Could Local Indian Mobile Davids Micromax,Spice Beat Global Goliaths Nokia,Samsung with Low Cost $100 Android Smartphones

13 Oct, 2010 by
Samsung,Telecommunications,USA

Google’s Android Operating System promises to be even a bigger game changer in the mobile handset market than iPhone.The Android Operating System which is open source and free has found a massive following amongst the general population.Recent Surveys point towards the increasing popularity of Android beating  the iPhone Operating System.While the current generation of Android phones in the Development Markets like Motorola’s Droid,HTC’s  Desire and Samsung’s Galaxy S are quite expensive with prices upwards of $400,the new generation promises to cost much less.Note Nokia has lost a huge amount of Indian marketshare in 2010 with the entrant of local Indian mobile makers like Spice,Lava,Micromax,Olive,Fly etc.These small handet producers have brought in a huge amount of innovation stealing marketshare from established Mobile Companies like Samsung,LG,Motorla and Nokia.Now these companies are partnering with Google to launch cheap affordable Android smartphones for as low as  $100.Note the current crop of Android Phones in India still cost a bomb and are out of reach of 99% of India’s population.

Could $100 Android Phones from Local Indian Makers threaten Global Giants like LG,Samsung,Nokia in US and Europe as well

While the quality of local Indian made phones are still quite poor with lots of complaints,these companies have recently got a lot of funding and support.With Mobile Handsets fast becoming a commodity with mobile apps and services becoming the more important factor,Global Handset Hardware Companies are seriously threatened.With success in one of the biggest,fast growing and competitive markets,could these small handset makers penetrate global markets as well.Micromax which is the most successful amongst the host of small,nimble Indian companies has already starting marketing its phones in the Middle East.With low cost $100 Android phones it could lead major prices wars in the West as well.The fat margins on smartphones enjoyed by Apple,Motorola,HTC,Samsung,LG and others could be a thing of the past.Its an event that cannot be underestimated by investors in these stocks.As the sharp fall in Research in Motion and Nokia shows,the mobile market is a fast changing one and the “Hero” (pun intended) of today can easily become zeros of tomorrow.

Google Inc. working with less known handset makers to target middle class Indians – ANI

In its attempt to become a significant player in India’s huge wireless industry, Google Inc. would reportedly allow several less known Indian handset makers to release low-cost devices that include the technology giant’s Android operating system in the coming months.Google is banking largely on a crop of inexperienced Indian smartphone manufacturers including Micromax Informatics Ltd., Spice Mobility Ltd., and Olive Telecom to make Android phones in the 150 dollar range, and eventually reduce it to a100 dollar level so the middle class Indians could be targeted, it added.

New Delhi-based company Micromax is hoping to release its first Android handset around Diwali early next month, and wants to have at least four Android phones by March. The company hasn’t finalized prices but is aiming for around 200 dollars, a person familiar with the company’s plans said.

Solar Panels in India – Complete Guide on Buying Low Cost PV Panels from Solar Energy System Manufacturers

13 Oct, 2010 by
Energy,Solar Panels,Solar Photovoltaic Energy

Solar PanelUpdated on 12th June, 2012

What are Solar Panels

Solar Panels are in general Silicon made Rectangular Shaped Glass Covered Products which Produce Electricity when exposed to the Sun.These Panels produce Direct Current (DC) Electricity which has to be converted by a  Solar Inverter to Alternating Current (AC) Electricity to be used by Consumers .Note Solar  Electricity can also be supplied to the Electricity Grid if allowed by your Utility.However in India,the industry is still immature and interconnections are not given to ordinary consumers in general.So you can use an Energy Storage Device to store Electricity.However Energy Storage Products like Chemical Batteries are quite expensive.Solar Panel produced Electricity usually costs between Rs 15-18 /KwH (much higher than the Rs 3-6/unit paid normally) which makes it uneconomical except in special cases like off grid applications.Replacing expensive Diesel powered Telecom Towers with Solar Panels is also an option.Sharply falling Solar Panel costs should make it competitive with your electricity in 2-3 years.In places like Italy,Solar Electricity is already competitive due to high prices of electricity.

