Aksu City, China (AHN) – While elementary school children were walking down the stairs toward their playground, some fell triggering a stampede. According to reports nearly 100 students were hospitalized and one is listed as being in a coma.

According to a government spokesman who refused to disclose his name, the incident occurred at 12 p.m. at an elementary school in Aksu city in China’s Xinjiang Uygur Autonomous Region.

Safety in China’s schools and its nearly 220 million primary and middle school students has been the topic of public scrutiny after several attacks on schoolchildren in various parts of the country over the last few months. The attacks prompted school officials to deploy more guards and surveillance cameras on the premises.

The recent stampede puts into focus another aspect of the issue that must be addressed in the protection and safety of China’s schoolchildren.

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Dubai, United Arab Emirates Michael Grubb – Dubai International Airport, the largest in the Gulf, is outpacing the world aviation industry’s recovery this year as it capitalizes on its role as a pivot for business travelers arbitraging between a struggling Europe and the burgeoning economies of Asia. But analysts warn that Dubai’s success makes it a likely magnet for new competition.

Traffic through Dubai International rose by close to 16 percent in the first nine months of the year, well ahead of the 12.9 percent average increase in the Asia-Pacific market, making it the world’s fastest growing, according to Airports Council International. The pace of growth for Dubai continued in October, when traffic exceeded 4 million people for the second time ever, Dubai Airports reported Wednesday.

Aviation is a big and thriving business for tiny Dubai, whose economy is otherwise struggling with some $100 billion of real estate debt. Dubai is home to the world’s 14th busiest airport, just behind New York’s John F. Kennedy Airport and ahead of Amsterdam’s Schiphol. The number of people passing through the airport in October alone was equal to more than twice the country’s entire population.

Dubai Airports has ambitious plans for expanding. Annual capacity at Dubai International will grow from 60 million passengers to 75 million next year when it dedicates Concourse 3, the world’s only facility dedicated to servicing the Airbus A380, the largest passenger airliner in the world.

Meanwhile, a second airport, the Al-Maktoum International, is under development next door. Al-Maktoum began cargo operations six months ago and will be opening for passenger travel in March 2011.

Dubai Airports is expecting growth to continue at a strong double-digit rate in 2011, with annual passenger traffic jumping 13.1 percent to 52.2 million from a forecast 46.1 million for all of 2010. Dubai’s flag carrier Emirates is counting on its passenger numbers growing 10 percent next year while the discount carrier Flydubai forecasts its traffic doubling.

“Before the end of the decade passenger numbers will approach 90 million making Dubai International the busiest airport in the world in terms of international passenger traffic,” Paul Griffiths, chief executive officer of Dubai Airports, said last week.

But Dubai’s airports – and its airlines — are vulnerable to emerging competition because it is entirely dependent on funneling passengers from Europe and Asia through its airports and sending them on to their final destinations, he said. The airport has no domestic market and a tiny regional one. Indeed, measured by international traffic alone, Dubai rises in the world airport rankings to No. 6.

“They will have competition, the dynamics will definitely change,” Philip Butterworth-Hayes, lead consultant of the aviation advisory firm PMi Media, told The Media Line. “I would look at Indian airlines in particular. Once you have a strong home market like India, you have the ability to capture traffic.”

Dubai has not only benefited from huge investment in its airport and carriers but also from low costs, the absence of environmental constraints to airport expansion and its strategic location. Demand for Europe-Asian travel has grown as European companies focus sales on the growing economies of China and the rest of Asia while newly wealthy Asians have the disposable income to travel to Europe for holidays. Dubai is about 5,500 kilometers (3,400 miles) from London and 6,400 kilometers (4,000 miles) from Shanghai.

Adding to world-class airports, Dubai’s state-owned Emirates airlines has been an aggressive competitor, taking market share from hobbled European rivals by adding capacity – the airline has the biggest fleet of the giant A380s on order – and is keeping fares and costs low.

