Newsletter for Mar 11, 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
  • Legal & Investment Guidance
  • Webinar Recordings Now on Sale!
  • Headlines
  • Energy
  • Information & Communication Technologies
  • Agriculture
  • Industrial Resources | Manufacturing
  • Environment | Climate Change
  • Corporate Responsibility
  • Innovation
  • Healthcare | Medicine
  • Logistics | Transportation
  • Newsletter staff

  • Legal & Investment Guidance

    Join us for a Webinar on Wed, March 12 at 11am EST.

    This webinar will share thoughts and reflections from Ken Cutshaw, a lawyer and business executive who has undertaken and advised on business investments in India, China and the USA. He will offer insights of recent business transactions. He will also offer thoughts on the franchising business trends for both China and India. India continues to liberalize and encourage foreign direct investment and Indian investment outside of India. There is a new trend for Legal Process Outsourcing that he will share. China has been expanding its business markets for internal investment and at the same time tightening up safety regulations in food processing and manufacturing. The US shows trends towards protectionism with outsourcing regulations. This presentation will bring you up to date on many relevant legal / investment issues for your practical business concerns.

    Kenneth A. Cutshaw, Honorary Consul for the country of India in the US and Executive VP for Church's Chicken, has extensive experience with a wide spectrum of global business transactions and authored the Corporate Counsel's Guide to Doing Business in China.

    The only cost is your long distance phone call to dial- in.

    Title: Practical Business Concerns Between India & China
    Date: Wednesday, March 12, 2008
    Time: 11:00 AM - 12:00 PM EDT

    System Requirements
    PC-based attendees
    Required: Windows® 2000, XP Home, XP Pro, 2003 Server, Vista

    Macintosh®-based attendees
    Required: Mac OS® X 10.3.9 (Panther®) or newer

    Space is limited.
    Reserve your Webinar seat now at:
    https://www1.gotomeeting.com/register/2803747 67

    Webinar Recordings Now on Sale!

    Recordings from the Tap into Chindia Global Virtual Seminar Series are now available at the ICA Institute Store.

    A great set of resources for you, your colleagues and students- recordings from this series offer important insight on business topics in India and China from top thought leaders and practitioners. These CDs will automatically play the audio and screen presentations from the original webinars on your computer.

    Available now:

    Dr. Jagdish Sheth's
    Rise of Chindia: The Next Largest Consumer Markets
    Rise of Chindia: Q&A Session

    Dr. Camille Schuster's
    Adapting Business Practices for India & China

    Suresh Sharma's
    Strategic Sourcing in India, China & America

    Each webinar recording is only $20 toward our ongoing non-profit efforts.

    More recordings from the series will be available soon!


    Olympic Pressure on China (Washington Post, Mar 11)
    It remains in question whether international pressures will stir China to expand press freedoms, shift long-term environmental policy, or change policy on hotly controversial topics like Darfur and Tibet. Human Rights in China s executive director, Sharon Hom, credits the communist country with reforming education and healthcare and increasing funds for social services. But she says these changes could be in response to domestic unrest and international monitoring bodies as much as pressure related to the Olympics. It is clear that any reforms will be limited by the key political imperative to maintain political and social control, says Hom. She recommends that China release a public progress report on its Olympics pledges so it can be held accountable in a transparent manner.

    Singapore poised to ride China- India wave, says Prime Minister Lee(The Hindu, Mar 11)
    He hailed the existing Singapore-India Comprehensive Economic Cooperation Agreement as "a gold-standard" pact, for the conclusion of which the SICCI had provided "useful inputs." The Chamber "can be an important agent" in growing the bilateral relationship.

    India's diplomacy in Central Africa on the upswing(Thaindian News, Mar 11)
    In an apparent bid to catch up with China, India is set to ramp up its economic diplomacy in resource-rich Central Africa - a region that didn't loom large on New Delhi's radar till now - by signing two pacts with the Democratic Republic of Congo (DRC) Wednesday. Official sources told IANS that a joint commission declaration and an agreement for the Telecommunications Consultants India Ltd (TCIL) to set up a segment of the Pan-African e-network in the African country are to be signed.

    Vietnam in Growth league with China, India(The Nation: Bangkok's Independent Newspaper, Mar 12)
    The answer is rather positive if you ask Phung Dinh Thuc, vice president of Petroviet-nam, who yesterday attended Gastech 2008, the global natural-gas exhibition and conference in Bangkok. Thuc, whose country will host the next major regional natural-gas event in Hanoi in November, said while Vietnam was not on the scale of China, it certainly was a significant economy in Asia. "Through the end of last year, Vietnam's growth rate exceeded that of Thailand, Malaysia, Taiwan, South Korea and even India, its closest rival." Thuc believes Vietnam can be the new Asian economic tiger, as evidenced by some key economic, financial and industrial indicators. For instance, the country now produces and uses more cement than does France, its former colonial ruler, and the main index for Ho Chi Minh City's stock market and smaller exchanges in Hanoi have nearly doubled this year.


