Bharat Rakshak

BEIJING — Premier Wen Jiabao told a visiting Japanese delegation Sunday that Japanese companies operating in China should address workers' unhappiness over low wages that he says led to labor disputes this year.Wen's comment comes after Japanese Foreign Miniter Katsuya Okada called for "transparent policies" governing workers in China, saying the labor disputes that halted work at dozens of factories were troubling to Japanese companies.Okada brought up the issue at a high-level economic meeting between China and Japan – the world's second and third largest economies – held in Beijing to discuss ways to recover from the economic crisis and foster regional cooperation. Wen met the Japanese delegation on Sunday."Labor disputes are occuring at some foreign companies, where there is a problem of relatively low wages. We would like (Japan) to address this issue," Wen told Japanese officials, according to a news release by Japan's foreign ministry.Okada said Saturday that the sides discussed ensuring transparent policies during talks on how to improve the business environment in China. "As to the recent frequent labor dispute issue, the Japanese side expressed willingness to further strengthen discussion."The widespread strikes were rare for China but the government permitted them, apparently trying to put more money in workers' pockets as part of efforts to boost consumer spending.

he grows his own food, forages, or does barter trade with others exchanging work for grain or other stuff.

he wrote a book ÈThe Moneyless ManÈ

These type of guys are just trying to be cool. It is possible to do these kind of things when one is young and healthy. I suspect that he must be hoping to make more money by selling the book. In order to have a realistic demonstration of lifestyle of this kind, he should have a family, children and elderly parents to take care of, while following this lifetyle.

Spain hopes China will increase its investment in Spanish government debt, Prime Minister José Luis Rodríguez Zapatero said on a visit to Beijing, highlighting China's importance as a source of global capital.

A spokesman at the Spanish embassy in Beijing said China bought €400 million of Spanish government bonds in July.

Mr. Zapatero's statement reflects how China is increasingly seen as a source of capital by global corporate and political leaders, thanks to its massive pile of foreign-currency reserves, which is by far the largest in the world, totaling $2.454 trillion at the end of June. The majority of China's holdings are invested in Treasurys and other U.S. dollar assets, but the government has made efforts to diversify into other currencies and asset classes in recent years, and companies and governments have sought to take advantage of that.

Earlier this year, the Greek government approached the Chinese reserves managers about buying its bonds during that country's sovereign-debt crisis. And in February last year, during her first visit to China as U.S. Secretary of State, Hillary Clinton praised China for its ongoing purchases at a time the U.S. was concerned about how it would fund its planned stimulus spending.

Global markets rallied yesterday as better-than-expected manufacturing data from the US and China allayed fears of a double-dip recession.

Sept. 6 (Bloomberg) -- European finance ministers this week will try to protect their clout at the International Monetary Fund after the U.S. unexpectedly forced a debate on which countries sit on the institution’s board of directors.

Meeting today and tomorrow in Brussels, European officials are under pressure to reduce the number of their seats to give emerging economies more voice. They’re rushing to respond to a U.S. decision last month to block a proposal to maintain the IMF board in its current 24-seat form.

If that's the case, then USA's major share in agricultural output means that global food prices could drop significantly. The common man in India might see benefit in this through a reduction in inflationary pressures, particularly on food.

Merger and acquisition activities of trans-national corporations (TNC) are due for a rebound and will be the major focus in foreign direct investment (FDI) activities around the globe, according to an UNCTAD survey. China, India and Brazil are likely to be the major beneficiaries of this rebound in global M&A business.

China, India, Brazil, US, Russian Federation, Mexico, UK, Vietnam, Indonesia and Germany are the top ten investment destinations for FDI until the end of 2012, says the survey. Last year's number two, the United States of America, is now in fourth place with India moving up from third position to occupy the second slot behind China.

We had a fight with the United States in the WTO on cotton and we won. We had a fight with them on sugar and we won,' Lula said, referring to two cases in which the World Trade Organisation had ruled in favour of Brazil and against U.S. farm aid. 'In the olden days, they said don't fight with the United States, they are very big,' Lula said during a public works inauguration in the central Minas Gerais state. 'Look, an elephant has a certain size. The trunk is as big as 10 rats but put a mouse near the elephant and see how the beast trembles and wets itself,' he added.

