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 2011, First Year of China’s 12th Five Year Plan

ECONOMY China’s Recent Fight Against Inflation

Lau Kin Tung, CEO of Jiwa Group

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

Established in 1958, China National Electric Apparatus Research Institute (CEI) is affi liated to China Machinery Industry Group (SINOMACH), now has over 2,000 staff , with 70% of technicians. Its three operation bases occupy over 400, 000㎡ in area. It is one of the largest state-owned enterprises with highest authority in household appliance industry of China and it is the authorized institute designated by Chinese government to establish the National Standard for Household Appliance. It is one and only enterprise in China to engage in providing engineering turn-key solution for household appliance. Business scope include the overall layout design for household appliance factory, design and manufacture of automatic production equipments for household appliance, testing equipments and painting equipments, household appliance R&D as well as household appliance testing and certifi cation, design and make of various dies & moulds. So far it has undertaken hundreds of turn-key projects for household appliance plants at home and aboard. Its equipments sell well in USA, Ital- ian, Turkey, India, Vietnam, Indonesia, Pakistan, Oman etc. As its professional and highly qualifi ed personnel, advanced management system, high quality products and consummate customer service, CEI has maintained a high reputation throughout China and abroad. China National Electric Apparatus Research Institute —Equipment Engineering Turn-key Solution Provider For Household Appliance

Add:16 Yufeng Road, Huadu District, Guangzhou, P.R.China Tel:020-86985899 Mobile:0086-18688892801 (Mr.Zhao) 0086-18688892810(Mr.Tree) Fax:86-20-86985656 E-mail:[email protected] http://www.kinte.com.cn WHAT’S ON? China auto shares calm on end of tax incentive

hina’s auto stocks, which were bruised recently by Bei- jing’s policy to limit new car registrations in the capital, were largely calm on Dec. 29, 2010, shrugging off government confirmation of an end to tax incentives for smallC cars. Top automaker SAIC Motor Corp. Ltd. was fl at on Wednesday morning in Shanghai after opening slightly down, while Shenzhen- listed rivals Chongqing Changan Automobile Co., Ltd. edged up 0.42 percent and smaller Tianjin FAW Xiali Automobile Co., Ltd. Govt to invest $15b in farmland was down 1.22 percent, against a 0.2 percent rise by the benchmark Shanghai Composite Index . The government plans to invest more than 100 “The market has already priced in the news that the tax incen- billion yuan ($15 billion) over the next fi ve years to tives will be scrapped,” said Yuanta Research auto analyst Johnny ensure enough farmland to guarantee China’s food Wong. security, the Ministry of Land and Resources said China has ended tax incentives on purchases of cars with 1.6 recently. litre engines or smaller on Jan. 1, 2011 — a long-anticipated step that The investment will improve about 4 million will apply the brakes to runaway expansion of the world’s largest hectares of land and replenish an additional 670,000 auto market. hectares of arable land in major grain producing areas. In Hong Kong, China’s No.2 automaker Dongfeng Motor Group These are Hebei, Jilin, Heilongjiang, Jiangsu, Anhui, Co,. Ltd. gained 0.5 percent and Brilliance China Automotive Hold- Jiangxi, Shandong and Hubei provinces, and the Inner ings Ltd., sole distributor of Bayerische Motoren Werke AG cars in Mongolia and Guangxi Zhuang autonomous regions. China, rose 1.65 percent. The plan will add 10 million tons to China’s Dongfeng and Brilliance plunged 9 percent and 7.5 percent, re- annual grain capacity, the ministry, which super- spectively on Dec.24, 2010 after Beijing unveiled measures, includ- vises land use, said. ing limiting the quota for new small passenger vehicles to 20,000 “We need to protect the arable land base for per month in 2011 to ease the city’s chronic traffi c jams and cut pol- grain security while also providing land for eco- lution. nomic development,” Minister of Land and Re- “Some funds have been cleaning their books before year- sources Xu Shaoshi said. end and switching to other high-growth sectors such as consumer “It’s a dilemma. To solve the problem, we need goods,” Wong said. to use land more economically, reduce farmland Analysts turned more cautious and forecast vehicle sales in seizures for industrial and residential use, and try China, the world’s largest auto market, to grow 10-15 percent next all means available to increase our country’s arable year. land area.” “People are more concerned about whether profi t margins will China began improving its farmland’s per- be squeezed if sales growth slows,” he added. (Reuters) unit grain production capacity by upgrading the

FIGURES 5.1% to exceed $2.9 trillion this year, and the country expects its trade and internation- China’s consumer price index (CPI), al payments to be more balanced over the a major gauge of inﬂ ation, rose to a 28- next five years, Minister of Commerce month high of 5.1 percent in November, Chen Deming said on Dec.16, 2010. 2010, the National Bureau of Statistics (Xinhua) (NBS) said on Dec.11. (Xinhua) $100b, $50b $2.9 trillion China’s actual use of foreign direct China’s foreign trade is expected investment (FDI) is expected to rise 11

2 QUOTES ecological environment for cultivation beginning in 2008. The move was made to alleviate food security concerns over China’s inflation ‘reversible’ but ‘warning signal’ shrinking arable land amid the coun- Merrill Lynch economist said on Dec. 14, 2010 that China’s infl ation is re- try’s rapid economic growth and urban- versible but clearly sending a warning signal to avoiding over-heating risk. ization. “Most infl ation so far we see in China is food, which is reversible The government has improved 4 to get better crops next season,” Ethan Harris, head of the Developed million hectares of farmland and turned AEconomics Research in Bank of America Merrill Lynch Global Research, told a press another 1.33 million hectares of reserve conference. land into arable farmland, boosting its “However, it was clearly a warning signal here that we need ongoing tighten- cultivated land productivity by about 10 ing policy even as the Fed and ECB (European Central Bank) sit here on hold,” he to 20 percent, the ministry said. added. (Xinhua) China’s grain output rose 2.9 percent year-on-year in 2010 to 546.41 million tons, marking the seventh con- “China’s portion of world growth in 2010 possibly secutive year of growth, preliminary 20%” fi gures released by the National Bureau Ba Shusong, noted Chinese economist and senior researcher at the Develop- of Statistics earlier this month said. ment Research Center of the State Council, told People’s Daily that a preliminary The country’s grain production area estimate has set world economic growth for 2010 at more that 4.5 percent with 60 also expanded 0.8 percent from a year percent of that coming from the emerging markets. China is expected to contribute earlier to 109.87 million hectares, the 20 percent, while the G3, namely the United States, the European Union and Japan, bureau said. will generate 25 percent. (People’s Daily) Food security remains a major government concern as the country’s arable land continues to shrink amid rapid eco- “China to promote auto imports in next five years” nomic growth and urbanization while China will actively promote auto imports over the next fi ve years to help the its population keeps expanding. country restructure and upgrade its auto industry, a Chinese offi cial from the Minis- Provincial governments have been try of Commerce (MOC) said on Dec. 26, 2010. urged to conserve 120 million hectares Qian Jingfen, an offi cial in charge of imports at the MOC’s Industrial Depart- of arable land nationwide by 2020, be- ment, told an auto imports forum in Beijing that the auto import-promotion strate- cause farmland shrinkage is threatening gy will be implemented during the 12th Five-year Plan period (2011-2015) through grain production. corresponding fi nancial, taxation and trade policies. “Our country must hold tightly to Qian said China will encourage the imports of advanced auto equipment, the bottom line of 120 million hectares key technologies and components of energy-saving and new-energy vehicles in the of arable land,” Xu said. “This is the life- period. (Xinhua) line of food security for our 1.3 billion people.” (China Daily)

FIGURES percent to some $100 billion in 2010 and totaled $216.6 billion in the 2006-2010 0.5 percentage points from October, the China’s outbound investments on the in- period, exceeding the government’s tar- China Federation of Logistics and Pur- ternational market are expected to exceed get 3.6 times, the Minister of Commerce chasing said on Dec.1, 2010. (Xinhua) $50 billion in 2010, said Chen Deming, (MOC) Chen Deming said on Dec.25, China’s minister of Commerce, on Dec.22, 2010. (Xinhua) 13.3% 2010. (People’s Daily Online) 55.2% China’s industrial value-added out- $216.6b put year on year growth quickened to 13.3 The Purchasing Managers Index percent in November from 13.1 percent in China’s outbound overseas direct in- (PMI) of China’s manufacturing sector October, the National Bureau of Statistics vestment (ODI) to non-ﬁ nancial sectors rose to 55.2 percent in November, 2010, up (NBS) said on Dec. 11, 2010. (Xinhua)

3 WHAT’S ON? China strengthens regulation on foreign property tainable, low-carbon and green development and investment will never repeat developed countries’ old path of high energy consumption and unlimited emissions, China is tightening regulation on foreign investment in the real estate sec- China’s climate chief negotiator said on Dec. 23, tor to crack down on speculation, according to a statement from the Ministry of 2010. Commerce (MOC) on Dec. 23, 2010. China still has a large population living in The ministry urges local authorities to increase checks and supervision on poverty and it is confronted with a lot of chal- property investment that involved foreign investors and strengthen risk controls lenges, such as the reduction of poverty, improv- on the sector, said the statement posted on the MOC web site. ing living standards and responding to climate According to the statement, foreign-funded developers are not allowed to change, Xie Zhenhua, head of the Chinese delega- make profi ts through buying and reselling real estate projects, which will be strict- tion, said at an open plenary during the UN Cli- ly monitored by the MOC along with the Ministry of Land and Resources and the mate Conference. State Administration of Foreign Exchange. “However, such challenges also provide oppor- The ministry also required local authorities to tighten scrutiny over foreign- tunities for countries like China to transform the funded investment companies and not to allow those companies to enter the real pattern of its economic growth,” he said. estate businesses, while closely examining the exact amount of foreign funds The Chinese government in 2009 announced used in new real estate projects. its mitigation actions, aiming at reducing carbon di- Foreign direct investment (FDI) into China’s property sector jumped 48 per- oxide emissions per unit of gross domestic product cent to $20.1 billion in the fi rst eleven months of this year, compared to a 17.73 by 40 to 45 percent from 2005 levels by 2020. percent growth in the total FDI in the same period, according to earlier MOC data. “Achieving these targets will require tremen- China introduced a group of measures to crack down on property market dous long-term efforts,” Xie said. “China will adopt speculation and rein in skyrocketing home prices since the beginning of this comprehensive policies to slow down the speed of year, including prohibiting the issuance of mortgage loans for third home pur- emission growth, and strive to reach emission peak chases and raising down-payments. as soon as possible.” The government is also guarding He also put forward several suggestions for the against possible “hot money” inflows conference: maintaining the UN Framework Con- that might complicate China’s policy to vention on Climate Change (UNFCCC) and Kyoto fi ght infl ation. Protocol the basis for negotiations; continuing to Property prices in 70 major Chi- work toward the objective of achieving common nese cities rose 0.3 percent in No- development; continuing to strength cooperation as vember, 2010 month on month, and a means to address climate change. 7.7 percent year on year, according He also called on Annex I Parties (the indus- to the National Bureau of Statistics. trialized countries plus those countries with econo- (Xinhua) mies in transition) to the Kyoto Protocol to make efforts to accomplish emissions reduction targets China to transform identifi ed in the fi rst commitment period and make pattern of growth further commitment on the substantial emissions reduction targets in the second commitment period. China will stay the course of sus- Non-Annex I (whose members are mostly de- FIGURES

43% 55%

Profits of China’s State-owned It is predicted that in the year 2010, enterprises (SOEs) in the first 11 55 percent of all crude oil in China months hit 1.81 trillion yuan ($271.92 would be imported from overseas, said billion), up 43.1 percent year-on-year, the Beijing News on Dec. 23, 2010, ﬁ gures released on Dec. 17, 2010 by citing information from the National the Ministry of Finance (MOF) show. Development and Reform Commission (Xinhua) (NDRC). (Global Times)

4 QUOTES veloping countries) developed countries “Chinese gov’t confident of keeping should make comparable promise under inflation in check” the UNFCCC and developing countries should also take voluntary adaptation With a series of measures being adopted to curb price and mitigation actions within their ca- spikes, the Chinese government is confi dent of keeping prices pacity, he said. at a reasonable level, Premier Wen Jiabao said on Dec. 25, The UN Climate Change Confer- 2010. ence, running from Nov. 29 to Dec. 10, “Infl ation expectations are more dire than infl ation itself,” 2010 in the Mexican resort city of Can- Wen said, urging people to remain confident and government cun, aims at fi nding solutions to global agencies to act to stabilize prices. climate change. (Xinhua) The premier made the remarks while answering a listener’s question during a radio broadcast by China National Radio. China exempts consumption The consumer price index (CPI), a main gauge of infl ation, rose to a 28-month high taxes on biodiesel of 5.1 percent year on year in November, according to government statistics. The overall price level, especially of major consumer goods, has now begun to China exempted consumption taxes drop, Wen said. (Xinhua) on pure biodiesel made from waste animal fats or vegetable oils, according to “China ‘doing right thing’ in raising interest rate to curb the Ministry of Finance (MOF) and the inflation” State Administration of Taxation. The new policy is effective from Financial expert Jim Rogers said on Dec. 7, 2010. that China’s Central Bank was Jan. 1, 2009 and taxes already paid doing the right thing by raising interest rate to curb infl ation in China right now. will be refunded, the MOF said in an “As we may all know that China is facing serious infl ation problems. However, announcement on its website on Dec. the Central Bank of China is doing the right thing to curb the infl ation by raising in- 24, 2010. terest rate and commercial banks’ required reserve ratio,” Jim, chairman of Rogers The move is aimed at boosting the Holdings, told Xinhua at a press conference held by Thomson Reuters. (Xinhua) renewable resources sector, easing demand for petroleum and protecting the “Chinese economy’s biggest challenge is economic ecological environment, the announce- restructuring” ment said. The move is expected to save biod- A well-known economist said on Dec. 6, 2010 that the biggest problem in iesel producers about 900 yuan (135.14 China is not infl ation, but shifting its economic structure to maintain sustainable U.S. dollars) per tonne. growth. It is expected to make the biodiesel “The biggest challenge faced by China is economic restructuring in order to shift producers more competitive in the fuel the economy to a more balanced way that will provide sustainable economic growth,” sector and guard against waste edible Stephen Roach, former chairman of Morgan Stanley Asia, told Xinhua. oils being reused for human consump- “In the post-crisis environment, the shift means to build a consumer-led econo- tion so to ensure food safety, the an- my, and that is the overriding challenge in China,” said Roach, who currently serves nouncement said. (Xinhua) as non-executive chairman of Morgan Stanley Asia. (Xinhua) FIGURES 18.7% rose 24.9 percent in the first 11 months Dec. 16, 2010 by the National Energy year-on-year to hit 21.07 trillion yuan Administration (NEA). (Xinhua) China’s retail sales of consumer ($3.19 trillion), China’s statistics author- goods grew 18.7 percent in November ity said on Dec. 11, 2010. (Xinhua) $6.5b year-on-year, the National Bureau of Statistics (NBS) said on Dec. 10, 2010. 5.36% China topped globally in sales (Xinhua) volume of luxury goods in 2010, with China’s power consumption in No- its citizens spending over $6.5 billion, 24.9% vember stood at 346 billion kilowatt- according to the China News Agency hours (kwh), up 5.36 percent year on citing information from Goldman Sachs China’s urban fi xed asset investment year, according to a statement released on on Dec. 23, 2010. (Global Times)

5 2011 No.494

REGIONAL TRADE AND INVESTMENT 08 ASIA-PACIFIC 12 EUROPE 16 NORTH AMERICA 20 LATIN AMERICA 24 AFRICA

Special report 30 2011, First Year of China’s 12th Five Year Plan

The China’s 12th Five Year Plan promises that 2011 to 2015 32 Chinese Economy Will Keep A High and Stable 30 will focus on solving China’s economic bottlenecks, as well Growth Rate as raising incomes. 36 Foreign Trade Trends in 5 Years 38 In 2011, What to Invest? 40 Continue to Lead Global IPO Activity in 2011 42 A New Phase in Economic Growth

ECONOMY 44 China’s Recent Fight Against Inflation 46 Trade and the Crisis: Protect or Recover

INDUSTRY 52 RMB 800,000 Cash Deposit: Game Between Qualification and Capital Nowadays with the homogenization of several technologies, 56 a sense of creativity and design ability is becoming the key 54 Green Everywhere for business innovation. 56 Cultural Creativity Booms at ICCIE 58 Realizing Dreams in Games

Technology 62 EPA Plans Greenhouse Gas Emission Standards

SURVEY

64 Foreign Brands of Consumer Electronics in China

COVER STORY 68 Lau Kin Tung: Duilds A Rising Pharmaceutical Beijing’s hutongs, the lanes or alleys running between Firm with Innovation and Entrepreneurship 78 the siheyuan in the oldest parts of Beijing have been well preserved. They give a wonderful glimpse into the world of yesterday’s Beijing, here you can see evidence of the history Case Study of Beijing, experience the old ways of life and experience 71 Outlook for the Establishment of China’s traditional Beijing culture. International Board

Lifestyle 74 Fuego! — Carmen Mota’s First China Tour Sponsored by (主管) CCPIT(中国国际贸易促进委员会)

THIS IS China Published by (主办) Trade Development and Cooperation Center of CCPIT 78 In the Hutongs Exploring Beijing 中国国际贸易促进委员会贸易推广交流中心

InfoRMANTION 社长 President 杨晓东 Yang Xiaodong 总编辑 Editor-in-Chief 王晓同 Wang Xiaotong 82 Investment Projects in Western China 副社长 Vice President 石净 Shi Jing 副总编辑 Vice Editor-in-Chief 孟燕星 Meng Yanxing 84 China Fairs & Expos 编辑部副主任杨蔚 86 China Market Suppliers List Editorial Deputy Director Yang Wei 编辑部 Editorial Department 郭艳 Guo Yan Tel:86-10-68053271 李振 Li Zhen EYE ON CHINA 阎漫漫 Yan Manman 88 Why Many Chinese Look Unhappy? 竹子俊 Zhu Zijun 英文校审 English Polisher 泰瑞·克兰丹农(美) TY Clendenen

BIZ TIPS 经营部总经理石净（兼） Marketing Department Director Shi Jing 90 Q&A for Foreign Business Practice in China 副总经理 Deputy Director 白义峰 Bai Yifeng 石林峰 Shi Linfeng 项目经理 Manager 游万龙 You Wanlong Culture Tel:86-10-88075934 李小冬 Li Xiaodong 88075494 丁秋珍 Ding Qiuzhen 92 Chinese Zodiac 高嵩 Gao Song

推广部总经理李英宏 Distribution Department Director Li Yinghong 项目经理 Manager 王石 Wang Shi Index of Advertisement Tel:86-10-88075342 王岱凌 Wang Dailing 理事会副秘书长兼秘书处主任杨复强封二 Guangzhou Baiyun Hotel Council Secretariat Director Yang Fuqiang 白云酒店联络专员 Assistant 刘晓东 Liu Xiaodong 01 China National Electric Apparatus Research Institute Tel:86-10-88075380 宋华峰 Song Huafeng 中国电器科学院戚英杰 Qi Yingjie 石林 Shi Lin 28-29 China FAW Group Corporation 王飞 Wang Fei 中国第一汽车集团公司 43 China Tianlunzhile Science & Technology Co., Ltd. General Distributor For Overseas Subscribers 天伦之乐科技有限公司国外发行总代理 96-封三 Shaanxi Automobile Group Co., Ltd. China National Publications Import & Export(Group) Corporation 陕西汽车集团有限责任公司中国图书进出口(集团)总公司 Add: 16, Gongti East Road Beijing, China 封底 Anhui Jianghuai Automobile Co., Ltd. 江淮汽车 Post Code:100020 地址：北京市朝阳区工体东路16号 Tel: 86-10-65066688-8822 65063082 China International Book Trading Corporation 中国国际图书贸易总公司(GUOJISHUDIAN) Statement Add: Box 399, Beijing 100044, China 地址：中国北京399号信箱(100044) From January 2011, Issue No.1/494 of China's Foreign 国内邮发代号 80-799 Trade magazine is to be altered into monthly-published magazine 国际邮发代号 SM1581 with richer content (96 pages for each issue) for the same price 国内统一连续出版物号 CN11-1020/F 及国际标准刊号 ISSN0009-4498 (RMB 16/US$5 per issue). Subscription is welcome. We sincerely AD LICENCE No. JXGS/G-0249 appreciate your continuous support to CFT. 广告经营许可证号京西工商广字第0465号 Domestic Price 国内订价 16元(RMB) China's Foreign Trade Editorial Department Overseas Price 国外订价 US$5 设计制作北京锋尚制版有限公司印刷北京瑞禾彩色印刷有限公司 Cooperation Media 常年法律顾问北京市天银律师事务所

License Mark of General Administration of Press and Publication, the People’s Republic of China TRADE SIA-pACIFIC

A Nepal, China sign MoU for promotion of trade

A Memorandum of Understand- He called on the Chinese counterparts, especially from the CCPIT to grab ing ( MoU) has been signed between the opportunity. the Confederation of Nepali Industries Similarly, speaking on the occasion Chinese Ambassador to Nepal, Qiu Guo- (CNI) and China Council for Promo- hong, said that business community and businessmen from both China and Nepal tion of International Trade (CCPTI) in brainstormed solutions to achieve common development to survive the global eco- Nepali capital Kathmandu in Decem- nomic recession last year. ber of 2010. “The two governments worked out policies and measures to promote bilateral Acting President of the CNI Na- economic cooperation and trade,” he said. rendra Kumar Basnyat and Chairman Ambas- of the CCPIT Wan Jifei signed the sador Qiu Guo- MoU. hong said, “Chi- Speaking at the program, Chief na’s policy to Guest and Minister of State for Com- offer zero- tariff merce and Supplies Saroj Yadav em- treatment to phasized on the need for strengthening Nepalese com- the ties between Nepal and China. modities means Likewise, Narendra Basnyat, that China’s Acting President of the CNI said that market is open the visit of CCPIT has opened a new to Nepal.” avenue of bilateral relations and added “China- to the existing goodwill between Nepal Nepal trade and China. volume in the “This kind of high level visit and first ten months exchange of ideas will strengthen our of this year has ties and help to build confidence at a exceeded 257 great level, ” he said. million USD, “The CCPIT, being an apex busi- registering an ness organization of China, deserves increase of 76 its own role in trade and investment as percent compared to the same period last year,” he informed. well as bilateral relations,” Basnyat fur- Similarly, Wan Jifei, Chairman of the CCPTI who is also leading the 60- ther emphasized. member business delegation from China to Nepal, said that the economic ties be- Highlighting the prospect of Chi- tween Nepal and China have maintained momentum in the recent years. nese investment in Nepal, Basnyat said, “China and Nepal share common trade interests,” he said. “There are prospects for investment in “Nepal has many potentials in the agriculture, hydropower and tourism sec- Nepal for the Chinese side such as hy- tors, thus, we are encouraging Chinese companies for investments in Nepal,” he dropower projects, construction, phar- said. maceuticals, minerals, cement, educa- He also proposed the idea of establishing Trade Areas and Special Economic tion and tourism.” Zone for further enhancement of trade relations. (Xinhua)

China-Vietnam trade up 42.4% in first 10 months: official

Trade volume between China and Vietnam in the first 10 months climbed tween SMEs of both countries in an APEC 42.4 percent from a year earlier to 23.12 billion U.S. dollars, a Chinese official said ministerial meeting in 2006, SMEs from on December 28, 2010. both countries have become more involved in Zhu Hongren, chief engineer of China’s Ministry of Industry and Informa- the bilateral trade, according to Zhu. tion Technology (MIIT), said at a China-Vietnam trade seminar that the trade Among the five China Economic growth was pushed up by intensified exchanges between small and medium-sized and Trade Cooperation Zones that enterprises (SME) of both countries. China established in ASEAN countries, Since China and Vietnam signed a memorandum of understanding on the cooperation be- two are located in Vietnam. (Xinhua)

8 A

INVESTMENT SIA-pACIFIC

China Huaneng buys power generation assets from Indian GMR

China’s top power generation erlands, Mexico, the Philippines and as a more efficient and strong power company China Huaneng Group will Australia with overall gross operational producer and we believe that China spend 1.232 billion U.S. dollars buying capacity of 8,148 MW. Huaneng will be an ideal partner in the 50 percent stakes of U.S.-based power GMR said the transaction re- next phase of InterGen’s growth.” generation firm InterGen N.V. from quires customary regulatory approvals GMR Group purchased 50 percent Indian infrastructure developer GMR from above-mentioned countries as well stakes of InterGen in October 2008 at Group. as China and is expected to wind up the price of 1.135 billion U.S. dollars. GMR said the purchase of assets the deal in the first half of 2011. Headquartered in Bangalore, will help China Huaneng tap power G. M. Rao, chairman of GMR GMR Group deals with airports, ener- generating assets in the UK, the Neth- Group, said the decision to divest shares gy, highways and urban infrastructure in InterGen falls in line with company businesses and has 14 power projects strategy to focus on Indian market and operational or under construction. GMR Group could hence deploy more InterGen has 12 power plants scat- China boosts South capital and management resources on tered in several countries and Ontario Korean bond holdings domestic investments. Teachers’ Pension Plan holds the other Rao said: “InterGen has emerged 50 percent of InterGen shares. (Xinhua) China boosted its holdings of South Korean bonds in December in 2010, even as lawmakers in Seoul reinstated a tax on Singapore opens overseas center in China’s interest income from debt securities. China’s net purchases of Korean Treasury notes totaled 444 billion won Hubei to explore business opportunities ($395 million), 23 percent more than in Singapore’s pro-trade agency International Enterprise (IE) Singapore in the end of December 2009, South Korea’s Finan- November of 2010 opened its 10th Overseas Center (OC) in China’s Hubei province. cial Supervisory Service said. Based in Hubei’s capital city Wuhan, the new OC will focus efforts on Cen- The addition more than tripled Chi- tral China, in particular Hubei, Hunan and Jiangxi provinces. na’s holdings of South Korean fixed-income The center will bring IE Singapore and Singapore Economic Development securities to 6.57 trillion won at the end of Board under one roof to facilitate trade and investment activities. last year. Net outflows by overseas investors It will assist Singapore-based companies to explore business collaborations and were a record 5.3 trillion last month. opportunities with the Chinese enterprises, help increase in-market knowledge of “China was a net investor every these companies as well as to build networks with the local governments and busi- month last year,” the statement said. nesses. It will assist Chinese companies to explore international operations from Sin- “We believe the record net outflows gapore, and help increase the companies’ familiarity of the international marketplace. came from several factors, including the “The establishment of the Singapore Center in Wuhan is timely,” said Sam passage of a foreigner bond tax, the Eu- Tan, Singapore’s Senior Parliamentary Secretary for Trade & Industry, and In- ropean debt crisis, a stronger dollar and formation, Communications & the Arts, “Singapore- based companies have the year-end position adjustments.” relevant expertise and experience to share and contribute to the developing needs of South Korea’s parliament passed a Central China in various industries,” he added. bill in December that revived a tax of as In 2009, there were a cumulative number of 287 Singapore projects in Hubei much as 14 percent on interest income from with cumulative actual investments reaching 770 million U.S. dollars. Singapore’s treasury and central-bank bonds and a 20 actual foreign direct investments into Hubei amounted to 138 million U.S. dollars. percent levy on capital gains from their sale. IE Singapore currently has Overseas Centers located in China’s Beijing, Chengdu, Officials from Latin America to Chongqing, Dalian, Guangzhou, Hong Kong, Qingdao, Shanghai and Xi’an. (Xinhua) Asia have tried to slow fund inflows and curb gains in their currencies since last year to protect exporters. China is considering allocating more wrote in a commentary published on South Korean bonds fell for a fourth of its $2.65 trillion foreign-exchange China Daily on Dec 30. day on Thursday. The yield on the 4 reserves to emerging-market currencies China increased its holdings of US percent notes due in September 2015 in- to boost returns, central bank Governor Treasuries for a fourth month in Octo- creased seven basis points to 4.27 percent Zhou Xiaochuan said in October. ber to $906.8 billion, Bloomberg data as of 1:25 pm on Thursday in Seoul, the The nation should expand invest- show. The nation bought a net 262.5 highest level since Aug 18. A basis point ment of its reserves in bonds and stocks, billion yen ($3.1 billion) of Japanese is 0.01 percentage point. The won rose 0.2 Zhang Monan, an economics research- bonds in October, Japan’s Ministry of percent to 1,123.95 per dollar. er with the State Information Center, Finance said on Dec 8. (China Daily)

9 TRADE

SIA-pACIFIC Chinese company gets permission to build cement factory in Suva A

Fiji’s Minister for Lands and ister Commodore Voreqe Bainimara- reported that Tengy had been given Mineral Resources Netani Sukanaivalu ma’s invitation to set up business in Fiji permission by the Fiji government to on Thursday formalized a 99- year lease after several trips he made to China, it conduct studies on the establishment agreement for a Chinese cement factory was reported. of a wind power generation plant in to be set up in Veisari Lami outside Sukanaivalu said he was particu- Fiji. Suva on December 30, 2010. larly pleased that the Fiji government The Tengy group of companies Sukanaivalu told local media that has stood true to its commitment to said they would provide environmental the Tengy Cement Company Limited facilitate the request from foreign in- protection industries while investing in was given consent by the state to secure vestors in the shortest possible time and Fiji. (Xinhua) the 99-year lease to build the country’s within reasonable cost. second cement factory. Under the agreement, the new 40 This move has been welcomed in million Fiji dollars (21.6 million US the island nation as they anticipate a dollars) factory is expected to serve Fiji Southern Airline decrease in the price of cement for the and the Pacific and reduce costs for construction of affordable homes, he home construction through competitive to start flights to New said. pricing of cement. Tengy is one of the first Chinese In August 2010, the state owned Zealand companies to accept Fijian Prime Min- radio Fiji Broadcasting Commission China Southern Airlines will begin flying to Guangzhou from Auckland three times a week from next April. Trade pact between Hong Kong SAR, Auckland Airport made the announcement at a news conference in New Zealand to be effective on Jan. 1 December 2010. China Southern Airlines will run The Hong Kong, China - New Zealand Closer Economic Partnership three flights between the cities (via Mel- Agreement (CEP Agreement), which is tantamount to Hong Kong’s first free bourne) each week, offering 88,000 more trade agreement with a foreign economy, will enter into force on Saturday, a seats annually than are currently available. spokesman of the Hong Kong Special Administrative Region government said Auckland Airport’s chief executive on December 31, 2010. Simon Moutter said better connections to The CEP Agreement, signed on March 29, 2010, covers a wide range of the city are critical for trade and tourism. areas of mutual interest to Hong Kong SAR and New Zealand, including lib- He expected the new services to inject eralisation measures in both trade in goods and services. NZ$50 million ($37.5 million) into New Under the CEP Agreement, New Zealand will phase out over six years its Zealand’s local visitor economy alone. import tariffs on all goods originating in Hong Kong. Over 90 percent of New The service is due to start by April Zealand’s tariff lines will become duty free within two years after the CEP 30, 2011. (Xinhua) Agreement has entered into force. On trade in services, Hong Kong service providers and the services they provide will enjoy secured preferential opportunities in the New Zealand market in a variety of service sectors. In terms of market access, Hong Kong service providers and the services they provide in a wide range of sectors will be treated no less favorably than their New Zealand counterparts in similar circumstances. To facilitate movement of business persons, without compromising le- gitimate immigration control, business persons of the two economies in the categories of business visitors, intra- corporate transferees, and installers or servicers in specified service sectors will be granted temporary entry into Hong Kong SAR and New Zealand under favourable conditions. To further enhance bilateral investment flows, the two sides have also agreed to negotiate an Investment Protocol to the CEP Agreement, with a view to concluding the investment negotiations in two years after the CEP Agree- amounted to 6.5 billion and 3.7 bil- ment has entered into force. lion HK dollars respectively. (1 U. S. New Zealand is an important trading partner of Hong Kong in the Asia- dollar is equivalent to 7.774 HK dol- Pacific region. In 2009, the total bilateral merchandise and services trade lars). (Xinhua)

10 A

INVESTMENT SIA-pACIFIC

China’s shipping company taps into Turkish market

China Ocean Shipping (Group) CO has become an important player in there has been good synergy between Company (COSCO), China’s largest the shipping market of Turkey. COSCO and the Marti Container shipping group, has been strengthening Zhang Zhiliang, former Chinese Services S.A., which has a good under- its foothold in Turkey since entering the consul-general in Istanbul and new standing of the local market. market in 1996. Chinese Ambassador to Qatar, said the The COSCO staff always listen COSCO, which owns and con- COSCO Turkey office has acted ac- to the advices of their partners before trols over 800 modern merchant vessels cording to the Turkish law, respected they making a decision or judgement with an annual carrying capacity of 400 working partners in Istanbul and and act in a fair and reasonable way, he million tons, offers container liner ser- brought their advantages into full play. said, noting that COSCO’s success in vices in major Turkish ports, including The office has set a good example Turkey was based on the Chinese cul- Istanbul, Izmir and Mersin, and pro- for the cooperation between Chinese ture, etiquette and ethics shown in its vides ship agency for bulk cargo carriers and Turkish companies, he said. interaction with the Turkish side. at all Turkish ports. Erdal Tokcan, vice chairman and “I hope we can foster closer co- With a 13 percent share in Turkey’s general manager of Turkey’s Marti operation with COSCO in future,” he container transportation market, COS- Container Services S.A., once said that said. (Xinhua)

China energy giant China, DPRK upgrade hydropower station on CNOOC signs gas deal border river with Australia’s Exoma A planned explosion blasted apart a dam spanning the Yalu River, a border river Energy between China and the Democratic People’s Republic of Korea (DPRK), on December 28 in 2010 as work crews Australia’s Exoma Energy Ltd has from the two countries signed an agreement with Chinese energy race to upgrade a dilapi- giant China National Offshore Oil Cor- dated hydropower station. poration (CNOOC) to sell a 50 percent The blast success- interest in its gas exploration permits in fully tore down the 273- Queensland’s Galilee Basin, the Brisbane meter back-up dam to based oil and gas exploration company Shuifeng hydropower announced on December 9 in 2010. station and enabled Under the agreement, an Austra- engineers to finish the lian subsidiary of China National Off- renovation project on shore Oil Corporation (CNOOC) will time — or by June acquire an equal interest in five permits next year, said officials in by spending 50 million AU dollars charge of the project. (49.34 million U.S. dollars) on explora- Shuifeng hydro- tion and appraisal. power station was built CNOOC also has the option to more than 70 years ago acquire 86.6 million ordinary Exoma and remains till now the shares at 31.5 AU cents (31.1 U.S. largest hydropower sta- cents) per share and a free attaching option on the Yalu River. The dam can hold up to 14.7 billion cubic meters of water. tion for further ordinary shares expiring It has generated more than 260 billion kw/h of electricity since China and the Dec. 31, 2012. DPRK co-launched a power company to operate the hydropower station in 1955, The agreement and options are official data shows. The generated electricity is shared by the two countries. subject to approval from the Queen- The renovation project started in August 2009. (Xinhua) sland government and Chinese Gov- ernment Authorities and the Foreign Acquisitions and Takeovers Act. Exoma’s Chairman Mr Brian Barker said, “It is a very positive endorsement that CNOOC, a world leader in the petroleum industry, shares our technical and commercial assessment of the resource potential of Exoma’s Galilee Basin permits.” The China National Offshore Oil Corporation (CNOOC) was founded in 1982 and is one of the largest state owned oil entities in China, as well as the largest offshore oil and gas producer. (Xinhua)

11 TRADE

e urop As Europe continued its recovery E from the global economic crisis, Chi- China-EU economic ties boosted in 2010, na-EU economic and trade relations were further boosted in 2010. Despite great potential ahead trade frictions and disputes, officials and businesses saw great potential in steadily in volume and expanded ing economy like China, which is in future ties. to various sectors. China’s statistics a crucial economic transformation Latest data from EU statistical showed that the EU invested US$5.1 period trying to readjust its industrial bureau Eurostat showed that from billion in China in the first 10 set-up and foster the development of January to September of 2010, the months of 2010. high-tech and high value-added in- EU's exports to China reached 82.3 EU businesses are widening dustries,” Wan said. billion euros (US$107.8 billion), up their investment from the traditional Bernard Dewit, chairman of by 39 percent compared with the manufacturing sector to such sec- Belgian Chinese Chamber of Com- same period in 2009. And the EU's tors as service and risk investments. merce, said he looked forward to the imports from China grew by 30 per- China’s direct investment in Europe expanding of economic ties between cent, standing at 204.5 (US$267.8) grew by more than five times in the Europe and China. Dewit hoped billion euros. first three quarters of 2010 and more more and more Chinese companies According to statistics from Chinese companies are looking to in- would come to Europe, opening the China, during the first 10 months vest in Europe. European market for their products of 2010, China-EU trade reached Wan Jifei, chairman of the and creating more jobs for Europeans. US$433.9 billion, gaining by 33 per- China Council for the Promotion of Europe could make advantage of cent compared with the correspond- International Trade (CCPIT), said China's enlarged consumer market, ing period of 2009. The figure is 10 during a business summit held in adjustment of industrial structure, percent higher than that of the same Brussels that China and Europe had commitment to developing green period in 2008, before the interna- entered a new era of trade coopera- economy, and China’s science and tional financial crisis broke out. tion with great prospects for further technology advancement, said Song Besides the increase in trade, expansion after decades of efforts. Zhe, head of the Chinese mission to two-way investment also grew “Europe is important to an emerg- the EU. (Xinhua Net)

China, EU to raise high-tech co-op

Economic and Trade Dialogue in Bei- submitted it to the European Com- jing, according to the Xinhua News mission, and China hopes the EU Agency on December 21. will end investigations into the com- The two sides agreed to enhance plaint. cooperation in technology trade and Hu Ronghua, a professor of eco- convene the first meeting of the China- nomics at Fudan University, said that EU High-Tech Trade Working Group complaints of dumping have always as soon as possible. They also agreed to been a problem in bilateral trade be- improve cooperation in trade, invest- tween China and Western countries. ment, innovation and customs areas, “To work toward their recognition Xinhua quoted Wang as saying. of China’s market economy would be “The EU side agreed to enhance the best solution. Only in this way can communication with the Chinese side our products’ prices not be compared for early recognition of China's market to those of other nations with different economy status,” Wang said. costs, usually higher, which is vital when The EU launched an investiga- being decided whether it is dumping,” tion in September into a complaint that Hu said. China had been dumping wireless wide- However, Hu added that besides area networking modems with radio the fact that China still has some work antennas, providing Internet protocol to do before being recognized as a mar- China and the EU reached an data connectivity for computers. ket economy, such as on well-enforced “important consensus” on high technol- During the talks, Commerce intellectual property rights, simmering ogy trade, Chinese Vice Premier Wang Minister Chen Deming said Chinese debt problems within the eurozone are Qishan said at a joint press conference and European companies had reached also making the EU more protective. after the third China-EU High-Level a basic agreement on the dispute and (Global Times/Agencies)

