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2015

  • links-with-africaIn a bid to catch up with China in Africa, India is hosting the third India-Africa Trade summit in New Delhi between 26 – 29th October. The trade summit will seek to increase Indian investments into Africa, a feat China has been pursuing since the early 2000’s. New Delhi however woke up to the continent only after the 2008 financial crisis when she realigned strategies to diversify trade beyond the US and Europe. Since then, two-way annual trade has more than doubled to US$72 billion

    Meanwhile, China has become by far Africa’s biggest trading partner, exchanging about US$184 billion-worth of goods a year, a growth of nearly 20 times trade since 2000 and almost three times the value of India’s trade in the region.

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  • cabs
    The sharing economy has got more competitive with Didi Kuaidi, Lyft, India’s Ola cabs and Singapore’s grabtaxi uniting by the force of their investors into one giant competitor for Uber cabs.

    Uber which essentially disrupted taxi services worldwide in 2015, is facing heat admist markets that hold the most potential. Asia with large populations, mostly all on smartphones, is fertile ground for this competition to be fought out. As a result, Uber recently invested US$1.2 billion into China and is expected to invest close to US$1 billion into India.

    While, Bangalore based, Ola cabs is yet to sign on the dotted line with Didi Kuaidi, the knot, according to sources is almost tied. If aligned, Didi Kuaidi, will not just be competing for India’s US$10 billion taxi market, but will become the biggest taxi sharing service worldwide.

    Didi Kuaidi whose investors include Alibaba and Tencent Holdings is valued at $16 billion and is expected to invest close to US$30 million of a total US$500 million raised by Ola. The alliance is targeted at growing their existing marketshare and offering strong competition to Uber which has faced several law suits and isn’t yet on firm ground in India. Ola cabs currently claims 750,000 rides a day in India while Uber plans to scale upto 200,000 rides a day with the new investment.

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  • middle-class

    India and China’s swelling middle class is what advertisers, marketers and investors have counted on for a bigger return on investment, higher profits and soaring sales.  Its her growing population with a rising income, fattening consumption levels and ballooning aspirations that have lead companies to the hungry navel of the sweet and sour neighbours.

    Yet, a recent PEW study shows that while both China and India have succeeded in pulling 356 million Chinese and 133 million Indians out of poverty between 2001 and 1011, China has managed to move a majority up the value scale – from poor to middle income. Whereas, India has just about managed to make her poor join the leagues of low income people, keeping their standard of living, access of opportunities and consumption rates dismally low at current purchasing power parity.

    This means that while China was able to increase the standard of living of her people dramatically, India only marginally managed to improve the lives of her people. The lost opportunity, takes significantly away from India’s demographic dividend which investors have been counting on to spur sales. Analysts pose the consequences to India’s slow governance, corruption and general apathy. Economically, it means that while China’s population will be older than India’s by 2010, it will also be much richer as a whole, leaving people happier and companies richer.

    According to the report, from 2001 to 2011, the poverty rate in China fell from 41 percent to 12 percent and the poverty rate in India dropped from 35 percent to 20 percent.

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  • 704125In 600 AD Xuanzang, a buddhist Chinese monk braved the Himalayas to cross into India in search of buddhist texts. Almost 15 centuries later, braving tense diplomatic relations, border security and weather, more than 30 Indian pilgrims braved the same mountain range to Mount Kailash, the holiest site for Hindu’s and Buddhist’s.

    Known as the abode of Lord Shiva, one of Hindu’s famed trilogy, Mt. Kailash, located in Tibet is only accessible from China. Tense border security due to a land route from India to Tibet had deterred Beijing in allowing pilgrims access up until now. Following President Xi Jinping’s visit to India last year, the neighbours decided to to give God a chance and open the sensitive land route. As a result, for the first time this summer, more than 30 Indian pilgrims traveled from Sikkim in northern India, across a 14,000-foot-high mountain pass into China and then journeyed more than another 900 miles to reach Kailash. The pilgrims were the first tourists to enter China at Nathu La since the 1962 war between India and China. Nathu La pass has until now just been accessible to traders with a permit  during the summer months.

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  • BCIM map

    Border relations between sweet and sour neighbours India and China are showing slight improvements with the BCIM – Bangladesh – China – India – Myanmar project finally getting off on the right foot. The New Silk road project which has an estimated trade potential of US$132 billion,has just 200 kms of road to be concretized before Kolkata in India will seamlessly be connected with Kunming in China.

    The BCIM economic corridor is expected to add a major boost to India-China trade as India looks at developing her North-East region bordering China and Beijing looks for alternative routes to the strait of Malacca. Both governments hope that the BCIM economic corridor will be a starting point for stronger bilateral relations. An Indian consulate in Kunming and a Chinese consulate in Kolkata are already in place.

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  • india-retail-ecommerce India’s digital space is expanding exponentially and has a huge potential for growth. While the country has already become the cynosure for software, bouyed by the growth of smartphones, an ecommerce revolution is brewing, with B2C and B2B companies vying for top consumer sales.

