China is poised to race ahead of the US as the world’s largest producer of manufactured goods. This prediction by Global Insight put US down to world number two because of its continuing economic woes.

The report has been compiled for the Financial Times by Global Insight, a US-based economics consultancy firm. It claimed that as early as next year, China would account for seventeen percent of all the manufactured goods in the world with a value-added output of $11,783 billion. US would be just a tad behind with sixteen percent of all manufactured goods coming from its factories.

Till last year the US was in the first place, accounting for a fifth of the world’s manufactured goods and was expected to maintain its position for at least another four years. Last year China was in the second place with 13.2 percent. The large-scale downward revision in the report has come in the wake of an economic slow down in the US brought on by a severe crisis in the housing market and heightened by surging fuel costs and rising prices all of which have led to reduced consumer spending.

However, China has been fighting high inflation and a fluctuating stock market in its own backyard. Thus if numbers are adjusted according to inflation rates and put in constant prices, the predictions look better for the US since its inflation over this period is expected to be lower than that of China.

-Kalyani Mookherji

India continues to maintain its status as an attractive offshore research and development destination despite rising labor costs and other infrastructural problems.

The findings are borne out by a report complied by Zinnov, a consulting firm which offers product development strategies to global companies. The study found out that the research and development scene in India is steadily gaining momentum and has assumed greater strategic importance than before. This growth is maintained in spite of spiraling wages which have pushed the average cost per employee to 16 percent for the last three years.

The boom in the offshore R&D centers in India is primarily being driven by increased demand from multinationals like Cisco, GE, Motorola and Hewlett-Packard. According to estimates provided by the Zinnov report, the offshore research and development industry is currently worth $9.35 billion and is growing at a rapid rate of 23 percent annually. The report expects the industry to touch $21.4 billion by the year 2012.

The main reason why US companies continue to outsource research and development work to India is its vast technical workforce which scores high on both skill and experience. Moreover an Indian engineer is still affordable when compared to the costs of hiring an engineer in the US for R&D work. Thus despite inflationary pressure on wages, India remains the R&D destination of choice for various multinational companies.

-Kalyani Mookherji

According to the US Department of Agriculture, the country will reap the second largest corn crop ever and the fourth highest yield in soybean crop. The report led to a rise in the share prices of meat processing and ethanol producing companies during the afternoon trading session on Tuesday.

The report brought out by the US Department of Agriculture says that the corn yield is expected to be around 12.3 billion bushels. The numbers are a welcome revision of previous month’s estimate of 11.7 billion bushels. The report also predicted that corn prices would come down and settle between $4.90 and $5.90 a bushel which is around sixty cents lower than the estimate given in June this year. The report was welcomed by meat processing companies like Smithfield Foods, Pilgrim’s Pride, Hormel Foods and Tyson Food.

The soybean harvest is expected to be around 2.97 billion bushels, according to The USDA report, which is slightly lower than last month’s estimate of three billion bushels. The prices of soybean prices are expected to settle down between $11.50 and $13 a bushel which is fall of around thirty cents from the prices predicted in June.

According to the USDA report, a larger corn crop will mean that around 4.1 billion bushels can now be used for ethanol production which is higher than previous estimates of 3.95 billion bushels.

-Kalyani Mookherji

General Motors Corp recently announced that it will come down hard on those workers who have been collecting medical benefits for ineligible dependants. The number one auto manufacturer of the US is seeking to prune its massive health care costs which have been reported to run up to $5 billion a year.

A report in the Wall Street Journal cited GM spokesperson warning nearly 67,000 hourly workers that they have until August 20 to eliminate ineligible persons from health coverage provided by the company. After this period the workers would have to produce an official document as proof of the eligibility of the covered family members. In case the worker was proved to have claimed health benefits for an ineligible member, he would be compelled to compensate the company in monetary terms.

In the second quarter of this fiscal year, GM Corp posted a net loss of a whopping $15.5 billion. It plans to cut at least $10 billion in costs which include abandoning health care for retired workers, doing away with executive bonuses and even laying off white collar employees. While the company has undertaken an audit of its health care accounts in previous years, now it plans to take a much more serious view of the lapses in its health care programs.

