NOV. 2012 No. 528 Sponsored by CCPIT Since 1956 CHINA’S F REIGN TRADE

Special report China’s Economy Stabilizing in the First Three Quarters

SURVEY China to Top the World’s Smartphone Market

Dr. NG Kai Lun, Chairman of the Board of Smart Group International

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

http://www.ccpit.org 福田欧曼TL 世界标准 Foton Auman TL World standard Quality: Adopts European stan- dards as the design standards, so as to ensure the full-value chain and get fully aligned with the world standards in the aspects of R & D, supply chain, manufacturing, quality control, and service; as well as high vehicle, long service life, and high secondary-sale residual value.

Safety: The car body can meet the European EEC safety regulations and standards, and has passed TÜV Rheinland safety certification, ensur- ing the safety of people, vehicles and cargoes.

Fuel economy: Car body has gone through wind tunnel tests and aerodynamic design, with lower wind drag; the power system had been op- timized by the European technology with more efficiency; 3-5% more fuel- efficient than comparable vehicles, and lower operating costs.

Intelligence: CAN-bus through- out the vehicle assembly, equipped with the smart power, with the world’s most advanced intelligent control and management systems, wireless net- work services and remote control sys- tems, intelligent navigation adopted, driving operability is more convenient and easier.

Comfort: large driving space, hardwood floor throughout the ve- hicle, comfortable configuration in the car, adopting the Ramsis software de- sign, in line with ergonomic principles; equipped with four-point full-floating air bag body suspension system, the European tuning, smooth manipula- tion; newly-developed high-level auto body molding, manufactured in the global digital factory, good sealing, low noise; riding comfort with less fatigue. Policies

China allocates more funds for boosting imports operation in China, shortening the period from the previous five years. China’s Ministry of Finance The policy changes took effect on Oct. (MOF) announced on Oct. 10 16 and came after other steps taken by China it has appropriated 2.5 billion to further open its financial markets and ease yuan ($394 million) for interest restrictions on foreign investors. discounts offered to importers this year to boost imports of cer- Shanghai policies woo tain products, Xinhua reported. multinational headquarters The fund was up 25 percent compared with a year earlier, ac- Shanghai has issued a package of new pol- cording to a statement posted on icies, including subsidies and duty exemptions, the MOF’s website. to encourage more multinational corporate The ministry raised the fund headquarters and R&D centers to set up shop for interest discounts in an effort to balance trade by encouraging imports of high- in the financial hub of China, said a Xinhua tech equipment, significant raw materials, as well as key components and parts, the report. statement said. New regional multinational headquarters Since China began to extend interest discounts to importers in 2008, the coun- in Shanghai will be able to receive a launch try has allocated a total of 9.5 billion yuan of interest discounts on the imports of subsidy of 8 million yuan ($1.27 million) in encouraged products with a total worth of $111.35 billion, the ministry added. three years, while foreign R&D centers will enjoy duty-free imports of facilities and equip- China ups foreign stakes limit in securities firms ment for their own use, according to the new policies. China’s securities watchdog on Oct. 16 allowed overseas investors to hold high- The new policies are intended to encour- er stakes in the country’s securities firms, its latest effort to relax controls on foreign age foreign-funded companies to divert their investment in the financial industry, Xinhua reported. management and innovation resources to Overseas investors can now hold stakes as high as 49 percent in joint-venture China in order to transform the local economy securities firms, compared with an investment cap of a third of those companies’ amid global recession, said Wang Xinpei, equities previously imposed, according to a statement issued by the China Securi- deputy director of the city’s commerce com- ties Regulatory Commission. mission. At least one domestic investor should own a stake of no lower than 49 percent The regional headquarters of investment in such joint venture securities firms, but the restriction does not apply to listed se- companies that have a turnover surpassing 1 curities firms, the CSRC said. billion yuan will get a one-off reward of 5 mil- In another statement, the CSRC said securities firms, including joint ventures, lion yuan, according to the new policies. can apply for permission to expand their businesses two years after going into The package also extends long-term

Figures

percent year-on-year to 825.8 billion yuan National Bureau of Statistics (NBS) 11.4 % ($131.08 billion) in September, the Minis- said on Oct. 18. Profits at China’s state-owned en- try of Finance said on Oct. 18. terprises (SOEs) fell 11.4 percent year 14.1% on year to 1.55 trillion yuan ($246 bil- 20.5% lion) in the first three quarters of 2012, China’s retail sales the Ministry of Finance said on Oct. 18. China’s fixed asset in- grew 14.1 percent year on vestment rose 20.5 percent year to 14.94 trillion yuan year on year to 25.69 trillion ($2.37 trillion) in the first 11.9% yuan ($4.08 trillion) in the three quarters of this year, China’s fiscal revenues grew 11.9 first nine months of 2012, the the NBS said on Oct. 18.

