03/02/2012

* Indian Supreme Court cancels all 122 telecoms licences

Declaring the allocation of 2G spectrum by the Congress-led United Progressive Alliance (UPA) government “illegal” and an example of the arbitrary exercise of power, the Supreme Court on Thursday cancelled all 122 telecom licences allotted on or after January 10, 2008 to 11 companies during the tenure of the former telecom minister, A. Raja.

http://www.thehindu.com/news/national/article2853159.ece

Mr Raja is charged with corruption.

This ruling, although deemed to be a step in the right direction, makes foreign investors nervous as it means any past deals, if proven to be corrupt, could be overturned, several years later.

For a view about corruption in India go to http://chindiapedia.org/Indianpitfalls.aspx

02/02/2012

* India, China join hands on the high seas to tackle pirates

New Delhi, February 1
“Faced with persistent threats from pirates operating off the coast of Somalia, uneasy neighbours India and China have started cooperating with each other, roping in Japan to tackle piracy. This is the first working relationship on the high seas between the Indian Navy and China’s People Liberation Army (Navy).”

http://www.tribuneindia.com/

01/02/2012

* China re-emphasizes agriculture

With growing affluence and changing tastes, several staples like soya, rich and pork that used to be exported are now imported. China focused on manufacturing and infrastructure for two decades. It is now re-emphasizing agriculture: in terms of investment in technology and research, in terms of exhorting local authorities to pay heed to it and to irrigation projects.

http://news.xinhuanet.com/english/china/2012-02/01/c_131386786.htm

01/02/2012

* Workers follow manufacturers moving inland

As a direct response to suicides and other labour issues, large manufacturers sucvh as Fozconn, one of the world’s largest contract manufacturers of electronic devices, employing nearly half a million workers in Shenzhen have started to open plants in inner provinces where the labour costs are 2/3 of that of coastal cities.

This will be good for the companies, good for workers of the local province who will not have to travel as far, and good for China who would prefer to reduce the immigrant worker population to more manageable levels, add economic stimulus to interior provinces as well as spreading the industries across China and reducing security risks.

http://www.chinadaily.com.cn/china/2012-01/31/content_14513647.htm

For a view of the challenges facing China, including migrant workers, go to http://chindiapedia.org/politicalpitfalls.aspx

31/01/2012

* Shanghai aims to be global financial centre by 2020

China Daily: “China plans to make Shanghai, the country’s financial hub, a global center for innovation, transaction, pricing and clearing of RMB-denominated financial products by 2015,the country’s top economic planner said Monday.

“The plan will be part of China’s bid to build Shanghai into an international financial center by2020 amid a shifting global financial landscape, with China’s economic weight and its currencytaking a more prominent position on the world stage.”

http://www.chinadaily.com.cn/china/2012-01/30/content_14507175.htm

This move is not contrary to Hong Kong’s continuing role as the ‘off-shore’ RMB trading centre, probably allied with London to provide 24 hour coverage.

31/01/2012

* Starbucks finally opens in India

Starbucks and a Tata company have started a JV and will open 50 shops in India this year, starting in Delhi and Mumbai.

http://indiatoday.intoday.in/story/starbucks-finally-arrives-in-india-with-tata-allaince/1/171350.html

In the meantime Starbucks has raised its coffee prices in its 500 stores in China.

29/01/2012

* Indian billionaire bids for Marriott Hotels

Bloomberg: “Indian billionaire Subrata Roy, the owner of Sahara group, has offered about 750 million pounds ($1.18 billion) for a collection of Marriott hotels being sold by Royal Bank of Scotland Group Plc (RBS), the Sunday Times reported, without citing anyone.

