Both China and India are leading the way forward for global vehicle trends as Tata�s Nano has stunned the US car manufacturing market in it�s simplicity and low cost.�The increasing rising of gas prices is having three effects, both of which China and India have long foreseen � the need for smaller cars, a fundamentally different financial production model than the current one used for auto manufacture,� and the trend ultimately to electric powered clean emission vehicles. � �

The Reva�

While the US market is not planned for market entry by Tata, many industry experts believe that the way forward will be vehicles of the Nano type. The disposable culture of the US fits that of the cheap USD2,500 Nano � with no need to spend much on repairs or maintenance � you just buy a new one when the need arises. The Nano is already mostly made from recyclable materials � with it�s manufacturer, Tata also owning many recycling plants in India, thus creating an entirely new economic model for vehicle production. This financial model is completely different of anything American, European and Japanese manufacturers have previously considered.

Forecasts for �small� car purchases are set to rocket by 65% in the next four years, and by 50% in Western Europe. Even the conservative US, lovers of big auto statements, are anticipating a growth of 25% in the category.

Auto analyst John Wolkonowicz stated �The Nano is the price of a small laptop computer, and is the 21st century equivalent of the Model T Ford. It is going to mobilize the third world and that will have implications for everyone�.

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A tailor displays fabrics in Beijing’s Cental Business District.

Alarm bells are definitely ringing in boardrooms across China.

Eating into exporters’ profit margins, producer prices jumped 6.1 percent last month to a three-year high.Meanwhile, labour wages last year rose 20 percent and the yuan has appreciated more than nine percent against the US dollar in the past 14 months.

This has meant that more exporters face bankruptcy unless they lift prices to salvage their disappearing margins, which is just what most plan to do.

According to a survey by brokerage and research firm CLSA, 80 percent of Chinese exporters intend to raise prices this year in response to higher raw material costs.
“The appreciation of the renminbi (yuan) against the US dollar is a secondary factor driving these price hikes,” Shanghai-based CLSA economist Andy Rothman said in the survey.

read more here: http://afp.google.com/article/ALeqM5hEgIChMQQp2ctk9tdgiuG7uYkBww

Does this mean that China is finally moving up the value added chain?, will it create more opportunity in the area for Vietnam, Cambodia, Sri Lanka and Burma in the low cost manufacturing space? Or will this erode China’s edge as a low cost manufacturer the world depended on for cheap goods, giving rise to India’s dominance as a quality supplier?

�The Chinese just have too much money! At a time when when world gold grices are at an all time high, China�has for the first time usurped the US, as the world’s second largest market for gold jewellry. China is however yet surpassed�by India - who still hold the global #1 position, according to the World Gold Council (WGC).

At a time when gold prices are already high (gold prices jumped more than 30 percent�last year, the biggest increase since 1979),� WGC statistics showed that sales of gold jewellry in China reached a record high of�302.2 tons�in 2007,�up 34% from 2006.�Conversely, WCG said that in 2007 demand for gold in the U.S. saw a 14 percent�year on year drop, while sales in Britain and Italy slumped too.

Interestingly, in January China’s gold futures made a strong debut on the Shanghai Futures Exchange as international gold prices repeatedly hit new highs.

Chinese demand for the metal helped boost its price in London to a record high of $936.50 an ounce in early February.

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�HAPPY NEW YEAR !!!

People gather to watch a lion dance performance during Chinese new year in Kolkata’s Chinatown. Kolkata in east India boasts the country’s largest Chinese population. Indians and Chinese together brought in the year of the Earth rat.

The year of the golden Pig which finished yesterday was truely a golden period for China’s superpowered growth. In 2007, the economy grew by 11.3%, the fastest rate in 13 years, stock prices on the main Shanghai bourses hit a record high of 6,000 having risen six fold in two years, foreign exchange reserves surged over $1.4 trillion thanks to booming exports and PetroChina became the planets most valuable company�- one of five Chinese firms in the world top 10.

In contrast, the year of the Earth rat starts with more expectations as the west looks to China to anchor it against recession. Inflation is at a 10 year high, share prices have fallen 25% from their peak last year, export growth is under pressure from a rising currency and the coldest winter for half a century has paralysed large parts of Central and Southern China. ~ lets just hope the worst is already behind us and the Olympics later this year bring China and all our readers a lot of warmth, wealth and happiness.

By Chris Devonshire-Ellis

So runs the summarizing headline in the Financial Times new �India & Globalization� special report (January 25). It�s a report will worth reading, covering as it does relations with Pakistan, competition with China, ties with Washington, and the concepts of transparency, openness and better corporate practice, not to mention moving up the value chain, and India�s participation in global M&A deals.

However, it�s pretty much a �mid-term� report than a longer term analysis of India�s development, and one that is not always accurate. For sure, calls for a stable Pakistan are a given � India certainly does not want a massively failed State on its doorstep, even given the history of antagonism between the two countries since partition. Indeed, it is relevant to note the Indian government�s current policy of restraint concerning news coming from Islamabad � the assassination of Benazir Bhutto for example being handled in a sensitive and low key manner by the Indian government � and its media. Signs here are positive then that in times of grave danger, India will reach out to its estranged neighbor and seek to secure the future of Pakistan rather than antagonize. (more…)

Beijing, Jan.14 - H.E. Dr. Manmohan Singh, Prime Minister of the Republic of lndia, and H.E. Mr. Wen Jiabao, Premier of the State Council of the People’s Republic of China, yesterday met in Beijing with the aim of strengthening peace and prosperity between the two nations as well as developing a strategic and cooperative partnership.

lndia and China, home to more than one-third of the world�s population, play a significant role in the future economic and social development of Asia and thus this meeting in Beijing served to further highlight the importance that both countries have attached to their role in maintaining sustainable economic and social development and simultaneously driving forward two of the most booming economies in the world.

