Honeywell CEO: How America can compete with China

Honeywell CEO: How America can compete with China

David Cote

@FortuneMagazine

JUNE 2, 2014, 5:18 AM EDT

The U.S. may never have more people than China so we need to focus on being the most innovative and productive country on Earth.

During the mid 1800’s, we eclipsed the UK economically because of population growth and dynamism.  We encouraged business, a strong working ethic, and innovation (some stolen from the UK).  During this century, China may eclipse the US as the world’s biggest economy.  While some might point to the unsustainability of China’s political system, it is very different than it was 50 years ago or 20 years ago.  China may have more issues to deal with (corruption, wealth disparity, state owned enterprises, pollution, and ghost cities to name a few), but they have shown tremendous capability to evolve their system and address their issues.  We are standing still.

This is not a case of is China “good” or is China “bad,” rather it’s a case of China “is.” At current growth rates, in about 25 years China will be the world’s largest economy and will still have a lower GDP per capita, meaning more growth is possible. This is not to say China’s growth will continue uninterrupted. Something could go awry.  It also doesn’t mean we should stop objecting to issues like cyber security, territorial disputes and intellectual property issues. Read more of this post

Bust may be looming over China property market

Bust may be looming over China property market
Monday, June 2, 2014
By Kelly Olsen, AFP

BEIJING–After years of boom that have seen prices rocket, the prospect of a bust is looming over China’s vast property sector, with authorities hoping to avoid a meltdown that could send shock waves through the world’s second-biggest economy.

Housing was doled out by the state when Communist-style collectivism dominated economic management. But in the past two decades that has given way to market-oriented principles as China’s economy has opened.

New home prices have soared, more than quadrupling in Beijing and Shanghai since 2003, and more than doubling in the country as a whole, according to a report by Jeremy Stevens, Beijing-based Asia economist at South Africa’s Standard Bank.

The increases have been a key source of wealth for China’s rising middle classes, and a major driver of the economy.

Now some — including individuals who have made fortunes — foresee imminent disaster.

“I think Chinese property is the Titanic about to crash into the iceberg right in front of it,” Pan Shiyi, billionaire chairman of commercial developer SOHO China, said at a forum, China Business News reported last week.

At the same time, surging prices have driven homes beyond the reach of many ordinary Chinese, stoking resentment and inequality. Read more of this post

Banks in China fear over-reliance on IBM information systems; Chinese banks ditch US providers for Alibaba’s Aliyun

Banks in China fear over-reliance on IBM information systems

Staff Reporter

2014-06-01

The issue of Chinese banks’ relying on core technology from overseas for their information systems has been a cause for concern for many in the regulatory and banking sectors.

It is estimated that 90% of China’s banking institutions use IBM for their core technology, and China is urging its banks to remove high-end servers made by IBM in favor of the servers made by local brands.

China Banking Regulatory Commission chairperson Shang Fulin spoke on the issue at a meeting held in late 2012.

Shang suggested a strategy for self-reliance in stages so as to gradually steer clear of reliance on foreign brands. Read more of this post

Thai coup protesters have adopted the Hunger Games’ three-fingered salute

Thai coup protesters have adopted the Hunger Games’ three-fingered salute

By Quartz Staff 7 hours ago

At demonstrations against Thailand’s military government continued this weekend, protesters unveiled their newest tactic: Appropriating the three-fingered salute from the Hunger Games, which the movies’ downtrodden citizens use as a silent rebuke to their dystopian government.

Ever since the Thai military seized power last month, protesters have been using social media to organize hit-and-run demonstrations in Bangkok, and on Sunday they made a last-minute change of venue, gathering at the downtown shopping district’s Terminal 21 mall. They were opposed by hundreds of soldiers and police, who have mobilized at possible protest sites around the city to pre-empt large-scale demonstrations. At least four people were arrested, including one woman who was dragged into a taxi by undercover police after giving the three-finger salute.

Thais are avid consumers of pop culture, including the Hunger Games movies, so it’s not surprising that they have chosen to use the salute favored by cinematic heroine Katniss Everdeen. Adding to the cultural mash-up, protesters on Sunday said the three fingers stand for liberty, brotherhood, and equality—a slogan associated with the French Revolution that is now the official motto of France.