 

Why Use Solar Panels?

Solar Energy in India represents one of the Biggest Opportunities in the Energy Sector.The Government has recognized India’s massive potential in Solar Energy and has planned a huge subsidy scheme through the Jawaharlal Nehru National Solar Mission (JNNSM).While currently the Support is mainly targeted towards big commercial plants,its only a matter of time before distributed residential systems become widespread.Some states like Gujarat and Rajasthan are also independently supporting solar energy through subsidies and grants.

How much does one Solar Panel Typically Cost ?

Note Solar Panels prices differ widely depending on the technology,power,brand and quality.Thin Film Panels in general cost lower than crystalline silicon panels.Higher Power Panels have a higher price as they generate more electricity.Good Brands also have a higher price tag while cheap imported Chinese panels cost less.Solar Panel prices have decreased by almost 50% in the last 2-3 years  and now sell for around Rs 1800-2500 ($400-$550) per panel internationally and should fall to around Rs 1000 in the next 3-4 years . However for small installations ,panels can only be bought from  distributors which is more expensive and can cost you almost 50% more.Note Solar Panels form only a part of the total Solar System Cost.The total cost of installation,equipment and wiring can cost upto Rs 300,000($6500)/Kilowatt.

What are the Major Steps in Making a Solar Panel

A Crystalline Silicon Solar Panel usually goes through  5 major steps before being produced.These 5 intermediary stages can all be done by the same company or different companies.First Polysilicon is cast into Ingots ,then Sliced into Wafers.These Very Thin Wafers are then Made into Solar Cells.These Solar Cells are Energy Units which actually convert Solar Energy into Electricity.Solar Cells are then Joined Together to Form a Solar Panel.The Panel is then put into a Frame and enclosed in Glass.Note there are different costs and processes associate with each step.The most technologically challenging step is the making of the cells.However equipment for making these intermediate products is widely and easily available.

Which Companies make Solar Panels in India

There are a number of Companies manufacturing Solar Panels in India and the domestic content requirements of JNNSM will give a further impetus to indigenous solar production in India.While upstream solar products like polysilicon and wafers are made outside of India,downstream solar products like cells and modules are made by some companies in India.Note most of the solar panels made in India is done through mainstream crystalline silicon manufacturing while a very small amount of production by Moser Baer is done through Thin Film amorphous Silicon (a-Si) Technology.The costs of the Indian manufacturers are higher than integrated Chinese companies like Trina Solar,LDK which make raw materials in-house.Due to low costs of transportation it might be cheaper for consumers to import solar panels from outside of India.

What are the Different Types of Solar Panels

Size

Solar Panels come in all sorts of sizes,colors and power.Solar Panels of 20-40 Watts are typically used for applications like a Solar Lamp,Lantern and products using small amounts of power.For Putting Solar Panels on the Roof for Generation of Electricity,sizes vary from 150 Watts to 300 Watts.

Type and Color

There are also 2 different types of Crystalline Silicon Panels – a) Monocrystalline b) Multicrystalline Panels.In general Monocrystalline Panels give higher amounts of power and cost more.Solar Panels generally come in blue color though black color can also be found.

Thin Film Panels

Thin Film Panels are generally used for Building Integrated Photovoltaic (BIPV) applications where the Panels are integrated as a part of the Building Structure.This is in not prevalent in India as of now but will become quite pervasive in the future.