2 Quotes residency to senior foreign executives “China focuses on managing inflation” and department managers at corporate Yi Gang, vice governor of the firms that have a registration fund of no People’s Bank of China, made a less than $3 million. speech at the last day of the Inter- Previously, only foreign staff at the national Monetary Fund and the headquarters could enjoy long-term World Bank annual meeting on residency, which lasts for a maximum of Oct. 14 to explain the monetary five years. policy of China, according to Xin- The headquarters can also enjoy hua. preferential financial policies, such as Yi stressed that the most im- convenience in cross-border use of the portant job for the central bank is yuan, with simplified procedures for to control inflation. China is devel- businesses under the yuan current ac- oping dramatically, and local gov- count. ernments have desires of pursuing The headquarters of multinationals higher growth, so the central bank are also encouraged to establish yuan need to remind the governments settlement centers for overseas business the danger of inflation. in Shanghai. He said the moral explanation is not enough, so the central bank has to use some tools, including required reserved ratio, open market operation, and exchange rate policy, to control the growth rate in a manageable range.

“China transforms to slower but better quality growth”

China is transforming to slower but probably better quality growth, Jim O’Neill, chairman of Goldman Sachs Asset Management, told Xinhua in a recent interview. His comment came as China reported falling imports and lackluster growth in exports for August, the latest set of worrying data to come out of the world’s second-largest economy. “China’s trade data was quite concerning especially the weakness in imports. China is supposed to be transforming away from the old model and consume more. Part of the hope is that China would import more from the rest of the world,” said O’Neill.

3.3% 3.8% 4.1% Hong Kong’s seasonally adjusted The Consumer Price Index (CPI) China’s urban registered unem- unemployment rate rose from 3.2 percent in Hong Kong quickened to 3.8 per- ployment rate stood at 4.1 percent at in June-August to 3.3 percent in cent year-on-year in the end of September, the same level July-September, while the un- September from the as at the end of the second quarter of deremployment rate fell from 1.7 3.7 percent in August, 2012, according to figures revealed percent to 1.6 percent, the city’s the city’s statistics by the Ministry of Human Resourc- Census & Statistics Department department said on es and Social Security (MOHRSS) announced on Oct. 18. Oct. 22. on Oct. 25.

3 Policies

China to issue national mobile payment standard

Officials from the People’s Bank of China said that China will issue a national mobile payment standard as early as the end of the year, said Xinhua. They added that the country is likely to conduct mobile payment trials in Chengdu and Ningbo. Li Xiaofeng, director of the IC card office with the PBOC, said that the China Fi- nancial Standardization Technical Committee had approved the national payment stan- dard on Oct. 16. The commit- tee is now sending documents to relevant authori- ties for further ap- imports last year, will be allotted to traders proval, according outside the dominant four state traders — to a report in the Unipec, Chinaoil, Sinochem and Zhuhai Oriental Morning Zhenrong — but these non-State traders will Post. have to sell back the crude they import to Li said that Sinopec and PetroChina. China would As part of China’s World Trade Organi- adopt the 13.56 zation commitments, the country had been MHz mobile pay- increasing the amount of crude and refined ment standard, fuels that non-State firms could import by 15 developed by China UnionPay, as its major mobile payment standard. percent every year for a decade until 2011. However, in some enclosed environments, such as in urban public transportation, the homegrown 2.4 GHz technology may also be used. Electronic monitoring network to include imported drugs China 2013 non-State crude import quota unchanged China’s food and drug safety watchdog China, the world’s second largest oil consumer, has set its 2013 non-State crude plans to put imported drugs on the national oil import quota at 29.1 million metric tons, the same as this year, the Ministry of electronic monitoring network in a move to Commerce said on Oct. 15, Xinhua reported. step up drug management, Xinhua reported. The country also set its 2013 non-State fuel oil import quota at 16.2 million Overseas pharmaceutical companies and tons, unchanged from 2012, the ministry said on its website. their designated agents in China will have to The crude import quota, equivalent to about 11.5 percent of China’s total crude apply to be covered by the network and get