But India could match many of these assets. Mumbai, the country’s commercial capital is about 7,200 kilometers (4,500 miles) from London and 5,000 kilometers (3,100 miles) from Shanghai, on top of being a business and tourism destination in its own right.

As India’s economy grows, demand for domestic air travel for its 1 billion people has also increased. Domestic air traffic in India grew 15 percent in October compared with a year ago to 4.6 million passengers, the government said last week. What the country still lacks to take on Dubai is a competitive airline to service an Indian hub, Griffiths said.

“If you were to have an Emirates-like operation in India, you could make it a major hub,” he said. “But they would also benefit from the presence of a huge domestic market.”

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Herzogenaurach, Germany (AHN) – Adidas reported 25 percent growth in its third quarter profits on Thursday, beating analysts’ expectations. The German sports goods manufacturer upgraded its outlook for the full year.

Net income for the period ended Sept. 30 rose to 266 million euros ($378 million), or 1.27 euros a share, from 213 million euros, or 1.03 euros per share, last year.

Sales spiked 20 percent to 3.47 billion euros ($4.9 billion) from 2.89 billion euros in the same quarter a year ago.

Excluding the effects of currency, revenue from the company’s stores rose 16 percent while its wholesale business increased 8 percent.

All regions reported strong performance during the quarter. Revenue in North America jumped 14 percent on a currency-neutral basis, led by a 15 percent rise in sales of the Adidas brand and a 25 percent increase for Reebok.

In China, sales increased 9 percent because of growth of both retail and wholesale businesses.

Gross margin increased to 47.3 percent from 45.3 percent last year.

“Double-digit revenue growth in football, Adidas Sport Style and Reebok year-to-date, as well as a resumption of growth in Greater China in the third quarter all reflect a well-executed 2010 strategy,” chief executive Herbert Hainer said in a statement.

Adidas revised its full-year sale forecast from a mid-single-digit increase to an 8 percent rise, excluding currency effects.

The company said sales and profits will rise at a mid-single-digit rate in the 2011 fiscal year. Earnings per share are expected to grow between 10 percent and 15 percent.

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Putrajaya, Malaysia (AHN) – Prime Minister Manmohan Singh believes India and China should not find it too difficult to thrive together because “the world has enough space” to allow the two upcoming economic giants to fulfill their ambitions.

Speaking ahead of his scheduled meeting with Chinese Premier Wen Jiabao on Friday in Hanoi, Vietnam, Singh said, “India and China are both fast growing economies. China happens to be the largest trading partner of India even though there is imbalance (in China’s favor).”

He did not indicate any untoward feeling towards his neighbor, even as diplomatic officials of both India and China were caught up in the controversy surrounding the stable visas issued to people from Jammu and Kashmir, over which, a war of words had ensued on Tuesday.

Brushing aside possibilities of competing with China, Singh said that the world offered “enormous possibilities” for both the nations to work together.

The practice to issue stapled visas to Jammu and Kashmir residents began two years ago and just last year, when Beijing issued one such visa to one of India’s top Army officers, the issue snowballed into a major diplomatic row.

However, PM Singh appeared to be cool enough to not mention any of these in his speech at a gathering of business leaders in the Malaysian capital of Putrajaya.

Both Singh and Jiabao will be meeting against the backdrop of the ASEAN summit, held between members of Association of South East Asian Nations (ASEAN).

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Washington, DC, United States (AHN) – The United States Congress acted on Friday to open the gates of retaliation against China for their failure to appreciate their currency, the yuan (or renminbi). The action, taken after repeated diplomatic efforts to resolve the ongoing currency dispute, is intended to send a stern warning to Beijing.

The House Ways and Means Committee, empowered to write tax laws, voted to expand the power of the Commerce Department from its present ability to impose tariffs on foreign goods only if the originating country is directly subsidizing its exports. In the future, the department will have the authority to impose tariffs when another nation is found to be manipulating its currency’s value.

