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Which Asian Country Surpassed the US for No.1 Spot at Bloomberg Innovation Index?

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The Bloomberg Innovation Index 2018 is finally out with some astonishing results. For the first time in six years, the United States has slipped out from the top ten nations while South Korea remained number one, followed by Sweden at number two.

The Bloomberg Innovation Index evaluates countries on seven categories including R&D spending and high-tech public companies’ concentration, the list of top 50 nations has been released. From last year’s ninth position, United States has slipped down to number eleven. Singapore, on the other hand, moved ahead to stand strong at number three, ahead of Germany, Switzerland, and Finland.

South Korea maintained the top spot for the fifth consecutive year owing to the rise in the number of US patents received by its leading brand, Samsung Electronics Co. Meanwhile China too gained two spots to move up to number 19. Following Thailand’s drop to number 45 from last year’s 44, CLSA Thailand Country Head said the country sees research and development as an expense, and not an investment, thus the mindset is what causes the country to slip down in the list. The country head added that there is a dearth of innovation in such countries where the culture speaks volumes about risk avoidance.

India Nowhere on the Bloomberg Innovation Index List

The top ten countries this year were no surprises with Japan at number 6, France jumping to number 9 from last year’s number 11 only to join five other European nations in the top ten list. The surprising fact to be mentioned is that Israel turned out to be the only country to go past South Korea in the research and development criteria. After a gap of 4 years, Iran and South Africa have finally found a space back in the top fifty list.

However, the upsetting point of concern here is the fact that India, the nation that boasts of highest education, was nowhere to be seen in the top 50 list of Bloomberg Innovation Index, 2018.

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Asia Pacific

Africa emerges as a new battle ground for India and China for trade, commerce war

India sees this initiative as an effort by China to flex its economic muscle and extend the reach of its influence. “However, India’s engagement with Africa is not limited to trade and commerce.

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Post the border clashes, India and China are striving to create a robust influence in Africa through humanitarian aid and investments. However, with the countries adopting different outreach strategies, analysts suggest that competition between India and China is unnecessary as there is room for both to make their presence felt. 

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According to Maria Siow, a China-based journalist and analyst, India’s renewed focus on Africa is a result of China’s growing footprint on the continent, not just in terms of trade and commerce, but also Beijing’s rising maritime interests.

China’s Belt and Road Initiative aims at connecting Asia with Africa and Europe through land and maritime routes which would enable regional integration and growth in trade and commerce.

Recently, Chinese Foreign Ministry spokesperson Zhao Lijian said during a press conference that a total of 44 African countries and the African Union Commission have signed cooperation documents with China on the Belt and Road initiative.

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“It is a vote of confidence in China-Africa cooperation from our African brothers,” he added.

India sees this initiative as an effort by China to flex its economic muscle and extend the reach of its influence. “However, India’s engagement with Africa is not limited to trade and commerce.

The Indian diaspora, for instance, has been a major force in several African nations’ pursuit of prosperity and political participation,” said Swaran Singh, a professor at the Jawaharlal Nehru University’s School of International Studies.

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India and China stand far apart in terms of the size of their economies. India’s US$2.7 trillion versus China’s US$14 trillion which acts as a roadblock for New Delhi to make further inroads in African nations.

According to United Nations trade data, 39 African countries imported more than US$71 billion worth of goods from China in 2017 and only US$21 billion from India.

“African governments are therefore aware that in spite of their rapprochement with India, China remains the most important – and at the government level, the most trusted – development and investment partner on the continent,” said Lin Minwang, the deputy director of Fudan University’s Institute for South Asian Studies.

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Nevertheless, India has not made huge loans to African countries and thus avoided being a major part of the serious debt problems facing by many African countries today.

However, it is expected that India’s investment in Africa will become more valuable especially in Africa’s health care and pharmaceutical sectors. Sizeable investments have already been made in oil and gas, mining, banking, pharma, textiles and other sectors in African countries under the strategic initiative, “Focus Africa” by the Government of India launched in 2002.

Zhang Yongpeng, a senior research fellow at the Chinese Academy of Social Sciences’ Institute of West Asian and African Studies noted that even though India posed a challenge to China’s strategy in Africa, for instance in bidding for commercial projects, the economic threats were not daunting for now.

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African nations are unwilling to choose between China and India because of the accruing benefits and investments from both nations. Also, the African governments are avoiding being dragged in conflicts, especially during the ongoing trade and diplomatic tensions between the US and China and the border tensions between India and China.

“India tends to have largely positive perceptions as a fellow Global South democracy. China can sometimes be more controversial, for example, due to the recent ill-treatment of Africans in Guangzhou,” stated Cobus van Staden, a researcher at the South African Institute of International Affairs.

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Asia Pacific

India refuses to review RCEP decision over China’s border hostility – Reports

Last year, India backed out of the RCEP agreement citing its negative effects on “farmers, MSMEs and dairy sector”. “The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP.

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India is firm on the decision to not become a member of the RCEP (Regional Comprehensive Economic Partnership). The Modi government is reportedly “not reviewing” its decision on RCEP due to the presence of China as a member.

According to the sources, India has decided it won’t join any trade agreement including RCEP where China is a member as matters have turned worse for India, especially after the border stand-off with China.

Last year, India backed out of the RCEP agreement citing its negative effects on “farmers, MSMEs and dairy sector”. “The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP.

It also does not address satisfactorily India’s outstanding issues and concerns. In such a situation, it is not possible for India to join the RCEP Agreement,” PM Modi had stated at RCEP summit in Bangkok. The summit included China, Japan, Australia, New Zealand, South Korea, and the 10-nation ASEAN grouping.

