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May, 2016

  • inchin leadersAs rightly put by Shivshankar Menon, India’s former national security adviser, the relationship between India and China is clearly under stress. “We need to find a new equilibrium between elements we’ve always been juggling — economic competition and complementarity, and strategic sensitivities” – he told the Financial Times.

    The sweet and sour neighbours, China and India have recently been at loggerheads over several issues which are gaining heightened importance as both stalwart heads of state, Prime Minister Modi and President Xi take charge of their bilateral affairs.

    The buzzword is that over a slew of meetings scheduled in the next 3 months, both leaders are expected to iron out their differences and tango more in complement with each other. The first visit on August 12 was by Wang Yi, China’s foreign minister to New Delhi. The aim of the meeting was to lay the communication groundwork before the upcoming G20 Summit in Hangzhou, China and the BRICS Summit in Goa, India. In other wards, it was Mr. Wang’s agenda to make sure India doesn’t stoke dissent against the South China Sea dispute.

    During his visit, Mr. Wang met Indian Prime Minister Narendra Modi, National Security Adviser Ajit Doval, External Affairs Minister Sushma Swaraj and the Governor and Chief Minister of Goa. Chinese state councillor and former foreign minister Yang Jiechi, who is Beijing’s designated special representative for border negotiations is also expected to visit India soon to quell tensions that have arisen with Beijing’s unilateral support of Pakistan. The flourishing friendship between India’s tense neighbours – China and Pakistan has created a strong rift in India China relations. With China asserting her infrastructural and investment muscle in Pakistan. Mr. Yang will need to come with a strong strategy if the two nations are going to support each other in the upcoming meetings.

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  • BATWe live in an interesting investment climate, where India and China can’t either do with or without each other.

    Cross border investments in online apps and platforms are breaking traditional barriers and creating healthy, profitable companies for both nations. For the Indian start-up market to flourish, Chinese investments are important and a vital cog in the wheel that will turn the Indian economy around.

    For Chinese investors, India is a massive market, similar to theirs, with a huge growth potential. Smell a win-win situation? Yet there are hurdles, a lack of political will and diplomatic trust enter at various points in a healthy India-China relationship to often mar the smooth functioning and often put a spanner in the works. However, since there is a strong potential that the bond between India and China will withstand political head winds, Inchin Closer takes a look at the India strategy for the Big 3 Chinese investment heavy weights – Baidu, Alibaba and Tencent – or BAT as they are more commonly referred to. The article aims to demonstrate where these investment bell weathers are now and the direction they are looking at. It is expected to foretell, the direction Chinese investments into India will take and subsequently how the rest will follow.

    ALIBABA: A scion for a variety of low priced goods, Alibaba has recently tied up with Indian payments gateways Paytm to initially allow select Indian Indian sellers to source products from China at cheaper rates as well as help them with logistics and payments. India is an inevitable market for Alibaba for whom a developing market in search of cheap goods is perfect, as compared to Europe. As a result, Alibaba India already has 4.5 million registered users, making it the world’s second largest market for Alibaba after China. Additionally, Alibaba invested US$680 million into Paytm last September making it the largest investor in the mobile payments leader. In October, Alibaba joined softbank to invest US$125 million out of a consolidated investment of US$500 million into Snapdeal an online shopping portal.

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  • wagesAs India stands in the sunshine with her rising GDP projections, growing investments and overall sunny outlook over a gloomy global economy, in the shadows lurks responsibility. The responsibility of sizing her social sector up to International (read Western) standards.

    Taking a cue from her more stalwart neighbour China, India needs to know that with being a growing emerging market comes caveats of all kinds from afar. Looking into the growth of China and her boom from the 1990’s spurred by foreign investments, technology and capital, came the over arching western regulations to industrial production.

    Chinese factories which initially ran robust on low wages suddenly had to deal with the western concept of a minimal wage scheme. Office goers got insurance and social security benefits and companies had to own up to stricter environmental laws. Papers were written on the appalling state of sanitation in China’s rural areas and education was kick started by making English learning enigmatic.

