Commentary: Modi’s magic is fading fast. Who’s next for India?

By:
On:
In: Asia

POTENTIAL Alternatives?

Perhaps the Rashtriya Swayamsevak Sangh ( RSS), the umbrella Hindu right-wing organization that supports the BJP, will try to find Modi’s replacement in Uttar Pradesh, India’s most populous state, which is crucial for forming a government in New Delhi.

Yogi Adityanath, the state’s yellow- robe- wearing general secretary, has acquired a status as a bodybuilder. He is known for carrying out home demolitions, especially of Muslim properties, as illegal consequence following episodes of social crime. He makes an appeal to the anti-Modi government as a force for the federal plan of spiritual polarization.

In the 12 or 13 years he served as governor of Gujarat, an industrialized condition on India’s northern coast, Modi had likewise established himself as an efficient economic administrator. Adityanath may struggle to simulate Modi’s” Gujarat Model” in Uttar Pradesh, which is less developed than sub-Saharan Africa and more popular than Brazil.

Aside from this, the liberal and left-wing factions opposed to the RSS and its Hindu-first plan will be more vigilant about allowing any new mysticism to occur within a social character. If it is possible to shake Amit Shah, who has been Modi’s range two for decades, then NDA partners will take care of the rest.

Shah is India’s most feared person due to his command over national analytical bodies and the way he used them against political competitors. Now that they can then justify their support for the BJP, alliance partners want to run their businesses without having to deal with constant monitoring or jail time, just like they would with constant surveillance. When Modi, during the most recent election strategy, referred to a 1, 000-year vision and made the claim that he had been sent by God, cables and reporters nodded graciously.

The person who makes these outrageous claims will likely be stopped before they take business. But who after Modi? Perhaps he is not liked by anyone. Or at least that’s the choice of voters. Economic areas may really get used to it.

Continue Reading

A weaker Modi means fewer reforms, slower economy – Asia Times

By:
On:
In: Asia

India’s 2024 general election was n’t the landslide victory for Prime Minister Narendra Modi and his Bharatiya Janata Party ( BJP) many had predicted. Quite the opposite, truly.

Since the BJP lost its majority in Parliament, Modi will now have to rely on two smaller parties, which both joined the BJP-led National Democratic Alliance ( NDA ) a few months before the elections. Significantly, the leaders of smaller parties are known to switch sides depending on which direction the social winds are blowing.

An NDA state will likely not run as smoothly as it did when the BJP commanded a parliamentary majority, even if the alliance is formed quickly and easily. This is mainly due to the election results’ generally negative reaction markets have experienced, but they have since recovered as a coalition government is formed.

However, many unanswered questions remain regarding the impact of a weaker BJP-led partnership on India’s and the world’s economy.

Reviewing the accomplishments and inadequacies of Modi’s ten- time career, two aspects stand out. First, India’s two Achilles feet, its twin physical and fiscal shortfalls, have been reduced.

India’s current account deficit decreased from an average of 3.5 % between 2010 and 2013 to just 1 % at this point, making it much less susceptible to external shocks like the Fed’s curving in 2013.

India’s endurance on the outside before, though, is not from stronger export but rather lower goods, notwithstanding booming local demand. Import substitution is a major cause of this because home goods are protected from foreign competition by great import tariffs and a growing business plan.

This resembles Latin America in the 1970s more than China, which gained entry into the WTO in 2001 and promoted foreign manufacturers ‘ technological advancement, more modern business methods, and a traditional economic boom.

Modi’s reluctant trade reform is one of the key reasons why foreign direct investment ( FDI) into India, especially in developing, is still underwhelming. It’s difficult to imagine a stronger push for business liberalization now that a weaker coalition government has emerged, especially given that protectionist trade unions and regional industrialists have more political options to play.

In light of this situation, and despite the political repercussions from a world that is “de-risking” China, India might not emerge as the FDI magnet that some analysts had predicted for Modi’s next term. &nbsp,

Next, on the macroeconomic front, Modi has significantly improved India’s placement, although the deficit remains big. His introduction of a goods and services tax ( GST ) was an important achievement, although much more needs to be done on direct taxation.

The majority of the tax-earnings have been used for public projects, including desperately needed system, in the past. However, with a weaker alliance government, Modi may have no choice but to redistribute more federal funding to welfare programs as a result of rising calls to target economic inequality.

However, this will undoubtedly be a problem in the future given the enormous amount of funding India will need to lower its system space and become more attractive to foreign investment, including manufacturing capability seeking to leave China.

In India’s populous country, it is crucial to build enough manufacturing jobs. The nation has done well in the ICT sector to time, but those positions only apply to the most highly skilled workers, leaving behind a much larger pool of poor workers.

There will be a lot of labor-intensive producing jobs needed to increase India’s average earnings over the next 20 years. It is uncertain whether a weaker Modi government will be able to implement the local measures that he needed to entice more foreign direct investment than he did during his first two administrations.

With all of these factors in mind, it seems safe to anticipate a slower reform plan and, as a result, a lower chance of development for India during Modi’s second term. There is still room for wish for a good financial narrative, given that foreign investors are interested in India as the only nation with the capacity to absorb their supply chains diversified from China. &nbsp,

Not only for its imports but also as an alternative to China’s FDI in manufacturing production, the EU in special needs a solid and opened Indian economy. India’s chances of reform have decreased following the election, but the EU and other countries may still be willing to strike a trade agreement with India in a time of increased global uncertainty and great strength contest.