12 INVESTMENT E urop e

Far East, in the areas of which the Longest passenger railway connecting economic and trade ties between the two countries are also the most robust. Russia, NE China opens Particularly, the “Outline on Coopera- tive Development Plan between China’s An 866-kilometer-long passen- operate a round trip twice a week dur- Northeast Region and the Russian Far ger railway connecting Changchun in ing the initial stage, on Mondays and East” issued by the governments of the northeast China’s Jilin Province and Saturdays respectively, and its frequency two countries in 2009 has injected new Vladivostok in Russia officially opened will be adjusted according to the num- energy into the economic cooperation on November 26, making it the longest ber of passengers in the future. between northeastern China and the transportation route between northeast Vladivostok, which is located at Russian Far East. China and Russia. It will help promote the border area among Russia, China, Yu Tiejun, director of the Interna- the trade and tourism cooperation be- and North Korea, is Russia’s largest port tional Land Transportation Manage- tween areas of both countries along the city on the Pacific Ocean and is one of ment Department of Jilin Provincial way. the earliest Russian cities to conduct Transportation Bureau, said that the The railway is 574 kilometers long cross-border barter trade with China. A passenger railway line from Changchun in China and 292 kilometers long in large number of Chinese businessmen to Vladivostok will become a major Russia. With a travel time of about 16 used to go to Russia to exchange Rus- portal for the opening of northeastern hours and 30 minutes, the train stops sian commodities, such as razors and China to Northeast Asia. It will also at China's Changchun, Hunchun, and telescopes, with Chinese commodities, play a positive role in advancing the de- Hunchun Port, Russia’s Kraskino Port such as clothing and cosmetics. velopment of economic, trade and tour- and Vladivostok, as well as some other There is a long border between ism sectors in areas along the railway places in both countries. The train will northeastern China and the Russian line. (People’s Daily Online)

Dutch giant opens China's 1st foreign- owned consumption financing service

Home Credit Consumer Finance Co., Ltd., China’s first wholly foreign- owned consumption finance enterprise approved by the China Banking Regu- latory Commission, was established in the Tianjin Economic and Technologi- cal Development Zone on December 1. released by the China Banking Regula- tion means that China’s financial sector This corporation is exclusively tory Commission. The establishment of has opened further to foreign investors. owned by the Holland-based PPF the Dutch consortium’s China opera- (People’s Daily Online) Group and its registered capital stands at 300 million yuan. It will provide un- 2nd phase of China-Kazakh pipeline begins secured mass consumption loans in the Tianjin region. This signifies that China’s construction first batch of four approved consumption finance enterprises established in Beijing, The China National Petroleum said CNPC, the project’s leading op- Shanghai, Chengdu and Tianjin have all Corp on December 22 disclosed con- erator. been put into operation so far. struction for the second phase of the The first phase of the pipeline was Consumption finance enterprises China-Kazakhstan gas pipeline has completed in 2009. are non-bank financial institutions that begun in Kazakhstan. The CNPC said the construction do not absorb public deposits. Instead, The second phase of the pipe- of the Beyneu-Shymkent gas pipeline they provide Chinese citizens with loans line, from Beyneu to Shymkent, has will help meet the energy needs and for consumption based on the principle a length of 1,475 kilometers, with a assist in the economic and social devel- of grants with petty amounts, accord- designed annual capacity of 10 billion opment of south Kazakhstan, as well ing to the “Management Approach for cubic meters. Its actual capacity is ex- as raise gas exports to China. (Shanghai Consumer Finance Enterprise Pilot” pected to hit 15 billion cubic meters, Daily)

13 e urop E Sino-UK Cooperation in Key Sectors

By UKTI

Automotive Environment and water The UK automotive sector is worth over £11 billion to the economy and The UK’s environment and water accounts for 10% of total UK manufactured exports producing more than 2 mil- sector has a market value of £25 billion lion automotive engines in 2009. Eleven of the world’s volume vehicle manufac- per year and a reputation for delivering turers have a UK presence, supported by 19 of the world’s top 20 suppliers. More world-leading capabilities and outstand- than 25,000 world-class engineers are employed in the UK’s motorsport valley ing low carbon solutions and services. The putting the UK at the forefront of innovation in the automotive sector. UK is the world's sixth largest environ- The UK is home to Shanghai Automotive Industry Corporation’s (SAIC) ment goods and services market, with new automotive design centre at Longbridge, Birmingham and Chang’An Au- strong opportunities for investors in ultra- tomobile’s £20 million research and development centre at Nottingham Science low carbon vehicles technologies, carbon Park. capture and storage, and offshore wind. In 2009, China decisively overtook the USA as the world’s number one In the next 10 years, China will automotive market. Total vehicle sales in China reached 13.6 million. It is es- face the increasing pressure of environ- timated that China would have sales of 17 million units in 2010. China is a mental protection and control due to market of significant opportunity for the automotive industry - not least in the continuing development of urbanisation development and introduction of new energy technologies. China aims to have and industrialisation. The central gov- 500,000 new energy vehicles on the roads in the next three years and green cars ernment has set the following key goals: will account for 5% of total passenger car sales. * Water pollution treatment and China has also started subsidising new energy vehicles to help boost mar- control, with priority on safe drinking ket demand. It aims to be the world's largest new energy vehicle market by 2020 water and key river basin treatment with 5 million cars and to sell over 15 million units of the most fuel-efficient * Urban pollution treatment and vehicles in the world annually by then. control, with the focus on urban waster- Closer cooperation between UK and Chinese industry can be built on the water treatment and solid waste treatment UK’s strengths in providing advanced technology for premier brands. Airports Link 1 UK has established working relationships with the Civil Aviation Author- ity of China (CAAC). An airports sub working group under the JETC Avia- Chinese Investment in tion Working Group meets annually to discuss activities and projects of mutual UK interest such as environmental impact at airports. UK companies’ successes in * China is now the UK’s 6th China include: largest investor (by number of proj- * Beijing Terminal 3 - designed by Foster + Partners with Arup, Vector ects) Management and Davis Landon * There are more than 400 * Kunming Airport Terminal - designed by Arup Mainland Chinese companies al- * Chongqing Airport Terminal - designed by Llewellyn Davis architects ready in the UK. and Arup * UK is the No. 2 destination * Changsha, Xian and Yinchuan for Chinese investment into EU. Airport Terminals - designed by At- * There are 7 Chinese compa- kins nies listed on the main board with The JETC sub-group has also a market value of £13.8 billion. facilitated a MoU between the Univer- * There are 46 Chinese com- sities of the CAAC and Manchester panies listed on the Alternative Metropolitan University (MMU) and Investment Market, with an esti- a CAAC student recently successfully mated total market capitalisation of completed a degree in sustainable avia- over £4 billion. tion at MMU.

14 * Air pollution control, mainly to An unrivalled concentration of firms, decrease volume of SO2 emissions capital, professional advice and skills * Rural area pollution protection, means more overseas financial institu- with the priority on soil pollution pro- tions and investors choose to do busi- tection ness in and with the UK. * Enforce the protection of eco- China is a vital partner for the logical environment future development of the UK-based China is a key market for the UK financial and professional services sec- environment and water sector and it tor. Engagement between the UK and features in an ongoing programme of Chinese financial services sectors is initiatives with the Sustainable Cities broad and deep. The FSA, HM Trea- Programme and Low Carbon Green sury and Bank of England enjoy an tribute 6.2% to the British economy Campaign (launched in September unrivalled relationship with Chinese and are set to grow at more than 4% 2010). Since 2008 UK Trade & In- regulators in support of developments per annum over the next five years, vestment (UKTI) has signed three in the corporate bond market and employing 1.3 million people. Cover- MOUs with Wuhan, Chongqing and SME financing. ing advertising, architecture, the art Changsha, under the top level MOU China’s financial services industry and antiques market, crafts, design, on UK-China collaboration on sus- is growing strongly across sectors and designer fashion, film, video games, tainable cities development. Trade offers broad business opportunities for music, the performing arts, publishing, missions focused on urban planning, UK companies. There are opportuni- software and computer services, and green/energy saving building design, ties for UK companies in the asset television and radio, UK creative in- urban sustainable development, project management, banking, insurance, dustries are among the most successful management, environmental planning professional services, maritime services in the world. and engineering services, river basin and education and training sectors. The UK is the second biggest ex- treatment and management, waste- London is already home to sub- porter of TV programming hours, with water treatment, Clean Development sidiaries of Bank of China, China the largest music market in the EU and Mechanism (CDM) and environ- International Capital Corporation third largest worldwide. In computer mental financing services, have visited (CICC), the Industrial Commercial games, the UK has the biggest devel- both Wuhan and Chongqing. Bank of China (ICBC) and China oper base in Europe, employing around Financial and professional Construction Bank; it also has offices 10,000 people. In design, the UK is a services of China Merchants Bank, Agricul- global centre of excellence and innova- tural Bank of China and the Bank of tion, generating over £4 billion in sales. The City of London is the world’s Communications. Investors are also 67% of international advertising agencies leading international financial centre. attracted to the UK’s position as a base their European HQs in London. springboard to the EU, Middle East Over the next ten years there are Link 2 and North African markets. major opportunities in security, cloud Creative industries computing, assisted living and digital advertising. ChangYou.com, one of China’s FDI in China from UK Creative industries currently con- largest online games companies, and e- * UK’s investment to China commerce company between January and August 2010 Alibaba.com have was US$480 million with 168 their European head projects. quarters in Lon- * The realised value of new don. Crystal Digital UK investment into China from Technologies, a 2012 January to August 2010 increased London Olympics by 3.1% compared with the same sponsor, has also es- period in 2009. tablished its European * Cumulatively, UK is the operations in London 2nd largest EU investor in China to service its growing by value, with a total realised in- international business. vestment value of US$16.86 billion The iconic UK at the end of August 2010 with pavilion at Shang- 6,639 projects (Germany became hai Expo designed the largest country among EU in by Thomas Heath- terms of realised investment value erwick was a sym- to China, with US$16.89 billion). bol of UK’s creativity in China.

15 TRADE

Trade Data Watch ORTH AMERICA ORTH

N Between China and U.S.

ourced from China Statistic Breakdown of China’s Export to US in Nov. 2010 (Top 25 items) Customs, China’s Commodity item unit quantity value(US$) quantity(±%y-0-y) value(±%y-0-y) total export to the US portable automatic data processors(≤10 kg) set 7097763 3054768538 73.4 35.5 Mobile phone(including vehicle-mounted) set 7721473 744123301 -3.6 5.5 in November 2010 parts and accessories of other machines under Item 8471 kg 12026961 512957002 -4.2 51.9 reached US$26.46 billion, in- LCD Color TV Receiver set 1688857 479291970 3.5 28.5 creased by 32.2% year on year. video games used with TV receiver set 2510483 392418588 110.7 132.0 S processing parts of microcomputer set 576318 297920276 86.7 100.1 And its import from the US was US$9.73 billion, 35.1% up hard disk drive set 4487995 288196933 31.0 22.6 on a year-on-year basis. The Footwear with rubber, plastics or recycled leather sole and leather cover kg 20193862 282724240 8.1 20.8 following are the statistics on unlisted automatic data processors set 1384237 280686443 311.2 108.4 the total trade volume and LCD monitor used in automatic data processing system under item 8471 set 2105748 231827950 15.4 3.2 unlisted electric equipment and devices with independent functions set 18493488 217266419 17.0 46.8 trade breakdowns between solar cells cell 1467099 207052120 917.7 562.0 China and the US respec- suitcases and vanity bags made of plastics or textile kg 28386346 198109531 29.3 70.6 tively. other type of digital camera without special use set 3401129 189460784 -5.3 -19.9 other machines with functions of printing, copying and faxing set 1378230 179257855 20.0 67.6 Unlisted wooden furniture piece 3677444 167380470 23.4 40.4 China’s total trade volume Cotton knitting pull-over, cardigan etc. piece 32968944 157120005 20.9 43.3 with the US in Nov. 2010 Unlisted footwear with plastic cover kg 17789006 156706230 3.3 14.6 To/from US cumulative Export Import static sensitization machine with function of printing, copying and faxing etc. set 212648 154462087 22.5 17.7 Nov.2010 Amount 264.6 32.2 Other toys suit 217397913 141350434 -42.6 30.4 (US$100m) footwear with rubber or plastic sole and textile cover kg 13542855 140702168 21.9 44.1 unlisted cabled digital communication equipment set 2152089 139540380 9.3 14.3 ±% 97.3 35.1 System micro computer set 178889 137483704 0.9 -15.2 Y-O-Y Other parts and accessories of the equipment under item 8443 kg 8057185 135690611 11.8 25.6 Statistic Breakdown of China,s Import from US in Nov. 2010 (Top 25 items) Jan. Amount 2,571.0 29.5 to Nov. (US$100m) Commodity item unit quantity value(US$) quantity(±%y-0-y) value(±%y-0-y) (2010) soybean kg 3784147370 1935065973 39.4 57.1 ±% 897.9 32.2 processor or controller set 475192373 353050087 56.1 -9.6 Y-O-Y airplane and other air craft(15000kg light weight≤45000kg) set 6 253821708 -50.0 -42.9 copper scraps kg 76276371 201854995 30.5 85.6 (Source: China Customs) Other silicon(silicon content ≥99.99%) kg 2570426 144992892 188.1 193.3 recycled (scrap) brown paper or fluting paper or cardboard without bleaching kg 523503043 136157677 14.4 66.3 unlisted chemical industry and related chemical products kg 8801490 97757871 97.7 114.2 Turbine fan jet engine(thrust 25kN) set 12 90484043 33.3 71.7 4 wheel-drive Gas-fueled SUV(2500ml displacement ≤3000ml) set 1620 86546823 -28.9 -34.0 aluminum scraps kg 47988066 78463898 -2.4 25.5 lead ore and concentrates kg 43792411 74872140 -7.3 23.0 uncombed cotton kg 34612447 74158169 105.2 153.6 memorizers 41831212 72189184 20.9 10.7 Semi-bleached or bleached coniferous chemical wood pulp, soda or sulphate kg 78752962 71528179 -4.3 41.7 other IC 365314940 69719796 186.8 5.7 airplane and other air craft(light weight 45000kg) set 1 69534133 0.0 0.0 Parts of turbine fan jet engine or turboprop kg 90965 69397966 62.2 9.3 unlisted steel scraps kg 167503659 68989227 33.7 58.5 other complete cowhide (16kg) kg 28596476 67667620 -5.5 37.5 dreg and remnant produced in brewage and distillation process kg 285995360 67193422 76.5 109.8 coking coal kg 291592622 59842265 305.4 371.9 4 wheel-drive Gas-fueled SUV(3000m displacement ≤4000ml) set 1459 58434384 -20.8 -21.2 PAHFCVD used for producing semi-conductor or IC set 36 56991856 200.0 747.7 Recycled (scrap)paper or cardboard made of mechanical pulp kg 256246965 56365610 -14.0 8.1 Frozen cooked chopped entrails kg 37469255 50317705 0.0 0.0

(Source: China Customs) 16 N

INVESTMENT ORTH AMERICA

US, China to build world’s largest solar Goldwind wins US wind power deal plant First Solar Inc, a US-based renewable energy Xinjiang Goldwind Science and Technol- company, signed a memorandum of understanding ogy Co announces that one of its units has won (MOU) with China Guangdong Nuclear Solar Energy Develop- a contract to sell wind power in Illinois in the United States, ment Co Ltd (CGN SEDC) on January 4 to jointly develop the and it sees this transaction as a key step to tap the global wind world’s largest solar power plant. power market. First Solar, the world’s largest maker of thin-film solar PV Under the agreement, a wind farm to be built by Xin- modules, said it will build a 2,000-megawatt (mW) solar power jiang Goldwind’s wholly-owned unit TianRun Shady Oaks plant with its partners in Ordos, Inner Mongolia autonomous re- LLC will supply 20 years of power to Commonwealth Edi- gion in the next 10 years. son Co from 2012, the Urumqi-based firm said in a filing to The first phase of the project is to build a 30-mW production the Shenzhen Stock Exchange on December 21. capacity plant. The rest of the project will be completed in three Construction of the 106.5-megawatt project, expected stages. to cost US$150 million to US$200 million, will begin in Under the terms of the agreement, First Solar and CGN 2011, the firm said. SEDC will work together to execute the first phase demonstration “Winning the contract is significant step in the com- project with a 30-mW production capacity in Ordos. pany’s strategy to go international after being listed in Hong The Ordos project is the first large-scale solar collaboration Kong in early October,” Essence Securities wrote in a re- between China and the United States, as well as an example of search report. “Goldwind is expected to benefit from provid- China-US bilateral cooperation on renewable energy. It will be the ing turbine and engineering services after transferring the largest solar power plant in the world upon completion. power plant to future buyers, as this has been the usual case “We are making efforts on establishing a global relationship for its domestic operations,” it said. (Shanghai Daily) between US and Chinese companies in collaboration with the Chinese local government,” said Bruce Sohn, president of First US keeps China’s furniture makers in Solar. “This project will be a good start.” the hot seat The agreement represents an important step forward for the Ordos project, following First Solar’s MOU with the local gov- The United States International Trade ernment in Ordos in September 2009. The Chinese government Commission (USITC) decided to maintain approved the pre-feasibility study for the first phase in September. anti-dumping duties on Chinese-made wooden bedroom TK Kallenbach, executive vice-president of First Solar, said furniture for another five years, which could shift Chinese since 2009 the company has been searching for a suitable long- enterprises’ focus from the US to their home market, industry term Chinese partner. experts said. Sohn said even though First Solar has the advanced technol- Chinese and US distributors of wooden bedroom furni- ogy of thin-film solar PV modules, the company lacks the experi- ture for the US market are subject to an anti-dumping tariff ence and network in the Chinese market, which CGN SEDC of from 43.23 to 216.01 percent, according to the USITC. can help to fill. “The anti-dumping tax on furniture made in China CGN SEDC will be the major project owner and operator, increasingly suppresses the profit margins of Chinese export- performing the engineering, procurement and construction (EPC) ers,” said Luo Yamei, an analyst at Industrial Securities.” functions for the project. Many Chinese export-oriented enterprises in the industry First Solar will supply its advanced thin-film solar PV mod- have transferred their target market from the US to China ules for the project and support CGN SEDC with EPC and ad- due to the shrinking profits. visory services. Zhao Shoutian, vice-president of the Beijing Furniture Currently, the largest solar power plant is the Sarnia PV Association, said Chinese manufacturers may rush to develop power plant with an 80-mW production capacity in Sarnia, Can- the domestic market because the US market is no longer so ada. promising owing to the unstable orders and high tax rates. According to First Solar, the construction of the first phase According to Zhao, Chinese companies have little yield will start in 2011 and it expects to complete the construction of the to share with their US distributors, who will definitely pres- 2,000-mW solar power plant by the end of 2020. The Ordos local sure them for more as they face the high tax rate. government said it will provide equipment and service supports for “Compared with distributors in the US, manufacturers the project. in China always get less profit in the export, as the pricing Established on Aug 27, 2009, CGN SEDC is a wholly power belongs to their US partners,” said Zhao. He added owned subsidiary of China Guangdong Nuclear Power Group, that most US distributors of Chinese-made furniture oppose focusing on solar power investment, construction, operation and the US government’s decision. maintenance. By the end of 2010, CGN SEDC completed con- US trade protection against Chinese wooden bedroom struction of solar facilities capable of producing 20 mW. (China furniture dates to 2006, when a tax rate of up to 210 percent Daily) was imposed on Chinese products. (China Daily) 17 TRADE

ORTH AMERICA ORTH Sino-US Green Business: N Dispute Albeit, Cooperation Is the Trend

By Yan Manman

group of business leaders On one hand is the dispute going, vealed one fact that what the American from renewable energy com- on the other is the business cooperation government claimed hurt was not so panies will visit the United running as a rule. concerned by the businesses. States, on a fact-finding trip, Dispute not in the interest of What the businesses saw was the in the first half of 2011, a US commerce the Americans business opportunity, the huge market officialA said during the wind power sec- in China and benefit won through co- tion at the China-US Renewable En- “Although the Obama Adminis- operation with Chinese Companies. ergy Investment Forum in December tration filed a wind-turbine complaint “While proponents say the Chi- 2010. “I believe the trip will help the with the World Trade Organization, no nese manufacturers should be welcomed Chinese companies immensely. They U.S. company joined to defend itself.”… as an engine for creating more green jobs will get to know where their advantages “G.E.’s Immelt was gung-ho for trade and speeding the adoption of renewable are and how to start their business,” with China in 2002. He then told G.E. energy in this country, …” New York said Bryan D. Larson, first secretary for managers: ‘I talk China, China, China, Times article China’s Push Into Wind Commercial Affairs of the US Depart- China, China. You need to be there. Worries U.S. Industry also had such a ment of Commerce. I am a nut on China.’ But G.E. got statement. According to the same article, However, meanwhile in December only half the China market that Im- “Goldwind is going to build an organic, 2010, U.S. Trade Representative Ron melt was counting onm,” wrote Mrs. North American organization,” said Kirk announced that the United States Schlafly, the founder and president of Mr. Rowland, a Texas native and former has requested consultations with the Eagle Forum in the US in her article engineer at the Boston-based wind farm People’s Republic of China under the dis- Reevaluating Free Trade with China. developer First Wind. “So the oppor- pute settlement provisions of the World She had meant to blame the American tunity to work with them — and with Trade Organization (WTO) concerning company for having no consciousness of folks I’ve known for a long time — was a program known as the Special Fund for defending their interest or the interest really attractive.” Wind Power Manufacturing. of the country but on the contrary re- Goldwind, which set up a sales office in Chicago, has hired about a dozen executives, engineers and other employees so far. Most are Americans already experienced in the wind energy field. It is revealed by Yao Yu, press spokesman of Gold Wind Science and Technology on December 24 that Tian Run Shady Oaks LLC, Gold Wind’s wholly-owned subsidies won a bidding of wind farm project in the US in December 2010, and planned to invest US$ 198 million and complete the project within 2 years. In addition, Gold Wind also functioned as the power plant. The bidding inviter was the Illinois Power Agency. Tian Run Shady Oaks will have 100% controlling right of the Shady Oaks Wind Farm, 18 which will provide IPA with 20 years of atic Chinese policy measure negatively af- Liangjun, president of Sinovel Wind, electricity. Tian Run Shady Oaks LLC fecting U.S. firms in China’s wind sector. said it was considering investment in would be in charge of the investment Going forward, China agreed to modify wind projects there but looking for a and construction(including equipment its criteria for approval of new wind power US partner is the first step. Han also purchase)of this wind farm. projects by no longer requiring foreign en- said the energy capacity the company Undoubtedly this project will not terprises to have prior experience supply- hopes to establish in the US will be at only provide green jobs, but also increase ing equipment to large-scale wind power least 500,000 kilowatt (kW) if they can the adoption of renewable energy in Il- projects in China and find a suitable project. linois, which is in the interest of the US. instead will recognize Yin Xiao, director Wan Jifei, in his letter to Only cooperation beneficial their prior experience of the economic cooper- both for the US and China outside China. Through Kirk, mentioned that now ation office at the Inter- the JCCT, China also raw materials for national Department in Concerning the US launched reconfirmed its 2009 50% CGC, said the company 301 investigation to China’s clean JCCT commitment that solar cells used in China may invest about $400 energy policy, Wan Jifei, President it had eliminated other was imported from abroad, million to build up a of China Chamber of International discriminatory provisions of which a half from the wind power project with Commerce(CCOIC) wrote a letter on related to local content 200,000 kW capacities November 17 to the American trade requirements in the wind US. And 60%-70% in the US. representative Kirk, pointed out that manufacturing sector. “Don’t exaggerate the trade issues between China and China has really of solar cell producing the trade dispute. Actu- the US was never able to be solved created favorable en- equipment in China was ally dispute is normal through simple sanction and hoped the vironment for the US also imported, and most and the Sino-US trade US government would not neglect the companies, and there imported from the US. dispute only accounted breath and huge potential of Sino-US was no excuse for com- for 3% to 4% of the US’ new energy cooperation. He pointed plaining any more. Now as the reporter trade dispute. Yes, there are really some in the letter that China has carried out learned, many American companies problems such as the IPR issue and close cooperation with the states and were planning to set up their factories in technology sharing etc. To solve prob- enterprises in the US in the new and China. Joseph Bach,Co-Founder and VP lems through WTO mechanism is a clean energy fields. These coopera- of Technology Development, Sunpreme, normal way. Sometimes, countries have tion effectively promote the American Inc., a solar panel company, told the re- to solve problems and disputes through companies’ export to China. Many porter that the company was planning this mechanism, and China should, too. business leaders in China and the US to set up a factory in Nantong, Jiangsu However, cooperation is still the trend all believed that the development of for the favorable policy and investment and will benefit the companies in our the US new energy companies can not environment there. “We have technolo- two countries. We will try our best to be achieved without taking advantage gies, their technologies, I mean, most of promote the business cooperation and of the capital of Chinese investors and Chinese companies, their technology is exchange between the companies of huge market in China. lagging behind, which would produce China and the US.” Robert Poole, Vice At the December 14-15 meetings pollutions. But ours will not. So we have President of US-China Business Coun- of the U.S.-China Joint Commission on advantages here.” cil, told the reporter. Commerce and Trade (JCCT), USTR While at the China-US Renew- Wan Jifei, in his letter to Kirk, was able to address one highly problem- able Energy Investment Forum, Han mentioned that now 50% raw materials for solar cells used in China was imported from abroad, of which a half from the US. And 60%-70% of solar cell producing equipment in China was also imported, and most imported from the US. He said that the American government should strongly encourage and promote the development of its new energy industry, improving the competitiveness of its new energy enterprises and helping the American exporters in this line to find Chinese buyers through the business associations including CCOIC, but not just use large amounts of money of the taxpayers to investigate or impose sanctions on companies of other countries instead. 19 TRADE

China and Chile Chile is China’s second biggest trade agree to expand trade partner in Latin America and China is Chile’s biggest trade partner. Bilateral China and Chile on December 16 trade in 2009 rose 2.1 percent to of 2010 agreed to expand trade and in- US$17.72 billion. vestment. Chinese President Hu Jintao held talks with his Chilean counterpart Sebastian Pinera, who is on a three-day state visit to Beijing, in the Great Hall can country to sign a bilateral agree- Hu urged the two countries to of People, followed by the signing of ment on China’s entry into the World deepen political trust, increase cultural three agreements on economic coopera- Trade Organization, to recognize exchanges and enhance coordination tion. China’s full market economy status and within international and regional orga- Hu suggested the two countries sign a bilateral free trade agreement nizations. diversify and expand trade ties by with China. Pinera said Chile was ready to boosting cooperation in areas like agri- Chile is China’s second biggest work with China in terms of economic culture, science and technology, mineral trade partner in Latin America and cooperation in the Asia-Pacific region, development, light industry, household China is Chile’s biggest trade partner. the Doha Round trade talks, the re- appliances and machinery. Bilateral trade in 2009 rose 2.1 percent form of global financial institutions and Chile was the first Latin Ameri- to US$17.72 billion. climate change. (Xinhua)

Brazil cuts taxes to stimulate long-term corporate debt market

Brazil will cut taxes and provide reais, according to the Brazilian capital ened 35 percent against the U.S. dollar incentives to stimulate the domestic markets association known as Anbima. since the start of 2009, the second- corporate debt market and supply Latin America’s biggest economy biggest gain among 25 emerging mar- longer-term credit for infrastructure is ramping up spending on infrastruc- ket currencies. investments. ture as it prepares to host the World Local debt issuance by Brazilian As part of the measures an- Cup and Olympics as well as develop companies is lagging behind Russia’s nounced on December 14 of 2010 by the biggest oil discovery in the Ameri- US$27 billion and China’s US$163 Finance Minister Guido Mantega, the cas since 1976. The government plans billion in 2010. Only India, at US$18 state-run development bank known as to oversee 955 billion reais in invest- billion, has had less corporate debt is- BNDES will set aside 10 billion reais ment over the next four years. suance among the biggest developing (US$5.8 billion) to purchase longer- The government will create a pri- economies, or BRICs. term debt issued by corporate borrow- vately-managed fund using about 2.2 Central bank President Henrique ers, helping provide liquidity to the billion reais in bank reserves to pro- Meirelles said in Sao Paulo that the secondary market for the paper. vide liquidity to the secondary market new measures are “step in the right Individual and foreign investors for the domestically-issued bonds, said direction” in Brazil’s bid to stimulate purchasing bonds with maturities of Nelson Barbosa, the secretary of eco- longer-term credit. at least four years and linked to infra- nomic policy. Short-term buying and It’s too early to say whether the structure projects will be exempted selling of the paper will no longer be new rules will achieve their intended from paying taxes on their earnings, levied a transaction tax. effect, said Jankiel Santos, chief econ- Mantega said. Institutional buyers will A tax on foreign capital inflows omist at Espirito Santo Investment see their tax rates reduced to 15 per- that was tripled this year will be re- Bank. cent from as high as 34 percent cur- duced to its previous 2 percent for “Since you’d have more liquidity rently. foreign-based private equity investors in the secondary market, people are The new rules should boost lo- who want to finance Brazil’s infra- going to start thinking about using cal debt issuances to 70 billion reais structure drive. more and more the capital markets per year, BNDES President Luciano Brazil raised the so-called IOF rather than just going to banks to fund Coutinho told reporters in Brasilia. tax in October in a bid to take pressure themselves,” he said in a phone inter- In 2010, companies raised 41 billion off its currency, which has strength- view from Sao Paulo. (Bloomberg) 20 INVESTMENT

US$7.06 billion to take full control of Pan American Energy LLC, the The deal allows Brazilian country’s second-biggest oil and gas producer, from BP PLC. authorities to renew the In October, Repsol S.A. of Spain license for a further 20 announced the sale of 40% of its Bra- years, a statement on zilian assets to China Petrochemical Corp. for US$7.1 billion. In a series the website of the state- of lower-profile deals, China also has owned Assets Supervision been expanding its footprint in the re- and Administration gion’s power sector. Commission of the State Deals struck this year include the US$600 million Sopladora hydro- Council said on December power plant in Ecuador, which will be 21 of 2010. built by China’s Gezhouba Corp. The agreement was negotiated at the same time as China Development Bank set out terms for a US$1 billion loan to the Andean country. A separate contract for China’s Sinohydro Corp. to build the 1.5- China’s state grid to buy brazilian gigawatt Coca Codo Sinclair plant in power firms Ecuador was underpinned by a US$1.7 billion credit loan from China’s Exim Bank. China’s giant utility State Grid in annual earnings for State Grid, the State Grid had US$164 billion Corp. has agreed to a deal worth nearly statement added. in revenue in 2008. The company was US$1 billion to buy seven Brazilian A State Grid media official con- founded in 2002 as part of China’s power transmission companies, the firmed earlier reports that the acquisi- efforts to overhaul and streamline its latest in a series of big bets by Chinese tion involves the subsidiaries of Span- power grids, which had been managed corporations in Latin America. ish companies Grupo Cobra, Elecnor by provincial governments with com- The deal is the latest of a string of S.A. and Brazil’s Grupo Isolux. peting interests. investments by Chinese companies in This is the first foray for a Chinese State Grid is spending billions of Brazil, as Beijing seeks to reinforce its company in the transmission-line auc- dollars on new infrastructure in China, links with the Latin American coun- tions in Brazil. A consortium that in- such as the installation of ultra-high try which is emerging as a big force in cludes Zhejiang Insigma United Engi- voltage power lines to ship electricity commodities markets due to high de- neering won the biggest lot on offer at from resource-rich western provinces mand in China, from soybean and iron this month’s auction, earning the right to cities like Shanghai in the east. ore to sugar and crude oil. to build 102 kilometers of transmission However, its position as China’s State Grid has also secured a 30- lines and four electric substations in monopoly power distributor in all but year concession to operate power lines, Rio Grande do Sul state. Insigma has a five provinces limits its opportunity to substations and other infrastructure 40% stake in the group, with Brazilian cultivate new markets at home. That that transmit power mainly to the companies controlling the rest. has driven management to seek oppor- densely populated southeastern region, Brazil, the region’s biggest econ- tunities overseas. In 2007, State Grid which includes major cities like Rio de omy, is on track to grow above 7% this was part of a consortium that made a Janeiro and Sao Paulo. year, according to Barclays Capital. winning US$3.95 billion bid to develop The deal allows Brazilian authori- Barclays forecasts growth of 10.6% in and run the Philippines’ national elec- ties to renew the license for a further Argentina, 5.7% in Chile and 8.9% in tricity grid for 25 years. 20 years, a statement on the website Peru. On December 13 of 2010, State of the state-owned Assets Supervision So far, China’s biggest energy Grid said it set up a subsidiary, State and Administration Commission of deals in Latin America had been in the Grid Brazil Holding Ltd., to run its the State Council said on December 21 oil and gas sector. operations there. of 2010. State Grid, one of the world’s Earlier this year, China Petro- State Grid plans to turn its Bra- largest utility companies, is wholly chemical Corp. agreed to buy Occiden- zil subsidiary into a “stronger, more owned by the Chinese government. tal Petroleum Corp.’s unit in Argentina competitive and influential first-class The deal for the seven power for US$2.45 billion. That deal came power business in South America,” the transmission companies is expected to two weeks after Beijing-based Cnooc statement on Sasac’s website said. (Wall generate more than US$110 million Ltd.’s joint venture in Argentina paid Street Journal) 21 Trade Data Watch in Latin America By Li Zhen

owadays, Latin American countries are increas- main exports are transport equipment, iron ore, soybeans, ingly of great importance to China in terms of footwear, coffee, autos, automotive parts, machinery. Brazil economic and trade relations. Take Brazil for accounts for 25% of global exports of raw cane and refined example, it has become China’s most important sugar; it is the world leader in soybean exports and is respon- partner, both as a market for Chinese goods and as a source sible for 80% of the planet’s orange juice. Brazil’s largest ex- Nof raw materials. Brazil supplies some 45% of all China’s ports markets are European Union, United Sates, Argentina, soybean imports and is also the source for other agricultural China and Venezuela. products, as well as iron ore and petroleum. It has becomes Brazil imports were worth US$11.4 billion in No- clear that China’s trade with Latin America has fuelled a vember of 2010. Brazil imports machinery, electrical and boom in the region’s export sectors in countries such as Ar- transport equipment, chemical products, automotive part gentina, Brazil, Chile, Peru and Venezuela. From the beginning of 2011, China’s Foreign Trade maga- Figure 2 Brazil’s Imports and Exports (IM/EX) in 2010 (Jan.-Nov.) zine will keep a close look on what happened in Latin American (Billion USD) countries’ trade agenda. In this issue, we prick three countries, namely Brazil, Chile and Argentina, for your reference. 25 Brazil 20 Brazil reported a trade surplus equivalent to US$662 15 million in November of 2010. Brazil has an export-oriented 10 economy. The main exports are transport equipment, iron ore, industrial raw materials, soybeans, footwear, coffee, au- 5 tos, automotive parts, machinery. Brazil imports machinery, 0 electrical and transport equipment, chemical products, auto- Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. motive part and electronics. The primary trading partners of Brazil are The United States, European Union and Argen- IM EX tina. (Source: TradingEconomics.com) Figure 1 Brazil Balance of Trade in 2010 (Jan.-Nov.) (Million USD)

4000 Figure 3 China’s Imports and Exports (IM/EX) to Brazil in 2010 3500 (Jan.-Nov.) (Billion USD) 3000 5 2500 2000 4 1500 3 1000 500 2

0 1 -500 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. 0 (Source: TradingEconomics.com) Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. EX IM Brazil exports were worth US$12.1 billion in Novem- ber of 2010, with exports amounting to 14% of its GDP. The (Source: China Customs) 22 and electronics. Brazil’s main import partners are European chemicals, electrical and telecommunications equipment, Union, United States, China and Argentina. industrial machinery, vehicles and natural gas. Chile’s main According to Figure 3, China has been running a import partners are United States, European Union, Argen- trade deficit to Brazil in the first 11 months of 2010, with tina, Brazil and China. the trade gap becoming increasingly large from the begin- Argentina ning of the year. That is probably mainly because China boasts a huge demand for Brazil’s iron ore, soybean and Argentina reported a trade surplus equivalent to refined sugar. US$390 million in November of 2010. Growth in foreign Chile trade, especially trade with MERCOSUR partners, has been one of the main factors driving the Argentine economy. Its Chile reported a balance of trade surplus equivalent to main trading partners are Brazil, Chile, European Union US$1.57 billion in November of 2010. Chile’s economy is and The United States. highly dependent on international trade. Exports accounts Figure 6 Argentina Balance of Trade in 2010 (Jan.-Nov.) for about 42% of its GDP. Chile has traditionally been de- (Million USD) pendent upon copper exports. Its main trading partners are European Union, The United States, China and Argentina. 2500

Figure 4 Chile Balance of Trade in 2010 (Jan.-Nov.) (Million USD) 2000

2500 1500

2000 1000

1500 500

1000 0 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. 500 (Source: TradingEconomics.com) 0 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Argentina exports were worth US$5.96 billion in No- (Source: TradingEconomics.com) vember of 2010. Argentine exports are mainly of the agricultural type, mostly processed goods (54% of the total). The main exports are soybean products, cereals, beef, motor ve- Chile exports were worth US$6.550 billion in No- hicles and parts, chemicals and medicine. Argentine’s largest vember of 2010. The state-owned firm CODELCO is the exports markets are Brazil, European Union, China, United world’s largest copper-producing company. The most impor- Sates and Chile. tant non-mineral exports are forestry and wood products, Argentina imports were worth US$5.57 billion in No- wine, fresh fruit and processed food, fishmeal and seafood. vember of 2010. Argentina is a major importer of industrial Chile’s largest exports markets are European Union, United and computing machinery and parts, industrial supplies, au- States, Japan, China and South Korea. tomobiles and other consumer durables, refined fuels and lu- Chile imports were worth US$4.96 billion in November bricants. Main import partners are Brazil, European Union, of 2010. Chile imports petroleum and petroleum products, United States and China. Figure 5 Chile’s Imports and Exports (IM/EX) in 2010 (Jan.-Nov.) Figure 7 Argentina’s Imports and Exports (IM/EX) in 2010 (Billion USD) (Jan.-Nov.) (Billion USD)

