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Newsletter for Apr 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
  • US-Chinese Trade & Investment: What's Ahead?
  • Emerging Telecom Market Forums: BRIC Opportunities
  • Headlines
  • Energy
  • Information & Communication Technologies
  • Agriculture
  • Education | Workforce Development
  • Industrial Resources | Manufacturing
  • Environment | Climate Change
  • Corporate Responsibility
  • Innovation
  • Health | Medicine
  • Logistics | Transportation
  • Newsletter staff

  • US-Chinese Trade & Investment: What's Ahead?


    Join us for a Webinar on Tu, May 6 at 11am EDT.

    Ask government leaders and senior executives in the United States, Western Europe or Japan how they intend to cope with the challenges of China and India, and you'll get a familiar response: "We shall move higher in the value-added chain." In the past, China was the "world's factory" and India the "world's back office." Today, new multinationals in the emerging markets are no longer satisfied with imitating. In certain cutting-edge industries, they already seek to convert cost advantages to more sustainable competitive advantages-often through innovation.

    Foreign multinationals - including U.S. corporations - play a vital role in the transition from cost-efficiencies to innovation in the emerging markets.

    As China has become America's most rapidly-growing export destination, the debate on the U.S.-Chinese trade and investment has accelerated. Whether the next president is a Democrat or a Republican, pressure is growing on free trade in general and the U.S.-Chinese trade and investment in particular. Since these two nations now account for almost half of global growth, the future of the bilateral U.S.-Chinese relationship has worldwide implications. What is ahead?

    The speaker, Dr. Dan Steinbock, is Research Director of International Business at the ICA Institute and will conduct this seminar from Shanghai. He is also Faculty Spokesman for the Forum to Advance Mobile Experience (FAME), an initiative by the CMO Council, representing 2,000 leading technology firms; Director of the Mobile Internet initiative at the Columbia Institute for Tele-Information (CITI) and Visiting Professor at Helsinki School of Economics. A senior Fulbright scholar, Dr. Steinbock has taught in executive education programs in the US, Europe and Asia. He recently authored the chapter "Higher Education and Innovation as Competitive Advantages" in Education for Innovation: Implications for India, China & America (Sense Publishers, 2008). His articles on US-Chinese trade have been released in the US and China.

    Title: US-Chinese Trade and Investment: What's Ahead?
    Date: Tuesday, May 6, 2008
    Time: 11:00 AM - 12:00 PM EDT

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

    Space is limited.
    Reserve your Webinar seat now at:
    https://www1.gotomeeting.com/register/166440623


    Emerging Telecom Market Forums: BRIC Opportunities

    June 5-6, 2008 · Washington, D.C.

    Information Gatekeepers Inc. (IGI), in cooperation with Paul, Hastings, Janofsky & Walker LLP, will organize the Emerging Telecom Market Forums: BRIC Opportunities on June 5-6, 2008 at the offices of Paul Hastings in Washington, D.C.

    The Forums will focus on the opportunities and challenges in four of the largest telecom markets in the world - Brazil, Russia, India and China (BRIC).

    For more information or to register, please visit www.etmforums.com or contact: Dr. Hui Pan Information Gatekeepers Inc. 320 Washington Street, Suite 302 Boston, MA 02135 Toll-free: 1-800-323-1088 Tel: 617-782-5033, Fax: 617-782-5735 hpan@igigroup.com


    Headlines


    China praises Pakistan's role in regional stability (Daily Times, Apr 27)
    Chinese Foreign Minister Yang Jiechi on Saturday praised Pakistan's role in promoting peace, security and regional stability and its contribution to the fight against terrorism. He met President Pervez Musharraf and congratulated him on the smooth transition to democracy. He said that China would continue to support Pakistan in its efforts for economic development and more Chinese corporations and businesses would be encouraged to invest in Pakistan. He said expressed satisfaction over the continued growth of the bilateral ties of the two "time-tested" and "all-weather" friendly countries. He said that Musharraf's recent visit to China had further consolidated the strategic partnership between the two countries. Yang said that China wanted to enhance co-operation in the fields of telecommunication networks, energy, minerals and education. He urged to intensify the people-to-people contacts.

    Iranian president to visit India, amid US concern (Radio Australia, Apr 29)
    Iran's president, Mahmoud Ahmadinejad, will arrive in New Delhi on Tuesday for a one-day working visit. The brief stay will be dominated by talks on two multi-billion-dollar energy deals, even as the United States urged New Delhi to persuade Iran to curtail its nuclear programme. Energy issues will top the agenda during the visit, with nuclear-armed India, hungry to tap new sources of energy to fuel its booming economy, is looking to Iran as a long-term energy partner.