List of Major Solar Panel Companies

1) Tata BP Solar – Tata BP Solar is a Joint Venture between Tata Power Company and BP Solar. This Tata Company has one of the biggest and oldest solar panel manufacturing operations in the country. The company’s 84 MW Solar Cell manufacturing facility is capable of processing mono and multi crystalline wafers of 125mm2 and 156mm2. The company’s 125 MW module manufacturing facility is one of the largest in Asia. Their products include customized solar illumination solutions. Tata BP Solar is perhaps the best solar lighting provider in India given the brandname and inhouse manufacturing of solar components.It has a range of Solar Lighting Solutions based on LED and non LED lights. The company has huge plans in wind,solar and geothermal energy

2) Moser Baer – is one of India’s leading technology companies, established in 1983. Moser Baer’s flagship company, Moser Baer India Limited (MBIL) is the world’s second largest manufacturer of optical storage media. Moser Baer Solar Limited is a subsidiary of MBIL. The Group’s photovoltaic manufacturing business was established between 2005 and 2007 with the primary objective of providing solar power as competitive & reliable source of energy. Its products include Multicrystalline cells & modules and Thin Film modules. This is primarily a Solar Panel Production Company which has recently made a big bet to get into the Power Production Space as well. Moser Baer Projects Private in which the Blackstone Group made a $300 million bet  has plans of a 20:80 mix of Green and Dirty Power.

3) Solar Semiconductor – is an international organization that offers  PV solutions, products and services to worldwide markets including the Americas, Europe, Asia and Africa. It manufactures its own PV modules and cells. Solar Semiconductor currently has a 195 MW manufacturing capacity and various Systems Integration projects around the world. It offers a comprehensive range of products including complete system kits and PV modules for grid connected as well off-grid applications. A Producer of Solar Power Modules and Cells, it renders services in Solar Installation as well. It also has a small capacity to produce silicon based solar cells or solar panels or both.

4) IndoSolar – is the leading Indian manufacturer of solar photovoltaic cells. Its manufacturing capacity is 360 MWp. The company has capacity to produce both multi and mono crystalline cells.

5) Topsun Solar – is one of the leading solar power solution manufacturers in India & International market. The company has vast experience in Renewable specific to SPV technology & solutions. The Company’s strongest areas are solar Telecom power system, KW to MW SPV Power Plant, Village electrification & Home lighting system. Its manufacturing unit is established with latest technology with their own R&D facilities for future development in solar solutions.

6) Titan Energy – is a major competitor in the distributed, renewable, and alternative energy industries and a leader in development and support for new energy-related technology.

7) PLG Power – is a vertically integrated company operating in the PV sector since 2008. The company is a part of a big, well-established Indian Group, PLG Group, which is almost 100 years old company diversified into numerous businesses in Asia and Middle-East.

8 ) Maharishi Solar – has a vertically Integrated manufacturing facility to produce multi-crystalline silicon ingots, Multi Crystalline wafers, Multi/Mono Solar cells, SPV modules and SPV systems in Andhra Pradesh. Maharishi Solar also designs, engineers and manufactures a wide range of Solar Panels, Solar Water Heaters, Solar Air Conditioning Systems, Swimming Pool Heating etc. for various Residential, Commercial & Industrial projects.

9) Kotak Urja Pvt. Ltd. – is one of the pioneering companies in India dedicated to the promotion of eco-friendly and environmentally safe renewable energy technologies. The company has forayed into solar PV technologies by establishing at that time an advanced PV module manufacturing facility. Over the years, Kotak Urja has developed expertise in Design, Engineering, Manufacturing, Integration & Installation of a broad range of solar thermal & solar photovoltaic systems and aspires to achieve a dominant position in the growing PV market in both India & globally.

10)Photon Energy Systems – established in 1995, is a leading manufacturer of Solar PV Modules, PV Systems and Solar Thermal Systems in India.

Note there are some other solar module producers as well.Note most of these companies import solar cells which are the main technology differentiators as there is very little addition in solar module production part of the supply chain.

How to Buy Low Cost Panels

If you are a large consumer then the best way to buy low cost panels is to import them from China or Taiwan.There are many high quality companies existing in these countries like Suntech,Trina Solar,Yingli Green Energy etc.In fact a number of these companies supply panels to high priced European and American companies.However if you are a small buyer then you have to look for a distributor/wholesaler who can sell you a good quality brand at low costs.Typically you have to pay 30-40% more for panels from these suppliers than directly buying from the companies themselves.

