F REIGN TRADE the Export-Import Bank of China: Want to Be the Best in a Better World ?

CHINA’S F REIGN TRADE The Export-Import Bank of China: Want to Be the Best in A Better World ?

Special report China’s New RMB Move: A Political Step in the Game of Negotiation? World Expo More Thoughts on the SH Expo

Sun Bingzhong, Chairman of Wuxi Sunmart Holdings Pte Ltd., listed company in Singapore Exchange

国内邮发代号：80-799 国际邮发代号：SM1581 国内刊号：CN11-1020/F 国际刊号：ISSN0009-4498

Lifestyle

2010 Football Charity Games: Birmingham City VS Beijing Guoan Time: 2010/7/21 Venue: National Stadium Price: RMB 100/180/280/380/580/880 Ticket Package: RMB 580 Website: www.piao.com.cn Ticket Hotline: 400-610-3721 (press 2 for English) July 21 17:30 Hong Kong Star Team VS Mainland Star Team July 21 19:30 Birmingham City VS Beijing Guoan

Australian Youth Orchestra Concert CNSO Music Season Closing Time: 2010/7/24 Concert-Opera Salome Venue: NCPA-Concert Hall Time: 2010/7/25 Summer Vocation Price: RMB 80/120/200/300/400/500 Venue: Beijing Concert Hall Highlight- Fundazzle Website: www.piao.com.cn Price: RMB 30/60/120/180/380 Bubble Show Ticket Hotline: 400-610-3721 (press 2 for Website: www.piao.com.cn Time: 2010/7/3-2010/7/25 English) Ticket Hotline: 400-610-3721 (press 2 Venue: Fundoule Children’s for English) Playground Price: RMB 80 Conductor, Li Xincao, Soprano, Usha- Ticket Package: R M B kova (Austrilia), Choir The China National 150/210 Symphony Orchestra (CNSO) Chorus Website: www.piao.com.cn Program: Opera Salome, Richard Ticket Hotline: 400-610- Strauss 3721 (press 2 for English) Salome is an opera in one act by Rich- ard Strauss to a German libretto by the Fundazzle is a huge en- composer, based on the German translation closed playground, which is a of Oscar Wilde’s adaptation of Salome, first “must see” place for kids in this performed by the Dresden Opera in 1905. summer vocation. The South Korea Bubble Show drew full houses on Broadway and South Korea ap- A Full-length Red Classic Dance Drama: Ode to Red Plum pearances. Time: 2010/7/29-2010/8/1 The Bubble Show will Venue: NCPA-Theatre amaze you with a fairyland Price: RMB 80/180/280/380/480/580 of blowing bubble magic. At Website: www.piao.com.cn several points during the show, Ticket Hotline: 400-610-3721 (press 2 for English) audience will be invited to come up on stage into his ‘world’ of Presenter: Art Ensemble of the PLA Air Force Political Department bubbles, either stepping inside Dance drama Ode to Red Plum tells a true story happened in the Cinder Cave Prison at or partaking in their creation. the foot of Mount Gele, Chongqing Municipality in the 1940s. It is a twin production of the The interactive feature of the opera Sister Jiang, as they are both derived from the same theme song. event is a beautiful touch and In a dark iron prison, unyielding revolutionaries in heavy chains are valiantly struggling unforgettable experience for all for their cause. “Be man of men when alive, and be soul of souls when dead.” In the face of those participating. Adults and torture and inducements, Sister Jiang and fellow comrades hold their heads high, and the in- children of all ages are sure to be nocent “Little Carrot Head” nestles by his mother, dreaming of flying butterflies. enchanted. At the sound of cannon marking the march of the People’s Liberation Army, the patriots The South Korea Bubble seam to hear the rumbling gun salute of the new nation’s founding ceremony. Sister Jiang, show lasts about 30 minutes together with fellow prisoners, loyally embroidered a red flag. starting at 19:30 (Admission Rows of patriots fall down, still more rush forward, with burning ideals and faith in their starts from 19:00). After the hearts, the revolutionaries live eternally despite the fire. show, kids can play hide-hiding When the dawn of victory shines, rainbow bridge stretches, the sun smiles, and the sky in mischievous fort and swim in clear and blue, the faithful spirits readily dance to a new world, a new China, and a brilliant pool until 21:30. New Year! Lifestyle 2010 Football Game: Beijing Guoan VS Barcelona Time: 2010/8/8 Venue: National Stadium Price: RMB 280/480/680/880/1080/1280/1680/2880 Website: www.piao.com.cn Ticket Hotline: 400-610-3721 (press 2 for English)

Futbol Club Barcelona also known simply as Barcelona, is a football club based in Barcelona, Catalonia, Spain. The team was founded in 1899 by a group of Swiss, English and Spanish men led by Joan Gamper. In 2009, Barcelona became the first club in Spain to win the treble of La Liga, Copa del Rey and Champions League. FC Barcelona also became the first football Ismena Trio Concert, Danmark team ever to win six out of six competitions in a single year thus completing the Time: 2010/8/6 sextuple, comprising the 2008–09 La Liga, 2008–09 Copa del Rey, 2009 Super- Venue: NCPA-Multi-functional The- copa de España, 2008–09 UEFA Champions League, 2009 UEFA Super Cup and atre 2009 FIFA Club World Cup. Price: RMB 160/220/280 Beijing Guoan Football Club is the champion of Chinese Super League, and Website: www.piao.com.cn is part of CITIC Group (China International Trust and Investment Corporation). Ticket Hotline: 400-610-3721 (press 2 Their current home stadium is Workers Stadium and the Fengtai stadium for less for English) popular games.

Myung-whun Chung and Asia Philharmonic Orchestra Concert Time: 2010/8/6 Venue: NCPA-Concert Hall Price: RMB 180/280/480/680/880/1080 Website: www.piao.com.cn Ticket Hotline: 400-610-3721 (press 2 for English) Presenter: Asia Philharmonic Orches- tra Conductor: Myung-Whun Chung Programs: Symphony No. 6 in F major, Op. 68 Beethoven; intermission: Sym- phony No. 4 in E minor, Op. 98 Brahms

Dino Dream Park Great Repertoires Series from China National Art Time: 2010/7/1-2010/8/31 Ensembles—Ballet: Eugene Onegin Venue: Dino Theme Park Time: 2010/8/6-2010/8/7 Price: RMB 60/90 (Remarks: RMB Venue: NCPA-Opera House 60 is for children under 1 meter and senior Price: RMB 80/120/180/280/380/480 citizen) Website: www.piao.com.cn Website: www.piao.com.cn Ticket Hotline: 400-610-3721 (press 2 for English) Ticket Hotline: 400-610-3721 (press 2 Presenter: National Ballet of China for English) Choreography: John Cranko Dino Theme Park aims to provide zero distances contact with the dinosaurs for Eugene Onegin is a ballet adapta- children and adults. Treasured fossils from Institute of Vertebrate tion of Pushkin’s classic novel in verse, Paleontology and Paleoanthropology of Chinese Academy of Eugene Onegin. Choreographed by John Science, giant mechanical simulation dinosaurs and fossil resto- Cranko and using Tchaikovsky’s music, ration of labs work are dizzying. it is destined to be a huge theatrical suc- Three Main Halls cess. The innocent charm of Tatiana and Reentry Jurassic Period Hall-simulation dinosaurs to recon- the flippancy and hypocrisy of Onegin struct the Age of the Dinosaur is vividly demonstrated. Eugene Onegin Science Hall-dinosaur fossil hall and fossil restoration show. integrates the merits of symphonic ballet Ice Age Hall--fossils of saber-toothed tiger, mammoth, cave and ballet drama and remains the best of bear, cheetah and recovered Ice Age ruins. Cranko’s works since its advent in 1965. Lifestyle FRENCH CULTURAL CENTRE French films with Chinese (and sometimes English) subtitles Tickets: RMB 20 (Students: RMB 10) Fidelity card: 100 Rmb/5 films + 1 free (Students: 50 Rmb) Free entrance on Monday More information: www.ccfpekin.org

July ~ French actresses Cet amour-là France, 2001 100 min Et Dieu… Créa la femme Director: Josée Dayan France, Italy, 1956 95 min With: Jeanne Moreau, Aymeric Demarigny Director: Roger Vadim Genre: Drama With: Brigitte Bardot, Curd Jürgens, Jean-Louis Trin- French with Chi- tignant nese & English subtitles Genre: Drama, Romance French with Chinese subtitles Cet Amour-là is an intimate portrait of Juliette Hardy is sexual dynamite, and has the men of a legendary love affair. a French coastal town panting. But Antoine, the only man Set against the beauty who affects her likewise, wouldn’t dream of settling down of the Breton seaside, it with a woman his friends consider the town tramp. While Antoine’s away, his is also a film that revels younger brother Michel, who worships Juliette, proposes to her; out of liking in the insights that Mar- rather than love, she accepts, and their marriage becomes happy. But what will guerite Duras’ writing happen when Antoine returns? affords. Monday 7/26 – 19:00 Wednesday 7/28 – 19:00

AUGUST~AUGUST~ Comedy!Comedy! This August, the French Cultural Centre invites you to relax with a selection of the best French comedies… Augustin capped woman, who was nursed by Selima, an Arabic nurse. When Esther’s eccentric behavior drives her former caretaker France, 1995 61 min away, Selima introduces her mother, Halima, na Muslim, to work Director: Anne Fontaine as the caretaker. When Esther’s only son is committed to work With: Jean-Chrétien Sibertin-Blanc, that forces Esther to stay with Halima under one roof, conflict Maggie Cheung arises that bonds both Esther and Halima together. Genre: Comedy Sunday 8/08 – 19:00 Wednesday 8/18 – 19:00 French with Chinese & English sub- Saturday 8/28 – 19:00 titles

Augustin Dos Santos is serious about The Very Merry Widows his part-time job as a clerk for an insurance company, and he also acts, with small parts under his belt in commercials and experi- France, Belgium, 2003 99 min mental films. An agent finds his serious innocence perfect for a Director: Catherine Corsini part as an odd bellman. Before his screen test, he volunteers for With: Jane Birkin, Emilie Dequenne a day at a hotel. At his screen test, his inability to see the comic Genre: Comedy center of the scene makes him perfect for the part. Can anything French with Chinese & English sub- break through his serious view of reality? titles Sunday 8/01 – 19:00 Wednesday 8/11 – 19:00 Saturday 8/21 – 19:00 Renée is Laurence’s grandmother and she intends to show her how to make rich men fall in love with her, in order to get their life insurance’s money. Two Ladies Both women will meet several men in the course of the movie. France, 2007 73 min Even the cynical Renée will fall deeply in love again. But even Director: Phillippe Faucon after getting married, Laurence and Renée don’t seem to be With: Sabrina Ben Abdallah, Zohra able to love their husband for a long time. Will they manage to Mouffok get rid of their rich, loving but irritating husbands? Will their Genre: Comedy husbands survive the experience? Or will true love triumph at French with Chinese subtitles the end? Monday 8/02 – 19:00 Friday 8/13 – 19:00 Esther is a middle-aged Jewish handi- Wednesday 8/25 – 19:00 Lifestyle ART & GALLARY 51m2: Project 9# PEI LI Venue: B2 Red No.1 Art District, Curators: Tang Xin, Su Wenxiang Caochangdi, Cuigezhuang, Beijing, 100015 Duration: 2010.6.26 – 7.10 T/F: 86-10-51273173 Gallory: Taikang Space www.taikangspace.com

“We’ve lost many things in our lives. It’s always hard to face choices or sacrifice. But if you don’t put them aside, you will get more de- pressed, which makes things worse.” Female artist Pei Li was given deep nourishments by her intellectual family since she was young. Her grandfather is an artist who “fiddles” with landscape bonsai for more than forty years. However, time passes by. When she has developed her particular artist care for the surround- ings, her grandfather, an artist himself, during the same time, has given up his treasured pots. In this project, the artist faces loss, and the dispiriting moment it brings, with her sensitive soul, and she’ll try to deal with it. The audience may share the artist’s stillness and melanchol- ies in this fresh constructed electronic miniature landscape.

Memory that Passed Away — Works from SongZhuang (July.3 -31) The cultural revolution in 60s is a special period in history of China that can’t be forgotten. Under Chairman Mao’s leadership during that time, People’s thought w e r e u n i f i e d as well as their u nifor ms, and they were active in attending the massive move- ment. Because the revolution interest and class struggle were superior to everything, the tradi- tion was destroyed and family relation disregarded, which resulted a big disaster to the culture and people suffered a lot. For those artists who were born in 60s, those miserable memories were deeply rooted in their mind and were often penetrated in their works. In this exhibition, all the works demonstrate the artists’ memory and reflection on that time.

Add: No.1 North of Renzhuang, SongZhuang, TongZhou, Beijing (appointment only) Tel: 86-10-69598343 13901244283 Fax: 86-10-69597655 Admission fee: RMB 20 Website: www.artistvil- lagegallery.com 2010 No.14/483

BI-WEEKly WATCH 8 Figure 9 Agriculture 10 Environment 11 Energy 12 Steel 13 Auto 14 Consumer 15 Textile 16 Electronics 17 Transportation 18 Investment 19 Finance

Special report 22 China’s New RMB Move: A Political Step in the This summer, China announced it will introduce more 22 flexibility into its exchange rate, and at the same time make it Game of Negotiation? remain “basically stable”. 24 What Is Its Purpose? 25 Differences Between Two Foreign Exchange Reforms 27 Restarted Exchange Rate Reform Raises New Doubts on RMB Appreciation 29 RMB’s Exchange Rate Policy Shift Creates Opportunity for Neighboring Countries 31 Conquering the Summit With Firm Strides

CITY

32 Yangzhou: City of Gardens

The city of Yangzhou, Jiangsu Province, is located about ECONOMY 32 225 kilometers northwest of Shanghai. Situated on the northern bank of the Yangtze River, the prefecture-level city 38 of Yangzhou is an important port city for international and Strong Growth and Inflation Today domestic trade, albeit, Yangzhou has a deep-water harbor. Industry 42 China’s Investment in Africa’s Banking Sector 46 China Independent Brand Commercial Vehicles Will Assemble and Produce in Russia

World Expo 48 More Thoughts on the SH Expo

Fair INFO 50 China Fairs & Expos Throughout history a city has always been a reflection of the 48 development of human civilization. It would be a waste if our COVER STORY cities just have tall buildings, big roads, and busy traffic, but no new thoughts in people’s mind. 54 A Decade Miracle: Wuxi Sunmart Sponsored by (主管) CCPIT(中国国际贸易促进委员会)

Global Published by (主办) Media and Press Center of CCPIT 59 Mexico: A Golden Opportunity 中国国际贸易促进委员会宣传出版中心

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常年法律顾问北京市天银律师事务所 Cooperation Media License Mark of General Administration of Press and Publication, the People’s Republic of China Coal imports: 114% ↑ from to see slower growth in the second half to RMB 24.06 trillion, representing a January to May due to big declines in demand for coal, decrease of 5.3 percentage points from iron ore and steel products, it said. the end of May. China’s coal imports surged 114.3 In June, the port borne the brunt The central bank statement also percent year on year to 68.98 million of slowing global trade. Cargo through- said yuan deposits increased by RMB tonnes in the Jan.-May period on the put was down 1.1 percent year on year 7.63 trillion in the first half, down by back of strong industrial demand, the to 34.1 million tonnes. (Xinhua) RMB 2.35 trillion over the same pe- Ministry of Industry and Information riod last year. (Xinhua) Technology (MIIT) said on July 5. New lending in June: drops In a statement, the MIIT attribut- to US$88.7 bln Forex reserves: US$2.45 ed the increased demand to the power, trillion in Q2 steel, cement and chemical fertilizer China’s new yuan-denominated industries. lending in June fell to RMB 603.4 Growth of China’s foreign ex- Boosted by robust economic billion (US$88.7 billion), down from change reserves are slowing as the growth, limited supply and summer’s RMB 639.4 billion in May, the People’s total reached US$2.4543 trillion by high electricity consumption, coal im- Bank of China (PBOC), the central the end of June, up 15.1 percent year ports will grow over coming months, bank, said on July 11. on year, the People’s Bank of China analysts said, underpinning the global The June figure brought new loans (PBOC), the central bank, announced coal price. for the first half to RMB 4.63 trillion, on July 11. Coal prices increased 4.7 percent down by RMB 2.74 trillion compared Statistics from the central bank month on month in May, a rate of to the same period last year. show China’s foreign exchange reserves increase 3.5 percentage points higher China’s broad money supply (M2), increased by US$7.2 billion in the than the previous month. China was a which covers cash in circulation and all second quarter, a drastic decrease com- net coal exporter in the decades before deposits, increased 18.5 percent year pared to the last quarter in 2009, when 2007. on year to RMB 67.39 trillion by the reserves grew by US$126.5 billion. In 2009, China imported 126 end of June, which marked a slowdown The PBOC also said the declin- million tonnes of coal and exported from the 21 percent increase at the end ing euro was the major reason behind 22 million tonnes. Those imports ac- of May, the PBOC said. the slowing growth in foreign exchange counted for more than one fifth of the During the same period, narrow reserves. world’s total coal trade. (Xinhua) money supply (M1), cash in circula- The exchange rate between the tion plus current corporate deposits, euro and U.S. dollar had fallen by near- Guangzhou port cargo: 12% ↑ climbed 24.6 percent from a year earlier ly 20 percent between the end of 2009 in H1 and May this year, according to the PBOC. China’s Guangzhou port reported China’s basket of foreign a cargo throughput of 201 million exchange reserves include the tonnes in the first half, up 11.7 percent U.S. dollar, euro, Japanese yen from a year earlier. and others. The major port handled 6.07 mil- On a monthly basis, re- lion twenty-foot equivalent units (TEU) serves increased by US$43.4 of containers, up 16.8 percent from a billion in April followed by a year ago, the Guangzhou Port Author- reduction of US$51 billion in ity said on July 10. May, while June saw reserves The cargo throughput was 8.1 increase by US$14.8 billion. percent higher than in the same period China’s gold reserves of 2008, that is, before the strike of the stood at 33.89 million ounces global financial crisis. at the end of June, according The port, however, was expected to PBOC figures. (Xinhua) 8 A griculture

China moves to transform cooperation in agriculture between the “Wheat prices at some purchase agricultural production two countries. stations have topped RMB 1.04 per jin. Zhou, who visited Sudan last It’s beyond the maximum price I can of- The State Council, or the Cabi- year, said that since the establishment fer, which is RMB 2.04 per kilogram,” net, on July 9 outlined tasks and goals of diplomatic ties more than 50 years said Gu Hongxin, a grain broker who for sound and fast development of the ago, the two countries had maintained purchases wheat for national reserves country’s farm mechanization. close political, economic and cultural and food companies in Yancheng City, In a statement to ministries and cooperation, especially in the fields of east China’s Jiangsu Province. Last local governments, the State Council oil and irrigation, which had brought year, the price was RMB 1.72 yuan per, said China was now at a critical tran- substantial benefits to the two peoples. he said. sition stage in its development from He said China was ready to en- China has set minimum purchas- traditional labor-intensive farm produc- hance cooperation in agricultural de- ing prices for grain, including wheat tion to that which is more reliant on velopment, mining and railways, so as and rice, since 2004. The government machinery. to advance the long-term, stable and will buy grain from farmers at the state- Farm mechanization and increas- comprehensive development of China- set price when the market price drops ing the use of agricultural machinery Sudan friendly relations. below it. was essential for boosting agricul- This year’s minimum purchase tural production and increasing prices are at RMB 1.72 to RMB domestic consumption in rural 1.8 per kilogram, according to areas. the National Development and About 49.13 percent of Chi- Reform Commission. Appar- na’s farmland was plowed, planted ently, the current market prices and harvested by machines by the are much higher than the state’s end of 2009, nearly 7 percentage minimum purchase prices. points higher than in 2007, accord- The competition in the wheat ing to figures from the Chinese So- purchasing market is very fierce, as ciety for Agricultural Machinery. grain and food companies thought Domestic agricultural ma- this year’s wheat output would be chinery manufacturers are en- affected by the cold weather since couraged to set up research and last winter. Therefore, they rushed development centers with foreign to store wheat, which helped push companies through joint ventures up prices, said Zhu Shoudong, to reduce China’s dependence on vice director of Peixian County’s imports of advanced technologies. Nafi’a said China had always been food administration, Jiangsu Province. According to the statement, the a true friend of Sudan. He appreci- As of June 15, China’s main Chinese central government would ated China’s support and contributions wheat producing areas had altogether continue to subsidize agricultural ma- to Sudan in the areas of maintaining purchased nearly 2.94 million tones of chinery purchases and provide better peace, economic development and the wheat, which was 4.61 million tonnes access to finance for farmers. improvement of living standards. less than the same period last year, ac- Tractor-plowing and machinery China was the first country that cording to statistics from the State Ad- irrigation companies will be exempted the National Congress of Sudan visited ministration of Grain. from operation taxes and agricultural after the general election. The visit was One reason for the drastic pur- machinery maintenance enterprises will aimed at enhancing relations and co- chase fall is that the cold weather had get income tax breaks. operation between the two parties and deferred the time for ripening and the The mechanization of China’s the two countries. He welcomed more reaping was also postponed by the rainy agricultural production has reduced Chinese companies to invest in Sudan, weather. the annual need for around 10 million especially in agriculture. (Xinhua) Meanwhile, some grain brokers farm labors, according an estimate by have also hoarded grain for later sale. the Beijing-based China Agricultural Soaring wheat prices make However, China is totally capable of University. (Xinhua) farmers reluctant to sell regulating wheat prices as it has a large amount of grain reserves. China, Sudan underscore ag- Chinese farmers are holding their China’s summer grain output rose ricultural cooperation wheat and reluctant to sell on expecta- six years in a row to top 123.35 mil- tions that the current high prices would lion tonnes last year, 2.6 million tonnes Senior Chinese official Zhou continue to rise as market reflects that more than the previous year. The total Yongkang met on July 8 with a del- wheat production and quality might be grain output reached 530.8 million egation from Sudan’s ruling National affected by persistent low temperatures tonnes last year, the sixth consecutive Congress party and called for more during the growing season. year of growth. (Xinhua) 9 Wind blows in energy for the national grid from other provinces. China to develop 13 solar Shanghai Power demand is expected to peak at power projects in western nvironment 26,000 megawatts during workday rush region E China’s biggest offshore wind hours on extremely hot days this sum- farm started transmitting power to the mer, officials said. (Shanghai Daily) China, the world’s second-biggest national grid on July 6 through a sub- energy user, plans to develop 13 solar marine cable, authorities said. Dunhuang solar PV plants to power projects in the western region as The Donghai Bridge Wind Farm be finished in July part of a government aim to cut emis- off Shanghai’s coast, consisting of 34 sions and boost energy investment in three-megawatt wind-driven genera- Two 10-megawatt solar photovol- the area. tors, can fuel more than 200,000 city taic (PV) power generation plants, built The government is tendering for households. by State Development & Investment bids to develop the projects in six prov- The capacity of the wind farm was Corp (SDIC) and China Guangdong inces, which will have a combined ca- only 102 megawatts, less than 1 percent Nuclear Power Corp (CGNPC), will pacity of 280 megawatts, the National of the city’s current total power capacity soon be completed and be fully opera- Development and Reform Commis- of about 18,200 megawatts from traditional by July 30, as a pilot program to sion, the country’s top planner, said in a tional fuel electric plants. develop the abundant solar power re- statement on its website yesterday. But Shanghai Electric Power Co sources in Dunhuang city of Northwest This is the second tender since Ltd, the city’s power supplier, said it China’s Gansu province. the country opened bids to build a 10- was a good start for the application of So far, the solar power plant built megawatt solar power plant in Dun- clean energy in Shanghai. by China Guangdong New Energy huang in Gansu province last year. “The operation of the Donghai Development Co (CGNEDC), a subsi- China wants the western region to be- Bridge Wind Farm provided good dy of CGNPC, which began construc- come a base for energy production and experience for the development of new tion on Aug 28, 2009, has generated processing of natural resources and energy,” said Li Chonghe, vice general 1.07 million kWh of electricity, and the aims to boost the share of non-fossil manager. SDIC project, which started construc- fuel in its primary energy consumption The company said that with the tion on Sep 8, 2009, has generated 1.48 to 15 percent by 2020 to cut pollution. operation of the Donghai wind farm, million kWh of electricity. The central government will in- the city could save about 86,000 tons of The statistics collected in the first vest in “key projects” in those areas to coal and reduce carbon dioxide by more three months of this year showed that improve the economic well-being of than 234,700 tons every year. actual power generation was better the local people, President Wen Jiabao Construction of the wind farm, than predicted, said Ren Tao, general said in a statement yesterday, without located at the east side of the Donghai manager of SDIC Dunhuang Solar identifying the provinces. Additional Bridge, was started in September 2008 Power Co. policies will also be implemented to and finished this February. Before This year is a construction year to support the development of the region, operations officially started, the wind accumulate statistics for further devel- he said. farm was on a trial run for more than a opment, he added. China aims to have an installed month, the company said. The State Council, China’s cabi- capacity of 20 gigawatts of solar units The first batch of power generated net, has set a strategic target to build a and 100 gigawatts of wind power by by the wind farm is being transmitted million-kW level solar power base in 2020, Zhang Guobao, head of the Na- to the World Expo site. Dunhuang by 2020. tional Energy Administration, said in Meanwhile, construction of the Dunhuang has submitted the May. (China Daily) Donghai wind farm’s second phase 240-mW solar PV has been approved for the west side of development plan the bridge, authorities said. The total involving six power capacity of the second phase was also enterprises, CGN- designed at about 100 megawatts, the PC, SDIC Electric company said. Power, GD Power The company said it plans to build Development Co, another four offshore wind farms: C h i n a D a t a n g one in the Pudong New Area, one in Cor p Renewable Chongming County and the other two Power Co, CHINT in Fengxian District. The total capacity Group and China of wind power could reach 1,100 mega- WindPower Group, watts after the farms are finished. to the provincial The city’s power capacity now gover n ment a nd amounts to 26,640 megawatts after in- awaits approval. cluding 8,440 megawatts brought in by (China Daily) 10 E nergy

