Trade Tensions Between the United States and China Pronounces Opportunities for India?

Henry Kravis, co-chief of KKR & Co Inc sees opportunities for India amid the ameliorating trade tensions between the United States and China. Highlighting the haphazard of Red Tape, Kravis maintained that “this (the trade war) is very positive for South East Asia and is very positive, in my view, for India”.

U.S. President Donald Trump started a trade war with China earlier this year as his administration imposed tariffs on steel, aluminium and various Chinese products. Beijing retaliated with import taxes of its own on products such as American-made cars.

“As you (India) get better infrastructure, get rid of some of this red tape bureaucracy … this country will benefit big time.”

India rose 23 places to 77th in the World Bank’s Ease of Doing Business Index for 2019, up from 100th in 2018, thanks to improving metrics in areas including access to credit and construction permits.

Kravis also said India’s large youth population was a big positive and that the country needed major investment in several sectors such as education, finance, healthcare and environment.

“That’s an opportunity for people like us,” he said.

Kravis also highlighted the need for a healthy local bond market in India.

“If you don’t have a long-term bond market you limit the growth because you’re putting all the onus back on to the banks to basically be the provider of capital,” Kravis. “That’s the reason that we set up our two NBFCs (non banking financial companies) here – one in real estate credit and one is in corporate credit.”

KKR, founded in 1976, currently manages assets roughly worth $195 billion. The company opened an office in India in 2009 and currently has about 43 staff. It has invested more than $7 billion in its credit business in the country and will invest more in the business going forward, he said.

KKR has also changed its focus to acquiring control positions or significant minority with near-control rights in companies instead of taking minority positions that did not give the company influence, Kravis said.

KKR’s investments in India include hospital management firm Radiant Life Care and Max Financial Services, the holding company of private insurance firm Max Life Insurance.

Huawei CFO Granted Bail From Canada, Hours After a Former Canadian Diplomat’s Detention in China

Meng Wanzhou, the CFO of China’s Huawei technologies, who was facing allegation of violation of U.S. Sanctions against Iran, has been granted bail from a Canada court on Tuesday, following the pressure from China and detention of a former Canadian diplomat was detained in China.

Meng, 46, was arrested Dec. 1 at Vancouver’s airport – the same day President Donald Trump met Chinese President Xi Jinping on the sidelines of a summit in Argentina.

Though the timing appears to be a coincidence – the warrant for her arrest was dated Aug. 22 – China sees the case as a bid to secure leverage in the ongoing U.S.-China trade war and has threatened “severe consequences” if she is not released.

Just hours before the Vancouver hearing, news broke that Michael Kovrig, a former Canadian diplomat and an analyst for International Crisis Group, was detained in China. Canadian Prime Minister Justin Trudeau said Tuesday that he was aware of the case and Canada has been in touch with Chinese diplomats.

It was unclear Tuesday whether his case was related to China’s threats. But his detention is likely to complicate an already complex standoff between Beijing, Washington and Ottawa.

Since Meng was taken into custody, the United States has said little about the arrest.

When pressed by the media, Trudeau and Chrystia Freeland, Canada’s foreign minister, have stressed that Meng’s arrest was a legal, not political, move.

Huawei, which was founded by Meng’s father, Ren Zhengfei, is China’s largest privately held company and the world’s largest supplier of telecommunications gear.

Though the company has global reach, its expansion has long been thwarted by U.S. concerns that it is too close to the Chinese government and could constitute a threat to national security.

Huawei and China deny these assertions and counter that U.S. security claims are an effort to hurt its business. China’s party-controlled press has compared Meng’s arrest to a hostage-taking and a kidnapping.

On Friday, before a packed courtroom in Vancouver, prosecutor John Gibb-Carsley argued that Meng committed fraud in 2013 by telling financial institutions that China’s Huawei had no connection to a Hong Kong-based company, Skycom, which was reportedly selling U.S. goods to Iran in violation of U.S. sanctions.

Meng’s lawyer said she will deny the charge.

In an affidavit released Sunday, Meng made her case for release.

“My father founded Huawei and I would never do anything that would cause the company reputational damage,” she said. “I wish to remain in Vancouver to contest my extradition, and I will contest the allegations at trial in the U.S. if I am ultimately surrendered.”

Over two more days of deliberation, Meng’s team argued that she should be granted bail on grounds that she is in poor health and has close ties to Vancouver, where she owns two homes and often visits.

Her lawyer initially said that her husband, a Chinese national who spends time in Vancouver, could serve as her guarantor – a suggestion the judge and prosecutors did not appear to like.

All agreed to put up their homes, or cash, as collateral should she flee.

The conditions of her bail stipulate that she must reside at her Vancouver residence, obey a curfew and travel only within a designated part of the city.