Alicia Garca- Herrero is Bruegel’s senior research fellow and Natixis ‘ general analyst for Asia Pacific.

Continue Reading

Junta waging war on Myanmar’s doom-loop economy – Asia Times

By:
On:
In: Asia

The rapid demise of Myanmar’s collapse into failed state position is clearly visible across the numerous battlegrounds of the countryside, but the most alarming decline is already being felt by the rapidly deflating economy.

What was once a promising “last frontier” Asian developmental state has been transformed into a war economy predicated on the survival of the regime by the State Administration Council ( SAC ) junta.

On May 3, the criticism National Unity Government ( NUG) and minister of planning, finance, and purchase Tin Tun Naing and government assistant Sean Turnell detailed the doom loop of drop that the SAC has orchestrated in a long press conference.

In recent months, the Myanmar kyat has fallen to 5, 000 to the US dollar, marking a historical low. The kyat is now at 25 % of its 2019 price, just before the mini tragedies of the Covid- 19 crisis and the February 2021 revolution.

The government has responded to the market’s decline by rolling the pecuniary machines, printing an estimated 25 trillion kyats since the revolution, fueling inflation and economic volatility. Myanmar’s dollar deposits have fallen by US$ 3 billion over three centuries.

The main thrust of SAC monetary policy, according to Turnell, is now very simple: to safe as much international trade as possible so that it can purchase the weapons and weapons it needs to survive.

60 % of the federal budget is currently estimated to be used for military spending, which has disastrous consequences for funding for health and education.

Budget dump: Burmese soldiers on festival in Naypyidaw in a March 2023 image. Image: Xinhua News Agency / X Screengrab

People living in dire poverty now represent 40 % of the population, with an average household “food basket” increasing by 140 % over the past three years. Many people in Myanmar are currently out of the reach of many of these standard items.

This will be felt more acutely in conflict-torn regions, where supply chains and businesses have been severely impacted by fighting. That was intentional in the Myanmar State war zones, where the SAC has censored access to basic foods and fuel in key cities like Sittwe.

The government has also directed Myanmar companies to” suspend interest and principal repayment on permitted loans made by foreign lenders,” which is basically a state-imposed loan default.

The Union of Myanmar Federation of Chambers of Commerce and Industry ( UMFCC ) demanded in a bizarre retrograde move that made it almost pre-industrial practice to use a Barter Transaction Arrangement ( BTA ) system for trading. Banks are then largely “zombie entities” according to Turnell, kept on living assistance by the regime but basically no- functioning.

Exacerbating the horrific circumstances, energy resources have quickly declined, including in key cities such as the business capital Yangon. However, the new Military Service Law, enacted in February to boost the government’s ranks, has driven thousands of young people into captivity or the arms of anti- SAC insurgents: a brain dump mirroring the nation’s capital flight.

Yet many foreign visitors to Yangon remark on the city’s alleged vibrancy and general calm. This may well be a surface- level mirage.

Despite some dreadful predictions that urban warfare would increase significantly in late 2023 but never materialized, the real threat to regime stability in urban areas is most likely caused by economic desperation and declining living standards, which were a major factor in the Saffron Revolution demonstrations in 2007.

The SAC is clearly agitated and is now taking draconian measures to try to stabilize an already depressed economy.

Former Commerce Minister Aung Naing Oo, a significant economic figure in the regime, recently received the slang used in Myanmar’s military to describe his dismissal as the third minister of the union, completing what was thought to have been a gradual decline in SAC strongman and coup leader Senior General Min Aung Hlaing. Maung Maung Win, deputy minister of the Ministry of Planning and Finance, was” sacked” the same day.

There are also widespread, credible rumors that the government has arrested a number of well-known business figures without question. Than Than Than Swe, the head of the Central Bank of Myanmar ( CBM ), was allegedly detained before she could board an international flight from Yangon to Naypyidaw, the military fortress capital.

She had just met with senior Thai bank executives a few days prior, where they reportedly discussed “(CBMs) established policies to stabilize the foreign exchange rate, remittances of trade and Myanmar migrant workers to be diverted from legal channels, facilitation of smooth delivery of the wages of expatriate Myanmar workers in Thailand to their families, more investments from Thailand in Myanmar, financial support… to further develop trade between Thailand and Myanmar, foreign exchange rates, and the facilitation of foreign currency transfers between the two countries

Than Than Swe, the governor of the Myanmar Central Bank, is in the limelight. Image: X Screengrab

Than Than Shwe was badly hurt in a targeted assassination attempt by an anti-regime armed group in April of 2022. He is portrayed as a loyalist. Soon after, she was promoted to the position of governor. In September 2023, she and 43 other CBM staff were designated as “terrorists” by the NUG for financing the SAC’s war effort.

The kaw la ha la ( rumors ) that dominate all political dynamics in Myanmar have been exaggerated by reports that prominent business cronies Serge Pun from Yoma Bank and Aung Ko Win from Kanbawza Bank have been detained, along with others.

Numerous important business documents are said to have been kept by the SAC while traveling with restrictions to Singapore and Bangkok. Aung Ko Win’s daughter, a Kanbawza executive known as Nang Lang Kham, was reportedly detained by military intelligence at Mingaladon in May 2022 while trying to fly to Thailand, although she was not arrested.

The central bank issued a warning to” those who are illegally trading and speculating in foreign currencies …will be prosecuted under Sections 38 and 42 of the Foreign Exchange Management Law, as well as under sections of the Penal Code for harming the public interest on the same day the CBM governor met with Thai banks.

