investingeast – Page 3 – Investing East

Uber Moves Into Chinese Market

Uber has recently struck a deal with China Yongda Automobiles Services Holdings. This is a Chinese luxury auto dealer. Together, they plan to provide discounts and financing for drivers of Uber cars. Yongda will provide Uber’s partners with discounts on new car purchases, financing and after-sale services.

Uber has faced a great deal of pressure in its attempts to expand into the Chinese market. Time will tell how they do trying to squeeze into the market. To read more about this ventu, see the full article.

India’s New Budget for the Coming Year

Indian Prime Minister Narendra Modi and his government unveiled their first full-year budget this week. They have planned a major increase in public spending on infrastructure and a lower corporate tax rate. There will also be a new welfare program for the poor and more relaxed plans for fixing the fiscal deficit.

The government is predicting a growth rate of 7.4% in this fiscal year.

Mr. Jaitley started out his speech saying, “The credibility of the Indian economy has been re-established. The world is predicting that it is India’s chance to fly.” He continued by saying “We have to think in terms of a quantum jump.”

Some found the budget’s focus on welfare to be a surprise. As Jayshree Sengupta, a senior fellow at the Observer Research Foundation, said “You know, I had expected it to be a very pro-business, pro-rich budget, and I was really surprised by how much he has given to the rural employment scheme.”

Read more details about the budget and the reaction from many.

Marketing Researcher Repucom Spotlights Asia Sports Investments

A recent report released by sports marketing research company Repucom on Monday shows the trend of investment in sports sponsorship from the Asia into US sports franchises.

The report was entitled “Emerging Giants” and explains that, in the last two years, Asian businessmen have invested approximately $1.1 billion in US sports franchises.

South Korea will host the 2018 Winter Olympics and the 2022 World Cup will then be staged in Qatar. The report explains that, as long as the economies in the Middle East and Asia remain strong there is no reason to assume that their investments in sports will slow down.

Read the whole article to gain more depth about this interesting economic change.

India Investments

SITA (Supporting India’s Trade Preferences for India)’s goal is to increase exports in Ethiopia, Kenya, Rwanda, Uganda and the United Republic of Tanzania. The organization’s focus is on the following sectors: pulses; edible and essential oils; spices; business process outsourcing and information technology-enabled services; coffee; cotton, textiles and apparel; and leather. Given that all the countries listed above (except Kenya) are given special access to the Indian market (under the preferential tariff treatment New Delhi accords), such investment is becoming increasingly popular.

According to SITA’s recent workshop participants, it is private sector based development – supported by Indian business investors – that will be the driving force of more trade between East Africa and India. There will also be an attempt to increase the value of East African products by getting more Indian-based investment opportunities.

Moving across to China, a substantial shift in its cohesion with India from trade to investment needs to happen. This is because, according to General Didar Singh, Ficci Secretary, it is only with an escalation in investments that the issue of trade imbalance can be addressed between China and India.

He explained: “Our trade with China is doing fine. There are some imbalances in the bilateral trade, but in the global context that does not mean much. The real important question is how open we are about our investments.” Indeed, the total trade amount between India and China in 2013 was $65.50 billion. However, the trade surplus was “heavily tilted in China’s favor.”

Vis-à-vis Tanzania, trade with India has been growing at an impressive rate. The only negative of that is that it has been in favor of India, which did not aid Tanzania’s manufacturing sector much. For example, even though tanzanite is mined in Tanzania, it seems that India is the largest exporter of the gem. In addition, Tanzania’s deficit remains “huge.”

So it seems that India is doing well but needs to assist its Asian neighbors in trade and deficit for the east to continue to thrive.

Optimism for Asia Pacific Investments

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Optimism is rising for making investments into the Asia Pacific region. There is greater confidence among executives in the region, a large percentage of whom, according to a PwC report believe that in the next 12 months there will be substantial growth. Given that it has risen 10 points from 2012 and four from 2013, this is a good sign.

However, growth has not been encountered all that much in China. So will this impact the rest of the Asia Pacific region? According to the study, 67 percent of executives are anticipating that they will make large investments in the APEC region over the next year. And they will be doing this within each of the 21 member economies. As well, China is actually up there as one of the most popular places for such investments.

If that is the case, how do investors justify these plans if China’s economy is not encountering growth? A couple of weeks ago, Bob Davis at ‘The Wall Street Journal,’ wrote that “we are witnessing the end of the Chinese economic miracle.”

However, just recently China started admitting its issues – which is a huge deal vis-à-vis solving them. It announced a drop in interest rates which will once again begin to make the region more attractive to outside investors.

Still, there is much more to be done. The facts are that the country’s manufacturing sector is facing challenging overcapacity, resulting in a drop in prices. As well, there was an increase of GDP in the third quarter by 7.3 percent. These issues have to be addressed as well as interest rates, if China is going to have a chance of getting back in the foreign investment game.

Is Asia on a Spending Binge?

Qatar recently acquired a small part of Lifestyle International Holdings in Hong Kong. This may be indicative of the start of an Asian spending binge. What this means for the near future is that Qatar may very soon be investing in other Asian regions including: China, Japan, Singapore and South Korea. The total amount spent could reach $15bn.

This is new for Qatar, which, via the Qatar Investment Authority (QIA) has primarily made investments in Europe, with businesses like Barclays, the Canary Wharf Group and Harrods. Now, with its move into Asia, Qatar is doing something new.

While in the past there have been some Qatarian investments into Asia (such as in 2010 the $2.8bn investment into the Agricultural Bank of China) until now there hasn’t been a steady flow. Now, putting £616m into Lifestyle International Holdings is according to QIA forming part of the region’s “strategy to diversify its portfolio.”

