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From WSJ’s Davos blog:

Standard Chartered PLC remains bullish on the major Asian economies of India and China, encouraged by the policy outlook for the two countries this year, the bank’s Asia chief executive said.

The U.K.-based lender, which focuses almost exclusively on Asia and emerging economies, also sees European rivals retreating from those markets as they are beset with challenges at home, Standard Chartered Asia Chief Executive Jaspal Bindra said in an interview on the sidelines of the World Economic Forum.

In India last year, Standard Chartered confronted a range of challenges including slowing growth, rising interest rates and a depreciating rupee. Revenue from the bank’s India unit fell by 12% in the first half of 2011 and by the “mid-teens” in the third quarter, Group Finance Director Richard Meddings said earlier.

Mr. Bindra blamed higher interest rates. “Interest rates went up almost 400 basis points in a short period, and it is very difficult, if you do wholesale business with the best clients in the country, to pass on a 400 basis point increase at any one time.”

But the central bank’s surprise move to loosen monetary policy this week has sent a “clear signal” that there will be no further rate hikes and the government is shifting its focus to promoting growth, Mr. Bindra said.

The Reserve Bank of India Tuesday held its key lending rate steady for a second straight policy meeting but cut the minimum cash reserve requirement by 0.50 percentage point to ease liquidity.

“The government has for a long time shown a huge preference to manage inflation through monetary policy,” he said. But following the RBI cut, “I think we will see a more balanced approach.”

Mr. Bindra also said that the recent “normalization” of the rupee exchange rate — it is up 6% against the dollar so far this year after declining 15.1% in 2011 — will encourage renewed foreign investment.

In China, Mr. Bindra believes authorities will be successful in guiding the economy to a “soft landing” ahead of a leadership transition at the end of the year.

“The priority for all of 2012 and beyond is going to be ‘how do we keep things stable,’ as they have this transition of power at the top,” he said, adding that not just the top political leadership, but also the leaders of major financial institutions and regulators are all due to be reshuffled. “It is quite a massive-scale change of power.”

As European banks regroup and retreat from Asia, Standard Chartered sees an opening. The trend is especially pronounced in industries including shipping and commodities and in markets like Indonesia and India where dollar liquidity is scarce, he said.

“It gives us an opportunity to scale up market share, and second, it gives us a little bit of pricing advantage.”

– Aaron Back. Follow him on Twitter @AaronBack.

In recent years, China has re-invigorated its support for leading state-owned enterprises in sectors it considers important to “economic security,” explicitly looking to foster globally competitive national champions.

In 2009, China announced that by 2020 it would reduce carbon intensity 40% from 2005 levels.

The government has also focused on foreign trade as a major vehicle for economic growth.

The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.

The disparities between the two sectors have combined to form an economic-cultural-social gap between the rural and urban areas, which is a major division in Chinese society.

The technological level and quality standards of its industry as a whole are still fairly low, notwithstanding a marked change since 2000, spurred in part by foreign investment.

China’s increasing integration with the international economy and its growing efforts to use market forces to govern the domestic allocation of goods have exacerbated this problem.

The growth in both outbound investment from, and inbound investment to, China reflects the nation’s rising economic power and attractiveness as an investment destination.

” Although the figure is already “quite amazing,” the volume is “not large enough” considering China’s economic growth and local companies’ expanding demand for international opportunities, Shen said.

It also aims to sell more than 15 million of the most fuel-efficient vehicles in the world each year by then.

Although China is still a developing country with a relatively low per capita income, it has experienced tremendous economic growth since the late 1970s.

Since the late 1970s, China has decollectivized agriculture, yielding tremendous gains in production.

China is the world’s largest producer of rice and wheat and a major producer of sweet potatoes, sorghum, millet, barley, peanuts, corn, soybeans, and potatoes.

China ranks first in world production of red meat (including beef, veal, mutton, lamb, and pork).

Growing domestic demand beginning in the mid-1990s, however, has forced the nation to import increasing quantities of petroleum.

China’s leading export minerals are tungsten, antimony, tin, magnesium, molybdenum, mercury, manganese, barite, and salt.

Major industrial products are textiles, chemicals, fertilizers, machinery (especially for agriculture), processed foods, iron and steel, building materials, plastics, toys, and electronics.

Brick, tile, cement, and food-processing plants are found in almost every province.

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Davos: StanChart Bullish on China, India

The prime minister is attending the World Economic Forum in Switzerland and meeting with leading business people to clarify Thailand’s flood recovery plan. Prime Minister Yingluck Shinawatra is in Davos, Switzerland today to take part in the 42nd World Economic Forum. She’s scheduled to take part in a round-table luncheon with leaders and leading business people to discuss sustainable economic growth.