Inflation Prospect Changes Japan Stock Strategies; Some Investors Look for Companies Putting Their Cash Hoards to Work

Inflation Prospect Changes Japan Stock Strategies

Some Investors Look for Companies Putting Their Cash Hoards to Work

KOSAKU NARIOKA

June 2, 2014 7:31 a.m. ET

Some long-term investors are capitalizing on the recent weakness in Japanese stocks to scoop up shares of companies they believe will be winners in an emerging inflationary environment.

These investors are buying shares in companies that are positioning themselves for growth by ramping up capital spending, or putting cash in shareholders’ hands, because merely sitting on funds will no longer be a viable strategy if steady inflation returns to the economy.

The demand has helped the Nikkei Stock Average reach a nearly two-month high, although it is still down 8% since the start of the year. The average gained 2.1% Monday.

Government data released Friday showed consumer prices in April were up 1.5% from a year earlier, after stripping out the effects of an increase in the national sales tax at the start of the month. Generally speaking, signs of inflation are good news for Japan’s economy because they suggest stronger demand—consumers are less likely to hoard cash—after a deflationary spell dating to the 1990s. Read more of this post

Remembering Tiananmen: The lessons of history

Remembering Tiananmen: The lessons of history

As our bureau chief leaves China, he reflects on the crushing of the protests he witnessed 25 years ago, and what has transpired since

May 31st 2014 | BEIJING | From the print edition

EVEN after the Chinese army moved into Tiananmen Square on the night of June 3rd 1989, and cleared it of the detritus left by the students who had occupied it for most of the previous seven weeks, it was several days before observers were certain who was in control of China. Your correspondent, looking down Beijing’s central boulevard, Chang’an Avenue, at a maze of still-burning barricades a day after the bloody operation, was not alone in wondering whether the Communist Party could ever heal. This newspaper, with which he was not then linked, summed up a common view: “This week China looked into the abyss of coup, counter-coup and civil war”. Foreign doomsayers were proved wrong. But even after 25 years of relative stability, it is still wise to be cautious about the cohesion of Chinese politics.

It was not just foreign observers who were given to apocalyptic musings at the time. “If the rebels had had their way, there would have been a civil war,” Deng Xiaoping told a visiting Chinese-American physicist, Tsung-Dao Lee, three months after the army crackdown that left hundreds, if not thousands, dead. Thanks to strenuous efforts by the Communist Party to erase memories of what happened (see article), many in China now have only a dim understanding of the history of the protests in Tiananmen Square and the nationwide unrest they triggered. But Deng’s analysis is remarkably close to the mainstream among the generation of young urban residents who have grown up since: if they have heard of the 1989 protests, many feel that, though the killings may have been bad, the army’s resolute action helped to create the stability that allowed China’s economy to grow from one that was then smaller than Britain’s into the world’s second-largest. Read more of this post

Bad News for the Big Four Auditors in China

Bad News for the Big Four Auditors in China

Mainland ban on HK firms has little effect »

Paul Giles, 2 Jun 2014

The CICPA has issued their annual rankings of Chinese CPA firms for 2013. It is bad news for the Big Four. BDO’s Chinese affiliate Lixin jumped over both KPMG and EY to kick EY out of the Big Four in China. RSM and Crowe Horwath’s shared affiliate Ruihua pushed KPMG out when it passed both EY and KPMG last year. PwC continues to be the largest CPA firm in China, extending its lead over Deloitte. PwC’s growth was a modest 4%, while Deloitte actually shrunk by 5%.

Here are the top ten CPA firms in China in 2013:

In most parts of the world the top accounting firms release information on their performance. Although they are private companies, they are public interest entities and the public deserves to look in their drawers just as they look into everyone else’s. In China and Hong Kong, however, the Big Four are intensely secretive about their operations. The CICPA data is the only look inside. I believe that the data are generally reliable. It is used by the CICPA to set dues, so cheating upward would be expensive, and cheating downward could risk their right to practice. The revenue includes only audit fees. The Big Four operate their consulting practices in WFOEs and local firms report consulting revenues separately. Read more of this post

Singapore-Taiwan cross-border contactless card in the works

Singapore-Taiwan cross-border contactless card in the works

By John Leong 
POSTED: 02 Jun 2014 12:10
EZ-Link and Taiwan company EasyCard will be developing the card to allow Singaporeans to pay for public transport or admission tickets to local attractions in Taiwan, and vice versa.

SINGAPORE: Singaporeans will soon be able to access public transport and retail options while in Taiwan, and the same is true for Taiwanese travellers visiting the city-state.