Figures

which measures infla- 1.9 percent year on year in Septem- 3rd tion at the wholesale ber, the NBS announced on Oct. 15. Construction of China’s third pipe- level, dropped 3.6 The index eased from a 2-percent line that will send natural gas from the percent year on year in rise in August. nation’s resource-rich western regions September, the NBS to the energy-starved east started on revealed on Oct. 15. 14.8% Oct. 16. China’s broad measure of 1.9% money supply (M2) rose 14.8 3.6% The CPI, the main percent in September from a China’s producer price index (PPI), gauge of inflation, grew year ago, accelerating from the

4 Quotes relevant cipher keys, the State Food and Drug Administration, or SFDA, said in “China’s economy transferring to new growth engines” a draft regulation. The regulation was made public to solicit opinions until Oct China’s economy has started transferring to new growth engines and search- 12. ing for new incentives, a Russian expert told Xinhua in a recent interview. The electronic network was de- The economic restructuring itself was one of the most significant achieve- signed to monitor the entire process of ments made over the last decade, said Yakov Berger, an expert from the Far East manufacture, transportation, storage and Institute of the Russian Academy of Science. sale of drugs. The move will also enable China used to rely its economic growth heavily on export, investment and realtime inquiries into inventories and cheap labor. Chinese leaders have long been aware of shortages of such an ex- destinations, according to Wang Yingli, port-oriented economy and looking for a more sustainable growth model, Berger chief of the SFDA information planning said. office. “US report on Huawei, ZTE not final”

The United States Congress’s latest report on Chinese tech firms Huawei and ZTE does not represent a “final conclusion” and the focus of the report is to exchange more information, US Ambassador Terry Kramer said on Oct. 25. Kramer, a telecommunications expert and head of the US delegation for the World Conference on Information Telecommunications (WCIT), said at a news con- ference in Beijing that the report, which was released by the House Intelligence Com- mittee on Oct 8, does not represent the position of the administrative branch.

“China foreign trade growth target may be missed”

Despite accelerated activity in September, China’s chances of hitting its an- nual foreign trade growth target this year were described as “hopeless”, accord- By assigning each package of medi- ing to a well-placed source, China Daily reported. cine a 20-digit unique code, the admin- Economists and trade watchers agreed that due to a number of factors, the istration can use the network to track euro-debt crisis being the most significant, the momentum of China’s foreign and recall drugs, Wang said. growth will remain weak as the year draws to a close. The network will also help curb An annual foreign trade growth target of 10 percent was set earlier this year but counterfeit drugs as consumers can use the chances of hitting that figure are “hopeless”, said the source on condition of ano- the code to inquire about the products nymity. via phone, text messages or the Internet, according to Wang.

13.5-percent growth regis- families next year, the Ministry to figures released on Oct. 5 by Mon- tered in August, the central of Finance said on Oct. 12. etary Authority of Macau. bank said on Oct. 13. 5.3% 4.4% 69.6b Macau’s resident depos- Bond sales on China’s interbank China has set aside 69.6 its in August increased by market fell 4.4 percent year on year billion yuan ($11 billion) from 5.3 percent from the previ- to 4.83 trillion yuan ($754.7 billion) the central budget to pay for ous month to an equiva- in the first eight months of the year, subsistence allowances to be lent of 341 billion patacas according to the country’s central given to needy rural and urban ($42.69 billion), according bank.

5 http://cft.ccpit.org www.ccpit-cft.net.cn 2012/11 No.528

Special report China’s economy has been stabilizing, 08 especially since September, due 08 China’s Economy Stabilizing in the First Three Quarters to a slew of measures taken by the government. 10 China’s Economic Growth Stabilizing, Annual Growth Target Attainable 11 China’s Economy to Pick up in Q4 14 China’s Foreign Trade Needs Adjustments 16 Expert views

ECONOMY 20 China’s Impact on World Commodity Markets 22 CCOIC Calls for Trade Facilitation 23 Hurun: China’s Rich Are Getting Poorer 24 Data Watch on China’s Foreign Trade and Investment in the First Three China is working to boost the 29 domestic photovoltaic (PV) Qs of 2012 industry by launching a variety of supportive policies. Industrial Watch 27 Steel stockpiles fall markedly in China 37 Independent Credit Rating Agency Established 38 Can the Golden Year Be Far Behind? 40 Information Design Boosts Smart City 42 Confidence in the Market

survey With staggering consumer demand 44 China to Top the World’s Smartphone Market 44 for affordable smartphones, China is to become the world’s largest smartphone market this year. case Study 46 Protectionism or Rule of Law? 48 Commerce Branch of CCPIT Launches International Trade Accountant Tests

