China launched its longest manned space mission on Monday, sending two astronauts into orbit to spend a month aboard a space laboratory that is part of a broader plan to have a permanent manned space station in service around 2022.
The Shenzhou 11 blasted off on a Long March rocket at 7:30 am (2330 GMT) from the remote launch site in Jiuquan, in the Gobi desert, in images carried live on state television.
The astronauts will dock with the Tiangong 2 space laboratory, or “Heavenly Palace 2”, which was sent into space last month. It will be the longest stay in space by Chinese astronauts, state media reported.
Early on Monday, Fan Changlong, a vice chairman of China’s powerful Central Military Commission, met astronauts Jing Haipeng and Chen Dong and wished them well, state news agency Xinhua reported.
“You are going to travel in space to pursue the space dream of the Chinese nation,” Fan said.”With all the scientific and rigorous training, discreet preparation, and rich experience accumulated from previous missions, you will accomplish the glorious and tough task… We wish you success and look forward to your triumphant return.”
Shenzhou 11 is the third space voyage for Jing, who will command the mission and celebrate his 50th birthday in orbit.
In a manned space mission in 2013, three Chinese astronauts spent 15 days in orbit and docked with a space laboratory, the Tiangong 1.Advancing China’s space program is a priority for Beijing, with President Xi Jinping calling for the country to establish itself as a space power.
China insists its space program is for peaceful purposes.
Shenzhou 11, whose name translates as “Divine Vessel”, will also carry three experiments designed by Hong Kong middle school students and selected in a science competition, including one that will take silk worms into space.
The U.S. Defense Department has highlighted China’s increasing space capabilities, saying it was pursuing activities aimed at preventing other nations using space-based assets in a crisis.
China has been working to develop its space program for military, commercial and scientific purposes, but is still playing catch-up to established space powers the United States and Russia.
China’s Jade Rabbit moon rover landed on the moon in late 2013 to great national fanfare, but soon suffered severe technical difficulties.
The rover and the Chang’e 3 probe that carried it there were the first “soft landing” on the moon since 1976. Both the United States and the Soviet Union had accomplished the feat earlier.
China will launch a “core module” for its first space station some time around 2018, a senior official said in April, part of a plan for a permanent manned space station in service around 2022.
Russia and India are expected to sign a deal on Saturday for the delivery of an advanced air defence system to Delhi, a Kremlin official has said.
The S-400 missiles are Moscow’s most sophisticated aircraft defence system.Yuri Ushakov said the agreement would be signed at a summit in Goa where President Vladimir Putin will hold talks with Indian PM Narendra Modi.
India is also hosting a Brics summit in Goa this weekend involving Brazil, Russia, India, China and South Africa.
“An agreement on the delivery of S-400 ‘Triumph’ anti-missile defence systems and other deals will be signed as a result of the talks,” Russian news agencies quoted Mr Ushakov as saying.
Russia’s missiles send robust signal
The Kremlin earlier this week said the talks with Mr Modi would focus on “a wide range of matters of bilateral relations, especially trade and economic ties”.
The S-400 surface-to-air missiles have been deployed to Syria, where Russian forces have been operating in support of the government of President Bashar al-Assad.Russia and India were close allies during the Cold War, but recently the relationship has become more complex.Talks have been held annually since 2000 and hosted alternately by Moscow and Delhi.
India’s global army of expatriates–which does everything from writing software in Silicon Valley to building skyscrapers in in Qatar–is the world’s most generous when it comes to number of dollars sent home, but this year they have become a bit stingy.
Recently released World Bank estimates predict the Desi diaspora will send home $65.45 billion this year. While that is just above remittances into China ($65.17 billion) and tens of billions beyond any other country, it is a 5% decline from last year.
The last time India saw a bigger slide in remittances was back in 2004 when remittances fell 11%.
Globally, remittances are expected to edge up about 1% this year, the World Bank predicted, so why is India underperforming?
The main problem is that many of the Gulf Cooperation Council countries have been struggling with the decline in oil prices. That has meant they are hiring fewer Indians, providing fewer perks to their international employees and in some countries even restricting the number of foreigners that can be hired.
“This year the South Asia region would see a decline of 2.3% in remittances to the region due mainly to the impact of declining oil prices and labor market nationalization policies on remittances from GCC countries,” the report said. “Moving forward remittance growth in the region is expected to remain subdued.”
Some parts of the southern state of Kerala and other regions in India that depend on remittances are already starting to feel the pain from the decline in oil riches.
