Flash News: ‘No-panty’ Yana shows India is booming

Venky Vembu

In the Vanities
No one wears panities
—- Ogden Nash, Theatrical Reflection

 

In the early 1990s, when the Indian economy was opening up to the world, foreign consumer brands, in the first flush of excitement, came tripping over themselves to sell to “one billion” Indian customers. But after all the low hanging fruit had been plucked, they had to work hard to ferret out ‘niche’ markets that they could sell to: and one of those hitherto-unexplored markets in India, which had remained outside their reach, was the market for intimate women’s apparel.

At that time, a market research agency came out with a well-padded (and, perhaps, underwired) report that claimed – presumably after surveying women in the most remote tribal belts – that nearly 98 per cent of women in India did not wear any kind of undergarments. It then claimed, on the basis of this titillating bit of statistic, that there was clearly a vast and unfulfilled demand for women’s innerwear. Predictably, it had well-established international lingerie brands all out of breast breath and pant(y)ing with excitement at the big market that lay tucked away – out of sight of prurient eyes – beneath the demure vestments that Indian women wore. 

Rahul Mao and Modi Zedong

(This column was published in DNA edition dated December 4, 2010.)

Venky Vembu

It is hard for anyone but the most fawning supporters of Congress dynastic politics to fathom precisely what distinctive skills Rahul Gandhi has that qualifies him for anointment as the Prime Minister-in-waiting. But after last week, when the Yuvaraj likened Gujarat chief minister Narendra Modi to China’s revolutionary leader Mao Zedong, that comprehension gap may have been bridged somewhat.

It is manifestly clear that Rahul has a highly refined sense of humour, which is markedly deficient among Indian politicians. Combine that unique gift with an inadequate understanding of history that borders on wholesale ignorance, and an infinite capacity to periodically plant his princely foot in his extraordinarily commodious mouth, and you have all the elements that could make for one of the laughable prime ministerial tenures ever.

WikiLeaks proves the world isn’t run by robots

(This column was published in DNA edition dated December 3, 2010.)

Venky Vembu

A couple of months ago, Sha Zukang, one of China’s top UN diplomats, made sensational news when, in a fit of alcohol-induced garrulousness, he told his boss and UN secretary-general Ban Ki-moon to his face exactly what he thought of him. “I know you never liked me,” Sha told Ban at a public reception during a retreat at an Austrian ski resort. “Well, I never liked you, either.”

Sha’s 15-minute hyperventilation, during the course of which he also made clear that he intensely disliked Americans, was of course seen as an undiplomatic outburst that was unworthy of a member of that exalted club of diplomats; and, when the effect of the alcohol had worn off, Sha felt compelled to offer an apology. Yet, for all its indecorousness, it showed up an all-too-rare moment of brutal honesty in the anodyne – even mind-numbingly boring – world of international diplomacy.

WikiLeaks, China – and a $10,000 ‘payment’

As a journalist who writes on China (among other countries), I often find myself curiously conflicted. For anything that one can state with compelling persuasiveness about China, exactly the opposite statement might also hold true. Finding the right nuance about reportage on China is often the most difficult challenge for me – and although on occasion I have erred on either side of the line, the endeavour is almost always to be fair-minded. Of course, where the requirement is for me to offer an editorial commentary, not just report (a distinction that’s lost on many), I allow myself a bit more swing room. But that’s par for the course, and anyone who knows the distinction between a news report and an editorial page column will understand that.

Reportage on China that is factually wrong – or commentary on China that is lacking in nuance or that has over time been proven to be erroneous – routinely get ‘out-ed’ and ridiculed by informed Sinophiles. In 2008, foreign media organisations that, from all accounts, got some facts wrong while reporting on the unrest in Tibet, faced an enormous pushback from within China – as witnessed by the campaign by the Anti-CNN website to expose “the lies and distortions in the Western media”. Likewise, Sinophiles have no patience – and even dollops of disdain – today for author Gordon Chang’s theory about The Coming Collapse of China – or economist Andy Xie’s extremely bearish prognostications on the China property market.

‘China can’t win a trade war; it will be massacred’

(This interview with economist and fund manager Richard Duncan, on the prospects of a trade war, and its implications, was published in DNA edition dated November 29, 2010.)

Venky Vembu

In his first book, The Dollar Crisis, published in 2005, fund manager and economist Richard Duncan offered an amazingly prescient analysis of the risks to the US and global economy from the flawed international monetary system since the collapse of the Bretton Woods arrangement. “The principal flaw in the post-Bretton Woods international monetary system,” he wrote, “is its inability to prevent large-scale trade imbalances… Those imbalances have destabilised the global economy by creating a worldwide credit bubble.”

Last week, Federal Reserve Chairman Ben Bernanke, in a speech in Frankfurt, acknowledged – in language that reflects Duncan’s spot-on analysis – that “the international monetary system has a structural flaw: it lacks a mechanism… to induce needed adjustments by surplus countries, which can result in persistent imbalances.”

To Duncan, Bernanke’s acknowledgement that the Dollar Standard is flawed signals the direction of US economic policy going forward. “They’re going to take steps to correct this flow, either through international cooperation or through unilateral action” – such as imposing trade tariffs on imports, principally from China.

In an interview to DNA Money’s Venky Vembu from Bangkok, Duncan explains the implications of US efforts to remedy trade imbalances, and why China – being the foremost trade surplus country – would be “massacred’ in the event of a “trade war”. But Duncan isn’t just a bearer of grim tidings: as he did in his second book, The Corruption of Capitalism: A strategy to rebalance the global economy and restore sustainable growth, he outlines a scenario in which the crisis could have a “happy ending”: the redistribution of wealth and purchasing power – through higher wages globally – towards the ‘bottom of the pyramid’ as a way to remedy the demand-supply imbalances. “Income redistribution may sound ‘Marxist’ and alarming,” he notes, “but I’m not coming at it from that angle: it would be good for billionaires and for poor people. Billionaires could be even richer five years from now if they play along; but if they don’t, they’re going to be worse off.” Excerpts from the interview: 

Behind China’s ‘bamboo curtain’ is an amoebic God

(This review of two books on China was published in DNA edition dated November 28, 2010.)

