out of tune with the Davos mood. China, Mr Xi assured delegates, “will keep its door wide open and not close it”.

The Chinese president also portrayed his country as a staunch defender of the environment. He said that sticking to the Paris agreement on climate change, which came into effect last year, was “a responsibility we must assume for future generations”. These, too, were welcome words to many listening: Mr Trump’s threat to reject the pact will make China’s commitment to it all the more crucial. The week of whose inauguration?

The timing of Mr Xi’s trip was fortuitous—according to the Financial Times his aides were working on it before Britain voted to leave the European Union and well before Mr Trump’s election victory. But he must have relished the points that those events enabled him to score at Davos. Mr Xi faces political battles of his own as he prepares for a five-yearly Communist Party congress in the autumn and a reshuffle right after it. He wants to install more of his allies in key positions. Standing tall on the world stage could help (and attending Davos will have reinforced the point to his colleagues that he is in charge of China’s economy, as he clearly is of every other main portfolio).

Mr Xi would have relished the occasion even had the predictions of many in the global elite a year ago proved accurate—that Britain would vote to stay in the EU and that Mr Trump would not win. The forum is one where embarrassing questions about China’s politics are seldom raised openly. Mr Xi could talk airily of China’s openness, with little fear of being asked why he is clamping down on dissent and tightening controls on the internet (last year this newspaper’s website joined the many foreign ones that are blocked). On January 14th China’s most senior judge condemned judicial independence as a “false Western ideal”.

Previously, the highest-ranking Chinese attendees had been prime ministers. In 2016 the vice-president, Li Yuanchao, who ranks lower than the prime minister in the party hierarchy, led the team. So why has Mr Xi waited until his fifth year as president to turn up? He may well have winced at the thought of doing so last year, when discussions were dominated by questions about China’s management of its slowing economy in the wake of a stockmarket crash and a sudden devaluation of the yuan. Many analysts still worry about China’s economy (not least its growing debt), but the West’s problems have loomed larger over the Swiss Alps this week.

And for all his uplifting talk, Mr Xi shows no signs of wanting to take over as the world’s chief troubleshooter, even if Mr Trump shuns that role. Mr Xi is preoccupied with managing affairs at home and asserting control in seas nearby (see article). “Nothing is perfect in the world,” the new Davos man sagely informed the delegates. But he is unlikely to take the lead in making the world a better place.

Source: Xi Jinping portrays China as a rock of stability | The Economist

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24/01/2017

5 Things Narendra Modi Will Be Listening For During His Chat with Donald Trump – Briefly – WSJ

Indian Prime Minister Narendra Modi is set to speak with U.S. President Donald Trump on Tuesday in a conversation that will set the tone for future relations.New Delhi hopes it can begin to decipher what the country’s top diplomat, S. Jaishankar, last week called a world in 2017 filled with “known and unknown unknowns”—a reflection on the rapidly-changing global landscape marked by Mr. Trump’s presidency in the U.S., turmoil in Europe and rising Chinese power.

Here are five things Mr. Modi will likely be listening for.

1 Pakistan

Mr. Trump has vowed to be tough on terror, a goal he shares with Mr. Modi. But it isn’t clear how that will shape the new U.S. administration’s views on Pakistan, India’s rival neighbor that Mr. Modi has called the epicenter of global terrorism.India’s security establishment will be watching to see if Mr. Trump puts greater pressure on Pakistan to stamp out terrorist groups on its soil and whether U.S. supply of aid and weapons to Islamabad, a long-standing thorn in India-U.S. ties, will diminish.Mr. Trump’s Pakistan policy will depend in large part on his approach to the conflict in Afghanistan, another big unknown Indians will be looking for more clarity on.

2 China

India is closely watching for clues on how Mr. Trump plans to tackle China, given the new U.S. president’s combative tone toward Beijing. A more-assertive China has in recent years driven closer U.S.-India collaboration on defense and security issues. In an address last week, Mr. Modi, without naming China, spoke about “rising ambitions and rivalries” in Asia as “visible stress points” and called for “predictable behavior rooted in international norms and respect for sovereignty.”But if U.S.-China differences spilled into a military confrontation, it is unclear how India, which is involved in territorial disputes with its more-powerful neighbor, will respond.

India will also be looking for signs of a different outcome analysts have predicted—a more inward-looking U.S. under Mr. Trump emboldening an ambitious Chinese leadership to expand the country’s power. Such a development could push India to play a bigger role in Asia and to further strengthen strategic ties with Japan, which is also wary of China’s rise.

3 H-1B visas

Indian officials are anxious to see if Mr. Trump moves to tighten visa rules that would affect the country’s outsourcing giants like Tata Consultancy Services Ltd., Infosys Ltd. and Wipro Ltd. that send programmers and engineers to the U.S. on high-skilled worker, or H-1B, visas. Mr. Trump at times during the campaign criticized the program for supplying “cheap labor.”

4 Russia

Among the biggest potential shifts under a Trump presidency is closer ties between the U.S. and Russia. India, which has long-standing ties with Moscow, would welcome such a development. Analysts in India believe U.S.-Russia tensions under President Barack Obama pushed Russia closer to China. New Delhi will keep an eye on whether Mr. Trump considers easing U.S. sanctions on Russia.

5 NSG membership

India is counting on U.S. backing to help it become a member of the Nuclear Suppliers Group that controls trade in nuclear fuel and technology. Mr. Modi has made a big push for New Delhi’s entry, but has repeatedly been stymied by China. He will hope Mr. Trump finds a way to override Beijing’s objections.

Source: 5 Things Narendra Modi Will Be Listening For During His Chat with Donald Trump – Briefly – WSJ

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