The World Bank expects remittance growth to return, expanding 2.2% in South Asia next year and 2.3% the year after that. Globally remittance growth will likely be stuck below 4% for years, the bank said.
“Remittances continue to be an important component of the global economy, surpassing international aid. However this ‘new normal’ of weak growth in remittances could present challenges for millions of families that rely heavily on these flows. This, in turn, can seriously impact the economies of many countries around the world bringing on a new set of challenges to economic growth,” said Augusto Lopez-Claros, Director of the World Bank’s Global Indicators Group.
In 2011, we tried our hand at predicting the ways in which, in the decade to come, Chinese consumers would change their preferences and behaviors.
This article takes stock of those predictions.
Why check in now? One reason is we’re about halfway to 2020. Another is a comprehensive new McKinsey survey, which follows nearly ten years of previous research that includes interviews with more than 60,000 people in upward of 60 cities in China. Along the way, we’ve bolstered our own team’s data on consumer preferences and behavior with a number of complementary analyses and models, including McKinsey’s macroeconomic and demographic studies of Chinese urbanization and income development. We’ve also interviewed academics to draw out the major trends shaping the course of the Chinese economy, such as its rapidly aging population, the growing independence of women in society, and the postponement of critical life milestones, such as marrying and having children.
We’ve done it all with the abiding belief that companies getting ahead of the trends can build their brands and offerings to fit a rapidly evolving set of consumer needs in China. Deeper and more nuanced understanding of Chinese consumers can help reveal fresh opportunities—for new entrants and incumbents alike—and signal those areas where established players may need to be more wary.
Looking back nearly five years on, it is plain that Chinese consumers are evolving along many, though not all, of the lines we’d predicted. While geographic differences persist, Chinese consumers are, on the whole, more individualistic, more willing to pay for nonnecessities and discretionary items, more brand loyal, and more willing to trade up to more expensive purchases—even as their hallmark pragmatism endures.
Evolving geographic differences
Much of the research we described five years ago highlighted the vast differences we found among consumers in China’s various cities and regions. Just as it was then, generalizing about Chinese consumers continues to be almost as difficult (and maybe as foolish) as it is to generalize about European consumers.
We predicted these differences would remain—and even grow more significant, especially in the consumption patterns and tastes that relate to discretionary items. To help companies better tailor their go-to-market approach, we grouped most cities in China into clusters based on their similarities, including their geographic proximity and the transportation infrastructure that connects them.
As the economic structure in each of the 22 biggest city clusters has evolved—and as each of them has been affected differently by the recent slowdown of China’s economy—significant differences, for instance, in consumer confidence, do indeed persist between these clusters.
For instance, some 70 percent of consumers in the Fuzhou–Xiamen city cluster, which lies on the coast across from Taiwan, said in our latest report that they are confident their income will significantly increase over the next five years. In that same report, the Byland–Shandong city cluster, which lies on the coast between Beijing and Shanghai, was comparatively pessimistic, with only 33 percent of its consumers expressing such confidence.
Furthermore, when our latest survey compared the consumers in the Shanghai area to those around Beijing and Hangzhou, certain spending attitudes also showed marked differences. For example, brand loyalty increased much faster in Shanghai (24 percent increase in three years versus just 7 percent in Beijing and 9 percent in Hangzhou), as did the willingness to pay for better or healthier products.
Despite geographic differences, there are broad similarities among Chinese consumers. These mirror the general trends economists have found among consumers around the world as economies develop. The general tendency is for consumers, as they earn more, to spend a lower percentage of their income on food, a little more on healthcare, and even more on travel and transportation, as well as on recreational activities. It was no great stretch then, in our report five years ago, to predict a significant shift in consumption from necessities and seminecessities into discretionary categories.
Sure enough, our new survey shows Chinese consumers following the anticipated pattern. When we asked how they plan to increase spending as their income increases, dramatically fewer consumers said they will increase it on food (46 percent in the latest survey, compared to the 76 percent who said they would do so three years earlier).
Responses trended slightly up for healthcare products (from 16 percent to 17 percent), and increased for travel (from 14 percent to 23 percent) and leisure (from 17 percent to 25 percent).
Aspirational trading up
In our previous predictions, we also argued that as the income of Chinese consumers grew, they would aspire to improve their quality of life by not only spending more on discretionary items, but also by shifting their spending to more expensive items in the same categories.
