Indian & Chinese entrepreneurs at India China Meeting of Multinational Corporations Leaders, 16 November 2013, Beijing

December 2013

India & China India-China trade (Jan. –Nov. 2013)

Trade Nov. 2013 US$ billion

Jan. - Nov. 2013US$ billion Change Compared

to Jan.- Nov. 2012Total Trade 5.386 59.249 -2.7%Imports from China 3.945 44.379 2.2%Exports to China 1.441 14.870 -14.8India’s deficit 2.504 29.509 15%http://www.customs.gov.cn/publish/portal0/tab49666/info679722.htm

CII & ChinaIndia China Meeting of Multinational Corporations LeadersCII organized an 18-member business delegation led by Mr. Deep Kapuria, Chairman, CII National MSME Council & Chairman, Hi-Tech Group to attend the 6th Multinational Corporations Leaders Roundtable (MCLR) from 15-17 November 2013 in Beijing. As part of the MCLR program, a session on ‘India-China Industry Roundtable’ was held on 16 November. The Meeting was attended by over 40 senior representatives from Indian and Chinese companies. It was chaired by Mr. Deep Kapuria and Mr. Xu Tianliang, former Deputy Editor in Chief of People’s Daily, Vice President of China International Council for the Promotion of Multinational Corporations (CICPMC). Mr. Wang Liping, Deputy Director General of Asian Affairs, Ministry of Commerce; Ms. Namgya Khampa, Counselor (Trade & Commerce), Embassy of India, Beijing; Mr. Gan Jingzhong, Vice Governor of Beijing Chaoyang District; Mr. James Zhan, Chairman, CII IBF China and President of Tata Sons Limited China; Mr. Jin Tao, Deputy Director General of China Development Bank delivered speeches on the theme of “Setting the Agenda for Building India-China Sustainable Business Partnership”. Speakers from Indian and Chinese companies such as Wipro Infrastructure, China CNR, Tech Mahindra, ZTE, Essar Group, etc. spoke on specific sectors like Infrastructure, Manufacturing, Service & Knowledge Industry, and Environment & Sustainable Development to map the road on how the Indian and Chinese companies can join hands to work together in these sectors. CII and CICPMC signed an MoU at the conclusion of the meeting.

Session on “China Update 2013 & the Way Forward 2014 and Shanghai Free Trade Zone Update”CII IBF China organized a session on “China Update 2013 & the Way Forward 2014 and Shanghai Free Trade Zone Update” on 13 November 2013 in Shanghai. Mr. Andreas Odrian, Director, Head of Corporate Banking Coverage, MNC China Corporate Finance, Deutsche Bank AG made a presentation on the key decisions of the Third Plenary Session of the 18th Communist Party of china (CPC) Central Committee, which was held in Beijing from 9 to 12 November, and their impact on different sectors. The Shanghai Free Trade

1

China PulseThe Monthly China Journal of Confederation of Indian Industry December 2013- Volume 10 No 12

Mr. Rangarajan Vellamore, Chairman, CII IBF China presents a gift to Mr. Andreas Odrian at the “China Update 2013 & the Way Forward 2014 and Shanghai Free Trade Zone Update”.

Mr. Ravi Venkatesan speaking at the China Europe International Business School, 11 October 2013, Shanghai

December 2013

Zone (FTZ) which came into force on September 29 is a historic step for the Chinese government, which has aroused the interest of many companies willing to invest in China. Establishment of the Shanghai FTZ highlights the simplification of foreign investment and trade rules, favorable fiscal policies and financial reform. Ms. Clare Lu, Qin Li Law Firm made a presentation on policy update of Shanghai FTZ. More than 45 representatives of Indian companies attended the session. This meeting was followed by an interaction with Mr. Wang Xinlin, Vice Chairman of China (Shanghai) Pilot Free Trade Zone Administration on 27th November 2013.

