2point6billion.com discusses business and investment news rising from the geopolitical relations of China and India, and the interactions these two countries have with the rest of emerging Asia.
Bilateral trade may dispense with the U.S. dollar and revert to RMB and rubles
Prime Minister Wen Jiabao of China is in Moscow holding talks with his counterpart Vladimir Putin over plans to grant an immediate loan to Russian oil companies in return for guaranteed exports to China for the next twenty years. The amounts are expected to be in the region of an immediate US$20-30 billion loan, with supplies worth two billion barrels a year going to China for the next two decades.
Russia and China have already expressed a desire to greater integrate their two economies, and the proposed deal comes at a time when Russia’s relationships with the EU are strained. It also indicates another signal that global power is shifting in deal making processes away from the United States and towards the cash rich economies of China and Japan, both of whom, unlike America, posses enormous cash reserves. Continue reading
There’s a very good summary by Kishore Mahbubani, dean of the National University of Singapore in the Financial Times explaining why Asia has managed to apparently keep its head well above the flood gates of the global credit crisis. Complaining with some justification that the Western media has not commented very much at all on the reasons for Asia escaping the worst of the West’s excesses, he reminds us that U.S. and European policymakers are now doing exactly the opposite of what they told Asia to do during the parallel Asian Financial Crisis a decade ago: do not rescue ailing banks, raise interest rates, balance the budget, and avoid government interference.
Asia is indeed ten years to the wise in terms of what Western nations are now facing – the Chinese government itself had to deal with the newly acquired Hong Kong going into financial meltdown soon after the handover. It’s a sense of déjà vu for much of Asia. For more on the similarities, please see this 2point6billion.com article from earlier in October. Continue reading
FDI into Thailand dropped by as much as a third during 2007 from 2006’s figures of US$9.6billion, and will struggle to reach US$3 billion for 2008, according to figures released by the Thai Finance Ministry. While much of Asia continues to boom, Thailand’s political problems continue to dampen investor interest in the country.
Thailand’s political problems have now become so acute that the government has been ousted from its own government house in Bangkok by protestors against the regime, and is now running the country holed up in executive suites at the old Don Muang International Airport. Quite how Thailand got itself into this position is a long and tortuous story. What should be a wealthy, attractive destination and a key regional business and transportation hub is fast turning into an Asian basket case. Continue reading
The Indian Association of Shanghai celebrated this year’s Diwali Festival at Shangri-la Pudong’s China Hall with the Indian rock band, Euphoria.
Diwali, the festival of lights, is one of the most popular celebrations from South Asia. It is celebrated by Jains, Sikhs and Hindus.
The lights signify the victory of good over the evil within every human being and is based on different legends found in India.
Dezan Shira & Associates’ Regional Manager, Olaf Griese, at the Diwali celebrations last Saturday with representatives from Jet Airways
This year it is believed that the number of people living in urban areas exceeded those in the countryside for the first time ever. This growing urban population breeds income inequalities which fuel negative social tensions.
“High levels of inequality can lead to negative social, economic and political consequences that have a destabilizing effect on societies,” said the State of the World’s Cities 2008/2009 report. “[They] create social and political fractures that can develop into social unrest and insecurity.”
Not surprisingly then the report finds that as populations rise, as they have in emerging Asia, inequalities widen, giving rise to food, religious, political and social riots as we have seen spreading across Asia. In the past few months, high oil prices competing with even higher inflation rates have widened the gap between the rich and poor leading to political clashes in Thailand, religious riots in India, as well as social unrest in China and the Philippines.
Asia hosts 15 of the top 30 cities expected to drive growth globally, according to the 2008 Mastercard Worldwide Centers of Commerce: Emerging markets Index. While Chinese cities—15 out of 65 including Shanghai, Beijing, Guangzhou and Shenzhen—dominated the index, Mumbai represented India in the top 20 and Kuala Lumpur and Bangkok also proved themselves as strong regional growth hubs amongst Asian nations.
The report says it compares emerging cities as regional growth hubs as compared to countries as due to their dense, hybrid populations its these cities that have emerged as financial and intellectual growth engines rather than the countries they belong to.
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