In necessity categories such as food, for example, we predicted consumers would be willing to spend more for healthier versions of the same products—for instance, that olive oil would grow much faster than less healthy (and less expensive) oils. In semi-necessity categories like apparel, we predicted people would buy more special-occasion and premium brands. We anticipated that the strongest beneficiaries of these changes would be in the more discretionary and aspirational categories, such as skincare and automotive. So what has happened so far?
Premium categories have really accelerated. Comparing cosmetics purchases between 2011 and 2015, 44 percent of consumers have traded up their purchases, compared with 4 percent who traded down. Even for rice, 25 percent of consumers traded up versus 3 percent who traded down. Automotive was not included in our survey, but sales data from the Traffic Management Bureau of the Ministry of Public Security in China suggest significant trading up. In 2011, 51 percent of the renminbi spent on cars by Chinese consumers were for autos cheaper than 100,000 RMB. These sales accounted for only 43 percent of the market. Cars selling for 100,000 to 250,000 RMB grew twice as fast with a compound annual growth rate (CAGR) of 19 percent versus 9 percent. And cars with price tags between 250,000 and 400,000 RMB grew the fastest of all, with 23 percent CAGR.
Emerging senior market
In 2011, we observed a big generational difference between consumers in their late 50s and early 60s, who were very conservative spenders, and all of the age cohorts younger than them.
We predicted that by 2020, as the needs of consumers over the age of 55 changed along with their economic confidence, their spending habits would follow suit, making this age group worth pursuing by consumer-product companies. If anything, we underestimated the speed and force with which this trend would unfold.
By 2015, the 55–65 age group had started to shift even faster than the rest of the population. For example, 52 percent of the people in this age group showed a preference for premium products, compared to just 32 percent in 2012. They leaped from being the most conservative age group to the one most likely to trade up. Similarly, the preference for famous brand names among these older buyers jumped by more than 20 percent, fully closing the previous difference among cohorts. As Exhibit 1 shows, these older consumers don’t shy away from indulgences, and they have grown more likely to use the Internet to research their purchases, even if they still do so less often than younger consumers.
That said, the upper age group has remained more pragmatic and cost conscious than any other age group, as we discuss in the following section.
The still-pragmatic consumer
Back in 2011, even as we were predicting changes in the behavior and preferences of Chinese consumers, we also saw ways in which their essential pragmatism would likely stay the same. For instance, we anticipated that impulse buying would remain lower than in other countries and that value for money would continue to be an important consideration when choosing products and services. Interestingly, Chinese consumers across all age groups have, in some ways, become even more pragmatic. They’re now even more likely to compare prices across multiple stores, to be more price aware, and to stock up on promotions. That said, they’re now willing to buy more often on impulse (Exhibit 2).
The individual consumer
We also predicted that as Chinese consumers aspire to a better life and trade up their purchases, they would become more discerning and gradually more individualistic. This would lead, for example, to a shift toward more healthy choices, more user-friendly products, and products and brands that better fit their personality. This could be a big opportunity for niche brands—and a threat to the mass-market brands that had won big in previous years by using scale and ubiquitous availability, supported by the trust gained by heavy advertising.
Our latest research certainly shows a decrease in consumption in categories deemed less healthy and a willingness to spend significantly more on health and more environmentally conscious categories. It also shows consumers are more likely to spend more to indulge themselves and more likely to try new technology. While their consumption choices have become more individualistic, though, it is important to note that family values continue to be at the top of their priorities (Exhibit 3).
One area our predictions missed, however, was by anticipating that consumers, as they became more individualistic in their choices, might focus less on basic product reliability and safety. Perhaps in part because of a number of more recent food scandals, however, consumers seemed more concerned with these issues in 2015 than they were before.
The increasingly loyal consumer
When our team first started researching Chinese consumers, nearly ten years ago, many of us were surprised by their fickle attitude toward brands. Fewer than half of consumers tended to stick with their favorite brands, compared, for example, with almost three quarters of US consumers.
As we debated this tendency while making our predictions, we wondered if, in the clash between pragmatism and individualism, brand loyalty would stay low, increase, or even decline. Ultimately, we decided it would increase as the emotional benefits of brands became more important to consumers and as increased choice and availability of branded products (online and off) would allow consumers to optimize for price and convenience without changing choices too often.
Our recent research confirmed the changes we anticipated. Consumers are now significantly less likely to buy a brand that is not already among their favorites, continuing the upward trend we observed in 2011 (Exhibit 4).