“China’s persistent manipulation is a major distortion in the international marketplace,” said Sander Levin, chairman of the House Ways and Means committee, adding, “(The Chinese currency yuan) has a major impact on American workers and therefore American jobs. That’s what this is really all about.”

On the eve of the House Ways and Means committee meeting, House Speaker Nancy Pelosi issued a statement that cautioned, “It is time for Congress to pass legislation that will give the administration leverage in its bilateral and multilateral negotiations with the Chinese government — so that U.S. businesses and workers have a more level playing field in world trade.”

In the coming week, the House is set to vote on these drastic measures, according to House Majority Leader Steny Hoyer.

“While a multilateral approach to addressing this issue is preferable, we cannot wait any longer to level the playing field for U.S. businesses and protect American manufacturing jobs,” Hoyer said in a statement.

President Barack Obama, last Monday during a hectic schedule in New York, described the yuan exchange rate a “real issue” and called for Beijing to let the yuan to rise.

Chinese Premier Wen Jiabao, the following day at a dinner event hosted by the National Committee on U.S.-China Relations and the U.S.-China Business Council told his audience, “If the renminbi appreciates by 20 percent to 40 percent according to the requests of the U.S. government, we do not know how many Chinese companies will go bankrupt and how many Chinese workers will be laid off and how many rural workers will go back to homes and there will be major turbulence in the Chinese society.”

On Wednesday, the contentious issue continued as Obama spent most of a two-hour meeting with the Chinese premier in New York pressing for a stronger yuan, according to White House officials privy to the meeting.

Wen, who is responsible for managing the Chinese economy, the world’s second-largest behind the United States, later told journalists that “common interests far outweigh our differences” and that despite “disagreements of one kind or another between our two countries, the differences can be resolved.”

In the global economy, the West has criticized China for months for keeping the yuan at an exceptionally low value, claiming Beijing enjoys an advantageous position due its manipulated lower yuan value, as it makes Chinese exports cheaper.

China abandoned a fixed exchange rate to the dollar in June, but the present exchange rate is controlled by the People’s Bank of China, which sets a daily rate.

The dispute is now that Beijing has allowed the yuan to appreciate only 1.9 percent since abandoning the peg.

Treasury Secretary Tim Geithner recently told Congress that the White House was looking at which tools the administration could use to influence China’s stance, as the currency is significantly undervalued.

The Obama administration, however, is following a softer diplomatic route, as Geithner has previously refused to designate China a “currency manipulator”–a formal designation that would open the way to trade sanctions.

With the White House choosing quiet diplomatic channels, the international trade community doubts the United States will impose tariffs, as even if the legislative process is completed, retaliation would be at the discretion of the Obama administration.

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Washington, D.C., United States (AHN) – Canada is leading the pack of countries upset about a trade bill that is set for a vote as soon as this week in the U.S. Congress.

The bill, called the Foreign Manufacturers Legal Accountability Act, would require foreign companies to have business agents in the United States before their products would be allowed through U.S. customs.

Canada’s ambassador warned in a recent letter to leading members of Congress that the bill would inhibit trade with the United States and lead to layoffs in both countries.

Small and mid-sized businesses that cannot afford U.S. agents would be hurt the worst, according to foreign trade representatives.

Nevertheless, the bill has won strong bipartisan support in Congress, meaning it is nearly certain to win approval.

The bill was sponsored by Rep. Betty Sutton (D-Ohio), who said, “We cannot allow foreign manufacturers to continue to undercut U.S. manufacturers by disregarding the safety of their products, thereby endangering our consumers and costing us jobs.”

The bill is an outgrowth of a scandal two years ago over a Chinese firm that exported drywall to the United States. Chemicals in the drywall made some Americans sick when it was used in building construction and remodeling.

The people who became ill sought to sue for their damages but found that the Chinese manufacturer was out of reach of U.S. courts. The manufacturer had no business agent in the United States who could be served with legal papers and held accountable for the defective products.

