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Newsletter for Jan 29, 2008


A weekly sampling of news, analysis and opinion on economic issues of India, China and the U.S. Articles and opinion pieces are from a variety of sources and viewpoints and do not necessarily reflect those of ICA Institute. Access to some articles may require free registration to the site or may not be cited to the original source.

In this issue
  • Chinese/Lunar New Year Reception
  • Chindia Rising
  • Economy | Finance | Trade
  • Politics | Diplomacy | Security
  • Technology | Communications
  • Energy | Resources
  • Health | Science | Environment | Education
  • Agriculture
  • Manufacturing | Transportation
  • Newsletter staff

  • Chinese/Lunar New Year Reception


    The China Business Alliance Committee of the World Trade Center Atlanta is organizing on January 31, 2008 a Chinese/Lunar New Year networking and reception celebration event, jointly with the Association of Chinese Professionals-Atlanta (ACP), at the World Trade Center Atlanta from 6-9pm EST.

    Mr. Craig Lesser, Managing Director International Public Affairs Group of McKenna, Long & Aldridge LLP and former Commissioner of the Georgia Department of Economic Development, will address Georgia's renewed efforts in furthering trade and commerce with China. Ambassador Wenzhong Zhou of the Embassy of the People's Republic of China in Washington D.C. has also been invited to speak.

    The cost is $25 per person for members of the World Trade Center and ACP organizations and $35 for non-members. Corporate Sponsorship opportunities available. RSVP is required by January 28th to Lilia Postolachi, 404-813-6672 or [email protected], or Crystal Hall, [email protected].


    Chindia Rising


    Prof. Jagdish Sheth's new book Chindia Rising: How China and India will Benefit your Business has recently been published by Tata McGraw-Hill, New Delhi.

    Advance praise for Chindia Rising from Azim Premji, Chairman and Managing Director of Wipro, Ltd: "Business Leaders in East and West will surely read with interest Jagdish Sheth's thought provoking assessment of how the rise of China and India (Chindia) will prove to be an enormous boom to the worldwide economy. With his profound insight into global business trends, Prof. Sheth shows how Chindia's rise will not only stimulate the mature economies of the West but will also help birth economies in Asia, Africa and Latin America."

    Chindia Rising is available online at Oxford Book Store.


    Economy | Finance | Trade


    China's volatile markets reflect growing investor uncertainty amid a booming economy (IHT, January 28)
    Chinese stock investors took a beating Monday as the Shanghai Composite Index sank 7.2 percent to its lowest close in nearly six months. The benchmark's decline came as regional markets plunged following malaise on Wall Street at the end of last week. But it also reflected jitters among Chinese investors over how their country will weather a global slowdown when it is facing daunting economic strains of its own.

    Reserve Bank of India Keeps Rates On Hold (Forbes, January 29)
    India’s central bank, the Reserve Bank of India, on Tuesday left policy rates unchanged in its quarterly review and reiterated its economic growth forecast of 8.5% annually. But inflation remains a concern. “Liquidity management will assume priority in the conduct of monetary policy,” the bank remarked in its statement. Inflation, based on the wholesale price index, dropped to 3.8% as of Jan. 12, down from its peak of 6.4% at the beginning of the financial year. The bank’s target for the year is below 5%.

    American consumers prove a keystone for the global economy (IHT, January 25)
    Not long ago, many experts were convinced that a vibrant world economy would prevent an American recession. Even if the beleaguered American consumer suddenly turned thrifty, they reasoned, healthy spending on other shores was supposed to keep the expansion rolling. But now, with the turmoil in financial markets resonating around the world, those same experts see signs that economic growth abroad will probably not be strong enough to prevent the United States from slipping into a recession.

    India's economy strong enough to weather global crisis: PM (The Economic Times, January 25)
    Prime Minister Manmohan Singh on Friday sought to allay fears of a possible US slowdown affecting Indian economy, saying that the country's economic foundation was strong enough to sustain 9-9.5 per cent growth.

    China's companies start to feel pinch of looming US slowdown, scramble to adapt (IHT, January 24)
    Oyimay Sofa Co. is already feeling the pain of a looming U.S. economic slump. Orders from skittish American retailers, who buy nearly two-thirds of Oyimay's output, are down 10 percent this month from the same time last year, said general manager Zhou Feng. He said the 1,000-employee company in China's export-driven southeast is scrambling to recover by switching to more appealing, profitable models but expects to see profits slashed this year.

