Archive for ‘Politics’

25/05/2013

* Restraint is the new red in China

The message for restraint and austerity flies in the face of the need to rebalance the economy from a manufacturing/export led one to a consumer led one.

LA Times: “President Xi Jinping is pressing the Communist Party’s elite to cut back on lavish living amid growing public resentment. The economic effect is far-reaching.

Men pass a billboard outside a mall in Beijing this month.

BEIJING — Exports of elegant Swiss watches to China have plunged. Sales of Mercedes-Benz and other premium sedans are slowing. And high-end restaurants, coming off their worst Chinese New Year festival in years, are starting to change their menus to lure ordinary families.

At a Montblanc shop in downtown Beijing, sales clerks recall the days when they rang up as many as 10 of the top-selling fountain pens every day. And never mind the $1,400 price tag: The platinum-plated pen capped with a half-carat diamond was a particular favorite. Nowadays the store sells one such pen every two to three days, said a saleswoman surnamed Ren, adding sadly that her pay is commission-based.”

via Restraint is the new red in China – Los Angeles Times.

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

25/05/2013

* China seals first free-trade deal with Switzerland

Will this be the first of many FTAs?  Will the floodgates be opened?

BBC: “China has signed the framework of a free-trade agreement with Switzerland, which could become Beijing’s first such deal with a major Western economy.

Chinese secretary of trade and Swiss economy minister sign memorandum of understanding of free trade on 24 May

The signing ceremony took place during an official visit by Chinese Premier Li Keqiang to Switzerland.

Bilateral trade between the two countries is worth $26bn through imports and exports of watches, medicines, textiles and dairy products.

Mr Li said he hoped the deal would be felt beyond Switzerland’s borders.

“This free-trade deal is the first between China and a continental European economy, and the first with one of the 20 leading economies of the globe,” Mr Li told reporters after the two countries signed the preliminary agreement.

“This has huge meaning for global free-trade,” he added.

For his part, Swiss President Ueli Maurer described the agreement as a “real milestone”.

China is Switzerland’s third biggest trading partner after the European Union and America, with exports to China of watches, pharmaceuticals and machinery amounting to over $22bn.

It is no coincidence that China’s premier made Switzerland his first stop on his brief European tour, the BBC’s Imogen Foulkes in Berne says.

China has hinted it could also make Switzerland its financial centre of choice, if Beijing allows offshore trading of its currency, the yuan, she adds.”

via BBC News – China seals first free-trade deal with Switzerland.

23/05/2013

* China to lend $580 mln for Sri Lanka development projects

China is past-master at geopolitics. India is a novice.

Reuters: “China Development Bank Corporation will lend $580 million to Sri Lanka to help implement key infrastructure projects, a government document released on Wednesday showed.

English: Location map of Sri Lanka. Equirectan...

English: Location map of Sri Lanka. Equirectangular projection. Strechted by 101.0%. Geographic limits of the map: N: 10.2° N S: 5.5° N W: 79.2° E E: 82.3° E Made with Natural Earth. Free vector and raster map data @ naturalearthdata.com. (Photo credit: Wikipedia)

The loan will bring CDB’s total lending to Sri Lanka to more than $1.4 billion. China’s increasing influence in the island nation has stoked concerns in neighbouring India.

According to the document, $300 million of the loan will be spent on developing roads and $200 million on water supply projects, with the rest going to the national business school.

It said CDB had already extended $652 million for road development projects and $214 million for an irrigation project.

The loan announcement comes ahead of a four-day official visit to China by Sri Lankan President Mahinda Rajapaksa.

The $59 billion economy has increasingly relied on China for financing and technical expertise for reconstruction projects following the end of its long civil war in May 2009.

In March, China’s Export-Import Bank agreed a $278.2 million loan to finance a rail track to a port Beijing is building in Sri Lanka’s deep south of Hambantota.

China has loaned $1.5 billion for the port’s construction and $209 million for a nearby airport.

Similar port developments from Myanmar to Pakistan have raised Indian fears about Chinese political and military influence, but Rajapaksa has rejected such concerns, saying China’s presence in Sri Lanka is strictly business-related.”

via China to lend $580 mln for Sri Lanka development projects | Reuters.

See also: https://chindia-alert.org/political-factors/geopolitics-chinese/

23/05/2013

* Conservatives counter demands for constitutional rule in China

It seems the ‘gloves are off’ – conservatives versus the President: see last para of this article.