Other products from China believed to have injured U.S. consumers include children’s toys painted with lead-based paint and infant cribs that could trap body parts in their gates.

Canadian Ambassador Gary Doer and other foreign diplomats say the Foreign Manufacturers Legal Accountability Act is protectionist. They say it gives an unfair trade advantage to U.S. firms, which violates World Trade Organization and North American Free Trade Agreement rules.

“In our view, it will adversely interfere with the flow of trade across the border by adding yet another logistical and administrative requirement,” Doer wrote in a letter to Speaker of the House Nancy Pelosi. “This would be especially unfortunate in light of our ongoing joint efforts to restore our economies.”

Doer said the bill is particularly unfair to Canada, the biggest trading partner for the United States.

Canadian law does not require U.S. firms to have agents in Canada before they can engage in international trade.

“Injured American plaintiffs can sue a Canadian manufacturer just as easily as they could sue an American manufacturer,” Doer wrote. “More importantly, Canadian courts routinely enforce American court judgments where the American court has jurisdiction and due process is followed.”

European Union Ambassador Joao Vale de Almeida protested the bill in a letter to Pelosi that said, “It is important to ensure that the provisions of the bill … do not create additional burdens for small and medium-sized business on both sides of the Atlantic.”

The U.S. sponsors say the Foreign Manufacturers Legal Accountability Act is allowed under World Trade Organization fair trade rules that grant exceptions for laws to protect life and health.

The bill is part of a wave of election year proposals to encourage U.S. industry, particularly in Rust Belt states that have been hit hard by job losses.

However, even U.S. manufacturers are warning the bill could backfire.

The National Foreign Trade Council, whose membership includes major manufacturers such as General Electric, Ford Motor Co. and Boeing Co. say the bill could lead to retaliatory trade practices by international business partners.

The National Association of Manufacturers said in a statement that it does not support the bill “as currently written.”

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Washington, D.C., United States (AHN) – The United States on Tuesday announced twelve finalists for the Secretary of State’s prestigious 2010 Award for Corporate Excellence (ACE) and the 2010 ACE winners will be announced at the annual ceremony hosted by the Secretary of State later this fall.

According to the state department communique, these U.S. companies were chosen from a record number of 78 nominations submitted by American ambassadors around the world. “ACE finalists are international business leaders who recognize the vital role that U.S. businesses play abroad as good corporate citizens,” it noted.

Since 1999, the Secretary of State has awarded the ACE and the department “is committed to working with business to further these best practices worldwide and to recognize efforts to improve lives at home and abroad.”

Out of the this year’s 12 finalists two each are in India and China, while one each hail from Mexico, Israel, Swaziland, Guatemala, Fiji, Costa Rica, Ghana, Armenia.

The details of the companies and their activities are:

Alta Ventures in Mexico – for the venture capital company’s work to open Mexico’s venture capital market; foster greater investment, employment, entrepreneurship, and U.S. exports; and share best practices in areas such as education, innovation, remittances, crime mapping, clean technology, health care, and information technology

Cisco in Israel – for the computer networking company’s efforts to reconnect the Israeli and Palestinian economies and people; build a sustainable model of job creation and economic development; and engage in several partnerships and initiatives to enhance technical capacity, connectivity, education, and opportunities for women and youths in Israel and Palestine

Coca-Cola in Swaziland – for the beverage company’s work to improve local communities’ water, education, and health; promote entrepreneurship; foster local science and technology initiatives; and demonstrate exemplary employment practices

Denimatrix in Guatemala – for the textile and apparel company’s environmental stewardship in reducing the environmental impact stemming from its production process; contributing to the development of the local economy; and reaching out to the community to help disadvantaged youth and the homeless

Fiji Water in Fiji – for the bottled water company’s disaster relief efforts; volunteerism; partnerships that focus on local health, education, and provision of water; and “carbon negative” approach to product lifecycle and conservation efforts

