In Gurgaon, India, Dynamism Meets Dysfunction

Although India is considered to be as economically promising as China, and its population is predicted to surpass China's in coming years, the two countries share little in common.  While both have embraced capitalism, the role of government in fostering economic prosperity is widely disparate.  In China, a strong central government has invested billions in infrastructure to permit companies to prosper and goods to move freely.  In India, however, a weak government means that businesses there prosper in spite of, not because of, the government.  One example is the city of Gurgaon, near New Delhi.  Gurgaon is a booming city filled with malls and businesses, but it lacks basic city infrastructure such as a functioning sewer system, reliable electricity or water, public sidewalks, parking, decent roads, or any system of public transportation.  Companies that operate in Gurgaon therefore provide these services to their workers, as this excellent and eye-opening article in the New York Times explains.

In Gurgaon, India, Dynamism Meets Dysfunction - NYTimes.com

Disney to Open Park in Shanghai

It will be "authentically Disney but uniquely Chinese." That is how company officials are describing Shanghai Disneyland, which broke ground today and is expected to open in 2015.  The $4.4 billion theme park is a huge gamble for Disney into the huge Chinese market.  With 330 million people within a 3 hour drive of the site, Disney hopes it can capture hearts and pocketbooks of generations of Chinese consumers.  Disney only owns 43% of the company owning Shanghai Disneyland, with the balance owned by a consortium of state-owned companies, but will own 70% of the company that manages the park.  After a bad start in Hong Kong (Chinese consumers take 40 minutes to eat meals, as opposed to 20 minutes for Americans, leading to crowded restaurants), the company hopes to apply its lessons in cultural sensitivity into building a brand and business in China.

Disney to Open Park in Shanghai - NYTimes.com

Groupon in Japan Faces Growing Pains

Groupon isn't just a hit in the U.S. -- it's rapidly expanding overseas as well, with 50 million subscribers in 35 countries.   Part of its expansion strategy, however, is to acquire local startups rather than compete with them, which has led to some growing pains for Groupon.  Most recently, a nationwide deal in Japan went bad, forcing Groupon founder Andrew Mason to post an online apology to Japanese customers (above).  The two-year-old company now pulls in more than $1 billion in revenue, and the business model of offering huge discounts to popular goods and services looks set to flourish in international markets.  Apparently a good deal transcends all cultural barriers.

Groupon in Japan Faces Growing Pains - NYTimes.com: "- Sent using Google Toolbar"

G.E. to Share Jet Technology With China in New Joint Venture

When it comes to joint ventures, GE is notoriously shy, prefering to use its own substantial assets to enter a market in order to protect its intellectual property.  Those rules are thrown out the door in China, however, where an infant aerospace industry is taking shape.  The Chinese want to rival Airbus and Boeing one day, and in order to do so, they need technology.  GE, which is desperate to supply engines, avionics and other systems to any Chinese aircraft manufacturer as the market reaches $400 billion over the next two decades, has agreed to share its most prized technologies with the Chinese in a new joint venture as a condition to entering the market, as this report details.

G.E. to Share Jet Technology With China in New Joint Venture - NYTimes.com

Sri Lankan Accountants Attract Global Outsourcers

War-torn Sri Lanka has 10,000 certified accountants, with another 30,000 in training.  Outsourced accounting offices in Sri Lanka are doing work for global giants including HSBC.  A U.S. CPA makes $59,430 while a Sri Lankan CPA makes $5900, making their work both affordable and high quality. 

Sri Lankan Accountants Attract Global Outsourcers - NYTimes.com

China’s Censorship Backfires in ‘Li Gang’ Case

In late October this year, a college student named Chen Xiaofeng was inline skating with a friend on the campus of China's Hebei University.  A VW sedan, driven by a drunk driver, struck them head on, killing Chen.  The driver tried to speed away, but was stopped by security guards.  "My father is Li Gang!" he yelled at them.  Li Gang is the Deputy Police Chief in the Beishi district of Baoding.  When the Communist Party tried to suppress the story for fear of populist reaction to the son of a high-ranking official being given favored treatment, the opposite happened on the Internet.  Soon, the driver was arrested and the phrase "My father is Li Gang" has become a mocking catchphrase.

China’s Censorship Backfires in ‘Li Gang’ Case - NYTimes.com

Japan’s Farmers Oppose Pacific Free-Trade Talks

Japan maintains a 777% tariff on imported rice, as well 252% on wheat, 360% on butter, 320% on sugar, and 38.5% on beef.  As a result, Japanese consumers have to pay some of the highest prices in the world for basic foods.  Now, Japanese industry groups are urging the government to reduce tariffs in return for greater market access to big economies such as the U.S.  Japanese farmers, however, are terrified that dismantling the tariffs will lead them to ruin.

Japan’s Farmers Oppose Pacific Free-Trade Talks - NYTimes.com

Gap Joins a Retailer Rush to the Chinese Market

With sales in the U.S. sluggish, Gap Inc. is setting its sights on China's fast-growing consumer market, opening a flagship store in Shanghai today.  The company expects to open Old Navy and Banana Republic stores in the future.

Gap Joins a Retailer Rush to the Chinese Market - NYTimes.com

Free-Trade Pact With South Korea Still Not Finished

At the G20 summit meeting in Seoul, President Obama failed to reach an agreement with South Korea over the last two sticking points in a proposed US-Korea Free Trade Agreement.  The sticking points are autos and beef, both of which face a tough time in the Korean market.  Both sides have set themselves a deadline of weeks (not months) to finalize a deal that may mean better market access for Ford to the South Korean market.

