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  • kfcYum Brands is undergoing a strategic shift in China, signaling towards changing market trends and slowing revenue. The brand under which KFC, Pizza Hut and Taco Bell operate decided to spin off its China business into a separate entity last year.

    As part of the realignment, CEO China of Yum Brands Inc Muktesh Pant sold 91,228 shares of Yum on the 22nd of July, for US$8.2 million. The Indian born CEO, of Yum China led the China entity to be the company’s highest profit earner. At the end of February 2016, Yum had over 5,000 KFC restaurants in China, accounting for a quarter of KFC restaurants worldwide. It also held more than 1600 Pizza Huts, in more than 400 cities and had acquired Little Sheep hot pot due to burgeoging demand in the Fast food space.

    However, as tastes changed – being healthy came back into vogue and the the brands faced backlash due to their involvement in International uprisings, the Yum brand faced sever criticism in local media resulting in a fall in revenue. Although China remains the company’s primary source of profit the company’s revenues fell from US$ 6.898 billion in 2012 to US$ 6.909 billion in 2015.  The latest performance report shows that in the first half of 2016, Yum clocked revenues of US$ 5.627 billion, down 1.75 percent.

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  • NSG ~ By Charmaine Mirza

    The Asian hotpot is simmering again. India’s bid to join the Nuclear Suppliers Group (NSG) has put Sino-Indian geopolitics back in focus – this time with the added masala of India’s arch nemesis and China’s ally: Pakistan.

    The Nuclear Suppliers Group is a group of nuclear supplier countries, which aim to stave off nuclear proliferation by monitoring exports of raw materials, equipment and technology that can be deployed to create nuclear weapons. China is spearheading strong resistance from a handful of member countries to India’s NSG bid.

    Beijing’s official party line is that India has not signed the Non Proliferation Treaty (NPT), which is a vital criterion for membership to the NSG. The not-so-subtle subtext is that Pakistan has also retaliated to India’s NSG bid with one of its own – and China is the key instigator behind Pakistan’s nuclear program. In an ironic twist of fate, India will have to bear the brunt of Pakistan’s poor track record. If Pakistan doesn’t get in, India’s not getting China’s vote.

    If Pakistan has built its nuclear resources from the ground up, it is largely due to the fact that China has supported it consistently, in gross violation of its own commitment to the NSG. Given Pakistan’s dubious track record of harbouring terrorists (it hasn’t signed the NPT either) and the fact that the father of its nuclear program sold nuclear technology and secrets to Iran and North Korea, red flags are waving madly across the globe about its acceptance into the NSG.

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  • 153917_600Two complementary, interesting trends are emerging from the warmer understanding between China and India and both nations fierce desire to constantly grow.

    Firstly, Chinese investors are eagerly watching the Indian market, coming to investigate investments and often pouring millions into Indian start ups as the Indian economy starts to trot at a slightly faster clip than the Chinese economy.

    The second interesting, emerging trend is that with the Chinese economy far ahead that of India, many entrepreneurs, venture capitalists and private equity players are visiting small to mid sized firms and start up conferences to understand and predict where the Indian market will be five to ten years from now.

    The mix of these two trends, is seeing a higher and more sophisticated level of transactions between the sweet and sour neighbours. While all of this is government agnostic, it is building stronger relationships between the two nations and filling a need gap in both economies. The Chinese have a new, energetic market to invest in and Indian start ups have an orb to see the future.

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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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  • stalled-investmentsIts time New Delhi pulled a Beijing – a massive capital infusion to kick start the Indian economy and get India rolling.

    Indian Private investments and capital expenditures have dropped significantly due to a slowing global economy and gradually waning economic enthusiasm. So much so that 2015 is recorded as the first year since 2006, that Indian public sector capital expenditure has overtaken the private sector, according to Standard Chartered. New Delhi needs to invest in her economy to get her engines chugging. Take for example Beijing’s infusion earlier this year which kept the Chinese economy in momentum.

    The Chinese central government announced both the allocation of 1.13 trillion yuan (US$185.8 billion) for upgrading internet infrastructure and the creation of a 124.3 billion yuan fund for affordable housing. These expenditures followed authorization of six new rail lines costing 250 billion yuan. Compare this with Indian Prime Minister Modi’s request to the US to digitize India earlier this month and with China to build roads and railways.

    Albeit the Indian economy is growing at 7 percent and is one of the stalwart BRICS economies, she is shaking at her knees, wobbly and uncertain of her next few steps, waiting and watching for the game to change – hopefully improve.

    Her steel sector is low, Private power producers are in the doldrums, dragged down by problems at state-owned electricity boards. The property market is also struggling, while slowing global growth has begun to hit exporters. The Rs. 700 billion (US$11 billion) which Mr. Modi kept aside for infrastructure projects earlier this year has but created a small filip for overall investments.

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  • ma modiBusiness to Business billionaire Jack Ma of Alibaba fame visited New Delhi this week to promote his cash cow as the next big thing to bring the sweet and sour neighbours back on track.

    Hot on the heels of warming India China relations and 6 weeks prior to Indian Prime Minister Narendra Modi’s first official visit as India’s head of state to Beijing, Ma’s presence in Delhi has already got global chatter waves going.

    In a closed door meeting with Mr. Modi, who the Chinese view as their ticket to a large market, huge returns on investments and scalable growth, Ma marketed B2B’s as a force to help empower smaller businesses and grow the market. At a time when the Indian government is toying with the idea of Foreign Direct Investments in the retail sector at the cost of upsetting smaller shops, B2B’s can be the ideal force to grow the market.  And who better to assist the Indian market than Alibaba, the big daddy of B2B’s whose already proved highly successful in a similar market to India.

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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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  • 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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  • ENERGYRussia and China signed a historic deal today, marking not only US$400 billion for a 30 year gas deal, but more importantly altering the way the world will work international relations in the years to come. Furthermore, the deal was signed even as China was locked in a tense standoff with Vietnam over a Chinese oil rig drilling in the contested South China Sea.

    Just over 40 years ago Richard Nixon and Henry Kissinger persuaded China to turn against the Soviet Union and ally with America. Today, Russia’s move to guarantee China with energy marks a strong alliance between the formerly communist states which are Asia’s largest nations. The tectonic shift East and strategic alliance between China and Russia not only demonstrates who will be calling the shots in international politics but also smartly sidelines the USA who has been a dominant force between China and Russia.

    Next stop, India. Russia an old ally of India, is expected to sign a mega oil deal with a National Indian Oil company to secure energy for India. According to a Reuters report, Rosneft, the world’s top listed oil producer by output, may join forces with Indian state-run Oil and Natural Gas Corp to supply oil to India over the long term. Russia also has plans to triple oil flows to China to over 1 million barrels per day in coming years.

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