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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. Access archive.

In this issue
  • Events: Webinar (third party)
  • Headlines
  • Energy
  • Environment | Climate Change
  • Industrial Resources | Manufacturing
  • Information & Communications Technology
  • Innovation
  • Logistics | Transportation
  • Money & Capital Markets | Economy
  • Real Estate
  • Newsletter Staff

  • Events: Webinar (third party)

    M&A in China New Challenges and Opportunities (The US-China Business Council, Jun 25)

    Date: Thursday, June 25, 2009
    Time: 10:00 am EDT
    Duration: 60 minutes

    Mergers and acquisitions (M&A) are one way companies can accelerate corporate development efforts in China during this economic downturn, yet the rejection of Coca-Cola's bid for a local juice company and new transaction challenges show that barriers and pitfalls still exist.


    Headlines

    IMF wants India to eliminate mandatory investment norms (Hindustan Times, Jun 19)
    The International Monetary Fund (IMF) wants India to gradually eliminate the norms that make it mandatory for banks and other saving funds to park a portion of their funds in government securities. According to the current guidelines, banks are required to park 24 per cent of their deposits in the government securities and government notified bonds. Similarly, National Small Savings Fund have to invest money in state governments' securities.

    India asks US, China to restart stalled Doha round (AFP, Jun 19)
    India has called on the United States, China and other powers to return to talks immediately to frame a world trade accord instead of waiting for recovery from the global economic crisis.

    India Regulator Allows IPO 'Anchor Investors' (Wall Street Journal, Jun 19)
    India's capital-market regulator Thursday approved the concept of anchor investors in initial public offerings that would allow these investors to subscribe to up to 30% of the shares allocated for institutional investors. The move, which allows the anchor investor to apply for the shares a day before the subscription opens for other investors, is expected to help companies' founders to create demand for their shares and get a better price.

    China Offers Neighbors $10-Billion Credit (VOA News, Jun 16)
    China is offering a $10-billion credit to help members of the Shanghai Cooperation Organization overcome the global economic crisis. The Shanghai Cooperation Organization groups Russia, China and the Central Asian republics of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

    U.S. treasuries fall as Brazil, Russia, India and China shed U.S. dollar reserves (Financial Post, Jun 16)
    Leaders of Brazil, Russia, India and China gathered in the Ural Mountains on Tuesday to discuss several issues, among them the possibility of shifting their cash reserves into alternatives to the U.S. dollar. The plan seems to be to invest in IMF bonds rather than treasuries.

    Russia, China, Central Asian nations hold summit (AP, Jun 15)
    Leaders from Central Asia, China and Afghanistan joined Russia's President Dmitry Medvedev on Monday at a summit that underscored Moscow's determination to maintain influence in its backyard and seek a stronger voice in global economic issues. Members of the six-nation Shanghai Cooperation Organization and leaders of observer nations are meeting in the Ural Mountains city of Yekaterinburg for two days of talks that are expected to include extensive discussions of Afghanistan.


    Energy

    (Indian) Oil firms hike jet fuel prices (Indian Express, Jun 15)
    After two minor price increases, state-run oil firms today hiked jet fuel or ATF rates by over 12 per cent on firming international oil prices. International crude oil prices have firmed to a seven-month high of USD 72 per barrel on hopes of demand revival in US. The three state retailers had from June 1 raised jet fuel rates by an average of Rs 108 per kl, which came on the back of a 1.8 per cent hike in rates on May 16.


    Environment | Climate Change

    Europe to offer China help in burying CO2 emissions (Reuters, Jun 19)
    Europe will next week start moves to help China and India develop technology to trap and bury carbon dioxide underground in the fight against global warming, according to a draft European Commission document. "China builds, every year, as much coal-fired power plant as the entire UK generating capacity," said a report prepared for consultations with industry and seen by Reuters on Friday.


    Industrial Resources | Manufacturing

    India's Steel Ministry Proposes Additional Tax on Cheap Imports (Bloomberg, Jun 16)
    India's steel ministry proposed imposing a temporary additional tax on cheap imports, accepting local steelmakers' demand to curb dumping. Imports of steel rose 21 percent to 528,000 metric tons last month from a year earlier. Producers from Ukraine and Russia are willing to sell in India at below-market prices.


    Information & Communications Technology

    China tells Google to end foreign site access (Financial Times, Jun 19)
    Beijing has ordered Google to stop users of its Chinese-language service accessing overseas websites in the biggest blow to the world's leading search engine in China since it started operating there four years ago. In a move that could disrupt Google's growth in China, which now has more internet users than the US, the Chinese government said it had told Google to suspend foreign searches and a feature that automatically suggests multiple search results once typing commences in the search window.

