Erogenous

The Chinese government’s stated ambition of turning the country into a global R&D center has aroused a fair bit of skepticism. Innovation, after all, is not something that can be conjured out of thin air at the whim of a bureaucrat. Scratch the surface of China’s impressive metrics, such as patent filing data, and there is often less genuine innovation there than meets the eye.

That said, there’s a difference between skepticism and scoffing. A visit to a large chemical plant about an hour’s drive north of downtown showed me why it would be a mistake to dismiss China’s innovation ambitions out of hand.

My hosts, German chemical company BASF, are investing heavily in R&D in China. This multi-acre campus, already crowded with showrooms, manufacturing facilities and labs, is about to become more crowded with a new ￠55 million ($75 million) research facility and a new headquarters. The company expects to employ 450 professionals at the site when it opens next year.

Even before the new facility comes online, research is already underway. The company manufacturers both high-tech plastics and polymers─chemical additives that make cement more water-resistant, say, or paint dirt-resistant─here. White-coat-clad Chinese technicians fine-tune chemical mixtures based on customer requests, making incremental tweaks to existing products. This is the ‘development’ in R&D.

But what of the ‘research’? That’s where Stefan Dreher comes in, as BASF’s scientist-cum-manager tasked with establishing the new innovation center. We speak on the phone after my factory visit because he happens to be in India at the time I’m in Shanghai.

The first question is, Why, given the challenges, China? Mr. Dreher says it’s because ‘you need to do R&D where the customers are.’ Old-fashioned proximity is a crucial way of collecting market intelligence and responding quickly to customer demands. Similar considerations are driving an uptick in BASF’s R&D investment in India, Malaysia and even Indonesia. Projecting strong economic growth here, BASF and other companies conclude they can’t not do research in China.

Meanwhile, what of the costs (Mr. Dreher might prefer the word ‘challenges’) of doing so?

Some of Mr. Dreher’s worries sound familiar. China produces a much-vaunted army of science grads, but the education system often leaves them unprepared to work in a modern research center. Mr. Dreher notes that despite recent improvement, too many grads still focus too narrowly on one branch of chemistry, for instance, depriving themselves of the broader scope successful research requires. Lack of English fluency is a big problem, especially for foreign companies whose China-based researchers must be able to collaborate with scientists around the world.

Then there’s personnel management. High staff turnover plagues many companies and will not be easily fixed. It’s not only salary competition. Mr. Dreher cites fundamental differences in corporate culture as a big culprit.

In the West, a researcher measures career progress not only in terms of job title but also with less tangible metrics such as whether he’s able to take on greater levels of informal leadership responsibility over time. Chinese hires tend to be much more concerned about prospects for rapid promotion up a well-defined hierarchy. Western companies struggle to accommodate that mentality.

This in turn is the main source of concern over intellectual-property protection─the fear of what inside knowledge workers take with them when they leave. Mr. Dreher notes that China is better at protecting intellectual property today than it was five years ago. And staff turnover is an IP danger anywhere in the world. But Mr. Dreher says he has to be more careful in China simply because of the high volume of turnover. The design of the new innovation center has included consideration of how to manage workers’ access to various kinds of information to limit the leakage when any one worker leaves.

Mr. Dreher raises one other challenge, and it’s the most surprising one of all: the government. Despite Beijing’s stated support, Mr. Dreher notes that at a practical level building the innovation center has been challenging simply because of the red tape involved in building anything in China. He points to the hassle of securing building permits and other licenses from various levels of local government.

This implies that Beijing’s message on innovation-encouragement hasn’t always filtered down to the local level, or that local officials haven’t always understood the relationship between ‘supporting innovation’ and seemingly unrelated issues such as building permits. Indeed, in Mr. Dreher’s telling government pro-innovation policy has been less significant than some might think. While BASF, like any rational company, won’t argue with tax breaks or other benefits, Mr. Dreher insists market forces are driving the company’s China research push.