7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. EX IM EX IM (Source: TradingEconomics.com) (Source: TradingEconomics.com)

23 INVESTMENT

airport’s aircraft park- fric a ing area and taxiway A Chinese company and restore the exist- signs agreement ing running way. E A E D i re c tor to expand airport in General Shiferaw Al- emu and CRBC Addis Ethiopia Engineering General Manager Wang Yang The Ethiopian Airports Enter- signed the agreement. prise (EAE) has hired China Road Shiferaw said and Bridge Corporation (CRBC) Ad- EAE will cover the dis Engineering to expand the Addis total costs for the proj- Ababa Bole International Airport in ects. December, 2010. When the proj- Both companies on Tuesday ects are finished, the airport will be able to park 44 aircraft, as compared to the signed a construction agreement 19 aircraft it can currently hold, he said. valued at 1.1 billion Birr (about 66.7 Shiferaw also said the airport will be able to park large aircraft, includ- million U.S. dollars) to expand the ing Boeing 747 and Boeing 777 after the expansion. (Xinhua)

China Exim Bank area we will focus on,” Exim Bank more than they see the benefits,” Li told eyes Africa loans, Chairman Li Ruogu told European Reuters. and Chinese executives, bankers and “We take a long-term view. We commodity focus officials meeting in Luxembourg. don’t expect profits this year or next “China does not interfere in the year; we see things in decades,” he internal affairs of Africa. What we said. The Export-Import Bank of Chi- want to do is foster their own devel- “If the Europeans follow the Chi- na sees plenty of opportunity to extend opment capacity,” Li told the confer- nese example they may have an oppor- loans in Africa, focussing on raw ma- ence. tunity in Africa,” Li added. terials and oil, while commercial banks Exim Bank is one of China’s He said Exim Bank would also are steering clear of the risk, its chief three policy banks that extend credit focus on Africa’s agriculture sector, executive said in December, 2010. in line with government initiatives. where it sees a potential for recovery “There are a lot of areas to oper- “Very few foreign commercial and future exports, potentially sup- ate - particularly in the raw materials banks are considering providing finance plying China’s booming demand for and oil sector. Certainly this is the in Africa. They may see the risk aspects basic commodities. (Xinhua)

China helps Africa build over 142 agricultural The Chinese government also encourages its enterprises to invest in projects by end of 2009 agricultural product processing and agricultural development projects in Africa, according to the white paper. China had helped build over 142 field for China-Africa economic and To improve the livelihood of agricultural projects in Africa by the trade cooperation, and helping Africa African people, China has made great end of 2009, according to a white paper solve its food security problem is the efforts to assist African countries to on China-Africa Economic and Trade ultimate goal in their agricultural co- build public facilities, improve their Cooperation released on December 23, operation. medical care and public health service, 2010. Currently, the two sides have reduce their debts, and provide disaster The projects mainly include pilot conducted cooperation in agricultural relief and humanitarian aid, the white agro-technical stations, stations for infrastructure construction, food paper said. popularizing agricultural techniques, production and breeding industry, The 29-page white paper, released farms, and agricultural technology exchange and transfer of agricultural by the State Council Information demonstration centers, the white paper practical techniques, and processing, Office, is the first white paper on its said. storage and transport of agricultural economic and trade cooperation with China said agriculture is a priority products. Africa. (Xinhua)

24 Self-owned Chinese Brands Preheat South Africa

By Zhao Ailing

On November 30th, 2010, sponsored by CCPIT, jointly co-sponsored by ANC of South Africa, and organized by Trade Development and Cooperation Center of CCPIT and China News SA, the eighth “China Auto International (South Africa) Exhibition Tour” completed the 7-day tour among six cities in South Africa, which attracted total 15 vehicles of self-owned brands from China FAW, Beiqi Foton, Dongfeng Auto Group, Hafei, YuTong, Gonow, Tianqi Meiya, Sinotruk and other Chinese automobile enterprises. The tour organizing committee held Sino-Africa Auto and Trade Seminars in Johannesburg and Cape Town respectively, and also other activities like greeting local governmental officials and dealers, to help “going out” vehicles of Chinese self-owned brands preheat and be familiar with local markets.

outh African officials encour- Sino-Africa Auto and Trade Seminar tion expressed their hope that Chinese age Chinese companies to in- in Johannesburg, marking the begin- auto companies should invest and set vest and set up factories there ning of 8th China Auto International up factories in South Africa, to pro- In the afternoon of No- (South Africa) Exhibition Tour. At vide high quality and cheap vehicles to vember 24th, the committee held the meeting, officials from South local clients. The official from South S Africa Department of Transporta- Africa Department of Trade and In- dustry said that though South Africa

25 560 kilometers, the auto fleet received fric a warm welcomes by South Africans. A And the representatives from participating companies had a deep feeling that Chinese vehicles would embrace a great chance in this country where there is no public transport, and it is urgent to introduce vehicles of Chi- nese self-owned brands to South Af- rica, this emerging market with great potential. South Africa is a production base for global right steering vehicles. Benz, BMW, Volkswagen of Germany, Ford of the United States and Volvo of Swe- den and other international famous brands all have set up assembly plants and agents in South Africa. Where are the opportunities for Chinese enterprises? On Nov 29th, the fleet finally local auto market is relatively limited, 20%-25% for auto parts and semi-fin- arrived in Cape Town after 2300 kilo- vehicles made in South Africa can be ished products, while give a government meters’ drive, withstanding the tests of exported to other countries who have subsidy of 20% to foreign-funded auto various and complex road conditions. trade agreements with South Africa. factories. If the factory employs more In the morning of November 30th, In this way, besides general auto trade, local people, the subsidy rate can go representatives from these exhibit- China and Africa can deepen coopera- up to 30% of the total investment. For ing companies visited Transportation tion and perfect Chinese automotive 3.5-ton or heavier truck manufactur- Commission of South African Parlia- export and sale network to South Af- ers, DTI of South Africa will provide ment, and were warmly welcomed by rica. “DTI will provide Chinese auto special allowance. In 2013, South Af- commission chairman. She introduced enterprises with lists of South African rica will further boost the development the development status of South Africa companies who are capable of produc- plan for automobile industry, mainly by automobile industry in detail. And she ing auto parts,” said he. favorable policies for industrial invest- said: “At present, the main problem for South Africa has abundant natu- ment enterprises. In Eastern London South African transportation is that the ral resources, with production of some there will construct multifunctional bottom black have no public transport. metals ranking the first in the world. industrial development zones, includ- The governing parties began to develop So, mine mining and ores transpor- ing the largest Benz assembly base in medium-sized buses that carried such tation bring great opportunities for Southern Africa, mainly for SKD and people and have carried out a series of China auto enterprises. It is learned parts manufacturing. In 2011, South assistance plans. I hope China can take that Gauteng, Eastern Cape Town, Africa will also highlight large and me- this chance to find their opportunities”. Kwazulu-Natal and other provinces in dium-sized buses and industrial trucks, According to a Chinese auto en- South Africa now all have production to promote the economic development terprise exhibitor, South Africa vehicle bases for auto parts, which are prefer- of South Africa. After the meeting, ac- and parts import market is mainly ential choices for Chinese companies. companied by leaders of the organizing monopolized by German and Japanese Meanwhile, South Africa has the committee, these officials visited the companies, with China only takes a lowest electricity charge in the world, exhibition of the vehicles of Chinese share of 6.11%, focusing on low-cost and the competitive cost including self-owned brands sold in South Africa. car, pickup and minibus. Affected by labor, tax, land, rent, transportation Bright colored Hafei cars, delicately the financial crisis, middle to high end and lower living expenses compared to decorated Dongfeng trucks and Foton vehicles exported to South Africa de- major economic entities. vehicles all gave a deep impression to creased sharply, while the sale volume In the morning, officials from South Africans. of 1.2 L or below cars increased quick- South Africa DOT, Department of Local dealers: China ly. Now, Hyundai, Honda and Tata Economic Development and DTI in- automobile is worth its price. and other cars with a price of 70,000 terpreted policies on auto import for rand or so have a good sale in South Chinese auto companies. In 2011, South Since November 25th, the Africa, with Hyundai ranked the Africa will begin to roll out a 10-year tour exhibition was held at Joburg, first, mainly due to the longest post- automotive industry development plan. Durban, Eastern London, Port sale service time (5 years or 150,000 In the decade of 2011-2020, South Af- Elizabeth, and finally arrived at Cape kilometers) and comprehensive con- rica will have a fixed import tax rate of Town. During the first day’s drive of figurations among similar price-class.

26 Chery, Geely, Great Wall, Changan East and other African countries in new energy heavy trucks, the group and other Chinese small cars also average, and even 40% higher than strengthened its leadership in domes- develop a certain market share. Take that from Thailand and other countries tic new energy heavy truck industry. chery for example, Chery completed with lower costs. GM now has moved Now LNG/CNG heavy trucks from the related certifications in South to some competitive foreign suppliers Shaanxi Automobile Group are the Africa in 2007, and made 48-hour en- from weak local suppliers, to reduce only natural gas heavy trucks with durance record under the supervision production cost. It has been long for mature technology and in batch opera- of South Africa Racing Association in China exports engines, gearboxes, tion, taking a market share of 90%. 2008. Current price for QQ3 (0.8 L) is cylinder covers, cylinder block, crank- Besides, heavy trucks from the group about 60,000 rand, which is one of the shaft, etc. to South Africa, and Chi- are exported to Southeast Asian coun- best selling models. However, Chinese nese products have won trust in auto tries. companies should pay more attentions post-sale market there. As the largest As the widespread of new energy to post-sale service and brand estab- vehicle market in Africa, South Africa technologies, Shaanxi Automobile lishment, which are the shortcomings will bring great chances to China- Group places “new energy heavy for Chinese auto manufacturers to do made vehicles and parts. trucks” a major driving force for fu- business in Africa. Chinese Enterprise Exhibitors: ture development. According to Yang During the exhibition tour, South new export market for new Zhigang, in addition to launching new African dealers agreed that China au- energy vehicles generation of 2011 “Chijiu” natural gas tomobiles are really attractive, and they heavy trucks, the group is developing think Chinese autos are worthy their Complying with the central dimethyl ether commercial vehicles prices, compared the European and US. government’s energy saving and emis- and pure electric heavy commercial One of the dealers was exclusive agent sion reduction policy, 2010 witnessed vehicles (China 863 Program), hybrid of chery and Foton in South Africa. a wave of new energy vehicle devel- heavy commercial vehicles (National This dealer not only has Chinese autos, opment in domestic manufacturers Science and Technology Support but also Indian products. The famous caused by LNG, CNG and other clean Progrom). China New Energy Heavy brand in India, Tata, was introduced by energy heavy trucks, besides the wide Truck Strategic Alliance, initialed by Imperial to South Africa. application of new energy technologies Shaanxi Automobile Group, is consid- Participants in South Africa ve- in China passenger car industry. ered to further strengthen the group’s hicle assembly industry said, because During the press conference for leadership in new energy heavy truck of higher prices for auto parts from 8th China Automobile International sector. South African supplier, local vehicle (South Africa) Exhibition Tour, Yang “Electric vehicles need compre- assembly companies will change spare Zhigang, head of Shaanxi Automobile hensive charging station facilities, so parts sourcing channels, and take more Group, said, the group is focusing on no new energy vehicles were included from China and other Asian countries. development of heavy and commercial in this exhibition tour,” Yang Zhigang GM South Africa Company clearly electric vehicles, and participating the said. Other Chinese vehicle manufac- expressed that price for the same part exhibition tour aims to find future ex- turers that attended the exhibition also from local suppliers are 30% higher for port markets for new energy vehicles had tasks of finding export opportu- that from Latin America, the Middle in South Africa. During the wave for nities for new energy vehicles, which South Africa can provide, too. Dur- ing the exhibition tour, officials from South Africa DTI mentioned that South Africa plans an annual production of 1.20 million vehicles after 10 years development in 2020, jumping from 0.6 million per year. To realize the plan, South Africa hopes China auto manufacturers to set up factories there, while introduce new automobile production technologies, such as new energy technologies, in order to lift vehicle manufacturing technical level in South Africa. “In the future, we will consider to export the new energy vehicles to South Africa, but it should wait till relevant accessory facilities are complete, for example the charging station network is mature, ” Yang said.

30 First Year of China’s 12th Five Year Plan he year of 2011 sets oﬀ as the ﬁ rst year of the China’s T12th Five Year Plan. China embraces another phase of its development. By Alice Yang

e 5th Plenum of the 17th CPC Central Committee completed its meeting in Beijing on October 18, 2010, on which the outline for China’s 12th Five Year Plan was adopted, guiding the economic development of China from 2011 to 2015. e plenum approved the outline for the plan, entitled e Communist Party of China (CPC) Central Committee’s Proposal on Formulating the Twelfth Five-year Program (2011-2015) on National Economic and Social Development. e formal plan will be drafted on the basis of the Proposal and will be submitted for approval at the next meeting of the National People’s Congress, scheduled for March 2011. e plan promises that 2011 to 2015 will focus on solving China’s economic bottlenecks, as well as raising incomes. Restructuring the pattern of economic development and enlarging domestic demand will be the strategic principle for China’s fast, smooth development in the next 5 years. Also, “the plan would deepen income distribution reform, increase incomes for farmers and urban low salary earners to support enlarging domestic consumption. Improving people's livelihood would be a fundamental goal. e Plan would take more active employment policies and provide more jobs.” said Xu Xianping, vice director of the National Development and Reform Commission. “ e plan would promote coordinated development between urban and rural areas. Migrant workers must gradually be given urban residence and a large population of farmers must enjoy the results of reform,” Xu added. China also eyes to boost the development of the strategic emerging industries in the next ﬁ ve years, including energy conservation and environmental protection, information technology, biology, advanced manufacturing, new energy, new material and new-energy automobiles. Innovation industry will be paid more attention to. What’s more has been highlighted in the Plan? More details on China's foreign trade trends and policies? Which industries are suggested to invest in the coming year? More voices and views from overseas? Special Report this issue on 2011 prediction and the 12th Year Plan will provide you the answers.

31 Chinese Economy Will Keep A High and Stable Growth Rate — An exclusive interview with Yao Jingyuan, Chief Economist of the National Bureau of Statistics By Gao Chao

he year 2010 was a year of great challenges for China’s economy. Faced with complicated internal and external economic environment, and also unfavor- able climatic conditions, the Chinese government took great initiative in economic work, grasped accurately the essence, strength and rhythm of the macroeconomic control and adjustment work, sped up the transformation of economic Tdevelopment pattern, eff ectively consolidated and expanded the achievements in fi ght- ing against the global fi nancial crisis, kept a stable and high economic growth rate, and fully completed the objectives and tasks defi ned in the “Eleventh Five-Year Plan”. However, the macro economy is still confronted with com- China's economy kept a stable and high growth rate in plexities, the pressure against 2010 economic restructuring has increased, the constraints of re- Q: During the 2010 NPC and CPPCC, Premiere Wen Jiabao stated source and environment become clearly in the Government Work Report that the year 2010 would be a year more obvious, and the tasks of of complex and volatile international situations to China. Positive changes improving people’s livelihood alternate with adverse eff ects; short-term problems are intermingled with and ensuring social stability are long-term confl icts; internal factors and external ones aff ect each other. It arduous and formidable. What is true that during the past year with the unusually diffi cult circumstances is the basic development situa- both at home and abroad, the Chinese government had taken great initia- tion of China’s economy in 2010 tives in the economic work, tackled various problems appropriately and and what are the major prob- ensured a stable and rapid economic growth. So what is your general com- lems? What will be the development on China’s economy in the past year? ment trend of China’s economy in 2011? A: e annual growth rate of China’s economy in 2010 will reach 10%. With these questions, Generally speaking, China’s economy grew rapidly and stably in 2010. China’s Foreign Trade had an Its economic structure is being optimized and economic effi ciency being exclusive interview with Yao enhanced. People’s livelihood has been further improved and the balance Jingyuan, Chief Economist of of payments is developing toward a favorable direction. e most note- the National Bureau of Statis- worthy to mention was the great achievements in employment work. e tics. year 2008 once witnessed the unemployment of tens of millions of people, and currently the labor recruiting diffi culties and the labor shortage also happen in many places. erefore it should be noted that this signifi cant achievement of our employment work is hardly won. As for the main problem of China’s economy in 2010, it may be the gradually rising pressure of infl ation.

32 happened constantly in the past year, including drought, flood, earthquake disaster, and debris fl ow. Also, people with evil intentions spread the information of price rising, and some merchants formed the price alliances that disturbed the market order. e fundamental reason is still our weak agricultural industry. erefore, these factors combined lead to the current infl ation problem, which should be resolved in a comprehensive way. First we should stabilize the price, and try to raise the supply through production, circulation, storage, import and export; second, Yao Jingyuan, Chief we should make all our efforts to lower the Economist of the Na- circulation costs; third, we should improve the tional Bureau of Statistics compensation mechanism; fourth, we should protect the market order and prevent the spread of market-disturbing information. In my opinion, in 2011 the Chinese com- China’s economy Infl ation will be kept under control modity price will turn to be stable and hyper- will grow rapidly infl ation will be impossible. e infl ation ev- Q: As you have mentioned, the main problem eryone is concerned about will be curbed. From and stably in the of China’s economy in 2010 lies in the rising monitored statistics from related departments, year 2011. The pressure from infl ation. In the recent Central there is no basis for hyperinfl ation in Chinese employment rate Economic Working Conference, the cen- national economy. e agriculture harvest has will rise and the tral government emphasized that during the happened for 7 consecutive years and the ex- year 2011, the relationship among economic cessive production capacity of industrial prod- commodity price growth, economic restructuring and the man- ucts lead to abundant supplies. For the middle- will be stable. agement of infl ation expectation will be dealt range and long run, the monetary policy will The balance of with in an active and stable manner. e ques- turn steady and factors leading to infl ation will tion is how to look at the current infl ations. diminish, which will lay solid foundations for payments will be stabilizing prices. Therefore the conclusion is improved. A: We should give high priority to the in- that the Chinese commodity price will keep flation problem. It should be clarified that stable in 2011. factors leading to the price increase are very “The Twelfth Five-year Plan”: Chinese complicated. Some factors are internal, while economy will maintain a robust others international; some work temporarily growth momentum and others affecting for the long run. Inter- nationally, it is mainly the quantitative easing Q: 2011 is the first year when the “the policies issued by the United States that led to Twelfth Five-year Plan” is implemented. How the substantial rise in prices of resources and do you look at the prospect of China’s economy agricultural products. Since last year, the price in 2011 and the future fi ve years? of wheat and corn in the international market has grown by 57% and rice 45%. China is a A: China’s economy will grow rapidly and big import country of agricultural products, stably in the year 2011. e employment rate and the imported inflation precipitated by will rise and the commodity price will be sta- the rising international agricultural products ble. e balance of payments will be improved. would exert enormous upward pressures on All these show that the economy in 2011 will Chinese commodity prices. From a domestic be better than this year. perspective, the excess liquidity is another Currently our national economy is in a reason. The excessive money will flow into period of strategic opportunity combined with where it is needed. Considering the principles prospective accomplishments. The industrial- of economics, the fl oating currency is in direct ization is being further promoted, the scale of proportion to the commodity price, while in urbanization is expanding, the market environ- inverse proportion to the value of currency. ment is improving and the internationalization e more currency fl ow will cause the rising keeps developing. The industrialization will commodity price and devaluing of the cur- lend support to the development of Chinese rency. What’s more, severe natural disasters economy; the urbanization will become a great 33 growth potential of the economy; the the Chinese economic growth. Cur- would say “Hello, it is cheap” in Chi- market development will reinvigorate rently the household income per capita nese. e globalization will bring more China’s economy; and the internation- in cities and towns is three times that development opportunities to China alization will provide huge space for of people living in the countryside. If in the future. the upgrading of Chinese economy. It a large number of farmers will become Three hidden problems is undoubted that during the “Twelfth city dwellers in the next 5 years, their in Chinese economic Five-year Plan” the Chinese economy income will triple. Therefore, it will development will keep a considerable growth mo- be very profi table to develop those in- mentum and achieve great accom- dustries related to urbanization, which Q: What do you think are the major plishments. will constantly create and stimulate issues in the Chinese economic devel- First, compared with the post- the domestic demands. opment during “the Twelfth Five-year industrialization of many developed Third, the reason why the Chi- Plan” period? countries, China’s industrialization nese economy is full of vigor and vital- is now still under way. The realiza- ity is that we have chosen the market A: For the Chinese economic de- tion of the Chinese industrialization economy. In the past when our nation- velopment, the current three hidden requires us to improve the manufac- al economy was planned, we needed problems include: in coordination, im- turing industry, develop the strategi- cloth tickets to buy clothes, food tick- balance and unsustainability. cally emerging industries, and provide ets to get food. After the opening-up First from the perspective of more entrepreneurial production and supply, our first, sec- opportunities. China ond and third industries are suffered became a major in- China’s foreign trade will keep growing. with imbalances, in coordination and dustrial country only The speed of recovery of the global unsustainability problems. Currently after the opening-up economy is still slow, but it has been on the fi rst industry, agricultural industry and reform policies has very weak foundations. The re- were implemented. In the track of recovery; also, the domestic cent infl ation is most refl ected in the 1930s the annual steel consumption will further expand, which rising price of agricultural products production volume was would become the driving force of the and food. e CPI in November rose only 50 thousand t, in national economy and the demand will by 5.1%, with 3.25% contributed by 1940 150 thousand t, the food price rise. Although reasons and the current daily be boosted. come from both international and production has reached domestic fi elds, and it might be work- 1.6 million t; in 1978 ing temporarily or in the long run, the the annual car produc- deep implication is that the foundation volume was 150 tion of China’s agricultural industry thousand, while this is still weak and its capacity to resist year the number sur- natural disasters is inadequate. As for passed 17 million. Therefore, in the and reform policy was conducted, we the second industry, although China future 5 years, the rapid development stuck to the market-oriented economy has become the major manufacturing of industrialization will provide strong and let the market play a fundamental country in the world, it should be ad- support for the Chinese economy. role in optimizing resources, which mitted that our second industry is still Second, the current urbaniza- invigorated the whole economy. The huge in scale but feeble in competitive- tion rate of China is only 46%, which deepening reform we are talking about ness. Next is the third industry. Now is still at the low level compared with is to improve the market economy the third industry took only more than developed countries. e urbanization mechanism, and make the national 40% of our GDP, which is 40 percent- is signifi cant to the Chinese economic economy more vigorous. age points less than that of the United development. e arable land per cap- Fourth, the globalization provides States, and even much lower than the ita for farmers is only 1.4 mu, which is a larger growth space for the Chinese world average level. The low propor- inadequate to help farmers get rich and economy. As we have mentioned ear- tion of the third industry might lead to improve their livelihood. To realize lier, in the past we need cloth and food many problems. For instance, it might this goal, the most important step is to tickets to meet our basic needs, but aff ect the structural employment and decrease the number of farmers, speed now the Chinese could make three exert pressures on the demand side of up urbanization, and let cities and and half clothes and two pair of shoes labor market. According to the UN towns absorb more and more farmers. for every one in the world. e com- standard of “the age from 16 to 65 If so, each farmer left will hold more modities made in China could be seen is the population working age”, the resources and it will be convenient to almost every where. In the past when labor population of China amounts promote industrialization and scale we went abroad, foreigners would to 909 million, which is 300 million production. Also, turning farmers to speak to us Japanese because they took more than the whole population of city dwellers will bring chain eff ects to us for Japanese; but now foreigners the United States, Japan, the United

34 Kingdom, Germany, France, Italy and Canada combined. The difficulties in fi nding jobs for young people and fresh graduates are closely linked to the low proportion of modern service industry in the national economy. Also from the demand side, investment, consumption and export are three diving engines of our economic growth. For quite a long time in the past, the Chinese economic development mainly depended upon the export and investment. The lessons drawn from the 2008 global fi nancial crisis tell us that the Chinese economic growth should not mainly rely on the external demands, but on the domestic ones. To expand domestic demands requires us to increase investment and consumption. Investment may become importance to the transformation of and also would have been impossible volatile as the economy fl uctuates, and economic development mode from without the eff orts made by all depart- excessive investments might crowd out dependence on the heavy material in- ments, all regions, the people of all the consumption. The recent several vestments to that relying on the tech- ethnics, especially the working people years saw a rise of investment rate and nological advancement and self inno- of the trade industry. At the end of a fall of consumption on an annual ba- vation. We should speed up cultivating 2009, we were still feared about the sis, which is detrimental to the expan- and developing the emerging strategic global economy prospects in 2010, be- sion of consumption. erefore, during industries, continuously promote the cause at that time, the global economy the “Twelfth Five-year Plan” period, energy-saving and emission reduction, slowed down, demands became feeble, we should attach greater importance expand domestic demands and stimu- the trade protectionism became preva- to consumption than to investment, late scientifi c growth. lent, and the global economy would and the consumption will become the Foreign trade is a highlight reach the bottom level again. But one most significant diving force of the accomplishment in 2010 year has passed and China’s foreign economic growth. Chinese economy trade still keeps a robust growth mo- Third, from the investment fac- mentum, especially the export and im- tors of economic growth, in the past Q: According to the data issued by port in November increased by more we mainly develop our economy the General Administration of Cus- than 10% than the previous year. e through heavy investments of material toms, the first 11 months of 2010 foreign trade volume would surpass resources. Now half of our oil con- the Chinese foreign trade volume 2.9 trillion USD in total, which is the sumption and 70% of the iron ore are amounted to 2.67728 trillion USD, up historical high. erefore, the foreign dependent on imports. e big mate- by 36.3% compared with the previous trade is a great highlight of the Chi- rial resource consumption leads the year. It should be said that in 2010 the nese economy in 2010. development of our economy into the Chinese foreign trade outperformed the e external conditions for Chi- vicious circle of high energy consump- expectations of the early 2010. How do nese foreign trade in 2011 will turn fa- tion, high material consumption, and you look at the Chinese foreign trade in vorable compared with the year 2010. severe pollution. Now a consensus has 2010? What will be the performance of The China’s foreign trade will keep been reached among the public that it the Chinese foreign trade? growing. e speed of recovery of the will be unsustainable to develop our global economy is still slow, but it has economy through heavy investment of A: China’s foreign trade will reach been on the track of recovery; also, the material resource. We have no rights its historical high in 2010. And this domestic consumption will further ex- to leave the unhealthy natural environ- accomplishment is achieved when pand, which would become the driving ment to the following generations. the global economy slows down, the force of the national economy and the Therefore, it should be noted demand is weak, and trade protection- demand will be boosted. What’s more, that accelerating the transformation ism is rising. It is the most important, the domestic demand increase will of economic development pattern is gratifying highlight of the 2010 Chi- lead to the import increase. erefore, the biggest issue the Chinese economy nese economy. is huge achievement the external and internal environment is facing today. The 2011 will be the is due to the scientifi c decision making for 2011 is better than the previous beginning year of the “Twelfth Five- of Central Committee of the Com- year and China’s foreign trade will year Plan”, and we should attach great munist Party and the State Council keep a stable growth momentum.

35 e policy of opening up to the outside world aims at balancing trade payment, equilibrating internal and external economic develop- Foreign ment, and easing external impact on domestic economy. International cooperation in the agriculture and energy resource sectors will deepen for the consideration of domestic food security and energy security. Trade Trends — China Post Securities in 5 Years This means economic development mode depending merely on investment and export needs to be transformed. — Fan Wei, Senior Researcher of Hongyuan Securities Foreign trade: Export-led → Investment: “Bring in” and “Go out” hand in hand Import & export balance Against the backdrop of higher economic development level and During the 12th five-year surging outbound investment, China will divert from such an invest- period (2011-2015), with foreign ment pattern dominated by absorbing foreign capital to a new one where trade remaining as a major force for utilizing inbound investment runs side by side with effecting invest- domestic economic growth, China ment abroad. In terms of sector and region preferences, inbound invest- will seek a new phase of economic ment should be directed towards the service sector and channeled to growth boosted by consumption, in- China’s central and western regions. us, structure of utilizing foreign vestment and export. investment will be optimized. As for the mode of using overseas invest- To this end, efforts are to be ment, overseas investors are encouraged to undertake M&A rather made as follows: fi rstly, when expand- than Greenfield investment in order to revitalize stock assets. On the ing domestic demand, China one hand, foreign investors are encouraged to set up R&D centers and should stabilize external marketing networks in China to speed up localization of inbound invest- demand with further ment; on the other hand, local enterprises are urged to enhance capacities exploration. With a for providing multinational corporations with auxiliary facilities. Intro- stable market share in duction of talents and technologies from abroad is conducive to improve developed countries, labor productivity. the country needs In the mean time, the central government will accelerate the to strive for foreign implementation of the “going global” strategy, which needs to conform trade market diver- to the overall trend of economic development mode transformation sifi cation by nudging and economic restructuring. e “going global” strategy is to be carried into new territory, out in combination with extending external contacts and off ering more the emerging markets economic aid to developing countries. In the implementation of “going in particular. Secondly, global”, diff erential strategies and policies will be developed for diff er- foreign trade requires ent sectors, and private enterprises and small- and medium-sized en- balanced development with terprises as well as state-owned enterprises should be brought together more imports of resources, en- into full play. China endeavors to cultivate a batch of multinationals ergy, hi-tech products together with by granting more fi nancial support for enterprises to go abroad and by key equipment and components, of establishing and perfecting risk prevention mechanism for outbound which China is in urgent need for investment. economic development. Thirdly, in- — International Business Daily ternational trade calls for an optimal RMB: to experience internationalization structure. Homegrown products may command enhanced international In the upcoming fi ve years, China’s foreign trade will orient to- competitiveness defined by higher wards a new blueprint — more prominence is to be given to “balance technological content and added value of import & export and of absorbing overseas investment and eff ecting via fostering a new cutting edge with investment abroad”, which was proposed by the 12th Five-year Plan. technologies, brands, quality and e change of foreign trade mix and investment structure will also be services at the core. Transformation conducive to the internationalization of RMB. and upgrading of processing trade e Ministry of Commerce is compiling the 12th Five-year Plan will be facilitated through extending on FDI Outfl ow and External Cooperation, designing medium- and the domestic value-added chain and long-term development plans targeting key nations and sectors, and great support will be granted to gen- is negotiating medium- and long-term development plans on eco- eral trade. Service trade deficit is to nomic and trade cooperation with foreign counterparts. Departments be reduced by vigorously developing concerned will earnestly carry out research on overseas investment service trade. environment and scientific evaluation of investment projects. The — International Business Daily Ministry of Commerce will issue on a regular basis such guidance

36 documents as Catalogue of Countries and Industries for Guiding Investment Overseas and Catalogue of Countries What Is Said in the Plan? and Industries for Contracting Project Links Overseas. In future, we will work for setting up special fund on external econom- e Suggestions of the CPC Central Committee on ic and technological cooperation, special Making the Twelfth Five-Year Plan (2011-2015) for the fund on guaranty letter risks for overseas National Economy and Social Development emphasizes that the Chinese project contracting and development government will implement the mutually benefi cial and win-win strategy, fund on overseas economic and trade co- and further improve the level of opening up to the outside world. Here are operation zones. More preferential credit more details. will be granted to such countries and To adapt to the new trend that the Chinese opening-up strategy will regions as Africa, Shanghai Cooperation shift its dependence from export and introduction of foreign investments to an Organization (SCO) and Association equal emphasis on export and import, introduction of foreign investments and of Southeast Asian Nations (ASEAN). overseas investments, the Chinese government should adopt a more proactive Management on foreign reserve for FDI strategy, expand the space and fi eld of opening up, diversify and deepen the will thereby be improved. convergence of all parties’ interests, improve the mechanism that could more — Li Gang, Director of Research adapt to the opening-up economy, prevent risks eff ectively, and promote de- Department of European Studies, Chinese velopment, reform and creation through the opening up policy. Academy of International Trade and Eco- Optimize foreign trade structure. Further stabilize and expand foreign de- nomic Cooperation, Ministry of Commerce mands, and maintain current export competitiveness, accelerate developing core competencies with technology, brand, quality and service as the essences, extend China: a driving force for the value-added chain of domestic processing trade, promote market diversi- investment and trade fi cation, vigorously develop service trade, and promote the transformation and liberalization upgrading of export structure. Let import play an important role in maintaining China will be committed to car- macro-economic balance and restructuring, to achieve a balance of foreign trade. rying out multi-tier regional and sub- Raise the quality and level of foreign capital utilization. To use foreign regional cooperation across the world. In capital requires an optimization of structure, enriching of methods, expan- accordance with the step-by-step prin- sion of channels, improvement in soft investment environment, and protec- ciple featuring a multitude of means and tion of investors’ legal rights. Increase eff orts to introduce more intelligence, distinctive focuses, China will speed up talents and technologies, encourage foreign companies to establish R&D the implementation of FTA strategy and centers in China, borrows ideas from the internationally advanced manage- will advance regional cooperation. While ment beliefs, rule and experience, and further promote the institutional and pushing forward ongoing negotiation on technological creativity. Open service industries like finance and logistics FTA, China will study the feasibility to more widely to the outside world, develop service outsourcing, steadily open negotiate FTA with other countries es- up education, medical and physics fields, introduce high quality resources pecially in East Asia and the Asian and and improve the international level of the service industry. Pacifi c regions. Speed up the implementation of “go global” strategy. In accordance In the course of negotiating FAT, with market orientation and corporate self-decision making principle, we special importance should be attached to should promote all ownership enterprises to invest cooperatively in foreign deepening cooperation with emerging countries. We should develop overseas project contracting, expand interna- economies and developing countries, and to tional cooperation in agriculture, deepen the mutually benefi cial cooperation expanding foreign trade markets by mak- in international energy and resources, and actively develop cooperative proj- ing full use of FTA. Meanwhile, China, ects conducive to local livelihood. We should also develop our multi-national with enhanced economic status on the in- corporations and international fi nancial institutions, and improve interna- ternational stage, will actively participate in tional operation level. We should expand the role played by RMB in trans- global economic governance and will claim border trade and investment, study well the overseas investment environ- more discourse power on global economic ment, and enhance the scientifi c evaluation of investment projects, to protect and trade rules in the international trade Chinese foreign interests and rights, and prevent all types of risks. and fi nance sectors. In this way, China will Actively participate into global economic management and regional make its contribution to the reform of the cooperation. We should further the reform of national economic structure, international monetary system, the estab- and promote the international economic system to develop toward a fair and lishment of an equal, inclusive and win-win just one. We should establish a multi trade system that is balanced, univer- bilateral trade mechanism characterized by sally benefi cial and leads to win-win result, and also fi ght against all forms a fair and rationale international economic of protectionism. We should guide and promote the regional cooperation, order, and the elimination of protectionism accelerate the implementation of free trade zone strategy, deepen cooperation in various types. with emerging market powers and developing countries, and raise economic — International Business Daily assistance to developing countries.