Ten nuclear reactors to use need final approval from the central the nuclear station in May, citing con- top technology government, he said. tinuous environmental monitoring of The plan to use advanced tech- radioactivity levels on the premise and China, which is currently building nology for more nuclear reactors is in in surrounding areas. the largest number of nuclear power line with the rapid development of the The company later admitted that a stations worldwide, is expected to use country’s nuclear power sector, ana- fuel rod at the plant experienced a “very one of the most advanced technologies lysts said. small leakage” on May 23, leading to for constructing 10 of its nuclear reac- “The country’s nuclear power in- a slight increase in radioactivity levels tors, an energy official said on July 5. dustry has seen accelerated growth since in cooling water for the Unit 2 nuclear 2005, as it fits well with the country’s reactor. (China Daily) objective to build an environmentally friendly economy,” said Lin Boqiang, a Heat wave sends power professor at Xiamen University. generation to new high As the world’s second-largest energy consumer, China now has 11 A searing heat wave that has nuclear power reactors in operation. scorched many parts of China has These reactors have a total capacity of 9.1 brought the country’s daily electric- gigawatts (gW), accounting for about ity generation to its highest level ever, 1 percent of the country’s total power touching 12.93 billion kilowatt-hours capacity. on July 5, according to data from the The country has three nuclear National Power Dispatch and Commu- power bases: Qinshan in Zhejiang nication Center. province, Daya Bay in Guangdong The figure was 6 percent higher province and Tianwan in Jiangsu prov- than the past record, which occurred ince. on July 21 last year, said Zhu Weijiang, China plans to increase its nuclear deputy chief engineer with the center. power capacity to 70 gW to 80 gW in The heat wave is affecting at least 2020, which will account for 5 percent 16 provinces, autonomous regions and of its total power capacity, officials with municipalities, according to the Na- The technology, called AP1000 the National Energy Administration tional Meteorological Center (NMC), from US-based nuclear power company said. which issued an orange-level heat alert Westinghouse, is a third-generation The development of nuclear power on Tuesday, the second highest level. nuclear system. Compared with other will also be highlighted in the coming With temperatures over 35 de- reactors already in use in China, those 12th Five-Year (2011-2015) Plan for grees Celsius, the electricity load in using the third-generation technology the country’s energy industry, industry Beijing, Tianjin, Fujian and north are considered to be safer and able to insiders said. China hit record high on July 5, Zhu operate longer. “The move to further develop told Xinhua. The AP1000 technology will be nuclear power is integral for China to At the Shanghai World Expo, used on six reactors at three inland achieve its goals in energy conservation the electricity load surged to 110,000 nuclear plants in Hunan, Hubei and and emission control,” said Li Junfeng, kilowatts from 70,000 kilowatts at the Jiangxi provinces - the country’s first deputy director-general of the Energy Expo’s opening, which added pressure batch of inland nuclear power projects. Research Institute under the National to power grid of Shanghai and east The technology will also be ap- Development and Reform Commis- China. plied for two pairs of reactors, one in sion, the country’s top economic plan- “As the heat wave continues, new Sanmen in coastal Zhejiang province, ner. power generation records could be set and the other in Haiyang, Shandong China is currently building 23 on Tuesday and Wednesday,” Zhu said. province, said the official who did not nuclear power units. The proportion of Zhu forecasted that power con- want to be named because of security nuclear power is expected to account for sumption would peak in late July or issues. 15 percent of the country’s total power early August this year, when the na- Future inland projects are also capacity in 2050, industry sources said. tional electricity load might climb to set to use the same technology and Still, the security of nuclear plants 13.5 billion kilowatts, up 10 percent Chinese authorities are considering the has been a source of public concern re- from a year ago. AP1000 as a standard, he said. cently. Power grid companies would “The technology will upgrade Last month, the Hong Kong me- strengthen monitoring and forecasting China’s nuclear power industry, which dia reported a radiation leak at the Daya of increases in electricity demand and is seeing its fastest development now,” Bay Nuclear Power Plant on May 23. make better power distribution plans, the official said. But officials at the plant later said so as to avoid a power shortage this Construction of the projects will that no radiation leakage occurred at summer, Zhu said. (Xinhua) 11 teel s Baosteel sees weak market Anshan Iron and Steel has a 14 in H2 percent stake, would mainly sub- stitute imports, it said. Rebar is a Baosteel Group Corp said although low-end steel product mainly used conditions in the steel market may in construction. change, it would remain weak overall in The 300,000-tonne plant in the second half of the year, Vice Chair- Amory, Mississippi would create man Liu Guosheng said on July 6. jobs and increase tax revenues and The Shanghai-based company would not harm local suppliers, it mainly produces steel products used in said. autos, home appliances and shipbuilding. “We chose the U.S. because However, auto output has continued to it has a perfect law system,” it expand at a slower pace this year as the said. “We believe the U.S. has effects of the stimulus measures to boost given, and will continue to give, auto sales are fading. In June, auto sales all businesses that respect local rose 14 percent to 1.13 million units, laws and customs the same mar- compared with increases of 34 percent in ket environment.” April and 25 percent in May. Qi Xiangdong, deputy secretary- Wuhan Iron and Steel Corporation Even as Baosteel cut steel prices general of the China Iron and Steel (WISCO), completed a joint venture for July by as much as 17 percent on Association, on July 5 urged western on Wednesday with Australian Cen- weak demand, it may face higher costs countries to maintain the proper at- trex Metals Ltd corporation (CXM) to because iron ore miners are seeking titudes towards global trade and eco- develop iron ore mines on south Aus- price increases for the third quarter. nomic globalization. tralia’s Eyre Peninsula. Baosteel highly depends on sup- “If the (U.S) government sup- WISCO paid 51.5 million Aus- plies from Australian miners as its steel ported blocking the deal, it was a pro- tralian dollars (43.7 million U.S. dol- products required high-grade iron ore, tectionist attitude,” Qi said. (Xinhua) lars) to CXM for mineral exploitation a major ingredient in steel making. rights and another 50 million Austra- Liu also said the steel maker in- Steel moves heat up in lian dollars to the joint venture to cover tends to actively expand abroad but he Shanxi the cost of the first-phrase exploration, declined to elaborate. said sources of the central-China-based He said there are currently no China’s largest stainless steelmak- WISCO. specific overseas investments but the er, Taiyuan Iron & Steel Group, hopes The joint project, with an esti- company will maintain the proportion to finalize details of a planned acquisi- mated investment of 1.5 billion U.S. of exports at 10 percent of its annual tion of Zhongyu Iron & Steel Group by dollars, is expected to annually produce production. (Shanghai Daily) early September, said a source familiar 33 million tonnes of raw iron ore, along with the deal. with 10 million tonnes of refined iron Steel giant calls for fair The consolidation move would ore, the sources said. market environment in U.S. make it the first acquisition of Shanxi With a controlling share of the province’s steel restructuring plan. new joint venture, WISCO would have China’s Anshan Iron and Steel “Taiyuan Steel and Zhongyu dis- the final say on the exploration and Group Corp. called for maintaining a cussed merger details two weeks ago, led operation of the Australian iron ore fair market environment in the U.S. on by Shanxi Province’s Economic and In- mines. July 7 after 50 U.S. lawmakers sought formation Committee,” said the source. CXM, a company listed on the to block its investment in a U.S. steel “Taiyuan Steel wants to conclude Australian Stock Exchange, owns sev- company. the deal in two months to allow time eral mining sites in southern Australia. In a recent letter to U.S. Treasury (to begin) operations before the peak The project area with WISCO is locat- Secretary Timothy Geithner, the Con- season starts in October.” ed on South Australia’s Eyre Peninsula gressmen said the joint rebar venture The deal will be the first acquisi- and is believed to have deposits of 2.282 proposed by Anshan Iron and Steel and tion by Taiyuan Steel as the State- billion tonnes of iron ore. U.S.’s Steel Development Co. threatens owned mill has taken the lead in With an average annual produc- “American jobs” and “national security”. Shanxi province’s 45 million tons of tion of 30 million tons, WISCO ranks In a statement, the steel mill said capacity consolidation, starting this seventh among steel makers in the its investments in the U.S. and other re- summer. (China Daily) world on a production scale. However, gions were commercial acts based upon WISCO receives 80 percent of its iron market demands and also attempts in Steel maker buys rights to ore from overseas and is facing a sur- international cooperation. mine Australian iron ore vival crisis caused by the spike in iron The steel bars produced at the 175 ore prices on the international market. million U.S. dollar facility, in which China’s third largest steel maker, (Xinhua) 12 A UTO

Some car makers said they were Green light for subsidies on not sure on what basis the subsidies A strong RMB won’t cripple 71 fuel-efficient vehicles would be given. An official from China’s auto industry Subsidies have been granted to Changan Auto said the firm was not The decision by China’s central 71 fuel-efficient automobile models as sure “whether the subsidies would be bank on June 19 to let the RMB’s value China drives ahead to promote vehicles given in terms of production capacity rise may someday hamper the nation’s that use less fuel to address pollution or sales.” electronics exporters, but automakers and to safeguard energy security, the Despite the under-developed in- have nothing to fear. country’s top economic planner said on frastructure for electric vehicles, such Before the announcement, the June 30. as battery-charging stations, China RMB was pegged at a fixed rate of 6.83 The vehicles, which have an en- wants about 500,000 green vehicles in- for one U.S. dollar. The bank is widely gine capacity of 1.6 liters or less, will cluding hybrids and electric cars on the expected to allow the Chinese currency be entitled to a 3,000-yuan (US$441) roads by 2011. to strengthen only about 3 percent this subsidy per car after they demonstrated The government has also said it year. they can save fuel consumption by 20 would offer subsidies of 60,000 yuan Even if the RMB rises more than percent, the National Development for plug-in hybrid and electric car mak- that, automakers and suppliers will be and Reform Commission said in a ers. (Shanghai Daily) insulated from the impact. Here’s why: statement. #1 China has become the world’s 16 Chinese car makers, including China’s largest EV charging largest auto market. Attracted by that BYD Automobile Ltd and Chongqing station built in Shandong demand, most major automakers have built production facilities in China The construction of China’s largest to serve the local market. The auto charging stations for electric vehicles industry’s classic strategy – build cars (EVs) has been completed where they are sold – is a natural hedge in Linyi city, Shandong against currency fluctuations. province, east China, #2 Every domestic Chinese auto- on June 23, and the lo- maker has tried hard to boost exports, cally produced Yixing but they are constrained by poor prod- electric bus has now uct quality. Few have sold any sizable been put into service volume overseas, and none has success- in the city, media re- fully penetrated mature markets such ported on June 25. as the United States and Europe. The As the seventh impact of a stronger RMB on these Changan electric-vehicle charging sta- companies will be limited. Automobile Co, will produce the first tion built by the State Grid Corpora- #3 Luxury brands such as Daim- batch of the vehicles, the NDRC said. tion of China (SGCC) in China, the ler AG and BMW AG will benefit More models that qualify for the sub- Linyi charging facility includes two from the RMB’s revaluation, since sidies will be included in the future, it 1600 kVA transformers, 30 charging imports account for about half their said. machines, 30 DC charging piles and China sales. But Audi, which builds Auto analysts said the subsidies, 15 AC charging piles, which can serve most of its products in China, is forc- which aim to popularize the more 45 vehicles simultaneously with a coming its rivals to assemble more vehicles costly fuel-efficient vehicles, will en- bined charge capacity of 3200 kVA. to keep their prices competitive. Be- hance their price competitiveness and According to SGCC, 75 electric cause of China’s stiff tariffs, a stronger boost sales. vehicle-charging stations will be built RMB isn’t going to trigger a flood of Shanghai General Motors said in 27 cities across China by the end of imports. it has 12 models in the subsidy list, this year and at present, two charging #4 Chinese exporters of auto including Chevrolet Sail, the 1.2-liter stations in Shenzhen city, built by Chi- parts will be hurt by a strong RMB, Chevrolet Lova, Cruze 1.6MT and the na Southern Power Grid Company, are but even they will survive. The Chi- new 1.6-liter turbo engine Buick Re- already in use. nese market is growing so fast that gal. The car maker said it would speed In addition, PetroChina Com- suppliers will have little trouble find- up producing new energy vehicles and pany Limited Comm (PTR) and ing customers. cut fuel consumption of its models by China National Offshore Oil Corpora- The bottom line? A stronger cur- another 15 percent by 2015. tion (CNOOC) also aim at developing rency someday might cause China’s Guangqi Honda has six models electric vehicle charging station busi- makers of TVs, cell phones and other on the list while China’s home-grown ness. CNOOC is planning to create a electronics to search for low-cost lo- BYD Co, backed by billionaire War- joint venture to build electric-vehicle cales like Vietnam or Bangladesh. But ren Buffett, said its F0 subcompact car charging stations in over two provincial automakers and suppliers are here to is eligible for the subsidies. capital cities. (Gasgoo.com) stay. (Automotive News China) 13 ONSUMER Food maker looks on the for over 20 percent of its total sales by Fang said LI-NING surpassed

c bright side 2018. adidas in sales last year to become the For starters, the company intends second-largest sportswear brand in Shanghai-based Bright Food to take the LI-NING brand global, China after Nike. To catch up with its Group, China’s largest food company, said Zhang Zhiyong, chief executive rivals the company is changing tack is still gung ho on exploring overseas of Li Ning. “By 2018, we expect the and spreading its focus to top tier cities acquisitions despite its failed bid for company to be one of the top five sports apart from enhancing its strength in Sydney-based CSR Ltd, the world’s goods companies in the world.” second- and third-tier cities. leading sugar producer. According to Zhang, the revi- Li Ning has also come out with a Bright Food’s spokesperson, Chen talization strategy was chalked out in new logo, which is based on its original Chunshan, made the remarks on July 2007 and the new face of the company wavy-line design and displays a resem- 6 after the company was beaten out by has been evolved through a series of blance to the Chinese character for Wilmar International Ltd, for CSR’s steps. “people”. The company also changed its sugar unit, Sucrogen. slogan to “Make the Change”, Wilmar International, the from “Anything is Possible”. world’s largest palm oil trader and (Xinhua) a Singapore-listed company, announced on July 5 it agreed to pur- Electric blankets face chase CSR’s sugar unit for A$1.75 stiff US duties billion ($1.48 billion), A$100 million higher than Bright’s previous The United States an- offer. nounced preliminary anti- The deal will be completed in dumping duties on Chinese- the last quarter of this year. made electric blankets on June “We will continue to expand 30, despite a consensus against our business through mergers and trade protectionism being acquisitions overseas as we believe claimed as the Toronto G20 there will be a lot more attractive deals The company on June 30 launched summit’s main achievement just the ahead thanks to the financial crisis, al- its Urban Sports range of products previous day. though we still regret the failure of the targeting young consumers. The new Analysts anticipate that such cases CSR bid,” said Chen. products are more fashion-orientated, will occur more frequently in the next But “the key is, Bright Food packed with energy and reflect strong three to five years and said China is doesn’t want to pay for any deal that is personalities apart from having an in- unlikely to take any substantial coun- unaffordable for us, either now, or in ternational flavor. termeasures in the near future. the future”, he added. “Over 50 percent of our existing The duties would range from 90 to Ge Junjie, deputy general man- consumers are in the 35-40 age group. nearly 175 percent, imposed on about ager of Bright Food Group, declined to As part of the brand transformation we $30 million worth of electric blankets comment on why the company changed plan to reach out to more younger cus- from China, said the US Commerce the price at the last minute for the deal. tomers,” said Zhang. Department. Ge told China Daily in early The Urban Sports range is ideal The US International Trade Com- March the company will focus on for both work and exercise, he said. mission is expected to make its final mergers and acquisitions overseas, in Founded by former Chinese gym- judgment in August on the issue. regions such as South America and nastics champion Li Ning in 1990, the “This is a signal to China, saying New Zealand, in the next few months. Hong Kong-listed company reported that trade disputes will become more (China Daily) sales of about 8.3 billion yuan in 2009. frequent in the next few years,” said It opened 1,004 new outlets in 2009, Zhang Monan, an economist with the Li Ning makes the change to taking the total number of stores to State Information Center. catch up 7,249. Lei Yanhua, a researcher with Li Ning is also planning to rope the Chinese Academy of International Li Ning Co, the Chinese sports- in top creative designers to pump up Trade and Economic Cooperation af- wear maker endorsed by US basketball its Crossover range of products. It has filiated to the Ministry of Commerce, star Shaquille O’Neal, is undergoing a already bought in Polish artist Filip said he expected no substantial coun- brand metamorphosis to revitalize and Pagowski to make the products trendier termeasures from the Chinese govern- catch up with global peers like Nike in and more global in style and feel. ment to deal with the matter. sales. Fang Shiwei, chief marketing of- Zhang said China could solve The company is also stepping up ficer of Li Ning, said the company will the problem by changing its export- its overseas expansion pace and hopes continue to partner with top designers oriented economy to one supported by sales from the global outlets to account and fashion houses globally. domestic demand. (China Daily) 14 T extile