Japan Plans to Seek Discussions With China on Bond Purchases

Just a few months ago, Barclays and Society General was caught trying to sell credit default swaps and other junk in India without permission from the govt.

Last week Japan’s minister of finance declared that he and his colleagues wanted a discussion with China about the latter’s purchases of Japanese bonds, to “examine its intention” — diplomat-speak for “Stop it right now.” The news made me want to bang my head against the wall in frustration.
You see, senior American policy figures have repeatedly balked at doing anything about Chinese currency manipulation, at least in part out of fear that the Chinese would stop buying our bonds. Yet in the current environment, Chinese purchases of our bonds don’t help us — they hurt us. The Japanese understand that. Why don’t we? Some background: If discussion of Chinese currency policy seems confusing, it’s only because many people don’t want to face up to the stark, simple reality — namely, that China is deliberately keeping its currency artificially weak. The consequences of this policy are also stark and simple: in effect, China is taxing imports while subsidizing exports, feeding a huge trade surplus. You may see claims that China’s trade surplus has nothing to do with its currency policy; if so, that would be a first in world economic history. An undervalued currency always promotes trade surpluses, and China is no different. And in a depressed world economy, any country running an artificial trade surplus is depriving other nations of much-needed sales and jobs. Again, anyone who asserts otherwise is claiming that China is somehow exempt from the economic logic that has always applied to everyone else.
So what should we be doing? U.S. officials have tried to reason with their Chinese counterparts, arguing that a stronger currency would be in China’s own interest. They’re right about that: an undervalued currency promotes inflation, erodes the real wages of Chinese workers and squanders Chinese resources. But while currency manipulation is bad for China as a whole, it’s good for politically influential Chinese companies — many of them state-owned. And so the currency manipulation goes on.

Sept. 14 (Bloomberg) -- Japanese investors are pouring more money into Brazilian bonds than any region in the world after Latin America’s biggest economy raised interest rates the most of any nation this year.

...

“The Japanese are probably some of the most aggressive investors because they know that the carry trade is very valuable,” said Luis Fernando Lopes, who helps manage 1.1 billion reais ($643 million) at Patria Investimentos in Sao Paulo. “Rates aren’t going down in the foreseeable future and that’s an interesting play on fixed income.”

...
Japanese Immigrants

Cultural ties between Japan and Brazil are helping fuel demand for the debt, according to Patria’s Lopes. Brazil has about 1.6 million Japanese or people of the nation’s descent, the biggest community outside of Japan, according to the country’s embassy in Brasilia.

The slow-moving standoff between the United States and Europe regarding the composition of the International Monetary Fund's board (see here) shows some signs of coming unstuck. Germany has signaled that the EU is moving toward acceptance of thinner representation on the IMF board:

"We agree in principle that there has to be some sort of reshuffle of the executive directors that allows for a better representation of the dynamic, developing nations but we see this in a slightly bigger framework."

That "slightly bigger framework" might include a firm agreement to keep the existing 24-member board and, perhaps, a U.S. willingness to forfeit the effective veto power it now has over major Fund decisions (these require 85 percent of votes, and the U.S. has about a 17 percent voting share). No word yet from Washington on whether that would ever be considered. For the major developing countries, the sight of Washington and Brussels bidding against each other to loosen the Western grip on the institution must be enjoyable.

I think that one of the main reasons why the WTO is no longer in the line of fire is that the change in the pattern of world trade over the last decade - combined with a slump in the West and a boom in China and India - makes the idea that global free trade is a tool of western domination look increasingly absurd. The world has got a lot more complicated than that; and even the anti-globalisation movement has had to acknowledge that complexity, if only tacitly. These days, it is the developing nations that are pressing for completion of the Doha Round and the rich countries that are dragging their feet.

India can showcase its massive infrastructure spending and a wider current account deficit at the next G20 summit as its contribution to reviving global economic demand, a senior adviser to the government said on Thursday.