    India's Reliance Energy to change name to Reliance Infrastructure (Forbes, Mar 10)
    India's largest integrated private sector power utility, Reliance Energy Ltd, said it has decided to change its name to Reliance Infrastructure Ltd. The change is subject to shareholder approval. In a filing with the Bombay Stock Exchange, the company said that over the past two and a half years it has emerged as a leader in all areas of infrastructure business and the new name adequately reflects the current nature of its businesses.

    China reshuffles energy sector, little change seen(Reuters, Mar 11)
    China on Tuesday unveiled a long-awaited reshuffle of its energy sector, setting up two new but relatively weak bodies that analysts say may struggle to improve handling of demand, security and powerful companies. The government is keen to consolidate control of industries that are a vast magnet for investment, a key component of foreign policy and a potential touchstone for social unrest at home.

    Information & Communication Technologies

    China SMBs set to spend US$42B on ICT(ZDNet Asia, Mar 7)
    According a new report from AMI-Partners, SMBs will spend US$42 billion on infocomm technologies this year, a 12-percent increase over 2007. The New York- based research house specializes in SMB research. The study also found that about 70 percent each of small businesses with fewer than 100 employees and medium-sized businesses with between 100 and 999 employees expect revenue growth this year. Some 55 percent of small businesses, and 53 percent of midsize ones, reported a jump in revenues in 2007.

    Nigeria: Revenue From Removable Memory Cards for Cell Phones Booms, Says Abi(allAfrica.com, Mar 10)
    The trade exhibition which attracted no fewer than 6,000 exhibitors around the world paid particular attention green IT. For one thing, millions of professionals who attended the event witnessed the coming of age of mobile communication and the event the market success of the internet. The fair which afforded foreign vendors to showcase their latest ICT products available in the global ICT market also afforded world class memory card supplies including China Biwin Technology and Hong Kong Coby manufacturing to present the latest removable cards available in the mobile phone industry.

    Investigation threat to RIM's India market Probing whether BlackBerry poses security risk (Financial Post, Mar 11)
    Research In Motion Ltd. faces a potential BlackBerry blackout in one of its hottest markets after the Indian government said it is investigating whether the device poses a security risk and could be used for terrorism- related purposes. The Indian government's Home Affairs office is involved in meetings with four of the country's telecom carriers to evaluate whether the BlackBerry's secure encrypted messaging features would help terrorists evade authorities.


    World Bank to increase Africa agriculture loans(Reuters, Mar 11)
    China has become one of the biggest investors in Africa as the world's most populous nation hunts the globe for resources to fuel its economic growth. But questions remain over whether China will adapt its various commercial interests to developing the African continent and push it toward more sustainable economic growth.

    China earmarks record funding to ensure grain safety, boost farmers' income(China View, Mar 8)
    China's record amount of agricultural funding this year will help ensure grain safety and increase farmers' income, but challenges to redress the rural-urban income gap remain, researchers say. Premier Wen Jiabao said in his government work report to the ongoing annual session of the National People's Congress (NPC) that the central government will spend 562. 5 billion yuan (about 79.2 billion U.S. dollars) on agriculture sector this year, nearly doubling the 2004 figure.

    India dumped from meet on Doha(Business Standard, Mar 12)
    India has been excluded from a high-profile meeting of the European Union, the US and Brazil that is attempting to hammer out an agreement on the Doha trade negotiations in London, trade diplomats said. Up until now, India is part of what is called the Group of Four - the US, the EU, Brazil and India - that held rounds of informal meetings to address issues pertaining to reduction commitments in agricultural subsidies and tariffs, and cuts in industrial products. Last year, the G-4 meeting collapsed in Potsdam, Germany, because of unbridgeable differences between the US and the EU on the one side, and Brazil and India on the other over how to liberalise trade in industrial goods. Subsequently, the US, the EU and Brazil held one-on- one private meetings without India to see how far they could stitch an acceptable package to address their specific concerns.

    Industrial Resources | Manufacturing

    Companies look to China as growth market and manufacturing hub (American Machinist, March 10)
    The advantage of China solely as a low-cost, manufacturing-for-export market is diminishing. Companies that integrate China into their global supply chains as a source of competitive advantage are far more successful than companies that pursue narrower objectives in China, according to a study jointly conducted by management consulting firm Booz Allen Hamilton and the American Chamber of Commerce in Shanghai.