Export of Textile & Clothes tariff treatment for underdeveloped cient. There are some large-scale textile Kept Growth in June countries. Since 2001, China began enterprises that have 6-months worth its zero-tariff programs for the specific of cotton stocked, which can support According to the latest Customs products from 41 underdeveloped coun- enterprises until the end of Septem- data on July 12th, the export of textile tries. Up to now, about 1000 products ber. This is sufficient to prove the full & clothes accumulated to 88.878 bil- from those countries could enjoy the resource capacity of China’s domestic lion USD from Jan. to June this year, zero-tariff treatment in China, cover- cotton industry. up 22.04% year-over-year. Of which, ing almost every products exported Adverse weather effects can delay textile export were 35.652 billion USD, from them. In year 2008, the export to the sowing of cotton in many areas, but up 32.31%; clothes export were 53.226 China accounted for 23% of the total this does not mean that there has been billion USD, up 16.02%. export from underdeveloped countries. a poor cotton harvest. As the cotton For June alone, the export of tex- China became the largest market for growth cycle is longer, it has a stron- tile & clothes were 21.062 billion USD, the underdeveloped countries. ger capacity to resist natural disasters. up 56.22%. Of which, textile export The 4762 zero-tariff products this Due to climate in China experienced were 6.595 billion USD, up 31.06%; time involve in poultry products, medi- over the past two years, some cotton clothes export were 14.467 billion cal materials, plastic utensils, leather, growing areas have switched to early- USD, up 71.21%. (CTEI) wood, clothing and apparel. Based maturing cotton. There has also been a on the statistics of 2008, those 4762 strengthening in cotton farm manage- Textile Industry PMI Stayed products accounted for 98.2% of the ment, and China’s cotton harvest is at 50% in June total products from underdeveloped expected to benefit with a substantial countries into Chinese market. China harvest. At present there is a pre- ar- China Federation of Logistics & government also promised to keep ranged state cotton quota of 0.6 mil- Purchasing (CFLP) released the latest enlarging the scope of zero-tariff prod- lion tons. At the same time, the state is Purchasing Manager Index (PMI) of ucts, and improve the export from 60% adopting regulatory policies to ensure June as 52.1%. That??s 1.8 percentage to 95%. cotton market supply. points lower than that of last month. The 33 countries enjoy the zero- RMB appreciation’s negative By its 11 sub catogeries, only stock tariff treatment include Bangladesh, impact of the textile industry cannot index grew 1.5 percentage points; the Ethiopia, Benin, Burundi, Equatorial be ignored. According to studies, with other index all went down at about Guinea, Guinea, Eritrea, Djibouti, every 1% appreciation of RMB, the two percentage points. Of which, the Democratic recently, Guinea Bissau, textile industry’s sales fall 2% - 6%, purchasing price index went down 7.6 Comoros, Liberia, Madagascar, Mali, damaging exports considerably. percentage points; import index and lo- Malawi, Mauritania, Mozambique, Currently, domestic cotton supply gistics time index went down about one Rwanda, Sierra Leone, Sudan, Tanza- is balanced. The international economic percentage points. nia, Togo, Uganda, Zambia, Lesotho, situation and China’s macroeconomic By the catogery of industries, tex- Chad, Central Africa, Afghanistan, regulations and controls are the main tile and other 13 industries stayed above Nepal, East Timor, Yemen, Samoa, factors limiting a continued rise in cot- 50%; chemical material and other five Vanuatu. (CTEI) ton prices. Although current cotton industries stayed below 50%. Raw ma- prices have risen to a near peak state, terial and energy enterprises were below Himfr Report: China’s Cot- most businesses are simply waiting to 50%; while intermediate goods and ton Market see the trend in cotton pricing for the consumer goods enterprises were above future. If RMB appreciation is signifi- 50%. (CTEI) Himfr.com, one of China’s leading cant, it will not be favorable for cotton B2B search platforms with more than and downstream textile industry devel- 4762 Products Enjoy Zero- 30 B2B industry websites to its name, opment. (Prnewswire) tariff Treatment in Chinese reports on the recent rise Market in China’s cotton prices. Textile enterprises In Summit on the Millennium have ample stock of cot- Development Goals of UN, Chinese ton -- enough supply to Government promised the zero-tariff support the fabrication of treatment for the underdeveloped coun- new cotton products for a tries. From July 1st of 2010, about 4762 long period of time. products from Bengal and other 31 Many textile enter- underdeveloped countries could enjoy prises purchase cotton the zero-tariff treatment in Chinese when the price is low, market. and currently, for large- China is one of the fist batch of and medium-sized enter- developing countries who gave zero- prises, inventory is suffi- 15 Apple opens 2nd China puter Corp, a smartphone vendor for is a major issue as most of its business Google and Windows Mobile systems, comes from exports. Nearly 60 per- lectronics flagship store in Shanghai will launch its own-branded phones cent of its products are exported and E Apple Inc. Saturday opened its on the Chinese mainland for the first as such any currency fluctuation could second China flagship store in Shang- time from the end of this month, have an impact on its profit, Liu said. hai to tap the country’s huge number Shanghai Daily learned on July 5. “We are shortening the order-cy- of tech-savvy young customers. Dopod, the brand HTC uses on cle time and using financial tools like the mainland, will be dropped and the forward-swap transactions to hedge first HTC-branded phone will debut the risks from the currency fluctua- at the end of this month or the start tion,” Liu said. of next month, an unnamed industry At the same time the companies source told Shanghai Daily. are also planning to increase export Officials of Shanghai-based prices. Galanz for instance is now Dopod Communications and HTC asking for prices based on the latest declined to comment on the issue. exchange rate of 6.77 yuan per US This is also Apple’s 295th retail The decision to brand its phones dollar. outlet globally. Apple, which makes marks a move by the Taiwan-based Six months back, the company popular electronic devices such as the firm penetrate the mainland which has was calculating product prices at an iPhone and iPad, opened its first Chi- almost 800 million handset users to exchange rate of 6.83 yuan per US na flagship store in Beijing two years tank as the world’s No. 1 market. The dollar, Liu said. Adding to the woes ago. HTC brand adoption will also build has also been the increase in labor Thousands of Apple fans lined awareness of an international brand in costs. According to Liu, labor costs up before the opening of the 1,500- the domestic market, industry officials have risen nearly 50 percent in a year. square-meter store at 10 a.m. in the said, as the firm sells phones under the Experts feel that the industry has Lujiazui finance and trade zone in Pu- HTC brand in overseas markets. no choice but to increase export prices dong New District. In the first half of this year, to offset the shrinking profit margin. An Apple fan HTC’ phone sales jumped 40 to 50 Like Galanz, there are several nicknamed “Penguin” percent from a year ago and helped manufacturers in Guangdong prov- flew to Shanghai from the firm become one of the world’s ince who face a similar predicament. the northeastern prov- top four smart hone vendors, Chief For many of them exports is the main- ince of Jilin on July 6 Executive Peter Chou told the media stay. In fact exports from the region to be the first in line recently. (Shanghai Daily) account for one third of the exports for the opening. from China. “It’s such a great Appliance makers may hike “Yuan appreciation will be a hard shop,” he said. “As an export prices blow to the nation’s export-oriented Apple fan, I’m satisfied today.” manufacturing sector which has been Mei Yongfan, who has been to Exporters of home appliances reliant on advantages like low labor the Apple store on New York City’s are likely to increase export prices to costs,” said Guan Luojun, director of 5th Avenue in February, said: “The mitigate the impact of an appreciating the Asian Manufacturing Association. two stores are almost the same, but yuan on their bottom line, analysts But not all are in the same boat. the after-sale services and industry sources said on July 8. Domestic manufacturers who are less area is even bigger at Jackie Liu, export director of reliant on exports are not in that bad a the Shanghai store.” Galanz, the world’ largest microwave- situation. T h e s t o r e oven maker, said yuan appreciation Haier, a leading home appliance displays Mac com- and rising labor costs will squeeze maker, said the currency appreciation puters, iPods and profit margins of electric appliance would have little impact on its profit iPhone 3GS for cus- makers. “e expect the full year profit because only 10 percent of its business tomers to try out. to miss our earlier expectations,” he comes from overseas sales. But Haier Apple’s new products: the iPhone said. is also expanding in markets abroad 4 and iPad are not on sale as they According to estimates from the and said it may increase prices to offset have not officially entered the Chinese China Chamber of Commerce for the pressure of the currency apprecia- market. But they can be bought on the Import and Export of Machinery and tion. grey market. (Xinhua) Electronic Products, a 3 percent ap- In the long term, currency appreciation of the yuan will erode 30 preciation may finally translate into a Dopod name to change to to 50 percent of the profit of the home price hike of products in retail stores HTC appliance makers while the profit in Europe and the US, the two largest margin is only 5 percent. importers of Chinese manufactured Taiwan-based High Tech Com- For companies like Galanz, that goods, said analysts. (China Daily) 16 T r a nsport

China’s largest land port The 200-meter-long CRH3 eign trade cargo throughput up 21 per- (China Railways High-speed) train has cent year-on-year in the first six months

exports wood productions a to US eight carriages and 557 seats. About of 2010, the port’s chairman said on tion 120 shuttles are scheduled everyday, July 1. A total of 6,800 sets of wood linking Shanghai, Nanjing and six Foreign trade cargo throughput hit products have been shipped to the other cities along the route. 128.87 million tons in the first half of United States from Manzhouli City of Tickets for the full journey be- the year, said Chang Dechuan, chair- Inner Mongolia Autonomous Region, tween Shanghai and Nanjing are priced man and president of Qingdao Port. China’s largest land port near the Chi- at 146 yuan (21.47 U.S. dollars) for Total throughput at the port, both na-Russia border on July 9. second class seats and 233 yuan for first domestic and foreign trade, totaled The shipment represents the class. 170.48 million tons, up 8.7 percent year first time the city has exported wood The railway is expected to enhance on year. Chang attributed the increased products to the U.S. after it initiated the economic ties between Shanghai cargo throughput to a series of techno- a policy to attract foreign timber to and nearby cities. logical innovations and a low-carbon be imported for further processing A businessman surnamed Wang drive. He gave no details concerning which is supported by tax refunds and said his company’s factories are in revenues. (Xinhuanet) subsidies. Nanjing while the headquarters is in Statistics show that among total 3 Shanghai. Kazakh airline to open new million cubic meters of imported tim- “I heard it will take only 73 min- route to Urumqi ber, one third will be further processed utes to get to Shanghai by the high- into wood products such as furniture, speed train, which means I can make Kazakh airline Air Astana would doors and windows. a shuttle between the two cities in a begin new services between the central About 80 percent of the processed morning. It feels like travelling within Asian country’s capital and wood products will be exported, mak- Shanghai.” northwest China’s ing an annual profit of 1 billion yuan With more convenient Urumqi City early for the city. (Xinhuanet) transport links, more people next month, the are choosing to live in company said High-speed rail to link less expensive cities near on June 23. Shanghai, east China cities Shanghai while working in The flight the metropolis. services, us- Tickets went on sale on June 26 Wang Huaping and ing an Airbus- for a high-speed rail service linking his wife are among the 320, would be Shanghai and Nanjing, part of a grow- commuters. With a month- provided three ing rail network to boost the develop- ly income of 20,000 yuan, times per week ment of cities around China’s financial they spent about 1.16 million from July 2, the metropolis. yuan on a flat of 137 square me- company said. ters in Kunshan City, a stop on the The current two high-speed railway. Air Astana routes, from Astana “The same amount of money could to Urumqi and from Almaty to Bei- only buy a flat of only 40 square meters jing, cannot meet passengers’ demands in Shanghai. After the high-speed train amid the increasing cooperation begins, it will take a little more than 10 between China and Kazakhstan in minutes to get to Shanghai. It’s no dif- social, political, cultural and economic ferent from living in Shanghai,” Wang fields, said Air Astana President Peter said. Foster. The rail network around Shanghai Foster said the new flight would is expected to get a further boost after inject new vitality for the development the central government approved the of bilateral trade. construction of a maglev railway link- Sun Linjiang, Consul General of ing Shanghai and Hangzhou, capital China in Almaty, said the consulate of east China’s Zhejiang Province, in issued more 130,000 visas for Kazakh March. (Xinhuanet) people last year. The number of passen- The trains will shuttle between gers traveling between the two coun- Shanghai and Nanjing, capital of Jiang- Qingdao Port sees foreign tries reached 500,000. su Province, at a speed of 350 km per trade throughput up 21% Air Astana opened the Almaty- hour, faster than a Formula One racing Beijing flight service in December 2002 car from July 1, said a statement from Qingdao Port, China’s second and the Astana-Urumqi route in No- Shanghai Railway Bureau. largest foreign trade port, saw its for- vember 2008. (Xinhuanet) 17 Allegations that China’s “The data shows China’s efforts index fell 6 points to 121 in the April- to improve its investment environment June period. The “Investment Wish” nvestment investment environment I worsens groundless have boosted investor confidence,” an sub-index slipped to 97 from 102 in the official with the MOC said, adding first quarter, implying that urban resi- China remains one of the most China has been working hard to re- dents are putting less time and money attractive destinations for investors and move restrictions and open more sectors into investing. recent western reports saying China’s to foreign equity ownership. China’s benchmark stock in- limits on foreign equity ownership are The Chinese subsidiary expanded dex, the Shanghai Composite Index, the most restrictive in the world are from a manufacturer with around 300 plunged 26.8 percent in the first half of groundless, experts and representatives staff 12 years ago to a Bigmac with the year while the Shenzhen Compo- of foreign companies said. 5,000 employees working in research nent index slumped 31.48 percent. centers, product testing centers and Only 8.2 percent of Chinese in- production lines. Nowadays, the com- vestors profited from equity markets pany undertakes 70 percent of the cor- in the first half the year, according to poration’s production task. a Sina.com online poll conducted on A survey conducted by the U.S. July 1. (Xinhua) Chamber of Commerce showed that 79 percent of foreign firms operating Europe is still key invest- in China said they would expand in- ment market vestment in China this year. And 51 percent of respondents said their invest- Europe would remain one of the ment in China this year would rise over major markets for China’s more than 10 percent. US$2.4 trillion foreign exchange re- China will improve its investment serves despite the continent’s sovereign environment, make more sectors open debt woes, the country’s foreign ex- The World Bank released a report for FDI, reduce approval procedures and change regulator said on July 7. titled Investing Across Borders 2010 on create more favorable policies for foreign “Europe was, is, and will be one July 10, assessing the investment envi- firms, the MOC official said. (Xinhua) of the major investment markets for ronment of 87 countries based on four China’s foreign exchange reserves,” the groups of indicators, investing across Chinese investment inten- State Administration of Foreign Ex- sectors indicators, starting a foreign tions weakened in second change (SAFE) said. business indicators, accessing industrial quarter The regulator remained confident land indicators and arbitrating com- that Europe will overcome its current mercial disputes indicators. Chinese investors turned cautious financial difficulties. “We support the China’s low ranking on the four in the second quarter of 2010 amid series of financial stability measures groups of indicators prompted criticism equity market fluctuations and govern- taken by the European Union and from western media that the country’s ment tightening measures designed to the International Monetary Fund,” it investment climate was worsening. cool property market speculation, an said. “A country’s investment environ- index indicated on July 2. Europe is part of SAFE’s investment cannot be fully reflected by the The ICBC Investment & Wealth ment portfolio because it adopts a four groups of indicators. The report Management Index fell 7 points to 109 diversified investment strategy, which just represents one perspective on the in the second quarter, with urban resi- ensures stable returns. issue,” said Zhao Jinping, a senior dents’ investment intentions swinging China has kept its foreign ex- researcher with the Development Re- to neutral from relatively strong. change reserve assets generally safe search Center of the State Council, or The index is compiled by the during the global financial crisis. “We the Cabinet. Industrial and Commercial Bank of have had quite good returns in 2008 The amount of foreign direct in- China (ICBC), China’s largest lender, and 2009, when the crisis was hitting vestment (FDI) into China rose 14.3 and consultancy firm The Gallup Or- the hardest,” the statement said. percent year on year to US$38.92 bil- ganization. Book gains from rising asset prices lion in the first five months of this year, The index’s “Macro Environment have far outweighed valuation losses according to data from the Ministry of Confidence” sub-index lost ground caused by the appreciation of the yuan, Commerce (MOC). for the second straight quarter with a the agency said. The country drew US$8.13 billion drop to 112, indicating city residents’ None of China’s foreign ex- in FDI in May alone, up 27.48 percent increased concern about the overall change reserves were invested in high- from one year earlier. That marked the economy and diminished confidence risk assets such as the US sub-prime 10th straight month that FDI has risen in investing compared with the first mortgage-backed bonds, which helped from year-earlier levels and the pace of quarter. ensure the safety of its investment secu- increase also picked up. The “Living Expectations” sub- rity, the SAFE said. (Xinhua) 18 F in a nce

ABC nets $19 bln in IPO their debut trading scheduled on July France and other developed nations 15 in Shanghai. were rated much lower in Dagong’s re- Agricultural Bank of China Ltd The bank sold 40 percent of the port due to their slow economic growth (ABC) raised at least US$19.2 billion in IPO to cornerstone, or strategic inves- and increasing debt burden. its initial public offering, which is likely tors. About 40.3 percent of the shares Dagong said it rated the 50 coun- to become the world’s biggest IPO, ac- were offered to retail investors, with the tries according to its own credit rating cording to its pricing data. remaining 19.7 percent to institutional standards for the sovereign entity of a ABC can increase the size of its investors. central government, which include the IPO to as much as US$22.1 billion if The bank’s huge IPO came at a ability to govern a country, economic it turns to the so-called green-shoe, time when the Shanghai Composite power, financial ability, fiscal status and or over-allotment, option to expand Index has lost almost a quarter this year foreign reserve. the sale after listing. The bank could to rank as the worst performer among In the report, Dagong rated U.S. surpass the Industrial and Commercial the world’s 10 biggest stock markets. government debt AA with a nega- Bank of China, which netted US$21.9 The IPO also coincided with a capital- tive outlook, which was lower than billion in October 2006, as the world’s raising spree by domestic rivals eager the firm’s top AAA rating. It warned largest IPO. to replenish capital after they extended that Washington, along with Britain, The Beijing-based bank is selling a record RMB 9.6 trillion in loans in France and other countries, might have 22.2 billion shares in Shanghai at RMB 2009. (Shanghai Daily) trouble raising more money if they let 2.68 (40 US cents) each, the top of its fiscal risks get out of control. (Xinhua) range from RMB 2.52. The shares were China unveils first sovereign 11 times oversubscribed by institutional credit rating report Central bank to continue and retail investors in Shanghai. loose monetary policy dur- China’s largest lender by custom- A Chinese company on Sunday ing next 6 months ers priced its Hong Kong shares at unveiled China’s own sovereign credit HK$3.20 (41 US cents) each, the mid- rating report, for the first time evaluat- China will continue its relatively dle of its offer price range of HK$2.88 ing 50 countries and becoming the first loose monetary policy during the lat- to HK$3.48. The bank sold 25.4 billion non-Western rating agency to assess the ter half of the year to maintain the shares in Hong Kong. world’s sovereign credit and risks. consistency and stability of macro “It’s a realistic pricing as the A- The report by Dagong Global economic policies, the People’s Bank share price was lower than previous ex- Credit Rating Co., Ltd., the first do- of China (PBOC), the central bank, pectations of more than RMB 3 yuan,” mestic rating agency in China, was said on July 8. said Hua Meiyu, an asset manager at a released at a time when many complain Multiple monetary tools will be major insurer in Shanghai. the Moody’s Investors Service, Stan- applied to maintain an appropriate Hua’s view is shared by Cai Junyi, dard & Poors and Fitch Ratings were growth in money supply, and adjust a Shanghai Securities analyst, who said partly to blame for the recent global the credit structure to reduce risks, the the pricing is the best option under the financial crisis as well as Greece’s debt PBOC said, which disclosed the con- current market sentiment. Some ana- woes. sensus reached by its monetary policy lysts said the lower pricing is set to pro- Dagong’s report covered 50 coun- committee during the second-quarter pel the shares to jump significantly on tries whose gross domestic product meeting. (GDP) ac- The PBOC reiterated it would im- counts for 90 prove the yuan’s exchange rate mecha- percent of the nism and adjust its value regarding a world’s total basket of foreign currencies. economy, and It also vowed to ramp up risk- gave mark- prevention efforts, to prompt the stable edly different and healthy development of the nation’ valuations to s financial system. 27 countries The PBOC said China’s economy compared with was heading in an expected direction those given by as a coordinated growth in domestic Western rating spending, investment and exports has rivals Moody’s, propped up the economic upturn, but St a nd a rd & China also needs to grapple with tough P o o r s a n d challenges, including managing infla- Fitch. tion expectations, maintaining a steady A t t h e and fast economic growth, adjusting same time, the economic structures and transforming United States, the growth mode. (Xinhua) 19

pecial report S

China’s New RMB Move: A Political Step in the Game of Negotiation?

By Guo Yan

22 his summer, China announced it would introduce more flexibility into its exchange rate, and at the same time make it remain “basically stable”. This move has drawn great attention from both home and abroad since China’s currency reform has always been a hot topic for economists, politicians, export businessmen, media and of course the pub- Tlic; these forces have combined to make it seem like a big issue that everyone should take a serious look at and know some facts about. First comes the accomplishments, it is believed that the central bank used technical reasons to justify the move, saying that improvements in the global economy and China’s ‘solid’ recovery have made it appropriate to “proceed further with reform of the RMB”. But actually there have been plenty of critics on China’s latest move. Some of the loudest believe that it’s just a deft political move amid the rising international criticism of Beijing, a move where the economic implications are much less certain. Even though some Chinese economists and most Western economists say that a stronger Renminbi is clearly in China’s best economic interests, helping China fight inflation and making imports cheaper, many Chinese see the issue as mainly a rivalry with the United States. Those who hold this opinion take China’s announcement as ‘a political move in a game of negotiations with the U.S.’, and feel that the new Renminbi reform might be potentially worrisome without enough transparency or clear standards. Further concerns criticizing the government’s announcement seemed to disappear almost as quickly as they appeared, and it’s worried that China’s determination to limit the rate at which the Renminbi rises against other currencies, particularly the U.S. dollar, may mean that further friction with the United States Congress is more likely. The crucial argument is that China conducts its exchange-rate policy to suit its own interests, not those of US politicians or others. It is right to take a gradualist approach, but its own interests also require it to contribute to the process of global rebalancing. Economists from different countries and institutions have also expressed diversified views on its implications and have detailed possible follow-up measures, yet many of them believe there are plenty of reasons to expect only a very slow strengthening of the Renminbi against the dollar in the near future. Now here comes the problem, when faced with such a big issue, what kind of perspectives can we find to help us understand the Chinese standpoint and intention? What factors might influence the RMB exchange rate mechanism? How will the new Renminbi affect the domestic and international economy? In this special, China’s Foreign Trade gives you a bird’s eye view on this comprehensive and complicated issue in order to help you analyze the current situation and figure out the future implications.

23 pecial report S What Is Its Purpose? —— “Advancing RMB Exchange Rate Formation Mechanism”

By Yao Yujie, You Zhixin, Wang Tao

pokesperson from People’s Bank of China said on June 19th, “further advance the reform in RMB exchange rate formation mechanism, and strengthen the flexibility of RMB exchange rate.” This is the first time for China central bank give a clear attitude on reform in RMB exchange rate, which attracts great attention for global market. Does strengthening the flexibility of RMB exchange rate mean that RMB will appreciate again? Why the central bank announces the news at this moment? How to S ? choose the time for the reform in RMB exchange rate formation mechanism

: Does strengthening the flexibility of RMB exchange rate Q 1mean that RMB will appreciate again?

Yu Qi, head of Fund Center future, RMB will directly relate to the basket of currencies, and at Bank of East Asia, said that this RMB vs US dollar will have a bilateral fluctuation.” meant the end of temporary exchange Shen Minggao, Asia-Pacific chief economist at Citibank, rate policies due to financial crisis, but strengthening the flexibility of RMB exchange rate means giving strengthening the flexibility of RMB the market more control power. Market-oriented and more flexible exchange rate doesn’t mean apprecia- RMB exchange rate is the future trend and a must for international- tion of RMB. Different from the uni- ization of RMB. lateral appreciation since 2005 reform, Participants in the market said that China should not and it is depreciation of RMB to US dollar in a not possible for China to “focus” to US dollar. For a more efficient period may be seen from time to time. macro economic management, strengthening the flexibility is a rela- “In the next three to six months, it is tively independent and effective precondition for the realization of impossible to see unilateral apprecia- Chinese currency policy, and a necessary process for the central bank tion of RMB again. The reform is not to deepen the reform in RMB foreign exchange. equal to appreciation of RMB. In the

: What does the central bank start the reform Q 2again for?