Despite the challenges, ‘there is no way around doing R&D in China,’ Mr. Dreher tells me as we conclude our chat. He’s almost certainly right, which might explain much of the run-up in R&D work multinationals are shifting to China. China will presumably get a lot of mileage out of that fact even without any further reforms. But this case study─and BASF is by all accounts not unique─suggests that the change from necessary innovation center to desirable R&D hub will take more than a couple of five-year plans.

If you think gasoline is expensive, just be thankful you don’t have to buy Chanel quilted bags in Asia.

According to a new Asian Lifestyle Index from the Swiss private bank Julius Baer, the cost of living the luxury life in Asia soared 11.7% in dollar terms over the past year. That’s more than twice the inflation rate for Asia as a whole. Even in local currency terms, the inflation rate was 7.2%.

The Lifestyle Index is based on a basket of 20 luxury goods and services that are commonly purchased by millionaires in Hong Kong,hermes kelly Shanghai, Singapore and Mumbai. The items include everything from Oyster Rolex watches and Armani suits to boarding school and face lifts. (Some sample items are below)

The main reason for the inflation: more demand from more rich people.

Julius Baer said the number of people in Asia with $1 million or more in investible assets will more than double by 2015, to 2.82 million.hermes birkin Their total wealth will nearly triple to $15.8 trillion, they said.

China alone will account for nearly half of the number of high net-worth individuals, with 1.4 million rich people by 2015, the report said.

Of course, Julius Bear, which is betting part of its future in Asia, has an incentive to pump up the projections.

Yet all reports point to a higher growth rate of rich people in Asia,Balenciaga handbags Europe and the U.S. And more millionaires means more people vying for the same BMWs and Birkin bags.

Do you think the luxury inflation rate in Asia will increase or decrease over the next year?

SAMPLE ITEMS FROM THE LIFESTYLE INDEX

Bottle of Lafite Rothschild 2000 Price in USD: $3,336,Balenciaga bags up 21.9% from 2010.

Chanel quilted bag. Price: $4,185, up 17.5%

Steinway Grand Piano. Price: $201,021, up 16.7%

Ladies Classic Louboutin pumps. Price: $1,868, up 10.8%

Tiffany 2 ct diamond ring. Price $96,479, up 10.3%

Oyster Rolex watch. $32,201, up 9.1%

Cohiba siglo VI cigar, $760, up 5%

Scupltra liquid facelift. $6,578, up 4.3%

Libya’s war has thrown many diplomats who abandoned Col. Moammar Gadhafi’s government into a curious limbo, as they attempt to hold down stateless missions while the conflict drags into its fifth month.

Their challenges range from securing new office space and visas to looking after family members who have gone into hiding back in Libya. No longer credentialed as diplomats, they are still working — but in many cases on behalf of the opposition government based in Benghazi.

Ibrahim Dabbashi, the deputy head of Libya’s mission to the United Nations until he defected Feb. 21 after violence broke out, now must use a ‘courtesy pass’ to enter the U.N. for meetings. He and former mission chief Abdurrahman Mohamed Shalgham, who defected several days after Mr. Dabbashi, are trying to persuade more governments to back the rebels. More than 20 countries recognize the opposition government in varying degrees.

‘We didn’t think it would take this long,’ said Mr. Dabbashi, referring to the war. He said he figures the mission has enough money in reserve to last until the end of the year.

In the meantime, he said, the mission has pared spending on travel, some medical costs and private-school education for staff children. He added he believes many more Libyan diplomats support the rebel cause than is publicly known, since rebel supporters have instructed diplomats not to publicly state their allegiance as they continue to serve local Libyans.

It wasn’t possible to verify those claims of wider support.

Libya’s enduring war is testing the commitment of parties on several fronts, including the North Atlantic Treaty Organization. British military commanders participating in NATO operations against Col. Gadhafi recently warned their forces would become stretched if air operations continued at the current pace. U.S. lawmakers are questioning the legality of the U.S.’s continued participation.

For Libyan diplomats in exile, waiting brings different challenges. In Paris, Abdoulsalam El Qallali, who in February resigned as Libya’s ambassador to Unesco, the U.N. agency, is looking for a cheaper apartment since he no longer receives a salary. Like other defected diplomats, he says he is receiving support from fellow Libyans abroad, as he assists the opposition government.