    Economies of China and India are not invulnerable (Taipei Times, January 30)
    It is so nice when a consensus forms among economic commentators. There is going to be a recession in US, the pack says, and probably in Britain too, for they have both sinned with their debt, deficits and soaring house prices. But the world as a whole won't suffer, as the great emerging economies of Asia -- China and India -- will carry on booming regardless. News that China's output expanded by an extraordinary 11.4 percent last year, its fastest rate for 13 years, only strengthened this view.

    China grows 11.2 percent in 4th quarter, says strong growth likely to continue (IHT, January 24)
    China's economy expanded by a robust 11.2 percent in the fourth quarter and fast growth should continue, the government said Thursday, in a possible positive sign for the world economy amid worries about a U.S. recession. A top official and economists warned that China, far from any danger of a slowdown, faces a risk of overheating as it tries to cool a surge in inflation, which the government said Thursday was stuck at nearly decade-high levels in December.

    Sino-Indian trade: It's helping only China (Rediff, January 28)
    A purely statistical analysis can be misleading. The current euphoria over the expanding Sino-Indian economic relations, the galloping bilateral trade and the mushrooming analytical studies triggered off by this euphoria are coming in the way of an adequate focus on certain emerging characteristics of these relations, which have already started redounding more to the benefit of China than of India.

    China says December inflation 6.5 percent despite government price controls (IHT, January 24)
    China's inflation rate eased to 6.5 percent in December but was still near decade-high levels despite government efforts to curb a surge in politically sensitive food costs, according to official data reported Thursday. December's increase in prices over the year-earlier period brought total inflation for 2007 to 4.8 percent, well above the official target of 3 percent, the National Bureau of Statistics reported.

    Columbia seeks to strengthen trade relation with India (Times of India, January 28)
    To strengthen its trade relations with India, the Columbian Association of Micro, Small and Medium enterprises on Tuesday entered into an agreement with Merchant Chamber of Commerce. The Memorandum of Understanding (MoU), signed in the presence of the Colombian Ambassador Juan Alfredo Pinto Saavedra and state Industry minister Nirupam Sen, was aimed at increasing participation in trade, investment, economic, commercial and technological and boost friendly relations between India and Columbia.


    Politics | Diplomacy | Security


    Olympics-China says will not submit to political pressure(Reuters, Jan 29)
    China will never submit to taunting or political pressure from groups or governments wishing to use the Beijing Olympics to change Chinese policy, a leading state-run newspaper said on Tuesday. Activists around the globe are seizing on this year's Olympics to pressure Beijing on a range of issues, from freedom of religion to Taiwan and Tibet.

    Bolivia to Open Embassies in S.Africa, India and China (Prensa Latina, Jan 28)
    As part of the so-called peoples' diplomacy, Bolivia will open embassies in India, South Africa and China, according to Foreign Ministry sources. Deputy Foreign Minister Hugo Fernandez said the government has the necessary resources to open these three embassies, whose ambassadors will be appointed in due time.

    A Bill for Bush(Frontline, Jan 29)
    JAPAN is once again veering towards a political orbit around the United States, while beginning to recognise the emergence of China as a major star on the international stage. This impression is evident from the manner in which Japanese Prime Minister Yasuo Fukuda successfully piloted a pro-U.S. Bill through the Diet, Parliament, in early January after having paid a "feel-good" visit to China in December.

    Opinion
    India's vision blurs over China(Asia Times, Jan 29)
    On concluding his recent visit to China, Indian Prime Minister Manmohan Singh remarked, "President Hu [Jintao] recognized the problems in Pakistan and agreed that a strong, stable, moderate Pakistan is in India's interests and in the interests of Asia," and it was "necessary for both India and China to consult each other more frequently". Earlier, a Chinese Foreign Ministry spokesman, on the Hu-Manmohan talks, noted, "The two leaders agreed to strengthen their consultation and communication for the peace and stability in the South Asia region so as to make joint efforts for the stability there." If one takes the long view of the many geopolitical futures for South Asia, the above comments reflect a strategic opportunity for New Delhi to consider - namely, the possibility for the two giant neighbors to discuss and perhaps even collaborate to stabilize a piece of strategic real estate that if it spirals out of control will influence both states adversely.