On June 4, it was revealed that 14 currency traders had been detained, 11 others had their photos and addresses listed, and were still at large due to the alleged offense of being “engaged in speculation to hinder the country’s economic development,” and 14 had been.

Meanwhile, some money changers who allegedly violated the rules and regulations set by the CBM to “destabilize” the economy have also been targeted. According to analysts, this is undoubtedly a sign of the regime’s frustration that so many people are attempting to circumvent measures that are causing the economy to collapse.

On June 3, state media reported the arrest of 21 gold traders, the majority of them in Yangon, for the crime of” committed instability of prices in the domestic gold market.” Ten more than ten traders received public access to their business addresses and photos, and the public was “urged to secretly inform relevant security forces about those evading suspects.”

Five real estate brokers are next in line to be accused of “illegally” selling condominiums to Thai citizens in Myanmar, a desperate attempt to stem the rising tide of capital flight and maintain hard currency there.

The Myanmar economy’s growing criminality is just one more reason to continue on this downward spiral. The repugnant scam center system at Shwe Ko Ko, KK Park, and many other locations is the most compelling proof. The SAC’s earnings are unknown, but they are thought to have generated billions of dollars worth of poorly received gains. &nbsp, &nbsp,

At the same time, drug trading, wildlife smuggling and human trafficking are also all reportedly intensifying, with Myanmar topping the list of 193 countries of the Global Organized Crime Index. The Financial Action Task Force ( FATF ) trotted out Myanmar on their blacklist last year for money laundering practices.

The absurdly named” Illegal Trade Eradication Steering Committee” targets everything from wood, unregistered motorbikes, lightbulbs, and” DeeDo” orange juice made in Thailand and traded “without official documents,” in a compulsion that has gripped successive military regimes of the past.

The government is increasing official predation and bribery for lower-level officials as the country’s economic conditions worsen and the population’s need for help diminishes.

Money changers exchanging Myanmar kyat bank notes into US dollars in a back alley of the country's main city and former capital Yangon. Photo: AFP / Soe Than Win
In a back alley of Myanmar’s main city and former capital Yangon, money changers exchange Myanmar kyat bank notes for US dollars. Photo: Asia Times Files / AFP / Soe Than Win

By all accounts, the SAC has completely abandoned its economic responsibilities to the Myanmar population. And by all indications, Min Aung Hlaing would rather choose to rule the abandoned land than to seek a negotiated resolution that would allow for the reconstruction of the war-ravaged economy.

Turnell’s remedy for the meltdown? increased a number of financial measures to accelerate the SAC’s demise. The junta’s ability to wage war must be the focus of sanctions. Capacity must be the focus, not sentiment or signaling”, said the Australian economist and NUG advisor who was imprisoned for nearly two years in the coup’s aftermath.

The international community should not be able to help Myanmar’s citizens, though heavier, targeted sanctions targeted specifically at the junta’s commercial interests are the least the outside world could do to undermine the SAC’s war economy and its resilience in this post-coup stage of rising vulnerability.

David Scott Mathieson is an independent analyst who studies human rights, conflict, and human rights in Myanmar.

Continue Reading

China downgrades AI chips to secure TSMC production  – Asia Times

By:
On:
In: Asia

After the US tightened its chip export restrictions in October, Taiwanese manufacturers of fabless artificial intelligence chips downgraded their designs to maintain access to Taiwan.

MetaX and Enflame, two Shanghai- based graphic processing unit ( GPU) designers, submitted downgraded designs of their chips to Taiwan Semiconductor Manufacturing Co ( TSMC) to meet the US chip export requirement, Reuters reported on Wednesday.

After its most advanced C500 cards ran out of stock earlier this year, MetaX released a GPU called the C280 for TSMC generation, according to the report. TSMC told Reuters that it works with consumers to ensure conformity with laws that apply to its business.

But, it is unclear whether TSMC had actually started the mass production of C500 bits for MetaX.

According to information gathered by Asia Times, MetaX finished the fundamental assessment of the C500 cards on June 13 last year and planned to begin size production at the end of the same year. Such a strategy might have been hampered by the US restrictions. &nbsp, &nbsp, &nbsp,

A set of new rules, announced by the US Commerce Department’s Bureau of Industry and Security ( BIS ) on October 17, last year, prohibit the shipment of chips with a total processing performance of 4, 800 or more or a performance density of 5,92 or more from China. &nbsp,

The new regulations blocked the sale of Nvidia’s A800 and H800 cards to China. &nbsp, It is said that A800’s efficiency has reached 70 % of that of A100. In October 2022, the BIS banned A100’s sale to China. &nbsp, &nbsp,

According to Taiwanese advertising, MetaX’s C500 device is something in between A100 and A800. It has computing power of 15 trillion floating point operations per second ( Tflops ) at a single- precision floating- point format ( FP32 ), compared with A100’s 19.5 Tflops.

In fact, MetaX might ask Semiconductor Manufacturing International Corp ( SMIC ) from Shanghai to produce its AI chips. However, Huawei Technologies is rumored to have made up the majority of SMIC’s 7 nm chip production capacity.

H20 cards

After the US tightened its device export controls next October, Nvidia planned to announce in November three AI cards – H20, L20 and L2 – for the Foreign areas. The release was postponed to 2024, however, because the California-based company wanted to see if the cards would cooperate with US export controls. &nbsp,

In March, Nvidia commenced pre-orders for its H20 cards. Alibaba reportedly ordered over 30,000 H20 cards. Last month, distributors sold H20 cards at a more than 10% discount to Huawei’s Ascend 910B due to an abundant supply of the chips in the market in China. 

