Foreign Trade

India & Myanmar Increase Trade and Investment Relations

June 13 – India and Myanmar formally committed to strengthening their bilateral trade and infrastructure investment relations during last week’s World Economic Forum on East Asia.

The forum, which was held in Myanmar’s capital of Nay Pyi Taw, was the first international gathering hosted in Myanmar since the country implemented economic and political reforms in 2011. The theme was “Courageous Transformation for Inclusion and Integration.”

During the forum, India’s Union Minister of Commerce, Industry & Textiles Anand Sharma met with Myanmar’s Chairperson of the National League for Democracy Daw Aung San Suu Kyi to discuss trade between the two countries. Their meetings were positive, and the two agreed on greater cooperation and cross-border investment efforts. Continue reading →

Posted in Business, Featured, Foreign Trade | Tagged Foreign Relations, India, Myanmar, Trade | Leave a comment

Germany Pledges Support for China in European Trade Dispute

By Nick Ottens

Jun. 4 – German chancellor Angela Merkel on Sunday promised to intervene on China’s behalf in its dispute with the European Union over the import of solar panels, deepening an economic relationship that already accounts for nearly $200 billion in global trade.

“Germany will do what it can so that there are no permanent import duties and we’ll try to clear things up as quickly as possible,” Merkel told reporters after meeting her Chinese counterpart Li Keqiang in Berlin. “We don’t believe that this will help us so we want to use the next six months intensively.”

The European Union accuses China of pricing its solar panels too cheaply at the expense of European competitors, even if they are usually heavily subsidized by their national governments as well. It is considering whether to impose punitive duties after the United States did so last year. Continue reading →

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

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

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

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

ASEAN-India Free Trade Area Part IV: Thailand, Singapore and Malaysia

By Alex Tangkilisan

Mar. 15 – In the fourth and final part of our ASEAN-India Free Trade Area analysis, we will examine trade trends and statistics from India to Thailand, Singapore and Malaysia.

Thailand, Singapore and Malaysia account for three of ASEAN’s six major economies known as the ASEAN six majors (the other three being Indonesia, the Philippines and Vietnam). Together, these three countries combine for a GDP of US$864.02 billion, a population of 101.6 million and exports to India amounting to US$23.5 billion (or, about 5 percent of India’s total imports). Continue reading →

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BRICS Must Deliver a Development Bank

The establishment of a BRICS Development Bank will be among the prime topics of discussion at the BRICS Summit on March 26. Gateway House’s Akshay Mathur interviews former Indian Ambassador and Foreign Secretary, Shyam Saran, on the prospects and viability of alternate financial architectures.

Mar. 15 – The next BRICS Summit is scheduled to take place in Durban on 26-27 March 2013. A proposal to create a BRICS development bank is being discussed at the Summit. Ambassador Shyam Saran speaks to Gateway House’s Akshay Mathur about the need for a BRICS development bank and why Western-dominated financial institutions and systems cannot be easily replaced in the near future.

Q: BRICS, as a concept, seems to have fallen out of flavor, especially among western scholars. Do you see any promise in the grouping?

If you’re expecting a major impact on the international economic or monetary order, it is too early for the group to act with the same coherence that, for example, the G7 has done for a long time. The G7 has carried a lot of heft in the global economy for the last fifty years. BRICS, in contrast, is not there yet.

Moreover, China is growing so fast that it is overshadowing Brazil, Russia, India, and South Africa. It has been adding one Indian economy each year to itself. It is difficult to work with coherence with such asymmetry between the members. Continue reading →

Posted in Business, Foreign Trade | Tagged BRICS, Development Bank, India | Leave a comment

2point6billion.com provides news and analysis on foreign trade in south east Asia, with a particular focus on China and India. The stories are contributed by the foreign direct investment experts at Dezan Shira & Associates, who have offices throughout China, India and Vietnam.