37 In , What to Invest ? By Xinhua Finance

n 2010, China reached the goals concern- the restructuring of the national economy. In ing its economic development set in “the the past, the net exportation and investment eleventh five-year plan” which was com- were the main impetus to economic growth. piled fi ve years ago, and also witnessed its However, the economic pulling eff ect from the economic aggregate skyrocket to be the second consumption plays a bigger and bigger role. e Ilargest in the world. e year of 2011 marks the section of macro-consumption includes phar- beginning of “the twelfth five-year plan”. For macy, retailing products, clothing, food, drink, investors, it is crucial to fi gure out how to adjust etc., which, more broadly speaking, embraces all their investment scheme within the framework aspects of domestic demand. of this new fi ve-year plan. So, what are the in- It is estimated that, in the twelfth five- vestment hotspots during “the twelfth fi ve-year year plan, when GDP grows by about 7%, the plan”? final consumption rate will rise from 48.6% Hotspot One: in 2010 to 55% in 2015. e goal in the long run is to make it reach 65% in 2020. To realize Macro-consumption: an inevitable this, the government should make two deci- rise under "restructuring" sions: one is to adjust the system of income distribution (including adjusting diff erent rela- The rise of consumption depends on tions in income distribution, reforming income distribution mechanism, enlarging the cover- age of social security, promoting public services, etc.); the other is to accelerate urbanization, of which the most important thing is the citizenization of migrant workers. Helping a population of 0.2 billion to settle down, be employed and be insured will generate enormous new demand, which requires the strengthening of the accommodating capacity of medium and small cities and small towns. Hotspot Two: High-speed railway and construction of urban rail: crucial impetus to economy Of the transportation infrastructure, highways, ports, airports and so on have been relatively well constructed. us, the construction of railway will become the highlight, owing to

38 the construction of high-speed railway, ing Industries. The Decision defines under National Development and urban rail and inter-city express pas- the key directions, main goals and Reform Commission points out that, sages, of “the twelfth fi ve-year plan”. supporting policies for these strategic during “the twelfth fi ve-year plan”, the According to the national plan- emerging industries. Judging from the energy consumption per unit of GDP ning on railway network in the middle actual situation in China, science and will reach an index of 18%. e goal of and long run, till 2020, there should technology, and the industrial founda- cutting emission for “the twelfth fi ve- have been constructed 120,000 kilome- tions, they are confi ned to the follow- year plan”, which is to make the energy ters railway in operating millage, coming seven industries: energy-saving and consumed per unit of GDP fall by less pared to the present 80,000 kilometers. environment-friendly industry, new- than 20%, is lower than that set for “the It is estimated that more than generation information technology, eleventh fi ve-year plan”. It is estimated 3,000 billion yuan will be invested in high-end equipment manufacturing, that in the decade to come, the annual the railway construction during “the new energy, new materials, and auto- growth rate of GDP will gradually de- twelfth five-year plan”. This, together mobile driven by new energy. Their cline till it lingers at 8% or below, ren- with other relevant investment thus development will be accelerated with dering the energy saving and emission brought about, will be the essential concentrated eff orts. reduction more diffi cult. prop for economic growth in this fi ve- Investment in the new green Someone also predicts that, dur- year plan. industries should be encouraged with ing “the twelfth five-year plan”, the Hotspot Three: an aim to reducing energy consump- government will put forward not only a tion and carbon emission. Xu Huaqing goal in reducing energy consumption, Manufacturing services: from the Research Center of Energy, but a goal in reducing emission of car- signifi cant strategy for Environment and Climate Change bon dioxide as well. industrial transformation and upgrading China’s imbalanced industrial structure is mostly attributed to the underdevelopment of the tertiary industry which is supposed to serve the Invest in commerce and trade industry and agriculture. This, to a industry large extent, restricts the expansion of Links domestic consumption market and the On the basis of “expanding the domes- increase of added value of exported tic consumption” and “enabling the lower- products, with the result that domes- income classes to consume more” stated in tic enterprises have to revolve around “the twelfth fi ve-year plan”, Hongyuan Securities are of the following opinions: products at the lower end of the value ● chain to carry out their production During the twelfth fi ve-year plan, the sales of ne- and operation. us, the optimization cessities, like food, drink, clothing and other products for and upgrading of China’s industrial daily use, and elementary optional consumer products, like structure is hindered. Considering the cosmetics, will grow faster at a annual compound growth present stage China's economic devel- rate, which we predict to be more than 25%, exceeding that opment have arrived at, China should of “the eleventh fi ve-year plan”. At the same time, we think get the manufacturing service industry highly of supermarkets and chain stores of household appli- fi rmly planted in its second stage, and ance which are settled in the middle or west regions, with penetrating network in the whole market. gradually lead the service industry to ● its third stage, shifting its auxiliary Multi-region economic development brings about and supporting role for the manufac- increase in income per capita. Sales in department stores turing industry to a strategic guiding are more resilient than those in supermarkets. We are con- one. fident in leading department-store enterprises in regions with a robust development momentum and enterprises that Hotspot Four: are able to expand and consolidate themselves, and enjoy Strategic emerging industries: sinking distribution channels and industrial upgrading when the entire business landscape is favorable. seven promising ones ● Investors can choose to invest in brand optional On September 8, 2010, the State consumer goods, especially enterprises that are in control of Council reviewed and basically ap- the end of the network, and can be easily expanded by way proved The State Council’s Decision of copying. about Speeding up the Cultivation and Development of Strategic Emerg-

39 with funds raised likely to exceed US$300 bil- Continue to Lead lion. Despite the fragility of economic recovery in Western markets, the economic growth story and record-breaking debuts in China have fu- Global IPO elled a strong worldwide IPO recovery. In the first 11 months of 2010, IPOs worldwide had already raised US$255.3 billion in 1,199 deals. Activity in By last year end, total global IPO values was estimated to exceed the previous record of US$295 billion raised in the global fundraising peak of 2007, according to Ernst & Young’s Year-end Global IPO Update. The fourth quarter of 2010 also was estimated to reach the highest quarterly IPO value on record (surpassing the US$104.8 bil- espite market uncertainty, new lion raised in Q4 2007). is record will likely By Ernst & Young IPO ﬁ lings continue to increase be achieved, as global IPO value has already around the world and a large reached US$102.8b through 294 deals so far backlog has built up as compa- this quarter, and in December, over 80 further nies await greater macroeconomic stability. We deals worth a minimum of US$17 billion are “Dexpect the current IPO momentum to continue currently expected. in 2011. In addition, we are seeing more foreign Benefiting from mainland China’s strong funds buying into the shares of Chinese compa- GDP growth and market liquidity, Greater nies, which are driving IPO activity in Greater China (including Mainland China, Hong Kong China. We believe that the trend will continue and Taiwan) issuers dominate, making up over in 2011,” said Philip Leung, Regional Manag- 46% of global IPO value (US$117.9 billion in 442 ing Partner, China Central, Ernst & Young. deals from January to November 2010, a 170% Hong Kong, Shenzhen and Shanghai exchanges increase in total value from the same time period are now among the top global IPO fund raising in 2009). agencies. e Hong Kong Stock Exchange (HKEx), IPO (Initial Public Oﬀ ering) fundraising buoyed by the Agricultural Bank of China and activity reached record levels globally in 2010 AIA Group listings, will rank number one by

Voices and Views Overseas

China’s eijing is becoming more concerned about quality, not quantity, Best-Laid when it comes to economic growth. That, in turn, Plans Bwill inform the Chinese government’s next five-year plan, due in outline this month ahead of formal adoption in spring 2011. e plan could see Beijing target a lower annual growth rate over the medium term while setting out reforms needed to rebalance China's economy toward more reliance on domestic consumption, rather than exports. Doing so will in- volve challenging strong vested interests, however. A lower growth target — potentially down to 7% per year for the next five years — doesn't

40 total funds raised in 2010, the second ranks second globally by funds raised, industries having IPOs in the US too.” consecutive year Hong Kong has domi- raising US$40 billion (15.7% of the “In 2010, six Chinese companies nated the global IPO market. From fi rst eleven month of global proceeds). listed in the US adopted IFRS instead January to November 2010, HKEx The Shanghai Stock Exchange (SSE) of US GAAP, while there was only raised US$ 51.3 billion in 79 IPOs. ranks fourth globally by funds raised, one in the previous year. All companies e US$22.1 billion mega IPO by the raising US$26.2 billion (10.3% of the listed in the US are required to adopt Agricultural Bank of China was the fi rst eleven month of global proceeds). IFRS starting from 2014 to 2016, and world’s largest IPO ever, and made up Due to great demand for growth-stage with this deadline approaching Chinese 9% of the first 11 months’ total IPO companies, the Shenzhen Stock Ex- companies are increasingly adopting funds raised globally. These proceeds change, including both its SME Board IFRS directly for their US IPO. This surpassed the US$21.9 billion raised by and ChiNext, was the most active by trend is welcomed by many Chinese the previous IPO record holder, another number of deals globally, with 288 companies planning for a US IPO be- Chinese state-owned bank, Indus- deals (24% of the total number of IPOs cause, comparing to US GAAP, there trial and Commercial Bank of China globally). are more IFRS resources in China. is (ICBC). e fourth quarter of 2010 saw Yuan Yongmin, Ernst & Young will in turn attract more Chinese com- the second largest IPO of the year: the Assurance Services Partner commented: panies not familiar with financial re- US$20.5 billion IPO by AIA Group, “The listing of Chinese companies in porting under US GAAP, as previously the Asian life insurance business spun the US is in the spotlight in the last two they did not consider this an option for off from America International Group, quarters in 2010. e market demand is them,” Yuan added. the US insurance corporation. huge as more and more US CK Lai, Ernst & Young Assur- investors would like to buy ance Services Partner said: “We expect into the shares of Chinese that IPO activity in 2011 will continue companies, and thereby to be strong. While Chinese Mainland participate in the economic companies will continue to be the major growth of China. is trend driver for IPO activity in Hong Kong, will continue in 2011, and we will also see more and more listings other than the technology, of companies from both the developed media and telecommunica- and emerging markets, as HKEx has tions (TMT), clean-tech become a hub for cross-border IPO ac- and healthcare sectors, tivity.” we will see more Chinese The Shenzhen Stock Exchange companies from ‘traditional’

necessarily portend a sharp slowing of large economies — as the major force facing increasingly congested cities for China's economy. China’s grown at in China’s economy. Reforms here, with inadequate social housing. 11.4% per year on average over the last though, may prove easier to plan than Further liberalization of interest fi ve years, according to UBS, way above enact. rates is another possible target for the the last fi ve-year plan's projection for 7.5% Take plans to bolster China’s so- fi ve-year plan, to refl ect market forces. annual growth. cial security system, giving consumers Initially it's thought this could result in Still, Chinese growth will likely be more confidence to spend. That could higher deposit rates: good for boosting closer to target in the future, primarily be funded by asking China’s state- the income of Chinese savers, but not because of a weaker contribution from net owned enterprises to pay higher divi- so good for China's powerful banks, exports, as major Chinese trading part- dends. Fine in theory, but it's hard to which will suffer from narrower net ners remain in the economic doldrums. get SOE chiefs, keen to protect their interest margins. Investment, China's other key economic fi efdoms, to part with their cash. Fast growth may, in retrospect, driver, should remain strong, as inland Reform of China’s household come to be seen as the easy part for provinces increase manufacturing capac- registration system is also in the cards, China’s economic policy makers. En- ity and industries upgrade equipment. helping grease the wheels of urbaniza- couraging sustainable growth is going But there should also be a sharper tion by making it easier for people to to require some heavy policy lifting. focus on encouraging domestic con- change residence, hopefully leading to sumption — which has fallen to around higher household wealth. Resistance — Andrew Peaple, Heard on the 35% of GDP, very low by the standards here may come from local governments Street

41 A New Phase in Economic Growth

eng Xiaoping said “We should allow some equipped to tackle them. people to get rich fi rst, and the rest will follow.” For example, large universities and research Now it’s time for the rest to follow, as the Chi- centers can be moved out of those big cities, so nese government has put it on the top agenda that not everything is concentrated in these ar- in the next fi ve years. e most signifi cant part of China's eas. As a result, the migrant population will not 12thD Five-Year Plan is the focus shift from the export-led always fl ow to big cities. sectors to increasing domestic consumer demand by rais- e global economy recession continues and ing Chinese labors’ incomes to allow all Chinese residents the global fi ght for social welfare increases, the prosper in this new era. role of the government in narrowing the income This is a significant change for China, and it also gap becomes more crucial. Therefore China means bigger challenges. Income increase obviously will should speed up forming a public service system lead to labor cost increase, which is possible to impact and a public service-oriented government, which export-led sectors as well as encourage high infl ation. So would lay the foundation for boosting domestic an important task for China is to balance the inflation demand and sustainable development. threats with increasing domestic demand while maintain- China should promote more technology ing export-led sectors. innovation and more value-added products. A e changes currently going on in the rural China more frequent intellectual exchange between are tremendous and under- reported, especially in the Chinese students and researchers are much Western media, whose focus is always on the large cities more needed for making the value-added prod- like Beijing and Shanghai. Actually the changes in rural ucts going global. China are going to be the engine of China's economic growth in the next fi ve or ten years, and of course China — Prof. Kay Shimizu, Weatherhead East will face tremendous challenges. I think China is well- Asian Institute of Columbia University, USA

By stepping up efforts to restructure the economy to boost domestic demand, adopt a green growth model, A Unique and make growth more inclusive, the current economic model will evolve into a “triple bottom-line”, achieving results through better economic performance, while pro- Opportunity tecting the environment and promoting social equality. e 12th ﬁ ve-year plan presents a unique opportunity to address lingering structural economic constraints and to allocate resources optimally, ensuring that the rich and poor people and regions of China achieve balanced economic development. In 10 to 15 years, China will be ranked as an upper middle-income country if its economy continues to grow at the current pace. Policies promoting the quality of growth are essential. e result will be a pattern of inclusive, balanced, and sustainable economic development.

— C. Lawrence Greenwood Jr., Vice President, Asian Development Bank

CONOMY E

China’s Recent Fight Against Inflation By Li Zhen

n December 11 2010, Na- Chinese Academy of Social Sciences Commodity prices were the main tional Bureau of Statistics (CASS), a research organization in concern of urban residents, followed (NBS) released that the Beijing, reported that high inflation by health care and housing prices, ac- consumer price index (CPI) and housing prices had contributed to cording to the findings. Job satisfaction rose 5.1 percent in November com- a deepening sense of popular disaffec- among those surveyed was at its lowest Opared with the same month in 2009; tion. in four years, according to the academy. it was the sharpest increase in three years. Chinese planners had hoped Figure 1 China’s CPI and Food Price Index in 2010 (Jan.-Nov.) (%) that the average of the index for the year would not go above 3 percent, but 14 that looks virtually impossible now. 12 Consumers have been especially hard 10 hit by soaring food prices. Food prices were a major driver 8 of November’s inflation, rising 11.7% 6 from a year earlier, faster than Oc- tober’s 10.1% rise. But nonfood price 4 inflation also accelerated, rising 1.9% 2 from a year earlier after October’s 1.6% 0 rise, and other indicators of economic Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov activity also picked up, in a sign that inflationary pressures could be spread- —— CPI —— Food Price Index ing outside food. Data Source: NBS On December 15, 2010, the

44 Also on December 15, 2010, liquidity and bank lending, presum- economy and the inflationary pressures the central bank said that satisfaction ably through raising interest rates that come with that. among people with the current level and other means, indicates that The PBOC has also increased the of prices had dropped to an 11-year Chinese leaders are worried about proportion of deposits that banks must low. The bank’s findings were based inflation but feel confident enough in hold in reserve with the central bank on a survey of 20,000 people during future growth that they can afford to six times in 2010 in a move aimed at the fourth quarter in 50 cities across cool the economy. reining in excess liquidity and tackling China. On December 12, 2010, a state- stubbornly high inflation. The real estate market is another ment released at the end of the annual Officials have expressed their concern. The property market in Chi- Central Economic Work Conference preference for such administrative na has been booming. Rising property said Chinese leaders had agreed to measures because of fears that compar- prices, along with the government “put stabilizing the overall price level atively high rates could attract flows stimulus money and loose bank lend- in a more prominent position” in their of “hot money” into the country, espe- ing, have spurred new developments ranking of economic-policy priorities. cially at a time of extraordinarily loose across the country. The new language out of one of the key monetary conditions in still-struggling According to National Devel- events in China’s economic calendar developed markets. opment and Reform Commission Table 1 China’s Inflation Fight in 2010 (NDRC), the pickup November’s was largely driven by temporary and sea- Date Measures sonal factors and that inflation will October 20 Benchmark interest rates raised by percentage point. October 21 Government says CPI rose 3.6% in September. likely slow to 5% or below in Decem- November 11 Government says CPI rose 4.4% in October, fastest in 2 years. ber. By then, some of the recent ad- November 16 Bank reserve ratio raised by 0.5 percentage point. ministrative measures the government November 29 Bank reserve ratio raised by 0.5 percentage point. has taken to rein in prices of agricul- December 11 Government says CPI rose 5.1% in November, fastest since July 2008. tural commodities, including price December 20 Bank reserve ratio raised by 0.5 percentage point. controls and releasing state reserves of December 26 Benchmark interest rates raised by 0.25 percentage point. some goods, will be showing some effects. Actually, the government has is likely to add to already-widespread On December 26, 2010, Chinese taken a series of measures to tame expectations that the nation’s booming Premier Wen Jiabao voiced his confi- the accelerating inflation. Officials economy will face higher interest rates dence that the government can contain have signaled that moves will be and tighter credit in coming months. rising prices, seeking to reassure the taken to better control spending On December 17, 2010, Li Keq- public about inflation a day after the across the country. China announced iang, the vice premier, said at a confer- central bank raised interest rates for on December 3 that it would tighten ence of government officials that “more the second time in 10 weeks. monetary policy in 2010, shifting it efforts should be provided to stabilize Speaking to listeners during a from “relatively loose to prudent.” prices next year.” He added that over visit to the state radio, Premier Wen That was a clear sign that Chinese the next five years, growth rates should acknowledged that recent price in- officials were intensely concerned be defined “reasonably.” creases have “made life more difficult” about inflation. The move to limit The central bank announced on for middle and lower income Chinese. December 25, 2010, that it was raising But, pointing to measures the leader- interest rates for the second time in ship has taken in recent months, he about two months in what appears to said: “As it looks now, we are com- be a long-term campaign to suppress pletely able to control the overall level inflation as many ordinary Chinese of prices.” express discontent with rising con- Many economists say China sumer prices. could better fight inflation by allow- The People’s Bank of China ing its currency to appreciate, which (PBOC) said it would raise the one- reduces the prices of imports in local- year benchmark lending rate by 25 currency terms. The yuan has gained basis points to 5.81 percent, and the close to 3% against the dollar since benchmark deposit rate by the same China un-pegged it from the U.S. cur- amount to 2.75 percent. rency in June 2010. But many analysts The Chinese economy has been do not think that Chinese government awash in liquidity due to government is willing to accelerate currency ap- stimulus money and generous lending preciation because of fears it would by state banks. Chinese officials are undermine the competitiveness of now concerned about an overheated China’s exports in dollar terms.

45 CONOMY E

Trade and the Crisis:

Protect or Recover By Rob Gregory, Christian Henn, Brad McDon- ald, and Mika Saito

he pace of trade reforms waned from the mid- finding with important consequences for policy makers. 2000s as protectionist sentiment began to The crisis-induced collapse of trade caught the attention of increase. With the onset of the global financial top-level policymakers. On the heels of the Lehman Brothers col- crisis, reform progress not only halted but lapse and its consequences for capital markets, the contraction in began to reverse. As we show in this note, new trade global trade was sharp and sudden. Global trade volumes fell 17.5 Trestrictions have had, in the limited products they tar- percent between September 2008 and January 2009 in an episode geted, a strong negative impact on trade. The aggregate Figure 1. World Trade, Industrial Production, and GDP: 2007-09 impact of new restrictions is modest, at about 0.25 (Seasonally adjusted, September 2008-100) percent of global trade, as most countries have resisted 105 a widespread resort to protectionism. Looking ahead, however, in 2010 sustained high unemployment, uneven 100 growth, and an unwinding of government stimulus measures suggest that protectionist pressures may rise. 95 Introduction

90 The trade contraction that followed the deepening World Trade Volume financial crisis in 2008 was sudden and sharp, but by World Industrial Production 85 mid-2009 trade had started to recover. Countries public- G-3 Real GDP 1/ ly undertook to resist widespread protectionist measures, which alongside supportive macroeconomic policies and 80 the existence of multilateral trade rules helped to restrain Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec protectionist sentiment in the crisis period. However, 2007 2008 2009 where new restrictive measures were put in place they CPB Netherlands Bureau for Economic Policy Analysis, and IMF WEO. Sources:1/GDP weighed average of US, Euro area and Japan. did heavily impact trade in targeted product categories, a

46 now termed the “Great Trade Collapse” Figure 2. Simple Average MFN Rates: 1990-2009 (Figure 1). 70 In downturns, trade normally falls 1990 1995 2000 2005 2009 more sharply than industrial produc- 60 tion or overall economic activity, but the 50 extent of the Great Trade Collapse was surprising initially. It has been largely 40 explained by three factors: composi- tional effects, global supply chains, and 30 reduced availability of trade finance. Not only was the collapse abrupt, it was 20 also highly synchronized. In September 2008 fewer than 5 percent of OECD 10 countries had negative export growth, 0 while in the subsequent months nearly Brazil China 1/ India 2/ Japan US EU 3/ all experienced an export fall of more than 10 percent. World Intergrated Trade Solution (WITS). Source:1/Tariff rates for 1992,1996, and 2008 are used instead of 1990, 1995, and 2009, respectively. Following its initial contraction 2/Tariff rates for 1997 and 2001 are used instead of 1995 and 2000, respectively. at the onset of the crisis, global trade 3/Conventional instead of MFN rates are used for 1990. Rates for 1996 are used instead of 1995. quickly leveled off and by mid-2009 began to recover. Trade rose 25 percent Figure 3. Simple Average Applied MFN Rates: 2008 between May and December 2009, re- Percent turning to some 90 percent of Septem- 40 ber 2008 levels. The onset of the crisis and the 30 sharp contraction of trade raised high- level awareness of the prospect of 25 resurgent protectionism. The 1930s experience illustrated how increased 20 protectionism could exacerbate a crisis and delay recovery. Moreover, recent 15 research has enhanced our understand- 10 ing of how open trade policies not only bring higher economic welfare through 5 the conventional and well-known mi- croeconomic effects, but also further the 0 macroeconomic objectives of economic China India Japan US EU growth and stability. All Products Textile Products Agridultural Products Slowing momentum of trade liberalization holds risks Source: WTO, World Tariff Profiles 2009 Much progress had been made in clothing, and footwear (TCF), with ceilings agreed in the Uruguay Round freeing trade over time. Among major the elimination (in the World Trade concluded 16 years ago. Average most- western European and North American Organization Uruguay Round) of long- favored-nation (MFN) tariffs are far countries, average tariffs fell from 15 to standing quota arrangements under the below the average WTO bound rate in 4 percent during 1952–2005. In many Multi-Fiber Agreement. In agriculture, such countries as Brazil (18 percentage major developing economies, tariffs the use of export subsidies and NTBs points), Argentina, and India. These increased or remained very high until has been curtailed. Still, tariffs in these countries have considerable scope to the 1980s but have since come down areas remain well above those in most increase import tariffs without violat- sharply. Brazil’s average rate declined other sectors (Figure 3). ing their WTO tariff commitments from 51 percent in 1987 to 12 percent This progress implies, however, (Figure 4). today; India’s average tariff fell from 71 that many countries now have ample The pace of trade liberalization percent in 1994 to 32 percent in 2002 scope to raise tariffs without exceeding seemed to slow beginning from the and 13 percent today (Figure 2). Even their WTO tariff bindings. In under- early to the mid-2000s, leaving sub- in sectors where tariffs remain relatively taking the substantial liberalization stantial trade restrictions in place prior high, there has been progress toward mentioned above, many major develop- to the crisis. As Figure 5 shows, overall removing non-tariff barriers (NTBs). ing economies have reduced tariffs to import restrictiveness is about 5 percent Important examples include textiles, well below the WTO-bound tariff rate for advanced economies, compared to

47 CONOMY Figure 4. Simple Average Tariff Rates: 2008

E sponse to a G-20 request. Other institu- Percent WTO Bound Rates vs. MFN Applied Rates 50 tions and unofficial entities supplement this with their own monitoring, perhaps 45 the most ambitious of which is Global 40 Trade Alert (GTA), associated with the 35 (London based) Centre for Economic Policy Research and supported by the 30 World Bank and others. 25 In addition to the heightened 20 awareness of the risks of protectionism, several other factors have worked to 15 limit the protectionist response: 10 a. Multilateral rules and institu- 5 tions have clarified the types of policy actions considered responsible. The 0 Argentina Brazil China India Japan US EU strong WTO-based trade system has MFN applied Bound been central. There appears to have been WTO, World Tariff Profiles 2009. very little resort to new WTO-incon- Source: sistent measures, and even where rules Figure 5. Overall Trade Restrictiveness Index(OTRI): 2005-06 exist but leave scope for policy reversal, Percent such as with tariff ceilings, this scope 20 has not been widely used. OTRI Market Access-OTRI b. As we observed above, trade Measure of restrictiveness of their imports Measure of restrictiveness of their exports declined much more rapidly than did 15 overall economic activity. The ratio of imports to GDP declined as well. Al- 10 though job losses mounted, they were not by and large blamed on trade. c. Macroeconomic and finan- 5 cial sector policies were supportive of trade. Monetary policy has been highly 0 expansionary, with interest rates down Advanced Emerging Others Advanced Advanced Emerging Others to record lows in most advanced and Economies Markets Economies Economies Markets many emerging economies, while cen- Tariffs NTBs tral bank balance sheets expanded to Kee, Nicita, and Olarreaga(2009) and Global Monitoring Report 2008. unprecedented levels in key advanced Source: Indices shown here are the weighted average of original indices reported in GMR 2008. AdvancedNote: economies refer to Members of Advanced Economies (WEO classification 110) excluding Czech economies, including in support of the Republic and Slovak Republic. Emerging Markets refer to Members of Emerging Europe(WEO classification 903) and Members of ASEAN-5(WEO classification 500). financial sector. Many governments injected additional fiscal stimulus, beyond “automatic stabilizers.” The coordination about 15 percent for non-advanced, to investment or to trade in goods and of the fiscal stimulus across countries— non-emerging market economies (Fig- services, imposing new export restric- reflecting IMF advice, helped to sustain ure 5). Despite various preferences, tions, or implementing WTO incon- demand. And McKibbin and Stoeckel exports from developing economies also sistent measures to stimulate exports.” (2009) argue that a coordinated fiscal face slightly higher restrictions in their In April 2009, G-20 leaders extended stimulus reduces protectionist sentiment export markets, as shown in the right this pledge through 2010 and asked the by more than individual packages could side of the figure. WTO and other institutions to moni- do alone. Awareness and monitoring tor their countries’ adherence to this There is a risk now that protection- have limited protectionism pledge. ism may increase. Unemployment has This provided further impetus for risen and may remain high, and more Thus far, political leaders have monitoring activities. WTO monitor- countries now face limited fiscal space. shown a heightened awareness of the ing reports cover trade measures for all This may help to explain the increased risks of protectionism. Mindful of the countries and reports prepared jointly frequency of industry’s requests for 1930s experience and trade’s contribu- by the WTO, OECD, and United trade remedy measures (Figure 6). Also, tion to macroeconomic performance, Nations Conference on Trade and unconventional measures, which are leaders of the Group of 20 (G-20) Development (UNCTAD) cover the harder to quantify, may already have had economies pledged in November 2008 trade and investment measures of G-20 a considerable impact. Analysis such as to “refrain from raising new barriers countries, the latter specifically in re- that by GTA has focused attention on

48 Figure 6. Newly-Initiated and Imposed Trade Remedy Investigations: Quarterly, 2007-09 the extent of this “murky” protectionism effected 50 35 through more subtle, often “behind-the-border,” measures. 45 Initiated by Developed Economies Initiated by Developing Economies 30 New trade restrictions have visibly 40 Imposed Trade Remedies (Right-axis) reduced trade 35 25 With monitoring activities coming to quite 30 20 different conclusions, the extent of harm caused 25 by trade restrictions has been unclear. None of the 15 20 watchdogs suggests that we have, or likely will, see an extreme protectionist surge as witnessed in the 15 10 1930s. But characterizations differ markedly. The 10 March 2010 joint OECD-WTO-UNCTAD re- 5 5 port indicates that protectionism has not escalated meaningfully, and suggests that new instances of 0 0 measures have declined: “Although some G-20 2007 2008 2009 members continued to implement new trade re- Source: Bown(2010). strictive policies, in apparent contradiction to their pledges at London and Pittsburgh, the overall Figure 7. Types of Distortionary Trade Measures Implemented, Nov. 2008–Nov. 2009 extent of these restrictions has been limited and an escalation of protectionism has continued to be Total Red/Implemented Measures in GTA:(Total=342) avoided. There have been fewer instances than in earlier [recent] periods of G-20 members taking po- Other 8 tentially trade restrictive measures, and more cases Export measures of trade opening measures….” In contrast, GTA’s Local 21 Tariffs/Import content/Public bans/Quotas 4th Report, released a few weeks earlier, argues procurement 62 20 that as reporting and investigative lags are being overcome, “the extent of anti-foreigner discrimina- tion is much higher than originally reported” and that despite improved macroeconomic conditions the frequency of new measures taken in the fourth quarter of 2009 continued at pace with those taken Trade defense at the height of the crisis, earlier in 2009. measures Our analysis finds that newly implemented Bail 66 outs/Subsidies trade restrictions have already had a strong negative 137 impact; fortunately, they have covered only a small share of trade. There is strong statistical evidence that trade in products targeted by protectionist Non-tariff barriers measures indeed declined significantly. And if pro- 28 Source: Global Trade Alert, as of January 20, 2010. tectionist measures become widespread or are allowed to balloon, this would cause significant harm Measures Included in Our Study:(Total=184) to global trade and stifle the broader economic Other recovery. The impact on targeted products is appar- 0 ent from the raw data, as shown below, but we also Export measures 16 Tariffs/Import use econometric methods to confirm this rigorously bans/Quotas and to estimate the quantitative effect on aggregate Local 51 content/Public trade. procurement 14 We match data on measures from the monitoring activities with detailed data on actual trade flows. For an intuitive sense of whether new measures have affected aggregate trade, we examine Bail outs/Subsidies how (within the same product category) bilateral 27 trade targeted by new measures has evolved as compared to bilateral trade that has not been targeted by new measures. More specifically, we use Non-tariff Trade defense monthly bilateral (import and export) trade values barriers measures at the 4-digit (HS) product level, as reported by 21 55 the largest trading countries through late 2009. To

49 CONOMY

E identify those trade flows targeted by new measures, Figure 8. Bilateral Trade Flows subject to Measures Implemented we then use information from the GTA database on in November 2008 1/ Index(2008M10=100) the 4-digit product category (or categories) and bi- 120 lateral trade partners targeted by a new measure and the month in which the measure was implemented. 100 A wide array of measures is considered (Figure 7), some of which restrict imports and others that re- 80 strict or support exports. In total, we incorporate information on 184 measures identified by GTA as 60 highly likely to be discriminatory (the so-called “red 40 measures”). The negative impact of import restrictions is 20 apparent in the raw data. To assess the trade impact of new measures we must account for the uneven ef- 0 fect of the demand shock caused by the global crisis. 2008M10 2008M12 2009M2 2009M4 2009M6 2009M8 2009M10 2009M12 For example, the crisis affected trade in some prod- IMF Staff calculations. Sources:1/bilateral trade flows subject to measures implemented in 2008M11 are divided by total ucts (such as durables) more than others. To separate bilateral trade flows of the same products. The ratio is normalized to equal 100 for 2008M10. the effects of the demand shock from those of the trade restrictions, we examine products in every time period separately and compare how trade performed in bilateral trading relationships (“country- Figure 9. Performance of Protected Trade Relative to Total Trade 1/ pairs”) targeted by new measures, relative to those Indes(t-1=100) 160 not targeted by new measures. Figure 8 illustrates Export support measures the results of this comparison for products on which 140 new import-restrictive measures were introduced in a particular month, November 2008. It shows that, 120 indeed, imports targeted by new restrictions declined Export restrictions more than did world trade in the same products. 100 Replicating Figure 8 for import restricting measures imposed in other months demonstrates that they 80 also generally had a negative impact (Figure 9). Export subsidies and restrictions distorted 60 trade as well. Analogous graphs for export subsidies Import restrictions and export restrictions are also presented in Figure 40 9. As expected, export subsidies seemingly increased t-1 t t+2 t+4 t+6 targeted exports relative to world trade of the same IMF Staff calculations. products. Export restrictions also seem to have led Sources:1/The index shows the simple average of bilateral trade flows subject to measures. to increased trade. This (initially puzzling) result is implemented at various months(relative to total bilateral trade flows of the same products). largely because the category includes measures that reduce (as well as intensify) export restrictions. Econometric analysis serves to quantify the 8 and 9. Across various econometric specifications, new measures are impact of new trade restrictions on actual trade (see found—with a high degree of statistical confidence—to discriminate Annex for more detail). Henn and McDonald (2010) against targeted trade flows. Our basic specification represents a close analyze how new trade restrictive measures have statistical analogue to the figures. The statistical estimates emerging impacted detailed (4-digit) bilateral monthly trade from this basic specification suggest that a new restriction is associated flows, after accounting, via different fixed effects, with about an 8.5 percent distortion to trade. A refined specification for changes in trade flows due to other determinants finds that a part of this 8.5 percent impact is attributable to other trade than new trade restrictions. These determinants ac- determinants. After accounting for these determinants, a new restric- count for the facts that: (i) the crisis induced more tion is still responsible for a 3 percent distortion to trade. The magni- severe changes in demand for some types of prod- tude of this effect is striking, as it applies to entire 4-digit product cat- ucts than for others; (ii) as the crisis progressed, egories—although most trade measures only cover a portion of these some countries faced more severe declines in income categories. This suggests that the impact on the products specifically than did other countries; and finally (iii) bilateral affected may be considerably larger. Detailed analysis in the Annex exchange rates, inflation differentials, and the costs separately quantifies the impact of different types of measures: import of transport between any two countries may have restrictions, export restrictions, and export support measures. varied as the crisis developed. Measures distorted aggregate world trade by about 0.25 percent. The statistical results confirm the distortionary We obtain this result by multiplying the refined product-level esti- effect of new trade restrictions suggested in Figures mates by the amount of trade subject to measures of each type. The es- 50 timates of various specifications imply that riod, high unemployment would be sustained against a backdrop of rising import measures distorted aggregate global trade growth and higher market shares of imports. This affects the success rate—and thus by between 0.2 and 0.7 percent. appeal—of anti-dumping petitions, which evidence shows were filed at higher rates After the crisis: continued in the second half of 2009 (Figure 6). More broadly, if public opinion blames unem- protectionist pressure ployment on imports, poor policy choices may follow. c. As macroeconomic policy space narrows and the political consensus for Whether this qualifies as a success sustaining monetary, financial sector, and fiscal stimulus packages erodes, a with- will depend on how countries deal with drawal of the stimulus before a sustainable recovery in private demand is in train protectionist pressures in the post-crisis would remove the support that has helped to dampen protectionist pressures. period. When League of Nations mem- Specific developments in some countries may generate additional demands: bers meeting in 1930 could not resist the a. Higher commodity prices bring a risk that some countries will tax or re- allure of new restrictions, the ensuing strict commodity exports, as demonstrated during the 2007–08 food price crisis. downward spiral of protectionism, some b. Where a surge in capital inflows leads to rapid currency appreciation, as of the most egregious measures came two in some emerging markets, the resulting pressure on export and import competing years later, exacerbated and extended the industries sectors may generate calls for trade actions. Great Depression. This time, good inten- c. Another widening of global imbalances may trigger a rise in protectionism tions were formalized as pledges in the as countries seek to remedy protracted current account deficits. As Faruqee and oth- G-20 communiqué and, despite a range ers (2006) argue, however, a protectionist surge would reduce global growth while of individual violations, countries have re- leaving these imbalances unresolved. sisted widespread protectionist measures, d. Perhaps most dangerously, giving in to these pressures may itself bring a although some doubt remains in certain response. Although uncommon to date, retaliation could become widespread if the “murky” areas. We consider this a quali- factors just described were acted on. fied success that can be ascribed to solid A stigma accompanies any reversal of the reduction of trade barriers achieved rules, strong institutions, and enhanced in recent decades. Widespread use of new measures—even if initially by only a few monitoring; and to the wisdom gained countries, would eliminate that stigma. In that event, the ability to resist widespread from hard-learned lessons, including the protectionism would depend on countries’ ability to increase trade restrictions while macroeconomic benefits of liberal trade remaining within their WTO legal obligations, a point to which we return shortly. policies and the need for macroeconomic How to avoid a return to widespread protectionism policies to respond f lexibly to sudden changes in conditions. Leaders and senior policymakers must remain on heightened alert. With the We stress that where measures have risk that protectionist sentiment may now intensify rather than subside, continuing been taken they have had large negative and further enhancing the monitoring of protectionist measures and maintaining effects. The apparently modest aggregate the high-level political awareness of the macroeconomic risks of protectionism will impact of new protectionism reflects the help to resist these pressures. restraint that has been demonstrated. As The surest way to avoid a widespread resort to protectionism with adverse our results show, it does not indicate that macroeconomic consequences is to conclude the WTO Doha Round. The Doha new protectionism has been harmless. Round would bring important actual policy changes in many areas, including Moreover, the experience of the 1930s, the substantial benefits for low-income countries. Underappreciated, however, is the benefits of liberal trade policy for econom- benefit that it would bring in enhanced predictability and security of trade poli- ic growth and stability, and the adverse cies. Because substantial past liberalization episodes have not been “locked in,” effects of trade restrictions in macro simu- the binding gaps mentioned above leave considerable scope to reverse that liberal- lation models, all suggest that expanding ization. Industrial product tariffs of several key emerging market countries could protectionist measures would jeopardize be raised on average by some 10 to 30 percentage points and yet remains within global recovery without addressing the WTO commitments. In agriculture, present commitments allow countries such factors that trigger the protectionist pres- as the United States to sharply raise domestic subsidies, distorting global agricul- sures. tural commodity prices. These are areas in which the role of WTO commitments There are several key reasons why is the easiest to grasp. But a Doha agreement could tighten or clarify commit- protectionist pressures may intensify: ments and rules across a broad range of topics, including anti-dumping, food aid, a. Unemployment is likely to re- services, subsidies, and trade facilitation. main high for some time and is associated Senior macroeconomic policy makers should see concluding the Doha Round with such pressures. Even with growth re- as part of their exit policy from the global financial crisis. New restrictions have bounding, a recovery in employment may had, in those products they have covered, a strong negative effect on trade. With occur only after many months. As leaders unemployment remaining high and imports rebounding, and as monetary and fis- face political pressures to address employ- cal stimulus begin to be withdrawn, protectionist pressure may intensify rather than ment concerns, protectionist pressures abate. Succumbing to those pressures on a widespread scale would jeopardize the associated with unemployment may be felt pace, strength, and durability of economic recovery. with some lag. b. In contrast to the crisis pe- (Author: Strategy, Policy, and Review Department, IMF)

51 RMB 800,000 Cash Deposit: Game Between Qualification and Capital

By Liu Yuzheng

Four years ago, China Association VOCC’s operation income mainly depends on freight of Shipping Agency officially changed differences. So, to a small-sized operator, unpaid or the name to China Association of Ship- not in time payment of freights for a large contract will certainly affect its capital turnover and lead to the diffi- ping Agencies & Non-Vessel-Operating cult operation. However, such things are common seennowadays. Common Carriers (CASA), and the NTill now, guarantee given to NVOCC enterprises is limited, and healthy and long term development weak. of China NVOCC market attracts more As is known to all, RMB 800,000 of cash deposit is an important entry requirement to NVOCC market. What does “RMB and more attentions. In these years, 800,000 of cash deposit” mean? Most enterprises regard it as a discussions on “RMB 800,000 of cash distinguishing from general freight agents, the “qualification”. Are deposit” have been hot in the industry. “qualification” and “capital” equal, and can they transform into the For long, bill of lading, tax payment other to “get the money’s worth”? Entry requirement should be tighten and cash deposit are three hot issues for China NVOCC operation, while cash It is sure that the cash deposit can’t equal market entry quali- deposit is the hottest. fication, but cash deposit has raised more and more voices to lift market entry requirements. According to Regulations on Ocean Shipping and the implementation provisions, enterprises applying for NVOCC business only

52 need to “register lading bill in Min- business, freight forwarders will sign tions on Ocean Shipping of the People’s istry of Communications, pay RMB a transportation contract with a third Republic of China, which established 800,000 of cash deposit and complete party under the owner’s name rather NVOCC system, took effect. It is filing of freight”, and there is no re- than his own, and they are not on learned that 3,000 plus companies quirement on the registered capital. In- behalf of a carrier to issue marine bill have obtained NVOCC qualifications dustrial participants appoint that no re- of lading. The only duty for freight through paying cash deposit to the spe- quirement on registered capital reduces forwarders is arranging export trans- cial account by the end of 2008, mean- the entry barriers of NVOCC market. portation and related export proce- ing the account had had a total deposit What’s worse, there are unqualified dures. Although freight forwarders of RMB 2.4 billion by then. If we can companies in NVOCC market, causing sometimes provide transportation make good use of this amount of mon- disordered market competition. and related storage, packing, customs ey, the capital bottleneck of NVOCC It seems that cash deposit has clearance and inspection; after all, enterprises will be solved, turning this been the key factor for a company to they are not the carrier or the goods “qualification” (RMB 800,000) into undertake NVOCC business or not. owner. “capital” in need. According to CASA, regulations on In other words, when freight for- Breakthrough in deposit ocean shipping have no registered capi- warders undertake import and export system and utilization tal requirement on corporate applicators business entrusted by the goods owner, for NVOCC, and though a require- they will be sure agents as long as they “Deposit” adds financial burdens ment on registered capital can raise the act under the owner’s name. And they to NVOCC enterprises, especially entry barriers, it cannot play the role of will not be responsible for goods losses when the financial crisis still has its recovery and warning as cash deposit. or damages caused by a third party, if influence. CASA has discussed the Every market needs a step by the agent itself and the second party it possibilities of replacing insurance step development. In consideration of chose has no fault. The both parties of system with cash deposit with CIRC market standardization and protection, the transportation contract arranged and other departments. However, as it may be appropriate to lift NVOCC by an agent are the shipper and the insurance companies belong to a third market entry requirements by other actual carrier. When the goods occurs party, they can play the compensation means. Meanwhile, CASA hopes damage or losses, the agent can as- function, but not that of governmental NVOCC enterprises to regulate their sist the goods owner to claim against fines. This is a difficult problem for behaviors, and have a standardized and the responsible parties, but this is not long. lawful operation. his duty. NVOCC signs contracts On this Nov. 16th, deposit liabil- “Capital problems” put NVOCC in person when undertakes goods ity insurance system for non-vessel- enterprises to a more risky transportation business, therefore he operating common carriers took effect. situation should be responsible for goods dam- In the future, NVOCC can choose age and losses. In this way, NVOCC cash deposit or liability insurance NVOCCs often have a larger takes much more responsibilities than to obtain qualification for NVOCC investment and higher costs, especially freight agents. business. 5 NVOCC enterprises were when they take new businesses as car- Is RMB 800,000 of cash deposit allowed insure deposit liability insur- riers, because NVOCCs are not only much? ance. This was a new measure taken by responsible for land transportation of Ministry of Communication together goods or containers before shipment, According to regulations on with CIRC to promote industrial but also for export declaration, docu- ocean shipping, entering NOVCC development, innovate administra- mentation and cargo warehousing, etc. markets only needs a registration and tive supervision model and develop NVOCCs usually are commercial pay RMB 800,000 of cash deposit, modern logistics and transportation organizations that do not have strong and RMB 200,000 of cash deposit for industry. economic strength as actual carriers. each branch. It is learned that the cash It is learned that due to his- Once encountering a problem, they deposit basically has two functions: on torical reasons, cash deposit was the even don’t have ships available for one hand, to recover the goods owner’s only financial liability guarantee for mortgage or seizure, nor other prop- losses; on the other, to pay the fines for NVOCCs. During the drafting of erty to for the protection of the third corporate illegal operation activities. In Regulations on Ocean Shipping (the parties. Cash deposit, to some extent, fact, NVOCC business is more risky, “regulations”), former Ministry of can ease shippers’ concerns. But, in and RMB 800,000 is not sufficient for Transportation tried to incorporate practice, NVOCCs have greatly differ- larger amounts of commercial compen- guarantee, insurance and cash de- ent financial status and business scales, sation. Such a cash deposit is more like posit into NVOCC liability insur- so the amount of cash deposit shall governmental supervision, to prevent ance, but due to unmatched financial differ. In general, the risk in choosing from commercial disputes. It seems that and insurance markets, finally cash a NVOCC is often greater than freight RMB 800,000 for each enterprise is deposit was stated as the only liabil- agents. not that much. ity guarantee means for NVOCC Besides, when taking goods On January 1st, 2002, the Regula- companies.

