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Dr. Jean-Marc F. Blanchard's picture

Shanghai Free Trade Zone Still Nowhere Near “The Zone”

The launching of the Shanghai Free Trade Zone (SFTZ) approximately one year ago generated considerable excitement. Months before its launch, Chinese media began to talk of an area that would be “grander and bolder than anything that has ever been conceived.” As far as foreign investors were concerned, the SFTZ’s marquee idea was a “negative list,” which essentially let in foreign investors automatically unless otherwise prohibited.

Dr. Toshiya Ozaki's picture

Micro-level Challenges to Abenomics

Poor macroeconomic policies over the last two decades have been highlighted as the main cause of Japan’s economic difficulties. Following the bursting of the economic bubble in the early 1990s, Japan failed to act decisively to boost money supply and lower interest rates to prevent the economy from falling into deflation. In a deflationary environment, consumers stopped spending and firms stopped investing which exacerbated deflationary pressures.

Dr. Jean-Marc F. Blanchard's picture

Trying to Turn Gold into Lead: Mislabeling Chinese-American FDI in Africa

The first US-Africa summit took place in August. It afforded the US an opportunity to show it was not completely distracted by events in Gaza and Ukraine. It also gave US businesses, encouraged by US President Barack Obama, a chance to strike deals with giants like Coca-Cola, General Electric, and IBM and investors like Blackstone pouring $14 billion into Africa. Not surprisingly, Western media seized upon the summit to raise the issue about the US-China competition in Africa (even Chinese media jumped on this bandwagon) and whether or not the summit showed the US was catching up.

Dr. Amitendu Palit's picture

Adani Coal Project in Australia and benefits for India

India's Adani Group got approval for its US$16 billion coal mining project in Queensland of Australia. The Carmichael coal project is India's biggest private investment till date in the Asia-Pacific. With six open cut pits and around five mines, the project, spread over around 30,000 hectares of land area will be the biggest in Australia. Being located close to the ecologically fragile Great Barrier Reef, the project invited the ire of environmentalists for obvious reasons. It has eventually been sanctioned with a large number of strict environmental compliance conditions.

Dr. Jean-Marc F. Blanchard's picture

Nuggets of Wisdom about Beefing up Cooperative Compliance

Roughly ten days ago, Shanghai authorities carried out a raid on Shanghai Husi Food Co. (owned by US-based OSI Group), a supplier of beef, chicken, and pork products to fast food chains such as KFC, convenience store FamilyMart, and coffee chain Starbucks. The raid occurred after undercover reporting revealed the use of expired meat and poor safety practices at Shanghai Husi. Various Shanghai Husi employees have charged the firm used meat that had passed its expiration date, mixed dirty meat with clean meat, doctored expiration labels, falsifying reports, and violated employment law.

Dr. Amitendu Palit's picture

India’s FDI Prospects and the APEC

The euphoria over the birth of the NDB (New Development Bank) at the 6th BRICS Summit overshadowed the invitation extended by Chinese President Xi Jinping to Indian Prime Minister Narendra Modi for the APEC Leaders meeting in China in November. Mr. Modi’s presence at the meeting would significantly improve India’s prospects of joining the APEC. President Xi’s invite reflects the possibility of China supporting India’s entry. This would enhance the strategic backing India enjoys from other major APEC members like Australia, Japan, Indonesia and the USA.

Dr. Scott MacDonald's picture

Corporate Rationalization and Iron Ore Miners: Tough Times

The global iron ore mining industry is undergoing a major rationalization, which emphasizes the importance of corporate flexibility in the face of changing market conditions. Iron ore industry prices have fallen from over $130 per metric ton (CFR Tianjin Port prices) at year-end 2013, hitting their lowest level ($89) in almost two years in June. Numerous analysts expect that prices will stay below $100 for the rest of 2014 and possibly 2015, as well. A major driver of this price plunge is oversupply, partially caused by the ramping up of production by the major multinational corporations (mainly Australian and Brazilian) that dominate the business.

Dr. Jean-Marc F. Blanchard's picture

Petrochemical Abuse or Libya All Over Again?

The Libya uprising in 2011 cost Chinese multinational corporations (MNCs) billions. Now, the story seems poised to repeat itself, albeit this time in Iraq where Sunni radicals belonging to the Islamic State of Iraq and Levant (ISIL) now control large portions of western and northern Iraq. While ISIL has yet to endanger Iraq’s most valuable oil fields, its onslaught still poses multiple threats to Chinese interests. These include higher oil prices, disruptions of oil shipments from Iraq (no small matter given Iraq is China’s fifth largest oil supplier), damage to multi-billion dollar investments by Chinese MNCs such as CNPC and Sinohydro, harm to Chinese nationals, and the validation of radical Islam.

Dr. Scott MacDonald's picture

Asian Corporations, Middle East Oil and New Geopolitics

The Middle East’s new geopolitics are creating a more challenging environment for Asian corporations. While Iraq’s future viability as a state is questionable due to the June battlefield successes of the Islamic State of Iraq and Syria (ISIS), more terrifying is the Sunni extremist movement’s incitement for a broader regional Sunni-Shia civil war. Add to this the potential fragmentation of Yemen and Libya and the ongoing brutish civil war in Syria and we are left to ponder - will a new round of instability spread into the major oil-producing states in the Persian Gulf?

Dr. Jean-Marc F. Blanchard's picture

Racing along a bumpy road-Automobile MNCs in China

The China car market assumed great salience in 2009 as a result of the global financial crisis, which pummeled auto demand elsewhere, Beijing’s successful use of stimulus measures to speed economic and sectoral growth, and the rapid expansion of China’s car culture. In response, many foreign firms accelerated their China investment plans, greased local relationships, and expanded the local sourcing of parts. China, now the world’s largest market, has become vital to global car companies’ sales revenues, licensing and royalty fees, and profits.

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