Category: Asia ex-China

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Made in Chindia: Two Paths Toward Industrialization

By Clement Tan and Siddharth Philip

June 1 (Bloomberg) — It may sound like another example of rivalry between the world’s most populous nations.

The Communist Party recently announced a Made in China program aimed at transforming its manufacturing sector, months after Prime Minister Narendra Modi unveiled his Make in India plan, also targeted at manufacturing. Look closer though and the signs point to a broad shift that could draw the two Asian giants closer economically in the years ahead.

Made in China 2025 is a 10-year campaign to push the country beyond labor-intensive work into more sophisticated sectors, from robotics to aerospace. Modi’s goal is to bring basic manufacturing to an economy that needs more decent-paying jobs. In short, China has set its sights on rivaling Germany or Japan, while India will happily settle for where China is now.

“Whatever industries China will be shedding over the years, India can capture,” said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong. “The advanced guys will find that they finally have to compete head to head with China and I think it’s going to be a big, big headache for these industrialized countries.”

Besides sheer scale, China is years, if not decades ahead of its neighbor. According to International Monetary Fund and World Bank data, China’s gross domestic product per capita is almost five times that of India at $7,600 and its manufacturing sector is 10 times bigger at about $3 trillion. Still, China is losing workers by the millions, similar to what Japan experienced in the late 1990s.

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TransAsia Won Delay of New Safety Rule Prior to Fatal Air Crash

By Tim Culpan and Clement Tan

Feb. 9 (Bloomberg) — Taiwan aviation officials agreed last month to TransAsia Airways Corp.’s request to push back enforcement of a new rule aimed at forcing them to have more time to conduct pre-flight checks.

Authorities delayed until March 1 their implementation of minimum transit time requirements, introduced this year after a fatal crash on Taiwan’s Penghu islands in July, because the airline had already published its schedule for January and February, Clark Lin, director of flight standards at the Civil Aeronautics Administration told Bloomberg News.

Enforcement of the new rule, which applies only to TransAsia and its fleet of ATR 72 aircraft, would not necessarily have prevented last week’s fatal crash, he said.

Flight GE-235, with aircraft registration No. B-22816, departed Taipei’s Songshan airport on Feb. 4 for the pilots’ second trip to Kinmen near China that morning before crashing four minutes later in the nearby Keelung River. A review of the aircraft’s Technical Log Book entries, which were kept by TransAsia and released by the CAA, show the pilots may have spent just 20 minutes at the gate in Kinmen while fuel was added, before returning to Taipei.

At least 40 people have been confirmed dead and three are still missing after pilots responded to engine warning alarms before the aircraft plunged into the water.

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Asia’s Richest Man Starts 2015 With $45 Billion in Deals

By Clement Tan

Jan. 23 (Bloomberg) — For Li Ka-shing, Asia’s richest man, 2015 is turning out to be a busy year.

Li’s Hutchison Whampoa Ltd. said today it’s in exclusive talks to buy U.K. wireless carrier O2 for as much as 10.25 billion pounds ($15 billion), three days after Li-controlled units agreed to purchase a British rail business for more than 1 billion pounds. Two weeks ago, the octogenarian announced his biggest deal yet: the $20 billion-plus merger of Cheung Kong Holdings Ltd. and Hutchison Whampoa, his two main companies.

Li, 86, isn’t done. One of his companies is among bidders for Fortum Oyj’s Swedish electricity grid, a sale people familiar with the matter have estimated could fetch more than $5 billion, and more deals may be on their way. The flurry of activity comes as the tycoon, so revered by Hong Kong’s media they call him “Superman,” reorganizes his business empire before handing over the reins to his eldest son, Victor Li.

“The profile of the company is slowly changing to becoming one where the regulated utility type of cash flow is becoming more significant,” said Kalai Pillay, head of Asia-Pacific Industrials research at Fitch Ratings in Singapore. “They will be looking at things that are more long term cash.”

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