UK Quashes Visa Programs for Super Rich Investors

Shutting its doors for the rich Russian oligarchs and Chinese influentials, Britain is embarking on a reclusive economy, debarring the super-rich head honchos from attaining citizenship and permanent residence.

The Visa program will be suspended from midnight on Friday ahead of reforms designed to tackle money laundering and organized crime, according to a Home Office statement. They require applicants to provide audits of their financial and business interests and exclude government bonds as a qualifying investment. The suspension will lift once the changes, due in 2019, have been put in place.

The suspension comes after relations between the UK and Russia sunk to their lowest ebb since the Cold War following the poisoning of a former Russian double-agent and his daughter in March. Prime Minister Theresa May retaliated against the attack, which left one civilian dead, by expelling dozens of suspected spies. Russian tycoon Roman Abramovich was among those caught up in the tension — the British government failed to renew his visa and he has since received Israeli citizenship.

May said earlier this year that the government was reviewing the program after Labour Party lawmaker Yvette Cooper questioned the origin of money from 700 Russians who have been granted the visas. The number of applicants fell sharply in 2015 after the government introduced new anti-money laundering due diligence checks and doubled the minimum investment for the permit to £2 million ($2.6 million).

The visa is open to those from outside the European Economic Area and Switzerland. Chinese investors have increasingly turned to the visas in recent years, making up almost 50% of applicants in the third quarter, according to data compiled by financial services firm Shard Capital Partners LLP.

Government-backed immigration porgrams aren’t uncommon in other parts of the world. The US has an immigration program, known as the EB-5 visa, that lets immigrants who create jobs in the country stay permanently. Portugal has a so-called golden visa program that allows foreign individuals to buy property valued at 500,000 euros ($567,000) or more in return for residency.

The UK’s move could hamper people worldwide, but Russian oligarchs may be most affected by the changes. The UK has long been a particularly appealing jurisdiction for ultra-rich Russians as a safe and stable place to do business, hold their wealth and educate their children, so much so that the city has been nicknamed Londongrad. But the suspension is the latest sign that such appeal may be fading after the government crackdown in the wake of the poisoning on British soil.

“We will not tolerate people who do not play by the rules and seek to abuse the system,” Immigration Minister Caroline Nokes said in the statement. The new measures “will make sure that only genuine investors, who intend to support UK businesses, can benefit from our immigration system.”

Huawei CFO Soon to Be Extradited to US

Chinese tech giant Huawei’s Chief Financial officer is soon to be extradited to United States. Wanzhou Meng has reportedly been arrested by Chinese authorities on suspicion of violating the US’s trade sanctions on Iran.

A Huawei spokesperson did not immediately respond to Business Insider’s request for comment.

Huawei is the world’s second-largest smartphone manufacturer, and one of China’s largest tech firms. According to Meng’s official company biography, she joined the company in 1993 and also serves as deputy chairwoman of the board.

China Plans to launch a spacecraft to the other side of the Moon

China seems to be planning to send a spacecraft to the far side of the Moon this month. The Chang’e-4 spacecraft is slated for a December 8 take off from the Xichang Satellite Launch Center in Sichuan. The spacecraft will be carrying a lander and a rover, that is said to touch down the surface on the lunar surface. No spacecraft has ever touched down on the surface of the moon’s far side.

The lander and rover will be exploring and study the crater-marker far side of the Moon. The mission also includes the first radio astronomy experiments, reported Scientific American. Chang’e-4 is the China National Space Administration’s (CNSA) new move to fulfill its lunar aspirations. Back in 2013, the Chang’e-3 landed on the surface, which was followed by the announcement of a moon base. If the new Chang’e-4 rover manages to successfully land on the surface, it will map the area around its landing site. The rover will measure the subsurface layer leveraging its ground-penetrating radar.

The CNSA hasn’t revealed the landing site of the rover, though Zongcheng Ling, a planetary scientist at Shandong University, told Scientific American that the rover is most likely to land in Von Kármán, a 115-wide crater. The Chang’e-4 is also assigned to prepare for future crewed missions and the CNAS’s desired moon base.

The rover will also study the growth of certain seeds sprout in a controlled on the moon’s low-gravity surface. “When we take the step towards long-term human habitation on the Moon or Mars, we will need greenhouse facilities to support us, and will need to live in something like a biosphere,” Anna-Lisa Paul, a horticultural scientist at the University of Florida, told Scientific American. Besides, the CNAS is also planning to launch the Chang’e-5 next year. The rover will be sent to collect and bring back the samples to Earth.

Trump Intimidates to Initiate Import Penalty Against China

White House on Tuesday in a series of twitter posts threatened Beijing with the import penalties which can be levied against it if the nation fails to mend their economic relationship with US.