A Hainan-based writer surnamed Tang says that a server with eight H20 cards is now priced at 1.1 to 1.3 million yuan (US$151,783 to US$179,380) while one with the same number of Ascend 910B chips costs about 1.3 to 1.5 million yuan. 

Tang points out that H20’s efficiency falls short of Ascend 910B’s. &nbsp,

According to Chinese advertising, SMIC is now in charge of producing Ascend 910B cards. The earlier version of the microprocessor, called Ascend 910, was made by TSMC in Taiwan. &nbsp,

According to SMIC’s limited production capacity of 7nm cards, China also needs to buy Nvidia’s AI chips, some experts said. &nbsp,

Jensen Huang’s conversation

A reporter from the Chinese Television System ( CTS ) approached Nvidia’s co-founder and CEO Jensen Huang as he was walking on the streets in Taipei on May 29 during his Taiwan trip. He agreed to an unexpected meeting. &nbsp,

The so-called “godfather of Artificial” claimed that Taiwan is one of the most significant nations in the world because it is the heart of the technology sector. &nbsp,

” The machine industry is built because of Taiwan, so it’s a very, very significant state”, he added. It demonstrated that his use of Taiwan’s name was accurate. &nbsp,

His statement has not yet caused much trouble in China, which is happily for him.

On May 23- 24, China launched huge- level military training near Taiwan. It complained that Taipei President Lai Ching-te criticized Taiwan in his opening statement on May 20 for supporting” Taiwan self-reliance.”

” Huang’s social position seems to be very similar to that of Lai”, Chen Fei, an associate professor at the School of Politics and International Studies, Central China Normal University, says in an article on Wednesday. ” But he, as a businessman, will definitely put commercial benefits on top of his agenda” .&nbsp,

In order to maintain stable chip manufacturing, Chen claimed Huang just wanted to say something to satisfy the Taiwanese contract producers during his Taiwan vacation. He claimed that Nvidia will continue to treat China as an essential business even though US device trade controls had hurt the company’s China income. &nbsp,

A blogger from Jiangxi who uses the pseudonym” Spring Music Dream” claims in an article that Huang has a powerful political sense and would not have given any contentious remarks about Taiwan problems. &nbsp,

Some media outlets, according to the author, wanted to push their political mission using Huang’s popularity. In October 2022, Kuomintang, a Beijing-friendly democratic party in Taiwan, complained that a pro-Democratic Progress Party editorial staff was operating in the CTS office. &nbsp,

Read: Huawei plans to make 3nm bits, but when?

Following Jeff Pao on Twitter at&nbsp, @jeffpao3

Continue Reading

India investor appeal to survive Modi vote setback – Asia Times

By:
On:
In: Asia

Narendra Modi’s Bharatiya Janata Party ( BJP), which has held a commanding presence in the Indian parliament, has lost its outright majority. This social upheaval caused the financial markets to experience fast turbulence.

The BJP will need to rely on smaller allies to form a partnership as a result of the shock result, which is a significant change from the BJP’s past two elections, which saw absolute majority support for itself. &nbsp,

Mumbai’s share prices plummeted, with the Nifty 50 index closing 6 % down after soaring to record highs the previous day, buoyed by exit polls that had erroneously predicted a comfortable victory for Modi and his party – which would have meant” the status quo”, or certainty, which markets appreciate.

For volatility may come as evidence of declining trust in India’s prospects for growth and balance. &nbsp,

However, this perception fails to account for the strong main elements that continue to make India a popular choice for foreign buyers.

Despite the social difficulties, the economic elements remain strong.

A burgeoning middle class and growing urbanization are the two main drivers of the country’s huge and expanding customer market. India’s statistical edge, with a fresh and powerful workforce, underpins its potential for sustained economic expansion. &nbsp,

This demographic dividend is a vital component for global buyers looking for long-term returns because it guarantees a constant supply of labor and an expanding customer base.

New Delhi has also been engaged in major economic reforms that aim to enhance the working environment. Activities like the goods and services tax have simplified the system, making it simpler for businesses to operate across the nation. &nbsp,

The government’s goes towards digitisation and improvements in facilities have even enhanced India’s charm as an investment destination. Startup India, for example, aims to build a solid habitat for nurturing creativity and businesses.

Entry and procedure in the American market are now more appealing to international investors because of the liberalization of foreign direct investment, which has also improved substantially across sectors like defense, railways, aviation, and financial.

Another significant initiative is the production-linked incentive ( PLI ) scheme, which was introduced in 2020 and offers financial incentives to businesses to promote domestic manufacturing and entice significant investments in important industries like electronics, pharmaceuticals, and textiles. The system strengthens manufacturing capabilities and draws foreign investment by fusing incentives with production output.

Regardless of the parliament’s social structure, these policies are likely to continue because there is general consensus on the need for financial modernization and development.

India’s charm is further strengthened by particular industries that provide significant opportunities for purchase. &nbsp,

Bangalore and Hyderabad are emerging as international tech hubs that are drawing significant foreign direct investments from technology giants like Google and Facebook, making India’s software and business ecology one of the fastest-growing in the world.

The country is home to a lively business society, supported by a strong network of startups, startups and venture capital funding. International investors who are looking for high-growth opportunities are drawn to this innovation-driven environment.

Also, the renewable energy sector in India presents considerable expense possible, with the president’s ambitious targets for efficient power capacity.