“Roy, who bought the Grosvenor House hotel in London last year, is competing with the Abu Dhabi Investment Authority, and Indian investor Blue Post Group, according to the newspaper.”

http://mobile.bloomberg.com/news/2012-01-29/indian-billionaire-bids-for-rbs-s-marriott-hotels-times-says?category=

Just as with China, India is buying into foreign tangible assets. The big difference is that Chinese acquisition are often carried out by its sovereign wealth funds or by SOEs (State Owned Enterprises – http://www.china.org.cn/video/2011-12/30/content_24292710.htm), whereas Indian acquisitions are more often than not by private sector companies; though India is considering setting up a sovereign wealth fund.

http://www.reuters.com/article/2011/11/23/india-fund-finmin-idUSL4E7MN1J820111123

29/01/2012

* Biggest human migration

This January sees the start of the Year of the Dragon. The Chinese dragon, opposite to its western counterpart, is perceived as an auspicious, powerful and dynamic icon, always courageous enough to face daunting challenges.

Chinese Lunar New Year/Spring Festival is when traditionally Chinese families get together to exchange presents and to wish each other well. With between 150 to 200m Chinese from rural areas working in big cities in China, the week-long break is a must-travel time. Most do so by rail, though many take coaches and some fly.  The travel exodus is exacerbated by students visiting families too. It is estimated that 3bn passenger trips are incurred during for the two-way trips.

The Chinese railways lay on up to a 1,000 addition trips at the two weekends on either end. This year, a new on-line and telephone system that was meant to ease booking problems actually contributed to chaos as many migrant workers do not use the Internet and many do not know how to book by phone, especially as some form of credit facility is needed. Another case of the manifestation of the “Law of Unintended Consequences” or, in this case, “The Law of Contrary Consequences”.

The fundamental problem is that migrant workers are not issued with full residency permits in the cities in which they spend 90% of their lives and often cannot either afford to or are allowed to bring their children with them. The children therefore remains in the village looked after by the grandparents. This in turn means if there is no wisit, they do not see their offspring at all!

http://www.chinadaily.com.cn/opinion/2012-01/12/content_14426708.htm

28/01/2012

* Cadmium discharge threatens 3.7m people in China

31/01/12 update: Seven chemical company officials arrested.

http://flashnewstoday.com/index.php/seven-detained-over-china-river-cadmium-spill/

27/01/12 – Reuters: “A cancer-causing cadmium discharge from a mining company has polluted a long stretch of two rivers in southern China, and officials warned some 3.7 million people of Liuzhou in the Guangxi region to avoid drinking water from the river.

“Pollution of waterways by toxic run-offs from factories and farms is a pressing issue in China, prompting authorities to call for policy tightening, though the problem shows no sign of going away.”

http://www.reuters.com/article/2012/01/27/us-china-pollution-cadmium-idUSTRE80Q0IN20120127

and http://www.chinadaily.com.cn/china/2012-01/30/content_14502146.htm

26/01/2012

* Huawei invests in British research firm

Huawei, China’s premier telecoms supplier, is acquiring the Centre for Integrated Photonics (CIP), the UK’s world-leading photonics research laboratory, for $10m.

The optical networking research unit is currently owned by the East of England Development Agency (EEDA), but is being sold as part of a larger rationalisation of assets.

Huawei said CIP will “significantly deepen” its optical research and development capabilities. The CIP research team will be retained and will form the core of a new Huawei UK R&D centre, part of Huawei’s global network.

This acquisition is much more significant than that of a 10% ownership of Thames Water by a Chinese sovereign fund. It will enable Huawei to tap into British brainpower. Given China’s meed to diversify its surplus from the US$ and other static holdings into tangible assets, this will not be the first such acquisition.

However, there is no need for alarm. Years ago Microsoft set up a research facility in Cambridge and HP set one up in the Thames valley. Even long before then, IBM set up research labs in Switzerland, Britain and France. This all plays to one of the three strands of global power shift that Paddy Ashdown talked about in his talk at TED.com – http://blog.ted.com/2012/01/05/the-global-power-shift-paddy-ashdown-on-ted-com/. From national states to global corporations.

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