Mar. 12 – While 2009 may have been a tough year for the average citizen of the world, it was undeniably an amazing year for Asia’s billionaires who, according to the latest Forbes rich list, more than doubled their net worth.

The continent’s billionaires boasted a combined wealth of US$729 billion last year, up from 2008’s US$357, as they welcomed 104 new members into their ranks – now numbering 234.

China and India, in particular, lead the trend, with China now claiming the second most billionaires in the world after the United States. Chinese billionaires went from 28 in 2008 to 64 last year, while India’s numbers increased from 24 to 49, according to the annual report by Forbes.

Although China claims more billionaires than India, India’s are much richer. Ten of Asia’s top 25 billionaires hail from India, while China claims only one.

In fact, India’s Mukesh Ambani of Reliance Industries and Lakshmi Mittal of ArcelorMittal rank fourth and fifth in the world with US$29 billion and US$28.7 billion, respectively.

Hong Kong’s Li Ka-shing of Cheung Kong Holding and Hutchison Whampoa ranked 14th globally and third in Asia with US$21 billion.

Mainland China’s wealthiest individual is Zong Qinghou of Hangzhou Wahaha Group with a personal wealth of US$7 billion.

Sri Lanka’s government signed a US$290 million deal with China to construct the Mattala Airport and upgrade the Sri Lankan Railway in the country’s Southern Province. Upon completion, the airport will become one of only two operational international airports in the country. The Chinese lending arm, Export-Import Bank, is also helping to construct a modern sea port in Hambantota.

China has been the island nation’s largest source of foreign funding in recent years, contributing US$1.2 billion in 2009. Sri Lankan officials said last week that funding from China accounts for more than half of the country’s construction and development loans.

Not to be outdone, India and Sri Lanka agreed on Wednesday to a US$67.4 million deal to develop the Southern Railway Line from Colombo to Matara, adding to a US$100 million deal endorsed by the Export-Import Bank of India in 2008.

There has been some speculation that recent Chinese investment in Sri Lanka is an attempt to undermine India’s influence in the region. Some in Sri Lanka, however, have a different take on the matter.

That sector, which has around 80 percent weight in the Index of Industrial Production –a measure of factory output in the country — rose by 17.9 percent during the month against one percent a year ago.

Within manufacturing, capital goods surged by a stunning 56.2 percent in January against 15.9 percent in the same month last year. Consumer durables rose 31.6 percent against 2.1 percent growth in January last year.

The agreement links up 7,000 duty-free goods between China and ASEAN members Brunei, Indonesia, Malaysia, the Philippines, Thailand, and Singapore, with the other group members – Vietnam, Cambodia, Laos, and Myanmar – planning to be included in the deal by 2015.

Southeast Asia currently only accounts for 8 percent of China’s exports, but Beijing sees great opportunity for growth within their neighbors to the south. The free trade block has brought together the region’s approximately 1.9 billion people along with a combined GDP of US$6 trillion and a total trade volume nearing US$4.5 trillion. There is some worry among the ASEAN members, however, that the deal will benefit China at their expense.

Thailand’s agriculture industry, in particular, experienced the deal’s negative side when the two countries agreed on a zero-tariff, “early harvest” deal – within which Thailand would supply tropical produce to China in return for winter fruits and vegetables.

The fallout of the deal was that Thai farmers of garlic, longan, red onions, and other temperate fruits and vegetables were completely wiped out by cheaper Chinese imports. Furthermore, Thai newspapers reported that Chinese officials refused to drop tariffs on Thai imports as promised.

In the Philippine’s largely agricultural province of Benguet, the governor has said that the CAFTA sneaked up on the region’s farmers, and that many fear for their livelihood. The smuggling of Chinese goods has also been a huge concern for the Southeast Asian countries. The Philippine’s shoe industry for example has been hit hard by the smuggling of Chinese shoes, as has the clothing and toy industries in Indonesia.