Some, shorn of diplomatic status, are braving new bureaucracies in their bids to stay in the countries of their former posting. Libya’s ambassador to the U.S., Ali Suleiman Aujali, was locked out of his country’s Washington embassy by staff members loyal to Col. Gadhafi after defecting in February, prompting him to call the police.

‘I’m hoping we will be able to free our country from this regime so we can regain our status,’ said Mr. Aujali, who was Libya’s first ambassador to the U.S. in about three decades. He defected in February. He just received special papers allowing him to travel and has applied for a visa allowing him to stay.

Ten diplomats in the embassy loyal to Col. Gadhafi were sent back to Libya. The U.S. State Department turned over the embassy to an American custodian chosen by the Libyan government. The State Department has terminated the diplomatic status of all Libyan diplomats in Washington.

Gone are the more than dozen luxury cars, including brands like Mercedes, BMW and Lexus, that had been at the disposal of Mr. Aujali’s staff. Mr. Aujali and his five remaining Libyan diplomats recently found temporary work space in a Washington law office.

His makeshift team helped unfreeze more than $200 million in Libyan assets to help finance the thousands of Libyans studying in the U.S. and Canada, and are working on cases of Libyans in the U.S. fearful of having to return to their war-torn country.

A former nuclear adviser to Japanese Prime Minister Naoto Kan blasted the government’s handling of the crisis, and predicted more revelations of radiation threats to the public in the coming months.

In his first media interview since resigning his post in protest in April, Toshiso Kosako, one of the country’s leading experts on radiation safety, said Mr. Kan’s government has been slow to test for dangers in the sea and to fish, and has understated certain radiation threats to minimize clean-up costs. In his post, Mr. Kosako’s role was to advise the prime minister on radiation safety.

And while there have been scattered reports of food contamination-of tea leaves and spinach, for example-Mr. Kosako predicted there will be broader discoveries later this year, especially as rice, Japan’s staple, is harvested.

‘Come the harvest season in the fall, there will be a chaos,’ Mr. Kosako said. ‘Among the rice harvested, there will certainly be some radiation contamination-though I don’t know at what levels-setting off a scandal. If people stop buying rice from Tohoku … we’ll have a tricky problem.’

Mr. Kosako also said that the way the government has handled the Fukushima Daiichi situation since the March 11 tsunami crippled the reactors has exposed basic flaws in Japanese policy making.

‘The government’s decision-making mechanism is opaque,’ he said. ‘It’s never clear what reasons are driving what decisions. This doesn’t look like a democratic society. Japan is increasingly looking like a developing nation in East Asia.’

Specifically, Mr. Kosako said the government set a relatively high ceiling for acceptable radiation in school yards, so that only 17 schools exceeded that limit. If the government had set the lower ceiling he had advocated, thousands of schools would have required a full cleanup. With Mr. Kan’s ruling party struggling to gain parliamentary approval for a special budget, the costlier option didn’t get traction, he said.

‘When taking these steps, the only concern for the current government is prolonging its own life,’ Mr. Kosako said.

Mr. Kan’s office referred questions about Mr. Kosako’s remarks to a cabinet office official, who declined to be identified. The official said the government is making ‘utmost efforts’ to improve radiation monitoring in the sea and working closely with fishermen and others.

‘Particularly close attention is paid to the safety of rice as Japan’s staple food,’ the official said, adding the government would suspend the shipment of crops if radiation exceeding a set standard is detected. The government has banned the planting of rice in certain areas.

As for schools, the official said the government was working to lower the ceiling for acceptable radiation, and ‘is also considering additional steps. ‘

The Japan Volleyball Association (JVA) said on Tuesday that six first-round matches in the men’s World League scheduled to be held in Japan in June have been canceled due to nuclear crisis and moved to Europe.

Japan was scheduled to face Germany on June 11 and 12 in Saitama Prefecture, Russia on the 18th and 19th in Nagasaki Prefecture, and Bulgaria on the 25th and 26th in Wakayama Prefecture in Pool B.

