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Investment News and Commentary from Emerging Markets in Asia - China, India and ASEAN

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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.

Monthly Archives: January 2009

Around Asia in a cycle rickshaw

Cycle rickshaws which originated in Japan around 1868, at the beginning of the Meiji Restoration are today considered a uniquely Asian mode of transport. Although the human powered three wheeler is popular across the United States and Europe, it still remains a distinctly Asian vehicle.

The cycle rickshaw is known by varying names across Asia – cyclo in Cambodia, Laos and Vietnam, cycle rickshaw in India and Bangladesh, trishaw in Malaysia and Singapore, becak in Indonesia, traysikel or pedicab in the Philippines, samlor in Thailand and saika in Myanmar. Known by different names across the region, cycle rickshaws are great ways to commute through zig zag and traffic infested Asian lanes.

While traditional cycle rickshaws involve a man peddling or pulling commuters who either sit beside, in front of or behind him, the more modern version of cycle rickshaws or auto rickshaws are motor powered gas guzzling vehicles that zip around cities. Meanwhile, some rickshaw drivers are also doing their bit to save the environment by using solar powered rickshaws.

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Posted in Culture & History | 2 Comments

Asia according to the Big Mac Index

If you are looking to relocate within Asia and are concerned about how much bang you can get from your buck turn to Burgernomics. Invented by The Economist magazine in 1986, Burgernomics is a modern, fast food version to calculate the purchasing power parity (PPP) of a nation. The informal theory uses a common standard, the McDonald’s Big Mac burger whose price varies according to a country’s cost of living.

Economists prefer comparing two country’s PPP’s because PPP takes into account the relative cost of living and the inflation rates of different countries, rather than just a nominal GDP comparison.

According to the latest statistics released by the Economist,  Malaysia is the most cost effective country to live in, in Asia. A big Mac in Kuala Lampur costs only US$1.70,  while it costs more than double that to buy a big mac in the U.S..

The Big mac Index is also effective in comparing currencies and explaining Asia’s export boom. Continue reading

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The Spratly Islands

Nestled between the Philippines and Vietnam in the azure clear waters of the South China Sea are the Spratly Islands, an archipelago of more than 30,000 islands and reefs. Laid claim to by China, Malaysia, the Philippines, Taiwan and Vietnam the Spratlys which are spread over 400,000 square kilometers of sea occupy less than five square kilometers of land area.

While ancient Vietnamese maps were the first to record the Spratlys, the archipelago has also been controlled by French and Japanese forces who claimed to rule the area after winning wars in the region. More recently, China, Vietnam, Malaysia and the Philippines have all encroached on territorial waters leading to naval disputes. ASEAN has consequently signed the Declaration on the Conduct of Parties in the South China Sea with China to ease tensions.

Growing political disputes are mostly triggered due to the Spratlys’ massive untapped economic value. The region, which is one of the busiest shipping lanes in the world, is rich in oil and gas and is also one of the world’s most productive areas for commercial fishing.

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India bans Chinese toys for six months

Its a definite sign of worsening times, but a measure that his highly advised against, especially during global economic downturns. India on Friday banned Chinese made toys for six months in order to protect the domestic industry which was being hurt with a flood of cheap Chinese toys that couldn’t make it to western shores.

While Indian importers will be hit, traders are more worried about China’s retaliation. China is India’s largest trading partner and a move to block trade between the nations could turn relations frosty again.

Indian markets saw a flood of Chinese made toys in the second half of 2008 after many western countries decided not to import toys manufactured in China anymore. Besides a lack of capital western importers decided to “buy American” also due to recent quality problems. Toy retailers were worried about the paint and materials being used to manufacture the toys and had recalled several batches in 2008. Indian officials were worried that a majority of these toys landed up on Indian shores at very low prices.

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Don’t expect a bull run this year

Happy Chinese new Year!! or if your in Vietnam – Happy Tet!! Across Asia its time to ring in the year of the Chinese Earth Ox / the Vietnamese water buffalo and ring out the year of the Earth rat.  Its time to visit family and friends,  gorge on a sumptuous buffet, burst noisy fire crackers, wear new clothes and hang the character ‘fu’ symbolizing everlasting prosperity on your door.The year of the Ox reigns in positive attributes the global economy needs post the roller coaster ride we had with the rat. While financial guru’s don’t predict a complete economic recovery, the year promises not be a bull run right through.

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Asia’s 2009 GDP Expectations vs. Global Trends

While the U.S., Japan and EU are expected to produce low or even negative GDP figures for 2009, such predictions paint a brighter picture in Asia. A quick chart assimilated by 2point6billion clearly points out that export dependent Asian nations will not see red this year.

In 2009, emerging Asia’s bold GDP run is expected to slow to 5.3 – 5.5 percent according to predictions by various research organizations. Galloping China, Asia’s stallion will slow to a canter at 7.5 percent over the next year while other emerging Asian nations will trot along.

Apart from pointing fingers at Asia’s highly western dependent export market economic experts are also concerned about the buying trends of Asia’s consumer classes. Asia’s middle class is historically not accustomed to consuming voracious amounts of goods they don’t really need – unlike their western counterparts, and are also being blamed for slowing growth by global economists. The lessons of prudence it seems, are still not being absorbed by the West.

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Complementary or Contrasting?

73.jpgOne might assume that China and India are mirror images of each other. They have different systems of government, attitude to FDI and excel in contrary economic sectors. yet however the two countries are not as distinct as chalk and cheese.

In a freewheeling talk with McKinsey’s Director of Publishing Rik Kirkland, Harvard Business School’s professor of strategy Tarun Khanna weaves together India and China’s similarities as they together emerge strong nations rebuilding trust and reshaping the contours of business.

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