-Kalyani Mookherji

Japan is poised to enter its first recession in six years as its economic growth suffers due to falling exports and reduced consumer spending.

In keeping with the trend of a global economic slowdown, the Cabinet Office of Japan revealed that the country’s second quarter GDP showed a fall of 2.4 percent as opposed to a gain of 3.2 percent in the preceding quarter. The Nikkei 225 Stock Exchange too lost the greatest number of points in a month.

Analysts say that exports, which had driven most of Japan’s post-war economic boom, are now lowest since 2001-2002. Exports came down in the last quarter by 2.3 percent, its biggest fall in three years. Rising food prices and soaring fuel costs have meant that consumers are also spending less. According to the reports released by the Cabinet Office, consumer spending fell by 0.5 percent from the last quarter.

The impact of falling demand has hit Japan’s manufacturing sector hard. Last week, Toyota Motor Corp announced that its earnings had declined the most in the past five years because of reduced demand in the US. At the same time, Japan Airlines Corp reported that it would go for pay cuts in order to offset increased costs. Even foreign markets, such as Europe and Asia have reported lower demand for Japanese products.

-Kalyani Mookherji

Despite breaking several box office records, The Dark Knight has been unable to catch up with Titanic as the biggest selling movie of all times.

The Batman sequel has turned out to be this year’s biggest release, and according to estimates provided by Warner Bros is expected to rake in between $510 to $520 million. The Dark Knight went on to break the record for the biggest opening and second weekends and the fastest run up to $200 million and $300 million mark at the box office. In its first four weekends at theatres, the film has made $441.6 million in domestic markets and another $263.5 million worldwide.

As The Dark Knight sped past the $400 million milestone, many in the industry expected it to catch up with Titanic. However James Cameron’s oceanic saga of love and sacrifice still remains the biggest movies of all times with earnings of $601 million after its release and almost $1.8 billion internationally.

Interestingly, if the figures of both The Dark Knight and Titanic are adjusted for inflation, they are hugely overshadowed by the $1.4 billion earnings of Gone With the Wind, the 1939 epic of love and longing set against the backdrop of the American Civil War.

-Kalyani Mookherji

FDA officials have issued warnings on an injectible treatment for alcohol dependence which might lead to severe skin reaction in patients. The drug called Vivitrol is manufactured Alkermes Inc and marketed by Cephalon Inc.

On Tuesday, federal regulators asked doctors and patients to look out for skin complications like swelling or infections at the point where the drug has been injected. The authorities also insisted that physicians use the correct needle for the injection which should moreover be administered directly into the muscle and not into the fatty tissue of the patient.

The FDA looked into the matter after receiving almost two hundred reports of skin complaints from patients who had been injected with Vivitrol as part of treatment for alcohol addiction. As many as sixteen patients have had to go for surgery for reasons ranging from pus drainage to tissue removal. According to a notice posted at the FDA website, patients whose skin condition does not improve within two weeks should go for a surgical consultation.

Vivitrol has been in the market since 2006 when it was approved for the treatment of alcohol dependence together with group therapy and personal counseling. It main competitors in the market are Campral from Forest Laboratories as well as other generic variations.

-Kalyani Mookherji

Ameriprise Financial Inc is set to acquire H&R Block Financial Advisors for $315 million in cash. The news led to a rise in the share prices of H&R Block during after hours trading on Tuesday.

H&R Block Financial Advisors is the securities brokerage unit of H&R Block Inc. its acquisition by Ameriprise Financial Inc will add to the latter’s revenues by 2010. according to company releases, the deal is expected to be sealed in another four to six months after getting the mandatory approval from the regulatory authorities.

The financial chairman and CEO of Ameriprise Financial claimed that the acquisition is proof of the company’s strong financial position and will form an important component of its larger growth strategy.

H&R Block Chairman claimed in a statement that the sale of the unit was being pushed in view of the fact that H&R Block Financial Advisors could not longer keep up with the competition at the highest level. the securities business needs to continually expand in size and scope and H&R Block Financial Advisors had failed to accomplish those goals. On Tuesday, the shares of H&R Block responded to the news of the acquisition by gaining fifteen cents and closing at $24.85 in after market trading.

-Kalyani Mookherji