REGIONAL TRADE AND INVESTMENT 52 More Uncertainties to the Sino-Japanese Economy 55 Indonesia Seeks for Chinese Investment 57 Beijing, Copenhagen Enhance Co-op on Sustainable Cities Xishuangbanna, in China’s south 58 U.S. Buy American Provisions 92 western Yunnan province, is a perfect travel destination with 60 China, Latin America to Diversify Co-op amazing tropical plants, fruits, elephants, peacocks, Pu’er tea, etc. 62 Pay in, then Save in 66 State-level Pilot Zone to be Built in Guangzhou 67 Beijing, Macau to Boost Economic Co-op Sponsored by (主管) CCPIT(中国国际贸易促进委员会)

COVER STORY Operated by (主办) 70 Trade Development and Cooperation Center of CCPIT For a Brighter Future 中国国际贸易促进委员会贸易推广交流中心

People Published by (出版) China’s Foreign Trade Magazine 76 “Civil Diplomat” between China, Indonesia 中国对外贸易杂志社 社长 President 杨晓东 Yang Xiaodong eye on china 总编辑 Editor-in-Chief 孟燕星 Meng Yanxing 副社长 Vice President 石 净 Shi Jing 79 Chinese Style Holidays 杨复强 Yang Fuqiang 李英宏 Li Yinghong InfoRMATION 编辑部副主任 杨 蔚 82 Investment Projects Editorial Deputy Director Yang Wei 执行主编 Executive Editor 郭 艳 Guo Yan 84 编辑部 Editorial Department 竹子俊 Zhu Zijun China Fairs & Expos Tel:86-10-68053271 崔晓玲 Cui Xiaoling 赵 炜 Zhao Wei LIFESTYLE 刘馨蔚 Liu Xinwei 流程总监 Operation Director 张 越 Zhang Yue 88 The Fifth EU Film Festival is coming 英文校审 English Copyeditor 刘英波（英） Lewis McCarthy 莫 雷（美）Adam Morley

THIS IS China 经营部总经理 石 净（兼） Marketing Department Director Shi Jing 92 Xishuangbanna — A Land of Magic and Dreams 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 Tel:86-10-68027947 李小冬 Li Xiaodong 高 嵩 Gao Song

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By Richard Zhu

6 Q2 Q3 Q4 hina’s economy has been stabi- The NBS said the stable economic 2009 lizing, especially since Septem- growth was evidenced by the following ber, due to a slew of measures positive economic indicators: Agricul- taken by the government, said tural production showed good momen- an official from the National Bureau of tum and autumn grain is expected to get CStatistics (NBS) on October 18. another harvest; the growth of industrial “The government paid more at- production fell slightly with enterprises tention to maintaining steady growth, profits decreased year-on-year; invest- carried out the proactive fiscal policy ment in fixed assets enjoyed steady and and prudent monetary policy, and made fast growth while the growth of total great efforts in policy presetting and fine planned investment in newly-started tuning. As a result, the overall national projects continued to accelerate; invest- economy realized steady development ment growth in real estate development with some positive changes: the eco- continued to drop while the growth of nomic development stabilized; structural the sales of commercial buildings turned adjustment speeded up and people’s live- from negative to positive. lihood continued to be improved,” said Furthermore, sales at domestic the NBS spokesman Sheng Laiyun. market enjoyed steady growth while According to the NBS, the GDP retail sales grew faster than catering grew 7.7 percent in the first three quar- industry; the growth of imports and ters and 7.4 percent in September. The exports declined while trade surplus figure was lower than the 7.6-percent increased; money supply showed faster growth in the second quarter and growth and newly increased loans in- 8.1-percent growth in the first quarter. creased year-on-year; the year-on-year Though, it was still in line with econo- growth of consumer price continued to mists’ predictions. fall back while producer price declined; The gross domestic product (GDP) urban and rural residents’ income in- of China in the first three quarters of creased rapidly with a higher growth for this year was 35.35 trillion yuan (5.61 rural residents. trillion U.S. dollars), up 7.7 percent year “In the next phase, we should pay on year. more attention to maintaining steady Although China’s economy has growth, make earnest efforts to imple- slowed for the seventh straight quarter, ment the promulgated policies and mea- positive economic indicators have shown sures, promote economic structural ad- growth has picked up and the country’s justment and industrial upgrading which economy is not at risk of hard landing. have won initial success,” said Sheng. “Clearly, concerns over continued Where will be China’s economy slowdown can now be put to rest,” Dariusz headed in the future and what is the out- Kowalczyk, an analyst at Crédit Agricole look? The Special Report of this issue will in Hong Kong, said in a research note. further explore the topics.