This is a much different characterization of the China talks than just three days ago, when Trump had dinner with China’s president at a meeting of the Group of 20. After the dinner, Trump said they reached the framework of a deal that would come together in 90 days.

“It’s an incredible deal,” Trump told reporters after the dinner. “It goes down, certainly, if it happens, it goes down as one of the largest deals ever made.”

He later said China had committed to buying large amounts of U.S. agricultural products and completely removing all tariffs on U.S. automobiles, a huge shift from its current 40 percent penalty. Chinese officials, meanwhile, did not confirm any of these details. They wouldn’t even acknowledge that there was a 90-day deadline under which they were operating.

In the past 24 hours, there were signs that White House officials were beginning to backpedal from some of their initial optimism. In his Twitter posts on Tuesday, Trump said they might need an extension if the 90-day timeline didn’t prove sufficient.

Meanwhile, White House National Economic Council Director Larry Kudlow said there wasn’t an actual agreement for China to remove auto tariffs, but that he expected China to eventually do it as a measure of good faith.

He also said that China’s vice premier, Liu He, had told him there would be changes made “immediately” to show the Chinese were serious about a new agreement. But Kudlow acknowledged Tuesday that so far they haven’t seen any evidence of concrete steps being taken.

There are significant differences between the two governments over what was agreed at the dinner, according to a side-by-side comparison of their post-meeting statements prepared by Bloomberg. The Chinese have not acknowledged a 90-day deadline for the talks or said that they plan to “immediately” increase purchases of U.S. farm goods.

Chinese officials are puzzled and irritated by the administration’s shaky handling of the meeting’s aftermath, according to a former U.S. government official who has been in contact with them. Even before the Buenos Aires talks, Trump last month had stated incorrectly that the Chinese government “got rid of” the Made-in-China 2025 program of subsidized technology development in response to his objections.

The comments by the president and his top advisers over the past 48 hours have only added to China’s confusion about their negotiating partners.

Chinese Researcher’s claim of gene editing of babies is problematic

On Monday, a Chinese researcher, He Jiankui of Southern University of Science and Technology in Shenzhen, created an international sensation with his claim that he had altered the genes of a human embryo that eventually resulted in the birth of twin girls earlier this month. If proven, it would be the first instance of human offspring having been produced with specific desired attributes, using newly-developed tools of gene “editing”. In the case of the new-born Chinese babies, the genes were “edited” to ensure that they do not get infected with HIV, the virus that causes AIDS, according to the claims.

The excitement that the announcement has caused, however, is not just because of the scientific leap it represents, but more due to the serious ethical questions it raises. Gene “editing” capabilities now exist with hundreds of researchers and laboratories across the world. But leading scientists in the field, including Jennifer Doudna, the co-inventor of CRISPR technology that was used to “edit” genes in the Chinese case, have for long been calling for a “global pause” on clinical applications of the technology in human beings, till such time as internationally accepted protocols are developed.

The technology

Genes contain the bio-information that defines any individual. Physical attributes like height, skin or hair colour, more subtle features like intelligence or eyesight, susceptibility to certain diseases, and even behavioural traits can be attributed to information encoded in the genetic material. An ability to alter this information gives scientists the power to control some of these features.

Gene “editing” — sometimes expressed in related, but not always equivalent, terms like genetic modification, genetic manipulation or genetic engineering — is not new, and is widely practised in agriculture, to increase productivity or resistance to diseases, etc. But even in agriculture, genetic modification is a subject of major debate, especially in developing countries, including India. Tampering with the genetic code in human beings is even more contentious.

CRISPR (short for Clustered Regularly Interspaced Short Palindromic Repeats) technology is a relatively new, and the most efficient, tool for gene “editing” developed in the last one decade. The technology replicates a natural defence mechanism in bacteria to fight virus attacks, using a special protein called Cas9.

CRISPR-Cas9 technology behaves like a cut-and-paste mechanism on DNA strands that contain genetic information. The specific location of the genetic codes that need to be changed, or “edited”, is identified on the DNA strand, and then, using the Cas9 protein, which acts like a pair of scissors, that location is cut off from the strand. A DNA strand, when broken, has a natural tendency to repair itself. Scientists intervene during this auto-repair process, supplying the desired sequence of genetic codes that binds itself with the broken DNA strand.

The technology was used to solve a problem — potential infection to HIV — that already has alternative solutions and treatments. It was not necessary to tamper with the genetic material, which can have unintended, and as yet unknown, consequences. The fact that the researcher made the announcement in the media and not in a peer-reviewed scientific journal has meant that the scientific community, as of now, has no way to verify the claims or whether the “editing” was carried out in the proper manner.