In his speech Dr. Singh highlighted a number of important issues that the two nations must face as well as ways in which both China and India can work together in harmony to ensure that this development continues unabated. Here are some excerpts:

In his opening paragraphs, Dr. Singh strongly emphasized the importance of strengthening the relationship between India and China stating that: �the India-China friendship and common development will have a positive influence on the future of the international system. India-China relations are not targeted at any country, nor will it affect their friendship with other countries.�

�Both China and India believe that in the new century, Panchsheel, the Five Principles of Peaceful Co-existence, should continue to constitute the basic guiding principles for good relations between all countries.�

Dr. Singh reiterated that: �An international system founded on these principles will be fair, rational, equal and mutually beneficial, will promote durable peace and common prosperity, create equal opportunities and eliminate poverty and discrimination.�

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While upbeat talks are being held this week in Beijing between the Indian Prime Minister Dr. Manmohan Singh and the Chinese President Hu Jintao, concerning record trade figures between the two nations, the real key to the continuing development of this relationship is a resurgent Russia. Indeed, while bi-lateral talks between India and China will make the headlines, it’s really a triumvirate story that is developing � the new Trading bloc that will be made up of these three superpowers to counterbalance both the United States’ aggressive desire for oil inflicting global imbalances upon the world’s economy and the geopolitical and geographical expansion of Europe.

It’s a subject largely unreported and little understood in the media’s seeming unending fascination with China and the hullabaloo of an American election. Yet Russia is expected to join the WTO later this year, with just Saudi Arabia standing between them and a mandate to come aboard and fully participate in the global community. Doing so will further add strength to Russia’s already booming economy, yet with wary eyes on its borders with Europe, and strongly felt suspicions concerning the proposed American desire to place missile sites in Poland, Russia is more likely to align itself with India and China as the global balance of power settles down into a tri-polar power base of America, Europe and Asia. (more…)

Jan. 14 - Prime Minister Manmohan Singh began his three-day visit to China yesterday with an informal meeting with his Chinese counterpart Wen Jiabao as both sides grapple to find a mutually acceptable solution to the on-going issue of disputed border areas. Dr. Singh and Wen discussed a range of issues of mutual interest during their ‘restricted meeting’, held at the Diaoyutai State Guest House. National Security Advisor, MK Narayanan, Foreign Secretary Shivshankar Menon and Indian Ambassador to China Madame Nirupama Rao were also present during the discussions. The borders issue is expected to figure prominently during the discussions though both sides do not expect any breakthrough at this stage. Special Representatives MK Narayanan and Dai Bingguo, senior Vice Foreign Minister, will brief the leaders on the progress in negotiations on the boundary problem.

“An early settlement of the boundary question will advance the basic interests of the two countries and should, therefore, be pursued as a strategic objective,” said Dr. Singh.

Dr. Singh, who was accorded a red carpet welcome at the Beijing international airport, will have official delegation-level talks with Wen at the Great Hall of the People today. (more…)

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Jan. 14 - Indian Prime Minister Dr. Manmohan Singh arrived in Beijing yesterday and urged the Indian business community both in India and China to “think big” and engage China to learn to both compete and cooperate.

“Indian businesses should think big. Indian business is ready to face the brave new world of globalization. China is an important part of that brave new world of globalization. We must engage China and learn to both compete and cooperate,” Singh said.

Singh discussed with high level Indian businessmen the problems they faced in developing trade with China, including the huge surplus in commerce with India. The main thrust from the Indian side was to ask him to press Beijing for the early removal of trade and non-trade barriers, and specifically in areas such as textiles and steel. Business leaders also praised Dr. Singh on the recent trends in bilateral trade and investment flows. They also drew attention to both the opportunities as well as the challenges faced by the Indian business in China. (more…)

In the wake of the India’s nuclear deal, the border issue and China’s ties with Pakistan, India and China are getting ready for a new new game. Today, ending more than more than 45 years of frosty relations, the armies of India and China are holding their first joint military exercise. This is in accordance with the Memorandum of Understanding (MoU) on exchange and cooperation in the field of defence, signed between India and China in 2006.

Indian and Chinese army officers ‘hand in hand’

Although security issues do exist and both India and China view eachother with suspicion, it was nice to come across news of the two armies taking part in joint exercies aptly code named ‘exercise hand in hand’ to practice counter terrorism and counter-insurgency drills.For the Asian giants, it’s a significant event especially since the two nations are regarded as competitors if not adversaries in Asia. Led by Brigadier DS Dadwal, the 100-strong Indian army team will conduct a week-long counter-insurgency and counter-terrorism exercise along with troops of the Chinese People’s Liberation Army in the Yunnan province bordering Myanmar.

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