Shen Minggao said: “Starting the reform again marks is a signal for estimated that China may have a trade Chinese top officials to begin economical structure adjustment.” Reform surplus of 79.0 billion US dollars in in foreign exchange is not a solution to everything, but the reform means 2010, as Chinese export and import China is glad to take some time and certain costs to boost economic struc- and international payment are balanc- ture adjustment and development mode transformation. ing. 2010 reform will help central bank According to industrial experts, the management officials realized further strengthen the fundamental that export-dependent economy has a great deficit and uncertainty, and role in resource allocation, and achieve China will increase the importance of domestic demand in economic devel- long term economic rebalance. opment. Therefore, competitiveness of exchange rate is no longer the most Huang Zemin, member of CP- factor in foreign exchange system. PCC and director of Institute of Inter- Sun Mingchun, chief economist for China at Nomura Securities, national Financial at East China Nor-

24 mal University, said: “The rate of RMB is complex, and there are many measuring relation, referencing on a basket of cur- standards to determine whether the exchange rate is rational. Now we should focus rencies and under management. How- on foreign exchange system, not current rate. We should give up the policy that ever, it is expected that the operation fixes on US dollar, and return to floating foreign exchange system, which is under will turn from “symbolic” to “material”. management and fixes on a basket of currencies, in order to put volume of trade RMB will fix on a basket of currencies, corresponding to their weight.” and increase the weight of Euro, Yen Yu Yi said, though the reform has a similar plan to 2005 reform, targeting and other currencies, and the range of at establishing a floating exchange rate system based market demand and supply RMB will be extended.

: How to decide the time for the Q 3reform?

Now that China has a sure eco- global economy is starting to recover, this temporary measure seems to have fin- nomic recovery, trade surplus decreases ished their responsibilities. greatly, and international payment is Chen Gong, chief researcher at Anbound Consultant, said, China should untie balancing, it is a chance for RMB to the fix on US dollar at the right moment gathering various favorable factors, and untie the fix on US dollar. China can 2010 reform is a great opportunity to turn passive into active. adopt an independent exchange rate Lian Ping, chief economist at Bank of Communications, pointed out that formation mechanism depending on reform in RMB exchange rate mechanism should consider both international and economy developing situation. domestic factors, including trade surplus between China and USA, the tolerance of In the later half of 2008, due export sectors, etc. Now the economic recovery sign in China is strengthened, and to global financial crisis, most cur- economy is getting smooth, so it is time to advance the reform in RMB exchange ries depreciated on US dollar, while rate formation mechanism, and lift the flexibility of RMB exchange rate. The data RMB fixed on US dollar again and issued recently shows that economy is recovering, though the uncertainty for domes- maintained at 6.8 or so for over 20 tic macro economy is increasing. months. Against a weakening global At present, the expected appreciation of RMB from foreign exchange markets economy, this can be helpful to export has been reduced, with the expected appreciation of RMB on US dollar by oversea and employment rate. This temporary undeliverable forward rate markets in the future 12 months was reduced to 1% or exchange rate policy by China so. contributed to the two major Wang Qing, chief economist for Greater China at Morgan Stanley said: “It economic entities of China is easier to make adjustments in exchange rates when the expected appreciation and USA, and also the is low. So it should say that China has made a great decision.” development of global economy. Nevertheless, as (Author: from Xinhua Net) Differences Between Two Foreign Exchange Reforms

By Hao Ying ifferent from that in July central bank started the reform again 2005, this reform in foreign due to pressure from international mar- exchange system happens kets, but it is not possible for RMB to with different economic appreciate greatly in a short term. environment, historical background Varied background andD expected appreciation. Participants in the industry said frankly that China Since the reform in 2005, the his-

25 torical background industrial upgrade, but 2010 reform and domestic and faces much pressure on this. In 2005, foreign economic other countries and regions still had a pecial report environment have

S good demand for Chinese exports. But varied sharply. In now foreign markets all hope China 2005, China was to increase imports while decrease ex- facing a booming ports. In long terms, it is uncertain that economy, with whether this reform can really boost the real economy in industrial upgrade for export-oriented good situation and enterprises and the resource allocation growing at a high moving from trade sectors to non-trade speed. However, sectors, realizing the transformation of China is having a economic growth mode from invest- structural adjustment and export-dependent to domestic ment for industrial demand-dependent.” upgrade and a slowing investment growth at present, while the external envi- Spokesperson from People’s Bank ronment is not settled yet. The developing European dept problems weaken the of China clearly pointed out that 2010 exports from China, and global economy still has possibility to dive. The major foreign exchange reform is helpful to difference between the two reforms is the change in domestic and foreign environ- boost structural adjustment and co- ment. ordinate for sustainable development, From 2002 to 2007, China maintains a high GDP growth rate of over 8% for guide resources to be allocated to service as long as six years, and the rate in 2005 to 2007 were 10.4%, 11.6% and 13% re- industry and other sectors of domestic spectively. However, in 2008, due to global financial crisis, the conventional driv- demand, accelerate industrial upgrade, ing force for Chinese economy of export and investment faded, and GDP growth change economic growth mode, and rate slowed down to 9.6%. In 2009, thanks to the economic stimulating policies by decrease the trade unbalance and over central and local governments, China maintained a GDP growth of 8.7%, declin- dependency of economy on export. ing again from 2008. Meanwhile, it can restrain inflation and In 2010, premier Wen Jiabao stated clearly in the government work report asset bubbles, maintain strategic oppor- that the main target for 2010 economic and social development is to gain an 8% or tunities, and improve the strategic op- so of gross domestic production growth. Judging from this, the two reforms have portunities and international economic different historic background: the former reform in 2005 occurred in an uprising and trade environment for Chinese eco- economic period, while the later happens at a hard time when financial crisis is not nomic development. settled down yet, external demand recovery is very slow and domestic economy is “2010 reform in foreign exchange in stagflation. is not an isolated measure, and it will According to Zeng Xiaoyong, analyst from Shanghai Securities, “Now real be supplemented with other policy economy is having a different performance. From 2005 to 2007, exports from Chi- changes. Recently, China stopped ex- na were competitive and active, and the great annual trade surplus brought a large port rebate for goods of six catalogues, amount of foreign exchange reserves. Since 2008, China has been having a declin- and implemented zero-tariff policy to ing trade surplus, with export growth in May 2010 was 48.5%, which was lower in goods of one thousand or so specifica- terms of trade surplus. In general, the ratio of trade surplus in GDP now is sharply tions from most undeveloped countries. declined since foreign exchange reform in 2005, so it is not the time for a complete All these shows 2010 reform is a part of reform.” China structural adjustment,” said Zeng Based on the data from General Administration of Customs on April 10th, Xiaoyong. in March 2010, China had an export value of 112.11 billion US dollars, and im- Not long after the foreign exchange port value of 119.35 billion US dollars, increasing 24.3% and 66% respectively reform being announced, Ministry of from a year ago. It is noticeable that this was the first monthly trade deficit since Finance and State Administration of May of 2004. Yao Jian, spokesperson of Ministry of Commerce, estimated that, Taxation jointly issued a notice, saying after a 100 billion US dollars decrease in 2009, trade surplus in 2010 may face an- that export rebate for 406 types of goods other sharp decrease. Data shows that trade surplus of China from 2005 to 2007 including steel products will be stopped were 102.0, 177.47 and 262.2 billion US dollars respectively, marking a high year- since July 15th, marking a turn in export on-year growth and reflecting a clear downturn trend in recent rebate policy, as China had continu- two years. ously increased export rebate rate since Different purposes 2008. The adjustment directly targets at industries with high energy Besides the background, the two reforms in 2005 consumption and pollution, over- and 2010 also differ in purpose. As to the purposes of the capacity and low value-added. later reform, Ceng Xiaoyong said: “2005 reform didn’t give enough attention to economic transformation and (Author: from China Times)

26 Restarted Exchange Rate Reform Raises New Doubts on RMB Appreciation

By Zhang Xueqing central bank’s intentions. A stronger yuan against the U.S. dollar reflected a booming demand for RMB in the market as people’s expectations about RMB appreciation rose. Considering the market reaction to the new policy of PBOC, Chinese people are confident about the economy. he de-pegging of RMB ex- In overseas markets, the rate of change rate from the US dol- yuan against the dollar at the currency lar does not lead to a substan- derivatives market in the future 12 tial change in the exchange months reached 6.6209, rising by 2.7%, rate in the short term. Considering the while last Friday it was only 1.8%. Tfuture regime, if the European financial Though the market witnessed crisis was not lessened, the Euro and a modest appreciation of the RMB other major currencies would continue exchange rate after the new policy of to devalue against the U.S dollar and PBOC was announced, currencies of the RMB would probably follow suit. other Asian countries against the U.S. June 22 was the second trading dollar were boosted and the global stock day after the People’s Bank of China market was lifted. The benchmark stock (PBOC) reaffirmed its decision to re- index of Hong Kong, Tokyo, Seoul and form the RMB exchange rate, and ac- Mumbai surged 1.6 percent to 3.1 per- cording to the central bank’s public an- cent. The European stock market also of the temporary fixed exchange rate nouncement, the central parity rate of rallied. policy issued for the purpose of fighting the yuan to the U.S. dollar marked the The Shanghai Composite Index against financial crisis in the past 20 first break of 6.8 since the RMB ex- also rose 2.9% on June 21, but the na- odd months. During the financial cri- change rate reform in July, 2005, clos- tional bond yields may drop because the sis, the Chinese government had imple- ing at 6.7980. Compared with the rate need for raising interest rates was eased mented a fixed exchange rate policy to of 6.8275 on Monday, the central parity by a stronger yuan. peg the yuan to the dollar. rate Tuesday means that the RMB had Great significance A further analysis reveals two appreciated by 0.43%, while on June 21 purposes of this exchange rate reform of this figure was flat with the previous On June 19, the People’s Bank of PBOC. The first is to ease the inflation trading day. China claimed to proceed further with pressure at home and the other is to Boost market confidence the freeform of the RMB exchange rate accelerate the restructuring of export- regime to enhance the RMB exchange oriented enterprises. After the PBOC claimed to rate flexibility. Observers also noted that the an- increase the f lexibility of the RMB Authoritative comments suggest nouncement of this policy happened exchange rate, the whole public was that the decision of PBOC to reform before the opening up of G20 Sum- paying heed to the middle exchange the RMB exchange rate was of great mit held in Canada on June 26, which rate performance to speculate on the significance, marking the conclusion shows the Chinese government’s sin-

27 cerity about exchange rate reform and for betting also witnessed a sharp slump. made implausible the criticism voiced At the same time, the Chinese government maintained a tough stance in its repeatedly in the U.S. Parliament that external public communications. Commenting on the American Treasury Secre- pecial report

S China was “manipulating” its RMB tary Timothy Geithner’s calling for China to reform its exchange rate regime, Qin- exchange rate. Thereby it would also al- gang, spokesman of the Ministry of Foreign Affairs, said that “the large amount of leviate the risks of the U.S. trade sanc- evidences have proved that the RMB exchange rate was not the main cause of the tions. Sino-U.S. trade imbalances. Unexpected policy Cui Tiankai, vice minister of the Ministry of Foreign Affairs, also stated that announcement RMB is Chinese currency and should not be discussed in the international arena, implying that the G20 Summit should avoid raising the RMB issue. CICC (China International China’s official statement seemed to make people believe that the RMB -ex Capital Corporation Limited) noted change rate reform would not start in the short term, but the fact was really beyond that besides the G20 summit factor market expectations. that affected the timing of policy an- Bill Belchere, chief economist of Mirae Asset Securities, said that the Chi- nouncement, the recent low expecta- nese public announcement arranged at the weekend resembled the year 2005 in tions about RMB appreciation in the many aspects, when China first loosened the control of its exchange rate in history. global market was another possible He further stated that the year 2005 was also out of market expectation, and the factor. The 12-month NDF forward market force kept waiting until it left due to the its tiredness, while this time the exchange revealed that the expectation market had held its expectations about RMB for several months, but risk takers about appreciation in the future year cancelled the trading due to the fear about real estate bubble and the Euro crisis. had dropped from 3% in April to about Glenn B. Maguire, chief economist from Societe Generale of France, com- 1.3%, the lowest since September, mented that these were two things certain about the Chinese macro economic 2009, which provided a good chance policy. The first is its un-expectations and the second is its reluctance to make any- for the RMB exchange rate reform. one benefiting from the change of policy. He continued that the actions of PBOC Non-delivery forwards (NDF) showed that they have completely known the position setting in the market. market provides with investors ex- Stable exchange rate in the short term pected RMB exchange rate tools. The NDF is a derivative, which changes Does the steady progress of RMB exchange rate reform means a new round as the investor expectation about the of RMB appreciation? Ha Jiming, chief economist of CICC, thinks that the RMB yuan-dollar exchange rates fluctuate. exchange rate would return to its pre-crisis state and no long peg to the dollar, but From March to April this year, a substantial change of exchange rate in the short run is unforeseeable. The de- strong expectations about RMB ap- pegging of yuan from dollar is better than simply RMB appreciation. preciation in the overseas market and As a matter of fact, the announcement of PBOC negated any possibility of the continuous American pressure on RMB one-off appreciation. The trading fluctuation range of 5‰ would not be- ex the RMB exchange rate pushed the panded and any future possible appreciation would only be gradual. RMB price of the NDF market to rise. The U.S. Peterson International Economy research Institute thinks that The yuan-dollar exchange rate closed China would not make a big adjustment of its exchange rate and actually China has at 6.6045 on April 22nd, the highest failed to realize its promises considering the inflation factor. closing price of the yuan during the “We want to further emphasize that the Chinese RMB policy would year, which showed that the overseas change very gradually” Said Sun Mingchun, a Chinese economist from Nomura expectation about RMB appreciation Securities. The Nomura predicts that in the rest of the year 2010 RMB would exceeded 3%. appreciate moderately against the dollar and at the end of the year the yuan- According to reports from the dollar exchange rate would reach 6.65. By the end of 2011, this figure would turn Wall Street Journal, investors began to to 6.30. throw substantial doubts at the cred- On the 21 day this month a report from Morgan Stanley predicts that the ibility of the Chinese exchange rate dollar would depreciate by 2%-3% in the future several weeks after the PBOC reform and think that China’s worrying promised to further carry out the reform of RMB exchange rate regime and in- about its export sector could not help crease the flexibility of RMB. it withstand the Euro crisis and RMB Credit Suisse also stated in its report that by the end of 2010 the yuan would appreciation concurrently. appreciate by about 2% against the dollar and in the future 12 months the yuan Several large hedge fund firms would rise by 4%-5%. and bank propriety trading transactions Limited impact have liquidated the RMB long positions when trading ended in May, some CICC thinks that the adjustment of RMB exchange rate would refer to a bas- of which were margin cut liquidations. ket of currencies, which is equal to a built-in automatic adjustment regime. In the Those revaluation positions betting past several months the yuan was pegged to the dollar, but a significant appreciation RMB were sold out and those markets of the dollar after the European debt crisis forced the yuan to appreciate against in which RMB appreciation was used a basket of currencies. As a result, the actual efficient exchange rate rose by 4.3%

28 since the beginning of the year and the CICC sticks to it judgment that more, the recent RMB appreciation one-month appreciation rate of May the yuan-dollar exchange rate would against the Euro has lifted its real ef- reached 3.4%. Besides the substantial rise by 3%-5% by the end of this year, ficient exchange rate (REER), therefore appreciation against the Euro, the past but the speed of appreciation would it curbed the flexibility of currency” two months also witnessed a significant slow down gradually as the current ac- said Sun Mingchun from Nomura Se- appreciation of RMB against major count surplus approaches the equilib- curities. emerging market currencies of South rium. More importantly, the impact on Analysts predict that as the RMB Korea, Mexico, India and Russia (see the overall exports would be limited be- exchange rate regime takes a basket of the table). Under the future regime, if cause it is almost impossible that RMB currencies into account, the deprecia- the European debt crisis continued and would significantly appreciate against a tion of the Euro as the major currency the Euro and other major currencies basket of currencies. of the basket would lead to the depre- continued to depreciate against the dol- “The Chinese exchange rate policy ciation of RMB and the optimistic lar, the yuan would possibly depreciate change would pose no direct impacts mood of the market will begin to fade against the dollar, and on the contrary, upon its macro economic policies, be- away. the yuan would possibly rise against the cause it could hardly reverse the tight- dollar. ening of the monetary policy. What’s (Author: from Money Week) RMB’s Exchange Rate Policy Shift Creates Opportunity for Neighboring Countries

By Xiao Yingying

he Chinese Yuan showed a trend to rise against the U.S. dollar after the announcement of the People’s Bank of China, China’s central bank, to proceed further with the reform of the Yuan’s exchange rate regime. With trade relation Other Asian currencies followed the upward move. tightening across the world, China’s T exchange rate reform is likely to create new The Chinese Yuan showed a trend to rise against the U.S. dollar after the announcement of the People’s Bank of China, China’s central bank, to proceed opportunities for further with the reform of the Yuan’s ex- her Asian neighbors. change rate regime. Other Asian currencies followed the upward move. Some analysts in China noted that the strengthening of the Yuan and other Asian currencies showed market’s growing confidence in Asia’s sustainable recovery. However, economies are sure to determine their respective exchange rate policies, based on trade structure, the balance of

29 total export of South Korea will increase by USD 4.4 billion. On the other hand,

pecial report prices of foreign products in South Ko-

S rea are likely to rise if the Yuan moves upward, as 17 percent of imports to South Korea are from China. However, even if the Yuan appreciates 10 percent, consumer prices in South Korea will rise only 0.24 percentage point. Furthermore, it’s very helpful for other Asian economies to ride the wave of RMB reform and adjust their mon- payments (BOP) situation, and inflation risk. etary policies to hold down inflation. “Two-way movements” by the Yuan are expected. According to Wall Street Journal, Chi- With trade relation tightening across the world, na’s monetary reform leaves other Asian China’s exchange rate reform is likely to create countries leeway in adjusting their new opportunities for her Asian neighbors. It’s important for these Asian countries monetary policies because if China, the to cooperate with each other in restraining asset bubbles. most competitive exporter in Asia, still Asian currencies will not follow the Yuan hooked her currency to the US dollar, these countries would have to control Morgan Stanley and other financial institutions indicated that history would local currencies from rising to preserve repeat itself, that Asian currencies, such as the Korean won, the Singapore Dollar competitiveness. and the Thai Baht, gained against the greenback after appreciation of the Yuan in Common focus on restraint on 2005. However, Apple Daily (HK) pointed out that the rise of the Yuan this time asset bubbles would not be so stable and fast as in 2005 because of changed international environment: in 2005 the euro was relatively strong, but now the Eurosystem is severely Some media hold that China's damaged; besides, China’s largest trade partner was the United States in 2005, but pledge to allow greater flexibility in the now her largest trade partners are the European Union, the United States and the Yuan will cause rising Asian currencies Association of Southeast Asian Nations (ASEAN) respectively. Accordingly, the to gather speed and then attract more exchange rates of other Asian currencies have an increasing impact on the Yuan. capital inflow to the Asian asset mar- Chen Bing, Deputy Director at Policy Department of Chinese Academy of ket. Therefore, the problem of how to Governance, said in an interview with Economic Information Daily that there restrain asset bubbles will surly become are two reasons for the recent strengthening of other Asian currencies: one is the a focus in Asia again. coupling effects or Herd Instinct caused by the Yuan’s rise; the other is that strong According to some analysis, some recovery of Asian economy brought about a need for these economies to adjust Asian central banks have already taken exchange rates. He also said that the strengthening may prove short-lived as these measures to curb inflow of hot money. economies are certain to adjust their exchange rate policies according to trade struc- For example, Indonesia’s central bank ture, the balance of payments situation, and inflation risk. imposed a one-month holding period Some analysts stressed that it is because of long-held expectation for the Yuan for central bank debt; and South Korea to rise and RMB’s releasing of bull position that the Yuan moved up against the U.S. capped positions of foreign exchange dollar after the restart of exchange rate policy reform; and the currency is likely to (FX) derivatives of both domestic and show a trend of two-way movements. foreign banks Benefit for other Asian economies Wang Tao, a chief economist with UBS in China, Wen Bin, a senior analyst at International Finance Institute said that the new exchange of Bank of China, said in an interview with Economic Information rate reform will involve more Daily that some Asian economies will be the first to benefit from Chi- two-way volatility by the nese consumers’ increasing purchasing power via a stronger currency Yuan. “There’s a possibility because “China exports more than it imports in both East Asia and for the Yuan to fall for a short Southeast Asia.” term when the U.S. dollar Yonhap News Agency argued that an expected Yuan hike, caused greatly strengthens in the by greater flexibility in exchange rate, will lead markets to expect a international marketplace. synchronous rise by the Korean won and other Asian currencies with Anyway thereby it’s easier for RMB, thus putting an upward pressure on the Korean won. LG Economic Re- China to curb the inflow of hot mon- search Institute in South Korea further pointed out that a higher won would lead ey.” to a reduction in export to China; total export of South Korea, however, would increase as Korean products become more competitive in overseas markets except (Author: From Economic Information China. As research shows, if the Yuan appreciates 10 percent against the U.S. dollar, Daily)

30 Conquering the Summit With Firm Strides

—— Review on the restarted RMB exchange rate reform

By Zhang Ming

n the evening of major currencies, if RMB refers on a basket of currencies, RMB June 19th 2010, may depreciate much against US dollar. However, in consideration the central bank of the sensitive norm exchange rate between RMB and US dollar, of China released the central bank of China won’t allow large depreciation, meaning a that “on further advancing the basket of currencies will only be references, and the core of the reform reformO in RMB exchange rate is to expand the fluctuating range. Forth, though the reform is started, formation mechanism and strengthen- China will allow a limited appreciation of RMB on US dollar, as RMB has ing the flexibility of RMB rate”. There appreciated greatly in fact, the ratio of trade surplus in GDP declines sharply, over- were three key points. First, “now that heating in demand has been cooled down by macro control and adjustment in real global economy is steadily recovering, estate industry, management of local financing platforms and fading of economic and the recovering trend in China is stimulating policies. I still expect the norm exchange rate of RMB against US dol- strengthened, it is necessary to further lar will have an appreciation of 3% to 5% in 2010. advance reform in RMB exchange rate Now there different opinions on the trend for RMB rate, the external pressure formation mechanism, and strengthen of RMB appreciation is released somewhat, and China and USA had a temporary the flexibility of RMB rate.” Second, agreement on the rate of RMB, which gives a hard-won time window for reform in reform in foreign exchange rate “should RMB rate. Restarting the reform is not only to optimize domestic resources alloca- be based on market demand, refer- tion, restrain overheating in demand, release the pressure of imported inflation and enced on a basket of currencies, while manage expected inflation, but also related to the expected appreciation of RMB in be kept under dynamic management international market. The central bank of China announced the reform a week be- and adjustment, in accordance with an- fore G20 Summit in Toronto, and after US Department of Finance and Congress nounced range of floating rate.” Third, exerted pressure on Chinese government, which is meaningful and noticeable. “as import and export is balancing, and However, restarting the reform doesn’t mean international markets will stop balance of international payments is pressing RMB to appreciate. The range and fluctuation for normal rate of RMB nearer, rate of RMB has no possibility against US dollar will be the focus of future argument on RMB rate. Chinese of large fluctuation and changes.” government should be independent and manage the effective rate of RMB de- This is a clear signal that cen- pending on the condition in import and export market, general demand, imported tral bank will again start the reform inflation and other factors, while form a two-way fluctuation for RMB rate by fulin foreign exchange,whic dated back ly utilizing daily fluctuating range (especially in consideration of these uncertain- from July 2005 to June 2008. It clearly ties). Besides, as the reform is restarted, the central bank pointed out the principles for the re- should pay attention to the changes in expected RMB However, form. First, it basically eliminates the rate, strengthen management and control of capital ac- possibility for RMB to appreciate at a counts, and restrain the hike in asset prices by adjusting restarting small margin at one time. Second, it the credits, to prevent new liquidity surplus caused by the reform is expected the situation that the daily inflowing hot money. doesn’t mean fluctuating range for RMB rate of ± international 0.5% is fully utilized will be changed. (Author: Economics Doctor, vice researcher, Third, in short terms, increasing the vice director at International Finance Research- markets will fluctuating range for RMB rate may ing Room of Institute of World Economics and stop pressing be more important than referencing Politics of China Academy of Social Science, RMB to on a basket of currencies. For example, and general secretary at International Finance based on current trend for the rate of Center of China Academy of Social Science) appreciate.

