‘Corruption on wheels’ in China

During the Olympic Games in Beijing, residents were impressed by the blue sky over the city. This was so because the air is very polluted in Beijing, but for the Olympic Games they did a lot effort against pollution. For example they sharply reduced the number of vehicles on the roads, about 70% of government-owned cars.

This was such a success that the Beijing Municipality decided to continue the car restrictions. But now it seems that Beijing's authorities don’t have any problems with the car restriction and operate as good as before.
This raised a big question: if they could function so well without so many cars, why did it spend so much tax money to buy and maintain so many vehicles in the first place?

Now, there is a big focus on the issue in China. If we compare the amount of money that China spends to education, 610.4 billion Yuan, and the amount of money for government-owned cars, 600 billion Yuan, I think it’s logical that the Chinese people ask questions...
A lot of the government-owned cars are not only used for what they serve, but a lot of officials also make private trips with their cars to famous holiday spots, pick their children up at school,...

Now the question is raising how many cars the Chinese government really needs. I think that’s quite logical because the people pay taxes that are used to buy cars for the Chinese government, who doesn’t need all those cars. Their tax money should better be invested in education or social security for example, instead of wasting it to unnecessary cars.
This also has an other positive aspect. China is finally doing something about their pollution. They are known as one of the most polluting countries in the world, so I think it’s a very positive fact that the people in Beijing now are asking questions if it’s really necessary to use so many cars. This only can lead to a more ‘green’ way of living and producing, which is really necessary.

source : http://www.atimes.com/atimes/China/JK25Ad01.html

India moves to cut prices on fuel

The Oil Minister of India has announced that the prices of fuel will reduce. The fuel retailers will be allowed to reduce their prices with five rupees or 10 US cent for a litre petrol and two cents for a litre diesel. With this drop, the government hopes to stimulate the economy in this global credit crisis.
For India, it's his first drop in 22 months of high prices. Price drop is also good for the government because now they could probably achieve their economic stimulus plan.Some economist say that the reducing prices also can be combined with a short-term cut of the interest rate but only for the weekend. With this move, the economist hope that people will put money on their bank or that they will buy more.

I think that the price dorp of India will give their economy a boost.The people of India will now have more money because they don't have to spend a lot of money anymore for fuel and with that money they buy more or put it on a deposit account. But I don't think that the cut of the short-term interest rate during the weekend will boost their economy, I think that it's a to short period for people to decide whether they will put their money on the bank or not.
So generally I think that India can boost their economy by dropping the price of fuel and the short-term interest rate, but they have to exist for a long time.

source: http://news.bbc.co.uk/2/hi/south_asia/7767617.stm

Will the Mumbai attacks hurt India's prospects?

After the attacks on Mumbai, the Indian financial sector is looking less and less attractive to foreigners. The situation was already very bad before the attacks, but now it’s worse. This year, investors already sold 13.4 billion dollars of equities. This is also a cause why the Sensex, the bench market, dropped with 60% since January.
Everyone thought also that the Indian economy was immune for the worldwide downturn, but India is just like all other Asian countries who felt the worldwide downturn. This is strange because India is less exposed to the global economy through export and felt the same effect as those countries who have more export.

There growth is also slowing down. At the moment there growth is about 7,5% and next year they hope to have minimum 5%, but it’s going to be hard to get this. The reason why it’s going to be hard to get that result, is the fact that the investments are decreasing. Local banks are less willing to give loans and companies have to loan more abroad.

Specialist say the growth of India in 2010 is going to be negative, but say that India still looks compelling over the long term. I agree with this because, I think now India is just like any other country, they just are trying to survive this economical recession. That is the reason why banks are less willing to give loans. The slowing down of the growth of India is not only caused by the attacks of Mumbai, but is also caused by slowing down of the world economy and the export.

