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April, 2015

  • leijun India – China bilateral ties have taken a quantum leap from raw materials to mobiles and technology. Recently mobile phone maker Xiaomi, or little rice in Mandarin received a generous investment from Ratan Tata, former chairman of Tata Sons Ltd. The CEO of Xiaomi, Lei Jun, a 45-year-old billionaire and serial entrepreneur, who last visited India 15 years ago recently visited New Delhi and Mumbai to promote the company. Photo’s of China’s Steve Jobs as he’s often known, posing in front of South Mumbai iconic landmarks and in an autorickshaw went viral across English and Chinese social media last week.  Lei Jun came to India, along with co-founder and company president Bin Lin, they met top Indian business leaders, startups, customers and retail partners.

    The company has big plans for India, where they plan to set up a local manufacturing center, expand their R&D center and emerge as India’s premier handset manufacturer by 2020. All this while maintaining their core USP of selling their handsets online only, while offering consumers a touch and feel experience before buying at select stores.

    Just weeks ahead of Indian Prime Minister Narendra Modi’s visit to Beijing India has become a hot buzzword in Chinese VC and investment circles. Aided by the central government and coxed by a tightening market at home, Chinese companies are keen to invest in India’s 1.3+ billion market. Jack Ma, Founder and CEO of B2B, Alibaba recently invested in Indian payment gateway Paytm and has set up an incubation cell in Bangalore to explore investments in the IT and mobile space.

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  • India-china-GDP-IMFIn a move that would further boost Chinese investments into India, the International Monetary Fund (IMF) has predicted that India’s GDP growth could outstrip China’s in this financial year 2015-16.

    According to the IMF’s report, for the first time in 16 years, India’s GDP will grow faster than China’s. India is projected to grow at 7.5 percent in both 2015-16 and the fiscal after that (based on market prices), while China, having experienced its worst economic slowdown in 24 years last year, could witness its growth sliding further to 6.8 percent in 2015 and 6.3 percent in 2016. While the IMF’s growth projections for China have been retained at the January level, those for India have been revised up by from 6.3 percent for 2015-16 and 6.4 percent for 2016-17. China’s annual economic growth slowed to a six-year low of 7.0 per cent in the first quarter of 2015 as compared to a growth of 7.3 percent in the last quarter of 2014.

    The turnaround could signal a change in tide and ring true what analysts have predicted for years – that China’s growth will eventually even off and India which has been a late bloomer will grow faster than China. Over the past decade, India has always been pitted against China, alikened to the tortoise and the hare, the elephant and the dragon, however inertia in the markets has now caused Indian companies to do much better this past fiscal.

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  • oil-price-droppThe dramatic 60 percent fall in oil prices since July last year has created interesting effects on the economies of China and India. The Chinese economy seems to have been significantly buffered due to the stark drop in oil prices since June 2014. On the other hand, the Indian economy has been lifted, sheltering its 1.3 million consumers from higher inflation, enabling consumers to buy more and the IMF to predict that India’s economy can outpace China’s this year.

    Analysts predict that China’s economy could have suffered a much harder blow had oil prices for the world’s largest energy consumer not fallen. A strong reminder of this came on Sunday, when Beijing introduced a 1 percentage-point reduction in the amount of cash that lenders must lock up as reserves. It is the largest cut in Chinese banks’ required reserve ratio (RRR) since late 2008, the nadir of the global financial crisis. Cutting RRR to 18.5 percent, frees up nearly 1.3 trillion yuan (US$210 billion) for new lending, money that should help shore up growth.

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  • ma modiBusiness to Business billionaire Jack Ma of Alibaba fame visited New Delhi this week to promote his cash cow as the next big thing to bring the sweet and sour neighbours back on track. Hot on the heels of warming India China relations and 6 weeks prior to Indian Prime Minister Narendra Modi’s first official visit as India’s head of state to Beijing, Ma’s presence in Delhi has already got global chatter waves going.

    In a closed door meeting with Mr. Modi, who the Chinese view as their ticket to a large market, huge returns on investments and scalable growth, Ma marketed B2B’s as a force to help empower smaller businesses and grow the market. At a time when the Indian government is toying with the idea of Foreign Direct Investments in the retail sector at the cost of upsetting smaller shops, B2B’s can be the ideal force to grow the market. And who better to assist the Indian market than Alibaba, the big daddy of B2B’s whose already proved highly successful in a similar market to India.

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