Asia's third-largest economy is looking overseas to import equipment to help build infrastructure projects worth a planned USD 1.5 trillion in the ten years to 2017.

India is planning to spend USD 1.5 trillion on infrastructure in the ten years to 2017 to overhaul its creaking road, railway and power sectors, long seen as a drag on growth in Asia's third-largest economy.Investment in infrastructure is more import intensive. So it is our expectation that if we follow that approach, even though exports will be a little depressed compared to what they would have been in a booming situation, the current account deficit may widen," Ahluwalia said.
"We are willing to live with that. We think we'll be able to finance it, so it's not actually a big problem, but the key to financing it is that there should be stability and an element of certainty in the global financial system, especially as far as flows to emerging market countries are concerned."

DOHA (Zawya Dow Jones)--Office vacancies in Dubai's financial center could hit 40% over the next couple of years as oversupply chokes the emirate's already battered property market, a new report from global real-estate consultancy Jones Lang LaSalle, or JLL, said Sunday.

"The inevitable conclusion is that vacancies will continue to rise across the Dubai market in the short term, as the level of office stock increases ahead of demand," JLL said.

Vacancy levels in Dubai's financial center are predicted to peak between 30% to 40% in 2011 and 2012, but then are expected to decline to 10% to 15% by 2014.

Global Governance 2025:at a Critical Juncture

The United States’ National Intelligence Council (NIC) and the European Union’s Institute for
Security Studies (EUISS) have joined forces to produce this assessment of the long-term prospects
for global governance frameworks. This exercise builds on the experience of the two institutions in
identifying the key trends shaping the future international system. Since the mid 1990s, the NIC has
produced four editions of its landmark Global Trends report. The most recent one, Global Trends
2025: A Transformed World, published in late 2008, noted that momentous change was ahead, with
the gap between increasing disorder and weakening governance structures widening. The EUISS
produced the first EU-level report on the factors affecting the evolution of the international system
in 2006, The New Global Puzzle. What World for the EU in 2025? The report stressed that a
multipolar system is emerging and that matching the new distribution of power with new rules and
institutions will be critical to preserving international peace and stability.

The shift to a multipolar world is complicating the prospects for effective global governance
over the next 10 years. The expanding economic clout of emerging powers increases their
political influence well beyond their borders. Power is not only shifting from established powers
to rising countries and, to some extent, the developing world, but also toward nonstate actors.
Diverse perspectives and suspicions about global governance, which is seen as a Western
concept, will add to the difficulties of effectively mastering the growing number of challenges.
• Brazilians feel there is a need for a redistribution of power from developed to developing
states. Some experts we consulted saw Brazil tending to like “old fashioned”
multilateralism, which is state-centered and does not make room for nonstate actors.
• Many of our Chinese interlocutors see mounting global challenges and fundamental defects
in the international system but emphasize the need for China to deal with its internal
problems. The Chinese envisage a “bigger structure” pulling together the various institutions
and groups that have been established recently. They see the G-20 as being a step forward
but question whether North-South differences will impede cooperation on issues other than
economics.• For participants from the Persian Gulf region, the question is what sort of global institutions
are most capable of inclusive power sharing. They bemoaned the lack of strong regional
organizations.
• The Indians thought existing international organizations are “grossly inadequate” and
worried about an “absence of an internal equilibrium in Asia to ensure stability.” They felt
that India is not well positioned to help develop regional institutions for Asia given China’s
preponderant role in the region.• Russian experts we consulted see the world in 2025 as still one of great powers but with
more opportunities for transnational cooperation. The Russians worried about the relative
lack of “transpacific security.” The United States, Europe, and Russia also have scope for
growing much closer, while China, “with the biggest economy,” will be the main factor in
changing the world.
• The South Africans assessed that globalization appears to be strengthening regionalization as
opposed to creating a single global polity. They worried that the losers from globalization
increasingly outnumber the winners.
In addition to the shift to a multipolar world, power is also shifting toward nonstate actors, be
they agents or spoilers of cooperation. On a positive note, transnational nongovernmental
organizations, civil-society groups, churches and faith-based organizations, multinational
corporations, other business bodies, and interest groups have been equally, if not more effective
than states at reframing issues and mobilizing publics—a trend we expect to continue. However,
hostile nonstate actors such as criminal organizations and terrorist networks, all empowered by
existing and new technologies, can pose serious security threats and compound systemic risks.
Many developing countries—which are likely to play an increasing role at the regional and
global level—also suffer from a relative paucity of nonstate actors, that could help newly
emerging states and their governments deal with the growing transnational challenges.

