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May, 2015

  • china-one-child Two weeks before China celebrates her singles day on 11/11, Beijing announced that she was going to abolish the one child policy altogether. Enforced in 1979 to curb China’s growing population and ensure a good standard of living for a nation aspiring to excel, the one child policy brought in sweeping changes for Beijing.

    However 68 years later, having reduced China’s population by almost 400 million child births (the estimated prevented births if the policy wasn’t in place), President Xi Jinping and his team decided to abolish the rule in order to boost the working age population for the next generation. The fear that China would get old before she gets rich held true and Beijing was finding it hard to pay retirement bills with a falling number of workers. The country’s working age population fell 3.71 million in 2014.

    The United Nations projects that China will lose 67 million workers from 2010 to 2030. At the same time, China’s elderly population is expected to soar from 110 million in 2010 to 210 million in 2030, and by 2050 will account for a quarter of the population, according to the U.N. China’s population, the world’s largest, rose to 1.34 billion in 2010, according to census data. Additionally, social unrest was growing with a large number of unmarried men and women who had to work doubly hard to support extended families admist growing consumption levels.

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  • iinchin tradeIndia truly is the proverbial elephant economy. When other economies are buzzing, bursting and sizzling their way through high growth numbers, the world looks to India and wonders why she is so slow.

    When economies around the world bust, crackle and fizzle down, India is considered the resilient behemoth who can stand the test of time. An economy that needs severe patience to deal with, groom into and mature, India like the elephant never forgets. She’s learnt from past mistakes, likes to move slow and steady and generally takes care of her heard. Yes she might strike wild if she is frightened or lost, she has been plundered for her riches, yet she leads a fairly happy, non-intrusive existence in the corporate jungle.

    India should be glad to be the elephant. Every jungle needs one. Especially when dragons come to roar, elephants bring about a sense of calmness. It is this resilient calmness that companies and investors are flocking to as global currencies and stock markets rumble.

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  • china-pharmaAs China gets older faster than it gets richer, her pharmaceutical industry is under threat. Owing to sky high prices of medicines, thrust onto citizens by local hospitals, the Central government has cracked down on drug prices in a policy to be implemented from June 1st, 2015. In the recently released pilot program, Beijing has introduced plans to abolish drug price mark-ups in more Chinese hospitals and to give hospital administrators greater clout to negotiate price cuts with suppliers.

    To further avert corruption that has severely tinged the pharma industry in China, China’s State Council, announced this month that a pilot programme to reform the hospital finance system would be extended to 100 big cities this year, with the goal of covering all urban public hospitals within two years. The pilot programme scraps the 15 percent mark-up that Chinese hospitals typically place on drug sales, providing them with 40 percent or more of their budgets.

    For anyone who frequents the India-China route and has local friends on the other side of the bamboo curtain knows that cancer drugs from India are in high demand in China primarily because they are typically 1/6th – 1/10th the price in India. Corruption, riddled with a pharmaceutical industry that is flamed by hospitals being the sole dispenser of drugs in China has created an illicit circle wherein the prices of medicines are highly inflated.

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  • Top-5-Indian-Films-in-ChinaIndian Bollywood actor Aamir Khan is a sensation in China. Having awed audiences in 3 idiots, as a geeky yet charismatic student, his latest film PK, recently released to rave reviews.

    In the first 72 hours of release in China, the film has already grossed US$5.3 million (32.6 million RMB). Known to make intellectual, creative and thought provoking films that have movie-goers reflect on their lives, society and ideologies, Aamir Khan’s movies also connect India and China – expose their differences and celebrate our similarities. Take for example, PK which ridicules the idea of religion and superstitions that are so ingrained in Indian society.

    Yet, at the same time, reflects Chinese sentiments which from an communist, atheist perspective, religion has no purpose or function. In the story, PK, an alien from outer space (Khan), who doesn’t know what religion is, lands in India and through his various experiences and idiosyncrasies exposes the often strange and inexplicable religious notions much believed in India. The movie, which in a way reflects how Chinese audiences might view Indian religious rituals makes a comedy of an otherwise sensitive topic.

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  • MODI_XIIndian Prime Minister Narendra Modi’s visit to Xian, Beijing and Shanghai has high on visuals yet, low on impact. The two countries had a lot of hopes riding on the shoulders of two of the most nationalist leaders we’ve had in decades, yet the steps taken to achieve any substantial impact either on economic, political or border issues was subpar.

