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  • India_Budget_2016India’s union Budget 2016-17 wasn’t centered around Chinese investments which are flocking into the nation and looking for a quick return on investments, but was rather focused around long term players. With India’s rural economy occupying centerstage, New Delhi’s aim is to spend on rural India, create jobs and boost the agrarian economy which in turn will reap rich dividends in the years to come.

    The belief that rural India will run India’s economy is a pluralist concept which bodes well for all governments catering to the vote bank, however it does little to spur the growth of an economy in the near term. Chinese investors and companies on the other hand are more interested in the new India, one that sizzles on software and is tethered to technology for which India’s union budget gave little leeway.

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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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  • 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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  • 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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  • links-with-africaIn a bid to catch up with China in Africa, India is hosting the third India-Africa Trade summit in New Delhi between 26 – 29th October. The trade summit will seek to increase Indian investments into Africa, a feat China has been pursuing since the early 2000’s. New Delhi however woke up to the continent only after the 2008 financial crisis when she realigned strategies to diversify trade beyond the US and Europe. Since then, two-way annual trade has more than doubled to US$72 billion

    Meanwhile, China has become by far Africa’s biggest trading partner, exchanging about US$184 billion-worth of goods a year, a growth of nearly 20 times trade since 2000 and almost three times the value of India’s trade in the region.

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  • brahmaputraChina today operationalized and put into commercial run the US$1.52 billion (9.6 billion yuan) Zam Hydropower Station, the largest in Tibet. Built on the upper reaches of the 2,900-km Brahmaputra river also known as the Yarlung Zangbo River, which flows through Tibet into India and later into Bangladesh is a major source of livelihood for Indians and Bangladeshis.

    The damming of the river, has been a major bone of contention between India and China for a few years now. While the river originates in Tibet, and Beijing has assured India it will not dam the waters but build the dams to generate electricity, New Delhi has been weary the sweet and sour neighbour might usurp power to flood or create a drought situation in North Eastern India during times of unease. As a result, Indian officials monitor and measure the flow of water into India from China to ensure the country is ready for any eventuality, such as the possible holding back and sudden release of water by China.

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  • stalled-investmentsIts time New Delhi pulled a Beijing – a massive capital infusion to kick start the Indian economy and get India rolling. Indian Private investments and capital expenditures have dropped significantly due to a slowing global economy and gradually waning economic enthusiasm. So much so that 2015 is recorded as the first year since 2006, that Indian public sector capital expenditure has overtaken the private sector, according to Standard Chartered.

    New Delhi needs to invest in her economy to get her engines chugging. Take for example Beijing’s infusion earlier this year which kept the Chinese economy in momentum. The Chinese central government announced both the allocation of 1.13 trillion yuan (US$185.8 billion) for upgrading internet infrastructure and the creation of a 124.3 billion yuan fund for affordable housing. These expenditures followed authorization of six new rail lines costing 250 billion yuan. Compare this with Indian Prime Minister Modi’s request to the US to digitize India earlier this month and with China to build roads and railways.

    Albeit the Indian economy is growing at 7 percent and is one of the stalwart BRICS economies, she is shaking at her knees, wobbly and uncertain of her next few steps, waiting and watching for the game to change – hopefully improve. Her steel sector is low, Private power producers are in the doldrums, dragged down by problems at state-owned electricity boards. The property market is also struggling, while slowing global growth has begun to hit exporters. The Rs. 700 billion (US$11 billion) which Mr. Modi kept aside for infrastructure projects earlier this year has but created a small filip for overall investments.

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  • w_pg1Chinese President Xi Jinping, Indian Prime Minister Narendra Modi and President of the United States Barack Obama came together for a heady week of negotiations, multi billion dollar deals, photo ops with business and technology leaders and bids to seal the growth of their nations.

    As each economy carefully hinges on that of the other, both Mr. Modi and Mr. Xi coaxed larger investments from the worlds richest democracy in exchange for a small piece of the pie that America always wanted – better transparency, a curb on corruption, protection of intellectual property rights, climate change enforcement’s  and opening up their economies further.

    While meetings hussled around the UN general assembly, Modi and Xi both received accolades for their work in American Media. China having a larger economy and much higher trade targets than India, found herself on more front pages than Mr. Modi who is holding on tightly to the sheen of his India shining. India and the US are hoping to increase bilateral trade to US$500 billion in the next few years from the current US$120 billion. China’s bilateral trade with the US is already around the US$500 billion mark.

    The idea was for each megalomaniac leader to drum up investments and create an international stir to drive their economy forward. For Modi this 2nd trip to the US was a whirlwind affair braced at pushing his “Made in India” campaign tweaked at increasing India’s manufacturing sector which will hopefully absorb the millions leaving agrarian land and graduating by 2020. For Xi, this was his first state visit to the US, marked by a lavish state dinner hosted by US President Barack Obama at the White House. His statement was to boost the Chinese economy with the higher value goods, services and American expertise.

    In addition to hob-nobbing with leaders in Washington, Xi visited Seattle and Modi Silicon Valley. Xi began his week-long visit in Seattle addressing a gathering of 650 business executives, while Modi chose New York to kick off his five-day visit, addressing two round tables—one of financial investors and another with representatives of media and communication companies including Comcast, Time Warner, Discovery, Sony, ESPN, News Corp., 21st Century Fox, Disney and the ABC television group.

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  • cabs
    The sharing economy has got more competitive with Didi Kuaidi, Lyft, India’s Ola cabs and Singapore’s grabtaxi uniting by the force of their investors into one giant competitor for Uber cabs.

    Uber which essentially disrupted taxi services worldwide in 2015, is facing heat admist markets that hold the most potential. Asia with large populations, mostly all on smartphones, is fertile ground for this competition to be fought out. As a result, Uber recently invested US$1.2 billion into China and is expected to invest close to US$1 billion into India.

    While, Bangalore based, Ola cabs is yet to sign on the dotted line with Didi Kuaidi, the knot, according to sources is almost tied. If aligned, Didi Kuaidi, will not just be competing for India’s US$10 billion taxi market, but will become the biggest taxi sharing service worldwide.

    Didi Kuaidi whose investors include Alibaba and Tencent Holdings is valued at $16 billion and is expected to invest close to US$30 million of a total US$500 million raised by Ola. The alliance is targeted at growing their existing marketshare and offering strong competition to Uber which has faced several law suits and isn’t yet on firm ground in India. Ola cabs currently claims 750,000 rides a day in India while Uber plans to scale upto 200,000 rides a day with the new investment.

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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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