Talk on "India: A Defining Choice for your business" CII along with the Embassy of India, Beijing and China Europe International Business School organized talks on "India: A Defining Choice for your business" by Mr. Ravi Venkatesan, former Chairman, Microsoft India & Member of the Board of Infosys and Volvo at Beijing on 8th October and at Shanghai on 11th October 2013 respectively. Mr. Venkatesan offered advice on how firms can overcome the unique challenges of the Indian market. He argued that chaotic India is in fact an archetype of most emerging markets, many of which present similar challenges but not the same potential. Succeeding in India therefore becomes a litmus test for your ability to succeed in other emerging markets. If you can win in India, you can win everywhere. Around 60 representatives from Chinese and multinational companies attended the talk in Beijing and Shanghai each.

China EconomyChina’s external trade (Jan. –Nov. 2013)

http://www.customs.gov.cn/publish/portal0/tab49666/info679722.htm

Economy indicatorsCPI (Nov) 3%, down from 3.2%

in OctoberPMI (Nov) 51.4

CPI (Jan-Nov) 2.6% PPI (Nov) Contracted 1.4%

Urban fixed asset investment (Jan-Nov)

Grew 19.9% to 39.13 trillion yuan

Industrial value-added output (Nov)

Up 10% YOY

Retail sales (2013) To increased by over 13%

Retail sales (Jan-Oct, 2013)

Grew 13%

TradeNov. 2013US$ billion

Jan.- Nov. 2013US$ billion

Change Compared to Jan. - Nov. 2012

Total trade 370.609 3,770.492 7.7%Exports 202.205 2,002.319 12.7%Imports 168.404 1,768.173 5.3%Surplus 33.801 234.146 17.6%

2

December 2013

Banks' non-performing loans up slightly in Q3Bad loans by China's lenders rose 24.1 billion yuan ($3.96 billion) in the third quarter, the biggest quarterly rise since the fourth quarter of 2005. The ratio of nonperforming loans rose to 0.97 percent at the end of September from 0.96 percent at the end of June (More).

China's Jan.-Sept. gold output rises 6.8%China produced 307.8 tons of gold in the first nine months of this year, an increase of 6.8% from a year earlier. Of the total output, 253.155 tons came from gold mines, up 4.93% year on year. The remaining 54.655 tons were a by-product of nonferrous metal smelting, up 16.44%. China became the world's largest gold producer in 2007 and is likely to overtake India as the world's largest gold consumer this year (More).

China's mobile phone users hit 1.22 billion The number of Chinese mobile phone users reached 1.22 billion at the end of October. Among them, 67.19 percent or 817 million mobile phone users are connected to the internet and 34.5 percent of them are 3G users. In contrast, the number of fixed line users shrank by 8.82 million in the first ten months of this year to 269 million (More).

Government & PoliticsCPC Central Committee pushes for reformsThe Third Plenary Session of the 18th CPC Central Committee which was in session from 9-12 November 2013 took decisions on major Issues concerning comprehensively deepening reforms in China. Reform and opening-up has been a crucial choice that China has made regarding its destiny in modern times. The Chinese leadership has emphasized that successful experience of the past reforms and opening-up must be built upon and decisive results are to be achieved in key areas in 2020. The proposed reforms covered areas such as: Basic economic system, Modern market system, Government role, Fiscal and tax system, Urban-rural development, Further opening-up, Political system, Rule of law, Supervision of power, Cultural system, Social services, Social governance, Ecological civilization, Defense and army reform, CPC's leadership etc. The document of the Third Plenary Session also stressed that the CPC must strengthen and improve its leadership in such a way to become a Party that learns, innovates and serves the people (Detailed reform roadmap).

Zhejiang province approves first private financing regulations Zhejiang Province of China has approved regulations on private financing for Wenzhou City on November 22. According to the regulations, first of its kind in China, private loans involving more than three million yuan or more than 30 lenders should be recorded by local financial management authorities or private lending registration service centers. The State Council, China's cabinet, approved the establishment of a pilot financial reform zone in Wenzhou in March last year to regulate private finance after a crisis in the city in 2011 (More).