    Technology | Communications


    Indian agency to aggressively market satellite launches (Silicon India, January 29)
    The launch of Israeli satellite Tecsar by an Indian rocket has boosted the morale of Antrix Corporation - the commercial arm of the Indian Space Research Organisation (ISRO) - which now plans to market this service more aggressively. "The latest launch reinforces the confidence that customers have in India's Polar Satellite Launch Vehicle (PSLV)," K.R. Sridhara Murthi, executive director of the Rs.6.6-billion ($167 million) Antrix, told IANS.

    Study says: China rivaling U.S. in tech competiveness (TechJournal South, January 29)
    A new study by Georgia Institute of Technology researchers says China may soon surpass the United States in technological competitiveness worldwide. It predicts that China will soon pass the United States in both developing basic science and technology and in transferring new technology to products and services.

    Infosy s to increase patent filings (Silicon India, January 29)
    Infosys, an Indian IT Service Company expects that its patent filings will increase with its primary R&D) centre, Software Engineering and Technology Labs (SET Labs), expanding the research to new areas, reported Business Standard. During the current financial year Infosys applied for a total of 16 patents in the U.S. and India. Infosys has filed an aggregate of 109 patent applications (pending) both in the U.S. and in India and has been granted 2 patents by the U.S. Patent and Trademark Office.


    Energy | Resources


    Coal still rules ahead of crude oil and natural gas(The Economic Times, Jan 29)
    There are recoverable coal reserves in around 70 countries - enough to last around 155 years according to most estimates. It is easy to produce, low tech, and relatively cheap to transport. The World Coal Institute says that coal provides around 25% of global primary energy needs and is used to generate 40% of the world's electricity. Two, coal is far from being oh-so-Third World. Most big industrialised nations, including USA, South Africa and Australia, get up to 45% of their current energy from coal. Uncle Sam gets a quarter of his electricity from coal-based power plants. With so much at stake, you can be sure no one is going to slag off coal any time soon.

    Bush moots fund to help India, China on clean energy sources(newindpress.com, Jan 30)
    President George W Bush has proposed a new international clean technology fund to help developing countries like India and China make greater use of clean energy sources. In his State of the Union address, Bush said the United States was committed to working with major economies and the United Nations to complete an international agreement with the potential to "slow, stop and eventually reverse the growth of greenhouse gases".

    Scramble for coal shares in China reflects growing thirst for resources(Times, Jan 29)
    A Chinese coalminer has attracted $433billion (�218billion) in share applications for its flotation on the Shanghai Stock Exchange. The scramble by private investors for shares in China Coal Energy occurs as coal prices surge to record levels worldwide and Chinese power stations struggle to keep the country warm and lit in an extraordinary winter chill.

    Mozambique stays in talks with China for energy investment(Reuters, Jan 28)
    Mozambique has begun talks with China for financing, including investment into its burgeoning energy sector, two of the country's officials said on Monday. Mozambique's Minister of Energy, Salvador Namburete, said the Chinese have shown interest in the country's energy resources, which include natural gas and coal reserves.

    Opinion
    Energy security: A new buzzword for Europe(Turkish Daily News, Jan 29)
    Without ensuring its energy security, Europe's ability to be a serious global player is at risk. The answer to the question "is Europe ensuring its energy security?" is negative. If current trends continue, Europe will be more energy hungry and more dependent on unreliable suppliers. On the other hand, attempts to build alternative energy supply routes for European markets face opposition by Russia. The EU should develop a common European Energy policy, collaborate with NATO in securing routes of supply from asymmetric threats, integrate energy rich countries like Azerbaijan and Kazahkstan into Euro-Atlantic structures, and develop stronger dialogue with Russia


    Health | Science | Environment | Education


    For FDA, a major backlog overseas (IHT, January 29)
    The Food and Drug Administration is so understaffed that, at its current pace, the agency would need at least 27 years to inspect every foreign medical device plant that exports to the United States, 13 years to check every foreign drug plant and 1,900 years to examine every foreign food plant, according to government investigators.

