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2013

  • India_FarmingThe Bali agreement which gave weight to the existence of the World Trade Organisation was finally passed and sanctioned by 159 member states last week. Although India adamantly held fort over her stance on food subsidies opposing a majority of nations, the Bali agreement which unanimously agrees to lower trade barriers and augment cross border trade and commerce was passed – by one estimate, cutting customs red tape could raise annual global output by US$400 billion, with much of the gain flowing to developing economies.. The Doha round of talks has lasted a decade, and had been left for dead on at least two occasions This being the first agreement since its formation in 1995, leads credence to the fact that decisions in a democracy do take time.

    While China held sway with more developed nations on its opinion on food subsidies, India coerced lesser-developed nations to fight for food rations for her poor. As the nation with the worlds largest population under the poverty line, India wasn’t going to concede easily. Industry and Commerce minister Anand Sharma and his band of advisors, held negotiations late into the night, fortifying India’s strength amongst world leaders. – In effect, India’s WTO triumph speaks to its improved bargaining power. The WTO victory is by no means a panacea to India’s food provision problems — something the current UPA coalition government has tried to combat with a slew of populist measures, Ankit Panda of the Diplomat wrote.

    In contrast, China which joined the WTO a tad later than India in 2001, has abolished, revised and adopted more than 3,000 laws, regulations and department rules to fulfill its commitment to the WTO, and further opened its economy to the outside world.

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  • bitcoinsThe storm with which Bitcoins have taken over the world is proof enough that the world demands an alternative global currency. The fact that nations are now skeptically looking at the large transactions in bitcoins however now points to its unreliability as a global currency. Chinese banks having recently banned the growing transactions of bitcoins is proof in the pudding that Bitcoins are yet not a trustworthy international currency, backed by neither institution nor nation.

    Nonetheless, bitcoin transactions in China and India have sky rocketed over the past year with rates hitting an all time high. On 28 November, the value of one bitcoin surpassed US$1,000 for the first time. Used mostly to hedge against other more real currencies, and avoid controls on trade in their own currencies, individuals are heavily investing in this four year old currency which is created through a complicated computing process called mining.

    According to the Wall Street Journal, BTC China, the country’s biggest bitcoin exchange, in the last 30 days averaged 64,000 bitcoin in daily trading volume, said BTC China Chief Executive Bobby Lee. Over that period, the exchange accounted for more than one-third of volume world-wide, up from about 20 percent over the past six months, according to industry tracker Bitcoinity

    Similarly, according to the Hindu, an Indian online portal for buying and selling bitcoins, buysell.co.in, has reported a leap in the number of transactions for bitcoins in Indian rupees. “We used to do about 20 transactions a day. Now, we are doing more than 50. On Monday, about 70 transactions were recorded”, said Mahin Gupta, who operates the portal out of Ahmedabad, but has a regional office in Bangalore to cater to ‘bitcoiners’ from South India.

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  • Bike-blog---Schoolgirls-r-005As nations battle the future of food security at the World Trade Organisation in Bali, China and India are going though dynamic social changes of their own – while one grapples with rethinking the education system, the other is realizing the strength of her women.

    In India a spate of women are rising up against harassment meted out to them in the workplace, home or on the streets. The slew of rape, molestation and sexual harassment cases being filed in India,  is on the rise and feminists attribute it to the growing voice of women who are slowly yet surely making themselves heard.

    “Indian society and Indian men have regarded women as subservient homemakers and not as equal partners in the economic mainstream,” Kiran Mazumdar-Shaw, one of India’s most prominent female entrepreneurs, wrote last week. “This deep-rooted cultural and societal mindset manifests itself in the way men behave with their female colleagues.”

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  • India’s first mission to Mars – Mangalyaan was given a skeptical send off by the Chinese, yet by successfully leaving the earth’s orbit on December 1st 2013, it joined an elite ring of nations – the United States, Europe, and Russia, whose probes have orbited or landed on the red planet.

    China, a keen competitor in the space race, launched the Jade Rabbit a day after India’s maiden Mars mission left Earth’s orbit on its journey to the Red Planet, in what some observers characterize as Asia’s new space race. The  probe gives China the possibility of putting a man on the moon sometime after 2020 and aims to become the third country to achieve a soft landing on the moon, after the United States and Russia.

    For India, “Getting to Mars is a big achievement,” said Mayank Vahia, a professor in the astronomy and astrophysics department of the Tata Institute of Fundamental Research in Mumbai. The Mars probe will study the planet’s surface and mineral composition, besides sniffing the atmosphere for methane, a chemical strongly tied to life on Earth.

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  • disputed islands

    Earlier this week China asserted her territorial control in the region by identifying an air defence identification zone over what she claims is her space. Not unusual for a nation to otherwise do so, what Beijing probably didn’t expect was an international outcry over what she maintained as her territory which included the disputed Diaoyu islands.

    Many nations including Japan and South Korea have maintained  an air defence identification zone since several decades, wherein non commercial flights have to identify themselves, their nationality, purpose and destination if flying over the a particular nations ADIZ. Therefore not completely out of bounds in marking the ADIZ, China brewed up the perfect diplomatic storm.