Venky Vembu

Prince Charles, whose own personality is far from sparkling, once described Chinese leaders as “appalling old waxworks”. The validity of that judgment is borne out on the rare ceremonial occasions when the ruling Chinese Communist Party’s top-rung leaders appear in public, with uniformly coiffured and greased hair and determinedly dour facial expressions.

Yet, for all their lack of slick liveliness, China’s Communist Party leaders represent arguably the most powerful political force in the world today, with the capacity to project enormous economic and military power, both at home and around the world, and bend the arc of history to reflect Chinese might. But while every aspect of China’s ascent – particularly the engines of its economic growth and the symbols of its military muscle – has been clinically analysed by countless Chinawatchers, the workings of the Communist Party have remained, for the most part, behind an impenetrable Bamboo Curtain. That in large part is because the Party remains a deeply secretive body, unaccountable to anyone or anything other than its own internal tribunals.

How China ‘punishes’ countries that receive the Dalai Lama

(This interview, with a research scholar who identified a ‘Dalai Lama effect’ on international trade with China, was published in DNA edition dated November 27, 2010.)

When jailed Chinese political dissident Liu Xiaobo was awarded this year’s Nobel Peace Prize, China responded angrily. It warned Norway, where the Nobel Peace Committee is based, that bilateral relations would be harmed; furthermore, it is now campaigning for third countries to boycott the award ceremony – or face Chinese retribution. It’s a threat that cannot be taken lightly, in the light of a recent research study that illustrates how China leverages its trade clout for political gain and “punishes” countries that antagonise it. Andreas Fuchs and Nils-Hendrik Klann, research scholars at the University of Goettingen, note that countries that receive the Tibetan spiritual leader Dalai Lama – against China’s wishes – see their exports to China contract in the two years following such meetings. In an interview to DNA’s Venky Vembu, Klann (in picture at right) explains the ‘Dalai Lama effect’ on trade with China – which works with karmic certainty – and the implications for China’s trading partners. Excerpts:

What precisely is the ‘Dalai Lama effect’?

 

It’s the negative effect on exports to China that a country experiences if its political leaders receive the Dalai Lama in the current or the previous year. These countries experience a contraction of exports to China because China punishes countries that receive the Dalai Lama at a political level. The extent of this export contraction varies between 8.1 per cent and 16.9 per cent. The effect depends on the level of importance of the foreign dignitary who meets the Dalai Lama: if the dignitary is more important, the effect is more pronounced. Exports of machinery and transport equipment to China are typically impacted. And the ‘Dalai Lama effect’ wears off after about two years.

China’s ‘hot money’ turned on by local Viagra

(This article, about a rush of hot money in China into non-traditional investments, including a traditional Chinese medicine that serves as a sexual aphrodisiac, was published in DNA edition dated November 25, 2010.)

Venky Vembu

China’s ‘hot money’ speculators, bearing barrel-loads of hard cash, are being turned on by the seductive appeal of investments in traditional Chinese medicines, including a fungus whose aphrodisiac qualities make it a local ‘Viagra’.

The gush of speculative money, looking to sexy new avenues for release following recently introduced curbs on the piping-hot property market, has seen prices of nearly 500 traditional Chinese medicines spurt by as much as 700 per cent over the past year, according to the China Association of Traditional Chinese Medicines.

Petticoat politics and the drawstrings of the 2G scam

(This column, discussing privacy issues arising from a recent big-money corruption scandal in India, was published in DNA edition dated November 24, 2010.)

Venky Vembu

Tamil Nadu’s former chief minister and leader of the Dravidian movement C.N. Annadurai once invoked an earthy, racy metaphor to illustrate the puritanical protocol that ought to govern official ‘secrets’.

The red tape that binds a government file, he said, is like the drawstring of a chaste wife’s petticoat: only one person – the minister (or, in the other instance, the husband) – must enjoy rights to tug at that drawstring and gain privileged access to what lies beneath.

After last week’s embarrassing expose of what lies beneath the inner vestments of governmental surveillance dossiers on the 2G spectrum scandal, the inheritors of Annadurai’s Dravidian mantle – the DMK led by M. Karunanidhi – stand revealed as naked peddlers of power for pelf. 

We’re in Phase 2 of a multi-year bull market: Anthony Bolton

(This report, incorporating Fidelity’s star fund manager Anthony Bolton’s outlook on global equity markets and the Chinese stock market, was published in DNA edition dated November 23, 2010.)

Venky Vembu

A year ago, Fidelity’s star fund manager Anthony Bolton was ready to retire after a distinguished career as wealth creator extraordinaire, returning an annualised 20 per cent for 28 years running. “But then I had this mad idea that I would do something completely different,” he recalled in Hong Kong on Monday. That pursuit of a ‘mad idea’ led him to head a fund focussed on China, a country that he reckons is “probably the most interesting investment opportunity of the decade.” And in the seven months since his 625-million-pound closed-end Fidelity China Special Situations Fund was launched, Bolton has even topped his ‘Midas touch’ record, returning 27 per cent, with help some astute multi-bagger stock-picks.

Bolton says there are three things that excite him about China: China’s position in a low-growth world, the changing drivers of its growth, and the fact that the market in China is less well-researched than markets in the developed West.