EZ-Link and its Taiwanese counterpart, EasyCard, signed a Memorandum of Understanding (MOU) on Monday (June 2) to jointly develop a cross-border, multi-functional contactless card.

The card, named Cross Border Combi Card, will allow people to pay for anything from public transportation to admission tickets to local attractions. It will contain separate “purses” to store both Singapore and Taiwanese currencies, according to the companies.

EZ-Link said it hopes the new card will be ready within a year.

Myanmar to launch stock exchange by Oct. 2015: media

Myanmar to launch stock exchange by Oct. 2015: media

YANGON, June 1 (Xinhua)– Myanmar is ready to launch stock exchange by October 2015 and the related plan is progressing on schedule, state media quoted a government’s financial official as saying on Sunday.

Deputy Minister of Finance Maung Maung Thein told a seminar in Yangon that the three components for emergence of a capital market are taking place simultaneously, which are formation of a securities and exchange commission, launch of Myanmar’s first stock exchange and preparation by companies to be listed.

He said the Yangon Stock Exchange will be operated by the Myanmar Economic Bank in partnership with Japan’s Tokyo Stock Exchange (TSE) and Daiwa Securities Group and the signing of a joint venture agreement will take place soon. Read more of this post

China clampdown ahead of Tiananmen massacre anniversary

June 1, 2014 7:03 pm

China clampdown ahead of Tiananmen massacre anniversary

By Jamil Anderlini in Beijing

China has detained dozens of people and launched an unprecedented security operation in central Beijing to stop anyone commemorating the 25th anniversary of an event that has been virtually wiped from the collective memory of the nation.

A quarter of a century after the People’s Liberation Army turned its tanks and guns on the people and marched into Tiananmen Square on the night of June 3 and early hours of June 4, 1989, any mention of the massacre of hundreds, perhaps thousands, of people is banned from public life.

More than 50 people, including activists, lawyers, journalists and relatives of students killed in the massacre, have been detained, arrested or simply “disappeared” in recent weeks because of their efforts to commemorate the anniversary, according to human rights groups. Read more of this post

South Koreans drawn to unification-linked funds

June 1, 2014 5:41 am

South Koreans drawn to unification-linked funds

By Song Jung-a in Seoul

South Korean investors are pouring millions of dollars into unification-themed equity funds, reflecting local investors’ growing optimism over a unified Korea, although the chances of the two countries joining remain as remote as ever.

Such funds have emerged as an unlikely darling for Korean investors after President Park Geun-hye in her new-year speech compared unification to an economic “jackpot”, which has prompted an increase of discussion of national reunification in local media.

A combined net Won35bn ($35m) has flowed into two such funds over the past two and a half months in spite of volatile inter-Korean relations and Pyongyang’s warning of another nuclear test, while Won3.4tn has flowed out of the country’s other equity funds in the same period. Read more of this post

Appetite grows for Indonesia’s herbal remedies

June 1, 2014 5:45 am

Appetite grows for Indonesia’s herbal remedies

By Ben Bland in Jakarta

Whether suffering from headaches, a cold or flatulence, Indonesians have long sought relief in a range of cure-all herbal potions known as jamu.

By producing its signature Tolak Angin (“expel the wind”) herbal medicine in small, cheap-to-distribute sachets, Irwan Hidayat’s family took a cottage industry dominated by itinerant hawkers and petty stallholders and transformed it into a billion-dollar business.

“When I was small, I could not imagine that we could build a company such as this,” says the 67-year-old chief executive of Sido Muncul, the family’s herbal medicine company, which has seen its shares rise by 40 per cent since it listed in Jakarta in December, giving it a market capitalisation of more than $1bn. Read more of this post

Tiananmen Square: the long shadow; The leaders of the Tiananmen Square protests have taken varied paths in the 25 years since the massacre

June 1, 2014 3:47 pm

Tiananmen Square: the long shadow

By Jamil Anderlini

The leaders of the Tiananmen Square protests have taken varied paths in the 25 years since the massacre

©AFP

The massacre in which hundreds, perhaps thousands, of people died in Beijing on the night of June 3 and the early hours of June 4 1989 remains the most important and traumatic single event in modern Chinese history.

It was the moment the people’s army turned its guns on the people, shattering the legitimacy of the Communist party and ushering in an era of rapid capitalist-style reforms. Read more of this post