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PM to Meet Leading Businesspeople at World Econ Forum

A severe drought and a decline in rice prices in early 2010 do not bode well for agricultural production and consumption, although increased employment in manufacturing will partly offset the impact to agriculture.
All in all, a more favorable external environment should help boost real GDP growth to 6.2 percent in 2010. After this year, slower growth in developed countries, emerging capacity constraints as capacity idled during the crisis is quickly put to use, and the weight of the ongoing political turmoil on new investment, should likely keep growth below Thailand’s historical average of 5.1 percent. On the whole, Thailand’s fiscal and financial picture remains solid

The relative strength and power of sovereign wealth funds is massively increasing, and the money has to go somewhere.
But another factor is likely the presence of larger, institutional investors in large-cap stocks who are more concerned about long-term performance than short-term market movements.

In 1972 the Government took a further step in this direction by amending the “Announcement of the Executive Council No. 58 on the Control of Commercial Undertakings Affecting Public Safety and Welfare”. The changes extended Government control and regulation over the operations of finance and securities companies, which until then had operated fairly freely. Following these amendments, in May 1974, long-awaited legislation establishing “The Securities Exchange of Thailand” (SET) was enacted. This was followed by revisions to the Revenue Code at the end of the year, allowing the investment of savings in the capital market. By 1975 the basic legislative framework was in place and on April 30, 1975, “The Securities Exchange of Thailand” officially started trading. On January 1, 1991 its name was formally changed to “The Stock Exchange of Thailand” (SET).

New Delhi business newspaper economic times says that India and Thailand will sign a free trade agreement by the middle of this year, according to Thai Prime Minister Yingluck Shinawatra.

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Thailand to expand trade and investment with India

Sectors linked to external demand (namely, manufacturing, hotels and transport) have been the main contributors to growth since the 1997-98 Asian financial crisis, and have also determined the dynamics of the economy in 2008-09. These sectors have accounted for almost all of the annual changes in real GDP.
Overall, domestic demand should provide a positive but limited contribution to growth: vulnerable households lost ground in 2009 and risks are substantial in 2010, as falling agricultural output due to the current drought may offset opportunities from the improved overall economic environment. Household consumption levels, which are highly correlated with the poverty rate, contracted in 2009 despite the rebound in the last quarter of the year, suggesting a likely increase in the poverty rate compared to 2008, especially when compounded by the loss in purchasing power from the food and fuel crisis of 2008. The outlook for 2010 is uncertain : average wages are likely to increase, thanks to the reallocation of labor from agriculture to manufacturing. Although labor markets appear very tight, with unemployment below 1 %, the data do not account for the large number of workers who moved to lower-productivity jobs in agriculture and informal services due to the crisis. Many of these workers are now returning to manufacturing, which offers higher wages than agriculture.

Total shareholder returns (TSR) for 2009 are calculated by assuming that investors reinvest all cash received over the course of the year to determine a total return from one’s investment. The 2009 analysis covers 505 companies from the Stock Exchange of Thailand and the Market for Alternative Investment and is based on share valuations as of Dec 31 and dividend payments made over the 2009 calendar year.
The TSRs for the two groups are similar.