31 CITY Yangzhou: City of Gardens

he city of Yangzhou, Jiangsu Province, is located about 225 kilometers northwest of Shanghai. Situated on the northern bank of the Yangtze River, the prefecture-level city of Yangzhou is an important port city for international and domestic trade, albeit, Yangzhou has a deep-water harbor. Yangzhou Harbour serves as an important distribution hub for goods destined for northern Jiangsu, eastern Anhui and southeastern Shandong provinces, especially raw materials such as cotton, grain, timber, coal, minerals, iron and steel and the city’s Tharbor is also a port of call for a number of international cruise liners. Yangzhou also boasts an old and interesting “port of call” history involving numerous emperors, and was home to a number of attractive ladies of ill repute, who were nonetheless frequented by emperors and sundry others, as well as being home to quite a few poets, scholars and remarkably good cooks. Even the famous 13th century Italian traveler, Marco Polo, served for a time in an official capacity in Yangzhou’s administration.

- - Daming Buddhist Temple - Situated in what is a northwestern suburb of the city of Yang zhou, Da Ming Temple is one of the Eight Great Temples of Yang zhou, just as many other cities or districts of cities throughout Chi na boast of “eight great temples” (the Eight Great Temples of the Western Hills district of Beijing). As anyone familiar with Chinese culture will know, the number eight is particularly auspicious. For example, there are Eight Great Cuisine Schools in China, and in the city of Yangzhou itself, a group of heterodox calligraphers and painters formed their own special artistic group called the Eight Eccentrics of Yangzhou. Da Ming Temple has had many names down through its - long history, among these: Xiling Temple, since there once stood a pagoda of the same name near the same site containing the ashes of Buddhist monks; Xi Temple, because the temple stood to the west of the then Sui (581-617) Dynasty palace, which inspired or dinary folk to refer to the temple by that directional name; Diping Temple, a name change the temple received during the Tang (618- 907) Dynasty; and Fajing Temple, the name given to the temple by Emperor Qianlong of the Qing (1644-1911) Dynasty, since the Qing Dynasty’s Manchu rulers were particularly sensitive about all things remotely connected, or even disconnected in this case, except in name, with the previous Han Chinese dynasty, the Ming (1368-1644) Dynasty.

32 33 CITY

Geyuan Garden Located in the northern part of Yangzhou’s Old Town, Ge Yuan, or Ge Garden is a former private residential garden, rebuilt in the classical Yangzhou style that stems from the latter half of the Qing (1644-1911) Dynasty. In spite of the current garden’s youthful vintage, comparatively speaking, Yangzhou’s Ge Garden is considered one of the four most famous classical gardens of China. The garden was originally built by the early Qing Dynasty monk and painter, Shi Tao (1642-1707). The private residential garden was later sold to a wealthy salt merchant of the city of Yangzhou. It was purchased by the chief administrator (salt tax assessor) of the Liang Huai salt district, the largest of China’s eleven salt districts that the garden came to be known as Ge Garden. In the 23rd year of the reign (1796-1820) of Emperor Jiaqing of the Qing Dynasty, in 1818, Huang Zhiyun (1770-1838), the then salt tax assessor for the Liang Huai salt district had the garden completely rebuilt, after which it came to be known as Ge Garden.

Slender Xihu Lake

From ancient times till now, Slender Xihu Lake is a to be simply decorated but elegant ladies while compare well known scenic area to the south of Yangtze River in Xihu Lake in Hangzhou. Generally speaking, Slender China. It accounts 103.7 hectares in total, 49.9 hectares of Xihu Lake Scenic Area covers Shigong Ancestral Temple, which are taken by water. Shugang is the core of Slender Dahong Bridge, Long Banks and Spring Willows, Xiyu- Xihu Lake Scenic Area and a key national scenic spot. It an Round pond, Little Jinshan Mountain, White Pagoda, is characterized by various tourist attractions along the Wuting Bridge, and Kwan-yin Mountain. The Slender two banks of the lake, such as the zigzag and winding Xihu Lake Park extends from Long Banks and Spring water ways, long lake banks, soft spring willows, romantic Willows to Kwan-yin Mountain. Slender Xihu Lake is bridges covered in mist and drizzles, Xuyuan Garden, about three to four kilometers long. There are many artful Little Jinshan Mount, Chuitai Platform, Wuting Bridge, and exquisite constructions along the lake; some extend White Pagoda, Twenty-four Bridge, Exquisite Flower into the lake, some runs over the lake, some are composed Park, Yichun Platform, Wangchun Platform, Yinyue Tea of deep and remote mazes, and some stand on mountains. Pavilion, long corridors, towering cliffs, running rivulets, They are characterized by myriad stances and incompa- and elegant study, etc. They are just like parts of a long rable profoundness. roll of traditional Chinese painting extending on the lake Slender Xihu Lake Garden is endowed with both surface. They also like the long and soft girdles of fairies fantastic landscape and rich culture. It present to tour- stretching tortuously with romance. In Qing Dynasty, ists different sceneries in different times and seasons, and Emperor Kangxi and Emperor Qianlong visited Yang- delivers the infinite interests of Slender Xihu Lake. Es- zhou for many times. Local landowners and nobles at that pecially when spring comes to the south of Yangtze River time rushed to build up various gardens so as to provide in March, Yangzhou will become a city of flowers in full imperial accommodation for the then emperor. Therefore, blossom; walking along the banks of Slender Xihu Lake, gardens in Yangzhou were honored “the best gardens un- you will deeply impressed by the gentle and lovely willows der heaven”. cuddled by green mist and the glamorous trees such as Poets in history like to compare Slender Xihu Lake camellia, guava, and peach.

34 Xianhe Temple Erfen Bright Moon Building Xianhe Temple is the most an- Erfen Bright Moon Building was cient Mosque temple ever retained built up in Mid Qing Dynasty. It used in Yangzhou. It was built up in the to be own by Yuang Shi and later Jia first ruling year of Deyou Emperor Songping, a merchant on salt. There is in Southern Song Dynasty when a wood and a long list of seven build- Puhaing, the sixteenth generation ings in the garden. On the building of Mahomet, came to introduce hangs a plague with inscription of Islam in Yangzhou. Later in 1390, “Erfen Bright Building” in Ming Dy- the 23rd ruling year of Hongwu nasty. The railings of the building are Emperor in Ming Dynasty, the just for decoration; the curved eaves on temple was rebuilt for by Ha San, an the top of the building are designed in Arabian missionary, after which it a unique artistic style. There are yel- was rebuilt for many times. Xianhe low stone artificial rocks in the garden; Temple combines the characteristics ascending the pavilion in the east of of Islamic structure and those of the garden by steps, you can appreci- ancient Chinese traditional archi- ate the fantastic scenery of mountains tecture. Xianhe Temple, and the and lakes; the lay out of the garden other three Islamic temples, namely, delivers an implicit and miraculous Phoenix Temple in Hangzhou, atmosphere. It could be reputed as an Huaisheng Temple in Guangzhou, exquisite design of private garden in and Kylin Temple in Quanzhou, are Yang Zhou. reputed as the “Four Grand Mosque The seven buildings are sitting to- Temples” in China. wards south. It looks grand, towering, and majestic. Although the original Food inscription by calligrapher Qian Yong fails to be retained, his handwriting Yangzhou food belongs to the Huai- “Erfen Bright Moon Building” in ink yang cusine, one of the four best known is still clear enough to make out. The cusines in China, which is popular in Ji- exquisite railings and long seats with angsu and Zhejiang provinces. handrails add romance to the building. Besides emphasis on broth, Huaiyang Accompanied by the bright moon, you dishes feature high-quality ingredients and can experience the gentle wind and meticulous preparation, with care taken a cup of delicious wine, enjoying to to maintain the freshness and authentic your heart content the fantastic scen- flavours of the food. Dishes incorporating ery of the garden. The rockeries on freshwater food and meats cooked in Huai- the southeast of the garden are quite yang style are eminent. Huaiyang dishes amazing. A couplet of calligrapher, are delicately braised, stewed or soasted and Wu Rangzhi, describes the wonderful the most famous include stewed pork ball, environment in front of the building stewed fish head, shredded pork in chicken like this: Thousands of tourists come soup, steamed hilsa herring, stewed pig’s to visit the fantastic garden in spring feet, etc. wind; the Bright Moon Building is the Huaiyang dishes also have a pleasing best in Yangzhou. appearance. Usually decorated with lifelike carvings of fruits and vegetables, they are neither too salty nor too sweet, suiting most plates. Huaiyang dim sum is also attractive with steamed buns filled with pork and veg- etable or crab.

35 CONOMY E Strong Growth and Inflation Today

By Li Wei, Jing Tan

Inflation pressures still bubbling, and there is still risk of a rate hike or two Industrial production and fixed asset investment growth slowed, but momentum still seems strong Policy tightening, especially in terms of real estate, will drag on growth momentum from Q3

Table 1: China’s April data Growth, y/y April Q1-2010 average 2009 average 2008 average CPI 2.8% 2.2% -0.7% 5.9% PPI 6.8% 5.2% -5.4% 6.9% FAI (YTD) 26.1% 26.5% 31.6% 26.4% Retail sales 18.5% 18% 15.5% 21.7% rowth momentum re- IVA 17.8% 15.5% 12.5% 12.7% mained pretty strong in New CNY loans (CNY) 774bn 868bn 798bn 409bn April, as Table 1 shows, M2 21.5% 24.7% 26.5% 16.7% according to the data Exports 30.5% 30.3% -15.8% 17.9% released by China’s National Bu- Imports 49.7% 65.4% -9.4% 19.9% reau of Statistics (NBS). CPI infla- Trade surplus (USD) 1.7bn 4.8bn 16.5bn 20.6bn G Sources: NBS, Customs, PBoC, CEIC tion accelerated to 2.8% year-on- year (y/y), from 2.4% in March, but seems to have stabilised on a m/m basis. Prices continue to rise in y/y terms in food, industrial products and services. Retail sales growth accelerated in nominal terms to 18.5% y/y (from 18.1% prior), while sales growth in real terms are likely to have held steady at around 15% y/y. Growth in industrial production (17.8% y/y) and fixed asset investment (25.5%) was still strong, although both decelerated. Policy tightening measures introduced in recent months will help to rein in growth in H2-2010. Nonethe- less, today’s data suggests that we might see further tightening in the short term, even if policy measures so far, especially those related to the real estate sector, mean that by Q3 growth momentum should be clearly slowing. Inflation spreads beyond food category We forecast CPI inflation will be 4% in July/August, driven by a broad set of products, and the risk of a sharper uptick in the next three months clearly exists. As

38 we show in Chart 2, prices are rising on a y/y basis in food, industrial products and ment projects fell to 10% y/y in April services. Above-potential industrial production growth, as well as rising inflation (we show 3MMA data in Chart 4), expectations (shown by the PBoC’s survey of bank depositors), adds to the short- FAI is likely to continue to decelerate term inflation risk. Accordingly, in our view, interest rate hikes cannot be ruled out. in H2-2010. We expect nominal FAI The producer price index (PPI) rose by 6.8% y/y in April (from 5.9% in growth to decelerate to about 20% on March), 0.8% on a m/m, semi-annual basis. Fuel, power and non-ferrous metal average in 2010. This will be a welcome products continued to see the fastest y/y price rises. Record-breaking production and a necessary adjustment; not only will it reduce inflationary pressures, but Chart 1: Inflation rising in y/y terms… Chart 2: …across the board will also help support the shift in the growth model. Strong sales boosted by rising optimism and wage growth Retail sales grew by 18.5% y/y in April, 0.5ppts faster than in March, as Chart 5 shows. Given higher inflation during the month, growth in real terms probably held steady at around 15% y/y (official retail sales price growth data has not yet been released). Sales of automobiles, home electronics and construction materials remained strong, rising by 36.9%, 34.3% and 29.2% y/y, respectively, as Chart 6 shows. Our own survey of compa- Sources: CEIC, Standard Chartered Research Sources: CEIC, Standard Chartered Research nies in Guangdong province and our informal conversations with clients levels suggest that much of industry is operating above potential capacity. Despite suggest that wage increases of 8-12% China’s energy price controls and fierce competition across much of the manufac- are common. Renewed wage growth turing sector, which limit producers’ ability to pass on higher costs to consumers, should support real private consump- there is still a pass-through effect. tion growth of some 8-10% this year, in our view. The government has also Investment growth is decelerating extended subsidy programmes aimed Fixed asset investment (FAI) grew by 25.5% y/y in April, versus 26.4% in the at supporting purchases of household first three months of the year. In real terms, it slowed by an additional 0.5ppt to appliances until the end of 2010 (and, 25% y/y, we estimate. Steel and cement production, which we believe are more ac- in the case of air conditioners, until curate barometers of investment activity, continued to grow strongly in April 2010 the end of 2011), but this should have (more on this below). However, given growth in the number of outstanding invest- only a marginal impact. Policies aimed at curbing speculative buying in the real-estate market could, however, be a Chart 3: FAI growth decelerating Chart 4: Growth in projects mild negative for sentiment. Industrial production growth remained strong Industrial value added (IVA) grew by 17.8% y/y in April, slowing from 18.1% in March, as Chart 7 shows. This was caused by a marginal slowdown in heavy industrial production growth, to 19.4% y/y in April from 20% in March; light industrial production growth continued to accelerate in April, to 14.1% from 13.4%. As Chart 8 shows, steel and cement output growth accelerated to 27% y/y and 16.1% y/y, respectively, from 22.5% and 12.1% in March, reflecting still-strong demand for con- Sources: CEIC, Standard Chartered Research Sources: CEIC, Standard Chartered Research struction materials. However, car pro-

39 CONOMY

E Chart 5: Rising nominal retail sales growth Chart 6: Strong products sales duction growth slumped to 36.9% y/y in April from 66.7% in March, despite still-strong car sales reported in April. In light of this, the May data on car production will be interesting to watch. Strong PMI readings in recent months (55.7 in April) bode well for industrial production growth in H1. However, it could decelerate in H2, when the effect of policy tightening kicks in. Return to a trade surplus Exports grew by 30.5% y/y in April, versus 24.3% in March; imports grew by 49.7% y/y versus 66% prior (Chart 9). China’s imports, driven by huge investment demand for global Sources: CEIC, Standard Chartered Research Sources: CEIC, Standard Chartered Research commodities (e.g., crude oil and iron ore) recovered strongly and early, but y/ Chart 7: Heavy industry production Chart 8: A sharp fall in car production y import growth now appears to have slowed (physical) peaked. Imports of unwrought copper and copper products fell by 4% m/m to 436 thousand tonnes (kt) in April; refined copper imports fell by 3% m/m to around 327kt; and iron ore imports fell by 6% m/m and 3% y/y to 55.3mn tonnes (mt). Soybean imports continued to rise, by 4.7% m/m and 13% y/ y to 4.2mt, reflecting strong domestic consumption demand. We expect export growth to exceed import growth in Q2 given the continued recovery in the US and EU economies. Exports of steel products rose by 205% y/y and 29% m/m to 4.3mt in April, and unwrought aluminium exports surged by 114% m/m to 90kt, indicating a further Sources: CEIC, Standard Chartered Research Sources: CEIC, Standard Chartered Research improvement in export markets. The trade balance returned to a Chart 9: Export growth to exceed import Chart 10: Falling trade surplus, surplus of USD 1.68bn in April, fol- growth for now lowing a one-month deficit of USD 7bn in March. As Chart 10 shows, China’s cumulative trade surplus fell by 78.6% y/y in the first four months of 2010 due to its strong commodity import demand, combined with the slowing pace of the global recovery. But as the global economy continues to recover (the impact of the European sovereign debt crisis will be fairly limited, in our view), we expect China’s trade surplus to rise further in H2. We look for a current account surplus of 5.2% of GDP for 2010. (Authors: Economists with Standard Chartered Bank (China) Sources: CEIC, Standard Chartered Research Sources: CEIC, Standard Chartered Research Limited)

40 ndustry

i 1 Introduction The global financial crisis, whose effects have been most severe on the China’s Investment world’s largest banks, has created a vacuum in banking sector in Africa by in Africa’s Banking Sector stalling investment from the traditional investor. The world’s largest banks, brought to their knees by the crisis, and having had to be bailed out, are in no By Sun Jin position to continue investing in the banking sector in Africa. China, less severely affected by the crisis, with a nese companies have little idea about local conditions in Africa but want to avoid burgeoning economy, and with banks investment risks. In such case, they need professional consulting services about firm that are awash with cash, is, in contrast, evaluation, strategic cooperation, debt restructuring, M&A, etc. from banks and able to invest in the banking sector in want to find a trusted partner with a bank. Africa. Meyer (2008) pointed out that As we know, many researchers concentrate on Sino-Africa politics and eco- China can take advantage of the void nomic cooperation in macroeconomic view. Nevertheless, most of them neglect the created by western banks in Africa as a importance of banking sector. In fact, among all the increasing investments from consequence of the global financial cri- China to Africa, the first one should be in banking sector, which connects with sis and, possibly, create a new banking other investment areas such as infrastructures, agriculture as well as manufacturing era for Africa. and adequately supports the investments to be efficient and effective. In a word, it’s In this crisis, Africa’s banking critical to create a favorable financial environment for Sino-Africa economic and sector has not been dramatically influ- trade cooperation. enced because financial development 2 China’s banking sector outlook: Ready for the next stage? is too laggard to make use of financial derivatives instruments. However, fi- Several years ago, China’s banking sector had its own problem and need- nancial development is very important ed profound changes to improve it. Today, China’s banking sector is much and needed to be improved greatly better and highly developed. China’s banking system is regulated by the for developing countries. The services Commercial Bank Law, which became effective in July 1995. The law formal- banks provide, such as cash manage- izes a 1994 policy to make the banking system adhere to market principles. ment, risk management, exchange rate Its regulatory capability and quality have improved substantially. Bank credit service, trade financing, project financ- has expanded rapidly and bank capitalization is higher. The stock shares of ing, enterprise consulting, etc., are key China big 4 banks have performed well. Though it still has great gap com- for Africa’s trade and investment devel- pared with America’s banking sector which has the most developed financial opment. system, it is a leader in developing countries. China’s banking sector is ca- For instance, foreign trade be- pable of investing in Africa. tween China and Africa has increased 2.1 Corporate and household lending dramatically in recent years even after From the table 2.1 below, we can see that China’s domestic credit to private the crisis (see figure 1). However, the sector has not been grown in recent years and is half of the level of that of U.S. truth is there are different kinds of cur- However, compared with Middle and Low income countries whose corporate and rencies in Africa, which is a matter that household lending is 61% of GDP in 2008, China’s level is over 40% higher. As for companies have to consider about when Low income countries, even though they have improved greatly, the index is still doing the trade because of exchange low-only 40% in 2008. rate risks. If banks can offer forward Actually, China’s GDP per capital has increased a lot in a decade (see figure exchange contracts for the companies, 2). GDP per capital in 1998 is $827 and in 2008 it goes up to $1963, which implies the problem can be solved and promote enterprises including private-enterprises are becoming a strong growth business for more trades. Moreover, a lot of Chi- Chinese Banks and the prospects are extremely bright. Figure 1 Foreign trade between China and Africa (million $) Table 2.1 Domestic credit to private sector Countries 2001 2002 2003 2004 2005 2006 2007 2008

U.S. 179 169 184 191 195 202 210 190

Domestic China 111 119 127 120 114 113 111 108 credit to private sector (%/ Middle& GDP) low income 50 53 55 54 53 56 60 61