Where to Buy Solar Panels – List of Solar Panel Distributors and Wholesalers

Besides Solar Panel Producers,there are a number of wholesalers and distributors who sell solar panels to small customers.You can find different lists of these distributors from different sources which are given below.Note you have to do your own due diligence in finding distributors who give you good quality solar panels at low cost.

1) ENF Database

2) Alibaba

3) TradeIndia

4) Solar Power in India – JNNSM,Technology,Solar Power Manufacturers

Indian Solar Industry –

India has a massive potential in Solar Energy with at least 20 GW of  Solar Power to be installed by 2022 according to the JNNSM Plan. This is a conservative target with more Solar Power in India to be installed as state government and falling prices of solar energy lead to much higher numbers. The list of solar companies in India has kept growing with a number of startups and established larger companies entering the solar industry. Foreign solar power companies too have increasingly started to set up base in India.

However, lately solar companies around the world are facing hard times with bankruptcies galore. Not only hundreds of small installers, erstwhile behemoths like Q-Cells have defaulted on debt and declared bankruptcy. The biggest and oldest Indian solar panel companies like Moser Baer and Tata BP Solar are facing survival questions. These companies have seen departure of top executives and are looking for CDR resolutions . Moser Baer which had invested hundreds of millions in investments into crystalline silicon and thin film solar is having difficulty in paying back its debt. Other companies like Indosolar are also looking like a write-off. Indian Solar Panel Companies are asking for protection from cheap imports from China and other countries. Note the prices of solar panels have fallen by 60% in 2011 due to a number of reasons such as cheap raw material polysilicon prices,high competition between major module manufacturers, dropping processing costs. The biggest reason for the solar panel price crash has been the support of the Chinese and other Asian government to their respective domestic solar industries.

It is a fact that many of the major solar module companies would be bankrupt right now without government support. LDK is the prime example of a zombie company flourishing on the back of Chinese government support. Indian solar panel makers have got some protection with the federal subsidy policy JNNSM mandating that cell and modules be made in India. However thin film solar panel technology is exempt which means that they are not fully protected. Besides state government solar polices do not protect them at all. The consequence has been that most of the solar panel companies are running at 0 to 20% utilization as orders dry up.

Was Iranian Nuclear Plant Computer Virus Made in China to Disable Indian Communications Satellite

11 Oct, 2010 by
China,Nuclear Energy

Sophisticated Stuxnet Worm could only be created by a Nation State

Iran which has been at the centrestage of a Nuclear Row with USA over its uranium enrichment plans has been said to be hit with a very sophisticated Stuxnet Computer Virus.The Technology and Sophistication behind Stuxnet had made USA and Israel as the prime suspects for being behind this cyberattack on Iranian Nuclear Facilities.The encryption breaking used by this Computer Worm and the Target of Attack makes it pretty much clear that is was not made by your common criminal or hacker but by a well financed and advanced organization.The virus attack the software used in logic controllers of complex machines like industrial plants or satellites.The Worm uploads itself through Windows made computers and infects Siemens made Software which is used in Iran’s Nuclear Facilities.Ordinary folks have zero risk from Stuxnet but targetted facilities are in huge danger.

Stuxnet Computer Virus Attacks Iran’s Bushehr Nuclear Plant – BigPeace

Stuxnet is not an ordinary, garden variety computer virus, like the ones that erase your hard drives, steal your bank accounts, or send your browsers to porn sites.In fact, experts aren’t completely sure what it is, or what it’s trying to do. One thing they’re sure of: This virus wasn’t concocted by some hacker sitting at a computer in his basement. This virus MUST have been created by some government or government-level group, using a well-financed highly organized team of programmers, with access to plenty of specialized resources.

