Business

New Issue of Asia Briefing: An Introduction to Development Zones Across Asia

May 10 – The new issue of Asia Briefing Magazine, titled An Introduction to Development Zones Across Asia, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of May and June.

The use of development zones in their different guises has been an effective model essentially brought to prominence by China over the past 25 years to help both foreign investors and domestic companies meet in a relationship that provides tax advantages to both. Development zones typically permit the foreign investor to bring component parts into a country for assembly without having to pay import duties. Investors may then add in locally-sourced components, assemble the final product, and warehouse it all duty free before then having the option of exporting the finished product (collecting some VAT rebates on the locally sourced portion) or entering the domestic market with a product assembled at local labor costs. Continue reading →

Posted in Business, Featured, Foreign Trade, Manufacturing, Markets | 1 Comment

Report Designates Delhi as India’s Most Creative State

May 9 – According to the Creative Index Report 2013, a report launched by Martin Prosperity Institute, Institute for Competitiveness and The Prosperity Institute of India, Delhi is India’s “most creative state,” or the state with the greatest economic potential in the Indian economy.

Selecting Delhi seems to be stretching the rules a bit, since it is in fact a Union Territory (UT) and not a state. The report, however, counts all seven UTs in India as states, judging 35 states in total. To determine the ranking, the report judges the “creative class” of each state by three criteria, which they refer to as the 3T system – tolerance, talent, and technology. Continue reading →

Posted in Business | Tagged Creative, Delhi, India | Leave a comment

India to Return to 7-8% Growth By 2015

Apr. 29 – In several recent statements both to the press, international investors, and the Indian parliament, India’s President, Prime Minister, and Finance Minister have stated that they are confident in returning to seven or eight percent annual growth as early as 2015. They have also stressed that foreign direct investment (FDI) is critical in this regard, signaling further facilitation in the times to come.

“We are confident that we will return to 7-8 percent growth bracket in the next two to three years,” said President Pranab Mukherjee on Tuesday, speaking to the IFTDO’s World Conference and Exhibition in New Delhi. “We need to revitalize investment in the country for this purpose. We welcome foreign investment which has a critical role in bringing in modern technology and globalizing our economy.”

Prime Minister Manmohan Singh recently expressed similar sentiments to the Indian Parliament. Continue reading →

Posted in Business, Markets | Tagged India, India Growth | Leave a comment

China’s Investment in Europe Continues to Rise

Apr. 29 – Chinese companies increased their investments in Europe by as much as 21 percent in 2012, solidifying its position as the main destination of Chinese Outward Foreign Investment (ODI). In total, Europe was the recipient of US$12.6 billion of Chinese investment last year, which now represents approximately 33 percent of all Chinese ODI.

The rationale for increasing investment in Europe is attributed to a convergence of multiple factors. The current problems affecting European economies have led many enterprises to be in need of fresh capital, as regional sources of capital have dried up. In addition, lingering uncertainty over future growth prospects has led valuations to remain moderate.

“Many Chinese investors regard Europe’s current weakness as an opportunity to jump in,” noted Mr. Loesekrug-Pietri, managing and founding partner of A Capital, referring to the unsettling effects of the current sovereign debt issues and low growth rates in the region. Continue reading →

Posted in Business, Foreign Trade | Tagged China, Europe, Investment | Leave a comment

A Risk Unique to China

Op-ed Commentary: Dr. David A. Owen

Apr. 19 – Every investment opportunity carries certain risks. Properly assessing these risks, however, can be difficult. A unique risk for those interested in investing in China is its neighbor, North Korea. How does one assess the potential risk of a seemingly unstable neighbor as in the case of North Korea? More specifically, how much risk does Kim Jong Un’s recent castigations actually pose for those interested in investing in China and the stability in East Asia at large? The answers may not actually be that complex.

North Korea has maintained a hostile posture in East Asia since its formation. During this entire period North Korea has been antagonistic towards South Korea, a self-proclaimed enemy of Japan (arguably not without cause considering historical relations) and a thorn in China’s side since at least the moment North Korea transitioned from a communist regime to one with more dictatorial attributes. Even though Sino-North Korean relations are not as hostile as the former two, they are still quite constrained, characterized by North Korean dependence on China and Chinese tolerance of an undesirable border state. Continue reading →

Posted in Business, Politics | Tagged China Investment, North Korea | Leave a comment

India-Pakistan: Business First

The road to reconciliation between India and Pakistan is likely to be a long and treacherous one. But perhaps economic compulsions can overtake political ones. That is the hope in Karachi, whose business community has started to make its journey across the border to India.

By Manjeet Kripalani

Apr. 11 – On May 11, Pakistanis will go to the polls and elect a new government. For the first time in its history, the country will see a peaceful, civilian handover of the reins of state. This is an exhilarating moment in South Asia, for democratic progress in Pakistan will positively impact the dynamics of the region. Pakistan is keenly aware of this – but also of the fragility of the moment. Continue reading →

Posted in Business | Tagged Business, India, Pakistan | Leave a comment

The Emergence of Vietnam and India as China Alternatives

China is not the only solution for export-driven manufacturing, and Asia’s trade evolution is determining that business models move on for adventures elsewhere.

By Chris Devonshire-Ellis, Principal, Dezan Shira & Associates

Apr. 9 – At the turn of the 21st Century, there were two main schools of commercial thought with regards to China. The most popular was that China represented a massive market to sell to with roughly 1.3 billion potential consumers. The second was that China had a young, available and inexpensive work force that was relatively skilled and disciplined. While the latter has proven the dominant economic driver for the past two decades, China’s one-child policy (implemented nationwide in 1982) has meant that the nation’s supply of cheap labor has been drying up – and is now doing so at an increasingly rapid rate.

China today is one of the fastest aging populations in the world – a fact that has not gone unnoticed by the central government. Wary of inheriting a huge population of aged, but poor citizens, it has been state policy over the past few years to get more money into the pockets of Chinese nationals and to implement what by global standards is a relatively expensive, contribution-based state insurance scheme. Continue reading →

Posted in Business, Foreign Trade | Tagged China, India, Vietnam | 1 Comment

2point6billion.com is a commentary and news forum specifically dedicated to the impact trade, development, investment, politics, and the emerging markets of Asia are having on the global business community.