The modern shopper
Our 2011 predictions were bullish on e-commerce, predicting that Chinese consumers would adapt their channel choices even faster than has occurred in developed markets.
We estimated that by 2020, online consumer-electronics purchases would jump to 40 percent, from about 10 percent. More mainstream categories would rise to 15 percent, and some categories, such as groceries (now below 1 percent), could reach about 10 percent. These changes are occurring even as the enduring pragmatism and diligence of the Chinese consumer continue to be in place. Our latest research shows that consumers of all age groups are much more likely to collect information online, even on fast-moving consumer goods, than they were just three years ago.
In 2015, online food and beverages sales (excluding fresh) reached 7.2 percent: reaching our predicted 10 percent in five years looks very likely. The online share of consumer-electronic purchases, meanwhile, has reached a whopping 39 percent in 2015, and it now looks possible that by 2020 it will be about 50 percent of overall sales.
Looking from today’s perspective at our 2011 predictions, it is impressive to see the evolution of Chinese consumers—even as their most characteristic traits endure. Certainly, we’ll check in on their progress as we get ever closer to the year 2020. Making predictions may be difficult, especially about the future—as US Baseball Hall of Famer Yogi Berra famously observed. But they can still provide valuable foresight for executives.
While India may be known for its oppressive pollution, poverty and bureaucracy, it’s a better place to be sent to work than China or even the United States according to a recent survey.
An HSBC report that tried to break down what it’s like to be an expatriate in different countries this week surprisingly ranked India ahead of the world’s two biggest economies.
In its HSBC Expat Explorer 2016 report based on an online survey of 27,000 expats this year, the bank ranked India 26th out of 45 countries. While that is on the bottom half of the rankings, the U.S. did worse at 30th as did China at 34th.
How is that possible?
One factor was the Indian economy. Even though it is decades behind China and the U.S. it is still the fastest growing major economy in the world right now. That means globe-trotting executives and entrepreneurs don’t feel like they have been relegated to the backwaters when they work in India.
“More than half (51%) of expats in India believe the country is a good place for them to progress their career, compared with 42% across Asia-Pacific,” said the report, which ranked India 10th for “entrepreneurship,” better than China which got the 16th rank. India was also rated by expats as “a good place to start a business,” about 7% more than China in the region.
“Expats in India are also able to save more, with 44% saying that living there has accelerated their progress towards making longterm savings and investments, compared with 39% across the region,” said the report.
More important for the rankings this year though was family and friends.
The expats who responded to the HSBC survey gave India much higher marks in terms of ease of integrating with the locals as well as cost of raising children.
Of course the report also showed how India continues to underperform in many areas including quality of life and safety.India’s overall ranking slipped this year. Last year it was 17th out of 39 countries just below the U.S. but still better than China.
“The slight drop in India’s ranking is due to a range of factors, for example, expat parents in India have reported that the country is more expensive to bring up a child than last year,” said the bank when asked about India’s lower ranking this year.
Why did India, China and the U.S. perform worse than last year? That’s because they faced new competition from 6 other countries which were not a part of last year’s survey, including Norway and Austria which were ranked 6th and 7th in 2016.
On the top of the rankings this year was Singapore, New Zealand and Canada.
At the opening of Zaozuo’s first furniture store this month in Beijing, a shopper snoozed on a couch while others clambered onto wall-mounted shelves to take selfies perched in chairs.
Welcome to furniture retailing with Chinese characteristics.Online furniture startup Zaozuo Zaohua Zworks Ltd. opened the outlet in an upscale mall after hitting resistance from customers wary of buying bulky items without so much as a feel of the fabric, let alone a bit of shuteye.
Liu Yusi, a 33-year old human-resource executive living in Beijing, said the showroom is a good idea given that buying large pieces of furniture without a test drive can be a leap of faith, although she was a little disappointed there weren’t any beds on display. “Maybe the store is too small,” Ms. Liu said. “But I think a mattress is something you really need to lay on before you decide to buy.”
Zaozuo has tried to distinguish itself from competitors by letting customers vote on the design and style of furniture items at the prototype stage before they’re mass produced, a strategy it says reduces inventory and cuts cost. This is a Chinese adaptation of business models used by the likes of U.S. website Threadless.com — which conducts online polls of crowd-sourced T-shirt designs before producing winning entries – and by crowd-funding sites that have investors vote on ventures they’re willing to fund.
