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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: February 2013

Understanding the Norm of Reciprocity: Avoiding Imminent Failure in China

Op-ed Commentary: Dr. David A. Owen

Feb. 28 – How important is the norm of reciprocity in China? The simple answer is extremely important.

The norm of reciprocity—the act of reciprocating a favorable act or returning a benefit for a benefit—is a social norm. In China, the norm of reciprocity—known as guanxi (关系)—is quite pervasive, with roots grounded deep in collectivism.

Collective societies such as China tend to place a higher value on relationships and relationship-building, harmony and a sense of duty. This is quite different from individualist societies, such as the United States (U.S.), that tend to place a higher value on individual rights and privacy, as well as other traits such as individual heroism. The end result is that the norm of reciprocity is more ingrained in the very fabric of Chinese society, which is not necessarily the case in the U.S. Continue reading

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Chinese Troops Getting “Battle Ready” In Yunnan

Feb. 27 – The Chinese state news agency Xinhua has reported that Chinese troops have been undergoing intensive training near Yunnan’s border with Myanmar as fighting intensifies between Myanmar’s Government forces and the Kachin separatists. Some military shells have already landed in West Yunnan, leading China to step up its surveillance of the deteriorating situation.

Burmese civilians in the region have apparently been seeking shelter from family and friends in Yunnan to escape the fighting.

Peace talks have been held both in Chiang Mai in Thailand and in China’s border city of Ruili, however no progress appears to have been made by either side.

Training by Chinese troops has been stepped up following Chinese New Year with forces being urged to be “battle ready” and prepared for “real combat”, according to Xinhua. Continue reading

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ASEAN-India Free Trade Area Part III: Cambodia, Brunei, Laos and the Philippines

By Alex Tangkilisan

Feb. 27 – In the third part of our ASEAN-India Free Trade Area analysis, we will examine trade trends and statistics from India to Cambodia, Brunei, Laos and the Philippines.

While the Philippines is part of the ASEAN six majors, Cambodia, Brunei and Laos are the three smallest economies in the region. Together, these four countries combine for a GDP of US$258.30 billion, a population of 115.85 million and exports to India amounting to US$1.33 billion (or, about 0.27 percent of India’s total imports). Continue reading

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India-Chile: Transcending Geography

Indian Foreign Minister Salman Khurshid’s February 5 visit to Chile and Argentina is emblematic of the new era in Indo-Latin America relations. What does this increased engagement mean for India and Chile, two rapidly growing economies of the Global South?

By Ambassador Jorge Heine

Feb. 21 – The on-going visit of Indian Foreign Minister Salman Kurshid to Chile and Argentina from February 5-8 is a welcome development. Though India is cutting a higher profile in world affairs, the visits of its various foreign ministers to Latin America and the Caribbean (LAC) have been few and far between. This is the first visit by an Indian foreign minister to Chile. Such exchanges at the highest levels, be it between heads of government or senior Cabinet ministers, give bilateral relationships the much-needed momentum to move forward. This is especially true for India and Latin America, which have much to offer to each other, but where links between its political elites have been scarce.

There is no country in the world farther away from India than Chile. Yet, what we have seen over the past decade is proof that, though we may not be living at the end of history, we are at the end of geography as we know it.

Globalization has facilitated much of this change, and India and Chile have certainly made the most of it as part of the Global South. Continue reading

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Privatizing Near-Earth

Op-ed Commentary: Dr. David A. Owen

Feb. 19 – When is it necessary to privatize? While there is no single correct answer to this question, it is a question that China and other states grapple with almost daily.

In no industry is privatization more important than in space exploration. More specifically, mining of Near-Earth Asteroids (NEA) is projected to result in significant profit margins.

Peter Diamandis and Eric Anderson, the founders of Planetary Resources, a private enterprise focused on commercial mining on NEAs, estimate that not only would a single mining expedition to a NEA be valued in the trillions of dollars, but will also fundamentally change the global economy as we know it! This effectively increases Earth’s GDP exponentially and potentially creates a new class of wealth: the trillionaire club.

Continue reading

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Indigenising Defence

No country has become powerful by being dependent on foreign defence supplies. It is now increasingly imperative for India to indigenise production through private sector involvement with the aim of eventually developing the ecosystem of a defence industry.

By Aakash Brahmachari

Feb. 18 – The unfolding scandal in the Indian Air Force’s acquisition of 12 helicopters from AgustaWestland has exposed yet again, the need for India to reduce the import quotient of its defence equipment purchases. It’s time to accelerate indigenisation through the participation of India’s private sector, simplify rules and specifications, and streamline the acquisition process.

As India seeks to replace its aging defence system, it has become the world’s largest armaments customer – and is expected to spend more than $80 billion between 2011 and 2015. India’s own public sector, which has so far been entrusted with localizing development, is notorious for cost overruns and long delays. For instance, the Light Combat Aircraft (LCA), India’s indigenous attempt to replace its dated MiG-21 fighters, was an early ambitious attempt. However, it first flew in 2001 and was scheduled to be inducted into the Indian Air Force in 2012 – four decades after the program was started. The ‘Arjun,’ India’s Main Battle Tank, was judged to be too expensive and inadequate for the Army’s requirements – hundreds of T-90S tanks were purchased from Russia instead. Now we are dependent on the French for fighters and missiles; the Russians for naval ships and aircraft; the Italians for helicopters; the Israelis for drones and missiles; the Americans for transport aircraft. Continue reading

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As China Burns More Coal, India Needs More

Feb. 14 – Recent figures from the U.S. Energy Information Administration have revealed that China consumes almost as much coal as the rest of the world combined. Perhaps even more shocking, it has been estimated that India, who currently faces domestic shortages, could be importing as much coal as China by 2017. As the Asian giants continue to consume resources at an extraordinary rate to fund their development, it is increasingly clear that their consumption of coal may be a cause for concern.

In 2011, China’s coal consumption grew 9 percent, rising to a massive 3.8 billion tons. In the same period, the rest of the world combined was consuming 4.3 billion tons of coal. Analysts from Macquarie Bank now expect China to consume 3.9 billion tons in 2013.

Chinese coal imports, however, will fall by almost 10 percent in 2013 due to rising domestic supply, improved transport networks and weak power demand growth. According to a poll of 12 analysts, total imports are expected to stand at almost 210 million tons in 2013, compared to the 234.3 million tons of coal which was imported last year. Continue reading

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