    Analysts pin the reason to India’s large and growing consumer base whose disposable income is only set to increase, raising the desire to consume more products and drive sales of both smartphones and online retail up. According to an eMarketer report, India’s e-commerce sales in 2014 were US$5.3 billion, 1/80th the size of China’s US$426.26 billion and 1/58th the size of the US’ US$305.6 billion. China will likely exceed US$1 trillion in retail ecommerce sales by 2018, accounting for more than 40 percent of the total worldwide. Similarly, although India has a population of 1.3 billion, making it the world’s third largest market, slightly more than one in 10 own a smartphone, creating a huge potential for growth.

    Considering that India’s population is expected to surpass China’s by 2028, the magnanimity of growth for consumer led digital devices and services is humongous. Its no wonder then, that Jack Ma has decided to start selling in India in August this year. The Hangzhou based entrepreneur millionaire, has already been to India twice this year to meet key decision makers including Prime Minister Modi. Smelling ripe opportunity Ma, has also appointed a startup-genius Suhas Gopinath to help him identify Indian companies in the digital space worth investing in. Confirming the growth potential in the Ecommerce market, Flipkart, India’s largest e-commerce firm, recently raised US$550 million at a valuation of US$15 billion.

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  • china-one-child Two weeks before China celebrates her singles day on 11/11, Beijing announced that she was going to abolish the one child policy altogether. Enforced in 1979 to curb China’s growing population and ensure a good standard of living for a nation aspiring to excel, the one child policy brought in sweeping changes for Beijing.

    However 68 years later, having reduced China’s population by almost 400 million child births (the estimated prevented births if the policy wasn’t in place), President Xi Jinping and his team decided to abolish the rule in order to boost the working age population for the next generation. The fear that China would get old before she gets rich held true and Beijing was finding it hard to pay retirement bills with a falling number of workers. The country’s working age population fell 3.71 million in 2014.

    The United Nations projects that China will lose 67 million workers from 2010 to 2030. At the same time, China’s elderly population is expected to soar from 110 million in 2010 to 210 million in 2030, and by 2050 will account for a quarter of the population, according to the U.N. China’s population, the world’s largest, rose to 1.34 billion in 2010, according to census data. Additionally, social unrest was growing with a large number of unmarried men and women who had to work doubly hard to support extended families admist growing consumption levels.

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  • iinchin tradeIndia truly is the proverbial elephant economy. When other economies are buzzing, bursting and sizzling their way through high growth numbers, the world looks to India and wonders why she is so slow.

    When economies around the world bust, crackle and fizzle down, India is considered the resilient behemoth who can stand the test of time. An economy that needs severe patience to deal with, groom into and mature, India like the elephant never forgets. She’s learnt from past mistakes, likes to move slow and steady and generally takes care of her heard. Yes she might strike wild if she is frightened or lost, she has been plundered for her riches, yet she leads a fairly happy, non-intrusive existence in the corporate jungle.

    India should be glad to be the elephant. Every jungle needs one. Especially when dragons come to roar, elephants bring about a sense of calmness. It is this resilient calmness that companies and investors are flocking to as global currencies and stock markets rumble.

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  • china-pharmaAs China gets older faster than it gets richer, her pharmaceutical industry is under threat. Owing to sky high prices of medicines, thrust onto citizens by local hospitals, the Central government has cracked down on drug prices in a policy to be implemented from June 1st, 2015. In the recently released pilot program, Beijing has introduced plans to abolish drug price mark-ups in more Chinese hospitals and to give hospital administrators greater clout to negotiate price cuts with suppliers.

    To further avert corruption that has severely tinged the pharma industry in China, China’s State Council, announced this month that a pilot programme to reform the hospital finance system would be extended to 100 big cities this year, with the goal of covering all urban public hospitals within two years. The pilot programme scraps the 15 percent mark-up that Chinese hospitals typically place on drug sales, providing them with 40 percent or more of their budgets.

    For anyone who frequents the India-China route and has local friends on the other side of the bamboo curtain knows that cancer drugs from India are in high demand in China primarily because they are typically 1/6th – 1/10th the price in India. Corruption, riddled with a pharmaceutical industry that is flamed by hospitals being the sole dispenser of drugs in China has created an illicit circle wherein the prices of medicines are highly inflated.

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  • Top-5-Indian-Films-in-ChinaIndian Bollywood actor Aamir Khan is a sensation in China. Having awed audiences in 3 idiots, as a geeky yet charismatic student, his latest film PK, recently released to rave reviews.

    In the first 72 hours of release in China, the film has already grossed US$5.3 million (32.6 million RMB). Known to make intellectual, creative and thought provoking films that have movie-goers reflect on their lives, society and ideologies, Aamir Khan’s movies also connect India and China – expose their differences and celebrate our similarities. Take for example, PK which ridicules the idea of religion and superstitions that are so ingrained in Indian society.

    Yet, at the same time, reflects Chinese sentiments which from an communist, atheist perspective, religion has no purpose or function. In the story, PK, an alien from outer space (Khan), who doesn’t know what religion is, lands in India and through his various experiences and idiosyncrasies exposes the often strange and inexplicable religious notions much believed in India. The movie, which in a way reflects how Chinese audiences might view Indian religious rituals makes a comedy of an otherwise sensitive topic.

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