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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

France’s top diplomatic envoy met with Burma’s leading opposition figure Sunday, as he became the latest Western official to visit the Asian nation following a series of fast-paced reforms. The trip comes shortly after the United States restored full diplomatic ties with Burma. 

The visit by French Foreign Minister Alain Juppe is the latest sign of Western approval of recent reforms by the new civilian government in Burma, after years of authoritarian rule.

In Rangoon, Juppe met with opposition leader Aung San Suu Kyi, to whom France is giving its highest award, the Legion of Honor.

At a news conference, Aung San Suu Kyi said she hoped the Burmese government’s recent release of more than 650 prisoners, including many political activists, will reinforce the process of democratization and national reconciliation in her country.

The French minister’s trip to Burma follows a similar visit in December by Hillary Clinton, who became the first U.S. secretary of state to visit the Asian nation in more than half a century.  On Friday, Washington restored full diplomatic ties with Burma, following the prisoner release.

Juppe told reporters he had met with some of the newly freed prisoners and had saluted their courage and dignity.  He said France and the European Union will consider how to adapt sanctions and their relations with Burmese authorities in light of the country’s democratic progress.

Juppe is expected to meet Monday with Burma’s president, Thein Sein, in the capital.  The French envoy has welcomed the recent Burmese government reforms as “historic.”

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French Foreign Minister Meets Burmese Opposition Figure

As if the reputation of China’s economic data wasn’t shaky enough already, an odd bureaucratic tug of war is casting new doubt on one of the country’s more closely watched indicators.

China’s official Purchasing Managers Index (PMI), a gauge of the nation’s manufacturing activity, has been jointly released by the National Bureau of Statistics and an industry association called the China Federation of Logistics and Purchasing (CFLP) since 2005. Now, however, each body is trying to claim the data for itself.

The dispute originated with a statement posted on the Bureau of Statistics website on January 6 (in Chinese) saying it was the bureau that conducted the manager surveys that underpin the index conducted by the bureau. According to the statement, the CFLP merely published the survey under the authorization of the bureau.

The statement also quoted Pan Jiancheng, deputy director of the bureau’s China Economic Monitoring & Analysis Center, as saying the bureau planned to integrate all economic climate surveys and publish them as a group because “whoever conducts the survey should be the one to publish it.”

Three days later, the federation said in a statement on its own website (in Chinese) that PMI would not be part of the official climate surveys to be published by the statistics bureau.

“Somebody from the Bureau of Statistics is unhappy that we are doing such a good job with the PMI and decided to get tricky,” Cai Jin, deputy director of the CFLP, told the Shanghai-based Oriental Morning Post this week (in Chinese). “This has very negative influence on China’s PMI data.”

CFLP said in its statement that it submitted a request to establish the index in 2004 and that the NBS said it supported the proposal but asked the federation can make use of bureau’s existing enterprise survey resources to avoid redundancy. “Our federation is responsible for the release, analysis and interpretation of the survey,” CFLP said in its statement, adding that it is common practice for independent organizations to publish PMI to ensure objectivity.

According to its website, the CLFP, which claims to have thousands of purchasing manager members, is the only purchasing industry association approved by the State Council, China’s cabinet.

In the days since the Bureau of Statistics published its statement, Mr. Cai said, financial institutions and news media have pelting the CLFP with questions, expressing concern that the bureau might manipulate PMI based on other macroeconomic data.

“That’s why we have to clear things out,” Oriental Morning Post quoted Mr. Cai as saying.

China’s Purchasing Managers Index rose to 50.3 in December compared with 49.0 in November, indicating an increase in manufacturing activity. The rise came after HSBC Holdings PLC’s survey of purchasing managers showed manufacturing activity contracting in December, though at a more moderate pace than in the previous month.

The HSBC PMI has showed contractions in manufacturing in all but one of the past six months, painting a significantly less optimistic picture than the Chinese government’s competing PMI. Analysts say the HSBC PMI has been weaker because it surveys more purchasing managers from smaller firms, which have had difficulty accessing loans from banks.

