Hong Kong’s Couples Invited to Wed at McDonald’s

In 2006, Hong Kong changed its marriage law to permit for weddings to be held outside places of worship or City Hall.  Since then, weddings have taken place on boats, in underwater theme parks, and shopping malls.  The latest company to cash in on this trend is... McDonald's.  A McWedding starts at $1280, which includes food and drink for 50 people, a "cake" made of stacked Apple Pies, gifts for the guests, and invitation cards with photos of the couple.  McDonald's employees dress in black suits, greet guests, and deliver Big Macs and fries with the proper pomp.  There is no alcohol -- toasts are accomplished with sundaes or shakes.

Hong Kong’s Couples Invited to Wed at McDonald’s - NYTimes.com

Foreign Investment Ebbs in India, and Questions Begin

Although India's economy is growing at a healthy 9 percent per year, and a growing middle class is consuming goods at historic levels, foreign direct investment (FDI) into India shrank by 31 percent in 2010, according to the United Nations.  The decline highlights the challenges foreign companies face when trying to operate in India, where extremely restrictive laws, inefficient bureaucracy, and corruption are starting to scare away investors.

Foreign Investment Ebbs in India, and Questions Begin - NYTimes.com

Russia's WTO Membership Faces Rocky Road

Russia remains the only major world economy that is not a member of the World Trade Organization (WTO).  In large part, this is because Russia's major export, oil, is already tariff free around the world, so Russia hasn't felt the pressure to join the WTO in order to obtain market access for its companies.  However, foreign investors are increasingly putting pressure on Moscow to enter the global group.  Entry is supposed to happen in 2011, but it won't be easy.  Russia still has steep tariffs, high levels of corruption, and customs controversies over goods valuations that will cause Russia many more transition problems than China, which entered the WTO in 2000.


Russia's WTO Membership Faces Rocky Road - WSJ.com

Dollar's Fall Rocks Far-Flung Families

The U.S. dollar is struggling.  Against all major world currencies, a dollar buys less currency today than it used to.  Within the U.S., this makes imports more expensive but also helps the export competitiveness of U.S. companies by making U.S.-produced goods cheaper overseas.  Outside the U.S., however, the dollar's fall is having dire consequences for many economies that rely on the exchange rate.  One such economy is the Philippines, where the exchange rate has strengthened the Philippine peso 15% against the dollar in the last year.  Over 10% of the Philippines GDP is made of remittances, where Overseas Filipino Workers (OFW) send money back to the Philippines.  These workers typically earn U.S. dollars, which means their remittances are now worth less in the Philippines.  This had led some in the Philippines to argue that the time has come to stop depending on these remittances and to start creating job opportunities at home.

Dollar's Fall Rocks Far-Flung Families - WSJ.com

Alabama Sock Town Suffers as Cotton Soars

Fort Payne, Alabama, calls itself the "sock capital of the world."  Ten years later, about one in eight pairs of socks came from Fort Payne.  Sock manufacturing is largely automated, so labor is not a huge component of the cost.  The closing of the sock's toe, however, is still done by hand so any cost advantage becomes important when multiplied over high volume.  A few years Ft. Payne fought to re-instate a sock tariff to protect itself from cheaper laborers in South America, but today, more mills are still closing in Ft. Payne.  The culprit this time is the high cost of cotton, up to $2.40 per pound, double last year's price.  Only 10 mills remain in Fort Payne, and while some are focusing on higher end (and profit) product like organic socks, the industry is once again in deep trouble.

Alabama Sock Town Suffers as Cotton Soars - WSJ.com

Huawei waits for White House review before selling unit

It was the deal that almost slipped under the radar screen -- in May, Chinese telecom equipment maker Huawei purchased U.S. startup 3Leaf Systems for $2 million, a tiny deal in the world of M&A.  3Leaf creates technology that allows groups of computers to work together like a more powerful machine.  When the Pentagon found out about the deal, however, it asked the company to file for a review with the Committee on Foreign Investment in the United States (CFIUS), an interagency committee that reviews FDI into the U.S. that may pose a national security risk.  Now, CFIUS has recommended Huawei unwind the deal and divest 3Leaf, something Huawei doesn't want to do.  The company has appealed to President Obama for a final decision.