Was India being targeted by China instead Iran by Israel

A US expert has said that India was the target of the Stuxnet Attack rather than Iran.India’s Insat 4B Communications Satellite suffered from a malfunction recently and it used the same Siemens software which was the target of this Worm Attack.India has been subject to Chinese cyberwarfare attacks in the past .This has led to a general wariness in the Indian Establishment over Chinese origin companies like Huawei operating in India.Tensions between Indian and China have been rising over a range of issues such as territory,supply of arms and nuclear reactors to Pakistan and construction of military bases around India.The failure of an Indian Communications Satellite without any explicit attack done surreptitiously by Chinese hackers does not seem far fetched.Nothing would be clearly known to the general public given the clandestine nature of these cyberwarfare between nation states.However India’s decision to bolster its cyberwarfare capabilities and the recent decision by Google to abandon China,all point to China using cyberattacks as an instrument of statecraft.

China hitting India via Net worm? – TOI

Providing a fresh twist in the tale, well-known American cyber warfare expert Jeffrey Carr, who specialises in investigations of cyber attacks against government, told TOI that China, more than any other country, was likely to have written the worm which has terrorised the world since June.

Carr, however, made it clear that he had not arrived at any definite conclusion till now. He said he was pointing out that there were alternative targets in countries other than Iran that also made sense and served another nation’s interest to attack — namely India’s Space Research Organisation which uses the exact Siemens software targeted by Stuxnet.”Further, the satellite in question (INSAT 4B) suffered the power `glitch’ in an unexplained fashion, and it’s failure served another state’s advantage — in this case China,” he said.

Alongwith Indonesia and Iran, India has had the maximum number of infections from Stuxnet which affects Windows computers and gets transmitted through USB sticks. While Iran and Indonesia had about 60,000 and 13,000 Stuxnet infections respectively till late September, India was at the third position with over 6,000 infections. However, it infects only those computers which use certain Siemens software systems. Siemens software systems are used in many Indian government agencies including ISRO.

Infra BeES ETF Review and Analysis- Good though not Great Way to Invest in India’s Infrastructure Growth

5 Oct, 2010 by
Real Estate and Construction

India suffers from  a lack of variety as well as depth in ETFs compared to developed markets such as USA.Only Benchmark Asset Management Company (AMC) has seriously invested in the ETF space and its NiftyBeES ETF which follows India’s Nifty Index is the most successful one so far.India’s Infrastructure Sector has attracted a lot of investor interest given the stupendous $500 Billion Investment planned over the next 5 years.This will be 2.5x the investment in the past 5 years and will help India’s crumbling ports,roads,railways,power and communications sectors to gear up to India’s 8-9% GDP growth.Recently EGShares launched INXX which also markets itself as a play on India’s Infrastructure Growth in the US Markets.However that ETF was found wanting in a lot of areas.The new InfraBeES ETF launched by Benchmark seems much better than INXX and has been launched in the Indian markets.This ETF is based on CNX Infrastructure Index and its 1 unit will be 1/10th of that Index.Here are some of the key features of this new ETF

1) 4 Sectors form 93% of the ETF Market Cap – The ETF has made 4 sectors Power,Telecom,Construction and Capital Goods.The other sectors like Hotels,Cement,Transportation form the rest.The weightage given to the Transportation sectors is quite low compared to the vast potential that exists,however a lack of big Transportation companies could be a factor in the low weighting.

2) Top 4 Companies form 50% of the ETF– The Top 4 Constituents of the ETF namely NTPC,Bharti Airtel,BHEL and L&T form more than 50% of the ETF’s value.2 of these companies are government owned and all 4 are high quality well managed companies.There are a total of 25 companies in the InfraBeEs ETF with most of them being part of India’s main Nifty Index and Junior Nifty Index.

3) Valuation of the ETF is quite high – The P/E and P/B of the ETF at 29x ad 3.14x is quite high and reflects the current bull run of the Indian market driven by yield hungry FII inflows.It may not be an oppurtune time to invest in this ETF at the present time,however its a good long term buy

4) ETF Costs not cheap nor expensive – The ETF is charging a total expense of 1% of the Weekly Average Assets which is not exactly cheap compared to average ETF costs of 0.6-0.8% and NiftyBees cost of 0.8%.The AMC is charging the maximum investment management fee of 0.75% allowed by SEBI.The AMC could have charged a lower fee  as the success of this instrument is currently not guaranteed.

