October 2010

India & China India-China Bilateral trade (Jan-August 2010)

Trade August 2010 Jan-August 2010China’s exports to China $1.29 bn, up 61.78% $14.60 bn, up 73.9%India’s imports from China $3.59 bn, 33.57% $25.73 bn, up 39.2%Total trade $4.88 bn, up 40% $40.34 bn, up 50%India’s trade deficit $2.31 bn, up 22.3% $11.13 bn, up10.19%

(More)

Fourth round of India-China financial dialogue China and India, during fourth round of financial dialogue on 2 September, agreed that maintaining continuity and stability in economic policy is important for the global economic recovery. The dialogue was co-presided over by Chinese Vice Finance Minister Zhu Guangyao and Indian Finance Secretary Ashok Chawla. Both sides vowed to further promote bilateral economic cooperation (More).

Suzlon plans China expansion as wind-turbine epicenter shiftsAhmedabad based Suzlon Energy Ltd, India’s biggest maker of wind turbines, plans to expand capacity at its plant in China. Suzlon wouldl be capable of making turbines with a combined electricity generating capacity of 1,000 megawatts each year at its China plant by 2013. (Bloomberg News - Sep 14, 2010).

Huawei to Invest $500 million in Indian factory Huawei plans to invest at least $500 million in a manufacturing plant in India, with the first phase of the facility opening before the end of this year near Sriperumbudur. The investment will be staggered over the next 5 years. Huawei already has an R&D centre in India which is its biggest outside China, employing around 2,000 people. Huawei has invested about $150 million/year over the past decade and has a total employee base of 6,000 people of which 95% are Indians (More).

CII & China An interactive session with Narayana MurthyCII and Infosys (China) jointly organized an interactive session with Mr N R Narayana Murthy, Founder Chairman, Infosys Technologies in Shanghai on 18 September. Mr Narayana Murthy spoke on the importance of corporate governance in today's business scenario and the leadership role of CEOs in building trust and transparency. He shared the values and ethics practiced by Infosys in driving business growth with over 150 representatives of Indian, Chinese and MNC companies who participated in the meeting. Ms Riva Ganguly Das, Consul General of India in Shanghai also attended the session.

CII participates in Summer DavosMr Hari S Bhartia, President CII and Co-Chairman and Managing Director, Jubilant Life Sciences Limited led a large delegation of Indian industry to the Annual Meeting, ‘Summer Davos’, held in Tianjin, People’s Republic of China from 13-15 September. Mr Kapil Sibal, Minister of Human Resource Development, Government of India and Mr BS Yeddyurappa, Chief Minister of Karnataka addressed the meeting. Mr Hari S Bhartia was one of the mentors at the meeting. During the mentor session on the topic “Building Innovation Capacity”, he shared his views with growing global companies on how to translate a country's innovation challenges into commercially viable business opportunities. He also spoke at the plenary session on “Driving Growth through Sustainability”. Mr S Gopalakrishnan, Chairman of CII Southern Region and Chief Executive Officer & Managing Director, Infosys Technologies Ltd, Bangalore shared his experiences on how to scale up systems throughout an organization to manage rapid growth.

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Mr Narayana Murthy speaking at “Corporate Governance and Leadership“ session at Shanghai, 18 Sept. 2010.

Mr Hari Bhartia meeting with Prof Klaus Schwab, Executive Chairman, World Economic Forum in Tianjin, China

October 2010Meeting with ACFIC visits CII HeadquartersA 21-member delegation of All China Federation of Industry and Commerce (ACFIC) led by first Vice President Mr Quan Zhezhu visited CII headquarters on 14 September 2010 and had an interactive meeting with CII officials and industry members. Mr Gurpal Singh DDG CII briefed the delegation on bilateral cooperation and investment opportunities in India.

Meeting with the Yunnan delegation CII Eastern Region held a meeting with a 12-member delegation led by Mr. Mi Dongsheng, Director-General, Development and Reform Commission of Yunnan province of China, on 17 September at Kolkata. Mr Kurush Grant, Chairman, CII Eastern Region and Mr Viresh Oberoi, Chairman, International Trade Task Force, CII Eastern Region interacted with the delegation and stressed on cooperation between India and Yunnan and asked the delegation to participate in various engineering, manufacturing and tourism shows held in this part of the country. Mr. Mi Dongsheng spoke about the strengthening India – China trade and bilateral ties.

China’s EconomyChina’s foreign trade (Jan-Sept 2010) Unit: US$ billion

September 2010 Jan-Sept 2010Value % Change Value % Change

Total trade 273.10 24.7 2148.68 37.9Exports 144.99 25.1 1134.64 34.0Imports 128.11 24.1 1014.04 42.4Trade surplus 16.87 33.2 120.60 -10.4

Source: MOFCOM, PRC

Forex reserves reach record highChina's foreign exchange reserves, the world's largest, rose $194 billion in the third quarter to reach a record $2.65 trillion (More).