GE in India – for the diversified technology, media and financial services company’s fostering of local partnerships and volunteerism, supporting health, education, innovation and disaster recovery projects across India; exemplary employment practices; and promotion of cleaner, more energy efficient products

Intel in Costa Rica – for the semiconductor company’s contributions to revolutionizing science and technology education in Costa Rica’s public schools through volunteer programs and community leadership; volunteerism; and practicing environmental stewardship that benefits local communities through means such as innovative recycling programs

Mars, Inc. in Ghana – for the confectionary manufacturer’s improvement of farming methods, sensitizing communities against child labor, and promoting the overall well-being and sustainability of cocoa growing communities; building partnerships to advance community empowerment; and contributing to the sustainable growth of rural economies

PepsiCo in India – for the beverage company’s fostering of environmental sustainability through water conservation efforts, which has benefited small and marginal farmers; supporting the health and well-being of local communities; and providing important employment opportunities through training with a focus on diversity and inclusion

Qualcomm in China – for the wireless company’s initiatives in education, healthcare and entrepreneurship; improving economic conditions; and enhancing the quality of life for Chinese citizens, particularly in underserved communities

Synopsys in Armenia – for the software and programming company’s promotion of U.S. and foreign investors by showcasing Armenia as a potential informational technology (IT) hub; collaboration with universities on IT training programs; and reduction of pollution levels by planting hundreds of trees to counter recent deforestation

Tang Energy in China – for the energy company’s efforts to promote development and U.S.-Sino cooperation in clean energy technologies; enhance industrial energy efficiency; and provide student health and education opportunities

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Washington, D.C., United States (AHN) – The United States on Tuesday announced twelve finalists for the Secretary of State’s prestigious 2010 Award for Corporate Excellence (ACE) and the 2010 ACE winners will be announced at the annual ceremony hosted by the Secretary of State later this fall.

According to the state department communique, these U.S. companies were chosen from a record number of 78 nominations submitted by American ambassadors around the world. “ACE finalists are international business leaders who recognize the vital role that U.S. businesses play abroad as good corporate citizens,” it noted.

Since 1999, the Secretary of State has awarded the ACE and the department “is committed to working with business to further these best practices worldwide and to recognize efforts to improve lives at home and abroad.”

Out of the this year’s 12 finalists two each are in India and China, while one each hail from Mexico, Israel, Swaziland, Guatemala, Fiji, Costa Rica, Ghana, Armenia.

The details of the companies and their activities are:

Alta Ventures in Mexico – for the venture capital company’s work to open Mexico’s venture capital market; foster greater investment, employment, entrepreneurship, and U.S. exports; and share best practices in areas such as education, innovation, remittances, crime mapping, clean technology, health care, and information technology

Cisco in Israel – for the computer networking company’s efforts to reconnect the Israeli and Palestinian economies and people; build a sustainable model of job creation and economic development; and engage in several partnerships and initiatives to enhance technical capacity, connectivity, education, and opportunities for women and youths in Israel and Palestine

Coca-Cola in Swaziland – for the beverage company’s work to improve local communities’ water, education, and health; promote entrepreneurship; foster local science and technology initiatives; and demonstrate exemplary employment practices

Denimatrix in Guatemala – for the textile and apparel company’s environmental stewardship in reducing the environmental impact stemming from its production process; contributing to the development of the local economy; and reaching out to the community to help disadvantaged youth and the homeless

Fiji Water in Fiji – for the bottled water company’s disaster relief efforts; volunteerism; partnerships that focus on local health, education, and provision of water; and “carbon negative” approach to product lifecycle and conservation efforts

GE in India – for the diversified technology, media and financial services company’s fostering of local partnerships and volunteerism, supporting health, education, innovation and disaster recovery projects across India; exemplary employment practices; and promotion of cleaner, more energy efficient products

Intel in Costa Rica – for the semiconductor company’s contributions to revolutionizing science and technology education in Costa Rica’s public schools through volunteer programs and community leadership; volunteerism; and practicing environmental stewardship that benefits local communities through means such as innovative recycling programs