8 Year-on-year growth 11.9 Unit: percent GDP 10.3 9.6 9.8 9.7 9.5 9.1 8.9 8.1 7.6 7.4

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2011 2012

Data Source: National Bureau of Statistics

9 China’s Economic Growth Stabilizing, Annual Growth Target Attainable

By Xinhua News Agency

hina’s economic growth country’s industrial value-added output implement a proactive fiscal policy and has started to stabilize and grew 10 percent year on year. prudent monetary policy, effectively shown positive changes, said The statement attributed the posi- carrying out the structural tax reduc- a statement released after a tive changes in the economy to govern- tion policy and maintaining appropriate State Council meeting presided over by ment pro-growth measures introduced money supply, it said. CPremier Wen Jiabao on Oct. 17. earlier this year, which include more China’s central bank has lowered The country is confident that aggressive fiscal spending, structural both banks’ reserve requirement ratio with hard work it can reach its annual tax reduction, monetary loosening and and interest rates twice this year in a bid growth target, the statement said, citing state-run sectors opening to private to buoy the slowing economy, which key economic data that were unveiled capital. has been dragged down by global eco- to the public early on Oct. 18. The government will continue to nomic woes and equally weak domestic In the first three quarters of this prioritize stabilizing growth and strive demand. year, China’s retail sales grew 14.1 to do a better job in the fourth quarter, While sticking to its control mea- percent year on year to 14.94 trillion which will play a significant role in at- sures over the real estate market, the yuan, while fixed asset investment rose taining the year’s growth target, the government will also step up efforts in 20.5 percent year on year to 25.69 tril- statement said. studying and formulating a regulation lion yuan, Sheng said, adding that the The government will continue to system that is more stable and predict- able, the statement said. China has spent the last two years Fitch: China Economy will trying to cool skyrocketing home prices - a major source of public complaint - by intro- Avoid Hard Landing ducing a raft of tightening measures such as bans on third home purchases and property By China Daily tax trials. The statement said efforts will China’s economy will avoid a “China has scope for policy flex- also be made to expand consumption of hard landing as the current slowdown ibility: we think fiscal stimulus will energy-efficient home appliances and is much less abrupt than during the be modest while the labor market increase financial supports for key na- global financial crisis four years ago, remains resilient, and the authori- tional projects that are under construc- ratings firm Fitch said in a report on ties are mindful of the risks of rapid tion. Oct. 22. credit growth — such as weakening Moreover, the government will China’s GDP grew 7.4 percent in the banking system. Nevertheless, the focus its energy on deepening reforms the third quarter from a year earlier, stimulus could still be sufficient to in the finance and taxation, investment the National Bureau of Statistics said help raise growth towards 8 percent and financing, electricity pricing and on October 18, down from 7.6 percent by year-end and support a rate of administrative approval sectors, while in the second quarter. about 8.2 percent in2013,” the report carrying out measures to boost foreign More positively, September’s said. trade, the statement said. retail sales saw the biggest year-on- In Fitch’s September Global China’s exports rose to a record year increase since March, although Economic Outlook, the company monthly high of 9.9 percent year on this may have been due to higher trimmed its expectations for China’s year to 186.35 billion U.S. dollars in sales during the holiday period, full-year GDP growth for 2012 to 7.8 September, due to government sup- while industrial production was up percent from 8 percent, following port policies and surging orders for the 9.2 percent year-on-year. the Q2 reading. Christmas shopping season, customs data showed.

