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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: September 2012

The Geo-Strategic Pacific Islands

Traditionally, the South Pacific islands have been considered strategically insignificant. However, the need for resources, and the geopolitical shift towards Asia-Pacific have prompted nations to realize that these small island states control large resource-rich ocean areas and are increasingly geostrategic.

“Five trillion dollars of commerce rides on the (Asia-Pacific) sea lanes each year, and you people are sitting right in the middle of it.”

– USPACOM chief Admiral Samuel Locklear, Pacific Island Forum, Cook Islands, 2012.

By Tevita Motutalo

Sep. 29 – From August 27 – 31, leaders from countries as far afield as India, China and the U.S. converged on the tiny Aitutaki Island in the South Pacific to meet members of the 16-country Pacific Island Forum. The need for resources and geopolitical rebalancing has raised the profile of the region so much that, for the first time, a U.S. Secretary of State, Hillary Clinton, attended the Forum — a clear demonstration that the U.S. is serious about its Pacific “pivot” to Asia.

The reason is China. In March last year, Clinton told the U.S. Senate’s Foreign Relations Committee about the region: “Let’s just talk straight realpolitik. We are in a competition with China. China is in there every day in every way, trying to figure out how it’s going to come in behind us, come in under us.” Continue reading

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Chinese Military Progress Can Worsen Sea Disputes

By Christopher Whyte

Sept. 26 – This past week has seen developments for the military of the People’s Republic of China that could eventually alter the balance of power between states that are engaged with it in disputes in the South and East China Seas.

On Wednesday, new pictures were released of a Chinese stealth fighter prototype taxiing near a testing and development site.

The press leak that revealed the existence of the plane, an aircraft thought to be the Shenyang J-21/J-31 outcome of the country’s domestic stealth fighter jet competition, corresponded with the visit of American defense secretary Leon Panetta and clearly showed a design different from last year’s J-20. According to experts familiar with fifth generation fighter design, the plane shares airframe characteristics with fighters like the American F-22 Raptor, even down to the twin engine design of the platform’s rear. Continue reading

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Declining Coal Prices Herald in New Chinese Reforms

Sept. 25 – Last year, China overtook Japan to become the largest importer of thermal coal, effectively granting China great influence over global coal prices. A recent reform proposal regarding China’s coal pricing system suggests that policy makers are anticipating a continual decline in global coal prices, currently at a three-year low of US$90 a ton.

As thermal coal supplies over two-thirds of China’s energy requirements, it has taken slow and careful steps in reforming its coal prices. China is also the world’s largest coal producer, yet in recent years domestic mines have been unable to keep up with the pace of China’s burgeoning power demand. China instead has had to rely on overseas coal suppliers more heavily, already importing approximately 150 million tons since the beginning of this year. Continue reading

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The Economic Costs of China’s Anti-Japanese Sentiment

By Nicholas Clement

Sept. 22 – During the outbreak of anti-Japanese sentiment throughout China, it has become increasingly clear that the costs for regional business and Sino-Japanese economic ties are rapidly rising. In the aftermath of Japan’s ‘purchase’ of the Diaoyu Islands, protests and demonstrations have broken out across China, often resulting in destruction and defamation of Japanese products and businesses.

While the political and nationalistic consequences of this situation remain central to regional harmony, the impact on China and Japan’s economic relationship should not be forgotten. Last year, two-way trade between China and Japan generated approximately US$345 billion. According to statistics from Japanese custom authorities, in the first half of this year Japanese exports to China amounted to US$73.54 billion, while imports from China were US$91.29 billion. As China is Japan’s largest trade partner, the severity of soured relations cannot go understated. Continue reading

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China Seen Whipping Up Anti-Japan Demonstrations

Protesters wave Chinese flags as they march outside the Japanese Embassy in Beijing, September 16 (AP/Alexander F. Yuan)

By Richard Colapinto

Sep. 18 – Anti-Japan protests across China intensified over the weekend as demonstrators vandalized Japanese products and businesses in more than fifty cities. With Japanese companies announcing plans to close temporarily, tensions between Asia’s two great powers mount.

The protests, coming after Japan purchased the disputed Senkaku Islands, known as Diaoyu in China, to which countries claim as sovereign territory, are believed to be the worst in years. Japan finalized a deal to purchase three of the islands from their private owner last week. Continue reading

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As Chinese Influence Grows, India Intensifies Defence Ties With The Maldives

Sep. 17 – During a high-level meeting on Sunday in the Maldivian capital of Male, India and the Republic of Maldives agreed to measures that will see the intensification of their defence and security cooperation. Indian Defence Minister A K Antony met with his Maldivian counterpart Mohamed Nazim, where both nations pledged to create a united front to battle the challenges presented by terrorists and non-state actors.

The main areas in which India and the Maldives will increase their cooperation include regional counter-terrorism, anti-piracy and maritime security in the Indian Ocean. Continue reading

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P2P Microfinance in China and India

Sangkhowl is a client of SoFMEDA, a Microfinance NGO located in Northeast India. She used a 20,000 rupee ($360) loan to open a small shop and continue her weaving business.

Opinion/Commentary: Keith Hilden, with assistance from Dylan Waller

Sept. 11 – Microfinance is one pillar of the economy that Beijing and New Delhi has increasingly considered in recent years, in the sense that it is most beneficial to allow free enterprise to administer. Experts have said that the regulatory environments in these two nations are most likely to impact P2P lending platforms in their future success. The networked power of millions of donors all over the world will no doubt be a boon to hundreds of millions of Chinese and Indians alike wishing to join the ranks of the middle class. P2P social networking microfinance can get them there.

India and China alike have faced similar problems in P2P microfinance. With lenders charging extremely high interest rates for loans, predatory high-interest loan shark operations, along with delays and failure in repayment, the demand for a P2P microfinance solution in the form of much lower interest rates is rising. Co-author Mr. Waller has personally seen clients in India transition from taking high interest loans from money lenders to taking low interest loans from credible microfinance institutions (MFI). These services, in the form of low interest, have resulted in clients of MFI being able to expand their business and increase their income. Continue reading

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