Mars, Inc. in Ghana – for the confectionary manufacturer’s improvement of farming methods, sensitizing communities against child labor, and promoting the overall well-being and sustainability of cocoa growing communities; building partnerships to advance community empowerment; and contributing to the sustainable growth of rural economies

PepsiCo in India – for the beverage company’s fostering of environmental sustainability through water conservation efforts, which has benefited small and marginal farmers; supporting the health and well-being of local communities; and providing important employment opportunities through training with a focus on diversity and inclusion

Qualcomm in China – for the wireless company’s initiatives in education, healthcare and entrepreneurship; improving economic conditions; and enhancing the quality of life for Chinese citizens, particularly in underserved communities

Synopsys in Armenia – for the software and programming company’s promotion of U.S. and foreign investors by showcasing Armenia as a potential informational technology (IT) hub; collaboration with universities on IT training programs; and reduction of pollution levels by planting hundreds of trees to counter recent deforestation

Tang Energy in China – for the energy company’s efforts to promote development and U.S.-Sino cooperation in clean energy technologies; enhance industrial energy efficiency; and provide student health and education opportunities

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Let’s take the recent North Korean negotiations over nuclear arms, which were actually making some headway. North Korea was moving forward towards a more open an honest relationship with the United States. Then all of a sudden they flipped and instead opened relationships with China at a great larger level, perhaps even using counterfeit US Dollars as currency in paying off the Debts that North Korea owes to China? Speculation.

Another example is Pakistan, where much of Al Queda lives and the U.S. special teams are strategically taking out Al Queda strongholds and buildings using Predator Drones and hellfire missiles. Pakistan has not helped us in removing these terrorists, although they work little hard to pretend to, of course to their credit they do have a large population which is somewhat anti-US and they even had fired on our Rescue Helicopters there to help assist in the Pakistani Earthquake. Now the Pakistan leader and general says that the U.S. is crossing the line on “Pakistani Sovereignty.” The general has canceled the deal to buy F-16s from the United States and is entering the relationship with China to buy and co-build fighter aircraft. Inferior aircraft? Yes, but that is not the point here.

China Economy Secrets Click here

China is also in close relationships with Iran. Has sold them ICBMs capable of carrying nuclear warheads over 1295 miles and other more sensitive technologies, which is problematic as well. Sure we have discussed this, but now China liking this deal and customer and looking for oil to buy to feed its new appetite, blocks UN Security Council resolutions to stop Iranian enrichment of Atomic Bombs?

China Economic Review Click here

However, what really do these nations stand to gain from her relationship with China; Protection or perceived protection, well certainly Iran is getting their monies worth at the UN and North Korean Leader lives another day to taunt the USA? China wants to continue their growth and new customers for the items they produce including weapons, but in trade what will these nations sell China? I submit to you that China would like to buy energy assets, oil and raw materials. Is North Korea going to grow ethanol for China? Obviously Iran will sell them oil but North Korea still owes the money in trade deals. What can Pakistan sell them?

We also find China is establishing relationships with Venezuela, Cuba and Mexico. In Cuba they will be drilling for oil and natural gas which are in the same fields underneath the Gulf of Mexico and off the coast of Key West that the United States will not allow companies to drill for. Meanwhile, Mexico is sending the legal aliens to invade our country and send money back to spur on Mexican Growth. Cuba is ready to pass the torch to Castro’s Sons and Venezuela does not like the U.S. Anyone see a future worsening of the problem yet as protestors of illegal aliens assert their right to free speech in a nation they do not even belong in on May Day, a Communist Holiday for God Sake, wake up!