Free-Trade Pact With South Korea Still Not Finished - NYTimes.com

Cotton Clothing Price Tags to Rise

Get ready to pay a lot more for T-shirts and jeans.  Flooding in Pakistan and bad weather in India and China means that there is a worldwide shortage in cotton.  This shortage recently led to a record high price for cotton, meaning that everyone in cotton's supply chain, from farmers to processors to manufacturers to retailers, are going to raise prices soon.

Cotton Clothing Price Tags to Rise - NYTimes.com

India’s Soaring Currency Attracts Foreign Investors, but Exports Suffer

The Indian rupee has climbed 9% against the dollar in the last 16 months.  That has taken a toll on a key Indian export -- textiles -- because it makes exporting more expensive.  Instead of fighting the appreciation like Brazil, however, India is letting the currency strengthen for now.  A stronger currency is helping the country to develop a modern consumer economy, and is fueling a boom in inward investment from giant shopping malls to new car dealerships.

India’s Soaring Currency Attracts Foreign Investors, but Exports Suffer

Once Banned, Dogs Reflect China’s Rise

Twenty years ago, there were hardly any dogs in Beijing. In the communist era, dogs were likely to be herders, guards, or meals, rather than companions. China's rapid globalization and increasing wealth, however, means that dogs are common these days, and increasingly pampered.

Once Banned, Dogs Reflect China’s Rise - NYTimes.com

Jili Journal - Silk Craft Fades in Village That Clothed Emperors

The Chinese village of Jili was once known throughout the world as a producer of extremely high quality silk.  Using traditional methods of sericulture, villagers produced silk for emperors and royalty everywhere.  Now, industrialization means most silk is produced in factories.  Environmental degradation means the water in Jili is no longer clean enough for sericulture.  And higher wages in booming cities elsewhere means there are no longer any young people willing to learn the craft of silkmaking in Jili.  Within a few years, the town will probably close its last silk mill, as the NY Times reports.

Jili Journal - Silk Craft Fades in Village That Clothed Emperors - NYTimes.com

A Thai Region Where Husbands Are Imported

A Thai Region Where Husbands Are Imported - NYTimes.com

China Imposes a Steep Tariff on U.S. Poultry

A year ago, President Obama imposed a stiff tariff on tires from China in an antidumping case. Less than two days later, the Chinese began an investigation into whether the United States harmed China's poultry industry by exporting chicken parts for less than it cost to produce them. Now, China has decided to impose tariffs on American poultry of up to 105.4%. The United States exports about $4 billion a year of chicken products, of which $678.2 million went to China last year. It is one of the few industries in which the U.S. maintains a positive trade balance with China.

China Imposes a Steep Tariff on U.S. Poultry - NYTimes.com

Top Executives Find It Pays to Spend Time in Asia

Kasper Rorsted, CEO of German company Henkel (above), just spent nearly six weeks working in Asia, an unusually long time away from headquarters for a CEO.  His trip spanned 9 countries and involved nearly 100 meetings.  The company makes 14 percent of its sales and 20 percent of its profits in Asia Pacific, and nearly 20 percent of its employees are based in the region with that number poised to grow to one-third in the coming years.  Many companies are now considering moving headquarters to Asia, or splitting their headquarters to include a "co-HQ" in Asia.  Once Cisco executive puts it this way: after changes in trade, manufacturing, development and research, "the next phase of globalization will be the decentralization of headquarters functions."

Top Executives Find It Pays to Spend Time in Asia - NYTimes.com: "- Sent using Google Toolbar"

Ikea Expects to Double Buying of Goods in India

Swedish furniture giant Ikea is privately held, which means it does not have to worry about declaring dividends to shareholders.  As such, its strategy is driven by long term growth, not short term profits.  The company therefore adheres to a management style that is not always the norm.  For example, Ikea will not form joint ventures even if local law requires it.  This week, Ikea CEO Mikael Ohlsson (above) announced IKEA is scrapping plans to open stores in India because of the local requirement that foreign retailers partner with an Indian partner and own a maximum of 51% of the Indian operation.  In spite of that, Ikea plans to spend about 1 Billion Euros in the next three to four years on Indian suppliers, mainly in textiles and fabrics.

Ikea Expects to Double Buying of Goods in India -- NY Times.com

Toiling Far From Home for Philippine Dreams

The town of Mabini, in the Philippines, is filled with large new homes much more luxurious than standard Filipino homes.  They are largely unoccupied, built by the 15% of the town's citizens who are OFWs -- Overseas Filipino Workers.  Working mainly as maids, nurses or service workers, these Filipinos return money to the Philippines as remittances, which rose from $7.6 billion in 2003 to $17.3 billion in 2009.  These payments now account for more than 10% of Phillipines' GDP and are the main factor driving the country's economic growth.

Toiling Far From Home for Philippine Dreams - NYTimes.com

U.S. Steps Up Criticism of China’s Practices

China spends $1 billion a day to maintain the value of its currency against the US Dollar.  By buying its own currency, it artificially maintains the currency at around 6.7 RMB to the USD, allowing its exporters an advantage in important foreign markets.  Now, the Obama administration, led by Treasury Secretary Tim Geithner (above), is stepping up attacks on China and its trade practices, including currency manipulation, theft of intellectual property, and continued market restrictions for U.S. products and services.

U.S. Steps Up Criticism of China’s Practices - NYTimes.com

A Thai City of Sleaze Tries to Clean Up

For years, Pattaya has been known as a sleazy, drug-infested town rife with prostitution and organized crime.  Now, the beachside town, only a two hour drive from Bangkok, is re-inventing itself as a family-friendly resort with luxury hotels, shopping malls, fancy restaurants, and polo tournaments.

A Thai City of Sleaze Tries to Clean Up - NYTimes.com