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  • chindia-stocksThe Chinese bear market is expected to have little impact on Indian stocks. While China lost more than US$3 trillion on the stock markets, India’s benchmark Sensex eked out a 0.6 percent increase over the past three months making India the only market to rise in this period.

    Although the Indian market has been bullish, while the Chinese indexes have crashed, the result is from a few foreign investors that have hedged their emerging markets money on India. Overall however, analysts expect that China’s crash will have little to do with Indian’s gain in the near term. The reason being that foreign investors hold less than one percent of Chinese stocks in China.

    The stocks that are held in Chinese companies are either that listed in Hong Kong or in the USA or in other countries. These stocks had not moved as much as those listed in China. Thus the fall in share prices in China will not result in fund managers withdrawing money from other markets, ruling out any near term impact on India. In the long run however, if Chinese stocks continue to drop, global markets including India will be affected.

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  • leijun India – China bilateral ties have taken a quantum leap from raw materials to mobiles and technology. Recently mobile phone maker Xiaomi, or little rice in Mandarin received a generous investment from Ratan Tata, former chairman of Tata Sons Ltd. The CEO of Xiaomi, Lei Jun, a 45-year-old billionaire and serial entrepreneur, who last visited India 15 years ago recently visited New Delhi and Mumbai to promote the company. Photo’s of China’s Steve Jobs as he’s often known, posing in front of South Mumbai iconic landmarks and in an autorickshaw went viral across English and Chinese social media last week.  Lei Jun came to India, along with co-founder and company president Bin Lin, they met top Indian business leaders, startups, customers and retail partners.

    The company has big plans for India, where they plan to set up a local manufacturing center, expand their R&D center and emerge as India’s premier handset manufacturer by 2020. All this while maintaining their core USP of selling their handsets online only, while offering consumers a touch and feel experience before buying at select stores.

    Just weeks ahead of Indian Prime Minister Narendra Modi’s visit to Beijing India has become a hot buzzword in Chinese VC and investment circles. Aided by the central government and coxed by a tightening market at home, Chinese companies are keen to invest in India’s 1.3+ billion market. Jack Ma, Founder and CEO of B2B, Alibaba recently invested in Indian payment gateway Paytm and has set up an incubation cell in Bangalore to explore investments in the IT and mobile space.

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  • In the second part of our India – China in Numbers series, we compare trade in products and services between the sweet and sour neighbours. We also look at the resultant impact both nations have on the world economy and the weight they can thereby leverage on international negotiations.

    Lastly, we look at the traffic of people – businesmen and tourists between China and India to determine whom is more interested in maintaining better bilateral relations. In the chart below, we analyse the reason behind why China is known as the factory of the world and India the global back office. China clearly outstrips India in trade of products, while India reigns over China in services. In 2013, India had a deficit of US$143 billion in goods trade whereas it had a surplus of US$73 billion in services trade. In contrast, China had a surplus of US$360 billion in goods trade but a deficit of US$125 billion in services trade.product-trade

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  • brahmaputraChina today operationalized and put into commercial run the US$1.52 billion (9.6 billion yuan) Zam Hydropower Station, the largest in Tibet. Built on the upper reaches of the 2,900-km Brahmaputra river also known as the Yarlung Zangbo River, which flows through Tibet into India and later into Bangladesh is a major source of livelihood for Indians and Bangladeshis.

    The damming of the river, has been a major bone of contention between India and China for a few years now. While the river originates in Tibet, and Beijing has assured India it will not dam the waters but build the dams to generate electricity, New Delhi has been weary the sweet and sour neighbour might usurp power to flood or create a drought situation in North Eastern India during times of unease. As a result, Indian officials monitor and measure the flow of water into India from China to ensure the country is ready for any eventuality, such as the possible holding back and sudden release of water by China.

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  • indian professionalsAs China’s economy slows, umpteen articles document the rise of Chinese companies globally. Few have looked at what inroads Indians have mapped into the dragons lair. As the world turns towards India for hope, Inchin Closer looks at a growing trend of Indians who have made China their home.

    Having settled in the Middle Kingdom, many Indians have either set up businesses or joined existing conglomerates to prosper within China. First Indians ventured into China just on official assignments, often spanning a year or two. Sent by their Indian company to spread wings in a booming Chinese economy. A majority of these professionals, stayed within themselves, ate Indian food and yearn for the time they would return.

    Few made local Chinese friends or even bothered to learn more than Ni hao. However with the recent flourish of Sino-Indian ties, many Indians are seeing more merit in China than returning back to India. Entrepreneurs, those who want to break away from the mundane in Mumbai or the drudgery of Delhi decide to move and either start a business of their own or join an existing multinational, finally settling in to China.

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  • oil-price-droppThe dramatic 60 percent fall in oil prices since July last year has created interesting effects on the economies of China and India. The Chinese economy seems to have been significantly buffered due to the stark drop in oil prices since June 2014. On the other hand, the Indian economy has been lifted, sheltering its 1.3 million consumers from higher inflation, enabling consumers to buy more and the IMF to predict that India’s economy can outpace China’s this year. Analysts predict that China’s economy could have suffered a much harder blow had oil prices for the world’s largest energy consumer not fallen.  A strong reminder of this came on Sunday, when Beijing introduced a 1 percentage-point reduction in the amount of cash that lenders must lock up as reserves. It is the largest cut in Chinese banks’ required reserve ratio (RRR) since late 2008, the nadir of the global financial crisis. Cutting RRR to 18.5 percent, frees up nearly 1.3 trillion yuan (US$210 billion) for new lending, money that should help shore up growth.