    India's Ceat to invest 8 bln rupees in new tyre manufacturing facilities (Forbes, March 10)
    Indian tyre manufacturer Ceat Ltd said it will invest 8 bln rupees in a new radial project and OTR (off-the-road) facilities. Speaking to journalists in Mumbai, managing director Paras K Chowdhary said Ceat will invest 5 bln rupees in the radial project in the first phase and 3 bln rupees in the OTR facility, which will be set up in the western Indian state of Maharastra.

    Wyeth To Build Nutritional Manufacturing Facility In China With $280 Mln Investment (RTT News, March 10)
    Madison, New Jersey-based research-driven pharmaceutical firm Wyeth (WYE) on Monday announced that it is investing $280 million in China, to build a state-of-the-art nutritional manufacturing facility, which would be one of the world's largest nutritional manufacturing facilities when completed. The production in the new facility in Suzhou Industrial Park, Jiangsu Province will mainly be infant formula milk powder and other nutritional products.

    Paradigm shift for Manufacturing industry (India PR Wire, March 10)
    The 21st centuryis seeing a paradigm shift for Indian Manufacturing industry. Companies looking at local markets are now aiming to be connected with Global markets. "To reach out to newer markets and alliances and business opportunities, company's are faced with the hard fact that unless they improve their return on investments, comply with tough regulatorynorms and enhanced safety requirements, they will miss the mark" said Mr J P Singh, President,Automation Industry Association(AIA), while speaking at PharmaTech 2008.

    China factory gloom plays into state plan (The Guardian, March 9)
    When production lines close in the United States, protectionism tends to rear its head. In China, the opposite is happening. A volatile mix of inflation, a rising yuan and new labour legislation has corroded profits in the country's manufacturing heartland. Hundreds, possibly thousands, of factories have been forced to close or leave the Pearl River Delta, which churns out more than a quarter of China's exports. Some are moving inland. Others are going to places like Vietnam, where labour is even cheaper.

    Environment | Climate Change

    India, China to work on 'carbon sinks' (Business Standard, March 9)
    Having pushed the idea that countries should be compensated for conservation of forests at the UN convention on climate change at Bali, India is once again in a leading role to make this happen. New Delhi has invited China, that had supported India's idea vociferously, and all other developing nations to a two-day meet where scientists and policy makers are discussing ways to quantify 'carbon sinks' - which in the layman's terms means the amounts of harmful green house gases (GHG) that a particular forest has guzzled up and thereby helped climate change mitigation.

    India's climate change policy a hot topic (San Francisco Chronicle, March 9)
    It is Friday night in the center of new Indian ambition. The air is thick with the construction dust of new glass-fronted high-rise buildings. The traffic moves so slowly that commuters can gape all they want at the Burberry advertisement that lights up the facade of a shopping mall. In the din of car horns and cranes, Sucharita Rastogi, 27, a business school graduate, waits wearily for her office van to pull up and take her home; it will be at least a 90-minute crawl. "Mind-wise," she says, "we are exhausted, sitting, waiting."

    China's green leap forward (Toronto Star, March 8)
    No gasoline-powered car assembled in North America would meet China's current fuel-efficiency standard. Even vehicles produced under California's proposed, and much praised, efficiency law - being fought tooth and nail by the U.S. and Canadian governments and the auto industry - wouldn't come close to the Chinese mileage limits. If that's a shock, take a deep breath. There's more.

    China to integrate biodiversity and climate change (China Internet Information Center, March 6)
    While harsh blame for global warming is directed at auto emissions released from automobile exhaust pipe that congest traffic on busy roads, or criticism is directed at the countless heavily smoking chimneys in plants, we may inadvertently ignore the wealth of natural resources - biodiversity and healthy ecosystems - as a way to mitigate and adapt to the impacts of climate change. For example, forests and marshlands are natural carbon dioxide sinks and naturally reduce atmospheric greenhouse gas concentrations.

    Corporate Responsibility

    Companies focus more on social responsibility projects in villages (LiveMint, March 11)
    Several foundations run by corporate houses plan to devise a common strategy to ensure transparency in their social and community development operations, such as tracking spending in and progress of such projects in their annual reports. The effort is significant because it brings together a wide range of Indian companies to share ideas on innovating sustainable programmes. Among them are Multi Commodity Exchange of India Ltd, Anil Dhirubhai Ambani Groupand media company Bennett, Coleman and Co. Ltd, which are expected to meet sometime next month in New Delhi.