Low income 21 23 24 25 27 29 35 40

42 Figure 2 China’s GDP per capita the rural credit cooperatives. Bank of China is the oldest of them, which handles deposits, overseas remittances and other transactions of foreign-invested companies in China. Bank of Communications was established in 1908 as a financier for the telecommunications and transport sectors. The last five banks in the table 2.2 are second-tier commercial banks and have been turned into shareholding banks. They are much smaller but better managed than state-owned commercial banks. 2.2 China’s domestic banks 2.3 China’s investment banks China’s domestic banking system is made up of five China’s banks have become a prime investment destina- state-owned commercial banks, 12 joint-stock commercial tion for western banks and China has used this opportunity banks, two private banks and urban & rural co-operative to gain skills and expertise as well as keep abreast of modern banks. The five state-owned commercial banks are the top trends. five domestic banks shown in table 2.2. They dominate China’s first international investment bank, China In- the banking sector, accounting for 52.6% of total assets of ternational Capital Corp (CICC), was launched in Beijing RMB69.4trn of all banks and financial institutions as well as in 1995. CICC’s shareholders are China Construction Bank, 52.6% of all deposits of RMB65.5trn at end of March 2009, Morgan Stanley (US), the Government of Singapore Invest- according to the China Banking Regulatory Commission. ment Corp and Mingly of Hong Kong. CICC is allowed to Industrial and Commercial Bank of China (ICBC), underwrite domestic equities in the local market, take equity China’s largest bank, was incorporated in 1984 to take over stakes in foreign direct investments in China, assist local en- the central bank’s branch network, budgetary allocations and terprises in mergers and acquisitions, organize project finance loans to state-owned-enterprises. It finances industry and and handle foreign exchange. Its mandate also includes as- is the main supplier of credit to the urban economy, mainly sisting domestic and joint-venture firms to raise capital on the through short-term working-capital loans to a wide range of international market, advising the loss-making state sector on industrial sectors. It claims to be the country’s biggest mort- restructuring and assisting foreign direct investors. gage lender. Internationally, ICBC has branches and offices Another investment-banking joint venture, China in the world. Euro Securities, was established in April 2003. It offers Table 2.2 Top ten domestic banks in China some investment-banking services, such as public offerings, Assets Pre-tax profit Non-performing Bank (million $) (million $) loans (%) underwriting and advisory services. Other banks that have Industrial & Commercial substantial business in China include ABN AMRO, BZW Bank of China 1427,685 21,260 2.29 China Construction Bank 1105,471 17,520 2.21 Securities, Credit Lyonnais Securities Asia, HSBC Invest- Agricultural Bank of China 1026,300 7,659 4.32 ment Bank, Rothschild and UBS. They typically offer as- Bank of China 1017,718 12,620 2.65 sistance with issuing bonds, underwriting share offerings and Bank of Communications 391,867 5,241 1.92 China Merchants Banks 229,976 3,915 1.11 arranging of syndicated loans in the international market. Shanghai Pudong Development Bank 191,588 2,239 1.21 These investment banks in China providing risk man- China CITIC Bank 173,798 2,596 1.36 agement, exchange rate service, trade financing, project China Minsheng Banking Corp 154,267 1,535 1.20 Industrial Bank 149,372 2,054 0.83 financing, enterprise consulting, etc works well to help the international enterprises invest in China. Chinese financial China Construction Bank (CCB) was set up in 1954 institutions used this opportunity to gain skills and expertise to provide medium and long-term finance for capital- as well as modern banking methods, which is an aggressive construction projects and unban housing development. The modernization drive of its banking sector. bank’s main strength is the evaluation and management Therefore, with the reforms and developments China’s of large-scale projects, which is the first bank to introduce banking sector underwent such as bank restructuring, fi- asset-liability management. As we can see in the table, CCB nancial liberalization, strengthened financial regulation and had assets of US$1.11trn at end of 2008, making it China’s supervision and gaining skills and modern banking methods second-largest bank. It earned pre-tax profits of US$17.5bn in from foreign banks, Chinese banking sector is ready for the 2008, up 26.8% from a year earlier. CCB has important sub- next stage: providing strong and stable investment in the sidiaries, such as the wholly owned China Investment Bank, banking sector in Africa. Hong Kong-incorporated Jian Sing Bank (40% stake) and 3 Case study: Banking sector in South Africa China International Capital Corp (42.5% stake), China’s first investment bank. In December 2006, CCB acquired 100% 3.1 Cooperation with domestic banks in South Africa of Bank of America Asia, the US firm Bank of America’s As it is shown in table 3.1, the largest domestic bank subsidiary in Hong Kong, which pushed CCB from 16th to in South Africa is Standard bank of South Africa with total 9th position in the Hong Kong banking industry in terms of assets of US$0.83trn which is less than 3/5 of the assets of outstanding loans. Industrial & Commercial Bank of China (see table 2.2). The Agricultural Bank of China (1979) was incorporated total assets of the biggest three banks of China is over total to provide finance and working capital to farming through market assets (US$3.07trn) in South Africa.

43 ndustry Table 3.1 Top ten domestic banks in South Africa i Bank Assets (million$) Market share (%) banks in Africa to expand their operations and in their re- Standard Bank of South Africa 833,089 27.1 capitalization drives. Absa Bank 696,608 22.7 FirstRand Bank 560,605 18.3 4.1.2 Technological know-how improvement Nedbank 520,386 16.9 China’s technological advancements far outweigh those Investec Bank 173,219 5.6 of Africa and therefore Chinese banks would import techno- Imperial Bank 49,691 1.6 logical know-how that should improve the domestic banking African Bank 21,776 0.7 Capitec Bank 5,983 0.2 sector. TEBA Bank 3,411 0.1 4.1.3 More new clients Grindrod Bank 1,793 0.1 While the Chinese investment is partnering up with the Total market 3,070,254 100.0 dominant banks in Africa, Chinese clients will be absorbed The acquisition of 56.1% of Absa Group by Barclays into these banks that China invests in. (UK) was finalized in July 2005. Absa bank plans to expand 4.1.4 Chinese state-owned bank to protect shocks to Tanzania, Angola and Mozambique. The Barclays-Absa The ICBC is in a position to provide a stable source of Group deal was the first foreign entry into the country of this credit that can help shield the banks in Africa from adverse scale since the 1980s and paved the way for further foreign economic shocks. One key aspect of the ICBC is that it is a investment in the banking sector. publicly-owned bank, which is directly under the control of In the largest foreign direct investment in South Africa the Chinese government. as of October 2009, China’s largest bank (ICBC) purchased 4.1.5 Common characteristic of developing country a 20% stake in Standard Bank for RMB36.7bn in Febru- The partnership presents learning opportunities for ary 2008. According to Jacko Maree, Standard Bank Group Africa since China is a developing country that probably un- chief executive, the ICBC investment will assist Standard derstands the constraints facing the banking sector in Africa Bank in becoming a leading global emerging-market bank. better than the western investors. 3.2 China’s banks in South Africa: need more invest- 4.1.6 Successful reform initiatives ment China embarked on a very radical reform of its bank- However, the investment is not enough. It shows on table ing sector, and as the Chinese banking sector grows from 3.2 that China Construction Bank Corporation ranks at the strength to strength, this reform drive is showing benefits. eighth foreign bank in South Africa, with 5,663 dollar assets. The entry of China in the banking sector in Africa could also And there is only one China’s bank in the top ten foreign banks be seen as an opportunity to reform the banking sector in in South Africa. Besides, China has only 0.2% of the market Africa and bring it in line with international standards and share, while U.S. has 2.9%, France has 1.1% and U.K. has 0.9% norms. The capital invested in these banks should be used for of the market share for the top ten foreign banks. such reform initiatives. Table 3.2 Top ten foreign banks in South Africa 4.2 The challenges that African banks face for Chi- Bank Assets (million$) Market share (%) Citibank(US) 44,525 1.5 nese investment JPMorgan Chase Bank(US) 42,384 1.4 4.2.1 Skill transfer to local workforce Deutsche Bank (Germany) 22,566 0.7 China’s banks are expected to bring in some new service Standard Figureered Bank(UK) 16,815 0.6 channels, diversified banking products as well as introduce Calyon Corporate and Investment Bank(France) 15,250 0.5 HSBC Bank(UK) 11,574 0.4 new banking portfolios. The challenge is to ensure that the ABN AMRO Bank(France) 10,038 0.3 skills and capacity that China brings is transferred to the local Societe Generale(France) 9,520 0.3 banks’ workforce. Generally, inadequate information infra- China Construction Bank Corporation(China) 5,663 0.2 Mercantile Bank(Portugal) 5,654 0.2 structure, regulatory barriers, lack of physical access to banks, Total market 3,070,254 100.0 affordability of banking services and financial illiteracy are main barriers at present. Therefore, it’s necessary to enhance China’s investment 4.2.2 Severe competition in banking sector in Africa to work in the investments in After the initial investment that is founded on partner- other areas in the future and to promote the investment ef- ships, it is possible that China could venture out to establish ficiency in the cooperation with Africa. Based on the analysis their own banking entities. In the current environment of of above chapter, China’s banks have the ability to ensure weak, inadequate regulation with insufficient human resource more investment in banking sector in Africa and they should capacity, such a development would be a great treat for do- do so since the market share is too small. There are feasibil- mestic banks. There is also the treat of domestic banks en- ity and necessity for the investment. Next, we will study the gaging in stricter credit-rationing. Competition from foreign advantages of the investment and challenges from it. banks may serve to push the domestic banks out of the more 4 Advantages and challenges analysis profitable market segment. 5 Investment procedures and recommendations 4.1 The advantages of Chinese investment in the banking sector in Africa The banking sector in Africa is generally weak and inad- 4.1.1 Awash cash for recapitalization equate for its domestic needs. However, demand for banking China has the most foreign reserves in the world and is services in Africa is going to expand and become more so- abundant in cash. The cash invested by China can be used by phisticated as economies move up a gear. China is enhancing

44 the banking sector in Africa. Through cooperation, banks in Africa will be developed with regulatory mechanisms, new reforms and assess index. After the technological know-how and reform process, with the improvement of financial services and efficiency, banks in Africa will be able to compete in the financial market. 6 Conclusions China, not severely affected by the global financial crisis, with a burgeoning economy, and with banks that are awash with cash, is able to invest in the banking sector in Africa. China’s corporate and household lending per GDP is much higher than that of middle and low income countries. Besides, China’s enterprises are becoming a strong growth business for Chinese Banks with bright prospects. After bank restructuring, financial liberalization, strengthened financial its distribution capabilities to tap into this expanding market. regulation and supervision in the banking sector in China, There needs to be an effective investment procedure in -ad Chinese banks have grown up. China’s largest bank-CIBC vance, which is recommended as follows. has US$1.43 trillion assets in 2008 and has branches in the A cautious approach in Chinese investment that is fo- world. Moreover, learning from foreign investment banks, cused on linking up with the bigger local banks and get in- China’s banks are highly modernized. house learning on the domestic banking environment first. Take South Africa as a case study, the total assets of As a long-time investor in Africa, China will take advantage the biggest three banks of China is over total market assets of this opportunity to know local operations and consolidate (US$3.07trn) in South Africa. However, China has only 0.2% its relation with Africa. of the market share, while U.S. has 2.9%, France has 1.1% A worthwhile and long-term investment is in the race. and U.K. has 0.9% of the market share for the top ten foreign While much of the investment to date has sought to deliver banks. There are feasibility and necessity for more Chinese a fairly quick financial payback, the scale of the necessary investment. investment in financial market development is likely to grow China’s investment in Africa’s banking sector has many and require a more long- advantages including term strategic approach in THE INVESTMENT SHOULD BE CONSIDERED awash cash for recapi- securing a favorable return. talization, technological This includes sustained AS LONG-TERM AND SUSTAINED INVESTMENT know-how improve- investment in product and INCLUDING WORKFORCE AND TALENT ment, bringing in more talent development. DEVELOPMENT, PRODUCT AND SERVICE new clients, Chinese The capital raised IMPROVEMENT, REGULATION AND SUPERVISION state-owned bank to from Chinese investment protect shocks, common should also be used for REFORM. THE REMOTE AREA IS ALSO WORTH THE characteristic of develop- expansion that involves INVESTMENT AND EFFICIENCY OF THE BANKS IS A ing country and success- reaching into the remote CRITICAL INDEX. ful reform initiatives. Of areas without banking course, there are chal- services and to give access to the poor. Naturally, investors lenges that African banks have to prepare such as skill trans- need to consider the risks of a still volatile and poorly devel- fer to local workforce and severe competition in the future. oped region in Africa. Yet, the potential rewards certainly Overall, there are more opportunities and benefits compared merit a fresh look and could make investment ultimately with challenges. payoff. As for China’s investment in Africa’s banking sector, it With the investment, banks such as the top banks in is recommended that linking up with the bigger local banks Africa should find incentives to improve their services. Di- to know local operations and conditions is the first approach. verse banking services include risk management, exchange The investment should be considered as long-term and sus- rate service, trade financing, project financing, enterprise tained investment including workforce and talent develop- consulting & evaluation, debt restructuring, mergers & ac- ment, product and service improvement, regulation and quisitions, advisory services, underwriting and arranging of supervision reform. The remote area is also worth the invest- syndicated loans in the international market etc. will be pro- ment and efficiency of the banks is a critical index. vided to facilitate Sino-Africa trade and promote economic growth as well as encourage regional integration. (Author: Ph.D candidate of School of Economics, Bringing immediate improvements in efficiency in the Renmin University of China, UCLA Visiting Scholar, An- banking sector in Africa. Low efficiency and bad manage- derson School of Management, University of California, ment can negate all the benefits of Chinese investment in Los Angeles. E-mail:[email protected])

45 ndustry i

China Independent Brand Commercial Vehicles Will Assemble and Produce in Russia

As a leading enterprise of com- lish a production base of 100 thousand 2025. That means the company will set mercial vehicles in China, Foton output per year within Russia boarders up factories in 5 important developing Motors will achieve its assembly and in 2012, which covers the complete countries, Russia, Brazil, Mexico, India production of the independent brand in series of Foton Motors, induding light and Thailand before 2015; finish the Russia by the end of 2010 and establish trucks, medium trucks, heavy trucks, regional market development in Euro- a production base that can produce 100 buses, pickups, SUV, etc. Foton Motors pean Union, North America and Japan, thousand vehicles per year in Russia in will place Russia as its producing and 3 developed countries; achieve one 2012. operating center of European area in great breakthrough of cars in China’s Foton Motors and the Moscow order to raise the curtain for its global- domestic market. To choose Russia as Municipal Government of Russian ization. a start for the global strategy is because Federation signed the cooperation Wang Jinyu, the general man- Russia has been the first big power for memorandum under the witness of ager of Foton Motors, said that the China’s car export in the years before Guo Jinlong, the major of Beijing, and company has made a global progress the financial crisis and has played a very Yury Luzhkov, the major of Moscow. strategy called “5+3+1” from 2011 to important role. European Motor Affairs Office of Fo- ton Motors in Russia or Russia Foton Motors has formally established. They cooperate in orientating Russia Foton Motors as European operating center which is in charge of sale, research and development and investment management of Foton Motors in Europe. Foton Motors will achieve the goal to assemble and produce in Russia by the end of 2010 and plan to invest to estab-

46 ORLD EXPO W

More Thoughts on the SH Expo By Alice Yang

Visitor number from the second month of the Expo. Also, from the middle Up to July 12, 73 days have past since of June, students from schools on summer holiday began to the opening day of the Shanghai Expo, gradually arrive. As the summer passes, more students and marking 40% of the whole 184 day Expo youth, along with their classmates, friends, and family will period, running from May 1 to October join the other visitors and long lines. 31, 2010. The total number of visitors has Here are the details on the number of visitors from June reached 26,375,700 person-times, roughly 26, 2010. According to the official Expo website there were 38% of the 70 million person target, or an 553,500 visitors packed into the Expo site on June 26, setting average of 380 thousand visitors per day. a new record for the number of visitors since the opening day From June, the average number of visi- of the Expo. Of those visitors, about 165,300 were in tour tors at the Expo has been over 400 thousand groups, or 30% of the total number. Around 147,000 visitors every day. During the first month of the used free tickets that the Shanghai government distributed Expo, May, it was about half of that figure, to local residents, accounting for 27% of the total visitors that and organizers were concerned whether there day. would be as many visitors as expected. Now, Historically, the World Expo that boasted the most it seems that it won’t be a problem. Just as visitors was the Osaka Expo held in Japan, which had 64 Haibao, the mascot of the Shanghai Expo, million total visitors in 1970. China’s aim is to surpass it and suggested the core idea of the Expo is about create a new record. In China’s eyes, big is always beautiful, 人, (rén, Chinese character but it often follows that thinking big meaning people). So it’s no ignores the smaller details. surprise you’ll see so many Enthusiasm people at the Expo. A local Shanghai With China’s ambitious dream resident showed me his free to be #1, queuing is the most fre- ticket from the Shanghai quent scene at the expo, where two government, indicating that hours of waiting in line is considered it was free tickets that caused Caution - no big deal. The large number of Chop for Shanghai Pavilion is broken! the sharp increase in visitors visitors everyday is the main reason

48 behind the long queues. However, there are shorter queues in some areas, such as the Puxi area. the theme pavilions, the Chinese provinces pavilions and less famous countries’ pavilions, all of which have some won- ders to see. Organizers are trying hard to attract visitors to these less crowded areas. But still the visitors’ enthusiasm for pavilions titled with world big economic names can’t be overcome. When I asked visitors at the Expo about their feeling on it, I frequently heard two keywords: wonderful, tired. Yes, the Expo is full of fantastic designs and inspired innovations, definitely worth a visit for whatever reason. But why tired? First, it’s not an easy job to tour the huge Expo area, which covers 5.28 square kilometers, in just one or two days. Second, waiting in the long queues takes away energy too. Third, I doubt that the organizers haven’t realized this, the complicated entrance process makes visitors worn-out before 1 they even get to seeing the pavilions. 2 While the Expo has some parking areas for the visitors, they “City makes your life better” are far away from any gate, so most visi- 1. A part of the queue before tors choose to take public transportation. This is the meaning of the Chinese version of the Expo Australian Pavil- (城市, 让生活更美好), From any of the closest metro stations or ion. slogan however the English version is slightly different from this one as we’ve already seen, “Better 2. "Don't wake city, better life”. I personally prefer the English version, be- me up. I need a rest."- Tired cause it seems more true, yet hundreds of millions of Chinese child at the Expo. accept or choose to believe the idea that the city will make their lives better. In the process of urbanization, China is so 3. Logo in the eager to build more and big cities, but do these cities really yard of Expo Me- dia Centre. make our life better? Is the pursuit of making things faster and bigger really that beautiful? At the Expo, after the zigzag queues, there will always be a trash road left on the queuing lines. Because of the free tickets, small vendors selling Expo souvenirs finally have a chance to get inside the Expo without ticket cost, and con- , duct their bargain there. A friend commented, “Ah, it s more 3 like China when there is someone on the street trying to sell you something.” A staff from the Norway Pavilion cried, “I’m bus stops, it will take at least 20 minutes of really fed up with the chop, chop, chop everyday. The only walking to get to the ticket-checking area. thing they really want is the chop.” Yes, we are in a big city And queuing starts from the beginning, now, but in how much way does the city improve our brain? where waiting 1 hour to get into the Expo City building is not only about infrastructure, but more is normal. And if you want to take line 13 importantly about building civilized thoughts in the public’s (the special Expo line), it will take about 40 mind, and establishing a creative way of thinking. Through- minutes walking just to transfer from line 9 out history a city has always been a reflection of the develop- to line 13 at the Ma Dang Road station. Be- ment of human civilization. It would be a waste if our cities fore you have a chance to get excited, you get just have tall buildings, big roads, and busy traffic, but no exhausted first. new thoughts in people’s mind.

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n - - - - Tel: 86-28-85380318 na Council for the Promotion of International Trade, Fax: 86-991-2850497 Fax: 86-28-85333218 China Association of Traditional Chinese Medcine Email: [email protected] Email: [email protected] Add: Room 8128, 8138, Huanglou, Southeast Contact person: Li Jianxin Corner, Municipal Administration Center, Bozhou, Food and Additives, Beverage, Drinks, Anhui, China th Seasonings, Dairy Products Tel: 86-558-5125770 The 4 China Northeast Asia Shenzhen Fax: 86-558-5125775 Imports Expo Web: www.bozhou.gov.cn Date: September, 2010 Hong Kong International Tea Fair Email: [email protected] Frequency: Yearly Date: August 12-August 14, 2010 Contact: Mr. Deng, Ms. Liu Year of the first event: 2007 Venue: Hong Kong Convention and Exhibition Venue: Liaoning Industrial Exhibition Center Center Media, Advertisement Exhibits: mechanic equipment, small vehicles and Exhibits: tea, processing tea and tea products, tea parts, electronic information and home appliances, 2010 China 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Textiles and Accessories Date: August 26-August 28, 2010 Road, Beijing, China, 100036 Date: August 24-August 26, 2010 Venue: Qingdao International Convention Center Tel: 86-10-68296359 Frequency: Yearly Exhibits: food addictives and ingredients, etc Fax: 86-10-68288219 Frequency: Yearly Add: Rm 605, Huayu Building, No.46 Shandong Web: www.4nshow.com Venue: Shanghai New International Expo Center Rd, Qingdao, 266071 Email: [email protected] Exhibits: all kinds of home textiles and acces- Tel: 86-532-85012515 Contac Person: Chen Dazhi sories, computer-aided design and manufacturing, Fax: 86-53285012915 related publications and network equipment, etc Email: [email protected] Add: Rm 546, No,12 East Chang An Avenue, Bei- jing, 100742 th Tel: 86-10-85229506 2010 China Qingdao The 5 Food & Fax: 86-10-85229300 Medicine Packaging Materials Exhibition Web: www.intertextile-home.com.cn Date: August 26-August 28, 2010 Email: [email protected] Venue: Qingdao International Convention Center Add: Rm 605, Huayu Building, No.46 Shandong 2010 China International Knitting Trade Fair Rd, Qingdao, 266071 Tel: 86-532-85012515 Date: August 24-August 26, 2010 Fax: 86-53285012915 Frequency: Yearly Email: [email protected] Venue: Shanghai New International Expo Center Exhibits: underwear, sweaters, knitting, leisure clothes, T-shirts, Gym, etc 2010 The Fourth China Shanghai Add: Rm 450, No.12 East Chang An Avenue, Bei- International Meat Industry Exhibition jing, 100742 Date: September 2-September 4, 2010 Tel: 86-10-85229098 Frequency: Yearly Fax: 86-10-85229059 Venue: Shanghai Everbright Exhibition Center Web: www.chinaknitting.com.cn Exhibits: Food and additives, beverages, wine, Email: [email protected] spices, milk, etc Host: China Food Culture Research Organizer, Furniture, Household Decorations, Shanghai Huagang Exhibition Services, Co., Ltd Woodwork Floor Decorations Add: Room 506, 2, 3758 Nong, Chunshen Road, Shanghai, China, 201100 Commercial Trade, Chain operation, Tel: 86-21-64607399 Agency, Import and export 2010 The 3rd China Qingdao International Fax: 86-21-64602848-808 Intelligent Building Technology and Product Email: [email protected] Urumchi Foreign Trade and Economic Exhibition Contact person: Zhang Lin Cooperation Fair Date: August 20-August 22, 2010 Date: September, 2010 Venue: Qingdao International Convention Center Medical Care, Health Care Frequency: Yearly Exhibits: Green Building technology and products, Year of the first event: 1992 heating ventilation air conditioning and heat pump 2010 International Bozhou Traditional Venue: Xinjiang International Exhibition Center system, etc Chinese Medicine Exhibition Exhibits: New product, new technology, new proj- Add: Rm 1001, Yinhe Building, No.29 Shandong Date: September, 2010 ect, negotiation of expert and import commodity Rd, Qingdao Frequency: Yearly trade, domestic commodity trade, etc Tel: 86-532-85017965 Year of the first events: 1985 Add: No.107 Xinhua South Road, Urumchi, Xinji- Fax: 86-532-85018382 Exhibits: traditional chinese medicine, medicine, etc ang, China, 830049 Email: [email protected] Host: People’s Government of Anhui Province, Chi- Tel: 86-991-2850497 Web: www.cibex.com.cn

51 A Decade Miracle: Wuxi Sunmart By Li Zhuyi

54 Miracle started

A decade years ago, Wuxi Sunmart was just no name. At that time, few people noticed Jiangsu Snow Leopard Atomization Pot Industry Limited Company, which was established in early 1998, as it was a small workshop with a registered capital of only RMB 1.6 million. And that is where Wuxi Sunmart’s miracle initiated and grew from. With ten years of development, Wuxi Sunmart Science and Technology Company Ltd now has a total asset of RMB 4 billion, with an annual output of various spray pumps (valves) of RMB 500 million, and a sale volume of RMB 350 million. From those years accumulation, no name has grown up into a big name, not only nation wide, but internationally. Its products are exported to more than 80 countries and regions, including North America, Western Europe, South Africa, the Middle East, Hong Kong and Macao. High reputation was received from the customers. At the same time, the company has won the honors of Outstanding Private Enterprise in Jiangsu Prov- ince, High-tech Enterprise in Jiangsu Province, Top 100 Packing Enterprise in Jiangsu Province, Quality Trustworthy Enterprise in Jiangsu Province, Top 100 Plastic Enterprises China, Nation Business Management Innovation Outstand- in China, Outstanding ing Demonstration Unit, the AAA Level Honesty Enterprise Packaging Enterprise in in China. New pages are being written down.