“There is no question to join the pact now that the prime minister has given a clarion call to a self-reliant or ‘atmanirbhar’ (self-reliant) India,” said an official who refused to be identified. The comments came after Thailand said all member countries have decided to sign the trade pact by the end of 2020 without India, and the deal may come into force by the middle of next year.

According to Chinese state mouthpiece, Global Times (GT), this is a method of venting of irrational emotions after a recent deadly border conflict in the Galwan Valley.

“India’s years of hesitation toward the RCEP are essentially due to the country’s weak manufacturing sector,” it said. “After the deadly border conflict in June, India’s diplomacy has entered an irrational state of anger.

It is expanding its emotional approach to many other aspects of relations. Using border tensions with China as an excuse for its latest RCEP rejection is just another example. If India continues this irrational approach, it would not only harm regional interests but would not benefit India’s own long-term interests,” it added.

It further criticised the Indian media for calling RCEP as “Chinese-dominated” and “Chinese-backed” trade deal.

Despite China’s belligerence, no other country has shown any hesitation for signing the RCEP agreement. “For countries such as Australia, South Korea, Japan and New Zealand it will be difficult to have inner coherence between geopolitics and trade,” said Rajiv Bhatia, a veteran diplomat.

Vietnam, which is now the ASEAN chair has said that it will continue to urge India to join the RCEP “whenever it feels comfortable”.

Amid soaring tensions in the South China Sea when the Chinese ship attacked and sank a Vietnamese boat near the Paracel Islands, it is still going to go ahead with the RCEP deal. Similarly, Australia, which has blamed China for the origins of Covid-19 and its growing military aggression, also seems clear about joining the RCEP.

China’s advice to India is that while facing a “more powerful neighbour”, it is imperative for India to properly assess its situation and rationally reduce its rivalry toward China to develop favourable economic and diplomatic strategies, rather than “irrationally heating up nationalism and blaming China when it encounters unsatisfactory situations”.

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Americas

Despite Chest Thumping, India Could Take Years To Reduce Economic Dependence On China – US Experts

Bilateral trade between India and China was estimated at $88 billion in the 2018-19 fiscal year, but India recorded a massive $53.5 billion deficit with China — the biggest trade deficit India has with any nation.

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Anti-China sentiments in India are at an all-time high. Recently India banned 59 Chinese-owned apps, including TikTok, while Chinese firms are being obstructed from participating in highway and other major tenders and projects. 

Has China Really Withdrawn Soldiers From Galwan Valley – Chinese FM Responds

The Indian hotel industry group also issued a blanket ban on Chinese tourists. “In view of the nefarious activities of China, it has been decided that no Chinese will be accommodated in Delhi’s hotels and guest houses from now onwards,” the Delhi Hotel and Restaurant Owners Association said in a statement in late June.

Reports suggest that goods from China are being delayed at Indian ports, and the Indian government are planning to impose higher tariffs and rigorous quality controls on shipments.

“Trade frictions, even symbolic ones, are obviously bad for business,” Pravin Krishna, professor of International Economics and Business at Johns Hopkins University, told DW. “As of now, it is not quite clear which goods are being held up at the ports and what the extent of the delay is.

The exact impact on businesses will clearly depend on their inventory positions and so on and this will vary quite widely across sectors and firms,” he said. “I imagine most businesses can manage delays, but perhaps not complete blockades.”

Bilateral trade between India and China was estimated at $88 billion in the 2018-19 fiscal year, but India recorded a massive $53.5 billion deficit with China — the biggest trade deficit India has with any nation.

China is also India’s biggest source of imports and exports more than 3,000 products to India at very competitive prices. Moreover, India has become a major destination for Chinese investment with key Indian startups like Zomato, Paytm having received millions of dollars’ worth of funding from China.

The total planned and current Chinese investments in India are estimated to be about $26 billion, according to the US think tank Brookings. Experts say – there is no easy pathway for India to reduce its current dependence on China and decoupling from China will be a slow, gradual process.

Observers believe that a trade conflict will likely be costly for both sides, especially given the timing of the current tensions. Both India and China have already been hit hard by the COVID-19 pandemic, which has created massive challenges for both the governments.

Their economies are undergoing a sharp devaluation. In India’s case, the rigorous lockdown has resulted in severe economic losses and the International Monetary Fund (IMF) now expects India’s GDP to shrink 4.5% this year.

To counter the economic collapse, Indian PM Narendra Modi launched “Atmanirbhar Bharat,” a campaign for a self-reliant India that aids businesses to make products in the country instead of relying on imports. This is in addition to the “Make in India” initiative.

Sumit Ganguly, professor of Political Science at the Indiana University Bloomington told DW – “Frankly, I think it amounts to foolish, anachronistic and pointless sloganeering,” adding that this is a “populist cry” and “will amount to little or nothing.” “The initial emphasis on self-reliance was coupled with rampant protectionism and had terrible consequences for Indian industry not to mention the hapless consumer,” he argued.

After India gained independence, import substitution industrialization, a policy centring on displacing imported goods with domestically produced ones, was the guiding principle of economic experts in the country.

Successive Indian governments from 1947 to 1991 followed this inward-looking model of economic development, but it chained private organizations and eventually proved disastrous in turning India into an industrial and economic power.

As a balance of payments crisis in 1991 pushed New Delhi on the verge of bankruptcy and the Indian government was compelled to introduce significant reforms and liberalize the economy.

If ‘self-reliance’ is merely an appeal to organizations to become more resourceful — that is fine,” Krishna said. On the other hand, if it is an appeal for import substitution, I would be worried: India’s experience with this in the past has been calamitous.

“Regarding the dispute with China, I sincerely hope it is not used as a pretext for a generalized return to protectionism.”

Via: DW May Not Reflect The Views Of The EurAsian Times

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