Posted by: Mehul Srivastava on November 09
After a long hibernation from the lecture circuit, India's soft-spoken and carefully scripted Prime Minister, Manmohan Singh, stepped onto a dais and promised more of the same.
Well, not exactly, but pretty much.
At the India Economic Summit Nov. 8, one of the many speak-a-thons that mushroom in New Delhi once the weather improves, Singh came out for a little bit of applause, a little bit of politics and little bit of wishful thinking.
The state of the Indian economy? "The worst is behind us."
The future of the Indian economy? "With a normal monsoon next year, we hope to achieve a growth rate of over 7 percent...Our medium term objective continues to achieve a growth rate of 9 per cent per annum."
Eradication of poverty, hunger and disease? " I am happy to say that we have delivered substantially on that promise. But the task is by no means (sic) unfinished." (I think he meant finished )
But there is news in between the platitudes. For instance, India's fiscal stimulus package, which measured anywhere between $50 and $80 billion, depending on how you count it, will be rolled back starting early next year. By most measures though, it was money well spent - government spending kept India's economy afloat when the private sector all but retreated last year. The effort almost broke the bank, though, and as the deficit climbed to 12% of India's $1.2. trillion GDP, it was clear there was no more where that came from.
Speaking of billions of dollars, Singh had just had a tete-a-tete with the Chairman of Wal-Mart's board, S. Robson Walton, and India's Commerce Minister, Anand Sharma, brought up Walton's enthusiasm for India as he totaled up foreign investment (some $35 billion for the twelve months ending March 2010, he estimated). Wal-Mart runs one store in India in a tie-up with Bharti, where it is allowed to sell only to shop-owners, not to customers. But when I visited that store earlier this year, in Amritsar in North India, not far from the Pakistan border, the lines ran out the door, the shoppers ooh-ed and aaah-ed at the prices, and the cash registers, literally, jingled. And even though organized retail is a puny little part of India's $450 billion retail industry, Wal-Mart has been lobbying India's government to open up foreign investment rules so that it can sell directly to customers.
Sharma is the shyer and less boisterous heir to Kamal Nath, who was India's last Commerce Minister, and is now relegated to drumming up foreign and state investment to build roads. It's an interesting study in contrasts - Nath made his name by holding up the last set of the Doha round of talks for a WTO-led global free trade pact, questioning the true intent of western investors. Now he flies around the world asking the same investors, if they will, please, help build a road in rural India.
Sharma, meanwhile, is the new face of Indian trade politics - reticent to speak his mind, even when egged on by reporters - and his appearance this week on the coat-tails of the Prime Minister underscores how closely Singh is monitoring the informal talks that continue non-stop. India's already signed a free trade agreement with South Korea, and with it's neighbors in the ASEAN region. By 2010, it might sign one with the European Union. That's a lot of ink in just a few months on the job.
But Singh speaks so rarely in public (the three public appearances in the last week notwithstanding) that any sense of direction from India's perpetually smiling economist-in-chief is helpful guidance for the over-eager markets, at least. The benchmark 30-stock sensex was up 300 points for the day, almost 2%. Bonds fell, and given the headlines in Monday's newspapers, Singh's stock rose.
Posted by: Ian Rowley on November 09
There are some interesting comments by Nissan and Renault chief Carlos Ghosn today in an article in India's Economic Times. In the piece, Ghosn reaffirms Nissan and Renault's commitment to a partnership with Bajaj Auto, an Indian two-wheeler maker. The three said last year that they would introduce a rival to the $2,500 Tata Nano low-cost car, but after an initial blaze of publicity, news on the car's progress has been scant. The Economic Times reports that Ghosn reckons the project is still relevant and on track for a 2011 launch. "We have to bring in the car with basic features [and] basic functionality at a very affordable price," the CEO, in New Delhi for the India Economic Summit, is reported as saying.