SCMP: “Chinese conservatives have come out to argue against the adoption of “constitutional rule”, a term increasingly used by liberals to demand the realisation of basic human rights guaranteed in the Chinese constitution.

china_housing_xhg104_5351411.jpg

The nationalistic Global Times in an editorial on Wednesday called such demands “empty political slogans” made by “a group of misled intellectuals”.

These intellectuals wanted to “change China’s course of development”, the paper argued.

“If the entire Western world together can’t muster the might [to change China’s course], then a small group of domestic dissenters will be even less able to do so.”

Even though the Chinese constitution in theory guarantees freedom of speech, the press and to demonstrate, and the right to elect and be elected, human rights organisations say such rights are consistently cracked down upon.

Many lament that courts cannot invoke the constitution to protect the civil and political rights of citizens. Nobel Peace Prize laureate Liu Xiaobo has attempted to cite rights guaranteed in the constitution in his trial for “inciting subversion of state power” that led to an 11-year prison sentence in 2009.

When the liberal Guangzhou-based newspaper Southern Weekly called for a realisation of a “constitutional dream” in its traditional New Years editorial in January, censors replaced the text with a more muted version, triggering a rare public strike by journalists.

Democracy activists are often seen holding placards with the Chinese characters for “constitutional rule” in photos shared on microblogs.

The editorial in the Global Times, which ranks among the most widely read dailies in China, comes a day after a Beijing law scholar Yang Xiaoqing wrote an article with similar reasoning for the Communist Party’s bi-weekly Red Flag Magazine.

Citing Marx and Engels, the Renmin University professor repudiated what she called the “old Western” understanding of constitutional rule as an oppressive tool of the – in Marxian terms – capitalist stage of development.

Those with capital use the constitution’s allure to trick those who have nothing into believing that they lived in a fair system, she argued in ideologically orthodox terms. Citing Deng Xiaoping and Jiang Zemin, she predicted chaos for China if the country were ever to come under constituional rule.

In contrast to that chaos, Yang offers a vision of a “Chinese contribution to humanity in regards to constitutional rule” in which China’s People’s Congresses under the leadership of the Communist Party are truly representative of the nation’s people and are able to supervise the judiciary.

While a few people supported her comments, they have predominantely been mocked on microblogs, with thousands of people sharing her photo. Lei Yi, a Beijing-based historian, sarcastically wrote in a microblog post that he was reminded of Stalin and Pol Pot.

President Xi Jinping has repeatedly called for more respect of the constitution since he assumed the leadership of the Communist Party in autumn. “No organisation or individual should be put above the constitution and the law,” he reportedly said at a Politburo seminar in February.”

via Conservatives counter demands for constitutional rule in China | South China Morning Post.

19/05/2013

* China Premier Li Keqiang in India for first foreign trip

BBC: “China‘s Premier Li Keqiang is travelling to India in the first stop of his maiden foreign trip since taking office.

Chinese and Indian flags flie in New Delhi on 18 May 2013

Upon his arrival in Delhi, Premier Li will hold talks with Prime Minister Manmohan Singh, followed by dinner at the Indian leader’s residence.

Border tensions and trade ties are expected to be among the issues discussed by the two men.

The neighbours are the world’s two most populous countries.

Beijing hopes the visit will help build trust and a new strategic partnership to the benefit of both countries, China’s official news agency Xinhua said.

Delhi thought “very highly” of Mr Li’s decision to make India his first foreign stop and the aim of the talks was to “enhance trust”, Indian foreign ministry spokesman Syed Akbaruddin said.

A decades-long border dispute flared up last month after India accused Chinese troops of crossing the countries’ de facto border in the Himalayas.

The dispute over the territory in the Ladakh region has dogged the two countries since the 1950s.

Boosting trade ties is also expected to dominate the talks. China is already one of India’s top trading partners and both countries have already agreed a new $100bn (£65bn) bilateral trade target for 2015.

Premier Li will spend three days in India before travelling on to Pakistan, Switzerland and Germany.”

via BBC News – China Premier Li Keqiang in India for first foreign trip.

18/05/2013

* China’s protesters: winning battles?

FT: “Even in China, David sometimes beats Goliath – though it’s sometimes hard to be sure.

This week, residents of Songjiang – a suburb of Shanghai which has gained fame around the world for having over 10,000 dead pigs floating in its water supply – found that though they could not vanquish the porcine invader, they had scared away an intruder from the corporate world. Shanghai Guoxuan High-Tech Power Energy company said it was abandoning plans for a battery factory in Songjiang, after residents protested on the streets and on the internet against it.