BBC News - Huawei waits for White House review before selling unit

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"

Rising China Bests a Shrinking Japan

It's official -- China is now the world's second largest economy, displacing Japan from a position it's held since 1967. At the same time, it's still one of the world's poorest economies, with over 100 million citizens living on less than $2 a day. This dichotomy is explored in today's WSJ article, as well as the video above.

Rising China Bests a Shrinking Japan - WSJ.com

WTO finds Boeing got billions in illegal subsidies, but how many billions?

While most are familiar with the bruising battle between Airbus and Boeing for market share as the only two competitors left in the large passenger jet market, with new competitors from Canada, Brazil, and China in the small passenger market nipping at their heels, it is the legal battle at the WTO between the two giants that is drawing the most blood.  Boeing and Airbus have been tied up in WTO litigation for years, each accusing the other of receiving various forms of subsidies from governments, all of which are illegal under WTO rules.  Boeing won a key victory last year when the WTO ruled Airbus did receive illegal aid, but this week the WTO signaled it would be handing Airbus a victory as well.  There are still major disagreements over which side received more subsidies, and over what to do next.

WTO finds Boeing got billions in illegal subsidies, but how many billions?

Auto Maker Nissan to 'Significantly' Reduce Exports From Japan

At Nissan, a move in the value of the dollar versus the yen by one yen in either direction is worth around 18 billion yen, or $219 million, of Nissan's operating profit on an annualized basis.  That's why the carmaker announced recently plans to dramatically reduce the number of exports from Japan and production increases in plants outside Japan.  Nissan joins Toyota and Honda, as all Japanese automakers have said it is difficult to export cars from Japan profitably when the Yen falls below 90 to the dollar (it is currently at 82).  Production of the Micra (above) will shift to India, the Micra to Thailand, the Juke to U.K., and the Rogue to Tennessee.

Auto Maker Nissan to 'Significantly' Reduce Exports From Japan - WSJ.com

In Nigeria, Used Cars Mark a Step Up for Middle Class

The World Bank predicts that the number of middle-class Africans, whose income exceeds their basic needs, will rise to 43 million by 2030 from 13 million in 2000.  That growth extends to Nigeria, the most populous country in Africa and a budding economic powerhouse.  The average income per capita is $2700, meaning that most Nigerians can only afford used cars.  This has led to a booming used car import industry, and the establishment of used cars as status symbols for middle class Nigerians.

In Nigeria, Used Cars Mark a Step Up for Middle Class - WSJ.com

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

Volvo Mulls China-Made Cars for U.S.

Volvo is a Swedish car company with a Chinese shareholder and a German CEO.  The company already builds a small number of cars in China for the Chinese market, but is now considering a major ramp-up in production in a new assembly plant (in Chengdu, where it's owner Geely has a major new plant), not just for the Chinese market, but also for the export market including the U.S.  Currently, American consumers readily purchase made-in-China consumer goods, but no one is selling a made-in-China automobile yet, and there is some concern that Volvo's customers may shy away from a Chinese-made vehicle.  This strategy is being driven partly by the desire to reduce currency risk.  Volvos produced in Sweden and Belgium are priced in Euros, and the exchange rate has eaten into Volvo's profitability.  The Chinese currency, the yuan, is pegged to the dollar and would provide Volvo with more protection from exchange rate swings.


Volvo Mulls China-Made Cars for U.S. - WSJ.com

Toyota Tries to Break Reliance on China

 

Toyota has a problem. The automaker, a leader in hybrid cars, is heavily reliant on neodymium (above, being mined), a rare earth metal that is used in magnets.  All electric cars rely on magnets in their motors.  These rare earths are mined almost exclusively in China (China makes 95% of the world's neodymium), making Toyota highly reliant on a supply chain that is vulnerable to import quotas, export tariffs (up 67% last year), political upheaval, and outright bans.  The price for these metals has soared recently as China orders more production to stay within China.  Toyota is forced to explore a new type of motor that doesn't rely on these metals.