It seems China is willing to deal with less than ethical partners and some have even said that China has also dealt in U.S. counterfeit currency. China also will not allow free speech of the Internet and is believed to be testing Bio-weapons, which involved bird flu on their own peasants. Either China is so hungry for raw materials and worried about economic collapse, currency juggling and is becoming a PR façade, as civil unrest grows or they themselves need to be judged by the company they’re willing to keep. Thus either the United States needs to go back and start dealing with less than ethical world leaders and adopt a less self-righteousness diplomatic policy for a more Machiavellian approach or the United States of America needs to strengthen its national defense, its borders and military and allies to a much higher level. If not be prepared to fight the whole friggin world and that means getting tough and doing the unthinkable in the coming decades and I do not mean precision bombs and guided smart ordinance unless it is massive destructive power. We must have that option if needed and not be afraid to defend if we fail to win friend and influence people. Not pretty to talk about, okay forget I said it, but don’t forget the points here.

This is not taking anything away from China, as when nations grow very fast sometimes they have to do a little extra scrambling however, the lengths at which they will go to must be questioned, as some feel they are indeed over the border line of ethical political maneuvering on several fronts including but not limited to; fair and honest dealings at the United Nations, human rights violations and counterfeit currency, to name a few. It is difficult for a nation that deals with honesty and integrity, as well as transparency and businesses, which are forced to deal with a nation, which follows no rules, takes the advantage and cheats against their so-called allies, trading partners and friends. But their maneuvering is fun to watch isn’t it, maybe that in itself is transparent? Pretend I did not say or think that, but understand and remember the point of contention these comments are indeed eluding too.

I predict that either China will need to have a war in order to continue the present growth or it will face civil unrest, a bloody and short lived Civil War and an Industrial Revolution all in the next two decades. The problem is if enough unethical and fanatical regimes get together with the help of China then we may actually be funding a war against the United States of America, even if China herself holds short of participating in directly. Many nations in the past periods have indeed sold weapons, munitions and partly bank rolled and funded both sides or all sides.

Am I alarmed by this well, yes and no; Yes because currently China is selling weapons and technology to Iran. China is buying advanced weapons systems from Israel, which is sharing technology with United States of America. China is buying advanced weapons systems and fighter planes, nuclear submarines and learning about missile technology from Russia. Iran sponsors international terrorism and is building nuclear weapons and buying anti-aircraft systems from Russia and God only knows what else. (Bio, torpedoes, nuclear, guidance systems, etc.)

China Economy Report Click here

Article Source:http://www.articlesbase.com/strategic-planning-articles/china-economic-policy-1337237.html

In 1947 when India got independence at Puerto Rico industrialist and government was busy setting up world first industrial park. Ireland and Taiwan followed Puerto Rico in sixties and in eighties China bring the SEZ to the global map with its largest SEZ at the metropolis of Shenzhen.

India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965. In 2000, after thirty-five years, Murlisone Maran, then Commerce Minister made a tour to the southern provinces of China and realized the importance of SEZ. Policy of India and after five year, Special Economic Zones Act 2005 was introduced and in 2006 SEZ Rules were formulated.

 Indian government is to instill confidence in investors and signal their commitment towards a stable SEZ worked on the Special Economic Zones Act. In May, 2005 the Special Economic Zones Act was passed by Parliament, which received Presidential assent on the 23rd of June, 2005. The Special Economic Zones Act 2005, after extensive consultations, came into effect on 10th February, 2006. The Act offered drastic simplification of procedures on matters relating to central as well as state governments. It is expected that the Special Economic Zones Act will trigger a large flow of foreign and domestic investment.

OBJECTIVES OF SEZ ACT:

To generate additional economic activity,

To promote exports of goods and services,    

To promote investment from domestic and foreign sources,

To create employment opportunities, and

To develop infrastructural facilities.

INCENTIVES OFFERED BY THE GOVT:

(i)  COMPANIES IN SEZ:
• Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
• 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
• Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
• External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
•Exemption from Central Sales Tax.
•Exemption from Service Tax.
• Single window clearance for Central and State level approvals.
• Exemption from State sales tax and other levies as extended by the respective State Governments.