    When the West invested in China, they didn’t just do so with their money, but they also poured time and energy in making her more like them. Fashion and diets changed. Holiday destinations and aspirations altered and consumer demands and family structures changed. Bringing in foreign capital meant sweeping changes for the Middle Kingdom. The resident soothsayer at Inchin Closer predicts the same. With India on the rise again, western media eyeing her for potential investments, collaborations and growth, the country will need to simultaneously pull her socks up in other aspects too. For investors don’t come in with a blind eye. They will want better security for their women, better infrastructure and cleaner air.

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  • herbal-formula-2 ~ By Charmaine Mirza

    Indian pharmaceuticals have been trying to enter the Chinese market for a while. Priced cheaper than drugs available on the Mainland, Indian pharma companies have always been kept at bay for fear that they may disrupt the industry. However, there might be light at the end of this tunnel.

    Shanghai based Fosun Pharmaceuticals has recently emerged as the billion-dollar bidder for India’s KKR backed Gland Pharma, outstripping US-based Baxter and Advent, as it aims to increase its research and manufacturing prowess. As China gets old before she gets rich, the pharmaceutical industry is now waking up to partnering with Indian drug companies to benefit their billion plus populations and avoid a healthcare meltdown. Both ancient nations have their medical advantages – – China and India supply much of the world (and the same pharma multi-nationals) with their APIs (Active Pharmaceutical Ingredients) and generics. – The roots of modern medicine lie in two ancient systems – Traditional Chinese Medicine and Ayurveda. So who really wields the whip in this pharmaceutical circus? Inchin Closer pauses to examine the larger picture.

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  • ~ By Charmaine Mirza

    Where are the Chinese headed in India? A question worth asking even as Wang Jainlin, Wanda’s big boss, committed 60,000 crores towards infrastructure in Haryana at the beginning of 2016. A massive industrial park in Kharkoda, near Sonipat, in Haryana is Wanda’s latest drop (more like a downpour, we feel!) in the Indian Ocean. Is this a trailblazing move by China’s cowboy investor, or is he riding a silent wave of Chinese investment? Inchin Closer dives beneath the surface of the matter to take a closer look.

    • What makes India an attractive prospect for our Chinese neighbours?
    • Who exactly are these new arrivals off the Chinese junks?

    Haryana is leading the Indian pack to lure the Chinese into the Indian playground. So what’s Haryana doing to get the Chinese in? Chief Minister Khattar has made a terrific pitch highlighting:

    • The ease of doing business and regulation reforms under his regime.
    • Low rent leases
    • Friendly tax breaks
    • Haryana’s enhanced infrastructure facilities.
    • It’s strategic location with close proximity to the National Capital Region.

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  • jaitley + guoliIndian Finance Minister Arun Jaitley is on a five day tour of China to pitch for Chinese investments from the slowing Chinese economy. India which is on a growth trajectory is aiming for 7.5 to 8 percent GDP growth at a time when China’s GDP has decelerated to 7 percent.

    While the Chinese are interested in investing in India – a neighbour and a large market most investors are yet skeptical on her policies. Mr. Jaitley’s aim is to convince Chinese bankers and wealth fund managers to invest in India. The finance minister is not alone. His visit was proceeded by the Chief Minister of several Indian states, the last being Mr. Shivraj Singh Chouhan, the CM of India’s central and second largest state Madhya Pradesh who was in Beijing, Shanghai and Guangzhou last week with a 20+ member business delegation to pump investments into his state. Madhya Pradesh has already allotted land at Pithampur towards Chinese investments in automobiles, pharmaceuticals and technology and has promised massive discounts in land, taxes and electricity.

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  • ma-modiWith most of the money pouring into start-ups across China and India drying up, investors are getting a lot more sharp edged and nickel nosed about where they put their money.

    China’s slowing economy earlier pushed several investors to India to reap rich dividends from her large population. However Chinese companies now too are second guessing putting their money into India and are rather cooling their heels even as the summer approaches.