The Philippine energy and natural resources department last week gave the thumbs down to the application of Sagittarius Mines Incorporated (SMI) for environmental clearance for its planned commercial production of copper and gold in the Tampakan, South Cotabato. The department of energy and natural resources (Denr) cited the ordinance of South Cotabato which banned open pit mining  in the province as the basis for rejecting the application. “We are returning herewith the application documents with instruction to deny the same without prejudice to resubmit until the issues and concern on the use of open-pit mining method shall have been clarified and resolved by the company[SMI] with the provincial government of South Cotabato,” Denr secretary Ramon Paje said in a memorandum dated last January 3, copies of which were obtained by the local Catholic Diocese in South Cotabato. Juan Miguel T. Cuna, director of the Environmental Management Bureau, then ordered Sagittarius Mines “to refrain from undertaking any development activity in the areas mentioned in the application for ECC” until it will be able to obtain the necessary permit. The order was dated January 9 this year, several days after Paye issued his memorandum denying SMI’s ECC application. The ECC is a mandatory requirement before any mining project could proceed. To appeal SMI president Peter Forrestal said they were disappointed by the Denr decision but said they will seek reconsideration. “SMI intends immediately to file an appeal for a reconsideration of the decision as permitted under the ECC application process,” he said even as he claimed the decision “was not made on the merits of our Mine Project Environmental Impact Statement (EIS), which fully complies with the requirements of the DENR’s own ECC process and is backed by a world-class environmental impact assessment study.” SMI’s minority partner Indophil Resources, which only in December said it was confident the company will get an ECC, also confirmed the ECC rejection in a disclosure to the Australian bourse. SMI held several public scopings and at least five public hearings during the last two years in a bid to obtain an ECC.  These hearings drew partisan reactions from both pro-mining and anti-mining groups The Bishop Dinualdo Gutierrez of the Diocese of Marbel hailed the decision, however. Gutierrez, along with two other bishops in the areas where SMI planned to operate, is a strong advocate against open pit mining. The militant Bagong Alyansang Makabayan (New Patriotic Alliance) said the rejection was a triumph for the people who opposed and rejected SMI’s bid to mine 2.4 billion tonnes at a grade of 0.6 percent copper and 0.2 grams per tonne gold and contains 13.5 million tonnes of copper and 15.8 million ounces of gold, using a 0.3 percent copper cut-off grade. SMI earlier announced it intended to pour in US$5.4 billion in capital and cash investments for the project. National mining policy Forrestal said the Denr decision “sets a precedent that contradicts the publicly stated views of the Aquino Administration.” The Aquino government however said it is yet to come up with a comprehensive policy recommendation on the mining industry following increased environmental concerns from several sectors. Meanwhile, the Chamber of Mines in the Philippines today said “the denial of the application for an Environment Compliance Certificate (ECC) for the Tampakan Mine Project underscores the urgent need for a national mining policy that would resolve conflicts between the national government and local government units as regards minerals development.” The Philippine mines chamber also warned that the denial of SMI’s ECC application may send mixed signals to the investment community.” The Denr decision came just days after a local trial court restrained the provincial government of Zamboanga del Norte from enforcing its own open pit mine ban which affected the ongoing operations of Canadian-owned TVI Resources Development. SMI however has refused to challenge the provincial ordinance saying that it was just a contractor under the Colombio Financial Technical Assistance Agreement which holds the Tampakan Copper and Gold Project. Aside from the Catholic Church and environment groups, the communist-led New People’s Army is also against mining large-scale mining operations. In October last year, some 200 NPA guerillas raided Taganito Mines and two other sister companies in Surigao del Norte torching over US$20 billion of equipment and properties.

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Philippines govt rejects SMI mining bid

Sitting on the beach on New Year’s eve with family and friends is supposed to be a relax affair. For those in the Thai seaside resort village of Hua Hin, what started out as a chilled environment quickly turned to terror when fireworks exploded out of control.

The fireworks caused a number of explosions that showered the beach resort. Fortunately no-one sustained any injuries, but the terror can be clearly seen in the faces of those running away from the wayward fireworks.

The pyrotechnics extravaganza was supposed to last several minutes ended up lasting less than half a minute.

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VIDEO: Hua Hin New Year’s Eve fireworks display doesn’t go quite as planned

Every year on Dec. 31, a number of cities stand out as being the hottest spots to ring in the New Year: New York, London, Sydney and Tokyo. Now Beijing wants to join that list too—and hopes doing so will help boost tourism to the city.

And if not many people show up to the party? Well, that’s part of the plan, too.

The city is unveiling its first-ever western New Year’s extravaganza, rolling out a digital light show surrounding one of the city’s most renowned cultural icons–the Temple of Heaven, where Chinese emperors in centuries past went to pray for good harvests.

As midnight approaches, digital lights will transform part of the temple grounds into a giant, skyward-facing analog clock. Hundreds of local students will ride stationary green bikes that have been placed facing the temple and will light up—an intended salute to the importance of environmental protection. Meanwhile, LED lights will shoot colored beams into the sky and a countdown of the final seconds left in 2011 will be projected onto the temple itself, a triple-tiered gable structure built in the early 1400’s, creating 3-D visual effects.

But there will be one major difference between Beijing’s attempt and other hyped international celebrations, such as New York’s famed ball-dropping and the ringing chimes coming from Big Ben in London.  Unlike Times Square, where one million people flock each New Year’s Eve, according to the Times Square Alliance, Beijing’s festivities won’t be open to the public.

“The park isn’t big enough to hold that many people,” said Sun Weijia, the vice chairman of Beijing Municipal Commission of Tourism Development and one of the event’s organizers. Organizers have, however, contacted travel agencies to extend invitations to more than 500 foreign tourists who will be in the city, and journalists have also received invitations, Mr. Sun said, predicting a total audience of more than 3,000 people.