10 By FinancialBy Research Center, Bank of Communications Pick up China’s Economy to Weak internal and external demand the domestic fixed asset investment grew has slowed down economic growth 20.5%, with a slight 0.1 percentage points for the seventh straight quarter higher than that of the second quarter yet 4.4% lower year-on-year. Demand from the The preliminary accounting data from real economy has also been slashed, which the National Statistics Bureau shows that is obviously reflected in industrial produc- China’s Gross Domestic Product (GDP) tion. During the past three quarters, China totaled USD 35.348 trillion during the first merely registered a 10% growth in industrial three quarters of this year, up 7.7% year-on- added value, 0.5 percentage points lower than that in the second quarter and 4.2 per- year based on comparable prices. The third Q4 in quarter saw a GDP growth of 7.4%, another centage points lower than that in the same decline in seven consecutive quarters. period of last year. Slowing economic growth is mainly Several factors contribute to the attributed to the sluggish demand at home recovering economy and abroad, which is reflected on the three forces driving China’s economic growth — In the third quarter, the economy is export, consumption and investment. Dur- still slowing down, but at a much lower ing the first three quarters, China’s export speed and the economy begins to stabilize. experienced an accumulative growth of In addition, a string of economic operating 7.4%, 1.8 percentage points lower quarter- data indicates that there exist several nega- on-quarter and 15.3 percentage points year- tive factors for the economy to pick up. on-year; as for consumption, the domestic First, the leading economic indicators total retail sales of consumer goods increased are redounding. In September, although by 14.1%, 0.3 percentage points lower than the official PMI 49.8% was still lower than that in the second quarter and 2.9 percent- 50%, it saw a month-on-month rise of 0.6 age points lower year-on-year; in terms percentage points and it began to pick up of investment, in the past three quarters, after a consecutive downward trend during

11 the past four months. In the same Pro-growth policies drives up month, the domestic Consumer Con- investment and the leadership fidence Index (CCI) was 100.8%, 1.4 transition in 2013 may further percentage points higher month-on- push up investment month. Second, industrial production be- The infrastructure projects ap- comes stable after striking the bottom. proved by the National Development In September, the industrial added and Reform Commission earlier have value grew 9.2%, 0.3 percentage points begun to kick off, and the booming higher than that in August. With an land market sends signal that property increase of 0.4 percentage points in developers are enthusiastic again about industrial added value, the eastern re- investing in the real estate. The total gions grew more quickly than the cen- Upward total demand in Q4 will planned investment in the newly-com- tral and western regions. For instance, drive up economic growth menced projects has been scaling up in Guangdong Province experienced a five consecutive months; with stron- growth of 10.2%, Fujian 16.2% and The future improving global envi- ger capital support, investment in the Shanghai 4.3% from negative growth ronment will boost China’s export. manufacturing sector will also stabilize a month earlier. With a higher degree The fourth quarter will see an due to favorable expectations. And in in both openness and marketization, improving global framework. Launch- the fourth quarter, investment in fixed the eastern regions are more sensitive ing the European permanent relief assets will recover with an approximate to economic changes and thus these mechanism ESM will help to ease the annual hike of 21%. regions are often than not the forerun- European debt crisis and as a result the Next year, investment may further ner to sense the significant economic economy in the euro zone will recover accelerate. First, the new generation of transition or turbulence. The climbing slowly; the US unemployment rate government leadership team will carry industrial production in the eastern unexpectedly decreased, promising a out new investment schemes and mea- regions signals that the total domestic staggering recovery momentum and its sures; second, the polices for advancing demand is expected to recover. QE3 will keep rejuvenating the econ- urbanization will scale up investments Third, the consumption-invest- omy. The stabilizing external environ- in urban infrastructure; third, invest- ment-export driving forces of economic ment, coupled with a series of domestic ments in manufacturing will pick up as growth are gaining momentum again. initiatives to boost global demand will export and the internal economy keep In September, the domestic consump- slightly push up the export in the fourth recovering; fourth, greater financial tion ramped up 14.2%, rising 1 per- quarter. However, considering that the support will be in place, including bank centage point month-on-month; during European debt crisis cannot be solved credit and non-bank financing. January and September, the inbound radically in a short period, the US will Policy stimulus and income investment registered a total increase of still be confronted with a “fiscal cliff” distribution system reform will 20.5% with an increase of 0.3 percent- at the end of the year and the external boost consumption in future age points than that from January to macro environment may improve limit- August; September also witnessed an edly within a certain degree, China’s In the fourth quarter, the retail increase of 7.2 percentage points in ex- export throughout the year is projected sales of consumer goods will be likely port to 9.9%. to grow at a rate of less than 10%, to be to grow at the current rate, and the an- Fourth, the employment and specific, approximately 8%. nual nominal growth rate is projected resident income keeps improving, lay- Next year, the global economic to reach 14.5% or so. First, during the ing favorable foundation for economic situation will become stable. On “two-festivals” holiday (Mid-autumn recovery. During the first three quarters, the one hand, the bond purchasing Festival and National Day), consumer 10.24 million job opportunities were program launched by the European spending was more vigorous than past newly created in China’s urban areas, Central Bank needs the countries con- years; second, the more housing trans- well ahead of the annual objective to cerned to cooperate in terms of policies actions earlier of this quarter will boost newly create 10 million job opportuni- and measures so as to take effect, and decoration and furniture consump- ties. What’s more, the domestic resident next year the economy may grow slowly tion to some degree; third, the capital income is also experiencing growth in the euro zone; on the other hand, the market may become active and the with a real hike of 9.8% in the per capita US will adopt measures to avoid a “fis- recovering wealth effect will build up disposable income of China’s urban resi- cal cliff” and its economy will continue market confidence and thus encourage dents and the cash income for the rural to recover moderately; besides, the residents to spend more. households increased 12.3% in the real strained Sino-Japanese island disputes In 2013, the domestic consumption sense. The resident income in both the may be somewhat eased. The domestic will grow after stabilizing. First, against urban areas and the rural areas has expe- export only saw a single-digit growth the backdrop of a recovering macro rienced a growth well above that of the this year, and next year it is expected to economy, a reformed scheme for income GDP growth. pick up. distribution is about to be carried out