    Arms ship exposes Robert Mugabe's link to Chinese firm (TimesOnline, Apr 27)
    The boycott of a Chinese ship laden with weapons for Zimbabwe has cast new light on the connections between the African country's president, Robert Mugabe, and a secretive Chinese arms-trading firm with a controversial track record from the Congo to Darfur. The ship steamed towards China last week after dock workers in Durban refused to unload it and a South African court blocked the transit of its cargo of mortar and small arms ammunition. The 15,000-tonne An Yue Jiang is registered in the southern city of Guangzhou and has been operated for about 20 years by Cosco, a state-owned cargo line. When Levy Mwanawasa, the president of Zambia, called on every country in the region to reject it, the ship became an embarrassment to Beijing, which has made a huge political and financial investment in Africa.

    Opinion
    What kind of China do you want? (Atlanta Journal Constitution, Apr 29)
    While the words "yellow peril" may not be overtly used today, the sentiment is reflected in a fear of China that borders on paranoia. China has become a convenient symbol for everything we see wrong with our country. China holds billions of U.S. government securities, which makes us supposedly "hostage" to them. China has "hollowed out our manufacturing" with their cheap labor, which "Benedict Arnold companies" from the U.S. exploit. Our presidential candidates speak about how they'll keep Chinese companies from selling us toxic dog food and toys that poison our children. 'm not some wide-eyed Westerner infected with "China fever." You don't have to travel far beyond the gleaming skyscrapers of Shanghai to see that China is a developing country with many problems. Despite significant gains in national living standards, rural poverty is staggering. The country's health care system is years behind what we enjoy, and pollution is a major problem in almost every major Chinese city. Which China, however, would you rather have? Today's China, seeking to join the world economic order, or yesterday's China, which walled itself off and characterized the United States as an enemy?


    Energy


    China considering relief for power companies due to rising coal prices (Forbes, Apr 28)
    The National Development and Reform Commission (NDRC), China's economic planning agency, is considering relief for power firms as coal prices rise, the China Business News reported. 'The government is paying attention to the losses of power companies; we are studying measures' to aid the industry, an unidentified NDRC official was quoted as saying. China's top five power producers, including Huaneng, Huadian, Datang, Guodian and China Power Investment posted a combined loss of 2.7 bln yuan in the first quarter due to rising coal prices and caps on electricity tariffs, the paper said.

    Haryana solar project draws in big guns (Business Standard, Apr 23)
    With companies like Reliance Industries Limited (RIL), EPURON, Admire Energy Solutions Limited (Moser Baer group company), Albina Power (an Indiabulls Company), Acme Telepower Limited and Emco Limited showing interest in harnessing electricity from solar energy in Haryana, the state government's aim to add 10 per cent of the new capacity addition of power through renewable energy by 2012 seems a possible reality. The Haryana Renewable Energy Development Agency (HAREDA), which is the nodal agency to promote and implement renewable energy projects, recently invited applications from independent power producers (IPPs) and other parties to set up solar photovolatic power (SPP) plants across the state.


    Information & Communication Technologies


    India's ten of the best (iol, Apr 27)
    India's satellite launch vehicle PSLV-C9 is set to launch 10 satellites in one go on Monday, officials said. The PSLV-C9 is scheduled to put in orbit the Cartosat-2A remote sensing satellite along with an Indian mini-satellite and eight foreign nano satellites, S Satish, spokesman for the Indian Space Research Organization (ISRO), said. "The 230-tonne rocket (PSLV-C9) will carry a luggage of 824 kilograms," he said. Cartosat-2A weighs about 690 kilograms an carries a panchromatic camera that can record high-clarity images covering a swathe of 9.6 kilometres. The remote sensing satellite will provide data that would be used for urban and rural infrastructure management and land information systems, Satish said.

    Lessons from India telecom operators on rural telephony (Vanguard, Apr 28)
    INDIA is a sub-continent of more than one billion people, next only to China both in terms of population and business volume, and last week the country hosted the 2nd Connecting Rural Communities Asia Forum, which attracted operators from not only Asia, but from the rest of the world. It was quite a big eye-opener how operators in the world's largest democracy have surmounted odds to boost rural telephony. The lessons are for everyone, operators, industry regulators and even subscribers on the way to go about the business of rural telephony especially in Nigeria.


    Agriculture


    Agri rebound: Grain output up 4.6% (Business Standard, Apr 29)
    Production surged 10 million tonnes to 227.32 million tonnes in 2007-08. After a near-stagnation or modest growth in output for several years, Indian agriculture is reckoned officially to have rebound in 2007-08 with foodgrain production surging by 10 million tonnes, or 4.6 per cent, to touch a new high of 227.32 million tonnes. The grain output in 2006-07 was 217.28 million tonnes.