We anticipate that India will continue to be able to attract foreign buyers while maintaining its status as a formidable rival to China. &nbsp,

In light of the growing global trade tensions between the US and China, which have made many businesses consider India as a replacement hub for manufacturing and services, the Make in India effort has been instrumental in creating a manufacturing ecosystem that can compete with its closest main competitor. &nbsp,

The shock election results ‘ sudden increase in market volatility does not overshadow the fundamental factors that appear to provide global buyers with beautiful returns and sustained progress, I’m comfortable. &nbsp,

Indeed, given the persistent trade tensions between the US and China, the appeal is likely to grow significantly throughout 2024.

Nigel Green is the founder and CEO of deVere Group.

Continue Reading

What keeps China’s tycoons awake at night – Asia Times

By:
On:
In: Asia

I recently had the chance to reconnect with former colleagues and learn about potential business possibilities in post-Covid China while attending the 40th anniversary meeting of the Tsinghua University School of Economics and Management.

Meetings with local business leaders revealed three urgent needs: expanding internationally, succession planning for home businesses, and asset diversification. These issues are different but inseparably linked, having a significant impact on and strengthening one another.

Growing Abroad

One of the most important changes I’ve noticed is how much Chinese companies are looking to expand internationally.

This upward trend is primarily fueled by the financial downturn in China. Chinese firms, recently material with the huge potential of their house market, are now actively exploring fresh destinations, as private growth rates fall below the strong 6- 8 % seen in the past two decades.

Standard companies, especially labor- and resource-intensive industries like textiles and cheap products, must look for new markets that match the demand profiles of their era as China moves to a different stage of economic growth.

Emerging markets are especially appealing because of their high and growing demand and relatively lower cost outposts in comparison to China. Moreover, the rise in mercantilist measures has prompted Taiwanese firms to modify their supply chains to lessen the impact of stringent taxes.

Leading companies in the Chinese business, such as Huawei and BYD, have been at the frontline of this trend, quickly gaining ground in areas in Southeast Asia, Africa, and Latin America. And then, this trend is even gaining speed among smaller businesses.

As evident in the data, China’s non- financial outbound direct investment ( ODI) came in at US$ 34.2 billion in the first quarter of this year, up 12.5 % from a year earlier and the highest level in eight years.

Most notably, ODI to the Association of Southeast Asian Nations ( ASEAN ) and European Union spiked 36.7 % and 34.5 % year on year, according to the Ministry of Commerce.

Family succession issues

Over the past several decades, China’s rapid financial transformation has resulted in the establishment of numerous family-owned enterprises.

Many of these companies are now aiming to pass the baton to the next generation as the nation celebrates 50 years since the tremendous economic opening.

Foreign business owners are frequently hesitant to cede control to specialized managers, preferring to keep the enterprise in the family. Contrary to their Western counterparts.

A survey of 182 Chinese entrepreneurs revealed that among” creative generation” entrepreneurs with an average age of over 52, 82 % of their children were “unwilling” or” not active” to take over. In light of this circumstance, the emphasis on maintaining community control complicates the transition process.

Take, for example, popular crystal company Fuyao Glass. The company’s dynasty took years to come, with Cao De Wang, the chairman, convinced about handing the ropes to his youngest son, Cao Hui.

Also, Country Garden leader Yang Guoqiang’s son is the eldest child Yang Huiyan, Wahaha creator Zong Qinghou’s successor is the only child Zong Fuli.

Consulting companies like McKinsey and BCG, which have a wealth of experience with European family businesses, encounter distinct difficulties when advising Chinese customers.

A customized approach that respects cultural differences and ensures a smooth move is required because the owners ‘ desire to remain important and their focus on reputation are both required.

Diversifying elsewhere

The growth of property outside of China is the next important trend.

By spreading their assets globally and beyond their home business, business owners are increasingly looking to protect their money. This pattern is influenced by a number of variables.

Second, the current state of the Chinese economy has caused asset prices to rise, leading business owners to look for safer and more robust investment opportunities worldwide.

Their main assets being concentrated in China and the home business, which goes against regular diversification wisdom.

In contrast, geopolitical tensions, especially in the Taiwan Strait, have further fueled this push for growth. Business users in places like Fujian and Zhejiang are especially concerned about possible problems and their financial and business ills.

Finally, some company officials are looking to retire comfortably in lower-cost nations where their money may provide a much higher standard of living without the fierce competition and higher costs that characterize China.

Sleepless corporate nights

Significant strategic adjustments are being made to the Chinese business community in response to domestic and international challenges.

Their current strategies are primarily driven by their desire to expand overseas, navigate complex generational transitions, and diversify assets globally.

The implications of these demands are profound. The rise in Chinese businesses looking to invest and run their operations abroad could result in increased competition as well as new opportunities for partnerships and innovation for global markets.

Understanding these motivations can aid policymakers in developing strategies that attract Chinese investment while keeping domestic interests in mind.

Finally, it will be crucial for consultants and advisors to develop strategies that support Chinese businesses’ successful transitions and expansions in terms of their specific cultural and economic contexts.

The changing needs of the Chinese business community reflect the wider economic and political shifts that are occurring within China and the global economy.

By understanding and addressing these demands, stakeholders from governments, business partners, competitors, bankers to investors can better navigate the complexities of this dynamic landscape.

Kok How Lee has over 15 years of experience in strategic roles at the Singapore MTI, EDB, BHP, and China Fortune Land Development International. He holds an EMBA degree from Tsinghua&nbsp, University and is accredited in business&nbsp, Chinese&nbsp, translation.