There are more serious issues as well. “The technology is extremely precise, but not 100% precise every time. There is a possibility that some other genes also get targeted. In such scenarios, unintended impacts cannot be ruled out,” said Siddharth Tiwari of the National Agri-Food Biotechnology Institute, who has used the CRISPR technology on banana genes.

Tiwari said as of now it is not clear whether regulatory approvals were taken. “In most countries of the world, possibly in China as well, such experiments are banned. In fact, in many countries it would be punishable by law. From what is known right now, we do not know whether regulatory approvals were obtained. If not, then there will be data and information gaps about the experiment.”

Alibaba Crossed $30.70 billion Benchmark in One Day Sales

The world of e-commerce whipped into frenzy on Sunday when the Chinese e-commerce giant Alibaba Group Holding Ltd cashed in an incredible amount of 213.5 billion yuan ($30.70 billion) in one day sales on Sunday.

During its 24-hour online retail frenzy Singles’ Day, the event recorded the unrivalled heights. But the event’s annual growth dropped to its slowest-ever rate.

Shoppers in China and across the world snapped up hot items including iPhones, furniture and milk powder starting pre-dawn, with Alibaba recording roughly $10 billion in sales in the first hour after midnight.

Singles’ Day, also called “Double 11” is the world’s biggest online sales event, outstripping the sales of U.S. shopping holidays Black Friday and Cyber Monday combined.

The Chinese event was originally a novelty student holiday to celebrate being single, countering Valentines Day, but has since grown into a month-long online shopping festival that peaks with a 24-hour sale on November 11.

This year, the company surpassed last year’s full-day sales record of 168 billion yuan in just under sixteen hours.

Despite the record haul, the annual sales growth rate fell from 39 percent to 27 percent, at the low end of analyst estimates, and the smallest rate in the event’s 10-year history.

It comes as the company is grappling with a slimmer sales outlook amid rising trade tensions the U.S. that have taken a bite out of China’s economy.

Earlier this month it revised down its full-year sales outlook by 4-6 percent, sending further chills through the company’s stock price, which has dropped roughly 16 percent this year after almost doubling in 2017.

To compensate, the company will take in less commission from its platforms in the near term in order to retain brands and attract new buyers, it said.

Online sales growth is also slowing across the board in the country’s eastern mega-cities, including Shanghai and Beijing, and Alibaba said roughly 75 percent of new users last quarter were in “less developed” areas.

While small appliances and cosmetics were strong on Sunday, sales in big-ticket items including large appliances slowed alongside a downturn in the housing market, Alibaba vice chairman Joe Tsai told press.

Netflix’s Intensive Expansion in Asia; India Tops the Hitlist

Heading forth on its mission of increasing the customer base in Asia, Netflix accentuated the need to capture Indian market- the second populous country of the world after China. However, the digital streaming nascent has prioritized India over China as a productive ground for this streaming giant.

Asia’s young and increasingly digital population presents an “incredible opportunity” to ramp up the company’s international subscribers, Netflix’s chief content officer Ted Sarandos apprised media on Thursday.

The subscription in Asia has already surpassed the 58 million in the U.S. All in, the company has 137 million subscribers globally.

“We’re in our early, early days here in Asia,” Sarandos told CNBC’s Akiko Fujita. But he said the company has “very specific initiatives” for each of the territories within the region.

Chief among those will be India, Sarandos said. Over the next few years, Netflix hopes to leverage off the country’s proven appetite for video streaming and add 100 million subscribers in India alone.

“If you think about the opportunity, there’s about 450 million internet users in India and about half of them are watching video on YouTube and services like that, which makes for a very interesting, addressable market,” said Sarandos.

In targeting India, Netflix will come up against the likes of Amazon and Hotstar, which have both seen success in the country with their modestly-priced media streaming models.

To manage that, Sarandos said the company is looking at testing a variety of pricing models to position itself against competitors, both in India and elsewhere. But he also said the focus will be on adding more locally produced original content that resonates with audiences both domestically and internationally.

Netflix plans to produce 100 original projects within the region over the coming years.

“The exciting part about that is that we’re able to come in and produce locally, using local story-tellers, and tell those stories on a grand scale because we can find a global audience,” he said.

Sarandos added that there’s “no real target” in terms of the regions those projects will come from. However, he noted that the company does not plan to use such means to enter the China market in the near future.

“In general, I would say Netflix operating in China is a little way off,” said Sarandos.

Netflix has had some success in the country via a licensing agreement with iQiyi, a video streaming subsidiary of Chinese internet company Baidu, but the firm has not launched independent operations there.

“China’s tough for a Western media company to operate in and we’ve not been very active in the market at all — with the exception of licensing some of our shows into the market. And that’s going to be our strategy for a little while,” Sarandos explained.