Another potential region for investments is Turkey. The Hassad Food Co. is planning on investing in Turkey’s country poultry, dairy and meat sectors. As it stands right now, 90 percent of Qatarian food products are imported. Hassad was launched to secure supplies. And then there is real estate investment, linked to the FIFA World Cup that is set to be in Qatar in 2022 and all the infrastructure preparations involved in that. Real estate prices are elevating due to increasing demand for infrastructure land.

East Online Investments: India and Singapore

At the beginning of last month, India’s internet retail industry encountered substantial profits. This put it in the top three web-using region, boasting 74 million users. This is an increase of 31 percent since 2012.

This has led to an increase in India of online shopping, escalating the country’s e-commerce market by 66 percent last year, with a value of $16bn. Not only is this figure huge, but compared to the rate of the rest of the world – which stood at 18.3 percent – it is even more impressive. As well, within the next decade, it is expected to be valued at a staggering $56bn.

In addition, according to Snapdeal (an Indian e-commerce site), is planning to sell properties online. The idea is to offer affordable housing, in conjunction with the Tataconglomerate. This is the first such endeavor that India has encountered. When the project starts, around a thousand units will be offered in cities including: Ahmedabad, Bangalore, Chennai, Mumbai and Pune.

Moving on to Singapore investments, a recent US-based report valued a gaming company at $1bn – higher than other US tech companies. This is indicative of Singapore’s local tech industry advancing with additional venture capitalist investments and acquisitions over the last few years. Singapore was ranked 27^th on the list of the top Internet companies by market from the World Startup Report. Indeed, it appears that South East Asia is one of the “fastest growing regions in the world,” vis-à-vis tech market. As such, Singapore’s gaming industry has been hailed as a “milestone” for the country’s start-up ecosystem, by CEO of the National Research Foundation, Professor Low Teck Seng.

Singapore has what to learn from India in the fiscal realm. According to Prime Minister Lee, India has been proving how social media technology can be used to enhance the quality of government, in particular through the MyGov platform. For more information on this endeavor, click here.

East and West Investments: True 2-Way Street

Historically, it was western countries exporting to and investing in eastern countries. That has not been the case though for some time now. In the UK’s Chancellor of the Exchequer George Osborne’s recent statement, it was announced that £120m in funding is being allocated to new investments into India from the UK.

These days the west actively looks for investments in the east. Thus Osborne went with British PM William Hague to Mumbai to seek out investments. Some examples of these include: Cipla – a Mumbai-based pharmaceutical firm – to invest £100m into the UK for drug-based research; Mahindra – automotive manufacturer – investing £20m into the UK for the development of its electric vehicle technology, with the hope of having a car on sale in the UK within the next 12 months. JCB – construction machinery manufacturer – is set to open a further two plans in India. In total during the trip, the deals amounted to approximately £370 million (around Rs.3,800 crore).

In the military field, India’s Defense Ministry signed a contract valued at £250m with MBDA, the UK’s missile maker for “the supply of advanced short range air-to-air missiles (ASRAAM) to the Indian Air Force’s fleet of Jaguar aircraft.”

Currently, India is Asia’s third largest economy and has just encountered a political change of a new government led by Narendra Modi. Of this appointment, Osborne said, “I believe a stronger relationship with Britain will help deliver the new economic policy of the Indian government. Prime Minister Modi is seeking more investment in India’s economy – and I want British companies to provide it, and the British government to support it. Good days are coming for the financial partnership we can forge to build, literally, the infrastructure of the future.”

Since 2010 there has been an escalation in UK exports to India by 50 percent as well as an increase in imports by a third.

China Pushes India Investments

China is currently focusing on making investments in India. This is quite timely, given that Xi Jinping, China’s President, is scheduled to make a visit to the country. The focus is transport. China is seeking to enhance railways in India while constructing expressways.

To further improve relations and investment opportunities between the two countries, China’s Foreign Minister, Wang Yi committed to China continuing the trend of issuing visas to Arunachal Pradesh residents, one of India’s 29 states. It is hoped that this will be seen as a “goodwill gesture” to Indian citizens.

Wang has pointed out that these days there are “consultations and a positive attitude” between the two countries, which facilitates the process of issue resolution as it arises.

What all this shows also is that China is committed to supporting India with its economic progress. Of India Wang said that his country “stands by your side throughout your efforts of reform and development. No country can choose its neighbour, but friendship may be fostered.”

This sentiment was echoed by India’s Ministry of External Affairs spokesman, Syed Akbaruddin, who pointed out that, “both leaders felt that there was tremendous untapped potential for the growth of economic ties.” Still, before these efforts can move forward, there is some significant unfinished business. The fact is, India runs a $40 billion trade deficit with China. There is a chance of China putting money into industrial parks in India. This might help rebalance trade.

In conclusion, there is work to be done but if the trend of positive attitudes and communication is maintained, a large space could be created for China India investments to move forward.

APR Investment Growth

A plan has been put in place to boost investments in the Asia-Pacific Region (APR). The recent Asia-Pacific Economic Co-operation (APEC) conference encountered discussion on improving conditions in the region for potential investors. It is believed that there is plausible reason to anticipate a boom in trade.

APEC – launched at the end of 1989 – connects America, Australia, Canada, China, Japan, Malaysia, and other countries, totaling 21 members. Its most recent meeting was held a few days ago in Qingdao, China, with a goal of boosting partnership relations in the region.

Russian Minister of Economic Development Aleksey Ulyukayev expanded on the specifics of the goals. He said the aims were boosting activity on the Doha Round format, improving conditions in the Asia Pacific region, making a better case for Kazakhstan to join WTO.