    During his three day visit, accompanied by the Chief ministers of some of India’s most prosperous states and heads of large Indian companies, Mr. Modi met Chinese president Xi Jinping in Xian his hometown, Prime Minister Li Keqiang in Beijing, Chinese and Indian students, businessmen, investors and society. He signed 21 MOU’s worth US$ 21 billion.

    Funding from Chinese banks ICBC and China Development Bank for Airtel, Adani Power Company and Jindal Steel and Power accounted for the major part of the agreement total, as did tie-ups for renewable energy companies. The two countries share bilateral trade of US$70 billion, making China India’s biggest trading partner, but the figure is worryingly skewed, with an estimated US$40 billion in favour of China.

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  • rmbbChina’s devaluation of the Ren Min Bi or peoples currency is expected to have a less than dramatic effect on the Indian economy – the most affected sectors being textiles, metals and chemicals.

    While the yuan becoming cheaper against the dollar will mean that Chinese exports rise, slightly spurring the economy, analysts expect it to have little impact on the Indian economy as the two little compete for much in the global economy. Brought on by a move from Beijing to delink the yuan from the dollar and change the currency’s reference rate, the Peoples bank of China has taken a baby step towards making the yuan an international currency.

    In the short term what experts are worried about though is that it will tilt the basket of goods further in favor of China, increasing the already yawning trade deficit between the sweet and sour neighbours. The widening gap in trade has historically always led to pressures both external and internal on the Indian government, which lends itself to often damaging international relations with China. With the Indian government already balancing under bad loans hoarded on Public Sector Banks, the Reserve Bank of India will need to take drastic measures to maintain a 7+ percent GDP growth this year.

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  • images-28The character 月 is the same for moon and month in Mandarin. This comes as no coincidence.

    Its because China, like India follows the lunar calendar. As a result, the two neighbours celebrate several auspicious days at the same time. Take for example, On the 27th of September, China celebrated the mid autumn festival while India celebrated the Ganesh festival. Similarly, Chinese New Year was celebrated on February 19th this year, while Maha shivratri was celebrated in India on February 17th. Also, an auspicious day in the holy month of Ramadan was June 20th, the 5th day of the 5th lunar month which coincided with the Dragon Boat Festival in China.

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  • Indian CEOs China maybe investing billions in companies worldwide, but its Indians who are controlling these empires. With the recent promotion of Sunder Pichai as the new CEO of Google, three Indian born executives now control companies whose combined revenue exceeds the gross domestic product of approximately 140 countries. The three CEO’s are Microsoft’s Satya Nadella and Nokia’s Rajeev Suri and Google’s Sunder Pichai. The combined revenue of the three brands is US$159.6 billion in revenue last year, according to Quartz. Add to this the intellectual capital brought in by Indian born deans of American universities – Nitin Nohria, dean of the Harvard Business School, Sunil Kumar, dean of the University of Chicago’s Booth School of Business, Dipak C. Jain, the current dean of INSEAD and we have ourselves a world in which Indians control both intellectual and financial capital worldwide. Below, Inchin Closer profiles 14 of the top Indian born CEO’s of our generation – Read more

  • black moneyIndia and China’s recent crack down on black money has sent shock waves across the world.

    With illicit money stocked in banks from Switzerland to Singapore, New Delhi is enforcing strict policies and tighter regulations to bring black money back to Indian shores. Meanwhile Since President Xi took over, Beijing has also come down heavily on evaders in a major clampdown on both government officials and businessmen.

    According to a report by Global Financial Integrity, Russia and China scale above India in the illicit funds that sit overseas. According to the report, India’s total (US$95 billion) is still less than 40 percent of China’s US$250 billion in illicit fund exports in 2012 but it’s gaining ground. Ten years earlier India’s total was only 20 percent of China’s, according to data from the Washington DC-based research and advocacy organization. Russia was on the top with US$123 billion in 2012.

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  • china stocks The Chinese stock market has nosedived loosing US$3.2 trillion or nearly twice the value of the Indian stock exchanges according to Bloomberg.

    Although Beijing attempted to arrest the free fall over the weekend, by pumping liquidity into the system, the Chinese stock markets continued to fall on Wednesday. Analysts fear India needs to look at the Chinese stock markets more closely as compared to the greek market collapse, as China’s markets are more closely linked to India than Greece is. According to the Financial Times, The Shanghai Composite opened down as much as 8 percent before paring losses to a 4.7 percent decline by 11:15am local time today. The Shenzhen index lost 3.3 percent, while the start-up ChiNext board was down 0.2 percent.

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