    Even as American, South Korean and Japanese warplanes asserted their prowess by flying over the region without informing Beijing, local publications shook their heads at Beijing’s mild respons to what was seen as a sign – both domestically and internationally of her powers of assertion in the region. The nationalistic tabloid the Global Times said in a Thursday editorial that China “failed in offering a timely and ideal response” and risked “undermin[ing] the image of our military forces”. “Chinese authorities must make speedy reactions to various emergencies and challenges,” the editorial added.

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  • A baby is carried in a basket on her mother's back on a street in Beijing, ChinaStock markets in Hong Kong and Shanghai jumped to a two and a half year high on news that China will be amending her one child policy, abolishing labour camps, and tweaking  land, market, financial and social welfare reforms. The changes announced as part of Beijing’s third Plenum reforms are expected to be a precursor of the good times ahead. Much needed changes, announced at a time when the initial reforms disappointed China watchers, the more recent reforms seek to bail China out of her doldrums and escalate her progress. As a sign of what the people felt – the Chinese stock market which has been one of the worst-performing world markets over the last three years or so with valuations remaining at a substantial discount to global and emerging market peers, is now expected to witness a soaring streak especially in baby and consumer products.

    The third Plenum, expected to set the economic vision for China’s next decade was watched eagerly by all with a stake in the nation. Expected to not only alter the fortunes of the billion plus people within Chinese territory, but more than half the world, the reforms announced at the end of the three day session, just before the weekend threw everyone in a tizzy. Having just digested the news, here is a brief of the five major reforms expected and their impact on domestic, Indian and International markets.

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  • online-shoppingThe internet is greatly transforming the way young Chinese and Indians consume products, view entertainment and gain information. While China has long since triumphed the US in the number of internet users, India is estimated to overpar the United States to the number 2 slot worldwide by next summer. According to a report released by the Internet and Mobile Association of India (IMAI) and IMRB, China currently has 300 million active internet users, the US has an estimated 207 million internet users and India will have 243 million internet users in the country by June 2014.

    With internet penetration driven largely by mobile phones, connectivity is changing the way the youth in China and India behave, react and feel. Besides flattening the world, being connected allows consumers to purchase products from the comfort of their own bedrooms, altering the retail industry. On Monday, the 11th of November, also China’s singles day, the country’s biggest online shopping company Alibaba processed more than US$5.75 billion in its online payments system — a record for a single day anywhere in the world, surpassing by two and a half times the total for American retailers last year on so-called Cyber Monday. Alibaba also reported Monday that it had 402 million unique visitors to its sites — more than a third of the adult population in China — and prepared 152 million parcels for shipping.

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  • Li-Singh_1628394gA confidence building measure was all that Prime Minister Manmohan Singh’s visit to China was. Sandwiched between corruption scandals and a floundering economy at home, the Indian prime minister failed to make waves in China. While the governments signed nine agreements on his short 1.5 day visit, neither held much water. While headlines screamed a border pact between the sweet and sour neighbors, the fine print reveled little substance to the story. Same was the case with the proposed visa on arrival for Chinese tourists, the proposed SEZ’s or the river pact between the countries – no big step forward, just an assurance that each had one anothers backs.

    While it is significant for China and India to publicly mention that they will support each other internationally and not interfere in each others foreign affairs, the meeting should have also outlined confidence building measures for the economy and trade. Fast floundering from the Indian side, it would have been prudent for Dr. Singh to have also thrown in a clause for international, regional and bilateral trade, economic and financial co operation.

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  • jinping_singhIndian Prime Minister Dr. Manmohan Singh is quite familiar with Beijing by now. Where he needs a guiding light is India China trade. The disproportionate skew towards China, is so dismal that it has the Chinese worried. In order to create inroads and persuade productivity, China has now upped the ante in increasing Indian exports and India has conceded. This means that soon, India will create five Special Economic Zones within her territories which she will lease to Chinese firms flush with funds and machinery to build her infrastructure within her borders. This grand plan of boosting trade seems on the outset to serve the purpose of both nations, India to gain infrastructure at Chinese prices and China a market almost as big as hers, which is almost saturated. The plan however could come with several divots and might not be as smooth sailing as expected. Although India is nowhere close to agreeing to China’s proposal of creating a large SEZ herself within Indian territory, by allowing a majority of Chinese companies to establish themselves in India, the South Asian nation is bartering away her bargaining power.

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  • china india borderSure, its the meeting of heads of state of Asia’s largest economies, yet maybe we shouldn’t be making such a big deal about it. Prime Minister Manmohan Singh’s two day trip to Beijing from Moscow isn’t expected to bolster trade or solve our age old border issue. Its not expected either that the bonhomie between the brothers who share the Himalayas will significantly improve relations between our countries. Yes steps will be taken, deals signed and hands shaken in the glare of a million news flashes, but it will continue to be more of the same – diplomacy at her best.

    We’re not trying to be pessimistic, but considering the sweet and sour relations our nations share, it will take much more than a milestone visit to alter history. Indian analysts especially don’t expect much to change with the Border Defence Cooperation Agreement, much touted by the Chinese and expected to be signed during the visit. They however warn of one particular clause withing the BDCA, which states that No new construction can can take place along the Line of Actual Control. While the move is more political than military, China has the might to get India to agree to signing this clause because of her economic strength, however the agreement will severely jeopardize India’s plans on her side of the border. While both nations do favour a speedy and effective resolution to our border issue which has been a thorn in our relations, agreeing to dis empower a neighbour shouldn’t be ratified.

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