That should go some way to assuage concerns that companies planning rivals to the Tata car are wavering. Two Bajaj executives, speaking on the condition of anonymity, told BusinessWeek recently that the company is finding it difficult to persuade suppliers to do the kind of aggressive research and development required to push down prices without a clear guarantee that it would produce a sizable number of cars, especially without an approved final design. Meanwhile, Nissan's executive vice-president for Africa, the Middle East, and Europe, Colin Dodge, told me at last month's Tokyo Motor Show that Nissan's input in the car is now minimal. "The project itself is very difficult," Dodge said. "Doing this car for around $2,500 and getting motorbike drivers to jump into four-wheel vehicles [is] very challenging…[but] the car is coming along."
Ghosn's comments suggest that, despite his leadership in the global push for electric vehicles, there is plenty of life in the project with Bajaj. Still, a few important questions remain. One is how many of the cheap vehicles will be built. In the original press release, Nissan said the car would be built at a plant in Chakan, Maharashtra, with an initial capacity of 400,000. As of October, Tata had only delivered 7,500 Nanos. Another is the price, especially if the Nissan-Renault-Bajaj car is sold outside of India. The Economic Times reports that Ghosn isn't sure if it will retail for $2,500 or $2,800 or $3,000. And, just as important for all involved, can they make any money selling such a cheap car?
Posted by: Frederik Balfour on November 05
It’s been a crummy 24 hours for the Hong Kong tourism industry. The first piece of bad news: China has given the green light to Disney to build a theme park in Shanghai. The $3.5 billion Chinese facility will sprawl across about 1,000 acres which will dwarf Hong Kong Disneyland’s 296 acre lot. Mainland Chinese account for more than one third of the visitors to Hong Kong Disneyland, and once the Magic Kingdom sets up in the Middle Kingdom much of that business will get cannibalized. Hong Kong legislator Emily Lau, a long-time critic of Hong Kong Disneyland in which the government has invested billions, called the news a “devastating blow.”
The second piece of bad news is really just more of the same: another day of extremely high roadside pollution reported by RTHK radio this morning. A Hong Kong tourism official interviewed on the radio tried to put a brave face on things saying the problem—which he presumably thinks is only temporary-will go away soon. That’s little consolation for anyone visiting Hong Kong at the moment, where the average stay is just a few days. “The blight of air pollution is a tax on the whole tourism industry as it affects tourists during their visit and leaves a negative impression of the city that will affect their desire to return,” says Joanne Ooi, CEO of Clean Air Network, an environmental advocacy group focusing exclusively on air pollution in Hong Kong. “Reduced visibility leads to strong association with less developed cities like Mumbai that leaves a black mark on Hong Kong’s image.”
Equally important perhaps is that Hong Kong’s air quality leads to unfavorable comparisons with its regional rival Singapore which has has long benefited from its reputation as the cleanest and safest metropolis in Southeast Asia. More recently the Singapore government has made a big push to improve the city’s tourism attractions by hosting the Formula One race and allowing casinos to open their doors next year. Another selling point for Singapore: a Universal Studios theme park is also set to open in early 2010. Though smaller than Hong Kong Disneyland, its proximity to Indonesia, Malaysia and Thailand will give it an advantage over Hong Kong.
But Shanghai is clearly the bigger threat to Hong Kong. Here’s what Parita Chitakasem, research manager at Euromonitor International in Singapore, who specializes in theme parks, had to say to me in an email. “Disneyland Shanghai will have two big features which will make it more attractive than its Hong Kong counterpart: although it is still early days, Disneyland in Shanghai will probably offer a much better experience for your money than Disneyland in Hong Kong – initial plans show that Shanghai’s Disneyland will be six times bigger compared to the current size of Hong Kong Disneyland, which is very small (only 16 attractions). Also, for visitors from mainland China, it will be much easier to travel to Disneyland in Shanghai, as there are no visa/cross border concerns to take care of.”
Still, the Shanghai project is still some years off. Indeed, the press release from Disney was short on details, saying it was in negotiations with the Shanghai government. The Burbank, California-based company will have a 40% stake in the Shanghai resort while the Chinese partners are as yet unnamed. But ff the experience of other U.S. corporations with joint ventures in China is anything to go by, Disney CEO Robert A. Iger is going to need a lot of pixy dust around to make things go smoothly.