The goal of the event is not to draw big crowds to one site but to serve as an advertisement to the world’s tourists, Mr. Sun said, adding that the city gained global attention in the run-up to the Olympics and that the spotlight has since faded.

“Some zones [at the event] won’t have an audience,” he said, adding, “we designed them especially for television broadcasts.”

Some might point out that China is home to one of the world’s largest public squares, a space that dwarfs Times Square and could fit many more people.

But China’s leaders have long opposed big public gatherings, especially at Tiananmen Square. The image of thousands of students rallying for democratic rights in 1989 remains a fresh threat in the minds of many officials. In this upcoming year of leadership transition, the focus will be on stability.

China’s masses will have to watch the celebration from their televisions at home. Events will be broadcast by those lucky enough to invited to the Temple of Heaven — camera crews and other media types who can broadcast the show across the nation and to the rest of the world.

Beijing’s New Year’s bash will differ from those in many cities in another respect, too: a lack of fireworks. Fireworks of the tube-launched, explosive variety are by no means rare on the streets of Beijing, and their public use can be a substantial fire hazard in the period around Chinese New Year (which will fall in late January in 2012).

But the Beijing government’s countdown won’t have any. “Beijing doesn’t allow the use of fireworks, especially in imperial parks,” Mr. Sun said.

–Laurie Burkitt and Owen Fletcher; follow Laurie at @lburkitt and follow Owen at @owenfletcher.

In recent years, China has re-invigorated its support for leading state-owned enterprises in sectors it considers important to “economic security,” explicitly looking to foster globally competitive national champions.

The Chinese government faces numerous economic development challenges, including:
(a) reducing its high domestic savings rate and correspondingly low domestic demand through increased corporate transfers and a strengthened social safety net;
(b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and
(d) containing environmental damage and social strife related to the economy’s rapid transformation.

The People’s Republic of China is the world’s second largest economy after the United States by both nominal GDP ($5 trillion in 2009) and by purchasing power parity ($8.77 trillion in 2009).

Some economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector and that the extent at which China is dependent on exports is exaggerated.

The two most important sectors of the economy have traditionally been agriculture and industry, which together employ more than 70 percent of the labor force and produce more than 60 percent of GDP.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

China’s increasing integration with the international economy and its growing efforts to use market forces to govern the domestic allocation of goods have exacerbated this problem.

China now ranks as the fifth largest global investor in outbound direct investment (ODI) with a total volume of $56.5 billion, compared to a ranking of 12th in 2008, the Ministry of Commerce said on Sunday.

Last year was the eighth consecutive year that the nation’s ODI had grown.

China is aiming to be the world’s largest new energy vehicle market by 2020 with 5 million cars.

In large part as a result of economic liberalization policies, the GDP quadrupled between 1978 and 1998, and foreign investment soared during the 1990s.

Even with these improvements, agriculture accounts for only 20% of the nation’s gross national product.

Except for the oasis farming in Xinjiang and Qinghai, some irrigated areas in Inner Mongolia and Gansu, and sheltered valleys in Tibet, agricultural production is restricted to the east.

Horses, donkeys, and mules are work animals in the north, while oxen and water buffalo are used for plowing chiefly in the south.

Coal is the most abundant mineral (China ranks first in coal production); high-quality, easily mined coal is found throughout the country, but especially in the north and northeast.

China’s leading export minerals are tungsten, antimony, tin, magnesium, molybdenum, mercury, manganese, barite, and salt.

China also has extensive hydroelectric energy potential, notably in Yunnan, W Sichuan, and E Tibet, although hydroelectric power accounts for only 5% of the country’s total energy production.

The iron and steel industry is organized around several major centers (including Anshan, one of the world’s largest), but thousands of small iron and steel plants have also been established throughout the country.