Continue Reading

NXP, TSMC-backed Vanguard to invest US.8 billion in Singapore wafer manufacturing plant

By:
On:
In: South-East Asia

NXP Semiconductors and Vanguard International, which are supported by TSMC, will form a cooperative venture to construct a US$ 7.8 billion silicon wafer manufacturing facility in Singapore to serve the automotive, industrial, customer, and mobile close areas, according to a statement released on Wednesday ( June 5 ). Vanguard doesContinue Reading

Modi’s tumble good news for India’s economy – Asia Times

By:
On:
In: Asia

Around his Bharatiya Janata Party ( BJP) is crashing down the veneer of strongman immunity that has ensnared India’s Narendra Modi for nearly 25 years.

The prime minister’s reliance on friends to form a government is already the subject of market sentiments. If enough seats are secured, a BJP alliance could form a state.

Modi’s group fell little of the 272- chair majority on its own. The National Democratic Alliance, led by BJP, seems on course to safe 293 tickets. 229 chairs might be won by the antagonism Indian National Developmental Inclusive Alliance.

It’s anything of a social “black bird” for a guy who’s dominated Indian politics since 2014. But whose tale had been permeated ever since he became Gujarat’s deputy minister in the early 2000s.

He was given folk-hero reputation that captivated the nation as a result of the northern state’s economic successes during Modi’s presidency. Year after year from 2001 to 2014, Modi’s plans typically generated faster gross domestic product, greater productivity and innovation, less government and fraud, and better facilities than the national statistics. &nbsp,

In 2014, citizens returned the BJP to strength in hopes Modi may use the” Gujarat&nbsp, type” throughout Asia’s third- biggest market.

Clearly, the last decade did n’t go as many of India’s 1.4 billion people had hoped. This time around, Modi’s inability to win a majority of parliament chairs speaks to the growing distance between soaring economic reform speech and real-world application. Modi’s&nbsp, Gujarat&nbsp, unit, it seems, is n’t as flexible as voters had hoped.

But there’s a silver lining to Modi’s vote fail: forcing Modi’s inner circle to rely less on his Hindu nationalist agenda and more on spreading the benefits of India’s 7 % progress. The BJP will probably change its position in light of rising inequality by changing its liberal constitution.

According to economist Shilan Shah at Capital Economics, Modi will start his second term with a weaker mandate that will make the passing of controversial economic reforms more challenging. However, he did continue to serve as the leader of a steady partnership.

Shah added that” the new government could still do much to maintain potential progress at 6 %- 7 %” given the wider acceptance across the political spectrum of the value of financial reform. That may allow the economy to grow by more than doubling over the next ten years.

In recent months, says Ian Bremmer, chairman of Eurasia Group, extended- time India watchers had noticed “scant mentions in his campaign rhetoric of the Hindu- patriotic agenda that dominated many of&nbsp, Modi’s previous two terms, and with good reason. Modi&nbsp, has mostly fulfilled his vows to the propagandists”.

Bremmer adds that” then firmly in strength, &nbsp, Modi&nbsp, is looking to turn the volume down on social issues as he pursues economic growth”.

Not as firmly as hoped, though, leaving Modinomics at anything of a fork in the road. Current actions by China to restore its house sector, which may help to sharpen the BJP’s focus on financial retooling, are emboldening the plot.

The China versus India argument broke out in the lead up to an vote that started in April, with Mumbai frequently taking the lead. The almost US$ 7 trillion Foreign investment fall from 2021 to early 2024 sent ripples of investment Mumbai’s method.

China, however, has since resurrected its capital march game by telegraphing significant steps to end the property crisis. Chinese President Xi Jinping’s team released new information in the middle of May, including urging local regulators to buy empty properties and lowering the amount that home buyers need for a loan.

It’s the most forceful move to handle a crisis that has hampered Asia’s largest sector for years. And there is growing hope that Xi and Premier Li Qiang are on the verge of a policy combination that will positively affect China’s financial outlook.

As his celebration plots its third-term plan, Modi’s math becomes more complicated. For India, the idea of a powerful Chinese bounce is a dual- edged sword.

Rising Taiwanese need is an obvious plus for India’s manufacturing sector, which grew in fame on Modi’s view. However, China‘s luring again trillions of dollars worth of worldwide investment, of which India Inc. flocked, would be a depressing blow for Mumbai shares.

Researchers at UBS speculate that one of the factors contributing to India’s wealthy prices might have been the political stability and plan certainty that a strong government provided. ” Some of those beliefs may appear under question” given the vote results.

Carlos Casanova, scholar at Union Bancaire Privée, says buyers have been cheered by the ruling government’s capital market- helpful reforms. They include the company’s” Make in India” initiative encouraging local businesses to establish local factories and foreign companies to place bets on local businesses.

” Besides, Modi has also published plans for India to become a developed nation by 2047, &nbsp, which will require&nbsp, investment into infrastructure and growth of around 8 % per annum”, Casanova notes.

” Given the structure of Indian markets, we observe a strong correlation between GDP growth and]earnings per share ] growth. High quality, high visibility earnings may fuel Indian equities higher in the months ahead”, he adds.

According to UBS analyst Sunil Tirumalai,” the bargaining power shifts materially within the alliance as BJP does not have a simple majority.” In contrast to expectations last week, the market may have taken the majority of the possible scenarios from this.