Addendum:
Zhongnan University professor Sun Xiliang says on his blog on China.org says Disney needs Shanghai a lot more than Shanghai needs Disney.
Posted by: Kenji Hall on November 05
The color blue has been thought to have a calming effect on people. But can it prevent suicides? Railway operator JR East is hoping that blue light-emitting-diode, or LED, lamps will help reduce the number of suicides on train tracks. Last month, the company spent $170,000 to put the lamps on the platforms of all 29 stations along the Yamanote line, said East Japan Railway spokesman Koji Takano. Among the dozens of commuter train and subway lines that crisscross Tokyo, the Yamanote, which travels in a loop around the city, is one of the busiest.
Experts say there's no conclusive evidence that blue lights will do any good. "Train operators are desperate to do anything that will bring down the number of suicides," said Tsuneo Suzuki, a professor who specializes in color psychology at Keio University in Tokyo. "But there's no research that proves that blue lights will dissuade people from killing themselves."
Suicides are a common cause of disruption for Japan's railway operators. Last year, Japan recorded 32,249 suicides, a 2.6% fall from the previous year, according to National Police Agency statistics. Of the total, close to 2,000 people, or roughly 6%, had killed themselves by jumping in front of a train. Last year's figures were well below the record high of 34,427 set in 2003. So far this year, amid a recession and unemployment that's hovering near record highs, suicides appear to be on the rise again, with 24,846 reported through September.
On East Japan Railway's lines in Tokyo, suicides rose for the third straight year to 68 in the fiscal year through March--18 of them on the Yamanote line--from 58 the previous year. Company spokesman Koji Takano said the decision to use blue LED lights wasn't based on any researchers' specific findings.
In recent years, cities and railways operators have experimented with colored lights. In one highly publicized case, authorities in Glasgow, Scotland, put up blue lights in parts of the city, and later pointed to anecdotal evidence that crime had fallen. Last year, Japan's Keihin Electric Express Railway set up blue lights inside a station in Yokohama, just west of Tokyo. Other train operators have set up blue lights at railroad crossings.
Recently, officials from Tokyo-based private railway company Tokyu recently paid Keio University's Suzuki a visit to seek his advice about the psychological effect of colored lights. Forget about it, he said, not least because the lights would be switched off during the daylight hours. "I told them that I understood their concerns but that they won't solve a deeply rooted societal problem like suicide by putting up lights," he recalled. "If you showed that it was possible, you would probably win the Nobel Prize."
Posted by: Bruce Einhorn on November 04
The China iPhone wait has ended, so now it’s time to obsess about another smartphone that’s pretty much missing in action in China, the BlackBerry. China Unicom launched its version of Apple’s iPhone over the weekend, with quite disappointing results. (See my colleague Olga Kharif’s blog here for more.) Now Research in Motion, which has a limited presence in the country through China Mobile, is hoping it has better luck. According to this Xinhua story, RIM has “entered into final stages of talks” with China Telecom, one of the country’s three state-owned operators.
China Mobile has offered BlackBerry to corporate customers since 2008. But China Mobile, the country’s largest carrier, is clearly interested in promoting its OPhone, smartphones powered by the Google-backed Android operating system. Since Beijing keeps a tight grip on the Chinese telecom market, RIM doesn't have a lot of options. China Mobile is focused on its OPhones and China Unicom working with Apple. That leaves China Telecom. According to the Xinhua story, “the handset manufacturer plans to introduce more Blackberry mobile phone models to China, with trendy new functions such as touch screens and handwriting recognition, and install new services including fashion and entertainment, social networking software, and instant messaging.”
Given the underwhelming early performance of the iPhone, does RIM need to worry that Chinese will not rush to embrace the BlackBerry? Urban Chinese are some of the savviest cellular consumers around, frequently replacing their handsets, and they want the latest features at the lowest prices. One reason the iPhone isn’t a hit yet for Unicom, for instance, is the popularity of unauthorized iPhones that come loaded with more features than the legit ones offer. RIM won’t have to worry as much about competing with its own phones in the black or gray market, though. Strange as this might sound, RIM probably will find itself in a better position than Apple because the BlackBerry isn't nearly as popular in China as the iPhone.