– Liyan Qi

Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment.

In 2009, the global economic downturn reduced foreign demand for Chinese exports for the first time in many years.

China is the world’s fastest-growing major economy, with an average growth rate of 10% for the past 30 years.

Available energy is insufficient to run at fully installed industrial capacity, and the transport system is inadequate to move sufficient quantities of such critical items as coal.

Agricultural output has been vulnerable to the effects of weather, while industry has been more directly influenced by the government.

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 ongoing economic transformation has had a profound impact not only on China but on the world.

Both forums will start on Tuesday.

But “this is just a beginning.

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.

Agriculture is by far the leading occupation, involving over 50% of the population, although extensive rough, high terrain and large arid areas – especially in the west and north – limit cultivation to only about 10% of the land surface.

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.

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

Oil fields discovered in the 1960s and after made China a net exporter, and by the early 1990s, China was the world’s fifth-ranked oil producer.

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.

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.

There are railroads to North Korea, Russia, Mongolia, and Vietnam, and road connections to Pakistan, India, Nepal, and Myanmar.

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China’s Stats Bureau in Odd Ownership Spat Over Important Index

Just thought i’d let you know, it’s on now! If you want to get the best airfares around Asia, and even long haul flights to destinations in Europe or Australia, AirAsia are now having their ‘Awesome 20% Sale’ on all flights operating on over 165 routes. AirAsia have begun their 20% off sale – Applicable on all flights on all routes! The sale begins today (January 11, 2012) and ends on January 13.

The three day sale is available on travel on any immediate flight departing between the 30 th  of January and the 26 th  of April 2012. For those planning a long haul vacation, the 20% offer includes thecomfy premium fly flat beds on flights to New Zealand, Japan, Australia, China, India, Taiwan, Europe and Korea. Long haul AirAsiaX flights, which feature the cheapest bed in the sky, are also included in the Awesome 20% Sale.

Thai AirAsia chief Tassapon Bijleveld said that it highlighted the budget carrier’s commitment to giving more passengers the chance to take off by providing low fares. “AirAsia is showing our commitment to providing low fares by offering this ‘Awesome 20% Sale’ throughout both AirAsia and AirAsia X’s route network. Now guests will be able to connect to more than 80 destinations in 23 countries. Apart from affordable air travel, this promotion will also allow people to travel immediately while enjoying even lower fares to any of the over 165 destinations that AirAsia and AirAsiaX fly to. ” But it’s not just in the sky where savings are to be made, but also on the ground.  The low-cost group’s holiday division, AirAsiaGo, is also offering a 10% discount on selected destinations for bookings made between 11 and 13 January.

The travel period for this promotion is also from 30 January – 26 April 2012.

To make holidays more interesting and memorable, guests may log on to airasiago.com to be able to mix and match their preferred tour and activities, apart from affordable holiday packages and lodging.

Together with the partnership with Expedia, the travel portal has 130,000 hotel partners around the world. Guests are also able to enjoy the ‘Awesome 20% Sale’ via AirAsia’s mobile apps on Blackberry, iPhone and Android devices, or via mobile.airasia.com on WAP enabled phones.

The discounted fares can also be purchased through our flight search engine – visit http://flights.thaitravelnews.net  Related Video

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Sale Time at AirAsia! Save 20% on bookings before 26 April 2012!

Author: John West, MrGlobalization

How does a Cold War organisation like the OECD respond to the end of the Cold War? Does it try to hang on to its former identity? Or does it embrace the new ‘age of globalisation’?

The end of the Cold War in 1989 represented a victory of values and ideology — the triumph of pluralistic democracy, respect for human rights and the market economy — for the OECD and its member countries. At the time, Asian economies were also emerging rapidly, based on a complex cocktail of export promotion, strong state intervention and non-democratic politics. Before the fall of the Berlin Wall, a number of these Asian economies were ‘economically qualified’ for OECD membership in terms of GDP per capita. But politically, there was never any suggestion that they might join.