53 Green Everywhere

By Yan Manman

“In the past, it cost RMB 300 to 400 to bury one ton of orange peel, while now the waste orange peel is made into green products through deep processing,” said Zhang Gang. “The orange deep processing industrial chain has a promising future.”

entioning low carbon and green economy, people will just think about the energy sector, actually, low carbon and green concept has The entrance of waste pipe at the households penetrated into every industry. At the China International Green of the residents Industry Expo 2010, the reporter found that “green” nearly could be found in every industry, ranging from the oil paint, fabrics, to buildings etc. MSmall orange peel with big use Usually after eating an orange, the thing you most probably do would be throwing the orange peel in the dustbin. It is hardly for you to imagine that be-

54 hind the useless peel hides a big some equip- industry. Would you associate the m e n t f o r orange peel with the oil paint? energy-saving I suppose the answer would be e q u i p m e n t , In the eco-demonstration probably “no”. resource recy- area, Hammarby Eco- At the Expo, Tianjin Li- cling and clean City was very appealing uhong Scientific and Develop- production in ment Co., Ltd. exhibited an oil garment pro- to the audience. The paint product, which is made cessing fields. staff at the pavilion from no other than the orange Green told the reporter that peel. This magic oil paint natural- house not the eco-city is an ly aroused much audience. Zhang far in the Gang, General Manager of this future example of completely company told the reporter that Paint made with orarge-peel integration of waste the small orange peel could have A t t h e processing, energy big business. They had cooperated with pavilion of Velux (China), a building one Sichuan juice producing company, model called “green light tower” at- saving, water supply taking all the orange peels after juice tracted much audience. It not only can and sewage processing. processing and making them into oil run using the solar energy, but also is paint. Through the preliminary process- upgraded from “passive energy saving” ing, orange peel oil could be exacted, to “active energy saving”. The window which then is transported to Tianjin for can automatically “feel” the sunshine mal energy and electricity. What’s deep processing. And the final products outside and the temperature inside. more, the microorganism deposited are oil paint, dope, solvent, detergent, When the temperature reaches the in the river course is also collected adhesive and orange peel plates etc. “In given limit, it will automatically pull for generating thermal energy and the past, it cost RMB 300 to 400 to down the window. electricity. 95% household waste bury one ton of orange peel, while now In the eco-demonstration area, could be collected for recycling use the waste orange peel is made into green Hammarby Eco-City was very ap- in Harmarby, which is most worthy products through deep processing,” said pealing to the audience. The staff at of learning. Harmarby will prepare Zhang Gang. “The orange deep pro- the pavilion told the reporter that the new residents three gifts: organic cessing industrial chain has a promising the eco-city is an example of com- waste dustbin, biolysis garbage bag future.” The green technology not only pletely integration of waste process- and energy saving electric bulb. So consumes the so-called waste, but also ing,, energy saving, water supply and residents there all fostered environ- gives birth to new industry, bringing sewage processing. In the eco-city, mentally friendly habit in their daily benefit. solar energy is widely used, and wind life. The heat produced in processing Scrap plastics made into fine power stations are also built in the the waste water could be used by the fabrics city. The residents in the city put the energy department, or else used for sorted waste into different vacuum heating. And the other solid waste is Now people’s clothes are more and pipe, of which the entrance is built used as manure for the agricultural more fashionable and beautiful, and in the house of the residents. When industry or the gardening. this for part is attributed to the develop- the waste are transported to the col- The residents in Hammarby have ment of fabrics. And now at the Expo, lecting point, it, through special one slogan—From Toilet to Omelet. It the reporter found that environmentally processing such as fermenting etc, means that the waste water discharged friendly and low-carbon fabrics have then could be used to generate ther- from the toilet will be processed into become a new trend. methane, which mostly is At the booth of Teijin Group, the supplied for the bus and reporter saw two sports shirts, one black part of which is also used as and one white, feeling quite soft and stove fire for cooking. light. The staff of Teijin told the reporter “Hammarby eco- that these two shirts were made of a city turns a new leaf be- special fabrics with great comfort and fore my eyes. The initia- good air permeability. To the reporter’s tor is Sweden’s federation surprise, this fabrics is made from the of real estate developers. recycled plastic bottles, the waste plastic The developers in China stationery. Compared with the ordinary also should make more fabrics, producing such a piece of clothes tries in this aspect,” one could reduce 80% CO2 emission. real estate developer au- Some companies also exhibit Harmmarby eco-city dience said.

55 Cultural Creativity BoomsBy Zhu Zijun

at ICCIE By Zhu Zijun

an you imagine the Mona away years ago could “speak”, “walk” A superb collection of creations Lisa jumping out from a and “sing” across space and time. This two-dimensional screen and is the result of bringing the hi-tech Compared with the previous ex- answering your questions and art together. pos, the 5th ICCIE is the most popular with her unique expression? And can The expo, which lasted four days, and has the largest scale. It is character- youC imagine you are just a few steps attracted an audience of more than istic of the expo to blend culture, cre- away from the late singer, Teresa Teng, 200,000, including many professional ativity and technology; and many new performing with her sweet voice… visitors; and the 24 projects drew at- creations made their debut at this year’s These are the virtual images created at tention from over 4,000 merchants. expo. the 5th China International Cultural According to incomplete statis- According to a report from The & Creative Industry Expo (ICCIE), tics, during the expo, the gross amount People’s Daily Overseas Edition, more which was held in Beijing from Nov. of contracts signed related to artistic than 500 creative “Beijng presents” 17-21, 2010. performance, publishing, copyrights, exhibits from all over the country made These miraculous experi- video production, design creation, it to the stage. Among them, 30 prize- ences were one of the features at the cyber games and animation, research winning works, like Gold & Silver Me- Xicheng exhibition area. With a & development, antique calligraphy, dallion with Beijing new 16 sceneries, combination of 3D technology and painting, cultural tourism, and indus- and blue and white porcelain, appeared holograms, the characters in these trial park buildings, reached RMB 47.8 for the first time. “I’ve been living in artworks and pop singers who passed billion, up 30.3 percent year on year. Beijing for three years. Viewing these

56 ‘presents’, I still get the feeling of Bei- Culture mixed with jing culture just like when I first came technology here,” a foreigner gave his praise. As the core of In addition, there was a group soft power, culture is of arts and crafts some of which from also the soul of cultural the list of national intangible cultural industry. “If Beijing is heritages, like the Mianzhu New Year to become a real global paintings and Luzhou oiled paper um- city, it should not solely brellas from Sichuan, Thangka from depend on economic Tibet, Raoyang ethnic musical instru- development and pros- ments from Hebei, glassware and clay perity. Instead it must figures from Beijing, paintings and have the culture power wood carvings form Shanxi, and many to influence the world,” others. These works, as a national cul- said Long Yongtu. Dur- tural symbol, are manifestations of the ing the expo, over 10 Chinese people’s aesthetic affection districts and counties in and cultural creativity. There were also Beijing gathered to showcase Beijing’s and cultural resources in the districts; some foreign crafts, like Malaysia tins, cultural creativity through a variety of across the space-time tunnel, you Burma jadeite, etc. colorful activities by making full use of could enjoy the rolling waves of the Introducing a win-win concept into their history and culture, and combin- Yongding River, the unlimited poetic modern Chinese culture is a significant ing it with modern technology. feeling of Morning Moon Over Marco part of breeding China’s cultural indus- At the Dongcheng District exhi- Polo Bridge…At the Beijing exhibi- try, Long Yongtu said at the summit fo- bition area, a map of the central axis of tion area, creativity, technology and rum of the expo. He added that respect- Beijing was rather striking. Using LED Beijing’s various cultures blended well ing other countries also plays an impor- lights, the map, which was 16.5 meters with each other. tant role in developing comprehensive long, displayed the historical sites along Design everywhere culture. This year, 26 international in- the axis from Yongdingmen to the Bell stitutions, and over 600 foreigners from and Drum Tower, including the Tem- The Jiugong cellphone for the 63 governmental and professional del- ple of Heaven, the Imperial Palace, and blind, designed by the Shanghai in- egations from 39 countries and districts the Lama Temple. Thus, the audience stitute of China Telecom, allowed the attended the expo, hitting a record high. could enjoy a panorama of the imperial disabled to enjoy communication with At the projects promotion conference of city. Using modern technology, the old modern technology. Using video calls, the cultural creative industry, projects Beijing culture was vividly expressed the blind could get remote assistance. like the China-Korea cooperation in along with a video of the historical sites. Hanwang Technology Co., Ltd. animation and the multi-media corridor There were other thoughtful sur- displayed its LCD screen which com- in Malaysia, were very appealing to do- prises as well. A touchscreen allowed bines advanced drawing board tech- mestic enterprises. you to view the history of historical nology with an LCD. Consumers can easily draw on the screen, just as com- fortably as on paper. “Design creativity is the pillar of production services and cultural creative industry. Directly contributing to the industrialization of technological achievements and serving enterprises’ independent innovation, it is a great tool in the realization of industrial restructuring and the transformation of economic development. Nowadays with the homogenization of several technologies, a sense of creativity and design ability is becoming the key for business innovation,” said Liu Mingjian, Chair- man of Hanwang Technology. “Only independent innovation and brand building can facilitate the transformation from ‘made in China’ into ‘created in China’,” said an official from the China Gift Industry Association.

57 Realizing Dreams in Games By Lin Feng Players: a huge base, a continuing dream I f yo u a s k w h e r e Earlier this year, the China Internet Network Information Center (CNNIC) do young people gather released “The 25th China Internet Development Statistics Report.” The report shows that the internet game players nationwide in 2009 continued to grow to a scale of 265 most and stay the lon- million, up by 41.5% comparing with statistics in 2008. What is also worth our con- gest nowadays, many cern is that the online game is the only Internet entertainment service which had up- people will blurt out a ward trend in usage, with its percentage rising from 62.8% in 2008 to 68.9% in 2009. word without thinking, The increase of 6 percentage points in just one year provides the conclusive evidence of this fast-growing online game market. the campus. The answer CNNIC’s survey also showed that as of 2009, the domestic massive online is not quite true, because game users had reached nearly 70 million, while in 2008 there were only 55 million, they ignore another im- achieving a growth rate of nearly 25% in one year. The major online game companies all made themselves a huge fortune in the substantial growth in game users. portant place – the 24- According to experts, there are two main reasons for this massive growth of hour Internet cafes in online game users in 2009. First, web games maintained a sound trend in develop- cities across China. ment, playing a stimulating role in increasing the numbers of the user; second, the SNS (Social Networking Service) game enjoyed a rapid rise in 2009, of which the interpersonal relationships and simple operation established a great platform for users to access to online games. So who exactly are playing those online games? According to CNNIC’s survey, among the online game users in the country, students accounted for 37.2%, topping the list; company employees accounted for 31.2%, ranking second place; freelance or self employed accounted for 11.8%, coming in third. The three categories above accounted for more than 80% in all game users. Although the survey did not provide age data, according to daily experience, students often started playing the online

58 games since their upper primary stage; The network management in in the industry start launching projects company employees gradually stayed Chuangtianxia Internet Cafe in Shen- in this field”, said one industry insider. away from online games while they got zhen said in the interview that during He pointed out that, comparing with older, with the age about 30 years old the game, players can set their ideas MMORPG games, the threshold for as a boundary limit. Judging from the free and unrestrained, and make their web games was much lower in aspects above, we can draw a conclusion that dream of becoming heroes to the limit. of development, promotion costs, and the domestic online game users are Players can get completely relaxed the player entrance, etc. There were mainly concentrated in between the while experiencing the joy of success. no client restrictions, and new players ages of 10-30, and mainly consisted This feeling of playing online games is could get access to online games more of students, company employees, and so good that it greatly exceeds the joy easily. a considerable number of freelancers provided by other entertainment and When accepting telephone in- or individual practitioners. Also, the leisure activities. terview, a network management in mainstream of online game players Companies: more new products Happy Inn Internet Cafe in Guiyang can only be these people because even and more marketing confirmed the rising popularity of if other groups of people want to play web games. He pointed out that the online games, their time and energy Over the past few years, due to the web game was actually played using are greatly limited. strong promotion of the mode “game for web browsers, and it did not need At the moment, online games free, props charge”, the relevant listed to download any client. It could be have become the new darling of enter- companies in online game industry all played in any place at any time, as tainment for young students and leisure gained a gross profit margin of more long as there was a computer with necessary for white-collars. Why are than 70%. To many people’s great envy, internet access. Besides, its access to online games so intoxicated and loved this industry can be “earning even while games was fast and easy, and there by players, even making them stay sleeping”. As of today, it is no longer that was no problem of insufficient ma- out all night? The main reason for the easy, and the growth of profits of many chine configuration. Thus, more and obsession with online games can be companies in the industry starts to slow more players began to favor this new summarized into the following three down. Chen Xiaowei, President of The 9, type of online game. aspects. First, they can enjoy the thrill once told the press that despite the profit According to “2009-2010 China’s of PK in battles; second, they can ap- margins of the current industry still be- Online Game Industry Research Re- preciate the beauty of graphics and ing regarded as higher than most other port” released by iResearch on April music in the game; third, they are able industries, the online game industry had 1 this year, the domestic web game to make up regrets in real life and gain been unable to maintain the excessive market amounted to RMB 990 million a sense of achievement and identity. profits since the above operation mode in 2009, up by 97.2%, and this figure A network management in Hu- emerged 5 years ago. will reach 1.47 million in 2010. IRe- ifeng Internet Cafe in Nangang Dis- Let’s see the crux of the above search analysts believed that the future trict, Harbin told the reporter that a operation mode. The online game com- revenues of web games would account growing number of Internet users like panies have been through the process of for 5% to 10% of the total income of to play online role-playing games such pursuing from PCU (Peak Concurrent China’s online game industry. as “World of Warcraft”, “DNF”, etc. He Users) to ARPU (Average Revenue per During the past two years, the also provided the reason of this phe- User). Although high ARPU would domestic self-developed online game nomenon. The competition is every- bring great benefits, as time went by, it products showed a good market trend. where in real life, and those who can might form the phase-out effect of “paid They had a lot of places worthy of ultimately come out on top are very few. users take it all”, making an inevitable praise, for instance, the popularity of So people try to get into the illusory loss of low-level users. Then, the game the game theme, and the playability of world of the Web and through playing would gradually lose its vitality. the game itself, etc. Particularly, there the role in intense fighting for final vic- While ref lecting on the charge were a lot of good casual games with tory to fill the lack of confidence and mode, some of the giants in the online creativity. So people are having high obtain the pleasure of winning. games industry have found a new way expectations on getting rid of foreign The network management in – web games. Prior to this, the majority games, which are currently flooded in Xiaoyao Internet Cafe in Zhengzhou, of the domestic online game companies China. said that almost all of the currently mainly concentrate on MMORPG Currently, the development of ca- developed games adopted the new (Massively Multiplayer Online Role- sual games is rapid. With its features of distributed processing technology, playing Games). But now, web games relaxing and simple, casual games are and the graphics were all beautiful have gradually become one of the new widely welcome by working population, and dynamic with enchanting music focuses in the development of the in- with its market growth rate already ex- and cool actions. These can be a great dustry. ceeding the MMORPG games. enjoyment for those who seek spiritual “The profit margin of web games In the structure of the casual comfort in the visionary and fantastic is higher than traditional MMORPG, games, the competition among music online world. and this may be the reason why giants and dance games show an intense state.

59 There are more than 10 similar types Concept Internet Cafe in Kaifeng said of domestic mobile phone game users of games in China, of which the most the Interim Measures had little effect is still small comparing with mobile known are “Groove Party”, “5JQ”, “We on young players, because the students phone users, not to mention there are Dance Online”, “QQ X5” and so on. nowadays had much more academic 700 million mobile users besides that. The success of the Beijing Olympic pressure and their parents were stricter Along with the state’s technical trans- Games greatly inspired people’s desire on them. Thus, they already spent a lot formation of the three major networks, for sports. As the perfect combination less time coming to cafes and playing i.e., the telecommunications networks, of sports and online games, racing and games than before. computer networks and television sport games become the best option for The network management in networks, as well as the popularity of players. The favorites include “Popkart”, Space-time Internet Cafe in Jinan told 3G networks, the threshold of mobile “Super Racing” and “Crazy Racing”, reporter that the implementation of the phone games will be significantly re- etc., as racing games; and “Street Bas- real-name system in the Interim Mea- duced, and more mobile phone users ketball”, “Kicking” etc., as sport games. sures would definitely play a positive will likely become supporters of mobile In addition, there are interesting games role, but there were still many problems phone games. which pay attention to the players’ unsolved, such as how to protect the Since September 1 this year, the techniques, represented by “QQ Speed safety of the players’ personal informa- three giant mobile operators will carry out of Sound” and “BNB”. Those types tion. Until the resolution of those is- real-name system on all of the new sub- of games become a new form of game sues, the business Internet cafes would scribers. This is an effective and reason- in the industry. They try to raise their not be affected. able means of control, and has provided a playability by their interesting designs From the above interview, it can guarantee basis for the healthy develop- and by constantly updating and up- be seen that the full implementation of ment of online mobile game. Imagine, the grading their features. As observed in a real-name system can prevent teenagers phone system can automatically prompt number of Internet cafes, casual games, playing game in the Internet cafes to a message and deduct related expenses in although not comparable with large- the utmost, and greatly reduce the op- your phone when mobile game players scale online games, are still favored by a erational risks of Internet cafes. How- need to pay. This simple payment method lot of players, especially by female play- ever, it can also cause problems such as not only greatly reduces the threshold for ers and young players alike. decreased attendance and increase the paid player standard, but also provides a Policy: using strong cost of Internet cafes, etc. Solving these broader entertainment channel for those management to promote problems takes time, and the online who want to play online games anytime, development games market will not be affected sig- anywhere. nificantly during this period. According to Enfodesk, in 2008 On August 1 this year, the nation’s As the country’s Triple-play Ser- the revenues of China’s mobile phone first online games management rule and vice policy and the maturing of 3G game was RMB 1.365 billion, up norm, the “Interim Measures for Online mobile communication technology and 75.18% comparing with 2007; in 2009, Game” was introduced, in which special network, the mobile phone games can the revenues was RMB 2.696 billion, emphasis was made on the protection of enjoy broader prospects for develop- up 97.51% comparing with 2008; En- adolescents playing online games. The ment. Currently, the interoperability of fodesk predicts that in 2011, the do- measures have caused a wide range of WAP and WEB has become the trend, mestic mobile game market is expected social debate since its introduction. Af- and it has already been applied in many to increase to RMB 8.508 billion. ter all, there are a considerable amount advanced technologies. As the more It can be foreseen that companies of teenage online games players. Our high-end technology, the mobile phone which has had a glorious history in this reporter randomly interviewed some in- online game is bound to give a broader industry such as Tencent, SNDA, and ternet cafes in different cities to see their game market in China. Netease will surely participate in the views on this matter. According to statistics released competition of mobile games, and thus Network management of Times by the Ministry of Industry and Infor- bring a bright future for this field. Internet Cafe in Shijiazhuang thought mation Technology in June 2010, the The vast domestic market is the that the Interim Measures had a core number of domestic mobile phone us- source of rapid growth in China’s on- principle for the content of games, i.e., ers has exceeded 700 million, of which line game industry. In the next few encouraging research and development, mobile phone internet users has reached years, the domestic online game indus- carrying forward the fine national cul- 277 million. However, according to try will continue to maintain a good ture, promoting healthy, educational Enfodesk, in 2008, the number of ac- momentum of development. IResearch and entertaining online games. He tive domestic mobile phone game users has predicted that in the next 5 years, believed that the recently released on- has reached 10.83 million, a growth of the overall online game market will line games had all got the approval of 100.18% compared with 2007; in 2009, maintain a growth rate of 20%. By relevant government departments, so the data was 23.19 million, a growth of 2012, China’s online games market is there should not be any major problems, 114.13% compared with 2008. Judg- expected to reach RMB 68 billion, ac- and would not impact on young players. ing only by the date, there is still much counting for half of the global online The network management in New room for development, as the number games market.

ECHNOLOGY Moves T Wal-Mart to Invest in China Online Retailer

Wal-Mart and five other companies have agreed to invest US$500 million in 360buy.com, a fast-growing online retailer in China. Liu Qiangdong, the founder and chief executive 360buy, announced the investment of about RMB 3.3 billion on his Chinese Twitter- EPA Plans Greenhouse style microblog last week. On December 27, a spokeswoman for 360buy, Li Jing, confirmed Gas Emission Standards that Wal-Mart was one of the new investors that had pledged a combined US$500 million to back the privately owned company, which is New standards for climate change-causing greenhouse gas emis- based in Beijing. sions from power plants and oil refi neries were announced by the U.S. Ms. Li declined to divulge the value of the Environmental Protection Agency on December 23. Collectively the investment by Wal-Mart, the world’s leading re- nation’s roughly 500 fossil fuel-fi red power plants and 150 oil refi neries tailer. She said a formal announcement with more emit some 2.4 billion metric tons of carbon dioxide (CO2) and other details could be made within weeks. greenhouse gases per year, nearly 40 percent of total U.S. emissions. Kevin Gardner, a spokesman for Wal-Mart, e EPA proposes to set standards for both existing and new facilities which is based in Bentonville, Ark., said in an e- under the nation’s clean air law for greenhouse gas pollution in July mail on December 25 that the retailer had made and December of 2011 under the new plan, with such standards to no announcement and did not comment on ru- take eff ect in 2012. mors or speculation. “We are following through on our commitment to proceed in a But a big investment in online retailing measured and careful way to reduce [greenhouse gas] pollution that would not be unusual. Many global retailers, in- threatens the health and welfare of Americans, and contributes to cluding Gap, are expanding aggressively in China climate change,” EPA administrator Lisa Jackson said in a prepared and beginning to sell online in the country. Wal- statement to announce the eff ort. “ ese standards will help American Mart operates more than 200 stores in China. companies attract private investment to the clean energy upgrades that e 360buy deal seems likely to feed excite- make our companies more competitive and create good jobs here at ment about China’s fast-growing Internet start- home.” ups. Just a few weeks ago, one of China’s biggest Starting January 2, new annual permits for refi neries and power online video sites, Youku.com, raised more than plants will cover greenhouse gas emissions for the fi rst time as well. US$200 million in an initial public off ering in the EPA will directly award such permits in Arizona, Arkansas, Florida, United States. en, in December, its shares raced Idaho, Kansas, Oregon, Texas and Wyoming while the remaining up in one of the hottest debuts in years on the states will incorporate greenhouse gas standards into their existing Nasdaq. permitting process. This year, the company said it expected to e new plan, developed as part of the settlement of a lawsuit sell about US$1.5 billion worth of goods, up from regarding EPA eff orts to reduce greenhouse gas pollution, proposes to US$200 million in 2008. Analysts say e-com- include CO2 standards as part of so-called New Source Performance merce is growing at an explosive pace in China, Standards, which set pollution limits for new facilities while address- with many shoppers ordering goods online and ing ongoing emissions from existing facilities. Such standards have having them delivered quickly, and cheaply, some- addressed air pollution from cement plants to diesel engines in the past times by local services that use bicycles. and will now expand in the case of fossil fuel-fi red power plants and Su Huiyan, an analyst at i-Research, a fi rm oil refi neries to include greenhouse gas emissions. in Shanghai that tracks Web developments, said It remains unclear exactly what that standard might be, whether a online commerce in China could reach US$75 bil- limit for greenhouse gas emissions per kilowatt-hour of electricity pro- lion in 2010, up from US$8.5 billion in 2007. duced, pollution per amount of fuel burned, or a requirement for all coal- Mr. Liu, the 37-year-old founder of 360buy, burning power plants to achieve a certain level of effi ciency, for example, has told Chinese newspapers that he started sell- according to the agency. Nor is it clear how burning natural gas might ing software from a small booth and then began to factor into these standards, though natural gas units will be covered un- open chain stores in various cities. (www.nytimes. der the plan, according to EPA. (www.scientifi camerican.com) com)

62 New version of Microsoft Windows to be released

Microsoft plans to announce a version of Windows in January 2011 that will power tablet computers and other handhelds and run on power-friendly chips designed by ARM. The announcement will come at the Consumer Elec- tronics Show in Las Vegas. After pushing tablets for years with barely Portable GPS devices any success, Microsoft opened the way for Apple to redefi ne the market for tablet computers with the head in wrong direction iPad. And Microsoft faces competition in the tablet arena from models that are based on Google’s Android operating system, among others. Unit sales of the gadgets, whose purpose is to Gartner analyst Michael Gartenberg said keep motorists from getting lost, are down 9% through that “Microsoft needs a credible alternative to the fi rst 11 months of the year, compared with the same these appliance-like computing devices that have period last year, according to the NPD Group’s retail tracking sprung up in the space between phone and tradi- service. In dollars, NPD says sales have skidded off course by tional computers.” 22%. ARM designs chips that are made by oth- “In 2007 and 2008, PNDs were the hot items,” says Tom ers, including Qualcomm, Texas Instruments and Murray, senior vice president of market development at Tom- Samsung, and are mostly used in smart phones. Tom, which in the U.S. trails only Garmin in market share. He e latest software also will be able to work on concedes that top-of-mind products for consumers this holiday processors made by Intel and Advanced Micro are tablets, e-readers and smart phones. Devices, chips that power PC versions of Win- Competition from smart phones may be the biggest factor. dows. As of the third quarter, 86% of mobile phones sold in the U.S. Mike Cherry, the lead analyst for operating had built-in GPS capabilities, according to NPD. Google added systems at the independent Directions On Mi- to the market disruption when it off ered turn-by-turn directions crosoft research firm, says moving Windows to on Android devices for free. an ARM processor will take “an awful long time” Feature-rich smart phones have put pressure on other because of the testing involved. gadgets, such as pocket digital cameras and MP3 players. For e other logical choice, he says, is to extend navigation devices, price erosion and saturation are also causing Microsoft’s mobile operating system software for bumps, says Ross Rubin, an analyst at NPD. phones to tablets. “Now that Windows Phone Efforts by navigation companies to beat back the trend 7 is out and appears to be successful, you follow have been mixed. Garmin tried competing in the mobile hand- Apple’s playbook (with) the iPhone and stretch it set market by teaming with Asus on co-branded GPS-capable a little.” smart phones. Sales went nowhere, and the companies said in Microsoft is also expected to reveal certain October they would not be introducing new handsets. aspects of Windows 8, or whatever the next Garmin provides navigation on infotainment systems built version of the operating system for PCs is to into new Chrysler models. And Suzuki is including Garmin be called, at CES, where CEO Steve Ballmer portables in some new models. is scheduled to speak. Windows 8 may appear TomTom is selling digital maps. And it’s selling navigation sometime in 2012. apps for the iPhone starting at US$40. Similar apps are sold by Whatever is announced at CES, Microsoft Navigon and Magellan. Garmin says it is developing apps, too. has to be careful about not saying something that Expect details at the big Consumer Electronics Show in Las could slow sales of current computers. Vegas next month. “Windows 7 is selling great,” Cherry says. Murray isn’t ready to give up on personal navigation de- “The minute they start talking about Windows vices. He points to advantages including generally larger screen 8 they put an idea in people’s minds that they sizes and better audio. He also says stand-alone devices are typi- should wait. Rather than announce Windows 8, cally mounted properly, leading to better reception and safety. I would announce a tablet strategy that makes (www.usatoday.com) sense.” (www.usatoday.com)

63 Foreign Brands of Consumer Electronics in China By Zhu Zijun

t the China Consumer Electronics Conference producer of consumer electronics, but also the second largest (CCEC) held on Dec. 17, 2010, Changhong, consumer electronics market in the world. Over the past few Hisense, KONKA, Panasonic, SAMSUNG, years, multinational companies have been transferring their SHARP and Skyworth were recognized as the research & development branches to China. At present, China “Most Competitive Brands” of the year in China; while TCL, has become an indispensible part of the consumer electronics Hisense,A SHARP, Changhong, LG and Skyworth industry chain in Asia, and the world at large. won the awards for “Best Innovation”. “China will be the fastest growing market for Of course half of the aforementioned brands are consumer electronics. The average growth rate of famous foreign brands from Japan or Korea, yet they China’s electronics retail sales reached 8 percent. It hold a significant position in China. is predicted that the sales volume will rise to €180 Asian consumer electronics brands are perform- billion in the next 10 years,” said Roland Weise, ing well in the Chinese market, thereby gaining their the CEO of Media Saturn, the leading consumer valuable recognition. But how about other foreign electronics retailer in Germany and all of Europe. brands? How are they doing in China? What is their Its flagship store, Media Market, just opened in popularity among Chinese consumers? Shanghai in last November. China: A promising market “Currently, the purchasing power of Chinese consumers is soaring, which offers us a golden opportunity to Just before the New Year, the reporter visited the flag- enter the domestic market. As one of the leaders in consumer ship store at Madian of the Chinese electronics retail giant electronics, and in cooperation with Foxconn, Media-Saturn GOME, where many consumers were choosing their favorite is taking its best chance to seek the great potential in this electric appliances. Enticed by the approaching New Year market,” he added. and various sales promotions, GOME saw an increase in the With the recovery of the global economy, and the poli- amount of customers. The New Year signifies hope and many cies of “home appliances going to the countryside” and “old wish to buy TV sets, mobile phones, washing machines, etc. for new”, China’s consumer electronics retailers are seeing while some just want to replace the old with the new. continuous growth. Both GOME and SUNING, another It is important to remember that China is not only a major leading electronics retailer throughout China, are embarking

64 Trend of Consumer Index Constitute Overall, domestic brands are doing better as they hold the top 4 120 positions. Foreign brands like SONY, Panasonic, SAMSUNG, SIEMENS and PHILIPS are also on the list, of which SONY is given the most attention (3.5%) by netizens.