Stories going on

Located in Xuxiake Town Industry Zone, Jiangyin City, and the plants cover an area of 270 Mu, with a building area Wuxi Sunmart Science and Technology Company Ltd is a of 100,000 square meters. The company has 1,650 employees. manufacturing company specialized in preparing mini-spray The company has a total asset of more than RMB 400 mil- pump (valves) used for varies daily-chemical products, medi- lion, and is equipped with more than 500 sets of advanced cine, food, healthcare with assorted aluminum pot and plastic injection-molding and blow molding equipments in China, bottle ,and a member of China Packaging Federation (Metal and 400 plus sets of aluminum punches, and four modern Container Committee), China Health Scientific Committee, automatic assembly lines. State Environment Protection Industry Association. Sun- Meanwhile, the company takes the advantages of over mart has a products mix of nearly 1000 specifications, such 50 sets of metal-processing equipments with high-precision as press vacuum proportioning pumps (lotion pumps, crimp- molds, to meet special requirements from the costumers. on pumps, screw-on pumps), mini aluminum pot, and plastic Through virtual design, 3D modeling, dynamic simulation bottles of PP, PE, PET series. analysis and drawing, quick molds making, the company is Differ from what the situation was ten years ago, right capable of producing spray pumps (valves) of different specifi- now Sunmart boasts of a registered capital of US$13 million, cations and injection products, aluminum cans, plastic bottles,

55 and a purification area especially for preparing medicine In 2007, the company manufactured different kinds packing material. Since 2005, Sunmart has become the leader of spray pumps (valves) in 500 million sets, and had a sale in packaging industry in China who has the largest produc- income totaled RMB 350 million, including US$30 million tion and sale volume of spray pumps (valves), and also in Asia. from foreign trade, and the profits and taxes amounted to In 2000, the company passed French BQI’s ISO9002 more than RMB 56 million. In recent years, the company quality system certification; in October 2004 the company was listed as one of the top 100 companies in Jiangyin City, passed through the auditing by Shenzhen Huantong Cer- and was nominated as one of the top 100 good companies by tification Center and gained ISO9001-2000 quality system Wuxi municipal government. certification, therefore put all production process under the Based on good performance, various channels of capital management of quality system. filled in this ten-year-old enterprise. Better news is that, in Wuxi Sunmart pays great attention to scientific and August 2007, the company was officially listed in Singapore. technological innovation, keeping on improving the science and technology level of the stuff, and boosting the new products of spray pumps (valves) development. During the past nine years since the foundation, the company has had an investment on science and technology development amounting to 4% plus of the total sales income, and the employees engaged in science and technology development has taken a share of more than 15% of the total staff. Till 2007, Sunmart has 33 products (technologies) possessed state pat- ent of intellectual copyright, and 4 identified as provincial new products. Furthermore, the lock spray pump (valves) developed by Sunmart won award of science and technology progress of Jiangsu Province, and new product award from provincial light industry office. And high grade spray pump (valves) was awarded Star of the Creative Technology by the United Nations (China), and the aluminum printing mini-spray pot for medical purpose has filled the blank space of this field in China, whose quality standard has reached advanced level in the world.

Honors of Sun Bingzhong

Individual member and director of China Association for Stan- dardization of General Administration of Quality Supervision, In- spection and Quarantine of PRC(AQSIQ ) National industry standard setter for BB/T0028-2004 press vacuum quantitative pump 33 patents of spray packaging owner Member of China Enterprise Directors Association Standing director of Metal Containers Committee of China Packaging Federation Outstanding CIO in China in 2005 Outstanding Entrepreneur of China Packaging Federation 2001 - 2004Advanced Worker in Jiangyin City, Jiangsu Province 2002 - 2004 Outstanding Party Member of CCP in Wuxi City, Jiangsu Province 2005/06 Outstanding Director (Manager) in Jiangyin City 2006 Medalist of Wuxi City’s “May 1 Labor” 2006/07 Good Faith Entrepreneur in China 2007 Model Worker in light industry in China

56 Dream purchaser

Facing the success Sunmart has created in the decade, more great efforts, Sunmart has developed a product mix and more people admire the industry leader and its creator. Sun of nearly 1,000 specifications of spray pumps (valves), Bingzhong, an over 53 years robust businessman, is the miracle with many passed the technology examinations by maker and also a dream purchaser too. With Sun’s strong earnest national or provincial offices, and won awards including the United Nations (China) Inventions and In- novations Star Award and Jiangsu Province Scientific and Technological Progress Award. With the capacity continues expand and the sale volume increases, now Sunmart has become a star enterprise and high and new technology company in Jiangsu Province, and AAA Level Honesty Enterprise in China, and outstanding private company in Jiangsu Province, and technology center in Wuxi City. Rich life experience endow Sun with never- give-up gift. Sun has ever taken positions like teacher, director of school-run factory and manager of school- run industrial company. In the hard times, he never forgot his dream: to be the best, to create a best company. Now, he made it. Titled with a MBA Chairman and General Manager of Sunmart Holdings Pte Ltd, this listed company in Singapore Exchange, at the same time, Sun is also a member of municipal Science and Tech- nology Association, vice chairman of science and technology association in Xuxiake Town, a member of China Enterprise Directors Association, standing to expand business, Sunmart once small company with a capital director of China Packaging Federation, Metal Con- of a few million yuan grows into a leading company in China tainers Committee, and model labor in light industry and Asia in packaging industry in ten years. Businessman in the in China. circle can never ignore Sunmart, which now ranks the first producer in Asia in the output of spray pumps (valves). Sun Bingzhong has rich experi- ences in enterprise management and operation, and a hard spirit while pays great attention on the market. Since he changed the role from a teacher to an enterpriser, he has been engaged in spray pump (valve) research and development. In recent years, under Sun’s operation, the research team has gained 33 patents for new products. And Sun presided and participated in several development projects of high science and technology high profit- ability products. With high quality and specialized products, the company has won fame both in domestic and oversea markets. Till now, with Sun and his staff’s

57 G LOBAL

exico is the second largest producer of silver in the world and is ranked among the top 12 countries in terms of production of eighteen typesM of minerals. It has become one of the most internationally competitive countries for mining at the same time as the sector has taken on a key role in the country’s own economic growth. According to the report from Behre Dolbear published in 2010, Mexico was the world’s fourth-best investment des- tination for mining among a 25-country-list and in f irst place regarding the fiscal regime. Meanwhile, Mexico has become China’s important partner in Latin America. The first quarter of this year, the amount of China’s imports from Mexico has achieved the strong Mexico : growth of 49%; from January to April in 2010, China enterprises investment in Mexico reached US$410 million. In order to attracting Chinese A Golden investors to cooperate and invest, on June 4, 2010 Mexico Mining Invest- Opportunity ment Environment Forum was held in Beijing, Mr. Gerardo Ruiz Mateos By Audrey Guo Minister of Economy of Mexico, assistant minister of Ministry of Com- merce Mr. Chong Quan, Maria Jimena medium-sized mining companies as well as the sector’s production chain with loans Valverde Valdes, General Coordinator worth US$510 million. In addition, it also offered training and technical assistance of Mexico Mining, the ambassador of to more than 8,000 companies. In 2009, its exports attained US 4 billion while its Mexico in China, and other officials in import was around US$2 billion. Direct investment from overseas was up to 70%. both sides presentde this forum. The This amount only contained the parts of metal and nonmetal, not including the parts official of Mexico introduced Mexico of the steel, cement and glass industry. Vice Chairman of China Mining Association, mining investment environment, the Cui Dewen said that since 2009, through the pre-trial by the China Mining As- opportunity of trade, and related laws sociation, the projects of Chinese enterprises investment and cooperation in Mexico and regulatory. Around 100 enterprises have included three iron ore projects and a precious metal projects. from Chinese and Mexico attended this When mentioned the advantages of Mexico mining, María Jimena Valverde forum. The Mexican group included Valdés, General Coordinator of Mexico Mining told the reporter of China’s Foreign many large-scales enterprises and ex- Trade: “there are several advantages of investment in Mexico’s. For instance Mex- perts in the fields of geological explora- ico’s Mining Act is the oldest among the Mining Acts in the history. According tion and mining laws with 20 projects to mining concessions, the mining law guarantees the mineral rights to Mexican covering gold, copper, zinc, lead, iron, individuals and companies established within the country. Companies could be manganese , non-metallic mineral class, constituted up to 100% with foreign investment capital. Fewer restrictions means marble, jade and so on. that initially mining concessions are yielded for 50 years and can be extended for According to Mexican Trade Pro- other 50 years”. Some Chinese enterprises raised questions that whether the con- motion Bureau President Bruno Ferrari cession areal extension is limited, Ms Maria Jimena replied that the investors could said that the contribution of mining ac- be guaranteed that there is no limited, all mineral rights excepting radioactive counted for 3.6% of GDP, and account- minerals, on the bases of “first came first served”. And Mineral rights can be freely ed for 4.4% of the total of exporting. transferred between Mexican individuals or companies constituted in Mexico. She Mining was one of the first Mexican also emphasized that foreign investors are considered evenly as national investors. industrial sectors to show recovery after Mexican government does not charge mineral royalties, excepting the surface and the international downturn, generating corporate taxes are charged. All these laws with the stability of Mexico political 4,613 new jobs since August 2009. Min- systems made it rank the fourth just behind Australia, Canada and Chile, which istry of economy’s mining promotion were the destinations for foreign investors in the fields of mining. trust helped capitalize micro, small and Mexican Ministry of Economy, Minister Gerardo Ruiz Mateos recom-

59 LOBAL G mended that Mexico’s abundant resources and preferential tax policies brought the of public investors reliable and sensitive opportunities for China mining. Mexico is the fifth largest mineral potential in the information. world, while, China could explore the industry by virtue of their professional tech- After this forum, the group nology, capitals and foresight. launched the exhibition “Magic natural Experts from Mexico also put forward different ways for financing in mining birth to Mineral miracle” in Shanghai industry, and introduced services from Mexico government that provides for enter- Expo Mexico Pavilion, for showcasing prises in the term of geological, geophysical and geochemical services, and showed the purpose of Mexico: harmonious sus- its advantage of in the physical information systems. The system is the world’s most tainable development combining mineral advanced geographic information systems in the world, can be in the mining areas development and the environment.

ments. Move Economic strength From 2000 to 2009, the GDP of the western regions increased from to the West 1,665.5 billion yuan to 6,686.8 billion By Yang Wei yuan, with an average annual growth

Links Chronicle of Events 1999: the “Western Develop- ment” guidelines are clarified 2000: the “Western Develop- ment” plan begins 2001: the official website of the “Western Development” program is launched 2002: construction of the “West-East Gas Pipeline” begins 2003: the policy of “Returning Grazing Land to Grassland” comes into effect 2004: the Law on Promoting Western Development is listed on the legislative plan of the 10th Na- tional People’s Congress 2005: compulsory education tuition and fees become exempt in Investment & western areas Trade Forum rom 1840s, a Report on Some Preliminary Ideas Con- for Coopera- millions of cerning the Implementation of the Strategy 2006: the Qinghai-Tibet Rail- tion between Americans for the Development of the West Regions, way begins operation East & West moved to its marking the beginning of China’s 2007: the Ministry of Finance China in invests 280 billion yuan in the west Shaanxi west, with a cowboy Western Development policy. dream. After years The policy covers 6 provinces to support key projects F 2008: 10 major projects to of development, the (Gansu, Guizhou, Qinghai, Shaanxi, big migration suc- Sichuan, and Yunnan), 5 autonomous launch in, with a combined budget cessfully boosted the western area of regions (Guangxi, Inner Mongolia, of 436 billion yuan America, and is China now on the same Ningxia, Tibet, and Xinjiang), and 1 2009: special efforts taken in track? municipality (Chongqing). This region post-disaster reconstruction after China has realized its western contains 71.5% of mainland China’s 5-12 earthquake region’s importance from 1950s, Chair- area, but only 27.5% of its population, 2010: the central government man Mao Zedong’s time; however, the as of the end of 2009, and 19.9% of its will invest more than US$100 bil- China Western Development strategy total economic output, as of 2009. lion in 23 new infrastructure proj- was officially launched half century In the past decade, the western re- ects later. In January 2000, China forwarded gion has harvested remarkable achieve- ...

60 velopment pattern lion hectares and the forest coverage towards foreign coun- rate had reached 17.1%, an increase 6.7 tries in various aspects percentage points compared with 1999. has taken initial shape. The forest reserve had achieved 8.27 China-ASEAN Free billion m3, an increase of 1.3 billion m3. Trade Area, Shanghai The project of converting cultivat- Cooperation Or- ed land into forests is a major ecological ganization, Greater project in China. This area in the west- Watermelon field in ern regions had totaled 15.793 million Ningxia hectares, taking up 34% of national total. The vegetation coverage rate of of 11.9%. The total foreign trade vol- Mekong Sub-region project areas had an average increase of ume increased from 17.2 billion USD Economic Cooperation and Central 14 percentage points, and yield of grass in 2000, to 91.5 billion USD in 2009, Asia Regional Economic Cooperation 68%. National Forest Resources Con- 20.9% increase annually. More eco- and ect are further promoted. servation Project had effectively pro- nomic data can be found in the follow- By the end of 2008, more than tected natural forest resources of 63.8 ing table. 200,000 enterprises in the eastern million hectares, accounting for 32.6% region have made investment in the of national forest areas. More economic data from 2000 to 2009 in western China “The entire country will not de- Item 2000 2009 Annual increase velop well if the western regions do (billion yuan) (billion yuan) (%) not develop well,” said Du Ying, vice- Revenuesby local-level collected 112.7 605.5 19.4 minister of the National Development governments and Reform Commission (NDRC) at a Fix asset investment 611.1 4,970 24.8 news conference in July. Overall retail sales 599.7 2,303.9 15.4 In the past decade, China has ad- opted many preferential policies to sup- Infrastructure construction port the regions’ development. In these western region, with a total investment 10 years, investment from the central Up to the end of 2009, major of nearly 3 trillion yuan. 20 provinces/ and local governments, as well as from newly-commenced projects had added municipalities provided counterpart the private sector, has totaled nearly 20 up to 120, with a total investment of support for post-Wenchuan earthquake trillion yuan, 5.5 times the amount in- 2,200 billion yuan. Newly-added high- reconstruction projects funded by 67.37 vested from 1949 to 1999, the NDRC way traffic mileage had amounted to billion yuan. Events such as Invest- said. However “the gap between the 972,000km, including 16,000km of ment & Trade Forum for Cooperation western regions and the eastern areas expressways. The operating mileage between East & West China, Western remains vast,” Du claimed. of new railways had amounted to over China International Economy and It took one hundred of years for 11,500km, making the total railway Trade Fair, China-ASEAN Expo have America to finish its western develop- mileage reach 32,800km. The number become an important platform for co- ment process. For China, it won’t be a of reconstructed and extended airports operation between western and eastern one-day task as well. The first decade of main and branch lines reached 48, regions and attracting more foreign was a good start, and more continued with 23 newly-constructed airports,81 investments. efforts are required. civil transport airports, accounting for Eco-environment 48.8% of the nation’s total. A number of large-scale water Major ecological conservancy projects had been com- projects such as convert- pleted and yielded economic returns ing cultivated land into in succession. The problems of water forests, returning graz- shortage and water safety of 94.37 mil- ing land to grassland and lion rural populations had solved. A natural forest protection total of 18,630km of new oil and gas have been implemented. pipelines had been constructed. The to- So far, the forest area of tal installed power capacity had reached the western regions had 266.07GW. amounted to 116.81 mil-

Reform and opening-up Dianchi in Yunnan In the western region, a new de-

61 LOBAL G a n ge xch owadays, China has more E and more focused Corporate Social Responsibility (CSR). From October 2009, more than 600 Chinese companies have Nreleased CSR reports. According to statistics from China WTO Tribune, in 2009 China issued a total of 631 CSR reports, 3.73 times more than that released in 2008. On June 5, 2010, at the Fifth International CSR Forum, the “2009 GoldenBee CSR China Honor Roll” was held in Beijing. The Forum also released the “2009 China CSR Practice Benchmark Report”, which is the third report published by China W TO Tribune since 2008. Mr. Wang Chao, Assistant Minister By Guo Yan of the Ministry of Com- merce said, “Despite CSR : the fact that the current world economy has been gradually improving, the process of recovery still faces many challenges. In New Engine of the future, responsibility will be the driving force Economic Recovery for sustainable development. We should form a production style that emphasizes provinces, increasing from 8 in 2007, to organizations, need to be further im- resource-saving and environmental- 12 in 2008, and 13 this year. proved. friendliness, in order to realize coordi- 3. Different types of enterprises 6. The practice of CSR has turned nated development between economic have their own characteristics. Compar- from avoiding the topic, to discuss- growth, social development and envi- atively, in terms of management strategy, ing the economic benefits, and finally ronmental protection. some are better than others; state-owned to focusing on combining the social, According to the report, in recent and state-held enterprises have an ad- environmental and economic aspects years China CSR showed the following vantage when releasing CSR informa- together. When carrying out CSR, features : tion; while private enterprises increased enterprises continue to emphasize the 1. The level of CSR has increased their amount of CSR practice. economic benefits so that CSR can be gradually. In the last three years, the 4. With respect to strategy and continued. According to the report, as average number of large enterprises management, enterprises have put the enterprises continue to practice CSR, with CSR rose from 50.8% in 2007 to concept of CSR into the corporate the factoring of economic benefits has 52.3% in 2008, then to 65.3% in 2009. management system. With a greater increased in importance from sixth It appears that during the recovery understanding of CSR, more and more place in 2007, to fifth in 2008, and from the financial crisis companies did enterprises have begun to pursue the fourth in 2009. not neglect the CSR, but instead put a goal of combining economic, social This forum was jointly sponsored stronger emphasis on it than before. and environmental endeavors. Some by China WTO Tribune, the China 2. Companies in China’s central companies are actively deepening the Association of Trade in Services, and and western regions are increasing their awareness in law compliance, and have the Sino-German CSR Project in col- focus on CSR. Analyzing data from taken measures to carry out fair opera- laboration with CSR Europe, CBCC different regions shows that the propor- tions and prevent commercial corrup- and the Society for Human Resource tion of voluntary CSR participation for tion. Management (SHRM). At the cer- enterprises in central and western re- 5. Enterprises fulfill their CSR- emony, twelve companies were awarded gions is higher than before; the rate has related interests, with respect to clients, as Leading Enterprises, six as Grow- increased from 10% in 2007, to 11.4% employees, the government and coming Enterprises, and another twelve in 2008, and now to 18.2% in 2009. In petitors, however, CSR-related interests received six additional awards such as the Midwest, voluntary assessment of such as the environment, suppliers, the best customer focus, employee care and enterprises has spread to more and more community and non-governmental responsible purchasing.