5) Performace of the CNX Infrastructure Index has been better than the Broader Market – The Index on which the ETF has been based on has outperformed the market over the last  5 years by 2-4 percentage points.With huge investments in India’s Infrastructure sector being planned there is a good chance of future outperformance as well.

Summary

The InfraBeEs ETF adds a new choice for investors looking to invest in India’s Growth Story.There is currently lack of cheap ETFs in the Indian market and so this new ETF provides a welcome addition.However currently the valuation of this ETF is looking frothy and investors might wait for a better entry point.

Are 30% of Indians Totally Utterly Corrupt – Does not seem an Exaggeration given the Number of Corruption Scandals being Exposed

13 Sep, 2010 by
Telecommunications

India’s outgoing CVC Commisioner has said that 30% of Indians are totally utterly corrupt.Given the number of corruption cases being exposed his statement does not seems an exaggeration.In 2008,one of the Biggest Corruption Scandals took place right under the Public Eye as India’s Telecom Minster Raja sold 2G Spectrum at artificially low prices to favored firms.This Scam led to Billions of Dollars of Losses for the Public Exchequer as it led Spectrum Winners to generate instant profits of Billions.The 2G Spectrum was sold at prices that were the same as in 2001 despite the Telecom Industry having totally changed in the time period.There was no transparent auctioning mechanism but a First Cum First Serve Policy of buying the spectrum at Fixed Price.It is almost funny how  India’s valuable resources were sold in a manner similar to sell of tennis tickets.Companies in the know managed to submit tenders and win the spectrum.These companies then sold stakes to foreign telecom companies like Telenor,Etilisat,MTS etc. at stupendous profits.It does not take a genius that some of the ill gotten money found itself in the coffers of politicians and bureaucrats.Supreme Court which is India’s topmost Judicial Authority has accepted a petition to look into the aspects of the 2G Scandal.Note past experience does not instill much confidence that justice will be served.The prosecuting agencies such as CBI and CVC are known to be puppets in the hands of the Ruling Politicians and you can’t expect a person to prosecute himself.India’s Manmohan Singh who has a very clean image strangely has defended A.Raja damaging his own credibility instead of taking a high moral stance and firing the Minister.

India’s Supreme Court Seeks Response on Spectrum Sale (Update1) – Bloomberg

India’s Supreme Court today sought a response from government agencies, Telecommunications Minister Andimuthu Raja and the Central Bureau of Investigation on a public interest petition on the sale of wireless spectrum.

The Centre for Public Interest Litigation is seeking a court-appointed team to monitor an internal probe by the CBI, a federal agency, into the award of second-generation airwaves for mobile telephony in 2008, the petitioner’s lawyer Prashant Bhushan said. The group is challenging a May 2010 judgment of the Delhi High Court, which dismissed the case against Raja and the government.

Spectrum Scam : India’s Mother of All Scams -J Gopikrishnan

The 2G Spectrum allocation scam, considered as the mother of all scam in India, caused more than Rs. 60,000 crores loss to public exchequer exposes the vulnerability of prevailing laws of the Nation, at the whims and fancies of political-middlemen nexus

The joke became a fact, when real estate companies Swan and Unitech bagged the spectrum license at a throw away price and they off-loaded their shares at a whopping price to multi-national telecom giants. The Swan Telecom bagged the license for Rs.1537 crore for operating in 13 circles. Within months (September) it sold its 45 per cent of shares to Etisalat, the telecom giant in UAE for 900 million US dollars (Approximately Rs.4500 crore).

Similarly, the Unitech, another real estate company too entered into a bumper deal, without investing anything in telecom infrastructure. The company got license to operate in 22 circles for Rs.1651 crore. Within weeks, it sold 60 per cent shares for Rs.6120 to the Norwegian company Telenor, who is currently a major telecom player in Pakistan and Bangladesh.