According to Goldman Sachs analysts,” India needs to continue to adhere to structural reforms, such as land and labor market reforms, while creating a conducive environment for millions of workers to be earnfully employed, to realize its true growth potential.”

This could be the equivalent of Warren Buffett’s famous observation that “only when the tide goes out do you discover who’s been swimming&nbsp, naked”. China’s growing appetite for international capital may reveal how policy-wise Modi’s government has been policy-stylish for a while.

” When I hear India called the world’s fastest- growing economy, I get very agitated”, Princeton University economist Ashoka Mody, author of&nbsp,” India is Broken”, tells the Guardian. That is not the paper they’re written on, the numbers are not worth.

Mody is hardly alone in arguing that, below the surface, India’s supposed economic boom under Modi is n’t all it appears.

” All that glitters is not growth”, write economists at Nomura&nbsp, Holdings in a recent note. Underlying growth is “less than what the headline suggests.”

The reason, &nbsp, Nomura&nbsp, reckons, is that India’s growth “is primarily supported by strong public capex growth, while private consumption and private capex remain subdued”.

India’s vital agricultural sector, meanwhile, has “underperformed”. To be fair, as&nbsp, Nomura&nbsp, points out, certain industrial sectors are indeed “resilient”. Look no further than the fact that more than 7 % of Apple Inc.’s iPhone production is currently done in India.

Yet there are growing worries that India’s 7- 8 % growth is n’t producing nearly as many new jobs as hoped.

Arvind Subramanian, a top former chief economic adviser to New Delhi, has warned that GDP data trends are “absolutely mystifying” and “do n’t add up”.

Subramanian believes that the government’s implied inflation figures range between 1 % and 1 %, but that actual inflation ranges between 3 % and 5 %. ” What’s more, he says”, the economy is growing at 7.5 % even though private consumption is at 3 %.”

” So it’s a lot of stuff about the numbers which you know, I do n’t understand,” Subramanian says”. These are not incorrect, in my opinion. That’s for others to judge.”

India’s economic momentum is n’t a mirage, but it also does n’t seem as efficient in sharing the fruits of rapid GDP as widely as Team Modi likes to argue. It echoes, in some ways, what befell Modi’s party back in 2004, when it lost power.

At the time, then-prime minister Atal Bihari Vajpayee fought for re-election with a opulent” India Shining” campaign that highlighted the optimism that was rumored to be sweeping the country.

Yet hundreds of millions of Indians not feeling&nbsp, Vajpayee ‘s&nbsp, economic magic showed the BJP the door. Fast- forward 20 years and the BJP seems to have reached another Wile&nbsp, E&nbsp, Coyote&nbsp, moment where the Indian masses realized the road below had disappeared.

For Modi, this moment must really sting. He largely influenced the outcome of the election. His face and the slogan” Modi’s Guarantee” were displayed on the nation to persuade voters that better days are yet to come.

What Modi’s disappointing election showing means for Indian foreign policy is anyone’s guess. Few observers anticipate much to change about Modi’s dual-track plan to maintain a leadership position in the Global South, or developing nations that account for the majority of the world’s population.

Yet for Modinomics, this electoral reality check could indeed refocus attention on much- needed steps to reduce bureaucracy, attack corruption, increase productivity, up investments on education and training and rewrite laws concerning land, taxes and the legal system.

And to prevent the significant economic lead that China has positioned against India in his third term from widening even further. &nbsp,

Follow William Pesek on X at @WilliamPesek&nbsp,

Continue Reading

Australia wants to become a renewable energy superpower. Can it?

By:
On:
In: Asia

1 minute ago

Hannah Ritchie,BBC News, Sydney

BBC Maia Schweizer BBC

A vast facility housing a scientific breakthrough is hidden among heavy bushland in the southern suburbs of Sydney.

The Asian company SunDrive Solar uses a brand-new, top-secret method to claim to have solved” a very high value problem” in this area.

Its huge development? Finding a way to change solar cells ‘ silver with metal, which was originally believed to be difficult.

” Gold is expensive, scarce and socially disastrous, and it limits how many solar can be rolled out around the globe”, explains chief commercial officer Maia Schweizer.

” Brass is also highly in demand, but it’s 1, 000 days more numerous, and 100 days lower value”.

The start-up is one of the beneficiaries of the government’s Coming Made in Australia program, a collection of policies that invest in local alternative industries to make the nation a “renewable energy superpower.”

But some experts question whether the$ A22.7bn ($ 15bn, £11.8bn ) package, which comprises tax incentives, loans, and kick- starter grants- is enough to meet those lofty ambitions.

And according to climate scientists, Australia must cease selling fossil fuels if it wants to be a significant participant in the net-zero change.

Australia’s market has long been powered by its natural sources, such as coal, oil and iron ore.

However, its essential minerals are exported raw and refined abroad, most of which are used to support important lower emissions technologies.

Australia has earned a reputation as the world’s rock thanks to its dig-and-ship model of trade, which has also resulted in significant loss of significant change farther up the supply chain.

One indication of lithium-based batteries that store solar energy and power electric cars is used.

Despite being responsible for more than half of the world’s supply, Australia captures just 0.5% of the global $57bn lithium battery market, according to the country’s national science agency.

The Coming Made in Australia plan, which was officially announced in April, aims to change that by providing tax breaks and money to businesses that process crucial minerals at home.

Doing so, the state argues, is a national surveillance concern, as countries examine their business dependence on Beijing, and seem to protect themselves against supply chain shocks.