In the September poll of 1,408 investors, analysts and traders who are Bloomberg subscribers, respondents rate the U.S. fourth for potential returns over the next year, behind Brazil and China, tied for first, and India, in third place. The U.S. economic situation “is obviously unsustainable, and the concerted attempt to suspend disbelief is playing increasingly poorly abroad,” says poll respondent Eric Kraus, chief strategist for Otkritie Brokerage House in Moscow. “One can delay, but no one can forestall the unwind of a multidecade credit bubble.” Economic reports released since the June poll show U.S. GDP growth slowed to 1.6 percent in the second quarter from 3.7 percent in the first quarter. In the final quarter of last year, GDP grew at a 5.0 percent annual rate.
Expectations for U.S. GDP growth next year have dropped to a median forecast of 2.5 percent in September from 2.9 percent in June, according to Bloomberg’s monthly survey of economists. Since the June survey, U.S. stock markets have been on the rise. The Standard & Poor’s 500 Index has risen 3.62 percent since the last investor poll was completed June 3. That’s not as much as Brazil’s Bovespa Index, which is up 10.56 percent and India’s Bombay Stock Exchange Sensitive Index, which is up 10.44 percent. The U.S. stocks still did better than China’s Shanghai Stock Exchange Composite Index, which has risen 1.41 percent since June 3. “I think the U.S. will get back on track, but not in the next 6-12 months,” says poll respondent Thomas Knudsen, a senior trader with OW Supply & Trading in Copenhagen.

By GREG KELLER

PARIS

The French government unveiled Wednesday a 2011 budget that aims to tighten the deficit sharply in the face of pressure from both its European partners and international investors.

The 2011 budget presented in parliament includes euro40 billion ($54 billion) in spending cuts and extra revenue that Budget Minister Francois Baroin says will rein in the country's deficit to 6 percent of gross domestic product next year from 7.7 percent in 2010.

"This is a historic budget," Baroin said. "A drop in the deficit by 1.7 percentage points in one year has not been seen in fifty years," he said.

To meet its goal, the government is also counting on economic growth picking up to 2 percent next year from 1.5 percent in 2010.

Finance Minister Christine Lagarde said she had "no hesitation" in sticking with that forecast, which is above that of many private sector economists as well as the European Commission.

France has pledged to its European partners to bring down its deficit to 3 percent of GDP by 2013. While Germany has set 2016 as a date to balance its budget, Baroin would only say that France will "probably take a little longer" to do the same. France's debt meanwhile is forecast to continue rising to almost 88 percent of GDP in 2012 from 83 percent this year, and to begin falling beginning in 2013.

Much of the spending cuts in next year's budget come from a rollback in stimulus measures France introduced during the financial crisis. Another euro10 billion will be saved by eliminating tax breaks, including those for so-called "triple-play" internet, television and telephone contracts and a break for newly wedded couples.

The view that nations compete against each other like big corporations has become pervasive among Western elites, many of whom are in the Clinton administration. As a practical matter, however, the doctrine of "competitiveness" is flatly wrong. The world's leading nations are not, to any important degree, in economic competition with each other. Nor can their major economic woes be attributed to "losing" on world markets. This is particularly true in the case of the United States. Yet Clinton's theorists of competitiveness, from Laura D. Andrea Tyson to Robert Reich to Ira Magaziner, make seemingly sophisticated arguments, most of which are supported by careless arithmetic and sloppy research. Competitiveness is a seductive idea, promising easy answers to complex problems. But the result of this obsession is misallocated resources, trade frictions and bad domestic economic policies.