Toyota Tries to Break Reliance on China - WSJ.com

Starbucks Brews Plan to Enter India

India remains a huge untapped market for coffee giant Starbucks.  The company plans to grow to 1500 outlets in China in the next five years, but doesn't have any retail stores in India yet.  That may change soon, as the company announced plans for an alliance with Indian conglemerate Tata Group.  Tata Coffee already owns Eight O'Clock brands sold in the U.S., and is a big coffee producer and exporter in India.  Indian law prohibits Starbucks from owning its own retail outlets.  The alliance starts with Starbucks purchasing coffee from Tata, and may grow to include joint operation of Starbucks-branded outlets in the country.

Starbucks Brews Plan to Enter India - WSJ.com

McDonald's Bets on Japan Big-Burger Blitz

Japan's top restaurant by number of outlets, McDonald's, rolled out its Big America 2 campaign last week, featuring the Texas burger (above).  It comes with chili, three buns, cheese and bacon, and comes in at 645 calories.  The Idaho burger features a quarter-pound patty, cheese, a hash brown, bacon, onions, and pepper-and-mustard sauce, for 713 calories.  In Japan, going big and unhealthy, and emphasizing its American roots, works well for McDonald's.  The company made $91 million in Japan last year.

McDonald's Bets on Japan Big-Burger Blitz - WSJ.com

Laos stock market opens to boost economy

Sandwiched between Vietnam and Thailand, Laos is one of the world's poorest countries.  The communist government has been trying to liberalize and attract foreign direct investment since the mid-1990's, and hopes to emulate China's model of gradual economic liberalization while maintaining a strong central government.  Yesterday, the country's first stock exchange opened.  It only lists two companies, but hopes to eventually serve as a fundraising tool to inject $8 billion into the economy.

BBC News - Laos stock market opens to boost economy

Vietnam Confronts Economic Quagmire

Although Vietnam's GDP is growing at 7% annually, double digit price increases, a downgrade on the country's sovereign debt, and an unstable currency make Vietnam's economy one of the most unstable in the region.  A big contributor to the instability is the existence of giant state-owned companies, especially Vinashin.  Vietnam's state-owned companies use 40% of the invested capital, but produce only 25% of the country's output.  Vinashin is now receiving a multi-billion dollar bailout from the government, and many investors believe that unless the Vietnamese government is willing to allow more state-owned companies to privatize or go under, the economy won't grow to its potential.

Vietnam Confronts Economic Quagmire - NYTimes.com

U.S. Ban on Mexican Trucking Is Reconsidered

Under NAFTA, the U.S. was supposed to allow Mexican trucks to operate on U.S. highways as long as they meet U.S. regulations.  Currently, goods trucked in from Mexico have to switch from Mexican trucks to U.S. trucks at the border.  Under pressure from labor unions, the U.S. has never implemented this portion of NAFTA, opening the door for Mexico to impose billions in retaliatory tariffs on a wide range of American agricultural goods.  This week, President Obama took tentative steps to resolve the dispute by proposing a concept document that would finally permit Mexican trucks into the U.S.

U.S. Ban on Mexican Trucking Is Reconsidered - NYTimes.com

W.T.O. Upholds Tariffs on Tires From China

Last year the Obama administration imposed tariffs of up to 35% on tires from China, arguing that the surge in imports had threatened domestic manufacturing.  China's ascession agreement into the WTO included a special safeguard section that allows the U.S. to make this argument, and this case marks the first time the U.S. has invoked this section of the WTO agreement.  Unlike traditional antidumping case, the U.S. only had to demonstrate that U.S. companies suffered "market disruption" from imports.  This week, a WTO dispute resolution panel ruled that the U.S. tire tariffs were legitimate and legal.  China vows to appeal the ruling.


W.T.O. Upholds Tariffs on Tires From China - NYTimes.com