1 Wary of China, companies head to Cambodia (Keith Bradsher in The New York
Times) Foreign companies are flocking to Cambodia for a simple reason. They
want to limit their overwhelming reliance on factories in China. Problems are
multiplying fast for foreign investors in China. Blue-collar wages have surged,
quadrupling in the last decade as a factory construction boom has coincided
with waning numbers of young people interested in factory jobs. Starting last
year, the labor force has actually begun shrinking because of the “one child”
policy and an aging population.
But multinational companies are finding that they can run from China’s rising wages but cannot truly hide. The populations, economies and even electricity output of most Southeast Asian countries are smaller than in many Chinese provinces, and sometimes smaller than a single Chinese city. As companies shift south, they quickly use up local labor supplies and push wages up sharply.
While wages and benefits often remain below levels needed to provide proper housing and balanced diets, the manufacturing investment — foreign direct investment in Cambodia rose 70% last year from 2011 — is starting to raise millions of people out of destitution. “People along the Mekong River are being lifted out of poverty by foreign investment inflows driven by higher Chinese wages,” said Peter Brimble, the senior economist for Cambodia at the Asian Development Bank.
Only a smattering of companies, mostly in low-tech sectors like garment and shoe manufacturing, are seeking to leave China entirely. Many more companies are building new factories in Southeast Asia to supplement operations in China. China’s fast-growing domestic market, large population and huge industrial base still make it attractive for many companies, while productivity in China is rising almost as fast as wages in many industries.
Foreign investment in China nonetheless slipped 3.5% last year, after rising every year since 1980 except 1999, during the Asian financial crisis, and 2009, during the global financial crisis. Still, at $119.7 billion, foreign investment in China continues to dwarf investment elsewhere. By comparison, investment in Cambodia rose to $1.5 billion. But last year was the first time since comparable recordkeeping began in the 1970s that Cambodia received more foreign investment per person than China.
2 The new WMD threat (Carol EB Choksy & Jamsheed K Choksy in Khaleej Times) The number of nations tempted by nuclear WMD is growing. Iran’s nuclear programme, having drawn upon Chinese, North Korean and Pakistani expertise, has fissile material for at least five warheads. China has benefited by receiving several billion dollars in revenue, securing access to crude oil, and strengthening its foreign footprint. Iran could even buy a nuclear weapon off the shelf from China or North Korea – the next stage in proliferation.
WMD proliferation usually focuses on technology and materials like precursor chemicals, biological agents, toxins and uranium. Yet delivery devices, projectile weapons, launch platforms and guidance systems are essential components. The Israelis sell those technically non-WMD items to the Chinese who resell to the North Koreans who then resell to Iran, Egypt, Syria, Libya, Yemen and Pakistan. As countries like North Korea and Iran collaborate on missile development, the WMD one develops could fit the other’s delivery systems.
The danger of nuclear, chemical and biological agents passing to non-state actors is on the rise. Since 2001 Al Qaeda and its affiliates have sought WMD capability. During Syria’s civil war some sarin, mustard gas and cyanide from government depots reportedly have fallen into illicit hands. The possibility of Islamists wresting materials from Pakistan’s WMD facilities increases as that nation’s political instability grows. Iran for its part appears to have transferred some technologies to regional militant organisations such as Hamas and Hezbollah.
Increasingly the US has been at the forefront of non-proliferation efforts through multilateral negotiations with Iran and North Korea and with the Proliferation Security Initiative. Yet those attempts are seen by others as attempts to impose agendas rather than safeguard the world. Therefore the United Nations, in addition to individual nations, must function much more vigorously as the center of initiatives to curb WMD proliferation. Global consensus through the UN would demonstrate shared resolve. Then accords, implementations and dissuasive actions can have maximum impact.
3 Iron Lady and Narendra Modi (Margherita Stancati in The Wall Street Journal) In India, the death of former British Prime Minister Margaret Thatcher has sparked comparisons between the “Iron Lady” and Gujarat Chief Minister Narendra Modi. The comparisons are tempting. Mrs. Thatcher – a politician who left a divisive legacy in her native U.K. – was a British nationalist and champion of free-market capitalism. She revamped her country’s declining economy in a process that also triggered social unrest.