CPIT C

n June 25, China-Slovenia Economic and Trade Forum was held in Beijing. The Financial Minister of Slovenia attended and addressed the forum. He said that Slovenia was politically stable and kept sustainable economic growth. Owing to the advantageous geographic position, Chinese enterprises not only could invest in Slovenia, n June 29, Chi- but also could take Slovenia as the gate and transfer station towards the EU market. The Minister na-SpainO Eco- hoped that Chinese enterprises actively explored Slovenia’s market and found the opportunities to nomic and Trade O Forum, sponsored cooperate with Slovenian enterprises. Dong Songgen, Vice President of jointly by CCPIT, China and Slovenia CCPIT addressed the forum. He hoped that enterprises from China and Slo- venia would learn more about the Expecting More economic situation of the countries through the forum and could Bilateral Trade Volumes reach cooperation on specific projects by means of match- By Yan Manman making conference. China- Slovenia Entrepreneurs’ Council would keep broadening the platform for the enterprises from the two countries to further mutual understanding and strengthen cooperation. CCPIT also would take advantage of this platform, trying to promote the trade, cross investment as well as economic and technological cooperation between the two countries. Federation of Spanish Entrepreneur Orga- Slovenia has been attaching great importance to its bilateral eco- nizations and Spanish Trade and Investment nomic and trade exchange and cooperation with China since 1992 Agency, was held in Madrid, capital of Spain. when China and Slovenia established diplomatic relationship. Ac- Zhang Wei, Vice President of CCPIT cording to the statistics of the General Administration of Customs delivered a speech at the Forum. He said in the of China, the bilateral trade volume between China and Slovenia speech that Spain was one of the earliest countries reached US$897 million, 18.2% down on a year-on-year ba- having trade exchanges with China. Since 1973 sis. The value of China’s export was US$770 million, 20.1% when Spain and China established diplomatic relation- decrease from that of last year, and of import was US$127 ship, the two countries have kept stable and close politi- million, 3.9% year-on-year decline. However, with the cal and economic exchange. In 2005, China and Spain world economy gradually pulled out of the crisis, China fixed comprehensive strategic partnership, making a histori- and Slovenia’s bilateral trade rebounded very fast. The cal stride for the relationship between the two countries. The bilateral trade volume amounted to US$304 million bilateral economic and trade cooperation developed rapidly, for the first quarter of 2010, a 54.5% increase year on especially in the fields of environmental protection, finance, tele- year. In detail, China’s export value reached US$ com and new energy in the recent years. At present, though there 266 million, increased by 54.2% compared with was sign of recovery for the world economy, the foundation was still the same period of last year, and its import value not firm, there were many uncertainties on the path of the recovery. was US$38.17million, increased by 56.7% year Therefore, CCPIT hoped, joining effort with Federation of Spanish -En on year. And the two countries are expected trepreneur Organizations, to promote the establishment of a more open to have closer economic and trade relations and favorable investment environment for the enterprises of the two coun- and more trade volumes between. tries through organizing this kind of activities, thus achieving more mutual benefit. The Presi- China-Spain Economic dent of Federation of Spanish Entre- preneur Organiza- and Trade Forum tions said that China was the biggest trade Held in Madrid partner of Spain outside of EU. The economic and trade cooperation between the two countries kept expanding fast in recent years. He hoped that this forum would further deepen the bilateral economic and trade exchange and also provide more effective and specialized service to SMEs of the two countries so as to inject new dynamics for the economic development of the two countries. At the forum, the participating enterprises exchanged ideas over some specific subjects, including investment consultation, biotechnology as well as the innovation and industrialization of energy saving and environmental protection technologies. Besides, the enterprises from the two countries also had match-making talks over the industries of construction, food, information consultation, banking, mechan- ics, chemicals and textile, etc. and reaped substantial fruit. 64 C ase S tudy

ARBITRATION — Alternative Dispute Solution

This article will introduce the arbitration and tell the traders how to resolve the disputes by the means of arbitration in China.

By Nan Chunyu

settlement technique in which a third tages. Here follows the advantages: party reviews the case and imposes a a. Simplified procedures and flex- decision that is legally binding for both ibility ith the constant develop- sides. Arbitration is most commonly Arbitration is time-saving and less ing of China’s foreign used for the resolution of commercial expensive than litigation. Although trade in recent years, the disputes, particularly in the context of a complex international dispute may volume of trade between international commercial transactions. sometimes take a great deal of time China and the other countries has been Arbitration has a long history. Records and money to resolve, even by means growing year by year. At the same from ancient Egypt attest to its use of arbitration, the limited scope for W especially with high priests and their challenge against an arbitral award, as time, more and more disputes have also ensued. How to resolve the disputes interaction with the public. Arbitration compared with a court judgment, of- effectively and timely has become an was popular both in ancient Greece and fers an obvious advantage. Above all, issue that the traders have to face in real in Rome. Real commercial arbitration it helps to ensure that the parties will earnest. system was established in the Middle not subsequently be entangled in a pro- In general, there are some ways Ages. Today Arbitration has become longed and costly series of appeals. Fur- to resolve the commercial disputes in very popular all over the world and thermore, it offers the parties flexibility addition to litigation which are called been a favored means of commercial in setting up proceedings that can be Alternative Dispute Resolution (ADR). disputes resolution. conducted as quickly and economically The two primary types of Alternative Why should we choose as the circumstances allow. Dispute Resolution (ADR) are Arbi- Arbitration as the way of b. Sufficient party autonomy tration and Mediation. And also some disputes resolution? Judicial systems do not allow the other methods can be used to deal with parties to a dispute to choose their own the disputes such as debt collection, Compared to other methods of judges. In contrast, arbitration offers urge of contract performance, and so disputes resolution, Arbitration has a the parties the unique opportunity to on. This series of articles will introduce number of inherent and unique advan- designate persons of their own choice as the two primary ways of Alternative Dispute Resolution (ADR) and the other alternative means to help all the traders involving the disputes. This article will introduce the arbitration and tell the traders how to resolve the disputes by the means of arbitration in China. What is Arbitration? Arbitration, a form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the “arbitrators”, or “arbitral tribunal”), by whose decision (the “award”) they agree to be bound. It is a

65 ase S tudy arbitrators, provided they are indepen- resolution field in China. Most of Chi- agreement shall prevail except where

C dent. This enables the parties to have nese traders and suppliers choose China such agreement is inoperative or in con- their disputes resolved by people who International Economic and Trade flict with a mandatory provision of the possess specialized competence in the Arbitration Commission (CIETAC) as law of the place of arbitration. relevant fields. In arbitration, parties their arbitration institution. a. Application for arbitration by are free to make provisions as to the There are two ways to choose the claimant following matters: Place of arbitration, CIETAC as the arbitration institution: When applying for arbitration, the Language used, Procedures or rules of incorporating an arbitration clause into Claimant shall submit to the CIETAC law applied, Nationality of the arbitra- the commercial contract when making Secretariat at the Beijing headquarters tors, so on and so forth. a contract or reaching an arbitration or the Sub-Commissions an arbitration c. Confidentiality agreement after a dispute arises. In agreement, a Request for Arbitration in Arbitration hearings are not con- practice, it is common to add the arbi- writing, and the facts and evidence on ducted in open sessions, and only the tration clause into the contract. Here which its claim is based. parties themselves receive copies of the follows the model arbitration clause The arbitral proceedings shall awards. Thus, business secrets and the recommended by CIETAC: commence on the date on which the reputation of the parties can be effec- “Any dispute arising from or in CIETAC or one of its Sub-Commis- tively protected. connection with this Contract shall be sions receives a Request for Arbitration. d. Lower costs submitted to the China International b. Defense and counterclaim by The arbitral award is final and Economic and Trade Arbitration Com- the respondent the procedure of arbitration is faster mission for arbitration which shall The CIETAC Secretariat shall than litigation. Therefore, arbitration is be conducted in accordance with the send to the Respondent the Notice of cheaper than litigation. Commission's arbitration rules in effect Arbitration, a copy of the Claimant's e. Final and binding decisions at the time of applying for arbitration. Request for Arbitration along with its Today, a final and enforceable The arbitral award is final and binding attachments, the Arbitration Rules, and decision can generally be obtained only upon both parties.” the Panel of Arbitrators. by recourse to a court or by arbitration. Because arbitral awards are not subject AT THE PRESENT TIME, CHINA INTERNATIONAL ECONOMIC to appeal, they are much more likely to be final than the judgments of courts AND TRADE ARBITRATION COMMISSION (CIETAC) IS THE of first instance. Although arbitral MOST AUTHORITATIVE AND IMPORTANT ARBITRATION awards may be subject to challenges on INSTITUTION IN THE TRADE DISPUTE RESOLUTION FIELD IN grounds of procedural irregularity, such grounds are limited. CHINA. f. International recognition of arbitral awards The parties may also stipulate the The Respondent shall produce Arbitral awards enjoy much following matters in the arbitration its written defense and relevant docu- greater international reverence than clause: mentary evidence to the CIETAC judgments of national courts. Over 130 • the place of arbitration and/or Secretariat. The Respondent may lodge countries have signed the 1958 United hearing; its counterclaim during the arbitration Nations Convention on the Recog- • the language of arbitration; procedure. nition and Enforcement of Foreign • the number of arbitrators; c. Foundation of arbitral tribunal Arbitral Awards, known as the “New • the nationality of arbitrators; According to the CIETAC Arbi- York Convention”. The Convention • the method of selection of arbitration Rules, the arbitral tribunal may facilitates enforcement of awards in all trators; be composed of either a sole arbitrator contracting states. China acceded to • the applicable law of the con- or three arbitrators. A case where the the New York Convention in 1987. tract; and/or summary procedure applies shall be How should we resolve the • the application of general proce- examined and heard by a sole arbitrator, disputes by arbitration in dure or summary procedure while cases where the general procedure China? What is the Arbitration applies shall be examined and heard by Procedure of CIETAC? three arbitrators. Since the disputes arise in the in- Where there are two or more ternational trade with the partners from CIETAC arbitrations are gener- Claimants and/or Respondents in an China, the best choice is Arbitration ally conducted under its current Arbi- arbitration case, the Claimant side in China. At the present time, China tration Rules, i.e. the Arbitration Rules and/or the Respondent side each shall International Economic and Trade Ar- effective as from May 1, 2005. Where jointly appoint or jointly entrust the bitration Commission (CIETAC) is the the parties have agreed on the applica- Chairman of the CIETAC to appoint most authoritative and important arbi- tion of other arbitration rules or any one arbitrator from the CIETAC Panel tration institution in the trade dispute modification of these Rules, the parties' of Arbitrators. The presiding arbitrator

66 or the sole arbitrator in such case shall representative(s) or authorized agent(s) related cases) or 4 months (in domestic be jointly appointed by the two sides or to attend the hearing. If the Respon- cases) from the date on which the arbi- by the Chairman of the CIETAC. dent fails to appear at an oral hearing tral tribunal is formed. In a summary d. Hearing without showing sufficient cause for procedure case, the arbitral tribunal The arbitral tribunal shall examine such failure, the arbitral tribunal may shall make an award within 3 months the case in the way that it deems appro- proceed with the arbitration and make from the date on which the arbitral priate unless otherwise agreed by the a default award. If the Claimant fails to tribunal is formed. At the request of parties. Under any circumstance, the appear at an oral hearing without show- the arbitral tribunal and with the ap- arbitral tribunal shall act impartially ing sufficient cause for such failure, the proval of the Secretary-General of the and fairly and shall offer reasonable Claimant may be deemed to have with- CIETAC, the time period of rendering opportunities to all parties for presenta- drawn its Request for Arbitration. an arbitral award may be extended. tions and debates. The arbitral tribunal e. Award The date on which the arbitral shall hold oral hearings when examin- In a general procedure case, the award is made is the date on which the ing the case. arbitral tribunal shall render an arbitral arbitral award comes into effect. The parties shall send their award within 6 months (in foreign- The arbitral award is final and binding upon both parties. Neither party may bring a lawsuit before a court of law on the same dispute resolved by the previous arbitration or make a request to any other organization for revising the arbitral award. (Author: Department of Legal Affairs of China Council for Pro- motion of International Trade)

n June 14, the first China- Russia Business As- ig Neighbors, More Potential to Tap for sociations Cooperation Round Table Conference, Economic Cooperation sponsored by CCPIT, Heilongjiang B ProvincialO Government and Harbin Municipal Government, was held in ness Representative in China, etc. ad- proposed by the leadership of the two Harbin. The theme of the conference dressed the conference. countries. With the joint effort of the was “Strengthening Cooperation for Du Zetian said that China and governments, business associations Common Development”, aimed at Russia are two great neighboring and enterprises at the two sides, the strengthening connection between countries. Over the 60 years since the bilateral trade between China and CCPIT system and the business as- establishment of diplomatic relations Russia saw a momentum of explosive sociations in Russia and building a between the two countries, especially increase. The bilateral trade volume sound platform for the entrepreneurs after the two countries established for the first quarter of 2010 reached in the two countries to exchange and strategic cooperation partnership, US$11.99 billion, a 63.8% increase cooperate so as to drive the bilateral the bilateral trade and mutual invest- year on year. trade develop healthily and rapidly. ment have both seen great progress. In China and Russia enjoy great The delegates from China and Russia 2008, the bilateral trade volume was potential in bilateral trade. In gen- had opened talks over the issues of US$55.9 billion. Though impacted by eral, the bilateral trade proceeds well. suitable strategy for trade coopera- the financial crisis, the bilateral trade However, in terms of the border tion between China and Russia and in 2009 declined somewhat, yet it still trade and Customs administration extending the range for the bilateral reached US$39.5 billion, and Russia etc, China and Russia also proposed trade, etc. Du Zetian, Deputy Direc- became the 9th biggest trade partner the plan of using the domestic cur- tor of Sub-Council and Membership of China. rencies of the two countries to settle Affairs Department of CCPIT, Sun 2010 is the last year for China the trade. These issues addressed, the Yao, Vice Governor of Heilongjiang and Russia to achieve bilateral trade trade between the two countries is Province as well as the Russian Busi- volume of US$60-80 billion, the goal certain to be further improved.

67 List upply info world. We also specialize in all kinds of garden tools which sell well in Europe, America, Australia and Southeast Asia. 2010 China MarketEmail: [email protected], Suppliers alutile66@hot- We always pursue the best quality and mail.com the fastest service with reasonable price. Website: www.alutile.com Our company will develop rapidly with our efforts and your cooperation. Company Name: Jiangxi Hongtai Indus- Contact Person: Company Name: Jiaxing Zhongwan John Xie try Group Co., Ltd Tel: Import&Export Co. Ltd 0086-591-83339491 Fax: 0591-83339493 Company Profile: Jiangxi Hongtai Company Profile: Jiaxing Zhongwan Post Code: 350001 Group Co., Ltd. was established in 1995, Import&Export Co. Ltd. is located in Jiax- Email: [email protected] specialized in manufacturing ALUTILE ing City which is the center city of the most Website: www.hq-electrics.com brand Aluminium Composite Panel, Solid prosperous and dynamic Economic Circle Aluminium Panel and Fire Resistance Al- in China --Yangtze River Delta. It cannot uminium Composite Panel etc. As a lead- Company Name: Fujian Glong Electric be ignored about highly convenient trans- ing foreign-invested Hi-tech. enterprise in Co., Ltd portation system of Jiaxing City. You can go Jiangxi province, the company has totally everywhere in China through the highway Company Profile: Fujian Glong Electric invested USD 20,000,000 to import 6 and three big airports around Jiaxing enable Co., Ltd is one of biggest motors and water advanced full automatic production lines; you to fly all over the world. pumps manufacturer in China. It covers annual output reaches 3,600,000 square In addition, several multifunctional an area of 66 thousand square meters .The meters. seaports along the coast of Jiaxing City company possesses advanced producing The main products include: Alumin- qualify us to do world trade without trans- equipments, perfect testing methods which ium Composite Panel and Fire Resistance portation problem. guarantee good quality of products. The Aluminium Composite Panel. Numerous There is only one hour away to go to products are in great demand in mother- specifications are available with thickness Shanghai metropolis by car. Hangzhou and land and also have been greatly exported to varied from 2mm to 6mm, and width from Suzhou are also an hour away from Jiaxing. many countries and areas. 1000mm to 1600mm. Special coatings This represents our company’s place utility With fifteen years professional experi- on offer include PVDF (Kynar500, Hylar that will down the transport expenses to ences we’ll continue to provide you high 5000) and Polyester. the lowest level. quality products and competitive prices Hongtai Group has been sticking Contact Person: Martin .Based on high-level business reputation. to the principle of Orientation to Quality Tel: 0573 - 82097709 We firmly believe the cooperation between and Creation of Famous Brand. In 2001, Fax: 0573 - 82078727 us will get better and better! it was the first enterprise that received Post Code: 314000 Contact Person: Kayla Lin ISO9001&ISO14001 Certificate in this Website: http://www.cnzhw.com Tel: 0086-15859310224 line.In 2004, ALUTILE panel has been Fax: 0593-6997786 tested by SGS U.S. Testing Company Inc., Post Code: 355009 which meets the American ASTM Stan- Company Name: Fuzhou Haoqiang Email: [email protected] dard. In 2006, ALUTILE won the title of Hardware Co., Ltd Website: http://www.glong-motor.com China Top Brand and Product Exemption Company Profile: Fuzhou Haoqiang From Quality Surveillance Inspection. Hardware Co., Ltd. enjoys convenient ALUTILE brand products enjoy a good Company Name: Jinjiang Xinxing Shoes transportation by sea, land and air. Our reputation in both domestic and overseas Co., Ltd company, which owns rights of import and markets. The products have exported to Eu- export, combines the manufacturing and Company Profile: JinJiang XinXing rope, Australia, Middle East, Middle Asia, trading. There are two main production Shoes Co., Ltd is a private enterprise and Southeast Asia, South America, North lines. One is electric appliance production manufacturer which was established in America, Africa and many other regions. line and the other is garden tool production 1996, which covers an area of approximately Specialized Manufacture: line. 2,000 square meters and has more than “ALUTILE” Aluminum Composite Panel, Our main products of electric appli- 500 skillful employees. We are specialized Metal Composite Panel, Fire-Resistance ances are electric porcelain and bakelite in high quality shoes for ten years. Com- Aluminum Composite Panel. appliances, such as lamp holders, plugs, pany is a vigorous, youthful, united group Tel: +86-791-8162161/8162180/8161917 sockets, switches, fuses, insulators and flood who works together and knows lot about Fax: +86-791-8162165 lights. We have established a strict quality management and technology. “roller shoes” Add: No. 116, 6th Gaoxin Road, State insurance program. Some items had autho- (single wheel, double wheels and retractable High-Tech. Development Zone, Nan- rized by CE, UL and ISO9001 certificates. wheel with a button) “sports shoes” “children chang, Jiangxi, China Our products are exported to all over the shoes” and “leisure shoes” are our lead-

68 ing products. We also accept OEM orders Contact Person: Jonathan Zhu Email: [email protected] based on your request strictly. Tel: +8613860383013 Website: www.earplug-china.com We wholeheartedly supply custom- Fax: +86-593-6580911 Post Code: ers with good quality, favorable price, fast 355000 Company Name: Desire Star (China) Tea Email: delivery and good service of all products. [email protected] Industrial Co., Ltd. All of our products are popular among Website: www.minsun-motor.com 20 countries and regions, such as Europe, Company Profile: Desire Star (China) United State, North America Japan, Korea Company Name: Shanghai Lizhi Poly- Tea Industrial Co., Ltd. was founded in Oct and Australia etc. our factory has attained urethane Manufactures Co., Ltd 2001,it is a key provincial industrialized ISO9002 certification and roller shoes have agricultural producer which engages in the passed the CE certification. Company Profile: Welcome to Shanghai cultivation, manufacture, production, sales, We guarantee our commitment to Lizhi Polyurethane Manufactures Co., Ltd. research of the oolong tea (especially in Wuyi the supply of excellent products and good and our web site. Shanghai Lizhi Polyure- Rock-essence Tea), green tea, jasmine tea, services. We are not afraid to compare our thane Manufactures Co., Ltd. is an inno- black tea etc. From the beginning of compa- products with others, and very sincerely vative specialty and custom Polyurethane ny history, “based on agriculture, promoted improve our products till meet your request. manufacturer. The years of experience we by technology, growing with tea industry, We are not the best one, but we dedicate to have in mold and polyurethane foam have develop together” is the soul of management, be better one Based on the business tenet of shown that we can offer True Value without and it keeps the mind of “Inheriting the his- “Good Service, Good Quality, and Good compromising on our high quality stan- tory, Promoting the tea industry” as its desti- Profit”. dards. ny. It owns scientific tea base & cooperation If you are interested in any of our We strive to design comfort and style organization, and exertion of making use of items, please don’t hesitate to contact us for for customers. This focus is backed up with the advanced technology in the organic cul- more information. We are willing to build advanced equipment and excellent special- tivation industrialization. a solid business relationship with your firm ists. Our main products include: anti-noise With the registered capital 109 mil- on the basis of equality and mutual benefit. earplug, protection earplug, polyurethane lions, 66.05 millions of permanent assets, We are looking forward to cooperating foam, polyethylene foam, air pillow, air and 156.49 millions of annual earning, we with you in the future. back cushion, sleep mask, sleep pillow, cool have owned tea garden 7500mu, and co- Contact Person: Jun Chen eye mask, beauty mask, cool anti-fever belt operating garden 13200mu which benefits Tel: 86-0595-22929137 and cool /hot pack. 5152 farmer families. Fax: 86-0595-85986903 The key to our success has always Contact Person: Neil E Post Code: 362200 been our people who strive to meet and Tel: 0086-591-83796888-802 Email: [email protected] exceed our customer’s expectations. The Post Code: 350002 Website: www.xxhbx.cn strong team of dedicated professionals at Email: [email protected] Lizhi does more than just make products; Website: http://www.wuyistar-tea.com Company Name: MinDong ShengYuan they provide solutions for our customers. Electromechanical Co., Ltd. We rely on our own strength to tackle Company Name: Xiamen Haojiang Imp & key problems and make breakthroughs in Exp Co., Ltd Company Profile: It is located in famous earplugs technology. Now, our products- China MinDong Engine City-the city zone earplug series, especially anti-noise ear- Company Profile: Haojiang is professional of Fu’an Fujian. Its traffic is very conve- plugs contest the chromo with the best food manufacturer of raw materials to collect nient, and environment is so beautiful. Our products in the world thanks to the untir- north & south fruits and vegetables. Enter- m2 company occupies 3600 with abundant ing efforts of our specialists and research- prise is headquartered in Nanan, Quanzhou. strength and skill base. We produce all ers. We also provide unique PU wheel, Chenggong cooperative mode of man- kinds of generators, electromotor, SY series armrest, steering wheel, cushion and air agement insisting on going in “enterprise gasoline gene-sets and pump professionally. pillow to meet the requirement of our + the base + peasants” “ provided with own , Our products move off in the national mar- customer. Lizhi s dedication to excellence fields specially plant Of Francs Green bean ket and export to the international market, has created long-term relationships with a and Sweet corn, follows Ideas of “resolve to and trusted by the customer. lot of companies in Europe , America and start an undertaking, revitalize the country I t is a modern enterprise with genera- Southeast Asia . of the Enterprise”, establishes quality con- tor, motors and electric pumps as its main We sincerely welcome friends all trol idea of “only better not to have it best”. products, and the establishment of modern over the world to visit our company for Contact Person: Alan Wang enterprise system as its goal. It strictly car- business negotiation and co-operation so Tel: 0086-592-5332183 ries out ISO9001-2000 management sys- as to create a bright and multi-benefit fu- Fax: 0086-592-5980804 tem and tries to create first -class product ture. Post Code: 361003 bands. It has strong technical forces, and Contact Person: Zhibing Gao Email: [email protected] its products include 20 series and regions as Tel: 021-68066434 Website: www.chenggongfood.com Southeast Asia, the Middle East, Africa, Fax: 021-68066343 America, etc. Post Code: 201318 (Source: Chinamarket.com.cn)