110 Attention Ranking of Home Applicances Brands in Q3, 2010

Haier 9.9% 100 Midea 9.4% GREE Purchasing Intent of Consumer Electronics 6.8% Change of General Income Joyoung 3.9% Change of Expenditure on Consumer Electronics SONY 3.5% 90 Q 1 ，2 0 0 9 Q2 Q3 Q4 Q 1 ，2 0 1 0 Q2 Q3 Panasonic 3.4% SAMSUNG 3.3% (Source: GFK) Hisense 3.2% SIEMENS 2.7% on ambitionous expansion plans. PHILIPS 2.7% The above chart shows that after a decline in Q2, 2010 due to the economic environment, consumer income levels, (Source: Baidu Data Research Center, Nov. 2010) expendable income and purchasing intent are all on the rise, indicating that their confidence is recovering. Various foreign brands have begun to spare no effort Another example are small home appliances, where a in their march to enter the promising and booming Chinese report shows that today domestic brands dominate the market market. There is hardly any type of appliance category where while foreign brands, which were once flourishing, are seldom you cannot find a foreign brand. From traditional home ap- seen. pliances, like TV sets and refrigerators, to IT products, digital However, in digital cameras, it is just the opposite. The products, and others; foreign brands are trying their best to market is dominated by Canon, SONY, Nikon, OLYMPUS allure Chinese consumers from all levels. and SAMSUNG. Only a few domestic brands like aigo and “With the rise of the consuming capacity, Chinese lenovo have any sizeable market share. consumers’s purchasing power is incresing. So is their brand As for washing machines, a survey by Zhongyikang, awareness. Now choosinig products of global brands is be- a marketing research firm, shows that the active players in coming a trend,” said Qu Wenchao, the manager of Advertis- the market are Haier, LittleSwan, SANYO, Panasonic, LG, ing Department of GOME Beijing Branch. Whirlpool, SIEMENS, SAMSUNG and Midea, with Haier A review of foreign brands and LittleSwan as the market leaders. Concerning conditioners, LG, Mitsubishi Heavy Indus- Statistics show that in terms of sales volume among the tries, DAIKIN, Panasonic and Electrolux are competing with top 10 brands for color TVs, air condition- domestic brands. ers, refrigerators and washing machines, As for LCD TV market, according to an domestic brands definitely hold a leading analysis from GFK, starting in the second half position far ahead of foreign brands, and of 2008, the competition between domestic possess a much larger market share. In the and foreign brands changed dramatically in areas of MP3, MP4 players and water heaters, China. The share of foreign brands shrank there is no significant difference between do- quickly and the position of Chinese brands mestic and foreign brands with respect to market increased in response. share. However, in the top 10 brands for note- In the field of laptop, foreign brands book computers, mobile phones, digital cameras like DELL, Apple, HP, SONY, TOSHI- and camcorders, in terms of sales volume, foreign BA, SAMSUNG, are performing well. brands have been performing better. Referrng to cell phone, NOKIA, MO- “Haier and SIEMENS are the two giants in white TOROLA, SAMSUNG, Apple, Sony Ericsson, goods, and foreign brands like SONY, SAMSUNG, LG, SHARP, LG, BlackBerry and PHILIPS are the main for- SHARP, and domestic brands like Changhong, TCL, KON- eign brands in the market. KA and Skyworth, hold most of the black business”, said Mr. Foreign brands’ popularity Yang, the Madian store manager of Dazhong, another electronics retailer giant in Beijing. Though domestic brands and foreign brands vary in their Looking at home appliances for instance, statistics from strengths and market share, when looking to foreign brands, the Baidu Data Research Center indicate that among the top most Chinese consumers still have the impression that they 10 brands, domestic and foreign brands both have equal shares. stand for higher quality and better performance. The word

65 “quality” is the one most heard from consumers. price is not that important, while quality comes first.” “High quality of foreign brands is the main factor that Mr. Lu, in his fifties, said he had a Panasonic refrigera- leads to consumers’ purchase,” said Qu Wenchao. Foreign tor that he bought 20 years ago and that it had always been brands are leading in technology, research & development working well until recently. He had such deep affection for and brand building, with their products on the environment- Panasonic that he bought a 46-inch plasma TV from the friendly and energy-saving trend, thus affecting and pushing electronics manufacturer just a few of days before, in addition forward the development of China’s consumer electronics. almost all of his electronics are foreign brands. Pan Chunyu, a recent graduate, was ac- Ms. Liu feels that foreign brands usually offer better per- companying his grandparents formance due to their higher price. She once had a Panasonic at the store washing machine which served her well for 15 years. Now when the she has changed to a high-power and water-saving Haier. The reporter met refrigerator in her house is also a Haier, her TV set was made him. He said by TCL and she also has a low-priced 32-inch Tsinghua that almost Tongfang. Her soymilk maker and pressure cooker are also all his elec- domestic brands, which satisfy her use of everyday appliances. tronic products Mr. Chen is also on the side of domestic brands. All of were foreign his electronics are domestic except a VCR which he bought brands, includ- years ago when most VCRs were foreign brands and he had a ing his mobile limited selection. Today, he believes that domestic brands are phone, laptop, no longer inferior to foreign ones. and MP3 player. Ms. Zhang was in the middle of buying a domestic When asked why brand mobile phone when she said, “Only when buying major he was so attached appliances will I consider a foreign brand. Things like phones to foreign brands, he replied, are likely to be changed frequently, so domestic brands can “Quality is the most important easily meet my needs.” and in my impression, foreign While Ms. Zhao added that most of her appliances were brands are usually superior in made by Haier, whose after-sales service was very appealing quality, compared with domestic to her. brands. That’s why I prefer for- “As for kitchenware like microwaves and gas appliances, eign brands. ” domestic brands have taken the lead. But recently, other for- His retired grandpa, in eign brands like SIEMENS have been entering China and his sixties, was looking to buy a we can feel some of the pressure,” said the salesperson for the TOSHIBA or SIEMENS major kitchenware producer, FOTILE, at SUNING. refrigerator. His “Foreign brands are well accepted by Chinese consum- last one, made ers. Above all, consumers buy products by foreign brands due by Haier, did not to their great brand recognition; secondly, some people simply work very well and follow others’ recommendations; and thirdly, there are those needed constant that buy again after experiencing the products themselves,” repairs after being concluded Mr. Yang. used for just a few Foreign brands’ competitive edge years. “Though they do not lose to for- “Foreign brands’ strengths are mainly research & de- eign brands in after- velopment of new products, utilization of new materials and sales service, domestic technology,” Qu Wenchao said. However, China’s brands are brands should do better making progress in research & development, with some of in quality,” he said. He their high-end products reaching international level. used to own a Panasonic Domestic brands still lag behind foreign brands in digi- TV, which performed tal products, particularly new and advanced technology, said well for over 20 years. In his time, Mr. Yang. For instance, Apple is establishing market trends Panasonic was so popular that several while domestic products tend to follow its lead. Foreign generations in his family used the brands not only have an advantage in this area, but also in company’s products. Today, his wash- smartphones and tablets, where domestic products seem to ing machine is still a Panasonic. appear a little later. Ms. Sha also believes in the qual- Foreign brands leave the impression of higher technol- ity and reputation of foreign brands. ogy and better performance with Chinese consumers, while She told the reporter her three notebook each brand is trying to foster its key competitive power in the computers were either IBM or SONY, Chinese market. while her TV set was a Toshiba. “To me, Whirlpool launched its new pureness series washing

66 machines in 2010 and for the first time, emphasized the “health” of its washing machines. Whirlpool was the first in the market to focus on the cleanness of the machines themselves. This new concept, breaks from the traditional idea of a washing machine’s use to exterminate the bacterium on clothes, but instead it also creates a clean and healthy environment for washing clothes. The iPad is known for its stylish look, unique operating system and humanized design, its Retina display screen with LED and ambient light sensors can automatically adjust the brightness to produce the best visual impact and ensure the longest battery life. But and Newsmy. “The most important are Apple’s ideaology and its products PHILIPS MP3 player which are ahead of their time. During the interview, is monotonous in its a woman bought 4 of the iPod Touch as New Year outer appearance, while presents for her company. its MP4 player has a Su Peiran, a postgraduate, bought an American-made smaller screen than the iPhone online through an agent. “I love it due to the variety of competition and a higher price, so the sales software and its high sensitivity. It’s just cool,” he said. are not as good when compared to domestic brands,” the Statistics show that SAMSUNG holds 16% of the TV salesperson, Ms. Zhao said. panel market and LG 15%. “These panel giants have mastered Electrolux air conditioners are well known for their high the core technologies,” the salesman, Mr. Li told the reporter. cost performance. “Even now it lacks a conversion air condi- Most of the interviewees had NOKIA phones. As for tioner model in China, which will be a future trend,” a sales- them, NOKIA means durability, which is the most frequent man told the reporter. word the reporter heard when talking about the phones. Some The market for conversion air conditioners is currently of their phones have even been in use for over four years. dominated by Midea, Hisense, GREE, Haier, DAIKIN, Moreover, NOKIA offers a variety of products at different Mitsubishi Electric, Panasonic and AUX, according to a re- prices to meet different consumers’ needs. port from Zhongyikang. Voices from salespeople and consumers As for Apple, some consumers are not used to its unique system and would like to change to Windows, a salesman Though foreign brands are maintaining their competi- said. In addition, online transactions are not compatible with tive edge on the market, in some sense, there is still room for some domestic banks now and then. improvement as consumers continue to have concerns such as An old man was buying a mobile phone. He didn’t care price, after-sales service, design, products updating, etc. if it was a domestic or foreign brand. “As long as the charac- The brand BARUN is renowned for its small home ap- ters showed on the screen are large and I can make calls and pliances. “Though its quality is beyond question, for Chinese listen to the radio via the phone, I will buy it,” he said. consumers, the price is indeed a little higher,” Ms. Cao, a The salesman, Wei Chunsong, in charge of Whirlpool at salesperson, told the reporter. the GOME store, told the reporter some of the products were “If consumers can afford to spend more money, they sold by word of mouth. Consumers get to know a product’s tend to choose foreign brands,” Ms. Liu said. Ms. Zhao also high quality from relatives, friends or others. “Since Chinese thinks the prices of foreign brands are comparatively higher. consumers are likely to be affected by advertisements, the As price is a major concern, consumers may think twice sales would be better for Whirlpool if the brand was adver- before a purchase, making the best advantage of domestic tised more.” brands’ their lower price. “The problem areas for foreign brands are their higher Ms. Liu feels that the maintenance network of some for- price and lack of low-end products. However, things are eign brands is insufficient. “Sometimes your product breaks changing. Foreign brands have gradually begun to develop down, and you have to send the product far away to the low-end products. In addition, the after-sales service of some brand’s headquarters in China, which is very time-consum- foreign brands is insufficient,” Mr. Yang concluded. Dazhong ing.” will continue to stock foreign brands, which will be given the “The response of foreign brands’ after-sale service has same treatment as domestic ones. room for improvement compared to domestic ones,” said Qu With such a huge market and their increasing share in Wenchao. certain market segments, foreign brands will keep on seeking HP used to be affected by quality problems with some larger market share and a better future in China, he added. models like the V3000 series. “Sales were affected after that. If enhancing cooperation with China’s household appli- Now that our service is reshaping, sales are turning for the ances chains, paying more attention to production localiza- better,” said the salesman, Mr. Han. tion, developing and producing goods tailored especially for In the MP3 and MP4 players section at Dazhong, Chinese consumers with lower price, foreign brands will enjoy Philips is positioned next to a few domestic brands like Aigo a promising future, said Qu Wenchao.

67 Lau Kin Tung:

A Rising Pharmaceutical Firm with Innovati on and Entrepreneurship

68 of ASEAN, South America, Middle East and North America. In order to consolidate and upgrade its innovation capabilities, Jiwa founded the Research In- stitute of Jiwa Group, which vigorously cultivates new drug projects with a R&D center for preparation and raw materials under its command. ese multi-level R&D institutes constitute the multi-tier and multi-dimensional pharmaceutical technological innovation mechanism of Jiwa Group. Furthermore, external technological cooperation has also become a major support for Jiwa’s R&D capabilities. The Group has established cooperation relations with overseas R&D organizations of the US, Canada, Italy and India, and has extensively initiated cooperation projects with domestic research institutes and academic institutions. Develops innovative products “ e Group has made breakthroughs in the ongoing key development program for pharmaceutical raw materials, which are expected to go to the market in 2012,” said Lau Kin Tung. e ounded in 1978, Jiwa Group was engaged in trade between program will make milestone contribution to the China and Europe, Middle East and South Asia at the early Group, as it will not only generate considerable stage of reform and opening up. Until mid 1980’s, the Group profi ts, but also enhance the Group’s status in the began to concentrate on pharmaceuticals, acting as agent for domestic pharmaceutical market and lead the such multinational pharmaceutical enterprises as Roche and Glaxo and Group to become a multinational pharmaceutical introducingF several European and American pharmaceutical brands. As enterprise on the international stage. a forerunner among the Hong Kong pharmaceutical enterprises to enter e reporter learned that the Group is also the pharmaceutical market of Chinese mainland, Jiwa Group plays an undertaking a cooperative program on cytara- active role in dealing with medicine supply shortage and improving drug bine pro-drugs with Shenyang Pharmaceutical quality of China. University. With smooth preliminary research, Lau Kin Tung: the vice-chairman and CEO of Jiwa Group, as- the program has selected some quality pro-drugs, sisted the Group in setting up Kunming Jida Pharmaceutical Co., Ltd. some of which has increased the oral bioavail- in 1993, and then Y.N. Jiwa Pharm Logistics Co., Ltd. and Jiangsu ability from 21.8% to 60% and has applied for Jiwa Rintech Pharmaceutical Company Limited. Thus, an industrial compound patents. Pre-clinic studies and opti- chain integrating bulk materials, fi nished drugs and marketing was ac- mization studies on techniques are to be carried complished. Confronted with the 2008 global fi nancial crisis, Lau Kin out and application for the fi rst-class new drugs is Tung once again demonstrated his confi dence in the Group and set up to be submitted as soon as possible. Yunnan Jiwa Biotech Limited., which develops the fi rst class new drugs According to Lau Kin Tung: the Group via bio-technologies and accommodates world-class new products with has launched in recent years several new drugs independent intellectual property rights such as reduced glutathione and with tamsulosin hydrochloride sustained release new type cephalosporin intermediate in Kunming. tablets, diacerein capsules, edaravone lnjection and risedronate sodium tablets as the key prod- Establishes an innovation system ucts. e total sales volume of these four drugs saw a leap in growth rate of around 47% in the Under the leadership of Lau Kin Tung: Jiwa Group has been striv- latter half of 2010 compared with that in the fi rst ing to establish an independent system integrating R&D, production half of 2010. A surging market for these drugs and sales and to develop new drugs and patented drugs. Jiwa’s product owing to their good performance in bidding, line mainly covers five therapeutic categories: antibiotics, digestive coupled with the expansion of the sales team in system and liver diseases, rheumatism and skeletal system, cerebro-car- the domestic core cities, will make them occupy diovascular diseases together with antidepressants and tumor. At pres- a signifi cant role in relevant therapeutic domains ent, Jiwa supplies drugs to more than 1,500 medical institutions of 31 over the upcoming three to fi ve years. domestic provinces, cities and autonomous regions. Meanwhile, in the It is also learned that Jiwa Group sold two manner of product supply and technological cooperation, the Group has brands of reduced Glutathione (GSH), one brand taken the initiative in introducing world-class new drugs into the Asian of products are produced by Kunming Jida and market and has energetically launched China’s drugs into the markets the other is a famous European brand Gluthion

69 carried by the Group in the PRC. e management quality. By introducing Group endeavors to launching serial total sales of two brands of products, professional independent non-executive patented products with competitive respectively accounting for 8% and directors, the restructured board of edge within five years through the 19% domestic market shares, exceeded directors commands stronger decision- combination of imitation and innova- RMB 200 million, taking the lead in making and governance capabilities. tion from its current fi ve domains for the domestic market. According to the R&D, namely antibiotics, cerebro-car- market statistics, the sales of this medi- diovascular diseases, digestive system, cine have increased at an annual rate of musculo-skeletal system and psychi- 30% in recent years. Another important product of Jiwa Group is triamcinolone acetonide injection. Similar with GSH, there were also two brands of triamcinolone acetonide injection that Jiwa sold. One “The Group has made breakthroughs in brand of products Transton is produced the ongoing key development program for by Kunming Jida and the other is a fa- pharmaceutical raw materials, which are expected mous European brand. The total sales to go to the market in 2012,” said Lau Kin Tung. of two brands of products, respectively accounting for 34% and 7% domestic market shares, exceeded RMB 100 million. Jida’s products are positioned as the atric system. 3) To perfect its high-quality domestic brand with higher industrial chain. Jiwa has been cost performance ratio, now leading the committed to perfecting its same fi eld in the domestic market. pharmaceutical industrial chain At present, Jiwa Group has 13 and so far the Group has set up products, including GSH and triam- In the mean time, in line with the subsidiaries for R&D, raw materials cinolone acetonide injection, listed regulations on listed companies and production, preparation production in the Yunnan Provincial essential suggestions from investors, Jiwa Group and marketing. Over the next two to drug list With the progress of China’s has made corporate management more three years, the Group will establish medicine reform, Jiwa Group works transparent and institutionalized, all enterprises engaged in production of hard to increase its sales, especially of which serve as favorable internal traditional Chinese medicine and bio- the sales in Yunnan Province, and lift conditions for the Group to participate engineering production enterprises. 4) its status in the industry through the in global competition in future. 4) e To integrate industries. e establish- Yunnan Provincial Fundamental es- Group becomes more open for absorb- ment of the fi nancing platform aims at sential drug list. ing top-notch management and techni- industrial integration via M&A based cal talents. on the Group’s cutting edge in terms Corporate profi le As a listed firm, Jiwa Group is of resources and management. The more attractive to specialists. The acquisition of excellent enterprises will Jiwa Group is a member of the Group has developed eff ective incen- complement its industrial chain and young Hong Kong General Chamber tives including offering share options thus make the Group stronger. of Commerce. The Group then made to integrate employees’ interests with Jiwa Group was honored with Hong new beginnings after its successful IPO corporate interests. The Group has Kong Outstanding Enterprises in 2007 in Hong Kong on October 14th, 2003: designed a roadmap for the next stage and then the Best Under A Billion of 1) Through restructuring, the Group in achieving its development goal: 1) 2009 by Forbes Asia in September 2009. focused on the healthcare undertaking To go global based on the domestic Currently, the Hong Kong-based and diverted other business to its non- market. Jiwa is to develop Jiangsu Jiwa Group has set up contact points, branch listed subsidiaries. 2) The Group was Rintech Pharmaceutical Company offi ces and subsidiaries with Milan of It- listed on the main board of the Hong Limited, which was founded through aly, Perth of Australia and provinces and Kong Stock Exchange, which created acquisition, into a world’s leading cities of China. Boasting of a personnel a favorable international financing supply base for pharmaceutical raw of over 1000 employees, most of whom platform for the Group. Due to the materials. The first step is to obtain are specialists, Jiwa Group is committed rapid development of the Hong Kong the US FDA authentication in order to developing into a leading regional hi- Stock Exchange, improved regulatory to nudge into the US market. In the tech pharmaceutical enterprise. regime and faster international capital initial stage of “going global”, product “Development is the only way out infl ows, the fi nancing platform is play- supply served as an eff ective form, and for the survival of enterprises, and giving an increasingly important role. 3) then effecting investment abroad. 2) ing up a life of ease is a must for indi- e Group has substantially improved To develop its own patented products viduals to achieve their personal value,” corporate governance and professional with stronger R&D capabilities. The remarked Lau Kin Tung. 70 C ase S tudy

Outlook for the Establishment of China’s International Board

n September 2010, it was reported that relevant to foreign companies in the aforesaid strategic eco- Chinese competent governmental authorities had nomic dialogue, the result of such strategic econom- managed to build consensus on the legal issues in con- ic dialogue shall only be deemed as a framework nection with the listing of foreign companies on the cooperation memorandum. It represents a tendency internationalI board of the China’s stock market (hereinafter rather than a binding rule. Before the detailed rules referred to as “International Board”) according to one have been issued by the State Council of China or person close to the management personnel of the Shanghai the China Securities Regulatory Commission (here- Stock Exchange (hereinafter referred to as “SSE”). Accord- inafter referred to as “CSRC”), it is not feasible for ing to Geng Liang, chairman of SSE, the SSE has finished foreign companies to be listed in China’s stock mar- the preparations in techniques and trading rules for the In- ket. Fortunately, the State Council has just issued ternational Board. We can clearly hear the footsteps of the one rule regarding the International Board, which International Board coming nearer and nearer. is described as follows. On April 14, 2009, the The launch of the International Board is not a new Opinions of the State Council on Propelling Shanghai to story emerging. On June 17 and 18, 2008, China and the Accelerate the Development of a Modern Service Sector United States held the fourth strategic economic dialogue and an Advanced Manufacturing Sector and Build an during which China promised that it would allow qualified International Financial Center and an International foreign companies to Shipping Center was promulgated by the Sate Coun- list on China’s stock cil. It set forth that qualified foreign companies will It set forth that qualified exchanges through be permitted to issue RMB-denominated shares in foreign companies will be issuing shares or due time, meanwhile saying there is no clear sched- depository receipts ule for the launch of the International Board. permitted to issue RMB- in accordance with What is the international board? denominated shares in relevant prudential due time, meanwhile regulations. Since The International Board refers to a new board then, more and more of SSE which permits companies that are registered saying there is no clear attention has been outside of China to be listed on the SSE and issue schedule for the launch of concentrated on the shares in mainland China. By comparison, the In- the International Board. development and ternational Board of the New York Stock Exchange establishment of the (hereinafter referred to as “NYSE”) permits both International Board. the companies registered outside of the U.S. and Various famous foreign companies, such as HSBC, Stan- the U.S. registered companies to be listed. Most of dard Chartered, Bank of East Asia, Coca-Cola, General the major stock exchanges around the world allow Electric, Wal-Mart, etc., have expressed their interests in foreign registered companies to be listed. Permitting issuing shares and raising capital in mainland China and offshore companies to offer shares in China is essen- being listed on the International Board. tial for China to bring its capital market in line with Although China has agreed to open its stock market international standards.

71 ase S tudy C At pres- and the direction of the capital flow of convert the CDRs into shares of for- ent, China only the International Board. It is difficult eign registered companies under the allows domes- to figure out the timetable for launch of current legal system in connection tic companies the International Board based on cur- with the securities clearing. The State to go public. rent new reports and various rumors. Council or CSRC have the concern However, it is Two possible listing vehicles that the CDR, as a new product in the worth noting Chinese stock market, may make the that foreign in- In respect of listing vehicles, can- investors confused and further require vested compa- didates may be allowed to list in main- lots of revision on the relevant laws nies will enjoy land China via initial public offering of and regulations. Technically, the is- the same treat- shares (hereinafter referred to as “IPO”) suance of the CDR may impose more ment as the or issuing China Depository Receipts strict technical demand on China’s domestic companies and will be entitled (hereinafter referred to as “CDR”). securities clearing system which is not to apply for public offering in China’s Both of the foregoing possible paths mature enough nowadays. stock market. In fact, many foreign have respective advantages and disad- In fact, China’s current IPO invested companies have been listed vantages. Compared with the CDR, system also faces many problems. on SSE or Shenzhen Stock Exchange the IPO is more straightforward for the China has the most cumbersome (hereinafter referred to as “SZSE”) regulators because China has already IPO procedures around the world. since 2005, but what is essential to draw collected rich experience on formulat- The listing candidates have to face our attention here is that such foreign ing rules and regulations governing the much more uncertainties and higher invested companies differ from foreign activities of public offering of shares. listing expenses than elsewhere. The registered companies because the for- That is to say, CDR still remains a new IPO approval procedures regulated mer have their registration addresses in listing vehicle for China’s regulators, by the CSRC may take three years China and the latter are registered off- market participants and investors. or more and subject to heavy impact shore. For example, many large Chinese CDR is similar to the Ameri- of the industrial policies and changes state-owned enterprises that have been can Depository Receipts (hereinafter in the economic situation. For ex- registered and listed outside China may referred to as “ADR”) used by the ample, at the earlier stage of the apply for the listing on the International NYSE. The shares of many non-US international financial crisis in 2008, Board although most of their assets and companies trade on US stock exchanges no companies have passed the IPO business are in China. via the use of ADR, such as SouFun approval procedures. If the regulator Today, China’s stock market is Holdings Limited, New Oriental Edu- finally chooses the IPO path, it is mainly based on the A-share market cation & Technology Group Inc., and advisable to streamline the approval which is composed of three main parts, Ambow Education Holding Limited procedures. Converting the IPO ap- main board for blue chip companies, whose businesses are mainly operated proval system for the International small and medium board for medium- within China. Similar to the ADR, the Board into a registration system may sized companies and growth enterprise proposed CDR represents ownership in be a good choice. board for startup companies. The main the shares of a company registered out- Two potential listing board is located in the SSE and the side China that trade in Chinese stock candidates small and medium board and growth market. CDR enables Chinese inves- enterprise board are located in the tors to buy shares in offshore companies Among various foreign reg- SZSE. China’s stock market also con- without the troubles and inconvenienc- istered companies, two kinds of tains B-share, H-share and other kinds es of cross-border and cross-currency companies are the most likely list- of securities in addition to A-share. The transactions. CDR is denominated in ing candidates for the International International Board may become the RMB, pay dividends in RMB and can Board according to the public avail- fourth board of A-share or otherwise be traded like the shares of domestic able reports and interviews. Firstly, change into other kind securities. Based companies. the international companies which on the past experience regarding the in- Although CDR has many advan- have already been listed in other troduction of growth enterprise board, tages, IPO of new shares dominated in stock exchanges (hereinafter referred it will take a long time commencing RMB may be more likely to be chosen to as “Multinational Listed Com- from the initial proposal to the final by the State Council of China or CSRC panies”) may be invited to apply for establishment of a new board. Indeed, according to SSE chairman Geng Li- the secondary listing on the Interna- there are lots of uncertainties and chal- ang. IPO is preferred to CDR because tional Broad. Secondly, certain large lenges in connection with the option of the CDR relates to series of issues that state-owned companies which have the basic models, potential candidates are difficult to handle. It is difficult to already been listed on offshore stock

72 C ase S tudy

exchanges (hereinafter referred to as successful stock exchanges. “Red Chip Companies”), especially Direction of capital flows the Hong Kong Stock Exchange (hereinafter referred to as “HKEX”), also Even if the regulators have ad- propose to apply for the listing on the dressed the foregoing problems and International Board. clarified the issues regarding the possible As set forth, a handful of famous listing vehicles and potential listing can- Multinational Listed Companies are didates, it still faces obstacles in connec- eager to be listed on the International tion with the foreign exchange because Board. The China’s regulators are for- Chinese currency, i.e. RMB, is not freely mulating the thresholds for listing on the and fully convertible. In China, cur- It appears that the foreign registered International Board. Generally speak- rencies conversion is heavily regulated companies listed on the International ing, the Multinational Listed Compa- according to the rules and regulations is- Broad may have limited access to the nies shall be mature and have a steady sued by the State Administration of For- cross-border capital transactions. growth record. Fortune 500 companies eign Exchange (hereinafter referred to Conclusion will be the perfect listing candidates for as “SAFE”). The crucial issue is whether the International Board. Contrary to the the capital raised by the foreign regis- The proposed International Broad Multinational Listed Companies, most tered companies from the International will have a substantial impact on the of the Red Chip Companies are directly Board can be converted into foreign cur- Chinese capital market participants. controlled, owned and strongly support- rencies and taken out of China. First of all, dozens of Chinese compa- ed by the central government of China. Under current legal system re- nies having shares listed on the HKEX, The International Board may also be a garding foreign exchange, there is no the Nasdaq Stock Market or the NYSE good opportunity for Red Chip Com- room for foreign companies to convert may have the opportunity to return panies listed on the HKEX proposing capital raised in China’s stock market Chinese capital market for separate and to return the China’s stock market for into foreign currencies. Upon the State secondary listing on the International secondary listing. Wang Jianzhou, chair- Council and CSRC launch the In- Board. Secondly, the International man of China Mobile, has expressed his ternational Board, it is predicted that Board will improve the quality of list- interests in listing on the International SAFE may issue implementing rules ings in the Chinese capital market and Board for many times. It is reported that to permit a range of capital raised by enable Chinese investors to purchase China Mobile has engaged sponsors and the foreign registered companies from shares of the famous companies around underwriters to prepare the application the issuance of the IPO or CDR on the the world or the red-chip companies documents for the secondary listing on International Board to be taken out of listed overseas. In addition, the launch the International Board. China. To the extent permitted by the of the International Board may further Interestingly, there are certain con- applicable rules and regulations, the spur the best-known investment banks flicts between SSE and central govern- foreign registered companies listed on to expand their presence in mainland ment in connection with the potential the International Broad may have the China in order to look for potential listing candidates. In order to expand right to carry out the cross-border capi- clients. Finally, introduction of the In- the scope of the potential candidates, tal transactions in future. ternational Board and the listing of the enhance the prosperity of SSE and Certain Chinese analysts also overseas companies in China may also further make Shanghai an international express their concerns on the Interna- improve the corporate governance of financial hub, the International Board tional Board which may become the the domestic listed companies. has been deemed as the stock market “international ATM” of Multinational There is still a long way to go for for return of the Red Chip Companies Listed Companies because share valu- the International Broad to be officially by the local government in Shanghai ation tends to be higher on the China’s launched and finalized. The Interna- and SSE. On the contrary, the central stock market than in other stock mar- tional Broad may help multinational government does not want to cause the ket around the world. However, many companies integrate themselves with Red Chip Companies to be the main officials from CSRC and SSE deny China’s economic development. It can body of the International Board. Ac- such allegations, claiming that cross- be foreseen that the competition among cording to the central government, the border capital transactions will be sub- the potential listing candidates will be International Board shall play a more ject to heavy regulation to prevent any fierce and prolonging. It is advisable for important role, saying that the Inter- wrongdoing. At present, A-share and the potential listing candidates to keep national Board shall become the global H-share can not be converted into each a close relationship with the regulators platform for high quality companies all other under the current circumstances in charge of the launch of the proposed over the world as the NYSE or other that RMB still remains unconvertible. International Broad.

73 ON STAGE Lifestyle Fuego! — Carmen Mota’s First China Tour

Time: 2011/1/18-2011/1/23 knowledge in highbrow dance related Venue: Beijing Exhibition Theater entertainment from Spain. Her name has Price: RMB 180/380/500/780/980 become another expression for passion- Ticket Package: RMB 1200 ate, flamboyant extravaganza. Tickets are available at 400-610- At age 17, Mota was already per- 3721; 86-10-64177845 forming as a leading soloist on the bill of the renown dancer Antonio. Throughout FUEGO! is a 21st century theatrical her career, Lola Flores & Carmen Amaya dance spectacular by Carmen Mota. It commissioned her to choreograph on a is a sensual, passionate and energizing number of their shows performed in Spain fusion between the deep-rooted rhythms and abroad. of Spanish dance and the abundance and The popularity of Carmen Mota Russian National Ballet Theater splendor of modern styles. grew following the start of her own Classic Ballet-Nutcracker FUEGO! is an accessible, captivating company, which was established in Time: 2011/1/27 world class production designed to appeal 1977. She trained over 100 dedicated Venue: Poly Theatre to mass audiences globally. It is a frontier dancers and created shows for a broad Price: RMB 50/100/200/300/500/800/1000 breaking experience. Stunning dancers in variety of world-class venues in Eu- Tickets are available at 400-610-3721; lavish costumes and spectacular choreog- rope, the USA, Canada and China. 86-10-64177845 raphy. Sensual and suggestive images take Mota is currently running 3 interna- turns with impressive synchronized group tional dance-companies in Tenerife, “The Nutcracker” is based on the story “The performances. Palma de Mallorca and Malaga. Nutcracker and the King of Mice” written by FUEGO! is an explosion of light, color and Apart from open-ended and long- E.T.A. Hoffman. Although what is seen on the movement. The rhythms of FUEGO! blend running shows Mota also created spec- stage today is different in detail from the origi- seemingly effortless with melodies of immortal tacular one-of-a-kind performances, nal story, the basic plot remains the same: The composers. The result adds to the sparkling amongst which an exclusive for the story of a young German girl who dreams of synergy between dance and choreography, Change-Of-The-Millennium-Celebra- a Nutcracker Prince and a fierce battle against between sound and image, between old and tion at the Reichstag in Berlin and the a Mouse King with seven heads. When Petipa new. All good things from Spain come together annually returning performance for the had the idea to choreograph the story into a bal- in this magnificent and colorful “Las Vegas - lavish Sporting Club of Monte- Carlo. let, it was actually based on a revision by French Madrid” collision of universal emotions. Carmen Mota is at the pinnacle of author Alexander Dumas. His version reflects FUEGO! is unlike any other show her career and the staging of FUEGO! more of what we have come to love as “The from Spain. marked the start of a new era for audi- Nutcracker” ballet. ences around the world to enjoy her Children under 1.2m are NOT admitted! About Carmen Mota work in a full length touring theatre Carmen Mota stands for years of show. American Tap dance: Caution Men at Work-Tap Time: 2011/1/29-2011/1/31 Venue: Poly Theatre Price: RMB 50/100/200/300/500/800/1000 Tickets are available at 400-610-3721; 86-10-64177845

“Tap Dogs” is a tap dance show, created by Australian dancer and choreographer, Dein Perry. The original production of the show had its world premiere in January 1995 at the Syd- ney Theatre Festival in Australia. Due to the unique and original staging ideas featured in the show, the Tap Dogs are often recognised within the dance community, as having revolutionised the way tap dance is presented to a modern day audience and subsequently, different variations of the show are now performed in major cities around the World, with numerous dance companies at- tempting to emulate the tap style seen in the show.

74 experts of special allowance of State Council, China Federation of Litera- ture Sixth Seventh Plenary, China Special Art Committee Chairman, Vice Chairman of China Dancers Association, the Beijing Dancers Association Vice Chairman, Chinese dance only “Star of the Century” title winner, “Twentieth Century Chinese Dance Classics” winners. Opening and closing ceremonies of the Beijing 2008 Olympic Games, Deputy Director, Paralympic Games opening and closing ceremonies Executive director. Zhang Jigang works as many as 420 kinds of remnants of creation, many of his works have been staged more than 60 countries and regions, many works have been staged at home and abroad transplantation, access to many high-level awards. He received nine highest award in international competitions: the international award once, “the French President of the Republic Award” once, “Hollywood Best Director Award” once, the international gold medal three times, the international “Golden Clown Award” three times. He has been awarded forty national awards, the Gold Award, first prize. 2004, 2006, his work has won two National Fine Stage Arts TAP DOGS went on to play to packed houses at Sadler’s Project “quality repertoire.” Former international, national director of a large Wells in London; return tours of Australia; a West End en- party of 60 times total, he was called “Wizards dance community” at home gagement, for which Dein won a second consecutive Olivier and abroad. Award in 1996 for his choreography; and an off Broadway, New York season in 1997. So far the company has won 11 In- ternational Awards including a Pegasus Award at the Spoleto Festival in Italy and an Obie in New York. Irish Dance Drama - Dance of Desire The Australian dance sensation returned home in 2000 Time: 2011/2/3-2011/2/4 to take part in the opening ceremony of the Sydney Olympic Venue: Poly Theatre Games. 1000 TAP DOGS from companies around the world Price: RMB 50/100/200/300/500/800/1000 performed to an audience of 3.4 billion viewers as the event Tickets are available at 400-610-3721; 86-10-64177845 was televised across the world. The TAP DOGS story has gone on to immortalized in the Desire of Dance is the story based on the Celtic Legends of Erin...... movie Bootmen, directed by Dein Perry and inspired by his In the land before time began, a land of ancient gods, of high Kings and TAP DOGS experiences. The stage show continues to wow au- warrior Queens, a King’s love for his children brought down a terrible curse diences all over the world with 2002 seeing TAP DOGS perform on them which held them in bondage for 900 years. When the wife of the in Venezuela and South Africa before returning to the UK for De Danann King Lir died, another regional tour. he married her sister Aoife. Because of his love for his four children their stepmother Dance-Drama: Thousand-Hands Bodhisattva became insanely jealous and plotted a terrible revenge. Time: 2011/1/27-2011/2/1 Lir protected his chil- Venue: NCPA-Opera House dren from evil with the Price: RMB 100/180/280/400/460/520/580 magic Sword Of Light. The Tickets are available at 400-610-3721; 86-10-64177845 bearer of the Sword be- General Director: Zhang Jigang stowed absolute power. But the evil Aoife watched Zhang Jigang is a famous director of China, dean of Chi- and waited and in time stole the na People’s Liberation Army Art School and graduate tutor, magic Sword from the King. With its magical powers she changed the children into the swans and condemned them to an eternity of suffering in ocean waters. The King, powerless to help, could do nothing to save his children from the tur- bulent seas as without the sword his magical powers lay dormant. At the time the De Danann were the rulers of Ireland, they were a magical people but were to lose their kingdom to new invaders called the Milesians. They were in search of their Island Of Destiny and were about to challenge the domination of the Tuatha De Danann and become the founding fathers of the mighty Celtic kingdom of Erin. Having witnessed the misfortune of Lir, the invaders sought to return his children to the Island of Youth and help banish the Queen Aoife forever. This could only be possible with the help of the Sword of Light, which they first had to win back. When a Milesian princess fell in love with one of Aoife’s servants the story was to change dramatically forever. Little did she realise the aston- ishing secret the servant held deep inside. Children under 1.2m are NOT admitted!

75 BEST-SELLER Lifestyle

The Art of Faking It

By Audrey

few days ago, the Chinese the thing very well, you won’t per- up The Art of Faking It, and prevent version of The Art of Faking suade your targets. Besides absorbing from displaying your ignorance: “Till It, a best selling book in the information the book provides, it is now, colorless and odorless remain the United States, went public necessary to develop matching smile, features of vodka. Adding lemon juice, with great expectation. This book was frown, shrug and sarcastic counte- lime juice, or pepper, gallons, vanilla, Aintroduced by Southern Publishing nances.” and even venison, that’s what bump- House. And just a week after its publish- Movie: never talk about stars kins will do, as they often swallow ing, it became the top-ranked new litera- or plots foods while drinking cocktails. People ture book at dangdang.com and one of graceful as you never do like that.” the most popular new books at douban. The first topic talked in the book As a real addict of whisky, you com. This book is viewed by New York is movie, which is also the hottest should talk of its origin emotionally. Times: “A so interesting dialogue guide topic in the Internet. Rule No.1 for “The pure malt whisky you select must that you have never seen before. The talking about movies is never talk of come from Highland or Islay. Highland best of it, is that it can teach you to be the stars or the plot, but the domi- whisky is sweeter, while Islay whisky humorous, which is the key to make nator of this world — the director. is famous for its flavor with smoke and you outstanding in the crowd, besides “Don’t discuss a cop and gang- peat taste.” bringing you important and fashionable ster movie starred by Dicaprio. information.” You should say ‘that’s Scorcese’s The author Laurence Whitted- the Gangs of New York’, and this Fry really has some knowledge in cul- film is about ‘violence, loyalty, ture, art and life style. The aim of the and the American dream’. Some book was to satirize those people who Like It Hot isn’t a comedy by used to fake themselves, but the hu- Marilyn Monroe, but the best morous and knowledgeable style make of Billy Wilder. The Lord of the it popular in no time, and become a Rings is not an exciting story of guide for the fake. The author felt sur- the hobbits, but a masterpiece of prised and frustrated. For a time, he Peter Jackson to express himself rejected all interviews, and swore to through fantasy.” “fake” for ever! Wine: drinking heaviely The Art of Faking It is composed means nothing, but a by 20 topics which were considered good taste could reflects groovy in social occurrences, includ- your erudition ing movie, wine, books, women and men pickup, drama, travel, music, If you just compare the architecture, psychoanalysis and so amount of liquor or beer you and on. Laurence reminded the copy- your business partners drink, but cats: “Fake is a technology that needs don’t know shake or stir the glass practice and research. If you spoke when drinking martini, you will shilly-shally, even though you know make a fool of yourself. Read

76 them something not mentioned in the book? A 4: Yes – “What about modern art? How do you know if it is good – or terrible?” I answer “If it looks good hanging on my wall, over my sofa (couch), it is good.” Q 5: For those young people who want to get into the upper class of society, do you have any Author words for them? Ten Qs to A 5: Do not lie – just smile and say “I know what you mean” when upper class people describe fab- ulous hotels or flying first class or sailing on a yacht. Q 1: Why you write this topic? Has there any Or if the upper class people like you and admire you specific thing inspired you to write this book? say “I have always wanted to learn about such things,

A 1: Too much information comes to us every but my studies have kept me from such leisure activi- day – internet, TV, newspapers, magazines - how can ties.” Maybe they will invite you! we be experts about everything? We can’t. I wrote the book to give busy people enough information about Q 6: What is the attitude to “ Being Fake” in some difficult – and trendy – subjects so they can American culture? Against it? Or others? sound informed and intelligent with not-too-much in- A 6: Well, the secret is to not look or act “fake.” formation. In social life, it isn’t how much you know, “Faking It” is an art, like painting or dancing. Do it it is how much other people think you know! gracefully so that people think that “Fake” is “Real.”

Q 2: Would there be any negative conse- Q 7: What do you think of the trend of “ being quence of being fake? Have you had any experience fake” in current society? that made you feel awkward? A 7: If you can guess that the person is “fake” A 2: Yes – do not try to fake it with a real ex- then they are failure. Like a wig (or toupé): if you pert on any subject. When you realize that someone know it is fake, it is immediately bad! else knows MUCH more than you do, just listen and agree! Q 8: What is your perception of China? Do And you can not fake knowing much about an- you like the culture of China? other person’s culture unless you have lived where they A 8: I am fascinated by Chinese history, ancient live! and modern and wonder what China will be like in 25 years. More western? A combination of east and west? Q 3: What is the highest lever of “being fake”? The world is watching and thinking! A 3: When the expert asks you your opinion. Q 9: If this book can be very popular in China, Q 4: After this book being published, was what do you want to say to Chinese readers? there anyone or any of your friends coming to you A 9: and saying that he or she would like you to teach Welcome to the world of knowing everything – and not being shy about not knowing enough. The real secret is: The more you know, the more people will tell you – and then you know everything!

Q 10: If you can choose, what is your most favorite job? Why? A 10: King of New York – if New York had King!

77 THIS IS CHINA

Beijing’s hutongs, the lanes or alleys running between the siheyuan in the oldest parts of Beijing have been well preserved. They give a wonderful glimpse into the world of yesterday’s Beijing, here you can see evidence of the history of Beijing, experience the old ways of life and experience traditional Beijing culture.