In a statement broadcast on local TV, the company said it would return the land allocated by local government and “will not seek any compensation”. It said it was halting its existing operations and pulling out of the area completely.

Residents staged street protests against the plant regularly since late April and more than 10,000 signed a petition against the project with many others voicing their opposition to it on the internet. At least one protester was reported to have been injured by police.

But Chinese citizens know that plants vanquished in one location in China, by “not in my backyard” or “nimby” protests, often pop up in someone else’s backyard. Residents of neighbouring Jinshan, another industrial area on the outskirts of Shanghai, now fear that the plant will end up on their doorstep.

“We already have so many chemical plants. We really cannot tolerate one more battery plant. Shall we protest together?” asks one user on a Jinshan property owner’s online forum.

Ordinary Chinese are less and less ready to pay the environmental price for economic development – or rather, more and more ready to see someone else pay it. This week, up to a thousand people protested in Kunming, in southwest China, the second large demonstration this month against plans to produce paraxylene (PX), a chemical used in making fabrics and plastic bottles, at a plant in the town.

Protestors complained that the environmental impact assessment for the project was suspect, because it was done by one subsidiary of China National Petroleum Corp, the country’s largest oil and gas producer and supplier, while the plant would be operated by another. That is the equivalent of “grandson assessing Grandpa,” said one Weibo user.

Last November, the eastern city of Ningbo suspended a petrochemical project after days of street protests. The year before, big protests against a PX plant in the northeastern city of Dalian forced the city government to suspend it.”

via China’s protesters: winning battles? | beyondbrics.

15/05/2013

* After ATM heist, India’s IT sector again in unwelcome spotlight

Reuters: “A breach of security at two payment card processing companies in India that led to heists at cash machines around the world has reopened questions on the risks of outsourcing sensitive financial services to the Asian nation.

The EnStage Inc. office is seen in the southern Indian city of Bangalore in this May 12, 2013 file photo. REUTERS/Stringer/Files

Global banks that ship work to be processed in India, either in-house or to big IT services vendors, were already under pressure to step up oversight of back-office functions after a series of scandals last year.

Last week, U.S. prosecutors said a global criminal gang stole $45 million from two Middle Eastern banks by breaking into the two card processing companies based in India and raising the balances and withdrawal limits.

“India is exposed in two ways: The threat that the same theft could happen in India and the fact that the outsourcing industry will also get affected,” said Arpinder Singh, partner and national director for fraud investigation and dispute services at consultancy Ernst & Young.

The episode is reopening debate on banks sending work requiring a high degree of confidentiality to offshore locations.

“It is the weakest link,” said Shane Shook, an expert with U.S. cyber-security firm Cylance Inc who has helped financial firms conduct investigations into some major cyber crimes.

“I think the lesson is they need to pull back on what they’ve outsourced. When you’re giving a third party, the outsourced entity, the ability to access credit limits or cash limits of the consumers you’re managing the finances for, you’re giving up control that is your fundamental responsibility.”

India’s $108 billion IT services industry is the world’s favored destination for outsourcing. Over 40 percent of exports by the industry are support services for the global financial sector, ranging from investment bank back-office functions to research, risk-management and processing of insurance claims.”

via After ATM heist, India’s IT sector again in unwelcome spotlight | Reuters.

15/05/2013

* Chinese austerity hits Diageo’s sales

English: Songhe and Moutai - modern Baijiu bra...

English: Songhe and Moutai – modern Baijiu brands from China (Photo credit: Wikipedia)

Read “corruption” for “austerity” and that would explain why sales and profits have dropped like a stone.

FT: “Sales of Diageo’s baijiu, a clear grain spirit popular in China, slumped 40 per cent in the first quarter of this year as the world’s biggest distiller became the latest casualty of China’s crackdown on conspicuous consumption.

 

The rapid deterioration in fortunes at Shui Jing Fang, one of the first Chinese household names to be taken over by a foreign company, comes as other makers of high priced spirits have suffered falling sales amid the chill winds of austerity with socialist characteristics. It is a turnround for the drinks industry which, like other purveyors of status symbols, had become accustomed to runaway growth in China comfortably offsetting European weakness.

Pernod Ricard, the world’s second-biggest distiller after UK-listed Diageo, is set to report an annual decline in Scotch whisky sales in China, following years of surging growth. This came after flat sales over the Chinese New Year period, when it sold more Cognac but saw Scotch sales fall by double-digits in percentage terms year-on-year.

