China will politely resist Obama's G-20 proposal

China will find it hard to object to US President Barack Obama's drive for a more balanced global economy at a G-20 summit this week, but will resist any sweeping reforms that risk checking its headlong growth.

US calls for exporting nations to consume more will shift the spotlight back toward China's managed currency regime and whopping trade surplus after a year in which these were put to one side, displaced by the imperative of recovering from the global financial crisis.

That the United States is ready to put pressure on Beijing became clear this month when, for the first time since time since China joined the World Trade Organisation in 2001,it invoked a "special safeguard" clause to slap duties on Chinese-made tires

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China venture capitalists most-favoured, India in 2nd spot

Even as recent industrial output numbers signal that the Indian economy is gradually heading towards the recovery path, it is China that catches the fancy of venture capitalists (VCs).

“Apparently, among venture capitalists, there’s China and there’s everyone else,” says a recent global survey by Deloitte Touche Tohmatsu (Deloitte) on VC sentiment in the times of recession.

The survey reveals that 50% of global and non-India based Asian investors who plan to increase their investments over the next three years look at China as the favourite location.

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Aquarter of Indians to live on 1.25 dollars per day in 2015: World Bank

India now is ahead of only Sub-Saharan Africa among developing countries in terms of the percentage of population below the poverty line, though it fared better than China on this count in 1990, according to the World Bank.

The multilateral lender, in its recently released report ‘Global Economic Prospects for 2009’, said a quarter of India’s population will be living in extreme poverty, on less than $1.25 a day, in 2015.

The corresponding figures for China is 6.1% and for Sub-Saharan Africa 37.1%. These are based on purchasing power parity exchange rates derived from the 2005 price surveys, meaning that the calculations have been made assuming a dollar’s purchasing power to be the same in the years under consideration as in 2005.

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Sensex tops 12k mark as global markets rally

The rally in emerging markets, especially Russia and China, last week was reflected in Indian markets on Monday, which reopened after a four-day recess. Equity markets jumped to their highest level since October 2008.

The 30-share Sensex of the Bombay Stock Exchange (BSE) topped the psychological 12,000-level to end the trading session at 12,134.75 points, gaining 731.50 points or 6.41%. The Sensex was the highest gainer among all Asian markets. Similarly, the broader S&P CNX Nifty of the National Stock Exchange (NSE) surged by 180.05 points, or 5.18%, to close the day at 3,654 points.

The rally was part of the extended gains witnessed in Asian markets, which moved up in response to data released by China revealing its industrial output had expanded for the first time in nine months.

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Global meltdown affects banks in Bric nations

Banks globally have found their bottoms ripped off by the global meltdown Bank in emerging economies have have also suffered. It has, in fact, been an eye-opener for these countries’ banking fraternity.

ICICI whose market capitalisation fell by8.6% and HDFC Bank,which fell by 6%, were among those Indian firms listed on American bourses that incurred loss to the tune of $10 billion during the past one week alone. Now the most important lesson to be learnt for the Bric countries’ banking community is be conservative in that follow strict rules while disbursing sub-prime loans and have thorough due diligence before finalising the loans. Another message for these countries from the US credit crunch may be to go aggressively for mutual cooperation.

Yet another major positive development for highly populous countries like India and China can be focus more attention to the domestic consumerism and generate more employment to their skilled youth which is coming up in the form of demographic dividend.

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Coca-Cola to buy China juice maker for $2.4 billion

US soft drinks giant Coca-Cola said today it planned to buy Chinese juice maker Huiyuan Juice Group in a$2.4 billion deal that would be its biggest acquisition in China.

Coca-Cola will offer 12.20 Hong Kong dollars ($1.6) per share in Hong Kong-listed Huiyuan, it said in a statement, adding that three shareholders holding a total of 66 %in the company had accepted the offer.

"It is the largest proposed transaction in China and the second largest for the Coca-Cola Company," the company said in an email Coca-Cola said it intended for Huiyuan, one of China's best-known juice brands, to carry on its business, but that it would later review its operations.

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Niche opportunities abound in China

During the last 10 years, a sea change has occurred as to how Indian businesses view China. The fear and awe has been replaced by a realistic understanding of Chinese import ‘threat’. Over the decade, Indian businesses acquainted themselves with Chinese Markets by visiting Chinese trade fairs and developing business relationships.

However, during this limited exposure to China what Indian businesses, particularly SMEs, missed was the rise of Chinese Markets: for imported consumer and producer goods as well as for raw materials and intermediate products for processing for export to third-country Markets. Indeed, China is set to overtake Japan as the biggest importer in Asia by around 2015. Many countries, particularly Asian, have lapped up the opportunities in the burgeoning Chinese market.

Asian exports to China increased on average by over 46% a year from the year 2000 to reach $52.4 billion in 2005. That was much higher than the annual growth rate of 4.3% in Asian exports to all Markets outside China. Malaysia became the largest exporter to China ($12.7 billion) within Asian in 2003, a position previously occupied by Singapore at $10.1 billion. The previous trade deficits became surpluses in Malaysia and the Philippines, while deficits were lower in Thailand and Singapore in 2003. The Philippines’ exports to China have quintupled since 1999 (2005).

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United States food grain intake growth exceeds India's

Destroying the claims of President George Bush, UN body FAO's data show food grain consumption by Americans has grown at a much faster rate during 2007-08 than just about 2% by Indians and the Chinese.

Growth in the cereal consumption in the US was the highest in the world in 2007-08, according to the Global Food Market Report of the Food and Agricultural Organisation. The food grain consumption in the US is estimated to have increased to 310.4 million tonne in 2007-08 from 277.6 million tonne in the previous year, showing 11.81 % jump.

In contrast, the consumption in India is estimated to have grown by mere 2.17% to 197.3 mt from 193.1 mt. In China the growth was 1.8% to 389.1 mt from the previous 382.2 mt. The growth in food grain consumption is quite low in China and India, compared to the scorching pace at which their economies have been expanding.

The Chinese economy has consistently been growing at 1011% while India has average over 8.5% GDP growth for the last four years.

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We are looking at smarter systems

With power generation high on the government's priority list, companies like ABB are hoping to play an important role in the entire value chain. And, having overseen ABB's China operations, Peter Leupp understands the enormous challenges and opportunities in the sector, especially in developing countries. Now, as head of the company's power systems division, Leupp discussed the energy imperatives for India as well as the future role ABB hopes to play in the country with FE's Anupama Airy. Excerpts:

How do you see the power scenario in India? And given your group's huge exposure in China, how do you compare the two?

India's per capita power consumption is among the lowest in the world (approximately 500 units, compared with a global average of 2,600 units and China's 1,100 units).

With an installed capacity of only around 1.5 lakh mw, the power imperative and the need to add capacity at a rapid pace is clear. But it is just as important for the country to utilise the scarce power it has more efficiently, cut unnecessary losses and conserve energy as it is to add new capacities because power is an expensive and highly capital-intensive proposition.

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