” This is not old- made isolationism or protectionism – it is the new opposition”, Prime Minister Anthony Albanese said, when announcing the program.

” We need to aim higher, be strong, and create large, to match the size of the option in front of us”.

Alpha HPA Rob Williamson at work at Alpha HPAAlpha HPA

Alpha HPA, based in Queensland, is one of the businesses that the government has chosen to carry out its perspective.

Similar to SunDrive, it sees itself as a industry because it can produce high-quality aluminum items that are used in applications like semiconductors and iPhones with less carbon footprint than their outside competitors.

One of the largest aluminium factories in the world is being built close to the coastal town of Gladstone, thanks to a$ 400 million federal loan, according to the company’s claim that it will result in hundreds of local jobs.

According to Alpha HPA’s chief operating officer Rob Williamson, there is still skepticism about whether Australia may produce goods, given that the company has historically outsourced its manufacturing to China.

” Anybody that puts forward the case that we do n’t have people in this country to do]this work ] is just not trying”, he adds.

SunDrive is on a similar trip.

Without government aid, Ms Schweizer says, the firm might have moved abroad.

Rather, it wants to turn one of the nation’s oldest coal power plants into a large solar panel manufacturing gateway.

Currently, one in three Australian households have solar panels, the highest rate in the world, and yet only 1% are made locally – with China responsible for more than 80% of global production.

” Every one material that you need to create a solar panel, we’ve got one of the best three resources in the world”, Ms Schweizer explains.

” Then there’s the possibility of the finish- to- finish value chain coming inland in Australia for the first time, which is very, very exciting”.

The Made in Australia pledge has won the support of the country’s biggest renewable energy industry trade bodies, who say the investments could be “game changing”.

” It’s a great option for us to be an exporter of climate solutions to the world instead of climate issues”, John Grimes, who heads the Smart Energy Council, says.

But some climate experts warn it is being “severely undermined” by the government’s recent decision to champion gas until 2050 and beyond despite global calls to rapidly phase out fossil fuels.

” We’re sending a genuinely mixed information to traders”, says Polly Hemming, the chairman of the Australia Institute’s environment and energy project.

Alpha HPA Alpha HPA production facility Alpha HPA

” This state has continued to review fresh gas and coal projects- it’s flown to Japan, India, Korea, and Vietnam to secure long- word markets for gas and coal.

” If we really wanted to be a green energy superpower, we would n’t be relentlessly pursuing customers for our fossil fuels,” she says.

One of the nation’s leading climate scientists agrees.

According to Prof. Bill Hare, chief executive of Climate Analytics and author of numerous UN climate change reports,” there is a very deep contradiction at the heart of the two policies.”

” The Future Made in Australia]plan ] is playing second fiddle to the government’s gas strategy.”

To understand how, Ms Hemming says you need to” follow the money”.

According to an analysis from her thinktank, last year alone, state and federal governments spent A$ 14.5bn subsidising fossil fuel use across Australia, and that sum is only expected to balloon, according to budget estimates.

By contrast, she says the A$13.7bn set aside to process critical minerals and incubate Australia’s nascent green hydrogen industry “isn’t real money”.

That’s because it will take the form of tax breaks over the course of a decade, which can only be cashed in on production starting from 2027 – a model which policymakers say will ensure taxpayers’ money is not wasted.

However, none of the green hydrogen projects are finished, many of which are being led by the nation’s largest mining and energy companies. If there is a change in the government, the incentives could be eliminated before they become effective.

It’s like I have a healthy eating and junk food policy in place at the same time in my house and tell my kids,” You can have$ 10 a week now if you keep eating junk food,” she says.

” Or,’ I’ll give you$ 2 in 2027 if you switch to broccoli’. What do you think they are going to prioritise?”

Given that the green hydrogen industry is still in its early stages and full of unknowns, some energy experts have also doubted the business justification for it.

Others worry that it will slow down climate action and derail investment away from renewable energy sources that have already proven their worth.

However, Mr. Grimes claims that green hydrogen will play a crucial role in” sliming emissions” from Australia’s carbon-intensive mining sector as businesses look for cheap green fuel to keep running their businesses.

And bigger picture, he argues that the government’s new green investments should be assessed as” a milestone first step “rather than an end point.

The government is aware that Australia could become the Kodak economy of the future: a big deal one day and completely irrelevant the next if it does n’t move beyond its coal, gas, and iron ore exports soon.

Getty Images Iron ore being loaded at a mine in Western AustraliaGetty Images

Not just Australia is trying to be the engine room of the new green economy, but it is also looking to.

Dozens of nations are putting forward ambitious proposals, such as the European Union’s Green Deal or America’s gargantuan Inflation Reduction Act.

According to the International Energy Agency, policymakers have invested over A$ 2tn in clean energy initiatives globally since 2020.

But Australia has some compelling natural advantages, such as enviable wind and solar capabilities, stores of critical minerals and rare earths, and a strong mining infrastructure network that can be repurposed.

All the experts the BBC spoke with agreed that if used correctly, it has every chance of securing its position as a crucial green trading partner among allies.

Getting there though, they say, will require even greater investment – particularly in research and development, which is currently at 30-year lows.

And they’ve warned that the government ca n’t afford to stutter on a topic that Mr. Albanese himself has addressed head on.

” We have to get cracking. We have unlimited potential, but we do not have unlimited time.

” If we do n’t seize this moment, it will pass. If we do n’t take this chance, we wo n’t get another. If we do n’t act to shape the future, the future will shape us”.

Continue Reading