In the Hutongs Exploring Beijing By Yan Manman

eandering along the Di’anmen Wai Street, I came to the entrance of one Hutong (lane or alley) before I realized it was called Bai Mi Xie Jie, which actually was not a part of my Hutong tour itiner- ary. However, my steps followed my heart to satisfy my curiosity. One of the pleasures of traveling Mis simply derived from the unknown field before you. This seemed like an ordinary hutong, nothing special. The sunshine of winter was cast on the ground of the narrow Hutong. There were not many people around and though outside the Hutong was bustling, it was very quiet in the Hutong. At the door to an old Siheyuan one grandpa, about 90 years old, and another man were sitting there chatting. I stopped and questioned them, asking them about the history and stories of this particular Hutong. “Zhang Zhidong, you know, one initiator of the

Westernization Movement in the late Qing Dynasty once lived in that end of this Hutong,” the old grandpa pointed while talking to me. “The General, Zhang Aiping, was also once living here shortly after the establishment of the New China in 1949…” To listen to the history in the old Hutongs was a special experience, since every Hutong has its stories. Chatting with them for a while, I continued my tour in search of the Maoer Hutong. As they told me, I walked to Houmen Bridge, literarily called Wanning Bridge, which is located at the north end of the Central Axis of the Forbidden City. Standing on the bridge, I saw the ice Shichahai, the soft fine leafless Willow branches stretching out over the lake, the bars silent around the lake. What beauty! Enjoying Peace in Maoer Hutong Passing the bridge, and moving on to the east side of the road I found 朴 the entrance of the Maoer Hutong. There was a study called Pudao ( 道 means simple and unadorned) Study there in the Hutong, which was very quiet. And if you have the time, staying there for an afternoon is not a bad choice, giving oneself a peaceful mood. There were just a few bars along this alley, unlike the bars around the famous Houhai lake, the bars here were also very quiet. Feeling hungry and looking around, I saw a small bittern flapjack restaurant. I entered and ordered one bowl of bittern flapjacks as my lunch. The bittern flapjack is a well-known local snack in Beijing, boiled beef giblets with cake. Actually sometimes, deliberately not planning a 78 offers quilts, embroidered pillow covers and cloth tigers for children—traditionally meant to ward off disease (10 NLGX). Strolling down the lane, the signboard of Wen Yu Cheese suddenly came to my attention. Oh, Wen Yu Cheese, which is said to be very delicious but cheap. Usually, there is always a long queue of people that runs out the door of the shop, or the cheese is sometimes sold out. However, it was a day that was exceptionally cold and a weekday. So I was lucky enough to have the opportunity to enjoy it, mmm, it really tasted delightful. Unnamed Hutongs: usual scene but different taste place to eat and enjoying whatever is randomly encountered Lingering on Nan Luo Gu Xiang though, I left for is also a kind of pleasure when traveling. The place was not another famous Hutong—Yan Dai Xie Jie. Before I arrived necessarily famous, but being casual is another way to enjoy there, I went through several unnamed and average Hutongs. traveling, experiencing how the locals live their lives. Just like Bai Mi Xie Jie, these Hutongs were quieter, Bei- Lingering in Nan Luo Gu Xiang jingers just living their lives in their own unique way. Two old grandmas were standing at the end of one Hutong, talk- At the end of Maoer Hutong is the renowned Nan Luo ing or gossiping in the winter sunshine. A burst of pigeons Gu Xiang. To those in the know, Nanluoguxiang is bet- suddenly whistling, raising my head, I saw the pigeons hov- ter known as NLGX. It has another moniker, “Centipede ering over the roof against the blue sky, circling one by one. Street,” due to the eight hutongs that trail off on either side of People in the lanes were buying or selling fruits or articles for the 768-meter-long central lane. The humble hutong has had daily use. By accident, one or two foreign travelers passed by a number of not-so-humble residents, including Wan Rong, swiftly. the last Empress of China, who was carried from her home Strolling down these average lanes made me feel so here to her wedding at the Forbidden City in 1922. close to the daily life of the local Beijingers. There’s a lot of history and culture here: The former Sometimes, it is really better to tour the most common residence of Mao Dun at 13 Hou’yuanensi Hutong is now a places and experience the real life of the locals. museum (admission: five yuan or 73 U.S. cents ). Mao Dun Drum Tower was an important early 20th-century Chinese writer who translated “The Constitution of the Communist Party of the I finally came to Di’anmen Wai Street again. Facing Soviet Union” into Chinese. Just next door at No. 7 is the north, at the exit of this street, I saw a massive tower-shaped former headquarters of Gen. Chiang Kai-shek; which in later monument whose walls are covered with the same red coat- years served as the Yugoslav Embassy. ing as the Forbidden City. Here is Beijing’s famous Drum The shopping in NLGX is also unique and fun: Start- Tower, built during the Ming Dynasty. Behind it, a few steps ing at a nameless shop in the center of NLGX alley where away, the Bell Tower, also built during this dynasty. you can pick up Cultural Revolution paraphernalia, or the What was the use of these buildings? Quite simply, now infamous “Oba-mao” T-shirt (U.S. President Barack they were used to regulate the life of the ancient Beijingers, Obama dressed in an army-Mao suit with cap, 40 yuan or at a time where watches and clocks did not exist ; this type about $6). On the opposite side of the street, Cloth & Paper of building existed in almost all the big cities of China, and

79 THIS IS CHINA

are therefore not only specific to Beijing. the Ming Dynasty from the scene of But at least these two buildings in Beijing “Viewing the West Mountain on Yind- are without a doubt among the oldest and ing Bridge” I then started walking around the most beautiful of their kind. Shichahai, the beautiful sunset of Shicha- Experience in Yandan Street hai was amazing, rosy and hazy against the (Yan Dai Xie Jie 烟袋斜街) chilling deep-blue sky, a magical blend of color and light. Night was falling on the city and neon lights Crossing the street I came to the entrance of Yandan began flashing around the lake. Street, also universally known as Pipe Street. Where did it “Where should I have my supper?” “Gui jie for spicy get this strange name? Originally it was called Gulou Xiejie food? Niu jie for Muslim food? Or Hu Guo Si Snack Bar 鼓楼斜街 ( Drum Tower oblique Street), because it ends at for Beijing local snacks? I finally made my way to Huguosi the front of the Tower), then under the Qing Dynasty it took Snack Bar. the name which it still has today. Two explanations exist: Brief guide to Beijing’s Hutongs the first tells us that it was due to the fact that the Manchus, tobacco lovers, came there to buy the stuff they needed for In Beijing, an old saying goes, “the famous Hutongs 36 their pipes; the other one, because of the shape of this street, hundreds while unnamed ones numerous.” At present, there which indeed has a shape similar to a traditional Chinese are about 4,550 hutongs. Every Hutong has many tales worth pipe. Whatever the explanation is, the name is undoubt- exploring if you are interested. edly related to tobacco. Today you will surely find two of the Among the numerous hutongs in Beijing, Beixinqiao 冰糖葫芦 oldest specialties of Beijing here, the tanghulu ( ), Hutong has the most turns. There are more than 20 in which skewers of caramelized fruit (very similar to small apples), you can easily get lost. some filled with the paste of jujubes or walnuts, a delight- The narrowest is Qian Shi Hutong (Money Market ful specialty that Beijingers (and others…) have loved to eat Hutong), only about 30 to 40 meters (32 to 44 yards) long, in winter since the oldest times. Cheap and delicious, that’s it is located in Zhubao Shi Street outside Qianmen. The definitely my favorite! Another specialty, unfortunately less narrowest part is merely 40 centimeters (16 inches) wide, so and less frequently encountered, surely because they require when two people meet, they must turn sideways to pass each 糖 a rare skill that few possess, the puffed up sugar figurines ( other. 人儿 ), which often tak the shape of the animals of the Chi- The longest is Dong Jiaomin Hutong, with a total nese zodiac. length of 6.5 kilometers (4 miles), lying between Chang’an Here I stopped and talked with two foreign friends, one Avenue and the East Street and West Street of Qianmen. from Denmark and the another from Spain, both of whom The shortest is Guantong Hutong only 30 meters (33 told me that they loved the Hutongs in Beijing, but were a yards) long. little worried whether the Hutongs would be retained in the The oldest Hutong is Zhuan Ta Hutong Zhuanta future. Hutong which got its name because of the brick tower at the Walking out from the other end of Yandan Street I entrance of the Hutong. It is also the former residence of the came to Yinding Bridge, which is an old bridge that got famous writer Mr. Luxun. You can get to Zhuanta Hutong ， its name for its shape resembling a silver ingot (Yinding by taking bus No. 22, 47, 626 or 826 and get off at the north 银锭 in Chinese means silver ingot). It became famous in station of The most intellectual Hutong is perhaps Guozijian 国 Street. The other name of this street is Guozijian Jie ( 子监街 ) named after the Imperial University that was home to China’s greatest scholars beginning in the Sui Dynasty(581-618). The university which stands here now was built in 1306, when Beijing became the new capital of China. The Confucius Temple sits right next door and is flooded with students and parents lighting incense and praying for good test grades during college entrance exams every year. The old Sanlitun: Dashila’r. Just a stone’s throw away from Tian’anmen and the Forbidden City is an area where Beijingers used to eat, drink, shop and have fun. With hundreds of restaurants and shops, the Qianmen area was the central business and shopping center during the Ming and Qing dynasties. Many time-honored shops and restaurants, including the most famous Peking duck restaurant, Quan- 全聚德同仁堂 jude ( ), and TCM store, Tongrentang ( ), 80 These traditional snacks are available at “xiao chi” or snack restaurants such as the following: Beijing 9-Traditional Snack Restaurant. 九门小吃 10:30am-1:30pm, 5pm- 9pm. 1 Xiaoyou Hutong, north side of Houhai, Xicheng District. 6402-5858. 西城区后海北沿孝友胡同1号 Di’anmen Traditional Snacks Restaurant地安门小吃店 6am-8pm. 180 Di’anmenwai Dajie, Xicheng District. 6404-2946. 西城区地安门外大街180号 Huoguosi Traditional Snacks Restaurant 护国寺小吃店 6am-8pm. 93 Huguosi, Xicheng District. 6618-1705. 西城区护国寺93号

瑞蚨祥 Ruifuxiang silk store ( ) and Neiliangsheng shoe store 内联升 When foods pass the test of time, they become classics, with the ( ) started and succeeded here, it is also considered the history and stories behind them becoming part of their attrac- origin of Beijing’s traditional snack foods. The China Film tion. Lvdagun is a steamed millet cake with mashed red bean Museum, which is also located here, chronicles the early be- stuffing, rolled in ground soy bean powder. Wandouhuang is ginnings of Chinese film. 琉璃厂 boiled pease jelly. And aiwowo is a small, snow-white, round West of Dashila’r is Liulichang ( ), a street that is glutinous rice cake with assorted sweet stuffing. Tang’erduo is dedicated to selling antiques, calligraphy and paintings. Bai- 百顺胡同胭脂胡同 brown sugar and flour cake soaked in maltose. Hama tumi is a shun Hutong ( ), Yanzhi Hutong ( ), Han- 韩家潭陕西巷 cake with red bean stuffing and a crack on the surface. jiatan ( ), and Shaanxixiang ( ), all of which are Other traditional snacks are the aforementioned 糖葫芦 also located in this area, are known for their top-class service, tanghulu ( ), candied hawthorn fruit on a skewer, 面茶豆腐脑 tea ceremonies, and musical performances. miancha ( ), fried flour tea, doufunao ( ), tender 姜汁排叉儿 Enjoying delicious Beijing local snacks in bean curd jelly, jiangzhi paicha’er ( ), ginger flavored crisp flour slices boiled in maltose, tangjuanguo Hutongs 糖卷果 ( ), a sweet Chinese yam and jujube cake, naiyou 奶油炸糕 Touring the Hutongs, you can taste the genuine Beijing zhagao ( ), deep-fried milk cream flour balls, 糖火烧 local snacks. tanghuoshao ( ), roast cake with brown sugar and Beijing’s traditional snack foods are irresistible to visi- sesame paste. tors to the Chinese capital. Their names alone are enough Some snacks have fallen from favor, deemed either too to entice the curious diner, with local specialties including, 驴打滚豌豆黄 oily, or too sweet for modern palates, while others remain lvdagun ( donkey rolls about), wandouhuang ( 爆肚艾窝窝糖耳朵 popular among the Chinese. These include baodu ( ), pea yellow), aiwowo ( ), tang’erduo ( sugar ear), boiled beef stomach slices served with sesame paste, and 蛤蟆吐蜜卤煮火烧 and hama tumi ( toad spits honey). luzhu huoshao ( ), boiled assorted beef giblets with Some of these snack foods have existed for 600 years. cake. 81 Economic Zone” urban developing and producing military and civil harmonic gear reducer and precision gear. group and industrial clusters, III. Project Description Shaanxi Caijiapo Economic nfoRMA N TI ON

I and technological Develop- The project, based on existing carbide- ment Zone is a characteris- tipped tool technology, is planned to build Projects workshop and other building facilities of tic industry park majoring 2 in the manufacturing of 26000 m , increase the key equipments Investment car and production of and instruments such as numerical control parts. It is 120km away grinder, optics curve grinding machine and in Western China from Xi’an in the east numeral control milling machine, expand Equipment Manufacturing Sectorand neighbors Chencang District of the production capacity and specification Baoji City in the west. The project is planned and variety of carbide-tipped tool. It can to build electric vehicle industry park, includ- produce 20 million PCB tools, 1.5 million ing: 1. Electric vehicle project has a covered numeral control machine tool cutters and the 2 I. Project Name area of 500,000m and a production capacity production value is RMB 300 million. The of 10,000. 2. Electric Car Project has a covered study feasibility report has been completed Construction Project of Zichang 2 area of 500,000m and a production capacity and it has been recorded by Baoji Municipal County Coal Mine Machinery Development and Reform Commission. Plant of 200,000. It can produce 50,000 vehicles in IV. Total Investment and Coopera- the first stage. 3. Parts and Battery Production tion Form II. Project Implementation Agency Project, the production capacity is 120 million Zichang County Coal Industry Bu- in the first stage period. 4. Battery material Total investment of the project is reau project: the designed production capacity in the RMB 120 million. RMB 70 million will III. Project Description first stage period is 500 tons. 5. Power assembly be obtained through investment and pro- 2 Total construction area is 36433m2 project, having a covered area of 100,000 m , is motion. Cooperation form: joint venture, and the covered area is 182.25 mu. The cooperation or establishing stock company. for electric vehicle power. 6. Charge and main- V. Anticipation of Market and Analy- main processing equipment are: over 400 tenance service project has an area of 10,000 2 sis of Investment Return sets of processing equipment, the workshop m , with a planned investment of RMB 10 facilities including ten workshops of ma- million. After the project is completed, annual chine work, rivet weld, hydraulic support, IV. Total Investment and Coopera- production value is RMB 300 milion, total repair of machine, electric appliances repair, tion Form profit is RMB 45.79 million. The internal casting, forge and press, heat treatment and Total investment of the project is rate of return (before tax) is 15.44%, profit galvanization and supporting materials. RMB 3210 million. Cooperation form: rate of investment is 38%. The investment IV. Total Investment and Coopera- joint venture or cooperation. recovery period is 2.62 years. tion Form V. Anticipation of Market and Analy- Contact: Liu Jun Ma Zhiliang Tel: Total investment of the project is esti- sis of Investment Return 86-917-8583591 86-917-8583566 Fax: mated to be RMB 75.6457 million. Coop- 86-917-8583593 When the park is completed, such im- E-mail: eration form: sole investment. portant projects as electric vehicle, car, bat- [email protected] V. Anticipation of Market and Analy- tery and battery material will reach a given sis of Investment Return degree. It is estimated that it can realize out- I. Project Name The development of coal in our country put value of RMB 51 billion and profit and will promote the development of coal mine tax of RMB 12.75 billion a year. Construction Project of Light and machinery. The sustainable development in Contact: Shen Gang Mini Passenger and Goods Car future 10-15 years can be estimated. Tel: 86-917-8561517 Production Base Contact: Fax: Li Tongqi 86-917-8561608 II. Project Implementation Agency Tel: 86-911-7112836 86-13891106868 E-mail: [email protected] Shaanxi Automobile Group Co., Ltd. is a large sized enterprise group company I. Project Name I. Project Name with 19 subsidiary companies. It focuses on the production of heavy truck, medium size Construction Project of Caijiapo Construction Project of Numeral truck, large passenger car and heavy axle. Electric Vehicle Industry Park Control Carbide-tipped Tool III. Project Description II. Project Implementation Agency Production Line It is proposed to build a production base Investment Promotion Bureau of II. Project Implementation Agency for light and mini passenger vehicles and Shaanxi Caijiapo Economic and Techno- Shaanxi Weihe Industrial Mould Plant, trunks, with annual output of 100,000 mini- logic Development Zone Administrative founded in 1960, is a backbone enterprise cars. Based upon Hanjiang brand vehicles, Committee specialized in producing large-sized industrial they are improved mini-passenger vehicles and III. Project Description moulds of mechanical and electronic industry. trunks. A significant improvement has been Lying in China’s “Guanzhong-Tianshui It also is a backbone enterprise researching, made in safety, environmental protection, and

82 INVESTMENT comfort. The overall performance is better, and I. Project Name billion, profit of RMB 350 million and tax it is orientated in low and middle-grade market. of RMB 90 million a year. The investment IV. Total Investment and Coopera- Construction Project of Electric Vehicle Production Line recovery period is 7 years. tion Form Contact: Lei Jinfei Wang Jinping Total investment of the project is II. Project Implementation Agency Tel: 86-13891332865 86-913-2109732 RMB 2.8 billion. The investment of the Weicheng District People’s Govern- 86-13992337366 first stage project is estimated to be RMB ment, Xianyang City Fax: 86-913-2109732 897.9 million including total building III. Project Description E-mail: [email protected] investment of RMB 683.8 million, fluid It is planned to build an electric vehicle capital of RMB 214.1 million. Cooperation production line which can produce 10,000 or joint venture is acceptable. new type electric vehicles used for tourism I. Project Name V. Anticipation of Market and Analy- and sightseeing, traffic patrol, environment sis of Investment Return Automobile Stamping Parts and sanitation. The project is planned to Production Project After the project meets its production build two modern production workshops, target, the total profit will be RMB 177.6 three electric vehicles production lines, a II. Project Implementation Agency 2 million and profit after tax will be RMB comprehensive lab, 3000 m of parking lot, Adminstrative Committee of Caijiapo 133.2 million. basic supporting facilities and office building. Development Zone Contact: Mao Rongdi Gao Bing IV. Total Investment and Coopera- III. Project Description Tel: 86-0917-8777788 tion Form Shaanxi Caijiapo Economic and Tech- E-mail: [email protected] Total investment of the project is nological Development Zone, located in ur- RMB 2 billion. Cooperation form: joint ban cluster and industrial congregation belt venture, cooperation or sole investment. of “Guanzhong-Tianshui Economic Zone”, I. Project Name Contact: Fang Panfang is 120km away from Xi’an in the east, and Tel: 86-29-33271069 adjacent to Chencang District of Baoji City Xixian Mould Park Construction Fax: Project 86-29-33220731 in the west. It is a featured industrial park focusing upon automobile/components II. Project Implementation Agency manufacturing. The project is planned to Weicheng District People’s Govern- I. Project Name build an automobile stamping parts ment, Xianyang City production line which can produce III. Project Description The Steel for High-speed and Heavy-load Railway Production 200,000 sets of dust cap, storage It is planned to build Xixian Mould Project battery tank, cab, bodywork, car Park in Weicheng District, Xianyang City. body parts, heavy trunk, medium It includes: 1) Construction Project of Xix- II. Project Implementation Agency truck, mini bus supporter. ian Automobile Parts Plant with construc- Weinan Municipal Development & IV. Total Investment and Coopera- 2 tion area of 294200 m ; 2) Construction Reform Commission tion Form Project of Standard Parts of Xixian Mould III. Project Description Total investment of the project is Park and Numeral Control Machine Tool Shaanxi Longmen Steel (Group) Co., RMB 1 billion. Cooperation form: sole in- 2 Plant with construction area of 299700 m ; Ltd. has a total asset of RMB 5 billion, com- vestment, joint venture or cooperation. 3) Construction Project of Xixian Mould prising of 9 holding subsidiaries, 6 stock-par- V. Anticipation of Market and Analy- Processing Plant with construction area ticipated companies and 15 institutions. It can sis of Investment Return 2 of 275500 m and (4) over 500 mu of sup- produce 2.5 million tons of steels, 3.5 million With the rapid development of ported and office facilities of Xixian Mould tons of crude steels, 3 million tons of pig irons Shaanxi Automobile Group Co., Ltd., the Park and staff dorm and the service sup- and 2.2 million tons of cokes a year. Relying on demands for pressings are 520,000 sets in 2 ported construction area of 445600 m . this, it can enlarge or develop steels for high- Baoji area, whereas the present production IV. Total Investment and Coopera- speed railway. The project is planned to build capacity in Caijiapo cannot reach Shaanqi tion Form steels for high-speed railway production line, demands at all, so Shaanqi relies mainly Total investment of the project is producing 200,000 tons of steels a year. Now, upon external procurement. The Project RMB 7.25 billion. Cooperation form: stock the project proposals have been finished. can relieve Shaanqi’s procurement pressure system, cooperation or joint venture. IV. Total Investment and Coopera- on pressings, and its costs can be lowered V. Anticipation of Market and Analy- tion Form accordingly, so the Project has huge market sis of Investment Return The total investment of the project prospects. After the Project is put into op- After the project meets its production is estimated to be RMB 2 billion and the eration, the annual output value will reach target, the production value of RMB 12 cooperation form is sole investment, joint up to CNY 3.2 million and profit and tax billion and profit and tax of RMB 2.489 venture or cooperation. up to CNY 380 million. billion are estimated to be obtained. V. Anticipation of Market and Analy- Contact: Zhang Xiaoting Contact: Fang Panfang sis of Investment Return Tel: 86-917-8561517 Tel: 86-29-33271069 After its completion, it is estimated Fax: 86-917-8561608 Fax: 86-29-33220731 that it can realize output value of RMB 2.5 E-mail: [email protected]

83 InfoRMATION tional Exhibi tional Interna guan Venue: Center bition Exhi International Venue: Frequency: 2011 20, Date: Coatings Exhibition International Dongguan 7th The Web: Fax: Tel: China Kong, Hong Kowloon, Wan Road, Sha Cheung 928-930 Center, Times 21F, Add: etc products, finishing surface materials, raw Exhibits: Center Venue: 2011 17-March 20, March Date: Exhibition TreatmentplatingSurfaceandIndustry Electro International Dongguan, 7th The Fax: Tel: 523008 China, Guangdong,Dongcheng-dadao Dongguan, Add: Exhibits: Center Venue: Frequency: Date: Exhibition Foundry and ing Die-Cast International Dongguan 4th The

84 China Fairs Glass, Ceramics, Plastic, Rubber Rubber Plastic, Ceramics, Glass, & Expos

86-769-22387875 852-21392280 86-769-22388565 852-21392281

World Trade Expo Co., Ltd, Rm 01, Rm Ltd, Co., Expo Trade World

www.shimaobolan.com 402 Jin’ao Garden Hotel, 33 March 17-March 20, 2011 17-March 20, March March 17-March 17-March March Dongguan International Exhibition Exhibition International Dongguan Dongguan International Exhibition Exhibition International Dongguan Dong Dongguan

Die-casting equipment, etc equipment, Die-casting Plating, electroplating bath andelectroplatingbath Plating, Yearly Yearly ------No.170 Road, Beiyuan Chaoyang Dist, Bei Add: etc Date: Frequency: Host: etc troller, con data network system, wireless explosion-proof conditioning air explosion-proof Exhibits: Hall) (New Center Venue: Frequency: 2011 22-March24, March Date: Exhibition Equipment Technologyand Electric Proof, ChinaInternational8thExplosion- The Web: Fax: Tel: 100028 China, Beijing, Dist, Chaoyang Rd, East Beisanhuan No.6 ter, Add: etc crafts, carved stone- stones, tomb products, stone blocks, and artificial slabs stones, quarry stones, of Exhibits: Center Venue: Exhibits: Center tion

86-10-64630548 86-10-84540980 Public Security and Fire Con Fire and Security Public

Rm 801, Building E. Kaixuancheng, Kaixuancheng, E. Building 801, Rm China International Exhibition Cen Exhibition International China

www.build-expo.com Email: [email protected] Email: The 2011 Beijing Stone Fair 2011 Stone The Beijing March 15-March 18, 2011 15-March March Beijing Zhenwei Exhibition Co., Ltd, Ltd, Co., Exhibition Zhenwei Beijing Fax: Tel: Tel: 100101 China, jing, raw materials, surface f inishing inishing f surface materials, raw products, etc products, China International Exhibition Exhibition International China Exhibition International China Add: Add: Rm 01, 21F, Times Center, 928- Center, Times 21F, 01, Rm 930 Cheung Sha Wan Road, Road, Wan Sha Cheung 930

Kowloon, Hong Kong, China Kong, Hong Kowloon, Marble, granite and other kinds kinds other and granite Marble, Tel: Tel: Plating, electroplating bath and and bath electroplating Plating, 86-10-58236567 Fax: Fax: 86-10-58236588

Web: Web: Date: Explosion-proof controller, Explosion-proof Yearly Yearly trol trol Exhibition Venue: Venue: 2011 TechnologyEquipmentand World Trade Expo Co., Ltd, Ltd, Co., Expo Trade World national Police Anti-Terrorist Anti-Terrorist Police national Inter Chongqing 2011China 852-21392280 852-21392281 www.shimaobolan.com

March23-March 27, Chen Jiaping Interna Jiaping Chen ------Fax: Fax: Tel: 400020 China, Chongqing, Dist, Jiangbei Road, anxindong Add: etc system, control access ment, BiometricExhibits: technologyCenter tion and equip Venue: Date: Exhibition Equipment nology Tech and Products Security Public munity Com International Chongqing China2011 Fax: Tel: 400020 China, Jiangbei Road, Chongqing, Dist, anxindong Add: etc cycles, motor police vehicles, proof bullet cars, lice Exhibits: Center Exhibition tional Web: Web: Fax: Tel: China Add: etc manage transmission, ment and of technology and system ment, Exhibits: Venue: Frequency: 2011 25, 23-March March Date: Exhibition work Net Broadcasting Content China 2011 The Industry, Metallurgy, Welding, Welding, Metallurgy, Industry, Mining resources, and Energy work, Communication, Broadcast Technology, Net Information 86-23-86830136 86-23-86830282 86-10-62126805 86-23-86830137 86-23-86830069 86-10-62126807

10-3, Guangyujinxin Building, 13 Ji 13 Building, Guangyujinxin 10-3, 10-3, Guangyujinxin Building, 13 Ji 13 Building, Guangyujinxin 10-3, No.2 Fuxingmenwai Street, Beijing, Beijing, Street, Fuxingmenwai No.2 www.ccbc.cn March 25-March 27, 25-March 2011 March China International Exhibition International China Chen Jiaping International Exhibi International Jiaping Chen

Film and TV production, equip production, TV and Film oie rtcin qimn, po equipment, protection Police Yearly ------

FAIR & EXPOS

Electric Power, International Trade Construction Industry The 15th China Guangzhou International Sub-Council, China International Exhibi- Industrial Control Automation and Instru- tion Center Group Corporation mentation Exhibition Organizer: Beijing B & D Tiger Exhibition Co., Ltd Date: March 4-March 7, 2011 Tel: 86-10-84600666 Frequency: Yearly Fax: 86-10-84600669 Year of the first Event: 1997 Email: [email protected] Venue: Chinese Export Commodities Fair Pazhou Complex The 11th China International Heating Ven- Exhibits: Fluid power transmission, me- tilation & Air-Conditioning Expo chanical transmission, etc Date: March 15-March 17, 2011 Web: www.fuyang.com.cn Frequency: Yearly

2011 China Guangzhou International Power Venue: China International Exhibition Transmission and Control Technology Exhi- Center bition Add: Rm 380, 4F, Hall 1, China Interna- tional Exhibition Center, No.6 East Beisan- Date: March 4-March 7, 2011 huan Road, Beijing, 100028 Frequency: Yearly Tel: 86-10-84600666 Venue: Chinese Export Commodities Fair Fax: 86-10-84600669 Pazhou Complex Email: [email protected] Exhibits: Fluid power transmission, mechanical transmission, air compressing technology, etc Beauty and Cosmetics Date: March 10-March 12, 2011 Add: Rm 3104, Tianjunge, No.365 Tianhe The 33rd Guangzhou International Beauty, Frequency: Yearly Road, Tianhe District, Guangzhou, Hairdressing, Cosmetics Products, Import Venue: China Import and Export Com- Guangdong, China, 510620 and Export Fair modities Fair Exhibition Complex Tel: 86-20-38823660 Date: March 10-March 12, 2011 Exhibits: Copper pipe music instrument, Fax: 86-20-38823677 Frequency: Yearly electronic music instrument, keyboard mu- Web: www.fuyang.com.cn Venue: Chinese Export Commodities Fair sic instrument, etc. Email: [email protected] Pazhou Complex Add: Guangdong International Science and Exhibits: Fragrance, cosmetics, personal Technology Center, No.171, Lianxin Road, Electrical Apparatus, Heating, care products, daily cleaning, franchise, Guangzhou, Guangdong, China, 510033 Air-conditioning naildoing products, etc Tel: 86-20-83560265

The 11th China International Heating Ven- Tel: 86-20-86259008 Fax: 86-20-83549078 tilation & Air-Conditioning Expo Fax: 86-20-86259533 Web: www.guangzhou music.cn Email: [email protected] Date: March 15-March 17, 2011 2011 Fuzhou International LED &Outdoor Frequency: Yearly Lighting Exhibition Venue: China International Exhibition Sound, Musical instruments, Date: March 11-March 13, 2011 Center Lighting Venue: Fuzhou Jinshan Exhibition Center Add: Rm 380, 4F, Hall 1, China Interna- 2011 The 9th China Guangzhou Interna- Exhibits: LED chips, epitaxial wafer, Epi tional Exhibition Center, No.6 East Beisan- tional Expo on Pro Sound and Light Wafer and outdoor lighting, etc huan Road, Beijing, 100028 Date: March 10-March 12, 2011 Tel: 86-10-68660512 Tel: 86-10-84600666 Frequency: Yearly Fax: 86-10-68666067 Fax: 86-10-84600669 Venue: China Import and Export Com- Email: [email protected] Email: [email protected] modities Fair Exhibition Complex The 11th China International Heating, Ben- Exhibits: Special sound, lighting, stage Textile and Clothing tilation & Air-Conditioning Expo machinery and equipment, KTV equipment LED display, etc 2011 China International Clothing & Acces- Date: March 15-March 17, 2011 Add: No.171, Lianxin Road, Guangzhou, sories Fair Frequency: Yearly Guangdong, China, 510033 Date: March 28-March 31, 2011 Venue: China International Exhibition Tel: 86-20-83560265 Frequency: Yearly Center Fax: 86-20-83549078 Venue: China National Convention Center Exhibits: Solar thermal collector, vacuum Web: www.soundlight.cn Exhibits: Garment, accessories, etc tube collector, flat-plate thermal collector, Tel: 86-10-85229382 water tank, etc 2011 The 8th China Guangzhou Interna- Fax: 86-10-85229018 Host: China Council for the Promotion of tional Music Instruments Expo Contact person: An Yiheng

85 Specialized Manufacture: “ALUTILE” meritorious and effective manufacture by Aluminum Composite Panel, Metal Com- China Writing instruments Association ON NFO RMATI

I posite Panel, Fire-Resistance Aluminum many times. Composite Panel The main products include gel pen, Tel: +86-791- ball pen, free ink system/reservoir sign 8162161/8162180/8161917 pen, free ink system/reservoir highlighter Fax: +86-791-8162165 pen, correction f luid, correction tape, Add: No. 116, 6th Gaoxin Road, white board pen, marker pen, fountain State High-Tech. Development pen, oil pastel, erasable pen and various re- Zone, Nanchang, Jiangxi, Chi- fills. Till now, Snowhite is one of the big- Market na gest correction pen manufacturers in Asia, China Email: [email protected], with annual production ability more than Suppliers List [email protected] 50 million pieces; and is one of the biggest Website: www.alutile.com pen manufacturers in China, with annual production ability more than 0.3 billion Company Name: New World Stationery pieces. & Sporting Goods (Tianjin) Co., Ltd After Snowhite became the first company in the industry line who suc- Company Profile: Company Name: Jiangxi Hongtai In- We are a manufac- cessfully actualize Quality/Circumstance/ dustry Group Co., Ltd turer & exporter specialized in produc- Occupation Safety Health three system ing paper pads, chalk, crayons, children’s management and input standardization Company Profile: Jiangxi Hongtai modeling clay, also children’s persuasion manage mode, the company give its best Group Co.,Ltd. was established in 1995, instruments. Our factory located in North on Performance Excellence evaluation specialized in manufacturing ALUTILE China Sea port city Tianjin, which is the mold. In 2005, Snowhite was appraised as brand Aluminium Composite Panel, Solid center of BOHAI-RIM REGION. Our Shandong Performance Excellence Ad- Aluminium Panel and Fire Resistance Al- location is near seaport and air port, trans- vanced Enterprise. In 2006, Snowhite got uminium Composite Panel etc. As a lead- portation is very convenient. We guarantee Shandong Quality Management Award. ing foreign-invested Hi-tech. enterprise in consistent quality, punctual delivery, good In 2007, Snowhite got two China top Jiangxi province, the company has totally service and competitive prices to ensure brands for ball pen and markers. invested USD 20,000,000 to import 6 customer’s value. All of our products are In 2006, Snowhite’s new Industry advanced full automatic production lines; non-toxic. They are all EN-71 and ASTM Area began to be used. A grand China annual output reaches 3,600,000 square D-4236 certified. Writing Instruments Science and Tehnol- Contact Person: meters. Michael ogy Garden Standing erect by Qingdao Tel: The main products include: Alumin- 0086-22-27834382 west coast in Yellow sea bank. This is a Fax: ium Composite Panel and Fire Resistance 0086-22-27834379 landmark in company’s socialization man- Post Code: Aluminium Composite Panel. Numerous 300070 agement development history. Snowhite Email: specifications are available with thickness [email protected] will use this field, expand and filter to Website: varied from 2mm to 6mm, and width from www.tjchalk.com every corner all over the world, keep go- 1000mm to 1600mm. Special coatings ahead to become “the most valuable writ- on offer include PVDF (Kynar500, Hylar Company Name: Qingdao Changlong ing instruments in the world”. Contact Person: 5000) and Polyester. Stationery Co., Ltd Li Yali Tel: Hongtai Group has been sticking 0532-83717181 Company Profile: Fax: to the principle of Orientation to Quality Qingdao Changlong 0532-83717181 Post Code: and Creation of Famous Brand. In 2001, Stationery Co., Ltd. (Snowhite), a profes- 266031 Email: it was the first enterprise that received sional stationery manufacturer specializing [email protected] Website: ISO9001&ISO14001 Certificate in this line. in investigation, production and market- www.showhite.com.cn In 2004, ALUTILE panel has been tested ing, was founded in May of 1988. After 18 by SGS U.S. Testing Company Inc., which years’ development, the total investment Company Name: Fuzhou Haoqiang meets the American ASTM Standard. In amounts to US$8.62 million. The factory Hardware Co., Ltd 2006, ALUTILE won the title of China occupies over 60000 square meters, and Company Profile: Top Brand and Product Exemption From more than 1800 people are working in the Fuzhou Haoqiang Quality Surveillance Inspection. ALUTILE company. The brand of Snowhite is the Hardware Co., Ltd. enjoys convenient brand products enjoy a good reputation in only stationery brand that was certificated transportation by sea, land and air. Our both domestic and overseas markets. The as the Chinese Well-known Trademark, company, which owns rights of import and products have exported to Europe, Australia, China Top Brand and China Product export, combines the manufacturing and Middle East, Middle Asia, Southeast Asia, Exemption from Quality Surveillance trading. There are two main production South America, North America, Africa and Inspection in Chinese stationery industry lines. One is electric appliance production many other regions. line. Snowhite has been appraised as most line and the other is garden tool produc-

86 SUPPLIERS tion line. business tenet of “Good Service, Good stones, tombstones, Fireplace mantels and Our main products of electric appli- Quality, and Good Profit”. mosaic. ances are electric porcelain and bakelite If you are interested in any of our Our group has total seven affili- appliances, such as lamp holders, plugs, items, please don’t hesitate to contact us for ated branches in home and abroad. They sockets, switches, fuses, insulators and more information. We are willing to build are Quanzhou Huayan Stone Co., Ltd, flood lights. We have established a strict a solid business relationship with your firm Quanzhou Guangyan Slabstone Craft quality insurance program. Some items on the basis of equality and mutual benefit. Co., Ltd, Quanzhou Guangyan Hongda had authorized by CE, UL and ISO9001 We are looking forward to cooperating Stone Industry Co., Ltd, Hongkong New certificates. Our products are exported to with you in the future. Guangyan Ltd, Singapore Guangyan Pte all over the world. We also specialize in Contact Person: Jun Chen Ltd, NGY Handels Gmbh in Germany all kinds of garden tools which sell well in Tel: 86-0595-22929137 and NGY Stones Enterprise Inc. Europe, America, Australia and Southeast Fax: 86-0595-85986903 Our group headquarter and our Asia. Post Code: 362200 plants are located in the “Hometown of We always pursue the best quality Email: [email protected] Chinese Stone” -- Quanzhou City, where and the fastest service with reasonable Website: www.xxhbx.cn not only you can find all Chinese Stones, price. Our company will develop rapidly but also many famous stones from all over with our efforts and your cooperation Company Name: Changsha Torch Auto the world, and is about 100 kilometers Contact Person: John Xie Parts Co.,Ltd. far from Xiamen port who can sail to the Tel: 0086-591-83339491 worldwide main ports. This excellent geo- Fax: 0591-83339493 Company Profile: Torch Group includes graphical location provides us the most Post Code: 350001 the most competent manufacturing fac- convenient transport to any places in the Email: [email protected] tories in China, such as Torch Spark Plug world. Our group’s plants are combined by Website: www.hq-electrics.com factory, which is the largest spark plug Quanzhou Huayan Stone Co., Ltd, Fujian manufacturer in China, Torch Special Quanzhou Guangyan Slabstone Craft Company Name: Jinjiang Xinxing Ceramic Factory, Torch Auto Lamp Fac- Co., Ltd, Quanzhou Guangyan Hongda Shoes Co., Ltd tory, etc. The factories have the advanced Stone Industry Co., Ltd., which have the technology to manufacture various kinds advanced production equipments and Company Profile: JinJiang XinXing of auto spare parts such as special ceramic, scientific management system in manufac- Shoes Co., Ltd is a private enterprise and fuel filter, automotive lamp, switch, alter- turing various architectural stones, tomb- manufacturer which was established in nator, and starter and so on. stone and sculptures. All products are 1996, which covers an area of approxi- Changsha Torch Auto Parts Co., exported to Southeast Asia, Eu- mately 2,000 square meters and has more Ltd., with huge manufacturing facilities, rope, and America and Middle than 500 skillful employees. We are spe- is responsible for the import and export of East countries for more cialized in high quality shoes for ten years. auto spare parts as well as its manufature than 40,000 square meters Company is a vigorous, youthful, united equipment and raw materials in Torch monthly. We have established group who works together and knows lot Group. We have established close business our branches in Singapore, Ger- about management and technology. “roller relationship with the world's renowned many, the United States, Hong Kong shoes” (single wheel, double wheels and companies such as Beru, ACDelco, Hon- and other countries or regions. Our retractable wheel with a button) “sports eywell, Valeo, GM, VW, Mitsubishi, Del- outstanding marketing networks provide shoes” “children shoes” and “leisure shoes” phi, etc. We wish to cooperate with friends our customers around the world with qual- are our leading products. We also accept from all over the world to create a brilliant ity products and convenient services. OEM orders based on your request strictly. prospect! Guangyan group has built up the We wholeheartedly supply custom- Contact Person: William Shen quality management system in accordance ers with good quality, favorable price, fast Tel: 0731-2742405 with the ISO 9001 quality management delivery and good service of all products. Fax: 0731-2742406 system standard and has been qualified by All of our products are popular among Post Code: 410000 the IMS International. We will continue 20 countries and regions, such as Europe, Email: [email protected] to provide our customers our satisfactory United State, North America Japan, Korea Website: www.torchgroup.cn products and considerate services by ad- and Australia etc. our factory has attained vanced equipments, scientific management ISO9002 certification and roller shoes Company Name: Quanzhou Huayan and honest services. Contact Person: have passed the CE certification. StoneCo., Ltd Charlie Guo We guarantee our commitment to Tel: 0086-595-22652222 the supply of excellent products and good Company Profile: Guangyan Group is a Fax: 0086-595-22653333 services. We are not afraid to compare professional organization who have been Post Code: 362011 our products with others, and very sin- engaged on stone manufacture and export Email: [email protected] cerely improve our products till meet your for more than ten years, we are special- Website: www.granite-supplier.com request. We are not the best one, but we izing in countertops, vanity tops, kitchen dedicate to be better one Based on the tops, tile, slabs, stairs, sinks, tubs, paving (Source: www.chinamarket.com.cn)

87 Why Many Chinese Look Unhappy?

By Paul Ward

here is a medical myth, that it takes look miserable. Some CEO’s are advised nev- fewer muscles to make a smile than er to smile in photos because, the next time it does to make a frown. I think this they announce bad company results or bad research is flawed. Perhaps it didn’t news, the media will publish a library picture include Chinese people. of them smiling next to the article of negative TI agree that many Chinese look unhap- performance. py, but I decided that they were just relaxed, False or natural: It is common for when the muscles to change the expression people to force a false smile; Sometimes this are not used at all. For many cultures, this can is through arrogance, or deception. It is a send a different message. My best example is valuable life skill to detect whether a smile is Thailand, which is well known as the Land of genuine or not. Think of air hostesses when I agree that many Smiles. The natural relaxed face of most Thai you enter or exit the plane. Chinese look is closer to a smile than a frown. They also use Frustration: It is very difficult for in- unhappy, but I smiling as a passive way of showing welcome dividuals to change anything in China. and friendliness a lot. Nearly all decisions come from the leaders; decided that they But what of other cultures? The British either government or work bosses. This un- were just relaxed, can be quite negative and pessimistic. The dervalues individuals and they live with the when the muscles older generation also have poor teeth, so they feeling ‘Nothing I can say or do will change to change the politely keep their mouth closed unless talk- anything’. This leads to a resigned attitude ing or eating. A common British statement is of living without effect. They feel only small expression are “I have nothing to be happy about”. control over their future destiny. They think not used at And the Chinese? only people with money can change their life, all. For many Self-consciousness: I think Chinese are so this becomes their motivation. Fit in with cultures, this can not so aware of themselves. China has many the system, but work hard to earn more. But people, so they grow up with an internal time and again, it is proved that money does send a different ability to accept they are not alone, and can not bring happiness. message. block-out the presence of others around them. Stress: High stress of the big cities can This is most evident when they are driving, be such that people need to focus and concen- on public transport, or on the mobile phone. trate only on what is important to them. This If they do not consider that others are reflects in their faces, accepting a difficult life, watching, their behaviour, and their facial ex- a constant struggle to survive and hopefully pressions reflect their inner detachment with get ahead of the others. society. Exceptions: Every face is unique. This is Cultural hiding of real feelings: Smiling often how we recognise each other. Faces are is associated with contentment and happi- different between north and south; between ness. There is much more daily negotiation in young and old; between healthy and hard- China, so everyone keeps hidden their true life; between beauty and ugly. feelings, to avoid sending any message that But visual beauty is in the eye of the they are happy with the price, or the service, beholder. Some prefer Rembrandt and oth- for fear that they will be taken advantage of. ers Van Gough. It is a good thing that there I often jokingly think that it is in the job are so many personal differences in tastes and description of the average Chinese boss to preferences.