    Olympic teams vie to find ways to deal with Beijing pollution (IHT, January 24)
    As the lead exercise physiologist for the U.S. Olympic Committee, Randy Wilber has been fielding one bizarre question after another from Americans training for the Games in Beijing. Should I run behind a bus and breathe in the exhaust? Should I train on the highway during rush hour? Is there any way to acclimate myself to pollution? Wilber answers with a steadfast no.


    Agriculture


    China weather crisis may lift January inflation(Market Watch, Jan 29)
    China's brutal and deadly winter weather and related power crises may not have a major impact on economic growth, but could further raise inflation and force Beijing to make additional monetary tightening measures, according to analysts. The risks have increased in the wake of the worst snowfall faced by China in decades, which has affected power supplies in several parts of the country, forced the closure of several manufacturing plants and thrown air, rail and road transportation into disarray.

    China to set up agricultural technology center for Sudan(China View, Jan 25)
    China will assist Sudan in establishing an agricultural technology demonstration center, according to a cooperative protocol signed here by the two countries Thursday. The center, covering about 60 hectares in Al-Qadarif in eastern Sudan, is designed to boost agriculture in Sudan by breeding improved strains, production demonstration and personnel training.

    Agri-biotech sector grows at 30%(Business Standard, Jan 29)
    The agri-biotech sector in India is growing at 30 per cent for the last five years, and it is likely to maintain the growth in the future as well, says a Rabobank report titled "Indian agri-biotech sector: Emerging scenario, issues and challenges". The country made its entry into agri-biotech in early 2002 with the government giving its nod for commercial cultivation of Bt cotton. Since then, agri-biotech continues to be the fastest growing industry among all the biotech industries in the country.

    China stresses sufficient supply of agricultural products(China View, Jan 27)
    Chinese Vice-Premier Hui Liangyu on Sunday urged agricultural producers' cooperatives across the country to guarantee a sufficient supply of agricultural products while providing adequate materials needed in farming. Those organizations should step up reform in rural logistics and help stabilize the prices of agricultural products, Hui told a meeting of All-China Federation of Supply and Marketing Cooperatives.


    Manufacturing | Transportation


    Top China chip maker SMIC swings to Q4 loss (Reuters, January 29)
    China's biggest contract chipmaker, Semiconductor Manufacturing International Corp (SMIC), swung to a quarterly loss amid punishing price declines in the global computer memory chip market. SMIC, which has made a net loss for much of the past three years, expects to spend $700 million in 2008 enhancing technology and converting some production from plain-vanilla memory chips to higher-end logic microchips in Beijing.

    Maru ti Profit Increases on Higher Car Demand in India (Bloomberg, January 29)
    Maruti Suzuki India Ltd., maker of half the cars sold in the country, reported third-quarter net income gained 24 percent after it sold more Swift hatchbacks and SX4 sedans. Net income in the three months ended Dec. 31 rose to 4.67 billion rupees ($119 million), or 16.17 rupees a share, from 3.76 billion rupees, or 13.03 rupees, a year earlier, the Indian unit of Suzuki Motor Corp. said in a statement today. Revenue rose 27 percent to 48.45 billion rupees.

    DuPont Opens Fluoropolymer Production Plant in China (CNN Money, January 29)
    A new DuPont fluoropolymer production plant has begun operations here. The plant, which produces polytetrafluoroethylene (PTFE) fine- powder and dispersion for global customers, with focus on Asia Pacific, marks a significant milestone in the company's strategic plan to establish a broader fluoroproducts manufacturing base in China. "The opening of the Changshu plant supports our belief that it is a very good time to invest in PTFE production in China," said Cynthia Green, vice president and general manager, DuPont Fluoroproducts. "DuPont's advanced, high-quality PTFE products already have established a leading position in the market and are delivering benefits to our customers around the world."


    Newsletter staff

    Publisher: Roxanne Russell
    Editor of Academic Resources: Dr. S.V. Char
    Co-Editor: Abhijit Agrawal
    Co-Editor: RJ Paulsick


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    ICA Institute, founded by Dr. Jagdish Sheth, is a non-profit institute with the vision of providing a sustainable, non-governmental platform to identify and drive synergies among India, China and America in the areas of emerging markets, commercial growth and alignment of policies for the benefit of a vast number of people. This is accomplished through knowledge creation and the delivery of knowledge-based services to policy makers, business executives, thought leaders and other stakeholders.

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