Zaozuo’s customers vote for the designs they’d like to buy. PHOTO: ZAOZUO, DON ARBOUR/THE WALL STREET JOURNAL
The approach has its skeptics. Guangdong Weiyuhua Furniture Co. says it thinks Zaozuo’s voting is a gimmick and questions whether selling furniture online is sustainable. “It targets a few rich people in cities like Beijing or Shanghai,” said company sales manager Li Songzhi. “Traditional furniture companies like ours have real stores all over China.”
With nearly 700 million online users, Chinese consumers are driving explosive growth in the e-commerce sector, undercutting traditional retailers and leaving new online ventures fighting for an edge. Zaozuo co-founders, Stanford business school graduates Shu Wei and Guan Zishan, say China’s struggling manufacturing sector needs a wakeup call as it battles rising debt and excess capacity.“
The old system is not working very well,” said Ms. Shu. “That was the starting point of our business model.”
One potential problem with the company’s voting system is possible voter fraud, says Travis Wu, China research director with consultancy Forrester Research Inc. “In China, everything is a bit tricky, and lots of people try to game the system,” Mr. Wu said. That could see designers tilt results toward their own models, for example, or allow competitors to steer Zaozuo into producing money-losing items, he said.
Another concern: with Zaozuo opening a showroom, it risks driving up costs and undercutting its advantage over traditional furniture makers. Mr. Guan says users must be registered before voting, the company watches carefully for unusual online activity and the new store is not a major investment.
Zaozuo, which attracted several thousand curious shoppers to its store launch on a recent weekend, sees itself inhabiting a competitive space between expensive designer brands and mass marketers like Sweden’s IKEA, a company that attracts its share of showroom lounge lizards. On any given weekend, entire families can be found snoozing on beds in Ikea’s massive showrooms, luxuriating in the air conditioning and enjoying the inexpensive food.
China’s fragmented furniture industry with around 5,000 large companies and combined revenue of 244.5 billion yuan [$37.3 billion] in 2015, up 16.1% increase from the previous year, is tradition-bound and due for a shakeup, say online companies. Internet furniture companies only command a tiny slice of the market but are growing rapidly. Privately held Zaozuo said sales are increasing by 40% annually although it has yet to break even. MZGF Furniture Studio Co., another online firm, said sales have been expanding by as much as 200% year on year in some months.
Zaozuo, which works with 50 Chinese factories and more than 80 European designers, has attracted $17.5 million in venture funding and hopes to eventually go public. Anna Fang, chief executive of venture capital group Zhen Fund, which has invested $1.3 million in Zaozuo, said prospects for the industry are promising but the startup may need to shorten delivery times, which range from three to 35 days. “Ikea can get furniture to you right away,” she added.At its store opening, Zaozuo said it tried to discourage shoppers from getting too comfortable on its furniture. “The customer might be comfortable, but the image is not that good for other customers who can’t feel the fabrics if someone’s sleeping on it,” said Mr. Guan. “Maybe they do it because they’re tired. Shopping can be very tiring.”
Urinating on the streets of Hong Kong? Hurling hot water at flight attendants? Stealing wood from Lovers’ Beach in Thailand?
These are the kind of mainland-Chinese tourist antics that the motherland is looking to stub out ahead of the week-long national holiday known as Golden Week, when throngs of citizens travel both domestically and abroad.
To help them do so, the China National Tourism Administration and one of China’s dominant online travel firms, Ctrip.com International, are teaming up to find model tourists to promote travel behavior worthy of emulation—and national recognition.
“Civility of Chinese tourists is an important indicator of a country’s soft power and one of the major ways to export a country’s influence,” the tourism administration’s Vice Chairman Wang Xiaofeng said at an event announcing the campaign.
The two organizations, along with state-run newspaper China Daily, are asking the Chinese public to provide examples of what they think is model traveler decorum. Ctrip will give gifts to exemplary participants, such as free travel products and company souvenirs, said Ctrip senior director of investment relations Zhou Shiwei.
“The campaign is about changing the perception of Chinese travelers,” he said. “We definitely want Chinese travelers to be well-received abroad.
