Norway’s $1.4 trillion investment fund is shutting its China office - CNN

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Norway’s $1.4 trillion investment fund is shutting its China office – CNN

Published

3 weeks ago

September 8, 2023

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Norges Bank Investment Management (NBIM), which operates the world’s largest sovereign wealth fund, has started the process of closing down its office in Shanghai, in another sign of big global companies pulling back operations in the world’s second largest economy.

The firm, which manages Norway’s $1.4 trillion government pension fund, is the world’s biggest single investor in the stock market. As of the end of 2022, it owned shares worth about $42 billion in some 850 Chinese companies. Those investments will be managed in future from its Asia hub in Singapore, it said.

The decision to close its Shanghai office was driven by “operational considerations” and doesn’t affect the fund’s investments or its investment strategy in China, NBIM said in a statement on Thursday.

There are currently eight people in the Shanghai office, the firm said. It will ensure the closing process is conducted in an “orderly” manner for everyone affected and will be in line with local requirements, it added.

A pedestrian walks by the Norges Bank building in Oslo in February 2019. Norges Bank is the central bank of Norway.

Odin Jaeger/Bloomberg/Getty Images/File

The retreat appears to be in line with a trend among international investors to diversify their operations away from China as uncertainty grows around doing business in the country.

Ontario Teachers’ Pension Plan, one of the world’s largest pension funds, closed its Hong Kong-based China equity investment team earlier this year. The company would no longer have country-focused stock-picking teams based in Asia, a spokesperson told CNN in May.

Forrester Research, a US tech-focused research and advisory firm, also planned to cut the majority of its China analysts around the same time. The firm said in a response to CNN in May that the move was part of its global restructuring, and it would service its clients in China through its global research team.

China’s economy is in trouble. The real estate market is in a deep slump and could spark a larger debt crisis. Young people are struggling with record unemployment. Households and businesses are losing confidence in the nation’s future and increasingly unwilling to spend or invest.

Beijing’s crackdown on Western firms over national security concerns has also unnerved foreign businesses. Consulting firms have been raided by police, and an espionage law, that was already broad in scope, was expanded in April to cover a wider range of activities.

NBIM set up its Shanghai office in November 2007, a year after the Chinese regulator granted the Norwegian sovereign wealth fund a license to trade directly in mainland China’s stock exchanges. It was the firm’s first Asian office.

The firm, which is the investment management division of the Norwegian central bank, said it was in the process of shifting the Asia region’s operational functions to Singapore. That office opened in 2010, three years after Shanghai.

“Over the years, our Singapore office has increasingly served as the hub for the whole of the Asian region and has been built up to take care of all operational functions, including for China,” it said.

In the first half of this year, the fund registered a 10% return, amounting to $143 billion, thanks to an AI-driven tech stock rally and weaker Norwegian currency, it said in an earnings report.

But the return was hampered by a loss on unlisted real estate and renewable energy investments, it added.

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Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts

Published

2 weeks ago

September 19, 2023

Anne Joseph

NEW DELHI: The tense diplomatic relations between India and Canada are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products.
“Hence, the trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries.
On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.
India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a “potential” Indian link to the killing of a Khalistani separatist leader in June.
Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations.
Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23.
India’s exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada’s exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products.
On investments, he said that Canadian pension funds will continue investing in India on grounds of India’s large market and good return on money invested.
Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.
The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.
Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern.
“However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” Saraf said.
He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy.
“In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada,” Saraf said.
India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions.
In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI.
According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021.
Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021.
Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.

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Apple supplier Foxconn aims to double India jobs and investment

Published

2 weeks ago

September 18, 2023

Anne Joseph

Apple supplier Foxconn aims to double its workforce and investment in India by next year, a company executive said on Sunday.

Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics, has rapidly expanded its presence in India by investing in manufacturing facilities in the south of the country as the company seeks to move away from China.

V Lee, Foxconn’s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.

He did not give more details.

Foxconn already has an iPhone factory employing 40,000 people in the state of Tamil Nadu.

03:02

Foxconn dangles incentives for workers as iPhone shortages plague holiday season

In August, the state of Karnataka said the firm will invest US$600 million for two projects to make casing components for iPhones and chip-making equipment.

The company’s Chairman Liu Young-way said in an earnings briefing last month that he sees a lot of potential in India, adding: “several billion dollars in investment is only a beginning”.

Taiwan election: Foxconn’s Terry Gou taps star-powered running mate

Last month, Foxconn’s billionaire founder Terry Gou said he would run for the Taiwanese presidency in next year’s election, as an independent candidate.

He said the ruling and independence-leaning Democratic Progressive Party (DPP) was unable to offer a bright future for the island and left Foxconn’s board following his decision to run.

The firm operates the world’s largest iPhone plant, in the city of Zhengzhou in Henan province.

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Foxconn to double workforce, investment in India by ‘this time next year’

Published

2 weeks ago

September 18, 2023

Anne Joseph

Foxconn, Taiwan-based Apple supplier, has said that they are planning to double their investment and workforce in India within the next twelve months, according to V Lee’s LinkedIn post on the occasion of Prime Minister Narendra Modi’s 73rd birthday.

Notably, Foxconn already has an iPhone factory in the state of Tamil Nadu, which employs 40,000 people.

V Lee, Foxconn‘s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.

In August this year, Karnataka governments had said that Foxconn has planned to invest $600 million for two projects in the state to make casing components for iPhones and chip-making equipment.

Earlier this month, Young Liu, Chairman and CEO of Hon Hai Technology Group (Foxconn) had said, ‘India will be an important country in terms of manufacturing in future’.

In the past, it took 30 years to build the entire supply chain ecosystem in China, he noted, adding that while it will take an “appropriate amount of time in India” and the process will be shorter given the experience. The environment too is not quite the same, he said pointing to the advent of new technologies like AI and generative AI.

Meanwhile, Apple Inc. has announced plans to make the India-built iPhone 15 available in the South Asian country and some other regions on the global sales debut day, according to a Bloomberg report.

While the vast majority of iPhone 15s will come from China, that would be the first time a latest generation, India-assembled device is available on the first day of sale, they said, asking not to be identified as the matter is private.

Apple introduced the iPhone 15, updated watches and AirPods at a gala event at its US headquarters. Sales of new products begin typically around 10 days after the unveiling.

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