However, the volleyball associations of the three European countries expressed concern over the nuclear crisis and made the decision not to travel to Japan.

Japan’s games will now be played on the same dates in Germany, Russia and Bulgaria respectively.

Opposition to Col. Moammar Gadhafi’s regime is simmering in the Libyan capital despite an unrelenting crackdown on any sign of dissent.

Some opponents of Col. Gadhafi in Libya’s largest city say coalition airstrikes against his military capabilities, including several installations in Tripoli, won’t be enough to dislodge him. Amid increasing pessimism that Col. Gadhafi will be ousted, some simple acts of defiance are emerging once more. Leaflets with the words ‘Libya is free’ and the image of the monarchy-era flag adopted by the rebels have surfaced. Antiregime graffiti has reappeared on walls.

In Tripoli, the latest tactics adopted by antiregime activists, who work in small, mostly uncoordinated groups, have involved brief and stealthy attacks on government targets. Exchanges of gunfire are heard in the capital almost nightly. On Friday, a government spokesman dismissed that as customary celebratory gunfire, but interviews with residents and activists gave a different picture.

Over the past week, they said, gunmen have shot at the state television building, while a tent for pro-Gadhafi neighborhood guards was attacked with a homemade bomb. It was unclear if any of the attacks resulted in casualties, but one activist suggested opponents of the regime would step up such activity. ‘We do not consider this treason,’ he said. ‘On the contrary, treason is not standing on the side of the rebels.’

Another activist describes the acts of defiance he helps orchestrate — including distributing leaflets and burning tires — as ‘morale-raising’ and ‘preparing people for the final push.’ But he says it isn’t a good time to resume street protests. ‘It would be counterproductive,’ he says. ‘If 100 come out, 30 will be shot in the head.’

A third concurs. Still, he argues that because of the regime’s brutality, an armed struggle is now the only option. ‘Going out in a peaceful demonstration means you want to commit suicide,’ he said.

The challenges facing the opposition in Tripoli are formidable. Protests at the start of the uprising in February were met with live ammunition from Col. Gadhafi’s forces; dozens were killed. Hundreds of suspected protesters and activists have been arrested or threatened, residents say. Military checkpoints ring the city; it has become a ‘big prison,’ says one resident.

The regime’s tactics were on display Friday in Tripoli’s eastern suburb of Tajura, a hotbed of antiregime sentiment. Three weeks earlier, protesters at the Murad Agha mosque were chanting ‘rebels, rebels, Tajura awaits you.’ This past Friday, the mosque was only a quarter full for traditional weekly prayers.

Watching from across the street was a group of pro-Gadhafi armed men. They stayed until the last person came out.

Residents are monitored not only by soldiers and the security forces, but also by revolutionary committees — neighborhood cells of regime followers that have served as armed militias to stamp out dissent.

Moammar al-Sharifi, a committee member, recounted how a teenage boy was apprehended recently for spraying antiregime graffiti on a wall. Committee members detained the boy and beat him, Mr. Sharifi said. He was released only after his father vouched for him.

‘We told him, ‘We will shred you into pieces if you do this again,’ ‘ said Mr. Sharifi, adding that this was no time for dissent given the perils facing Libya from ‘outside enemies.’ He added, ‘If someone protests after Friday prayers, we will set him on fire.’

China’s central bank stepped up its efforts to rein in inflation by ordering domestic banks to increase the level of deposits they hold in reserve, the third time it has done so this year.

The People’s Bank of China said on Friday it would raise the reserve requirement ratio by half a percentage point on March 25. This would force most large institutions in China to hold a record 20 per cent of their deposits in reserve at the central bank.

Economists said the increase in the reserve ratio would lock up as much as Rmb370bn ($56bn) in funds that banks would otherwise have been able to lend.

The increase is designed to reduce liquidity in the system and curb inflation, which has remained stubbornly high in recent months.

In February, consumer prices in China rose 4.9 per cent from a year earlier, the same reading as in January. But politically sensitive food prices accelerated and producer prices increased 7.2 per cent, their fastest rise since October 2008.