”Examples include pictures of Chinese soccer fans who picked up trash in Seoul, even after the Chinese men’s team lost to South Korea earlier this month, or photos of Chinese tourists patiently waiting in line.Ctrip says the campaign is aiming to publish a compilation of guidelines and pictures suggested by Chinese netizens during Golden Week. Chinese tourists can upload pictures via Chinese social-media network Weibo, and to the China Daily website. It is unclear how the photos will be verified.More than 600 million Chinese are expected to travel abroad in the next five years, as China’s middle class grows and visa restrictions ease in some countries welcoming Chinese spending. Last year, about 120 million Chinese traveled overseas—10% more than in 2014, according to the national tourism administration.
Domestically, tourism generated about $620 billion last year, with more than four billion trips taken.
The campaign, entitled “Good Chinese Tourists,” is an addition to other recent efforts the government has put forth to curb travel misbehavior. Last year, it unveiled new measures that allow authorities to track the bad habits of wayward tourists for up to two years.
The tourism administration also recently published a guidebook on civilized tourism, in which it urges tourists to refrain from spitting and littering—common practices back home—and to take photographs only where permitted. “Do not chase, beat or feed animals,” it adds. “Do not be greedy with complimentary items.
”For traveling abroad, the guide includes recommendations that cutting in line is “shameful wherever you are” and suggests that tourists “not leave footprints on toilet seats.”
On Monday afternoon, a school bus was stopped in the Banashankari area in southern Bangalore. Three drunk men got into the bus and asked aloud: “Which child belongs to Karnataka and and which child belongs to Tamil Nadu?”
The 15-odd students, aged between 10 and 14, were stunned. Their school had asked them to leave early because the situation was tense, with violence and arson breaking out in many parts of the city.
“Luckily the driver handled it tactfully. He told the intruders that everyone was a native of Bangalore and that their families supported Karnataka on [water sharing with] Cauvery,” said a parent, not wanting to be identified.
Battle for access
By dusk, dark smoke had filled the Bangalore skies. Some 35 buses had been set on fire by protesters, just because the buses belonged to a travel agency whose owner is Tamil.
Is India facing its worst-ever water crisis?
India to ‘divert rivers’ to tackle droughtEarlier this month India’s Supreme Court ruled that Karnataka must release 12,000 cubic feet of water per second to Tamil Nadu from the Cauvery river until 20 September. Both states say they urgently need the water for irrigation and a battle about access to it has raged for decades.
Karnataka says water levels in Cauvery have declined because of insufficient rainfall
India’s water war
The Cauvery originates in Karnataka and flows through Tamil Nadu before joining the Bay of Bengal.
The dispute over its waters originated in the 19th Century during the British rule between the then Madras presidency (modern day Tamil Nadu) and the province of Mysore (now Karnataka).
Karnataka and Tamil Nadu have both argued that they need the water for millions of farmers in the region.
The Cauvery river water tribunal was set up in 1990 after the failure of several rounds of talks between the two states.
Dozens of meetings have been held to find a settlement to the century-old dispute.
In 2007, the tribunal ruled Tamil Nadu state would get 419bn cubic feet of water a year. Karnataka would get only 270bn.
Karnataka says water levels in the Cauvery have declined because of insufficient rainfall – 42% of the 3,598 irrigation tanks in the state are dry – and that it cannot therefore share water with Tamil Nadu. So Tamil Nadu went to the top court demanding 50,000 cubic feet of water per second.
When the Supreme Court on 2 September asked Karnataka to “live and let live”, the state softened and offered to release 10,000 cubic feet of water per second to Tamil Nadu every day for five days.
On 5 September however, the top court ordered Karnataka to release 15,000 cubic feet of water per second for 10 days. This ruling was later modified to 12,000 cubic feet of water per second until 20 September.
This would mean that nearly a quarter of the water now available in the Cauvery basin will flow into Tamil Nadu.
A truck from neighbouring Tamil Nadu set on fire in Bangalore
Tamil Nadu says it badly needs the river water for irrigation. Drought-hit Karnataka argues that most of the river water is now needed for drinking water supplies in Bangalore and some other cities, leaving no water for irrigation at all.
But even farmers in Tamil Nadu are unhappy with their share.P Ayyakannu, president of the local South Indian Rivers Interlinking Farmers Association, called it “akin to giving pigeon feed to an elephant”.
Rising violenceFeeling let down by the top court’s order, Karnataka is boiling.
The main city of Bangalore is the worst affected: the violence in the technology hub forced the closure of many offices and much of the public transport system. Police have imposed an emergency law that prohibits public gatherings, and more than 15,000 officers have been deployed across the city.