See the article here:
No Crowds for China’s New Year

A crucial part of a start-up CEOs job is to build a team that lets him or her be just that: the CEO. The phrase ‘minimum viable product’ has become part of the start-up lexicon. It’s a useful term for that significant milestone in the start-up life cycle—when an entrepreneur has built a stripped-down most basic version of his or her product so he can begin to get customers and feedback. Borrowing from this phrase, I’ve found myself highlighting a different inflection point in the start-up lifecycle: when it has a ‘minimum viable team.’ This is the group of initial employees that enable the CEO to focus exclusively on performing the duties that CEOs are supposed to do. At each stage of start-up development, additional employees increasingly specialize in their roles. In the extreme, when founders first setup shop they do everything. Founder-CEOs initially act as CEO, CTO, head of HR, head of sales, administrative assistant, junior operations managers, and mail boy. As the company grows, those functions are divested to members of the team who specialize in those respective areas. Eventually founder-CEOs find themselves entering a state of operational nirvana in which they transcend into handling only the core responsibilities of the CEO. In my view, this is a very short list limited to: strategic alignment, company culture, talent recruitment and optimization, and broadly being the firm’s face for marketing and fundraising. This nirvana is likely to be interrupted. When a team changes, the CEO may temporarily pick up slack. The inherent volatility of running a new company will also inevitably bring unexpected challenges that sit on the rocky banks of the CEO’s river of duties. For some CEOs, there isn’t a team large enough to liberate him or her from non-core tasks. A CEO also needs to be capable of appropriately delegating, and giving over certain responsibilities, so that the minimum viable team can free up the CEO. Whether or not the minimum viable team phrase makes it into the mainstream start-up terminology, the concept should, as CEOs should be working toward developing an environment in which they can focus 100 percent on properly doing their job…and only their job.

Continued here:
The Importance of the Minimum Viable Team

A list of what The Wall Street Journal’s reporters in China are reading and watching online. (NOTE: WSJ has not verified items in the ‘News’ section and doesn’t vouch for their accuracy.)

News:

* The former CCTV official blamed for a deadly and costly fire almost three years ago gets more years added to his term. (Xinhua)

* China plans new taxes on vehicles (China Daily)

* China should reduce reliance on overseas credit-rating companies by pushing its own, PBOC Gov. Zhou Xiaochuan said. (Bloomberg)

* Sudan’s unrest represents a minefield for oil-thirsty Beijing. (Washington Post)

Analysis and Commentary:

* Mao’s past mistakes show the need for an open government. (Global Times. Yes, that Global Times.)

* China is too big to support continued heady growth through exports, Gordon Chang argues. (Forbes)

* The Wukan revolt: A harbinger of things to come? (New York Times)

Just Because

Marilyn Monroe plans an appearance in Harbin. (Xinhua)

The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.

The government vowed to continue reforming the economy and emphasized the need to increase domestic consumption in order to make China less dependent on foreign exports for GDP growth in the future.

China has emphasized raising personal income and consumption and introducing new management systems to help increase productivity.

Some economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector and that the extent at which China is dependent on exports is exaggerated.

Its mineral resources are probably among the richest in the world but are only partially developed.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

By the early 1990s these subsidies began to be eliminated, in large part due to China’s admission into the World Trade Organization (WTO) in 2001, which carried with it requirements for further economic liberalization and deregulation.

The ministry made the announcements during a press conference held in Xiamen on the upcoming United Nations Conference on Trade and Development (UNCTAD) World Investment Forum and the 14th China International Fair for Investment and Trade.

“China is now the fifth largest investing nation worldwide, and the largest among the developing nations,” said Shen Danyang, vice-director of the ministry’s press department.

China is expected to have 200 million cars on the road by 2020, increasing pressure on energy security and the environment, government officials said yesterday.

In large part as a result of economic liberalization policies, the GDP quadrupled between 1978 and 1998, and foreign investment soared during the 1990s.

Despite initial gains in farmers’ incomes in the early 1980s, taxes and fees have increasingly made farming an unprofitable occupation, and because the state owns all land farmers have at times been easily evicted when croplands are sought by developers.

In terms of cash crops, China ranks first in cotton and tobacco and is an important producer of oilseeds, silk, tea, ramie, jute, hemp, sugarcane, and sugar beets.

Sheep, cattle, and goats are the most common types of livestock.

China is one of the world’s major mineral-producing countries.

China is among the world’s four top producers of antimony, magnesium, tin, tungsten, and zinc, and ranks second (after the United States) in the production of salt, sixth in gold, and eighth in lead ore.

The largest completed project, Gezhouba Dam, on the Chang (Yangtze) River, opened in 1981; the Three Gorges Dam, the world’s largest engineering project, on the lower Chang, is scheduled for completion in 2009.
Beginning in the late 1970s, changes in economic policy, including decentralization of control and the creation of special economic zones to attract foreign investment, led to considerable industrial growth, especially in light industries that produce consumer goods.

The iron and steel industry is organized around several major centers (including Anshan, one of the world’s largest), but thousands of small iron and steel plants have also been established throughout the country.

Read more here:
China Watch: CCTV Sentence, Car Taxes Planned, Marilyn Monroe at Harbin