    'Sapporting' a cause (The Economic Times, March 10)
    "When you sit in air-conditioned offices day and night, it's very easy to lose perspective of daily realities," muses SAP Labs employee Rathish Balakrishnan. So how does he manage to stay afloat amid the rigours of the daily grind? "Being part of the CSR initiative of SAP Labs keeps me grounded and gives me a chance to create opportunities for the underprivileged and make a difference to society."


    What's Next For India? (InformationWeek, March 8)
    Gail Farnsley knows in her gut that better online collaboration tools will help Cummins build better truck engines. But gut feelings don't deliver ROI, so this CIO hasn't been lobbying for a big budget to implement them. Instead, she's talking with IT outsourcing partners in India, including IBM, Tata Consultancy Services, and its own IT joint venture, KPIT Cummins, about what they have going in this area. Do they have collaboration tools that they hope to sell to other companies, where Cummins could be a test site for little or no cost?

    China's new designers: Building on a rich heritage of innovation (IHT, March 9)
    It is the country that once invented gunpowder, wrought iron, the compass, paper, silk, and the toothbrush. These days it is the world's biggest workshop, making everything from the contents of Wal-Mart's bargain bins to lusciously designed objects like the iPhone. That country is, of course, China. Given its frenzied growth, the next logical step is for the Chinese to revive their rich history of innovation to ensure that some of their future products are "Designed in China," not just "Made in China." Whether they succeed is one of the most contentious issues in design today, and a thorny challenge to all of the foreign companies that have been manufacturing there so profitably.

    Healthcare | Medicine

    Chinese doctors say wronged on health care woes (Reuters, March 6)
    Thousands of Chinese doctors are beaten up every year and the profession is commanding less respect as rising medical costs and inequality of access fuel mounting discontent, a survey in the country has shown. China embarked on massive economic reforms three decades ago and has since abandoned a cradle-to-grave welfare system, causing hardships for millions left behind by rapid development.

    Pfizer's anti-smoking drug in India despite US regulator warnings (LiveMint, March 10)
    Doctors and experts have expressed concern over an anti-smoking drug, manufactured and marketed by the world's largest drug maker Pfizer Inc., being launched in India barely a month after the US health regulator issued safety warnings and said it was continuing investigation whether the drug triggers mood changes and, in some instances, suicides. Pfizer Ltd, the Indian unit of the US pharmaceutical giant, which has launched the drug varenicline sold as Champix in India (it is branded Chantix in the US), says the drug has proven therapeutic value. It is a prescription drug that will be promoted only through doctors who will be informed of its risks carried in its labelling, the company insists, adding that it will carry out detailed post-marketing surveillance on the drug.

    Minister calls for ethical medicine (China Daily, March 5)
    Improving the ethics of the country's medical professionals is a key task for the nation's universities, China's top health official has said. Chen Zhu, the minister of health, made remarks to this effect at a two-day inter-ministerial meeting on medical education that concluded last Friday. He said the medical community was beset by a general unwillingness to accept responsibility and a lack of awareness on the part of its members about their legal obligations.

    Logistics | Transportation

    Beijing Takes Aim at Passenger-Jet Market (Wall Street Journal, March 10)
    China has confirmed plans to set up a company to make large passenger airplanes, taking another small step toward a grand goal but with a long haul yet ahead. The new company will aim to design, produce and sell jetliners big enough to carry more than 150 passengers. If successful, it could eventually pose a threat -- at least in mainland China -- to Boeing Co. and Airbus, which now dominate the Chinese and global markets for passenger aircraft.

    Bumpy ride for automobile industry, falls 10.34 pc (The Hindu, March 10)
    The rough ride for the Indian automobile industry continued with the overall vehicle sales declining by 10.34 per cent in February, mainly on account of falling motorcycle sales, down by 17.68 per cent. According to figures released by the Society of Indian Automobile Manufacturers (SIAM), the domestic passenger car sales managed a growth of 2.31 per cent in February.

    Newsletter staff

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


    ICA Institute, founded by Dr. Jagdish Sheth, is a non-profit research institute working to foster research and dissemination of knowledge on the rise of China and India and their impact on global markets, global resources and geopolitics of the world. The ICA Institute's mission is to generate new perspectives on the role of market and resource driven economic development. ICA Institute fosters interaction and dialogue between academic scholars, industry leaders and policy makers on the impact of emerging economies in general and China and India in particular. Specifically, ICA Institute is positioned to be a catalyst between faculty and students in International Business and industry leaders and managers.

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