Chinese economist Hu Angang explained China’s trade strategy as a “half open model,” with “open or free trade on the export side and protectionism on the import side.”

The CAFTA, though, is not altogether as bad as it seems. Despite these occurrences, the deal has enormous potential and will undoubtedly increase competitiveness and efficiency in the region.

The free trade area also creates room for easier cooperation between the two areas as China can import raw materials from ASEAN members such as rubber, tin, cotton, and oil and, in return, export manufactured goods.

Furthermore, to their credit, Chinese officials have at least acknowledged the concerns voiced by their neighbors and reasserted their aim to advance the economies of both parties.

“Such worries are understandable. But the FTA is mutually beneficial. With full consideration of economic development levels and market capacities of both sides, the FTA will advance the regional economic integrity by eliminating barriers of trade and investment,” reassured China’s Vice-Minister of Commerce Yi Xiaozhun at the CAFTA establishment ceremony on January 7.

“Policymakers from both regions have reached consensus that trade pressures would ultimately be transformed into an impetus that drives the economic development of the whole region,” he continued.

The agreements will largely focus on defensive deals, including the completion of the Russian-made aircraft carrier Admiral Gorshkov and 29 MiG-29 fighter jets. Russia and India have enjoyed a longstanding partnership as they rank among the world’s largest arms exporters and importers, respectively.

During Prime Minister Putin’s visit, the two countries will also discuss India’s nuclear market, which Russia already has started to invest in. Russia is currently building two reactors at the Kudankulam nuclear power plant in southern Tamil Nadu.

India and Russia signed a nuclear-energy cooperation agreement this past December that will permit Russia’s state-owned nuclear company, Rosatom Corp., to negotiate new contracts in Kudankulam.

Putin is also expected to talk about bilateral trade relations during the visit as he tries to increase the current value of US$8 billion up to US$20 billion by 2015.

The Figo, priced aggressively at US$7690, is set to compete against already established models like Hyundai’s i10, General Motor’s Beat, Chevrolet’s Spark, Volkswagen AG’s Polo, and Maruti Suzuki’s Ritz and Swift. Renault, Nissan, Toyota, and Honda also have plans to introduce models into the market within the next few years.

“If you are not in a segment where 70 percent of cars in India are purchased, you are not there at all,” said Ford India President Michael Boneham at a press conference.

“This is the right product and at the right price point for Ford,” he said, commenting on the low price of the Figo. “We are not in the business to lose money. You can get profits of scale and you can also compete in a very price-sensitive environment.”

Ford will be manufacturing its new model at their plant in Chennai, which has a production capacity of 200,000 units per year.

Mar. 10 – Top environmental and climate negotiators for China and India instructed the United Nations Framework Convention on Climate Change (UNFCCC) on Tuesday to include them amongst the nearly 200 countries listed at the top of the Copenhagen Accord.

The accord, a three-page nonbinding statement, was the only thing to come out of the failed attempt at world government that was the Copenhagen Summit this past December.

The deal underlines climate change as one of the great challenges of our time and calls for limiting the rise in global temperature to below two degrees Celsius. It also asks developed countries to raise funds of US$30 billion for new and additional resources by 2012 and for the world to raise US$100 billion a year by 2020 to help developing countries mitigate carbon emissions.

China and India are the last two large economies to attach their name to the deal, but are among the most important due to the role that they are forecast to play as they continue to fuel their growth in the coming years.

“After careful consideration, India has agreed to such a listing,” India’s Environmental Minister Jairam Ramesh told Parliament on Tuesday, according to Reuters. “We believe that our decision to be listed reflects the role India played in giving shape to the Copenhagen Accord. This will strengthen our negotiating position on climate change.”

In a similar move yesterday, Beijing’s Su Wei sent a one-sentence statement to the UNFCCC confirming China’s desire to be named among the countries that “take note of” the Copenhagen Accord.

“I am writing to confirm that the Secretariat can proceed to include China in the list of Parties included in the chapeau of the Copenhagen Accord,” it read.

