Economist 4/18/14

  1.  China’s urban population has risen by more than 500m, the equivalent of America plus three Britains. China’s cities, already home to more than half the country’s people, are growing by roughly the population of Pennsylvania every year.By 2030 they will contain around a billion people—about 70% of China’s population,  Chengdu, whose population has grown by 50% since 2000, boasts the world’s largest building: the New Century Global Centre, which includes a shopping mall and a 300-metre-long indoor artificial beach. Zhengzhou now claims the largest bullet-train station in the world.Two flaws in the Chinese model of urbanisation are causing these strains. The first is economic. Farmers in China have no property rights, so officials are able to grab agricultural land on the peripheries of urban areas and make money for themselves and their cities by selling it to developers. This is not only unjust; it has also led to a relentless pouring of concrete that has given rise to “ghost cities”.The second flaw in the urbanisation model is a social one. China’s cities are now largely made up of two classes, each with a population roughly the size of America’s: a property-owning middle class which enjoys new social freedoms (see article), takes holidays in Europe (see article) and spends like its Western counterparts; and a migrant underclass which toils in factories and menial jobs but is denied public services because its hukou(household registration) is still in the countryside.
  2. THE Peugeot group (PSA) , second-largest European carmaker, in volume terms, is struggling to escape from losses topping €7 billion ($9.7 billion) in the past two years. A €3 billion capital increase agreed on in principle in March, which hands both Dongfeng, a Chinese carmaker, and the French state 14% stakes in exchange for €800m apiece, will help PSA secure its future.he first aim is to distinguish more clearly Peugeot’s high-end family cars from Citroën’s cheaper, trendy ones, pulling out Citroën’s DS range as a stand-alone premium brand. PSA thinks car sales will grow by 38% globally between now and 2022 but by just 20% in Europe, where it now makes almost three-fifths of its sales. Riding this wave means above all that PSA must follow its rivals and expand in China, already its second market. Nissan was a sad case when Renault took a stake in 1999 and whipped it into shape, closing plants and cutting costs
  3. RANBAXY has brought Daiichi Sankyo nothing but trouble. The Japanese drugmaker paid $4.6 billion for Ranbaxy in 2008. Daiichi Sankyo wanted to expand into the burgeoning market of generic medicines.. American regulators have banned imports from four of its factories. Last year America’s Justice Department fined Ranbaxy $500m for, among other things. . On April 7th Sun Pharma, another Indian generic-drug maker, said it would buy Ranbaxy in a deal valuing it at $3.2 billion, 2.2 times its annual sales. Sun is an experienced shopper—it has snapped up 16 companies over the past 20 years—and has improved the performance of a recent target, Taro. With margins greater than 40%, it is popular among investors. Sun’s expertise in formulating copycat drugs helped it ink a deal with Merck, a much bigger American pharmaceutical firm, to develop and sell generic medicines to emerging markets.The combined company will still be half the size of the world’s largest generics maker by sales, Teva of Israel.Before the Ranbaxy deal, Sun earned only 17% of its revenue in markets beyond India and America. Now it will have broader reach, with that share rising to 31%.
  4. IT IS one thing to see Russia’s hand in the disruption in eastern Ukraine, quite another to muster the strength to arm-wrestle it back. Europe says meekly that it will expand its list of Russian citizens subject to travel bans and asset freezes. America, which faces less economic blowback from sanctions, is showing more resolve.Having targeted senior Kremlin figures, an oligarch and Vladimir Putin’s favourite bank in three earlier rounds of measures, America is preparing to add more of the president’s allies to the list. It has been reported that Igor Sechin, the president and chairman of Rosneft, a giant state-owned oil company,  America’s central role in the clearing of cross-border bank and credit-card transactions, and the American-led globalisation of money-laundering compliance. Bank Rossiya, the only bank sanctioned so far, has been cut off by Visa and MasterCard and forced to cease foreign-currency operations.Sanctions will have collateral damage; hit Rosneft and you hurt BP, which owns 20% of it, and ExxonMobil, its partner in various projects around the world. . JPMorgan Chase has plenty to lose by annoying Moscow; it earned $51m in Russian investment-banking fees last year, according to Thomson Reuters. It has nevertheless been blocking transfers first and asking questions later if there is the slightest hint of a link to sanctioned parties.
  5. Over the past three years other activists at unregistered NGOs have received similar phone calls from the authorities about the sensitive issue of registration, an apparently mundane bit of administrative box-ticking which in fact represents real change. China has over 500,000 NGOs already registered with the state. The number comes with a big caveat. Many NGOs are quasi-official or mere shell entities attempting to get government money. Of those genuine groups that do seek to improve the common lot, nearly all carry out politically uncontentious activities. But perhaps 1.5m more are not registered, and some of these, like Mr Zeng’s, pursue activism in areas which officials have often found worrying. These unregistered NGOs are growing in number and influence. They are a notable example of social forces bubbling up from below in a stubbornly top-down state.he new rules apply only to some types of NGOs, notably those providing services to groups such as the poor, the elderly and the disabled. Those engaged in any kind of political advocacy continue to be suspect. Human-rights organisations remain banned, as do most groups promoting religious, ethnic or labour rights.Until 2012, any NGO that wanted to register—and so be legal—had to have a sponsoring official organisation, typically a government agency that worked in the area of the NGO’s interest. This ensured firm government control over all NGOs, or “social organisations”, as the party likes to call them . Foreign NGOs could operate in China only under strict conditions. The nascent sector has a long way to go. The biggest problem is funding. Some local governments finance NGOs directly: the government of Guangdong province gave 466m yuan ($75m) in 2012; Yunnan spent 300m yuan. Those numbers are expected to increase. But, although many groups no longer need an official sponsor and are free to receive public donations, they are not allowed to raise money publicly. Fundraising activities must go through a dreaded GONGO, which means the government can control how much publicity an NGO receives and therefore its sources of income. Control over foreign funding has even been tightened.

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