Mr. Modi, chief minister of India’s western Gujarat state, has presided over an economic boom in his region. Foreign investors say he has cut down on red tape and improved infrastructure in a country where red-tape-ism torpedoes many business deals and has held back economic growth.
At speeches on Monday and Tuesday to business executives in New Delhi and Kolkata, which are widely seen as part of Mr. Modi’s attempts to kick-start a run for prime minister in 2014, he hit many notes that would have been familiar to Mrs. Thatcher. Mr. Modi, who is a member of the opposition Bharatiya Janata Party, talked about how governments should play only a small role in an economy, a dig at the national ruling Congress party’s massive social welfare programs. (By comparison, a speech last week by Rahul Gandhi, touted as Congress’s likely prime ministerial candidate, was more focused on inclusive growth and wealth redistribution.)
Champions of free markets are hoping Mr. Modi can emulate Mrs. Thatcher, who took over the U.K. government in 1979 amid a broken economy and labor strife. “I think he’s our Iron Man,” said Naveen Aggarwal, an India-based analyst at KPMG LLP. Gurcharan Das, an author and former executive with, believes the comparisons are valid. “I think there is a lot in common between them,” he said. “In his inclination for small government and a high level of governance, in that respect he’s close to Thatcher.” Mr. Modi, on his Twitter account, had this to say: “Inspirational leader of immense stature & fortitude, Baroness Margaret Thatcher was an epoch maker. A sad loss for UK and the world.”
But there’s another way Mr. Modi and Mrs. Thatcher could be compared. Both figures polarized opinion in their countries. Mrs. Thatcher, an uncompromising politician and a British nationalist, sidelined trade unions through sweeping privatizations. Hundreds of people died in the military campaign she spearheaded to retake the Falkland Islands from Argentina. In the UK, some went as far as cheering her death. Mr. Modi faces criticism for his ties to right-wing Hindu groups, even from some BJP allies. Critics also say he didn’t do enough to stop anti-Muslim violence during communal violence in Gujarat in 2002. He has denied any wrongdoing.
But multinational companies are finding that they can run from China’s rising wages but cannot truly hide. The populations, economies and even electricity output of most Southeast Asian countries are smaller than in many Chinese provinces, and sometimes smaller than a single Chinese city. As companies shift south, they quickly use up local labor supplies and push wages up sharply.
While wages and benefits often remain below levels needed to provide proper housing and balanced diets, the manufacturing investment — foreign direct investment in Cambodia rose 70% last year from 2011 — is starting to raise millions of people out of destitution. “People along the Mekong River are being lifted out of poverty by foreign investment inflows driven by higher Chinese wages,” said Peter Brimble, the senior economist for Cambodia at the Asian Development Bank.
Only a smattering of companies, mostly in low-tech sectors like garment and shoe manufacturing, are seeking to leave China entirely. Many more companies are building new factories in Southeast Asia to supplement operations in China. China’s fast-growing domestic market, large population and huge industrial base still make it attractive for many companies, while productivity in China is rising almost as fast as wages in many industries.
Foreign investment in China nonetheless slipped 3.5% last year, after rising every year since 1980 except 1999, during the Asian financial crisis, and 2009, during the global financial crisis. Still, at $119.7 billion, foreign investment in China continues to dwarf investment elsewhere. By comparison, investment in Cambodia rose to $1.5 billion. But last year was the first time since comparable recordkeeping began in the 1970s that Cambodia received more foreign investment per person than China.
2 The new WMD threat (Carol EB Choksy & Jamsheed K Choksy in Khaleej Times) The number of nations tempted by nuclear WMD is growing. Iran’s nuclear programme, having drawn upon Chinese, North Korean and Pakistani expertise, has fissile material for at least five warheads. China has benefited by receiving several billion dollars in revenue, securing access to crude oil, and strengthening its foreign footprint. Iran could even buy a nuclear weapon off the shelf from China or North Korea – the next stage in proliferation.