    China 'may lease foreign fields' (BBC News, Apr 29)
    Soaring grain prices have encouraged the ministry of agriculture to consider the scheme, according to the Beijing Morning newspaper. Chinese enterprises would lease or even buy farmland in Latin America, Australia and the former Soviet Union. The land in production could replace Chinese farmland lost to rapidly growing cities and industrial zones.


    Education | Workforce Development

    Help Wanted: Top Managers in China (The Wall Street Journal, Apr 29)
    U.S. companies in China say recruiting talented managers for their local operations has become their biggest business challenge, a finding that highlights the continuing gap between the skills taught in China's universities and what businesses here are actually looking for. A joint survey by three U.S. chambers of commerce in China showed "a continued worsening of human-resource challenges as companies expand," said J. Norwell Coquillard, chairman of the American Chamber of Commerce in Shanghai. Difficulty in finding, training and retaining managers was named as the top operational problem by 37% of the 324 companies responding, more than issues such as regulation, bureaucracy or piracy.

    China's sci-tech human resources top 42 mln (China View, Apr 29)
    China has a human resources reservoir of 42 million in science and technology, said a report issued on Tuesday. The report, compiled by the China Association for Science and Technology, said 65.7 percent of the sci-tech human resources were below 40 years old, and the ratio of male to female was 2:1. The sci-tech human resources formed an important foundation fora nation's renovation capacity, and after half a century's efforts, China now stood at the forefront of the world in terms of the quantity of sci-tech human resources, the report said. In 2005, China's sci-tech human resources stood at 35 million, according to then Minister of Science and Technology Xu Guanhua. According to the report, most of such resources were now in the secondary and tertiary industries, and in terms of sector, education had the most of such resources, followed by manufacturing, building, public administration and social organization.


    Industrial Resources | Manufacturing


    Australia denies telling China to back off on investments (AFP, April 27)
    The Australian government Sunday denied a report Chinese firms have been told to withdraw from investing in Australian mining companies while it reviews foreign investment rules. "There's been no suggestion that China or any other investor should back off," Resources Minister Martin Ferguson said. A report last week said that at least 10 Chinese companies had pulled back their foreign investment applications under pressure from Prime Minister Kevin Rudd's government. The government had made it clear, in private, to the potential investors it wanted more time to consider the national interest implications of greater foreign ownership of the resources industry, The Australian said.

    Dubai Group acquires 40% stake in India's Chiranjjeevi Wind Energy (Al Bawaba, April 28)
    Mitsubishi Motors Corp. is aiming to nearly double manufacturing capacity of a powertrain unit here to 420,000 engines a year by 2010, as part of the company's strategy to make Shenyang a global supply center of small engines. Construction workers are rushing to finish a second plant in the engine company's manufacturing facilities in an industrial park south of this northeastern Chinese city.

    Costs driving US manufacturing firms out of China: AmCham (AFP, April 29)
    China is losing some of its attractiveness to foreign investors as rising costs are forcing some US manufacturing firms to leave the country, the American Chamber of Commerce (AmCham) said Monday. More than two-thirds of AmCham's member companies surveyed in an annual white paper agreed that China was losing some of its competitive advantage in global markets due to rising costs. Factors with the biggest financial impact last year included price pressures from competition and major customers, rising salaries and wages, changes in raw material prices, tax expenses and real estate cost inflation, the survey said.


    Environment | Climate Change


    New chapter opens in EU-China Climate Change Partnership (Cordis News, April 29)
    China's involvement in global sustainable cooperation is crucial if the World is to reduce greenhouse gasses. In recent years, rapid economic growth has seen a major lifestyle shift in the country, leading to the creation of new megalopolises, increased car ownership, and growing demand for energy. All this growth has therefore led to increased carbon emissions, emissions which the Kyoto Protocol and the United Nations Framework Convention on Climate Change aims to curb. The EU is leading the way in cutting CO2 emissions, and is working at a multilateral level with countries such as China to achieve a global response to the issue. In keeping with this, in 2005, the EU and China first began its partnership on climate change. The partnership contains two concrete co-operation goals, to be achieved by 2020. The first is to develop and demonstrate, in China and the EU, advanced 'zero-emissions' coal technology. This technology will allow for the capture of CO2 emissions from coal-fired power plants and its subsequent storage underground, for example in exploited oil or gas fields or in sealed geological strata, thereby avoiding CO2 emissions into the atmosphere.