One person was killed when police opened fire on protesters on Monday evening. Buses and trucks bearing Tamil Nadu number plates have been attacked and set on fire. Schools and colleges are closing early and many businesses are shut.
A group of activists belonging to a fringe pro-Karnataka group assaulted an engineering student because he had ridiculed Kannada film stars for supporting the strike on Friday, by posting memes on Facebook. The student was hunted down and forced to apologise.
Across the border, in Tamil Nadu, petrol bombs were hurled at a popular restaurant owned by a resident of Karnataka in Chennai while the driver of a vehicle with Karnataka number plates was slapped and ordered to say “Cauvery belongs to Tamil Nadu”.
The latest violence brings back memories of the anti-Tamil riots in Bangalore in 1991 over the same issue.
Then, some 200,000 Tamils were reported to have left the city, after incidents of violence and arson targeting them.
There was a proposal in 2013 to set up a panel comprising representatives from the two warring states to resolve disputes over river water sharing.
But successive governments have dragged their feet on this, and the two leaders – Karnataka chief minister Siddaramaiah and his counterpart in Tamil Nadu, Jayaram Jayalalitha – have not reached out to each other to resolve the crisis. And with Delhi reduced to being a reluctant referee, the onus has fallen on the Supreme Court to crack the whip.
After a summer lull, China’s economy is likely to have picked up, if only slightly, in August, according to economists.
The stirring in business activity, while lackluster, points to stabilization in the world’s second-largest economy, a survey of 15 economists by The Wall Street Journal showed. August data numbers to be released in coming days are expected to show that factory output improved marginally and new bank credit picked up, while investment and retail sales slowed, though not by much, the survey said.“We expect the upcoming August data release to show China’s economic activity finding a slightly firmer footing after July’s more-than-expected weakening,” said economists at UBS Securities Asia Ltd.
A surprising rise in a key gauge of manufacturing activity earlier this month buoyed the outlook for many economists.Industrial output, a rough proxy for economic growth, likely grew 6.2% in August from a year earlier, compared with a 6.0% increase in July, the survey showed. Fixed-asset investment outside rural households, a key gauge of construction activity, likely expanded 7.9% for the January-to-August period, slightly slower than an 8.1% increase over the first seven months.
Retail sales likely climbed 10.1% in August, a tick down from July’s 10.2% growth.
Among the other positive signs, the consumer-price index, a main gauge of inflation, moderated, likely rising 1.6% from a year earlier last month and slightly slower than the 1.8% growth in July, the survey found. Meanwhile, the producer-price index, a gauge of factory gate prices, likely dropped 0.9% from a year earlier last month, improving from a 1.7% decline in July and continuing a march out of deflationary territory where it has been for more than four years.
The better performance should give policymakers confidence to stay the course and refrain from interest-rate cuts or other aggressive easing measures, economists said.
At the same time, the faint improvements are largely the result of better performance of large firms that benefit more from policy support, economists said, while growing piles of debt and percolating bubbles in the property market are a looming concern for policymakers.
“At this moment, the key constraint faced by China’s monetary policy is not inflation, but the property market and the financial market,” said economists at Macquarie Capital Ltd.
Chinese banks probably gave out 792.5 billion yuan ($118.69billion) in new credit last month, well above July’s 463.6 billion yuan, the survey of economists showed. The economists mainly attributed the rebound to seasonal patterns, since banks tend to pick up the pace of lending at the end of each quarter.
In July almost all the new credit went to medium- and long-term household loans, predominantly mortgage lending. Lending to corporate borrowers, however, recorded a net drain of 2.6 billion yuan, the first negative growth in 11 years.
Household mortgage loans may have continued to surge in August. Recent data show a jump in housing transactions in many cities, and housing prices continue to rise. Credit demand from the corporate sector likely remained sluggish, though may have improved mildly, economists of Standard Chartered Bank.
Trade also remained anemic. Outbound shipments likely declined 4.0% from a year earlier in August, compared with July’s drop of 4.4%, while imports likely dropped by 5.0%, improving notably from July’s 12.5% dip, the same poll showed. Improvements in imports reflect last year’s low base, likely slightly better industrial production activity, and continued easing of import price deflation, UBS economists noted.
That would bring the country’s trade surplus to $59.40 billion last month, widening from July’s $52.31 billion. A large trade surplus should lend support to the country’s hoard of foreign currencies, which is expected to have dropped only slightly last month. The nation’s total reserves likely fell by about $2 billion last month to $3.199 trillion, the survey showed.