While the actual ramifications of China and India signing on to the deal are minimal due to the difficulty of establish a legally binding agreement, it does give the Copenhagen Accord a bit more credibility and could help to put everyone on the same page for real progress being made in Mexico in 2010 or, more likely, South Africa in 2011.

According to the World Federation of Exchanges, about US$18.6 trillion was traded on the 16 Asian bourses that are members of the WFE, while Europe’s 26 members achieved US$13 trillion. The European figures also include exchanges in the Middle East and Africa. The WFE has said that this trend has continued during 2010. IPO finance raised by China and Hong Kong last year was also double that of the United States.

The trend is set to continue with news that Eurex, Europe’s largest derivatives exchange, has admitted its first China member. Eurex also expanded into Asia and opened up offices in Hong Kong, Singapore and Tokyo last year. Asia’s stock exchanges include those in China, Hong Kong, India, Japan, Korea and Australia.

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The port, which is on North Korea’s east coast next to the city of Rason, gives China easier access to South Korean and Japanese markets, and opens up Jilin Province to easier Northeast Asian exports.

North Korea gave Rason free trade zone status two years ago, and it was the first city to host an economic zone – Rajin-Sonbong. Since then, China has been exporting coal through the port. The new lease agreement, though, means China can choose what facilities it wishes to utilize and where to build them as it sees fit. The port may also be used for tourism, with Chinese tourists holding special visas being permitted to land and board onward cruises to Russia, Japan and South Korea.

China lost control over the Sea of Japan in the 19th century following skirmishes with Russia and Japan in the region. China ended up losing territory to both and, as a result, the provinces of Jilin and Heilongjiang have been landlocked ever since.

The deal underlines the Chinese Government’s desire to develop the Northeast as an important trade route into Russia, Korea, and Japan.

Last year, China’s State Council approved a proposal to turn Jilin’s Tumen River area into an economic development zone.

“It is encouraging to see North Korea taking commercial steps and the Chinese certainly know how to develop port facilities. While it remains an experimental project as is reflected in the short lease period, it could well turn out to be pivotal for the region. Northeast Russia, and ports such as Zarubino also need investment,” says Chris Devonshire-Ellis, publisher of 2point6billion.com and the founding partner of Dezan Shira & Associates. Similar short-term lease arrangements could be just the spark to show the area’s regional governments the way ahead.

“While concerns may remain short term in the region concerning China’s intentions over land claims,” says Mr. Devonshire-Ellis, also an elected member of the Business Advisory Councils to the United Nations Development Program mission for the region, the Greater Tumen Initiative, “if these can be allayed and the Chinese be seen to be playing an even hand in providing these ports with upgraded facilities, and recognizing sovereign territory, then the northeast has great potential for development over the next twenty years.”

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The United States topped the list despite being among the worst hit by the Global Financial Crisis. In contrast, China and India recovered sharply ahead of most other economies from the slowdown that hit markets in 2008. The report pointed out that India is emerging as an attractive investment market for PE firms as an increasing number of family-owned businesses are turning to outside investors to raise funds.

Rapid domestic expansion across several sectors is set to provide ample opportunities for growth-capital investing within the country, said Sri Rajan, head of Bain and Company’s PE practice in India.

“Given the growth trajectory in India, PE investments will pick up in the coming fiscal but the average value of deals will be lower than that of 2007, which was the boom period for investments. Key sectors that will witness an upswing in future are infrastructure and healthcare,” he said.

The report also said PE deals are showing signs of recovery globally with value of buyouts moving to US$36 billion in the past quarter of 2009 after hitting a low of US$8 billion for the quarter ending March 2009. However, even as PE firms are flush with commitment now, raising capital will still be a challenge over the short term, it said.

Fund-raising more than halved in each of the four quarters of 2009 year-on-year, shrinking as much as 76 percent to US$37 billion in the fourth quarter ending in December, the lowest since the third quarter of 2004, according to the report.

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