(ii)  DEVELOPERS:

Exemption from customs/excise duties for development of SEZs for authorized operations approved by the BOA.
• Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.
• Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act.
• Exemption from dividend distribution tax under Section 115O of the Income Tax Act.
• Exemption from Central Sales Tax (CST).
• Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act) Allowed carrying forward losses.

• No license required for import made under SEZ units.
• Duty free import or domestic procurement of goods for setting up of the SEZunits.
• Goods imported/procured locally are duty free and could be utilized over the approval period of 5 years.
• The SEZ unit is permitted to realize and repatriate to India the full export value of goods or software within a period of twelve months from the date of export.
• “Write-off” of unrealized export bills is permitted up to an annual limit of 5% of their average annual realization.
• No routine examination by Customs officials of export and import cargo.
• Setting up Off-shore Banking Units (OBU) allowed in SEZs.
• OBU’s allowed 100% income tax exemption on profit earned for three years and 50 % for next two years.
• Enhanced limit of Rs. 2.40 crores per annum allowed for managerial remuneration.
• Since SEZ units are considered as ‘public utility services’, no strikes would be allowed in such companies without giving the employer 6 weeks prior notice in addition to the other conditions mentioned in the Industrial Disputes Act, 1947.

From the above, it is felt that, the advantages of the SEZ are evident from the investment, employment, exports and infrastructural developments additionally generated.

DISADVANTAGES
• Revenue losses because of the various tax exemptions and incentives.
• Many traders are interested in SEZ, so that they can acquire at cheap rates and create a land bank for themselves.
• The number of units applying for setting up EOU’s is not commensurate to the number of applications for setting up SEZ’s leading to a belief that this project may not match up to expectations.

The economist strongly believe that the benefits derived from the investments and additional economic activity in the SEZ and the employment generated thus will outweigh the tax exemptions and the losses on account of land acquisition.

CORPORATE STRATEGY RULES:

The new period companies in India like Future Group, Wipro, Infosys, and Satyam had no strategic bent of mind. The only positive thing about the management of these companies was starting the respective business at right time which is no mean task. They utilized every opportunity in their growth path very well; they were highly flexible.

When the business landscape was simple, companies could afford to have complex strategies. But now that business is so complex, they need to simplify.

These Indian companies attained the current state of prominence by pursuing constantly evolving strategies in market spaces that were considered unattractive. Managers of these companies – both global and Indian identified the opportunity in the chaotic markets. They jump into chaotic markets, probe for opportunities, build on successful forays, and shift flexibly among opportunities as circumstances dictate. In the chaos they recognize the need for a few key strategic processes and a few simple rules.

From the above discussion, it is clear that Special Economic Export Processing Zone model is one of the important segments for the companies in promoting exports and to avail more incentives, tax benefits from the central government.

Dr.R.SRINIVASAN is a Post graduate in commerce and Management. He received his doctoral degree from Alagappa University in 1997. He currently teaches financial management and Research Methodology Subjects in Post graduate and Research Department of Corporate Secretaryship at Bharathidasan Government College for Women (Autonomous), Pondicherry University, Puducherry. Before Joining BGCW, he was teaching in SNR College, Coimbatore, Sindhi college, Chennai& T.S.Narayanasamy College, Chennai for eight years. He was with the industry for a short term at Salzar Electronics Pvt. Ltd, Coimbatore. He has about 20 years of teaching experience and having research experience of 15 years. His interests are in Accounting and finance, Capital Market, Quantitative Methods. He underwent the Faculty Development Programme at Indian Institute of Management Ahmedabad during 2000-01. He has presented 20 papers in national and international conferences and has published twenty papers in the areas of Finance and Human resource Management in National Journals. Co-authored a book titled, ‘Investors Protection, published by Raj Publications, New Delhi He has delivered lectures in contemporary finance topics at Pondicherry University. He is involved in consultancy projects for Godrej Saralee, Chennai in the areas of Statistical Applications. He has supervised a number of research projects in the area of corporate finance and Human Resource Management. He is the Board of examiner in corporate Secretaryship and Management for the past two decades.
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