Politics has always trumped economics at the OECD, even though economics is its core business. In the 1990s, for example, four central European countries were rushed in as members (following Mexico’s 1994 membership), while they were still fledgling market economies and democracies. They were the lost sheep of the North Atlantic community, having been occupied by the Soviets, and Western Europe and the US strongly supported their membership ambitions.

But Korea’s membership was very much a different case in point. It was economically better qualified, with a GDP per capita more than 60 per cent higher than the other five new members. It was perhaps even more qualified politically. Nevertheless, it is widely recognised that the OECD went soft on Mexico and the central European countries during the membership process, and went much tougher on Korea.

By 2007 when it came to inviting other countries to join the OECD, none of the most interesting possible members — Brazil, China, India, Indonesia and South Africa — had expressed interest in joining. They were offered and accepted a program of ‘Enhanced Engagement’, which was designed to prepare them for possible future membership.

Today the OECD finds itself with 34 members, with some 24 from Europe and only two from Asia. In contrast, the WTO’s list of the world’s 34 leading exporters includes 10 Asian economies. Many of these Asian countries are also internationally significant in areas such as investment, finance and carbon emissions — and school students from Shanghai now outperform all OECD countries in the organisation’s Programme for International Student Assessment, which measures literacy, numeracy and scientific ability. But while the Enhanced Engagement countries participate in a wide array of OECD activities, none of them are interested in membership. A very senior OECD official once described this program as a ‘one-way love affair’.

So the OECD, which has sometimes called itself a ‘hub of globalisation’, seems destined to have a membership which accounts for an ever-declining share of the world economy. It stands at a crossroads, bypassed by Asian-led globalisation at a time when the G20 has more member countries from Asia than Europe.

What are the main problems and solutions?

Even though it is essentially an economic organisation, the OECD has retained a strong North Atlantic political identity. This is partly because it is governed by foreign ministries and also because of the US’ dominant role. And as the recent UN vote on Libya showed, there are still vast political gulfs between the Enhanced Engagement and OECD countries.

New members are also forced to accept and align their policies with a now vast array of instruments and conditions they had no role in creating. From an OECD point of view, this means becoming a ‘responsible stakeholder’. From an emerging country point of view, it means being a ‘rule-taker’, that is, swallowing an OECD agenda now increasingly questioned in light of recent financial crises.  The OECD also has too many European members.  Something must be done about this ‘eurocentricity’, such as establishing constituencies, to improve the organisation’s effectiveness.

Overall, the OECD must adapt much more radically to the changed world and offer a more flexible and pragmatic approach to the application of its values and instruments through its membership. It must then launch a major campaign to recruit the Enhanced Engagement countries as members. The OECD Secretariat and its membership have not yet managed to convince emerging Asian economies of the organisation’s manifest benefits. But the OECD is still in many ways the best idea in town, with its excellent analysis and opportunities for policy dialogue. And emerging Asia has much to learn from the OECD experience in many areas, like developing social safety nets, economic upgrading, dealing with ageing populations, and public-sector reform.

As well as revitalising the OECD, this strategy could contribute to improving relations between the two major blocs which divide the world today — the OECD countries and the Enhanced Engagement countries.

John West is Editor-in-Chief at MrGlobalization.  This article is based on his paper ‘The OECD and Asia: Worlds Apart in Today’s Globalization’, published in Revista de Economia Mundial No. 28 (2011), 67–92.

1. OECD policy brief on emerging economic giants
2. Engaging Central Asia: the EU-Shanghai Cooperation Organisation (SCO) axis
3. The South Asia Cold War ‘quadrilateral’ redux?

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The OECD and Asia: a Cold War organisation in the age of globalisation

Budapest: Fitch Ratings downgraded Hungary’s credit grade to junk status on Friday, citing a standoff between the country and the European Union and the International Monetary Fund over rescue loans. Fitch, which followed similar moves from Moody’s and S&P, kept a negative outlook, indicating a more than a 50 per cent chance for another downgrade within the next two years. Continue Reading

Two big Android handset makers had terrible quarters. HTC announced a 26% drop in profit from the previous year — its first such drop in two years — and Motorola warned that it would have only modest profits on smaller-than-expected revenue. But more important, both companies saw mobile phone unit sales drop from the previous quarter. HTC sold only 10 million units in the last three months of the year, down from 13.2 million in Q3, reports Bloomberg . And Motorola sold only 10.5 million, down from 11.6 million in the previous quarter (although smartphone sales were up slightly).