China's September FDI hits US$8.384 billion FDI in China in September 2010 rose 6.14% to 8.384 billion, compared with $7.602 billion in August. The total amount of FDI for the first nine months this has reached $74.34 billion (More).

Government & PoliticsChina-Russia energy deals mark 'new era' Russian President Dmitry Medvedev on September 27 signed a series of political and commercial deals on his second state visit to China. Medvedev held talks with Chinese President Hu Jintao and celebrated the completion of a long-awaited China-Russia 999-km pipeline running from Angarsk in Russia to Daqing in northeast China, the largest bilateral project between the two countries. The two countries also signed 15 deals on cooperation covering coal, gas supply, energy efficiency, renewable energy, nuclear power, power grids and banking (More). Medvedev said that Sino-Russian ties have reached their "highest point" (More).

China, Afghanistan sign agreement on railway constructionThe Afghan government and China Metallurgical Corporation Group Corporation (MCC) signed an agreement on September 22 under which the Chinese firm agreed to construct a railway corridor in Afghanistan from Aynak copper mine in Logar province to eastern Torkham and northern Hyratan border towns (More).

EU business group calls for better market access in ChinaAlthough the Chinese government has acknowledged the contribution of the foreign investment and foreign-funded companies in balanced growth model in China, European businesses were still facing considerable barriers in China, said Jacque de Boisséson, president of European Union Chamber of Commerce in China (EUCCC). "We need a market which is open, fair, transparent and predictable," he said. "Improved market access and a better playing field — we are convinced of that — will help China's transition to a more balanced growth model," he said. The chamber said in their annual business position paper that compulsory certification and business license requirements, intellectual property policies as well as government procurement practices are three major types of market access barriers in China (More).

China to stick to family planning policyChina's one-child policy has proved to be efficient for population control and economic development, despite concerns over gender imbalance and an aging population as a result of the 30-year-old program, according to Vice Premier Li Keqiang (More).

China likely to reach energy efficiency goalChina is likely to reach its goal of improving energy efficiency by 20% from 2006 to 2010. During the period from 2006 to 2009, small thermal power plants with a total capacity of 60 million kilowatts were shut down and in the first seven months this year, small

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Meeting with Yunnan delegation at Kolkata, 17 September 2010

October 2010thermal plants with another 10 million kW were eliminated. China had also allocated $19.22 billion from its central budget to energy-efficiency and environmental protection projects during the four years.

Urbanization could cost $3.6 trillion China may need to invest up to $3.6 trillion in urban infrastructure by 2020 to accommodate the increasing number of rural residents moving to the cities, according to a report by a government think tank. China's urbanization rate is currently around 47% and is increasing by about 1 percentage point each year. If the nation continues its urbanization-friendly policies, the rate could rise to 65% by 2020 (More).

Tibet railway extension under constructionChina began construction on an extension to the world's highest rail link, the Qinghai-Tibet Railway, on September 26. The construction will connect the Tibetan capital of Lhasa to Xigaze, Tibet's second largest city. The extension will create a 253-km railway line and would be completed in four years, with a budget of $1.98 billion (More).

China pledges biggest-ever aid to PakistanChina pledged to give an additional assistance of $200 million as flood relief to Pakistan, totaling China's aid to $250 million, its largest ever humanitarian aid to a foreign country. China sent two international search and rescue teams to the worst hit Thatta district in southern Sindh and the Chinese army sent a 68-member medical team to Sehwan of Sindh and a 64-member rescue team with four helicopters to Hyderabad (More).

Chinese company to invest $3 billion in CambodiaA Chinese company, Inner Mongolia Erdos Hongjun Investment Co, plans to invest $3 billion in Cambodian energy, property, and aluminum processing projects. The firm plans to build a 700-megawatt coal power plant in the popular sea side resort of Sihanoukville (More).

China's power generation capacity leaps above 900 million kilowatts China's installed power generation capacity exceeded 900 million kilowatts on September 20, 2010 after a reactor with the second phase of Ling'ao Nuclear Power Plant began operation in Guangdong Province (More).

22 million jobs created through stimulusAn estimated 22 million jobs were created in China through the $595.4 billion in government stimulus injected into the economy since the international financial crisis hit. The stimulus also helped about 1.6 million hard-hit enterprises in 2009 in retaining 60 million jobs (More).

Ministry clears deal for $8.7 billion refinery ventureThe Ministry of Environmental Protection of China granted clearance and approved a technical review of an US$8.7 billion oil finery and petrochemical joint venture between Sinopec and Kuwait. The venture, to be built in Zhanjiang city of Guangdong Province, includes a 300,000 barrels-per-day refinery and a 1million tons-per-year ethylene complex, at a cost in line with previous estimates of around US$9 billion (More).

Xi Jinping calls on Chinese firms to boost foreign investmentVice President Xi Jinping on 7 September 2010 asked Chinese companies to expand overseas investment. China ranks as the fifth largest global investor in outbound direct investment (ODI) with a total volume of $56.5 billion in 2009. As of 2009, Chinese companies had set up 13,000 overseas enterprises with overall assets exceeding $1 trillion. Chinese enterprises had made investments worth $245.7 billion in 177 countries and regions by the end of last year (More).

