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…)

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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                          Year 2007 has been marked as the ‘India-China Year of Friendship through Tourism’ which was lunched on 14.2.2007 in New Delhi to promote tourism between the two countries. On this date the two also officially released a joint logo for the tourism year, made up of Chinese landmark the Great Wall and India’s Taj Mahal as well as the two national flags.

Since then both have had on their agenda number of activities such as :

1. A sixteen Member Chinese Media / Tour Operators group visited India on fam tour in March, 2007 under the ‘Hospitality Scheme’ of Ministry of Tourism. 
2. China National Tourism Administration (CNTA) sponsored delegation comprising of Tour Operators from Jiangsu Province, Zhejiang Province and Shanghai visited India for tourism promotion.
3. CNTA participated in South Asia Travel & Tourism Exchange (SATTE) Exhibition which was held in April, 2007 in New Delhi
4. Ministry of Tourism organized Road Shows in Beijing and Shanghai in April 2007 to showcase India’s tourist attractions in Chinese market

And both governments are immensely encouraging their citizens to visit each other’s country as part of the move to enhance economic, strategic and cultural ties.

The increase in the number of tourists from China to India and vice versa justifies these moves. (more…)

China and India are set to begin joint military exercises in October, just another example of the two nations growing bilateral relations. The decision to begin military exchanges and cooperation has focused on two areas: counterterrorism and joint military exercises. 

In June we reported on India Army Chief of Staff General Joginder Jaswant Sigh’s visit to China and the subsequent announcement that China and India would hold the first ever joint army exercises between the two nations. Both countries hope that the joint exercises will strengthen Sino-Indian defense ties and build up confidence within each another.

Jagannath Panda comments in a report for The Jamestown Foundation’s China Brief, that China has increasingly relied on its military diplomacy to advance its strategic ambitions overseas. Indeed, China’s military is a very active ambassador for the country abroad, supplying arms and training across the developing world. In India, the Chinese have looked to overcome a historical mistrust by increasing the breadth of the exchanges, as Panda’s report states:

Perhaps, the significance of these exchanges is their unprecedented nature; not even in the prime days of the “bhai-bhai” Sino-Indian relations did this type of relationship exist. It seems that the proposed “joint military operations” are intended to bridge the communications gap between the two militaries. Both armies are in favor of inviting observers to their exercises, which suggests a “degree of comfort” with each other more than anything else. (more…)