International Business Opportunities

A report from the World Trade Organization explains how the terrorism fears are changing international trade patterns.
WTO says new security measures have imposed additional costs on countries’ economies and on international trade by adding a burden on business travel, transport and investment.

For instance, the report said these measures are boosting the transaction cost of cross-border trade because of higher insurance premiums and additional screening at borders, sea ports and airports. And Most businesses have probably incorporated the security premium into the final cost of goods sold, thereby passing it along to the consumer.

Daniella Markheim, trade policy analyst with the conservative Heritage Foundation, said :
“Depending on the industries, some will have higher costs of doing business. Once you add the terror risks, insurance rates creep up. Those companies who can’t cope will cut back on production and sourcing. Prices will go up and consumers on average will be paying more for what they buy”
(source)

According to a recent study by the Abu Dhabi Chamber of Commerce and Industry, rents have increased by 50 per cent in Abu Dhabi this year.

That despite the massive investment in the constructions operated in recent years in the emirate.

Recent estimates suggest 36.1 per cent of an average household budget goes toward rent.

The main factors for this surge were:
- Dubai rental costs soared by 40 per cent which had a knock-on effect in Abu Dhabi.
- Restrictions to the demolition and construction of commercial buildings in the capital slowing down the construction of new units.
- Oil companies have now started to pay employees’ rent rather than paying them for leave.
- Influx of the incoming labour to participate in the booming economic development of the emirate.
- Excessive interference of brokers and realtors.
- Increasing costs of building materials.
- Absence of a clear outline for the owner/tenant relationship(source)

According to survey by Chinese government, changes in population structure in China will cool the  real estate market by 2008.

The study found that:  

China’s birth rate, which peaked around 1965, has an influence on the current demand. Many people born during the two decades after 1960 were getting married and looking to purchase their own homes, around 2000.

After 1978 birth rate dropped significantly to 2 percent.
So, after 2008 these people will have all been over 30 and the majority will have been married. The house purchase peak will pass at the same time. According to an analysis, the number of marriages is likely to fall dramatically by 30 percent.

House prices are dictated by market demand. With the changes in population structure it seems that the current boom could no longer last after 2008. (source)

Of course, many other factors, including urbanization and economic development, also influence China’s real state market.

According to a survey carried out by Credit Management Research Centre (CMRC), only 20.3% of businesses in United Kingdom seek trade finance advice from their banks.
The survey also reveals that 9.7% of companies never seek any trade finance advice.

These figures, when compared to the 2002 survey findings, clearly show a trend away from banks as sources of export trade finance advice. In 2002, 34% of exporters sought advice from their bank and only 7% never did so.
….Interestingly, SMEs were more likely to seek bank advice, with more than half of companies with a turnover of less than £10 million reporting they do so regularly. However, these companies also make up the majority of the 38% of companies that had experienced difficulties in raising finance from their bank.

(source)

Incorporation of a company in India is easier, after ministry has simplified the process and brought it online.

It has launched a website, www.mac.gov.in, to help new firms register online. It has also recast exit norms to make it easier for out-of-business firms without any financial liability to get their names struck off the RoC list.

That will eliminate cumbersome forms, long queues, stupid queries and making several rounds of the office of Registrar of Companies. (source IndiaTimes.com)

The raise of the costs to keep the Malacca Strait open and safe, may have as a consequence that shipping vessels could soon have to pay a fee to use it.

Littoral states Singapore, Malaysia and Indonesia have stepped up patrols of the Strait in response to a surge of concern over incidents of piracy that prompted London insurers Lloyds to list the region as a war-risk zone, boosting premiums [..]
The 900-km-long Malacca Straits links Asia with the Middle East and Europe, carrying about 40 percent of the world’s trade, including 80 percent of the energy supplies of Japan and China.

(source:Reuters)

A support to the proposal, from the International Maritime Organisation, a United Nations agency charged with safeguarding international shipping that groups 166 nations, will be crucial to set up a fee for Malacca strait’s users.

Some relevant trade shows will be held in the upcoming weeks in China.

From August 15 to August 18 the, the 9th Asian-Pacific Int’l Plastics & Rubber Industry Exhibition is taking place at the China International Exhibition Center of Beijing.
Exhibits: Injection moulding machines, extruders and extrusion lines, blow moulding machines, ancillary equipment, rubber machines, plastics packing & printing machines, plastics & rubber materials and products, moulds & dies, parts & components.

At the Guangzhou Jinhan Exhibition Centre in Guangzhou will be held the 88th China Cotton Knitware Trade Fair sponsored by China Textile Commerce Association, date: August 15 - 18.

Brands in sports, fashion and lifestyle in Asia will be exhibited at ISPO China 2006 at the Shanghai New International Expo Centre, in Shanghai, from August 21 to August 24.