That’s exactly the opposite of what happens with most successful consumer products, where the holiday quarter is usually the biggest of the year.

Samsung , perhaps not wanting to be tarred with the same brush, pre-announced a fantastic quarter : it will earn $4.5 billion in operating profit, which is about 10% than analysts expected (according to Reuters ), and 22% higher than Q3. A lot of reports credited the strength to Samsung’s smartphone business.

That’s reasonable — Samsung passed Apple last quarter as the number-one smartphone maker in the world according to one estimate, and analysts are expecting big growth. But Samsung itself said nothing about smartphone sales in its note. Every report citing Samsung smartphone sales in Q4 are estimates from analysts. Guesses, if you will. But let’s assume that the Android market has one big winner — Samsung — and a lot of smaller players at the margin. Either way, the business of being an Android reseller is starting to look a lot like the traditional PC business.

Some hardware makers do great, others don’t, and the players change from year to year. But the big winner is always the platform provider.           Please follow SAI on Twitter and Facebook . Join the conversation about this story » See Also: UH-OH: The Company That Google Just Paid $12.5 Billion For Had An Awful Holiday Google Goes On The Offensive In Oracle Fight THE GOOGLE INVESTOR: Does The Weak European Ad Market Suggest A Google Miss?

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So How’s That "Bet On Android" Thing Working Out For You? (GOOG)

British Foreign Secretary William Hague, on a visit to Burma, says European Union economic sanctions will not change until authorities release all political prisoners.  The top British diplomat made the comments after holding separate meetings with democracy leader Aung San Suu Kyi and Burma’s military-backed leaders. 

Hague held talks Friday morning with Burma’s opposition and Aung San Suu Kyi at her lakeside home in Rangoon. Hague’s visit is the first in more than 50 years by the former colonial power’s top diplomat.

Following the meeting, the British foreign secretary told reporters it was an exciting time in Burma as there was a real chance for democracy in the country after decades of military rule.

He voiced support for the government’s reform efforts, including opening a dialogue with Aung San Suu Kyi, loosening its iron grip on the media, allowing labor unions, and releasing some political prisoners.

But, Hague said much more needs to be done, in particular, giving freedom to all remaining political prisoners, estimated to be in the hundreds.  He acknowledged widespread disappointment this week with the government’s Independence Day amnesty, which saw only about 30 such prisoners released.

“It is not possible to say a country is free and democratic while people are still in prison on grounds of their political beliefs.  And, so it is vital for such prisoners to be released if European Union restrictive measures are to be changed,” Hague said.

The EU and United States limit diplomatic relations, trade and investments with Burma because of the military’s violent suppression of democracy movements. But expectations are growing that those restrictions could soon be relaxed.

The EU announced Thursday it would open a representative office in Burma to manage humanitarian aid programs and facilitate political dialogue.

Hague met the same day with leaders of the government, including President Thein Sein, who promised all political prisoners would be released without giving a timetable.

His government is also allowing Aung San Suu Kyi and her National League for Democracy to contest by-elections in April after being sidelined from the historic 2010 election.  The Nobel Prize winner told reporters Friday her goals were clear.

“All political prisoners should be released and there should be all efforts made to put an end to ethnic conflict within our country,” she said.  “And, certainly we would like to see free and fair by-elections.  And, I must add I would like to see the NLD winning very well in those elections.”  

Aung San Suu Kyi was under house arrest for most of the past two decades for challenging military rule and was banned from contesting office.

She was released just days after the 2010 election.  Her NLD won Burma’s previous election in 1990 but the military refused to give up power.

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Britain to Maintain Sanctions Until Burma Frees Political Prisoners