    Indian IT Plugs into a Growing Market of Small and Midsize Enterprises (India Knowledge @ Wharton, Jun 18)
    Despite the economic slowdown, the SME sector's potential has caught the attention of India's IT players. New York-based research firm Access Markets International (AMI) Partners estimates the addressable SME market for IT vendors at four million. It defines these enterprises as legal entities registered in India that are profit-oriented and in a commercial location. Bangalore-based Zinnov Consulting, on the other hand, puts the number at 35 million.


    Innovation

    When robots fight, software will ensure ethics are followed (The Times of India, Jun 20)
    A team, led by Ron Arkin at the Georgia Institute of Technology has developed an "ethical governor", which aims to ensure that robot attack aircraft behave ethically in combat, and is demonstrating the system in simulations based on recent campaigns by US troops, using real maps from the Middle East.


    Logistics | Transportation

    China Starts Building Railway to Desolate Lop Nur (Beijing Review, Jun 18)
    China Tuesday began building a railway to the Lop Nur, a former lake area known as "the sea of death" in northwestern Xinjiang Uygur Autonomous Region. Construction the 360-kilometer railway from Hami Prefecture on the China-Mongolia border to the Lop Nur near China's largest desert, the Taklamakan, started Tuesday and would take about two years, said Nur Bekri, chairman of the Xinjiang regional government, Wednesday.

    Mahindra Will Help India Beat China to U.S. Market With Pickups (Bloomberg, Jun 17)
    Mumbai-based Mahindra plans to start selling small 2- and 4-door pickups with a diesel engine that meets California's strict exhaust rules. U.S. plans for Chinese brands such as Chery Automobile Co. and Geely Automobile Holdings Ltd. have yet to materialize, five years into their announcements.


    Money & Capital Markets | Economy

    Preference for Sons in China May Lead to Bubbles in U.S. (Wall Street Journal, Jun 18)
    Mr. Bernanke's explanation for the savings glut in the developing world was that the financial crises of the 1990s had convinced countries that they needed to hold more cash in reserve. While there is probably truth to that, the jump in China's savings still raises an eyebrow. In 2007, Chinese household savings as a share of disposable income was 30%, up from 16% in 1990.

    India slips into 'statistical' deflation (Financial Times, Jun 18)
    India's economy has slipped into deflation, according to its closely watched wholesale price index, but officials and analysts said the first decline in wholesale prices in 30 years did not signify a contraction in demand. India's wholesale prices levels fell 1.6 per cent during the week ending June 6, compared with their 0.13 per cent increase the previous week, the first time since the financial year ending March 1978 that the index has fallen.

    India reluctant to join de-dollarisation chorus at BRIC (Economic Times, Jun 15)
    While China and Russia are likely to pitch for the induction of a new global currency to replace the dollar as the world's main reserve (de-dollarisation) at the first BRIC summit beginning tomorrow in Yekaterinburg, it is most unlikely that India will join the chorus on this issue, according to government sources.

    China wants U.S. to assume global duty of care for dollar (AP, Jun 15)
    Beijing is diversifying its overseas investments and pressing U.S. officials for an "exit strategy" from the ultra-loose fiscal and monetary policies that China fears will eventually inflate away the value of its U.S. bond holdings and fell the dollar.


    Real Estate

    China shares rise after 9-month ban on IPOs ends (Associated Press, Jun 19)
    Chinese shares rose Friday, led by banks and real estate stocks as investors reacted positively to news that the government was lifting its nine-month moratorium on initial public offerings. China Vanke Ltd., the country's biggest developer, vaulted 3.9 percent to 12.39 yuan, while rival Poly Real Estate Group added 1.6 percent to 26.22 yuan.

    Property downturn has Morgan Stanley reeling (PI Online, Jun 15)
    Morgan Stanley, once a giant in the real estate business, is in a world of hurt. The firm just reopened the $525 million MSIF U.S. Real Estate fund, a real estate investment trust fund, to investors. And while the firm did close its real estate operations in Brazil and Russia, it still has real estate offices in China, India and Mexico.


    Newsletter Staff


    International Contributors Editorial Board
    Prashant Das - Co-Editor
    Geoff Hiscock - Australia
    Priya Roy- China (Shanghai)
    Harsha Harjani - Hong Kong
    Dr. Nilay Yajnik - India
    Farhad Mirzaei - Iran
    Asha Hemrajani- Singapore
    Melissa Steinmetz - UK
    Dr. Daney Jackson - USA
    Dr. Sudhanva Char - Academic Resources
    Shree Pandya - Engaging Youth
    Laurel Askue - Environment & Conservation
    Christopher Chan - Intellectual Property


    Kennesaw State University

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