All Political Parties Involved in Looting and Plundering

India’s Telecom Minister A.Raja claim to fame is his loyalty to regional satrap’s Karunanidhi who supports the Federal Government.Family Infighting in DMK’s Dynasty led to ouster of erstwhile Telecom Minister Dayanindhi Maran one of the more  dynamic ministers in the government to be replaced by A.Raja.This Auction has been severely criticized by not only the Oppositoin but also Government Vigilance Agences.But in typical manner in which government works,the voices are being silenced or being ignored.Corruption in India these days has become quite blatant and open with the politicians and bureacrats operating with impunity.The recent Commonwealth Games (CWG) has seen multi million dollars scams as well but there has been invesitgation or legal cases.The leader of the Games Preparation Suresh Kalmadi who is also ruling party leader is still in charge of the preparation despite mass scale corruption being reported.Corruption is indulged openly by all parties with even Opposition Politicians being exposed for engineering Scams on a Daily Basis.

Recruitment scam: Under HC fire, minister quits  – IndianExpress

Put under pressure by the Karnataka High Court over a minister’s role in the illegal recruitment of staff to two new medical colleges in the state, Chief Minister B S Yeddyurappa forced the minister to resign on Sunday.

Medical Education Minister Ramachandra Gowda submitted his resignation after his role in the recruitment of 350 people in violation of recruitment rules was put under scrutiny by the High Court over the last week.

Gowda’s continuance as minister was questioned by the court since the Medical Education minister is the overall in-charge of affairs of all government medical colleges in Karnataka. The government in filings in the HC had admitted to illegalities in the recruitment of staff to colleges at Hassan and Mysore.

EU and Japan worried about Chinese Discrimination against their Domestic Companies

5 Sep, 2010 by
China,Europe,Japan

China has been criticized for its discriminatory policies against foreign companies by Global Giants like GE and Siemens.These companies have explicitly complained about strong Chinese bias against non domestic companies.China heavily subsidies home grown companies both explicitly and implicitly.Cheap cost of capital,free land and cheap labor have already made Chinese very difficult to compete with.On top of that,the Chinese government has introduced a host of rules like mandatory domestic content,technology transfers and other restrictive rules which have infuriated foreign companies.The discrimination has become particularly severe in the last few years making companies like Google openly revolt against the Chinese despite the potential loss one of the world’s largest markets.

Now Japan has warned China that it will lose FDI if it continues to use such policies against foreign companies.Recent labor unrest in Honda and Toyota factories have become a sticking point for the Japanese.Opaque and confusing rules,export controls over rare earth minerals and heavily biased judiciary have made life quite difficult for the foreign companies.The European Union on the other hand has complained of the lack of access to the Chinese market.Rules meant to deter foreign investment has made EU companies look elsewhere.Despite WTO rules,China has not eased market entry of foreign firms into the domestic market.Though some of these complaints are hypocritical as EU and  Japan keeps their agricultural markets tightly closed,some of the objections are valid.

China breaking promises to EU firms, report says – EUObservor

The European Union Chamber of Commerce in China in its annual survey out Wednesday (1 September) listed a series of technical barriers to EU investment in the airline reservation, automotive, construction, insurance, oil refinery, research and innovation and telecommunications sectors.

The paper took China’s leaders to task for failing to live up to commitments in the World Trade Organisation. The business lobby’s chief, Jacques de Boisseson, also gently criticised the authoritarian country’s top economic official, Premier Wen Jiabao, who in April said foreign firms can compete on a level playing field with Chinese ones.”I do believe the words of Premier Wen when he says that foreign investment is welcome,” Mr de Boisseson told Reuters. “[But China] would probably be satisfied with a lower level of foreign investment and a higher share for Chinese companies.”

Firms Face ‘Unthinkable’ in China, Tokyo Official Says – WSJ

Japanese Foreign Minister Katsuya Okada warned Thursday China risks losing foreign investments unless it introduces more transparency and consistency into its business rules, including its legal framework to deal with labor issues.Among other examples of problems Japanese companies have had to deal with, the foreign minister also pointed to abrupt cuts in exports of rare earth metals used in manufacturing hybrid cars, and unfavorable local court rulings and weak implementation of favorable rulings for companies facing intellectual-property disputes.

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