Authorities in Belgorod province are urging schools and other state institutions to refrain from celebrations marking the heart-shaped holiday, seen by some conservative Russians as an unhealthy foreign phenomenon.

The initiative is part of a recent directive on “measures to provide for spiritual security,” which calls on officials to ban Valentine’s Day and Halloween celebrations in educational and cultural centers in the province, Russian media reported.

“The very atmosphere of these holidays does not foster the formation of spiritual and moral values in youth, and holding them primarily benefits commercial organizations,” RIA quoted provincial government consultant Grigory Bolotnikov as saying.

The directive was signed by the Belgorod governor’s top deputy and “blessed” by the province’s Russian Orthodox bishop, the state-run news agency said.

Many nightclubs and other businesses in the province 600 km (380 miles) south of Moscow, have also been urged not to plan any special events for the February 14 holiday, according to RIA.

The dominant Russian Orthodox Church has grown increasingly powerful since the collapse of the officially atheist Soviet Union in 1991 and enjoys close ties with the Kremlin leadership.

Its efforts to influence education and secular life have drawn criticism from rights groups and members of minority faiths.

Western-style holidays such as Valentine’s Day and Halloween have also gained popularity since the Soviet collapse opened up Russia to the world.

So popular is Kentucky Fried Chicken over the festive season that the fast-food chain’s Christmas Party Barrels can be ordered up to five months in advance in Japan.

KFC for that special Christmas meal, somebody? In Japan, the answer is a resounding yes.

“I entered the company in around 1980 & at the time it was  hard because there would be these long queues outside the stores,” said Ichiro Takatsuki, a company spokesman. “Because of that over the past decade we’ve been taking orders. We started in November, but people would call & ask if we were taking orders yet, so we started earlier.”

Through one of the most successful advertising louis vuitton handbags, which started in 1974, KFC Japan has made eating its chicken meals at Christmas a national custom. This happens on December 23, 24 & 25, but particularly Christmas eve. Sales for the three days are equal to half normal every month sales, the company says.

“One of the reasons the campaign lasted so long is that the message is always the same: at Christmas you eat chicken,” said Yasuyuki Katagi, executive director at Ogilvy & Mather Japan, the advertising agency.

Japan is well known for taking foreign products & ideas & adapting them to suit domestic taste, & Christmas is no exception. A highly commercialised & non-religious affair, lots of cash is spent every year on decorations, dinners & gifts. KFC is arguably the largest contributor, thanks in part to its advertising campaign.

Yoshiaki Hirose, a Tokyo businessman, ordered his Party Barrel a couple of weeks ago. “It’s like a Christmas standard,” she said. “You need to have a party together with your relatives, save your spouse from having to cook, & you can pick it up from your local shopping street on your way home from work.”

Lining up without an advance order, particularly on December 24, is feasible but dicy as the chicken is freshly fried & thus volume is limited.

“If we’re in Tokyo [for Christmas] we definitely need to buy chicken,” Mr Katagi said.

it began in the early 1970s when KFC was new to the market. According to the company, a representative of a Christian mission school had ordered chicken at a Tokyo KFC as we could not get hold of any turkey. A bright employee suggested the situation could be made in to an advertisement campaign.

“My daughters expect this.”

According to a recent study, expectant mothers’ exposure to high levels of a chemical, called triclosan which is used in toothpastes and soaps, may bring damage to their babies’ brains.

In the study, tests on sheep showed triclosan interferes with an enzyme that allows the hormone oestrogen to circulate in the womb. Oestrogen helps to keep open the artery carrying oxygen-rich blood to the foetus. If there is too little, this artery narrows, starving baby’s brain of the oxygen it needs to develop properly.

Triclosan is a powerful anti-bacterial that was developed nearly 50 years ago. It is now commonly used in everything from toothpastes to washing-up liquid.

In the UK, the chemical’s maximum content allowed in any product is 0.3 percent, and drug giant GlaxoSmithKline has phased out the use of triclosan in its products. But it is still used in brands such as Colgate Total.

But a spokesman for the Cosmetics, Toiletry and Perfumery Association said the study in sheep did not prove the same effects would be seen in humans.