    India, China should be part of climate change policy(The Economic Times, April 29)
    The US has said post-Kyoto protocols to tackle climate change will not make any sense if India and China are given a "pass" and that Washington will not be a signatory to any such framework if the two Asian giants are not on board. "... the international community has got to come up with a new plan. And if we give a pass, again, to India and China, these major rapidly growing economies -- if we don't get them on, whatever measures we take are going to be totally cancelled and overshadowed," Deputy Secretary of State John Negroponte said in an interview on PBS.


    Corporate Responsibility


    Sonia invites pvt role in health security (Business Standard, April 29)
    "There are difficulties, especially in the Northern part of the country to successfully implement the programme. The private sector has a definite and growing role in rural healthcare programmes. The government will encourage such projects", she said. The CII session also saw the industry chamber announce the launch of 'CII Healthy Villages Project' that aims at aggregating the CSR (corporate social responsibility) efforts of multiple corporates to create effective partnerships in selected villages.

    Will Social Responsibility Ever Rival SLAs as Outsourcing Consideration? (IT Business Edge, April 23)
    Last summer's recalls of products made in China - from pet food to children's toys to toothpaste - had lots of folks pondering cultural differences in outsourcing relationships and how they relate to business ethics. But since then, such talk has died down. It still remains on the minds of decision-makers, however, based on the International Association of Outsourcing Professionals' selection of socially responsible outsourcing as its top trend in the outsourcing industry for 2008.


    Innovation


    The State of European Innovation (Business Week, April 28)
    "China produces more scientists and engineers every year than we have in all of Europe," says John Bessant, a professor of innovation management at Imperial College London. "We've got to innovate twice as fast." At first glance, the 2008 World's Most Innovative companies ranking from BusinessWeek and Boston Consulting Group makes depressing reading for Europhiles. Only 10 European companies made the top 50, and only one-Finnish mobile handset maker Nokia (NOK)-made the top 10. North American companies dominate the list, with Asian companies second and coming on strong.

    Biotech sector posts 30% growth in 2007-08 (Business Line, April 24)
    The domestic biotechnology industry is now a $3-billion (around Rs 12,000 crore) sector, registering 30 per cent growth in 2007-08 over the previous year. Half of the 24 companies that came up were in Bangalore, that accounts for 60 per cent of the $1.5-billion exports, the Karnataka IT and Biotech Secretary, Mr Ashok Kumar Manoli, said citing an industry survey. The top five companies by revenue contributed a third of the $3-billion turnover of the industry. Research services touched $500 million and bio IT (bioinformatics) was $250 million.


    Health | Medicine


    U.S. official: China's health care reform provides opportunities for American companies (Union-Tribune, April 25)
    China's efforts to reform its health care system provide a major opportunity for American companies to enter the Chinese market, a top U.S. commerce official said Friday. As China looks toward revamping a health care system that currently has hundreds of millions of uninsured citizens, American businesses have the chance to be involved through selling medicine, health services, and health insurance, Undersecretary of Commerce Christopher Padilla told reporters in Beijing. "We see in China's health care reforms something that's not only good for Chinese citizens, but something that is a tremendous opportunity for U.S. companies to expand their business in China," he said.

    Chinese raw materials may push up common drug prices (Business Standard, April 28)
    Sharp increase in prices of raw materials may soon force domestic drug firms to raise prices of a majority of the commonly used medicines. The main reason is the high cost of imported drug intermediates from China, it is learnt. All major antibiotics, which account for about 60 per cent of the Rs 35,000-crore domestic medicine sales, will become expensive if prices of these imported intermediates continue to rise, industry sources say.

    Brazil declares anti-AIDS drug to be of public interest; India's pharma industry may benefit ne (domain-B, April 28)
    The Brazilian government recently declared the drug Tenofovir, used against HIV/AIDS, to be of public interest. The announcement signals the country's interest in using an option to avoid the patent on the drug and beginning the process of issuing a compulsory license for the antiretroviral which is produced by the Gilead Science biopharmaceutical company. A clause in World Trade Organization rules, to which Brazil is a signatory, allows nations to flout drug patents in the name of public health. Other countries, including Canada, Italy and Thailand, have also taken this route to gain access to cheaper AIDS drugs.


    Logistics | Transportation


    New airports policies get Cabinet nod (The Financial Express, April 24)
    The Union Cabinet late on Thursday cleared two significant policy initiatives allowing private developers to set up captive airstrips and general airports-moves aimed at decongesting air traffic in cities and developing aviation infrastructure. The government has also allowed for case-by-case approval of greenfield projects within 150 km of an existing airport, which could bode well for the proposed airport at Noida on the outskirts of Delhi. In a major relaxation, the civil aviation ministry and the Directorate General of Civil Aviation (DGCA) will henceforth decide on all such proposals after security clearance from the ministry of home affairs.


    Newsletter staff

    Publisher: L. 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 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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