Yuan cross-border trade settlement hits 8.6 trillionChina's cross-border trade settlements in its national currency, the yuan or renminbi, totaled 8.6 trillion yuan ($1.4 trillion) by the end of September this year since the program's launch in July 2009, according to Xing Yujing, secretary general of the monetary policy committee of the People's Bank of China. Cross-border yuan transactions have been conducted in 220 countries and regions. China had signed currency swap contracts with 23 countries and regions by the end of September (More).

Shenyang, Dalian to offer 72-hour visa-free staysShenyang and Dalian cities in Liaoning Province of China will launch 72-hour visa-free stays for foreign travelers from January 2014. Travelers from 45 countries would be allowed 72-hour visa-free stays if they hold third country visas and have onward tickets to leave for a third country or region within 72 hours. So far, Beijing, Shanghai, Guangzhou, Chengdu and Chongqing have introduced 72-hour visa-free service (More).

China to target price fixing China's leading price regulator will crack down on excessively high prices in six industries as it looks to further protect consumers, according to the news of Shanghai Securities. These six industries include aviation, consumer goods, automobiles, telecommunications, pharmaceutical and home appliances (More).

Business & IndustryChina Construction Bank buys Brazil's BIC China Construction Bank has entered into a share purchase and sale agreement with Brazilian bank BIC to acquire BIC's controlling stake for 1.6 billion Brazilian Reais ($720 million). China Construction Bank has agreed to buy 157.4 million ordinary shares and 24.7 million preferred shares issued by BIC, by which it would hold 72% of BIC's total shares upon completion of the transaction. The transaction is subject to approvals from the China Banking Regulatory Commission, Banco Central do Brasil (Brazil's central bank) and other regulatory authorities in China and other jurisdictions. The acquisition would mark a significant step in the globalization strategy of China Construction Bank, facilitating future expansion of the bank's networks in Latin America (More).

3

December 2013

PetroChina acquires 25% interest in Iraq oil field PetroChina Company Limited (PetroChina) has acquired a 25 percent interest in the Technical Service Contract (TSC) for the West Qurna-1 (WQ1) oil field in Iraq. The entry of PetroChina into the WQ1 project will be beneficial for PetroChina to work efficiently with other projects in Iraq and can help the company develop a larger and stronger presence in the upstream operations in the Middle East, as well as drive cooperation with other international oil companies in high-end oil markets. (More)

Sinopec takes share in Apache's Egyptian business Sinopec Group and Apache Corporation announced on November 15 that Sinopec has acquired a one-third share of Apache's Egyptian oil and gas business for $3.1 billion. Apache is an independent U.S. upstream oil and gas company, with 24 contractual blocks in Egypt, mainly located in Egypt's West Desert (More).

CII India OfficeU. D. Bhatkoti, Advisor

Confederation of Indian Industry

CII China Office Madhav Sharma, Chief Representative

Confederation of Indian Industry

The Mantosh Sondhi Centre23 Institutional Area, Lodi Road, New Delhi-110003

Tel: 91-11-2462 9994-7; Fax: 91-11-24601298Email: u.d.bhatkoti@cii.in; Website: www.cii.in

Room No 11A47/49, Shanghai Mart,2299 Yan'an Road (West), Shanghai 200336, China

Tel: +86 (21) 62360969; Fax: +86 (21) 32283510 Email: ciichinarep@cii.in; Website: www.cii.in

Translation Disclaimer: English is our official business language. Due to the complexities of the human language, and the possibility of a number of different translations and interpretations of particular words and phrases there are inherent limitations in translations. Thus, the CII accepts no responsibility or liability for the accuracy of the translation of its contents (wherever applicable), its study and test materials, submissions, comments, reviews, correspondence, and external links, etc.

Disclaimer: This document is being shared for information purposes only and is therefore not intended to substitute for formal professional advice. All information in this document has been compiled and/or arrived at from online sources in the public domain.

4