Diageo has so far shrugged off concerns about the crackdown saying it is having little effect on gifting, which makes up 10 to 15 per cent of Scotch and Cognac sales in the country.

Kweichow Moutai, China’s largest baijiu maker, reported a halving in year-on-year profit growth in the first quarter. Baijiu, like a host of other food and drinks in China, has also been caught up in food safety concerns.

Shui Jing Fang, which Diageo acquired last year after years of protracted and complex negotiations, saw both sales and earnings before interest and tax fall by 40 per cent in the first quarter of the calendar year, Diageo said on an investor call on Tuesday. That followed net sales growth of 10 per cent and operating profit growth of 12 per cent in the previous full year.

Although Shui Jing Fang is just a drop of Diageo’s sales at around 1 per cent, baijiu dwarfs sales of international spirits in China and is seen as an attractive sector for multinationals to increase their grip on.”

via Chinese austerity hits Diageo’s sales – FT.com.

15/05/2013

* UK to try and simplify visas for Chinese tourists

Hard on the heels of special visas for Indian business applicants, Britain is trying to do something for Chinese visitors.

FT: “Home Office ministers are to start talks with Chinese tour operators in the hope of setting up an easier visa application system for groups of high-spending Asian shoppers who are discouraged by the UK’s border bureaucracy.

Chinese tourists at cake shop with windows decorated during Queen Elizabeth II Diamond Jubilee

The department has been under pressure from luxury retailers to streamline the process for Chinese tourists, who can enter most of continental Europe with just one Schengen visa and are therefore less likely to apply for a separate UK entry. As a result, France receives at least 25 per cent more Chinese tourists each year than Britain does.

Mark Harper, immigration minister, said on Tuesday that he hoped to begin discussions soon. “It’s just thinking about, practically, what can we do with the tour operators to enable them to make that process for getting both [UK and Schengen] visas as straightforward as possible,” he told the Financial Times. “We may not be able to get it to be perfect, but we can get it to be a lot better than it is now, which then makes us a lot more competitive.”

However, Mr Harper suggested that a previous idea of negotiating “parallel” processes – so that data for Schengen and UK visas could be submitted in one joint application – was looking less likely. This was because “you start running into issues about government IT projects and complex issues about data protection”, he said.

Mr Harper also indicated such a joint application would be difficult to achieve diplomatically because it was “not obvious” that it would be in the interests of Britain’s European partners.”

via UK to try and simplify visas for Chinese tourists – FT.com.

15/05/2013

* Arctic Council to rule on observer status for China

FT: “The Arctic is at the centre of a global geopolitical battle as China, India and Japan attempt to join the main body involved in setting the rules for future development of the polar region.

Oil drilling in the Arctic seas has become a highly contentious issue.

At a meeting in Kiruna in northern Sweden on Wednesday and Thursday, ministers from the five Nordic countries, the US, Canada and Russia will decide whether to let 14 countries and organisations gain the status of “observer” to the Arctic Council.

China is the most controversial name on the list, but its candidacy has the support of all the Nordic countries.

Canada and Russia have expressed concerns about further opening up the council, which already has six European countries as observers as well as various intergovernmental and non-government organisations. The US has said it is undecided over the decision, which needs unanimity.

The Arctic is viewed as an increasingly strategic area due to the presence of many resources such as oil, as well as the possibility of quicker shipping routes between Europe and Asia as the ice in the polar region continues to melt.

China, Japan, South Korea, Singapore, India, the EU, Italy and Greenpeace are among the bodies applying at the twice yearly summit for observer status, which would allow them to attend all meetings but not participate in the ministerial conferences.

The council, which was launched in 1996 and serves as a body for international rulemaking on the Arctic.

In a sign of the importance the US is now according the Arctic, secretary of state John Kerry arrived on Tuesday in Sweden for talks first in Stockholm with the government and then in Kiruna.

China has heavily wooed Nordic countries such as Iceland, with which it signed the first free-trade agreement with a European country last month.

Oil exploration in the Arctic has proved to be incredibly difficult, but more than a fifth of the world’s undiscovered oil and gas reserves is thought to be in the region, and there is also great scope for mining of various minerals in places such as Greenland, northern Sweden and Finland.

A northern sea route through the Arctic to the north of Russia could cut several weeks off shipping times and thousands of kilometres off distances between Europe and Asia, especially in the summer, which experts think could soon be ice-free in parts of the region.”

via Arctic Council to rule on observer status for China – FT.com.

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