WMD proliferation usually focuses on technology and materials like precursor chemicals, biological agents, toxins and uranium. Yet delivery devices, projectile weapons, launch platforms and guidance systems are essential components. The Israelis sell those technically non-WMD items to the Chinese who resell to the North Koreans who then resell to Iran, Egypt, Syria, Libya, Yemen and Pakistan. As countries like North Korea and Iran collaborate on missile development, the WMD one develops could fit the other’s delivery systems.
The danger of nuclear, chemical and biological agents passing to non-state actors is on the rise. Since 2001 Al Qaeda and its affiliates have sought WMD capability. During Syria’s civil war some sarin, mustard gas and cyanide from government depots reportedly have fallen into illicit hands. The possibility of Islamists wresting materials from Pakistan’s WMD facilities increases as that nation’s political instability grows. Iran for its part appears to have transferred some technologies to regional militant organisations such as Hamas and Hezbollah.
Increasingly the US has been at the forefront of non-proliferation efforts through multilateral negotiations with Iran and North Korea and with the Proliferation Security Initiative. Yet those attempts are seen by others as attempts to impose agendas rather than safeguard the world. Therefore the United Nations, in addition to individual nations, must function much more vigorously as the center of initiatives to curb WMD proliferation. Global consensus through the UN would demonstrate shared resolve. Then accords, implementations and dissuasive actions can have maximum impact.
3 Iron Lady and Narendra Modi (Margherita Stancati in The Wall Street Journal) In India, the death of former British Prime Minister Margaret Thatcher has sparked comparisons between the “Iron Lady” and Gujarat Chief Minister Narendra Modi. The comparisons are tempting. Mrs. Thatcher – a politician who left a divisive legacy in her native U.K. – was a British nationalist and champion of free-market capitalism. She revamped her country’s declining economy in a process that also triggered social unrest.
Mr. Modi, chief minister of India’s western Gujarat state, has presided over an economic boom in his region. Foreign investors say he has cut down on red tape and improved infrastructure in a country where red-tape-ism torpedoes many business deals and has held back economic growth.
At speeches on Monday and Tuesday to business executives in New Delhi and Kolkata, which are widely seen as part of Mr. Modi’s attempts to kick-start a run for prime minister in 2014, he hit many notes that would have been familiar to Mrs. Thatcher. Mr. Modi, who is a member of the opposition Bharatiya Janata Party, talked about how governments should play only a small role in an economy, a dig at the national ruling Congress party’s massive social welfare programs. (By comparison, a speech last week by Rahul Gandhi, touted as Congress’s likely prime ministerial candidate, was more focused on inclusive growth and wealth redistribution.)
Champions of free markets are hoping Mr. Modi can emulate Mrs. Thatcher, who took over the U.K. government in 1979 amid a broken economy and labor strife. “I think he’s our Iron Man,” said Naveen Aggarwal, an India-based analyst at KPMG LLP. Gurcharan Das, an author and former executive with, believes the comparisons are valid. “I think there is a lot in common between them,” he said. “In his inclination for small government and a high level of governance, in that respect he’s close to Thatcher.” Mr. Modi, on his Twitter account, had this to say: “Inspirational leader of immense stature & fortitude, Baroness Margaret Thatcher was an epoch maker. A sad loss for UK and the world.”
But there’s another way Mr. Modi and Mrs. Thatcher could be compared. Both figures polarized opinion in their countries. Mrs. Thatcher, an uncompromising politician and a British nationalist, sidelined trade unions through sweeping privatizations. Hundreds of people died in the military campaign she spearheaded to retake the Falkland Islands from Argentina. In the UK, some went as far as cheering her death. Mr. Modi faces criticism for his ties to right-wing Hindu groups, even from some BJP allies. Critics also say he didn’t do enough to stop anti-Muslim violence during communal violence in Gujarat in 2002. He has denied any wrongdoing.
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