CIC buys into Morgan The US Federal Reserve on September 2 approved China Investment Corp's (CIC) takeover of 10% voting shares of Morgan Stanley. CIC's total investment in Morgan Stanley has reached $6.8 billion with the new takeover (More). $300 billion sovereign wealth is also negotiating with Harvard University's endowment to buy the US institution's stakes in property funds worth about $500 million (More). CIC is also planning to invest up to $25 billion in Indonesia’s state firms (More).

China unveils plans of industrial relocations to inland provincesChina's government has unveiled plans to encourage low-end industries to relocate from the country's coastal areas to inland provinces, as part of its efforts to accelerate industrial restructuring and the transformation of the nation's economic growth model (More).

US countervailing duties shut out Chinese aluminumThe U.S. Commerce Department recently announced the preliminary decision of the countervailing investigation on Chinese aluminum extruded products, which will slap a punitive tariff of nearly 138% on goods from three major Chinese aluminum products exporters. The high tariff could force most Chinese aluminum companies out of the U.S. market (More).

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October 2010China to cut 90 rare earth firms into 20Since 2009, the Chinese government has been paying more attention to the development of the rare earth industry and now will commit to step up efforts in restructuring the rare earth industry, releasing favorable policies as well as encouraging mergers and acquisitions in the industry. According to the draft plan, by 2015, the country will have incorporated the current 90 firms in the field into 20 (More).

China to hike SEZ spending in AfricaChina is willing to accelerate investment in special economic zones (SEZs) in Africa under a partnership with the World Bank, Chong Quan, deputy international trade representative of China's Ministry of Commerce said on September 14 (More).

China finds more than 15 billion tons in new iron reservesChina recently discovered new iron ore reserves exceeding 15 billion tons. Approximately 10 billion newly-found iron ore reserves are located in Yanzhou, Anshan and Jidong (More).

China opens service sector, foreign enterprises can sell onlineChina has opened more than 100 service industries, including tourism and retail industries, out of the 160 service industries in accordance with the classification of the WTO (More).

Business & IndustryChina's machinery, electronic exports rank 1st worldwideThe export volume of China's machinery and electronic products exceeded Germany for the first time and ranked the first worldwide in 2009, but the proportion of high-tech products is small. China's share of export volume of the world total rose from 3.4% during the Ninth Five-Year Plan (1996-2000) period to 8.5% during the Tenth Five-Year Plan (2001-2005) period. In 2006, the export volume surpassed Japan to take the third-place ranking, only next to Germany and the United States and it was bumped up to second, after Germany, in the end of 2008 (More). However, nearly 70% of exports of machinery, electronic products was done by foreign-funded firms. Foreign-funded enterprises exported $494.4 billion worth of machinery, electrical and electronic products in 2009 (More).

China's solar photovoltaic output 40% of world totalThe output in the solar photovoltaic field in China has increased over the past 10 years at an annual average rate of 30%, and the solar photovoltaic industry made nearly $15.8 billion of foreign exchanges based on the Chinese-own systemic industrial chain. Presently, China's solar photovoltaic energy industry accounts for 40% of global output (More).

Chinese train breaks world speed recordA high-speed train running on the Shanghai-Hangzhou (capital of Zhejiang province) railway set a new speed record of 416.6 kilometers an hour on September 28 (More).

Buffett invest in says BYD Billionaire investor Warren Buffett reaffirmed his support in Chinese electric carmaker BYD Auto on September 27. Buffett's Berkshire Hathaway group bought 10% of Hong Kong-listed BYD Auto for $230 million two years ago (More).

China has 1.13 billion phone users by AugustChina's phone subscribers rose to 1.13 billion by the end of August the number of Internet users reached 420 million by the end of June 2010 (More).

China to promote M&A in steel, auto and machineriesChina has worked out a plan to prop up consolidation of companies in some important fields, including automobile, rare earth and machineries. The plan includes encouragement of merges and acquisition (M&A) in the automobile, cement, steel, machinery, rare earth and aluminum industries (More).

China's auto market bounces back in AugustChina's automobile market rebounded in August with "unexpected" sales numbers, ending the continuous decline of the past four months. Sales of cars, sport-utility vehicles, multipurpose vehicles and minivans reached 1.01 million units in August, up 18.5% over last year, and increased 9% from the previous month (More).

Contact: CII China OfficeU. D. Bhatkoti, Advisor E B Rajesh, Chief Representative

Confederation of Indian Industry Confederation of Indian IndustryThe Mantosh Sondhi Centre Room No 11A47/49, Shanghai Mart,

23 Institutional Area, Lodi Road, New Delhi-110003 2299 Yan'an Road (West), Shanghai 200336, ChinaTel: 91-11-2462 9994-7; Fax: 91-11-24601298 Tel: +86 (21) 62360969; Fax: +86 (21) 32283510Email: u.d.bhatkoti@cii.in; Website: www.cii.in Email: e.b.rajesh@cii.in; Website: www.cii.in

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