Daily Archives: June 27, 2010

Is  it mere coincidence that the strikes that have hit foreign carmakers in China have affected only Japanese companies not their US, European and South Korean rivals? Or is there something about Japanese management that has invited trouble?

With the industry internationalising so many practices, the question might seem 20 years out of date. After all, much of what is now regarded as best practice is common to most big carmakers – with a big contribution to raising efficiency coming from Japanese companies, headed by Toyota Motor.

But, as a report by correspondents in today’s FT shows, Japanese executives seem to have had more difficulties handling relations with their Chinese workers than western competitors – perhaps because western companies headed by Volkswagen, have been in China longer and established deeper roots.

By Timothy Ash, head of emerging markets research, Royal Bank of Scotland

The global financial crisis has stress tested all economies, and some, e.g. Brazil, Poland and Turkey, have come out relatively well, proving their durability and reinforcing the view that emerging market nations are in many respects in better economic shape than their G7 counterparts.

However, one EM economy that has underperformed through the crisis has been Russia. Real GDP declined by 7.9 per cent in 2009, which marks it out against its BRIC peers; China posted 10 per cent plus growth, India over 7 per cent and even Brazil just about managed to achieve positive growth.

Russia bulls claim the country is now shrugging off the crisis and recovering fast. I struggle with this rose-tinted view: first quarter 2010 numbers are weak and the country needs fundamental reforms if it is to fulfill its potential.

Plenty of trade data out this week, with Thailand export data and manufacturing production potentially shedding some light on how political unrest may have affected the economy. PMI also in focus, with Taiwan, China and India all releasing figures. The week finishes with round two of Poland’s presidential race.

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54.46 Rupees to the dollar on Wednesday, an all-time low for India's currency.

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