88 Reasons Behind Unhappy Faces

By Alice Yang

ach time when I’m alone on my way safe, easily to be offended by strangers who to office, way back home, or going are forced to be too close to them. Look at the shopping, I’d love to read people’s subway or buses every peak time in big cities. faces. I’m happy to find different How many smiling faces can you count? The expressions on each face, and try to make up unhappy expression is the exact reflection of aE story for myself to explain why. Sometimes, the body feeling, and also a warning to oth- the story in my head will make me smile ers around: “Hey, guys! Don’t get closer! I’m or frown. But generally, I prefer to weave a already unhappy now!” cheerful story instead of an upset one. It’s a #3. Basically, Chinese life is hard. Most habit lasting for many years. I often keep a people here have to fight for a living or a bet- light smile when watching others. However, ter living. Too many unhappy and unsatis- for those years, few people noticed that I was fied things happen every day in people’s life. watching them. When they are in the social society, talking I conclude from years of observation to others, they have to force themselves or that, in general, when people are alone, there want to respond properly to what others are For foreign faces are more faces in miserable expression, or no doing or saying. That’s a way to show your in China? They expression at all (but if there is no expression politeness and also at least you are not so are most likely to at all, people are more likely to have a sad boring. However, when they are alone, it’s mouth because of gravitational force) from time to think about their own life, which have a confused Chinese. For foreign faces in China? They unfortunately is not so optimistic. The true expression. China are most likely to have a confused expression. feeling will be expressed to face without is too complicated China is too complicated for them to under- masquerade. 人无远虑，必有近 stand. Confucius said , “ for them to 忧 rén wú yuǎn lǜ, bì yǒu jìn yōu I often wonder why Chinese faces are ” ( ), understand. unhappy when they are alone. In fact, when which could be explained in both ways as there are two or more Chinese together, follows. their faces are more cheerful and face expres- 1) He who does not think of the future sions change more frequently. Here are my is certain to have immediate worries. thoughts on the reason: 2) A person is subject to either long-term #1. There is nothing for them to think concerns or short-term troubles. about when stay alone: an empty head reflects Confucius’s wisdom is the original of no expression on face, and the gravitational Chinese thinking and behaviour rules. He force from the earth will pull the corners of predicted more than two thousand years ago the mouth down. That is also a sign of get- that the Chinese nation is always in worry. ting old. And a pulling-down mouth is a sad Brilliant! face. Children are more easily to be seemed as And, I was often asked by others, “Why happy, and just a short time of gravitational are you so happy?” I replied, “Why not?” force on them is one of the reasons. Yes, I’m alive; I’m relatively healthy; I #2. China has too many people, so aver- can look after myself; I have someone to love age resource and private room for each person and be loved; I’m financially independent; I is very limited. When people are in a crowded have best dreams to fulfil... The reason to be group, they often feel uncomfortable and unhappy can’t be that complicated, right?

89 IZ TIPS B I come from Malaysia and intend to invest registered capital). The enterprise shall submit the Q:in my friend’s existing company to be a new board resolution, the amendment agreement of small shareholder (accounting for 10%), and the articles of association and the report on alteration my friend is engaged in pre-school English of application while applying for alteration. The Sino- teaching materials. I’d like to know how to in- foreign joint venture (cooperative) enterprise approved vest in the company in the premise of not af- by the Ministry of Commerce or the higher-level fecting his current business or the status of busi- commerce management department shall also report ness license. to the higher commercial management department A joint venture may be allowed for your small for filing. Please consult the local provincial-level for- investment if the company is a domestic eign economic and trade commission (department) or A:company of China. You may refer to the Law of the the commerce bureau for specific information. , People s Republic of China on Foreign-Capital Enter- prises and the Rules for the Implementation of the Law Shall a Sino-foreign joint venture (coopera- of the People’s Republic of China on Foreign-Capital En- Q:tive) enterprise conduct import and export terprises and please consult the Several Provisions for trade by holding the Registration Form of For- the Equity Alteration of Investors of Foreign Investment eign Trade Operator or the Approval Certificate Enterprises if the company itself is a foreign-invested for Foreign-Invested Enterprises while conduct- one. Please consult the local commerce management ing the import and export trade business? department for specific formalities. Only when a Sino-foreign joint venture (cooperative) enterprise shall firstly handle the Reg- What ways are there to know the laws and istrationA: Form of Foreign Trade Operator and all the Q:regulations related to foreign exchange follow-up formalities (including industry and com- management? merce, alteration of taxation, customs and registration The laws and regulations newly released by the of commerce inspection can it carry out import and State Administration of Foreign Exchange export business. A:(SAFE) shall be publicized in the column tilted “Policies and Regulations” in the website of the Providing that our company has registered SAFE (www.safe.gov.cn). In addition, the SAFE has Q:a foreign-invested commercial enterprise in organized and formulated the data base of laws and a certain province and set up several branches regulations of the Assembly of China Foreign Ex- (retail sales of electric appliances) in the same change Management Laws (electronic edition), cov- province and whether can branches be set up ering all the laws and regulations related to foreign across China (inclusive of other provinces and exchange management released by the SAFE since cities) with this brand? If not, what formalities the founding of new China and conducted marks on shall be handled? the validness and invalidation of each item. The data The application of a foreign-invested commer- base simultaneously also collected the laws related to cial enterprise for the establishment of a branch foreign exchange passed by the NPC, the administra- A:in other places shall be examined and approved by the tive regulations of the State Council and rules of the provincial-level competent commerce authority where People’s Republic of China and other governmental the enterprise is domiciled within its approval author- departments, international treaties, conventions, ju- ity. Providing that a cross-provincial branch is set dicial interpretations as well as important data and up, the enterprise should also seek the opinion of the news data of laws and regulations related to foreign provincial-level competent commerce authority where exchange, which is so far the most complete and the branch is domiciled. Please refer to the Measures authoritative laws base in foreign exchange manage- for the Administration of the Foreign Investment Com- ment. merce Area (No. 8 circular of the Ministry of Com- merce in 2004). Suppose the registered capital applied by Q:a Sino-foreign joint venture (cooperative) A Sino-foreign cooperative hospital is pres- enterprise decreases, what does the compe- Q:ently preparing to alter its Chinese investor. tent commerce authority mainly review? What Would you please tell whether there are specif-

Q&A for Foreign Business Practice in China Q&Afor Foreign Business Practice materials shall be provided by a Sino-foreign ic requirements for the registered capital and cooperative enterprise? And what does the business scope of the transferee while altering competent commerce authority mainly review? Chinese investor? The application of alteration shall be filed in the In terms of alteration of equity of the investors of commerce department conducting examination a foreign-invested enterprise, please refer to the A:and approval of the enterprise while a Sino-foreign A:related provisions on printing and distributing the notice joint venture (cooperative) enterprise applies the al- concerning the Several Provisions on the Equity Alteration teration of registered capital (increase or decrease of of the Investors of Foreign-Invested Enterprises.

90 What conditions shall be satisfied for setting up funded Enterprises and related special regulations and rules, Q:an international shipping agent company? such materials as board resolution, agreement on contract According to the relevant provisions prescribed in the modification and agreement on revision of articles shall be (Interim) Measures for Filing of International Shipping submitted for approval. A:Agent Companies (No. 9 Decree of the MOFCOM, 2005), any person or entity that intends to conduct international We are a foreign-invested enterprise (an auto shipping agent businesses shall go through procedures for Q:distributor). Since we plan to engage in auto registration with the administration for commerce and renting business, we want to consult issues about industry in the place where the company to be set up is relevant laws and regulations and procedures for located and then go through procedures for filing with the application. As we have the same business in other competent commercial department in the said place. For places of China, may we ask whether those regula- details, please read the said Measures. tions are applicable throughout China? Since there is no provision concerning auto rent- I’m a Hollander and have my own company and ing industry in the Catalogue for the Guidance of Q:business license in the Netherlands. Now, I want A:Foreign Investment Industries (amended in 2007), such to set up an industrial design company in China and business is allowed. You may file an application to rele- employ Chinese industrial designers. What proce- vant local departments according to the type of the com- dures are required and how to go through? pany that makes such application in accordance with the You may go through procedures for registration in Detailed Rules for Implementation of the Law of the People’s the competent commerce, administration for industry Republic of China on Sino-foreign Equity Joint Venture, the A:and commerce and tax departments according to the provi- Detailed Rules for Implementation of the Law of the People’s sions on contents and procedures of registration as provided Republic of China on Sino-foreign Cooperative Joint Venture in the Detailed Rules for Implementation of the Law of the and the Detailed Rules for the Implementation of the Law People’s Republic of China on Foreign-invested Enterprises. of the People’s Republic of China on Foreign-invested En- terprises. The administration of auto renting enterprises What are the specific procedures for approval shall be subject to local regulations or governmental Q:of the establishment of a joint sales and service provisions. If there are no relevant local regulations or enterprise? governmental provisions, such administration shall be The Ministry of Commerce and the competent com- undertaken by local competent transport department. mercial authorities at provincial level conduct the For details, please consult local commercial department, A:approval of investment of enterprises at abroad, namely, the administration for industry and commerce and transport actions including establishment of non-financial enterprises department. abroad and acquisition of such rights of ownership, right of control and business management right of the existing If the scale of the fixed-assets of a foreign- non-financial enterprises. The related procedures have been Q:invested enterprise exceeds that of the specifically prescribed in the Measures for Overseas Invest- original investment amount due to purchase of ment Management (Decree No. 5, 2009 of the Ministry of equipment with business profits for expanding Commerce), which took effect as of May 1, 2009, please for production capacity, does the enterprise need to reference. alter its registered capital and the total amount of investment? With respect to the current state,s provisions for Whether the failure of alteration of the regis- Q:foreign equity transfer, does it go through ap- tered capital and the total amount of investment will proval or archival filing? have any impact on the policies applicable for the 1. With respect to issues concerning the alteration of foreign-invested enterprise? , investors equities in foreign-funded enterprises, in According to the relevant interpretations of the A:accordance with the provisions of Article 17 of the Provi- Interim Provisions of the State Administration of In- , sions for the Alteration of Investors Equities in Foreign-Funded A:dustry and Commerce on the Proportion of Registered Capital Enterprises, the approval authority shall decide whether or and Total Amount of Investment of Sino-Foreign Joint Ven- not to approve within 30 days upon reception of the full ture, please refer to the actual situation of your company documents submitted as prescribed. first and you do not need to alter the registered capital if 2. With respect to the issues concerning the altera- the original proportion does not exceed. The alteration, tion of foreign-funded enterprises, except the application if necessary, shall comply with the relevant articles of for alteration, copies of certificate of approval, and copies the Detailed Rules for the Implementation of the Law of the of business license, in accordance with the Implementing People’s Republic of China on Foreign-invested Enterprises or Regulations for the Law of the PRC on Sino-foreign Equity the Regulations on the Implementation of Law of the People’s Joint Ventures, the Rules for the Implementation of the Law of Republic of China on Sino-Foreign Joint Venture. Please go the PRC on Chinese-foreign Contractual Joint Ventures, the through alteration procedures with local administration Rules of the Implementation of the Law of the PRC on Foreign- for industry and commerce.

91 ulture C has wide currency in several differences: the “Chinese” 12-part cycle East Asian countries. is divided into years rather than months; Identifying this scheme the animals of the Chinese zodiac are not using the term “zodiac” re- associated with constellations, let alone flects several similarities to those spanned by the ecliptic plane. the Western zodiac: both have In China, we have Tiger year in time cycles divided into 12 2010, and will embrace Rabbit year soon parts, each labels at least the after Chinese Spring Festival, which is on majority of those parts with February 3, 2011. names of animals, and each is Chinese zodiac signs represent twelve Chinese zodiac (中国十二生肖; zhōng widely associated with a culture of attribut- different types of personalities. The zodiac guó shí èr shēng xiāo) is a scheme that ing influence of a person's relationship to the traditionally begins with the sign of the relates each year to an animal and its reput- cycle upon their personality and/or events Rat. The following are the twelve zodiac ed attributes, according to a 12-year cycle. It in their life. Nevertheless, there are major signs in order and their characteristics.

鼠 shŭ 牛 niú 虎 hŭ Rat: Forthright, tenacious, sys- Ox: D e p e n d a b l e , Tiger: Unpredictable, tematic, meticulous, charismat- calm, methodical, born rebellious, colorful, pow- ic, sensitive, hardworking, in- leader, patient, hard- erful, passionate, daring, dustrious, charming, eloquent, working, ambitious, impulsive, vigorous, stim- sociable, artistic, shrewd. Can conventional, steady, ulating, sincere, affection- be manipulative, vindictive, mendacious, ve- modest, logical, reso- ate, humanitarian, generous. Can be rest- nal, selfish, obstinate, critical, over-ambitious, lute, tenacious. Can be stubborn, narrow- less, reckless, impatient, quick-tempered, ruthless, intolerant, scheming. minded, materialistic, rigid, demanding. obstinate, selfish, aggressive, unpredictable.

兔 tù 龙 lóng 蛇 shé Rabbit: Gracious, good Dragon: Magnanimous, stately, Snake: Deep thinker, wise, friend, kind, sensitive, soft- vigorous, strong, self-assured, mystic, graceful, soft-spoken, spoken, amiable, elegant, proud, noble, direct, dignified, sensual, creative, prudent, reserved, cautious, artistic, zealous, eccentric, intellectual, shrewd, ambitious, elegant, thorough, tender, self- fiery, passionate, decisive, pioneering, ambi- cautious, responsible, calm, strong, constant, assured, astute, compassionate, flexible. tious, artistic, generous, loyal. Can be tactless, purposeful. Can be loner, bad communica- Can be moody, detached, superficial, self- arrogant, imperious, tyrannical, demanding, tor, possessive, hedonistic, self-doubting, indulgent, opportunistic, stubborn. intolerant, dogmatic, violent, impetuous, brash. distrustful, mendacious, suffocating, cold.

马 mǎ 羊 yáng 猴 hóu Horse: Cheerful, popular, Ram: Righteous, sincere, Monkey: Inventor, motivator, quick-witted, changeable, sympathetic, mild-mannered, improviser, quick-witted, inquisi- earthy, perceptive, talk- shy, artistic, creative, gentle, tive, flexible, innovative, problem ative, agile - mentally and compassionate, understanding, solver, self-assured, sociable, artis- physically, magnetic, intel- mothering, determined, peace- tic, polite, dignified, competitive, ligent, astute, flexible, open-minded. Can ful, generous, seeks security. Can be moody, objective, factual, intellectual. Can be egotisti- be fickle, arrogant, childish, anxious, rude, indecisive, over-passive, worrier, pessimistic, cal, vain, selfish, reckless, snobbish, deceptive, gullible, stubborn. over-sensitive, complainer, weak-willed. manipulative, cunning, jealous, suspicious.

鸡 jī 狗 gǒu 猪 zhū Rooster: Acute, neat, meticu- Dog: Honest, intelligent, Pig: Honest, gallant, sturdy, lous, organized, self-assured, straightforward, loyal, sense sociable, peace-loving, pa- decisive, conservative, critical, of justice and fair play, attrac- tient, loyal, hard-working, perfectionist, alert, zealous, tive, amicable, unpretentious, trusting, sincere, calm, practical, scientific, respon- sociable, open-minded, idealistic, moralistic, understanding, thoughtful, sible. Can be over zealous practical, affectionate, sensitive, easy going. scrupulous, passionate, intelligent. Can be and critical, puritanical, egotistical, abrasive, Can be cynical, lazy, cold, judgmental, pes- naïve, over-reliant, self-indulgent, gullible, opinionated, given to empty bravado. simistic, worrier, stubborn, quarrelsome. fatalistic, materialistic.

Question: What’s your Zodiac Animal in the year you were born? Are you of the similar personality as what it is described?

92 zuì zhōng guō hàn zì 最中国汉字 5 Insight into Chinese 国 guó Meaning: country; nation; state. Characters In the very beginning of Chinese 国 creation period (it was said in Zhou dynasty, BC1066 -BC256), the char- 1 国 in simpli- acter was written as 國. It suggests, 耕 gēng fied Chinese if it is a country, there are four things Meaning: furrow; plough up. 耒 (lěi) as the required: 1) 口 kǒu (small, middle in left part of the character means a farming tool the left), mouth, means people, 2) _ 耕 in ancient China. 井 (jǐng) as the right part of (under the mouth), a symbol to mean the character means a water well. Since China land, 3) 戈 gē (middle in the right), is a traditional agricultural country, Chinese language has a 国 means weapons, 4) 囗 wéi (big square high emphasis on farming. around), means territory. 国 in complex During Chairman Mao’s lead- Example: 春耕秋收。chūn gēng qiū shōu. font Chinese ership of the PRC, on June 1, 1956, Sow in spring; harvest in autumn. many Chinese characters were simplified in mainland China. (However the complex font still remains in Taiwan.) This character was also simplified as 国 to the simplified style used today. In 田 tián 2 the middle of the square, it is 玉 yù, means jade, in the hope that everyone will cherish his country as jade. (Jade Meaning: farmland; field. This character rep- is precious in China.) resents a vivid picture of fields in the countryside: the boundaries of a field, or the straight 田 Example: 我爱中国。wǒ ài zhōng guó. furrows created by the plough. “耕田” together I love China! means plough up a field.

Example: 田野里开满了花。tián yě li kāi mǎn le huā. Flowers are blossoming in the field. 6 家 jiā 3 Meaning: home; family; household. The upper 美 měi part of the character is宀(mián), in the shape of Meaning: beautiful; fair; delicious. The up- 家 a roof, to mean something connected with house per part of the character is 羊 (yáng); sheep, to and home. The bottom part of the character is豕 mean the mild tempered people. The bottom (tún); pigs. In ancient China, people often kept pigs at home, 美 part of the character is 大 (dà); big, to mean vast so “a pig in a house” means home. In modern Chinese, 国 land. Together, the original meaning of the character means and 家 are often used together to express the meaning of a “Tender citizens, vast land, how wonderful it is!” country.

Example: 你好，美女! nǐ hǎo, měi nǚ! Example: 保家卫国。bǎo jiā wèi guó. Hello, beautiful lady! Protect my home, safeguard my country.

好 hǎo 4 和 hé 7 Meaning: good; fine; nice; excellent; very. The left part of the character, 女 (nǚ) means daugh- Meaning: peace, harmony. The left part of the 好 ter, female, while the right part of the character, character, 禾 (hé) means rice seedling, while 子(zǐ) means son, boy. 好 combines the two 和 the right part of the character, 口 (kǒu) means characters together to mean, “If you have a daughter and a mouth, population. The character could mean, son, what a good thing it is!” Usually, Chinese will use 美 “When people have enough rice to eat, then peace will be and 好 together to describe beautiful things. achieved.” This expression is regularly used at happy family or national events, such as spring festival. Example: 好美的月光，真是个美好的夜晚。hǎo měi de yuè guāng, zhēn shì gè měi hǎo de yè wǎn. Example: 家和万事兴。jiā hé wàng shì xīng. Very beautiful moonlight! What a nice night tonight! If the family lives in harmony, all affairs will prosper.

93 Member List of Council of China’s Foreign Trade

Honorary Chairmen: Gao Kecheng Chairman of Jibao Enterprise Development (Singapore) Co., Ltd. Wan Jifei Chairman of China’s Council for the Promotion of Inter- Geng Jian Chairman of F&J Int’l Group / Shanghai F&J Investment national Trade and Management Co., Ltd. He Guangwei Former Director General of China National Tourism Ad- Gong Liming Chairman of Li-Ming Gong Enterprise Ltd. ministration Guo Dong Chairman of Guostar Group Ltd., Uganda Li Kenong Vice Minister of General Administration of China Customs Han Qiangchou Managing Director of Muhibbah Engineering Cambodia Co., Ltd. Consultants: He Chaoqiong Managing Director of Shun Tak Holdings Limited He Jinsheng President of e-Phone Group (USA) Shi Guangsheng Vice Director of Financial and Economic Committee of He Manguang CEO of Asian Products (HK) Co., Ltd. NPC’s Standing Committee Hu Jieguo Chairman of Nigeria Golden Gate Group of Companies Former Minister of the Administration of Foreign Eco- Hu Zhiqiang Chairman of Foster, Andrew & Co., Inc. nomic and Trade Cooperation Hu Anhua Chairman of Neonlite Electronic & Lighting (HK) Ltd. Gan Ziyu Vice Director of Financial and Economic Committee of Huo Zhenyu Director of Fok Ying Tung Group Hong Kong NPC’s Standing Committee Huang Jinyi Chairman of the board of Pacific Plywood Holdings Ltd. Former Vice Director of National Development and Re- Huang Guoyu Founder and Chairman of 4th World Chinese Entrepreneurs form Commission Convention and of Canada Founding & Development Society Yu Xiaosong Consultant of China’s Council for the Promotion of Inter- Huang Guozhong President of Wee Boon Ding Group, Malaysia national Trade Huang Junjie Chairman of Ericorps Group Former Chairman of China’s Council for the Promotion of Huang Zhiyuan Chairman of Sinar Mas Group-APP China International Trade Huang Tianwen President of Sinosteel Corporation Huang Yihong Chairman of Qin Jia Yuan Media Services Company Litmited Chairman of the Council: Jacky Chen Chairman of Thailand Council for the Promotion of Econ- omy and Trade of Small and Medium-Sized Enterprises Zhang Wei Vice Chairman of China’s Council for the Promotion of Jiang Lili President of Eco-Tek Holdings Limited International Trade Jiang Qingde President of Sumber Mas Group, Indonesia Jiang Qifeng Chairman of SBC Bank, Singapore Standing Vice Chairmen: Jorge Mora Asia-Pacific President of Veolia water Kong Lingfa President and General Manager of Tianxiang Group (An- Mr. Benjamin Fok Board Member of Fok Ying Tung Group Co., Ltd . hui) Co., Ltd. Mr. William Chiu Beijing Badaling Cableway Ltd. Leow Yoon Loy President of IPC Shopping Services Ltd., Malaysia Liu Jingzhen President of China National Automotive Industry Interna- Vice Chairmen: (Names in Alphabetical Order) tional Corp. Lu Dehua General Manager of Prime International Conference Exhibition Alan Liu President of AXL Musical Instruments Co., Ltd. Corp. Li Hexun President of Tetra Pak China Ltd. (Shanghai) Li Houlin Executive President of Hong Kong Hiersun International Angela A. Chao Vice President of Foremost Group Diamond Organization Alyce Su Founder of China Queen Capital (HK) Ltd. Li Jinyou Managing Director of County Height Holdings, Malaysia Bao Yifang Managing Director of Florence Town (Tianjin) Co., Ltd. Li Jiafu President of Majestic Group Int’l Ltd. Cai Xiyou General Manager of China International United Petroleum Li Songzhi Chairman of Myanmar International Business Promotion Centre. & Chemicals Co., Ltd. Li Xinzhu Chairman of Trade Manufacturing Ltd. Cai Tianzhen Chairman of Titan (Holdings) Ltd. Li Jinyuan Chairman & President of Tianjin TIENS Group Co., Ltd. Cao Heping Chairman of SKALA Investment Co., Ltd. Liang Gongbi Chairman of Orient Int’l Group, Ecuador Cao Weide President of IMC Shipping (China) Co., Ltd. Liang Jiaqiang President of Transpac Capital PTE Ltd., Singapore Cao Xiaopeng Chairman of Rongji Investment Ltd., Macao Lin Xinping Chairman of Nines (USA) Corp. Chau Pui Yin Director of Accordion Troupe Hong Kong Lin Guoguang Chairman of Greatwall Group S.R.O, Czech Cheng Yong Chairman of Glee Int’l Holdings Inc., Former Director of Lin Dexiang Chairman of GITI Tire (China) Investment Co., Ltd. Int’l Association of Lion Club Lin Jindan Chairman of LINNS INVESTMENT CPTY, LTD, Namibia Chen Chengxiu Chairman of Daching Holdings, Ltd. Lin Xuming Chairman of Hong Kong Minhoong Group Ltd. Chen Jinlong Senior Director of Far East Holding Group Co., Ltd. Lin Lisheng Chairman of Thaihua Rubber Public Company Ltd. Chen Renai Chairman of Jinghua Trade Company, Societa Montag- Lin Jianzhong Chairman of eBiz Anywhere Technologies Ltd. nora dei Servi Ass, China-Italia per le aree Marittime Lim Chee Oun Executive Chairman of Keppei Corporation Ltd., Singapore Chen Hanzhong Chariman of Chenshi Trade Group Ltd, Spain Liu Zhengchang Chairman and General Manager of Columbia Group, Indonesia Chen Xiaoping General Manager of Haining Hongyang Group Liu Jianmin Chairman of Empire Capital Group, Hong Kong Chen Xiaofeng Chairman of Wenzhou Chengwen Import & Export Co,. Ltd. Liu Shaorong Chairman and Executive President of Baltrans Holdings Ltd. Chen Xiaozhong Chairman of Wenzhou Xingyu Stationery & Sports Manu- Mimy Mock de Fung Chairman of General Committee of Sino-Venezuela facturing Co., Ltd. Trade, Industry, Agriculture and Tourism Chen Wenyue CEO of ASIAEP BERHAD Ma Li Chairman of Macao International Education Development Centre Chen Zhiling Operating Chairman of Wynn Macau Ma Renlin General Manager of Shanghai Meiheng Investment Co., Dato’ Sri Joseph Chong Managing Director of Westmont Power Ltd. Ltd. Dato’ Lim Hock San Managing Director of LBS BINA Group Berhad, Malaysia Mr. Banthoon Lamsam Chief Executive Officer of The KASIKORNBANK Public Deng Tengda CEO of International Trade Co., Ltd, Singapore Company Limited Ding Jiayan Board Chairman of Thai Guohuo Group Co., Ltd. Mr. Kampol Srethbhakdi President of The Thai Malleable Iron and Steel Co.,Ltd. Dong Rui’e Chairman of Western Meral Products Co., Ltd. Ren Zhijie President of Beijing Century Boai International Medicine Eddie Chng Chairman of Ternary Technologies PTE. Ltd. Technology Development Ltd. Fan Yifei Vice President of China Construction Bank Ouyang Riping Chairman of the board of DaTong Group (West Africa) Feng Shaoyu Chairman and Executive President of Hongkong Aon Asia Group Qi Xianjin Executive Consultant of Puente China Espana. S.L. Feng Minghui Chairman of Jincheng Investment Co., Ltd. Qiu Dachang Vice Chariman & Executive President of Far East Devel- Gallant Y.T. Hong Kong Philanthropist opment Co., Ltd. Steven LEOW President of IPC Shopping Service (M) Sdn Bhd Zhuang Yaozhi Honorary Chairman of Global Petrolum Industry Devel- Shen Qinhua Chairman of Head Force Development Ltd., Hong Kong opment Co. Ltd. Shen Yaozhang Chairman of Shanghai Baoyao Minmetals Import & Ex- Zou Weimin Chairman and General Manager of Metallurgical Corpo- port Trade Co., Ltd. ration of China Overseas Ltd. Shi Huamin Chairman of Beauty Bond Holdings Ltd. Chairman of China General Chamber of Commerce in Executive Directors: Brazil Shi Zhenyuan Chairman of Kingsland Enterprises, Inc. / Agusan Planta- Chen Mingzong Chairman of Intan Group Indonesia tions, Inc. Cen Shunguo General Manager of Inversions Nueva China Shu Rongbin President of Shanghai Waigaoqiao (Group) Co., Ltd. Hong Guiren Wijayakusuma Group Coal Mining and Power Station Sun Ziyu Managing Director of China Harbor Engineering Com- Indonasia-China Cooperative Investment pany Ltd. Li Zhimin Chairman, Xinjiang Tianhai Lvzhou Group Co., Ltd. Tang Chai Yoong Chairman of Kumplan Langkawi Resorts, Malaysia She Wenmin President of Singapore Technologies Electronics Ltd. Wu Duanjing Vice Chairman of New Lakeside Holdings Limited Mr. Michael Kwan Associate Director of Shun Tak Holdings Limited Wu Huiquan Chairman of Fusion Int’l Holdings Ltd. Yang Chisheng Chairman of China Audit Certified Public Accountants Wang Shousong Chairman of Wang’s Corporate Group, Holland Ltd. Wang Zhenling Chairman of Hanxing (China) Group Ltd. Yao Yuntao Director of Administration Committee of Gu’an Develop- Wang Huizhen Managing Director of Wang Xinxing Co., Ltd. ment Area Wang Jiahou Chairman of the Dynasty, Italy Yu Mingquan President of Juhai Group (Russia) Wang Jiayi Chairman of Yi Ni Int’l, New Zealand Zheng Jingxin Chairman of Tee The Sdn Bhd Malaysia Wang Jiaming Chairman of Canada Ebridge International Ltd. Zhang Dongxiao Chairman of REDAS, Singapore Wang Qiandong President of Suntec City Development PTE, Ltd. Wang Qinghai General Manager of Shougang Group Council of China’s Directors: Foreign Wang Shufang Chairman of Chinese Committee of Golden Coast, Aus- Cai Zhipeng Chairman of Shantou Diming Trading Co., Ltd. tralia Cha Meilong Managing Director of CHA Textiles Wang Renqing Chairman of Aims Financial Group, Australia Chen Caiji Chairman of PT. Gunung Garuda Brazil Wang Wu Managing Director of Central Huijin (Beijing) Investment Chen Dan Managing Director of Leawell International Ltd. Ltd. Chen Ming Chairman of FORWARD Group Logistics Companies Wang Zhanhua Managing Director of Global One Headwear Co., Ltd. Chen Guangdi Mang Gai International Golf Committee of Vietnam Hong Wu Shuqing Chen Liqun General Manager of Asia Satellite Telecommunications Chairman of Hong Kong Executive Committee of World Co., Ltd. Trade Centre Chen Gongwei Executive Director of Weili International Investment Vice Chairman of Beijing Air Catering Ltd. Holdings Co., Ltd. Wu Xiaobin Chairman of LOXCO., Ltd. Dato’ Yan Mengjie Executive Chairman of VIBRANTWAVES S.D.H.BHD, Wu Yingmei Executive Director of Kowloon Motor Bus Co., Ltd. Malaysia Managing Director of Roadshow Co., Ltd. He Haitang Director of Shanghai Haitang Helmet Factory Xiao Dexiong Chairman of Tw Fok Holding Co., Ltd. Hu Zhimin Chairman of Woo Investments Group Xie Bingzhen Chairman of Strategic Decision Committee of China Huang Biyun Chairman of Huada Industry and Trade Development Co., Ltd. Machi Group Huang Jianlong Vice President of SANY Group Co., Ltd. Xie Futian Chairman of Green World Holdings Ltd. Hung Chi Ching Chairman of HCC Assets Management Ltd. Xie Liqun Chairman of Yunnan Anhong Real Estate Development Li Guoqiang Chairman of Nuovo Collection Co., Ltd. Li Liming Chairman of DingXiang County LiMing flanges Co., Xie Mingcheng Chairman of China Win-Win Group Limited Ltd. Xu Zili Chairman of the Board of Directors of Supermercado Sun Lin Jiashui Executive Chairman of Unimech Group Miu Ltd. Liu Junying Chairman of China Xinghai Group Energy & Mining In- Xu Wenbo Executive Director of Macau Huan Yu Group Holdings vestment Co., Ltd. Co., Ltd. Ma Zhongli General Manager of Taching Petroleum Co., Ltd. Xu Li Chairman of the board of Nankai Transport International Ma Jianbo Chairman of Zhenghua International Trade Co., Ltd., (HK) Co. Ltd. Thailand Xu Zhiming Chairman of Yuemei Group Guo Kongfeng Chairman of Hilmar Trading PVT Ltd. Xue Baojin President of Beijing Smart Garments Co., Ltd. Gong Xuebin Chairman of Longda Foodstuff Group Co., Ltd. Yao Junwen Chairman of Russia Yujia Group Jiang Xing Director of Lippo China Resources Ltd. Yang Jinhua Chairman of King Far B.V., Holand Peters Lim Managing Director of JP International Travel Pte Ltd., Yang Luming Managing Director of Danchen Group of Companies Singapore Yin Xiaomin Chairman of Yinshi Group, Brazil Qian Yuezhen General Manager of Nordic China Center (Finland) You Kaicheng Chairman & General Manager of Binhtien Imex Co., Sun Jianxi General Manager of Xi’an Dagang Road Machinery Co., Ltd. PTE. Ltd. Shao Chuanwei Chief Director of Information and Technology Division, Yu Mingquan Chairman of Juhai Group, Russia Phillips Electronics (Hong Kong) Co., Ltd. Yang Luming Managing Director of Australian Chen Enxi Group Co., Tang Lei Head of Public Affair & Government Relationship, Ltd. Shanghai eBay China Yang Zongde(Lin) Managing Director of GLENCAIRN International Group Teng Yunpeng Beijing Walson International Property Rights Agent Co., Ltd. Zhao Hui Manager of Wuhu Cigarette Factory, Anhui Province Wang Anlun CEO of Ascott Group Zhao Anji Vice Chairman of Fumao Group Wang Junqin Chairman of J.K. Wong Inc. Zhang Weizhi Chairman of Hacau-Taiwan Portugal Chauber Of Com- Wang Shuyin Managing Director of Shaanxi Xianyang Grain Machin- merce ery Factory Zhang Liqun Great Will Inv. Co., Ltd. Xuan Guangri General Manager of Yiwu Yana Imports and Exports Co., Ltd. Zhang Xiaoqun Chairman of Dubai China Trade City, Saudi Arabia Xie Gang General Manager of Beijing Helen Travel & Culture De- Zhang Xiqing Chairman of Union of Overseas Chinese Greece velopment Co., Ltd. Zhang Jianwei President of Sino-trans Limited Yang Chuanli Chairman of Jingu Jewellery Ltd. Zhang Qingxin President of Chongqing Wijaya Reality Ltd. Zhang Yin Chairman of Nine Dragons Paper (Holdings) Limited Zheng Weicai Executive Director of Malaiya Flour Mills Berhad Zhao Zhiming Chairman of Chow Kim Lin Group SDN. BHD. Zhou Jinhui Chairman of Legendale Constructive Co., Ltd, Macau Zhu Chunzi General Manager of Seaport Industrial Park Development Zhu Shanyi Chariman of Jiangsu Mingda Mining Investment Co. Ltd. Company, Zhanjiang Port Group