Source: http://www.moneyweek.com/news-and-charts/economics/will-the-mumbai-attacks-hurt-indias-prospects-14214.aspx

Japan set to tackle lending costs

The bank of Japan held last Tuesday an emergency meeting to solve the problem of the rising borrowing cost for Japanese companies in this economical crisis. These costs are rising at their fastest pace in ten years.
The bank is under increasing pressure because they provide money to the financial markets aggressively as market rates increase due to the credit crunch.
It’s a fact that the Japanese economy is getting more worse every day. Japanese industrial output and the consumer spending has fallen deeply what encourages the fear that Japan is heading to a recession.
Despite the sad prognosis, economists say that a interest cut would be very good, but cutting further then would have an negative influence on the operations on the money markets.
It’s a good idea to reduce the lending costs because cheaper loans will encourage companies and consumers to borrow more money and they will spend it to consumer products which is exactly what’s necessary to get out of the negative spiral where they are in at the moment. Now it is upon the economist to solve this very difficult balance exercise to find the perfect interest rate that wouldn’t influence the financial market to bad but would encourage consumer spending.

Source: http://news.bbc.co.uk/2/hi/business/7758401.stm

Shares up as India market reopens

The stock exchange of India has reopened after it was closed on Thursday because off the attacks in Mumbai, the business capital of India. The benchmark Sensex has rising with 0.7% wich is not bad for what's happend in Mumbai.
The attacks have a little impact on the other Asian markets, most of them have rising, but have brought many companies in problems on short-time. Some companies have to cancell al their meetings and conferences which means that they couldn't be working like they would and maybe have had losses. But people say that the businness in Indai wille be normal again, they haven't got a choice, people have to have food, companies have to produce,...
Like many other countries, India has sufferd from the global credit crunch, plenty off foreign investors have already pulled their money from the Indiane markets. But their are also companies who said that, due to the attacks, they will be no changes in their long-term investments.
Indian economists said that India will always be popular for foreign investors because they can give them what others countries can offer. The predictions for the future are good. The growth rate for example will be 9% in 2009.

I think that India will be in problems if the attacks will last on will go further through the country. When I for example will be an investor and i have had money in India I would immediatly pull off the markets. Because off the attacks the companies can produce what they produce normal conditions. And also becausse off the global credit crunch, I think that India has no good papers for the future despite off the good growth rate of 2009.
Also I think that new foreign investors will put their money on markets that are more stable than the Indian market.

source: http://news.bbc.co.uk/2/hi/business/7753843.stm

China sets a green standard

American environmentalists are pleased with the efforts that China is doing to green its financial sector. The environmentalists even say that regulators in the United States could learn from the recent success that China achieved by stimulating investments that don’t despoil the world.

In a recent Chinese report we could see a very positive and remarkable highlight! The Chinese financial sector does now even have policies to limit the pollution and climate change. There is a regulation that says that Chinese banks may not lend money to companies that aren’t in compliance with the environmental laws. For example we could take the industrial and commercial bank of China. They reduced their loans to polluting industries by 24%!

There’s even a Ministry of Environmental Protection created. So far, there are already 38 firms consigned on a credit blacklist. This because of their environmental violations. In figures we could say that there is already a $293 million in loans is denied or recalled because of environmental violations.

I think that the Chinese government is on a very good way with the efforts that they are doing to green its financial sector! It’s very important that we all think about the environment because we have to think about the next generations. If we keep polluting like we are now doing, there will be a big problem. So I think that it’s very important to stimulate and reward companies who are trying to produce in a less polluting way.


source: http://www.atimes.com/atimes/China_Business/JK25Cb01.html

Japanese production falls sharply

The Japanese production and consumer spending have fallen sharply what indicates that the country is heading for a serious and prolonged recession.
The industrial production fell by 3.1% and the consumer spending by 3.8% in October compared with previous month. Both a lot faster than analysts predicted. That resulted in companies adjusting their production very quickly to reflect the lowered demand. Car makers are the ones that are hit the worst. But other sectors also start suffering, steelmakers for example.
Analysts are now forecasting a drop in industrial production of 8.6% for the fourth quarter. Early figures already showed that the Japanese exports fell by 7.7% and the Yen climbed stronger than ever against the Dollar. This is very bad because the Japanese production is very reliant on export to other industrial countries who all have been hit by the global crisis.

The recession is something the Japanese government will have to fight against by taking measurements that will help both the companies and the consumers. And it’s their duty to preserve the current level of prosperity by minimizing the negative effects. But on a general view I think the Japanese economy will have to endure this difficult period and they can only hope it will get better soon.


Source: http://news.bbc.co.uk/2/hi/business/7754159.stm