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  • w_pg1Chinese President Xi Jinping, Indian Prime Minister Narendra Modi and President of the United States Barack Obama came together for a heady week of negotiations, multi billion dollar deals, photo ops with business and technology leaders and bids to seal the growth of their nations.

    As each economy carefully hinges on that of the other, both Mr. Modi and Mr. Xi coaxed larger investments from the worlds richest democracy in exchange for a small piece of the pie that America always wanted – better transparency, a curb on corruption, protection of intellectual property rights, climate change enforcement’s and opening up their economies further.

    While meetings hussled around the UN general assembly, Modi and Xi both received accolades for their work in American Media. China having a larger economy and much higher trade targets than India, found herself on more front pages than Mr. Modi who is holding on tightly to the sheen of his India shining. India and the US are hoping to increase bilateral trade to US$500 billion in the next few years from the current US$120 billion. China’s bilateral trade with the US is already around the US$500 billion mark.

    The idea was for each megalomaniac leader to drum up investments and create an international stir to drive their economy forward. For Modi this 2nd trip to the US was a whirlwind affair braced at pushing his “Made in India” campaign tweaked at increasing India’s manufacturing sector which will hopefully absorb the millions leaving agrarian land and graduating by 2020. For Xi, this was his first state visit to the US, marked by a lavish state dinner hosted by US President Barack Obama at the White House.

    His statement was to boost the Chinese economy with the higher value goods, services and American expertise. In addition to hob-nobbing with leaders in Washington, Xi visited Seattle and Modi Silicon Valley. Xi began his week-long visit in Seattle addressing a gathering of 650 business executives, while Modi chose New York to kick off his five-day visit, addressing two round tables—one of financial investors and another with representatives of media and communication companies including Comcast, Time Warner, Discovery, Sony, ESPN, News Corp., 21st Century Fox, Disney and the ABC television group.

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  • India-china-GDP-IMFIn a move that would further boost Chinese investments into India, the International Monetary Fund (IMF) has predicted that India’s GDP growth could outstrip China’s in this financial year 2015-16. According to the IMF’s report, for the first time in 16 years, India’s GDP will grow faster than China’s.

    India is projected to grow at 7.5 percent in both 2015-16 and the fiscal after that (based on market prices), while China, having experienced its worst economic slowdown in 24 years last year, could witness its growth sliding further to 6.8 percent in 2015 and 6.3 percent in 2016. While the IMF’s growth projections for China have been retained at the January level, those for India have been revised up by from 6.3 percent for 2015-16 and 6.4 percent for 2016-17.

    China’s annual economic growth slowed to a six-year low of 7.0 per cent in the first quarter of 2015 as compared to a growth of 7.3 percent in the last quarter of 2014. The turnaround could signal a change in tide and ring true what analysts have predicted for years – that China’s growth will eventually even off and India which has been a late bloomer will grow faster than China. Over the past decade, India has always been pitted against China, alikened to the tortoise and the hare, the elephant and the dragon, however inertia in the markets has now caused Indian companies to do much better this past fiscal.

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  • ximodiChina’s president Xi Jinping visited Indian Prime Minister Narendra Modi on his home turf to strengthen bilateral relations and augment trade and investments between the two countries. While the ensuing border dispute was on the agenda, simultaneous incursions, and nonchalance by visiting Chinese delegations both before and after the Presidents visit numbed down the issue for India.

    The border wasn’t the only moot point between the neighbours, strangely just a week before President Xi’s visit, the Chinese Ambassador to India, was suddenly and unceremoniously asked to return home. While the readjustment within the cadre has sent diplomatic rumour mills on fire, it did stoke nerves of distrust amongst the sweet and sour neighbours.

    Nonetheless, on the outset, China – India relations blossomed. The two nations signed 16 agreements in Delhi (for the full list click here), one of which will see China investing US$20 billion (£12.2billion) in India’s infrastructure over five years. Landmark agreements were also signed to realign India’s railway system on modern lines and build atleast two Special Economic Zones exclusively for Chinese companies to manufacture and export from. Other deals were also signed in the pharmaceuticals and farm products space as well as increasing co-operation in trade, space exploration and civil nuclear energy. Softer issues were also touched upon and signals were given for boosting language and cultural ties between the people.

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  • land reformA small yet highly significant Chinese delegation of six members led by Vice minister Xia Yong came to New Delhi last week to understand India’s rural reforms policy with special focus land reforms leading to greater land rights for farmers, the reform of the household registration system,  which is outlined in the governments 60-point reform agenda

    Land reforms which have been high on President Xi Jinping’s agenda are one of the major issues that Beijing has decided to focus on this year. With the number of rural migrants moving to cities on the rise, infrastructure and basic resources are being strained. It is estimated that every year, 20 million Chinese move into cities. That is 1.8 million a month, the equivalent of the cities of Hamburg or Vienna. As a result, sosts for basic amenities have already gone up and Beijing recognizes land reforms as a priority now.

    According to the Times of India, the Chinese delegation met with Additional secretary of the Legislative department Mr. Sanjay Singh to learn how land ownership rights are regulated in India, including compensation paid on land acquisition, and the Indian government’s rehabilitation and resettlement policies.

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