    Several Chinese companies including Qufenqi, a student loan company owned by Alibaba which was looking at buying into an Indian student loan firm have back tracked and are no longer interested in the Indian market as of now. The only beacon on the horizon seems to be Jack Ma’s Alibaba who are keen to enter India’s burgeoning e-commerce market. India is roughly estimated to be 5 years behind that of China when it comes to the adoption and implementation of new technology. This gives Alibaba a huge head start in implementing strategy for a market similar in size and value to China, and also a great advantage in knowing where the market is headed.

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  • make-in-indiaTaking a leaf out of China’s development handbook, India launched her “Make in India” week on Monday with much fan fare. Inspired by Germany’s annual Hannover Messe, India’s Make in India week is New Delhi’s effort to bring India’s manufacturing sector on par with her services sector, generate jobs and ease imports.

    Estimated to create a 100 million jobs and increase manufacturings contribution to the national output to 25 percent from the current 17 percent, the initiative is a massive nationwide drive to boost manufacturing in India.

    China’s manufacturing sector in comparison contributes 35 percent to the GDP. Initiated in 2014, ‘Make in India’ is a flagship of the Modi regime. The main objective is to develop a Chinese-style global manufacturing and export powerhouse that will make India one of the top 50 nations in the world on the World Bank’s Ease of Business ranking.

    Currently, India stands at 130. In comparison to her sweet and sour neighbour, India’s desire to propel manufacturing comes from weak industrial data. Never a manufacturing powerhouse, India is now keen to increase factory output and industrial production. However in order to do this and bring in fresh investments, New Delhi needs to cut the proverbial red tape and lay out the red carpet instead. Like China she needs to give funds at affordable rates, offer cheap inputs and provide world-class infrastructure. In addition, she will also need to bring in technology, regulate environment norms and create skilled talent to attract both domestic and international manufacturers.

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  • oil-demandA tectonic shift is taking place between India and China and its becoming obvious by the subtle changes in oil consumption.

    According to a report by The Oxford Institute for Energy Studies this month India’s oil demand grew by 300,000 barrels a day last year, double the average rate in the previous decade while China’s growth has slowed to 300,000 barrels from an average 500,000 barrels in the decade to 2013. The shift heralds not only a change in the domestic economy with China moving higher up the value chain, becoming more conscious of her environmental footprint and increasing her services sectors, but also signals clearly that she will no longer be swayed by oil politics.

    The oligarchy of oil, means that with a drop in demand and consequently in price, China was able to alter the economies of oil producing nations such as Saudi Arabia and Iraq which gave her a foothold in international politics.

    While the shift has been gradual, the change is substantial to highlight that oil producing nations will now play into India’s hands as she holds the reigns on higher oil consumption.

    Foreseeing this is also probably why Rosneft,’ Russia’s largest oil company, has decided to sell nearly half of the largest oil deposit in Eastern Siberia to Indian investors. The company has ceded 49.9 percent of “Vankorneft” shares to a consortium of Indian public sector oil majors.

    Of these, the Oil and Natural Gas Commission (ONGC) will get 26 percent of the shares, while 23.9 percent will go to Oil India Limited (OIL), Indian Oil Corporation (IOC) and Bharat Petroleum (BPL). ‘Vankorneft’ owns a deposit with 500 million tons of oil and condensate reserves and 182 billion cubic meters of gas, reports the Rosneft press service.

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  • 20160411-xinhua-obesitychinaTheres a good reason why marathons have become a fad in China and India.

    Of late with the number of overweight people outnumbering those that are underweight worldwide, its become popular to exercise and what better way to do it then out in the open with friends? While marathons have mushroomed across South East Asia, so have crazy diet plans and the sales of sporting goods.

    This predominantly stems from the fact that people in China and India are excessively getting more obese.

    According to a study on Global Trends in Body Mass Index (BMI), published in the medical journal, Lancet, China displaced the United States as the world’s most obese country in 2014. The figures for China stood at 43.2 million obese men and 46.4 million obese women while the U.S. had 41.7 million obese men and 46.1 million obese women. A diet high on junk foods, crazy work hours, and a society that believes burgers to be cool can do that to a population.

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