12 and resident income is expected to grow and then production prices. Probably, credit loans in future; during the first steadily; second, the package of policies to enterprises are expected to launch a new half of this year, inadequate effective expand internal demand will help to build round of re-stocking, but the structural credit demand led to an over 700 bil- up consumption confidence and then to de-stocking with sector features may last. lion of bill financing, a considerable continuously boost consumption; third, a With greater financial support portion of which will convert into variety of social security measures keeps to the real economy, social substantive loan in the fourth quarter, improving, removing residents’ worries financing may scale up in particularly medium- and long-term for spending more. However, commodity moderately in 2013 loans for enterprises. This will further prices will enter the upward cycle, which ramp up financial support for economic may dampen consumption growth to a Since this year, under prudent growth. Under such circumstances certain extent. monetary policy with moderate pre- that the interest rate of bonds issued by De-stocking may end up in Q4 adjustments, more financial support enterprises is still lower than the aver- and enterprises will usher in re- goes to the real economy. From Janu- age interest rate for loans, corporate stocking ary to September of 2012, the social bond financing is expected to keep financing scale stood at RMB 11.73 rapid growth; in the mean time, such Experience in the past years tells trillion, up by RMB 1.927 trillion financing techniques as trust loans will us that the de-stocking process usually year-on-year. In September, in spite of also keep a staggering momentum for lasts for about 15 months. In September, a slight hike in credit loans, the volume growth. To sum up, the total social the PMI finished product inventory index of trust loans increased RMB 202.4 financing scale in the fourth quarter is continued to drop, while the raw material billion, nearly RMB 100 billion more predicted to reach RMB 3-4 trillion inventory index picked up. The de-stock- than that of the previous month; cor- and the aggregate social financing scale ing course starting from the end of last porate bond financing also managed to above RMB 14 trillion, exceeding year is likely to end up in the fourth quar- to stay above RMB 200 billion. The the level of last year. ter. The accelerated approval process for increase in these two financing catego- Looking into 2013, although infrastructure projects and expectations ries is mainly contributed by quicker the total credit loans will keep steady on project kick-off have helped to restore project approval process and recovering growth, with staggering demand in confidence in the national economy in investments. Looking forward into the investment, medium- and long-term the fourth quarter. Expectations on price fourth quarter, under a steady mon- loans will maintain fast growth and the hike of raw materials under loose global etary policy along with reasonable and structure of credit loans will keep im- monetary conditions have also made en- moderate aggregate liquidity, the credit proving, both of which will lend greater terprises to consider replenishing invento- loans are expected to increase steadily support from credit loans to the real ry. The government leadership transition with a possible increment of around economy. At the same time, against next year may heat up investment, which RMB 1.5-1.7 trillion; the picking up such a backdrop that the bond market will stimulate social production demand demand in investment will push up is encouraged to grow, enterprises are expected to be more ag- gressive to issue bonds and consequently corporate bond financing is likely to usher in rapid development. More- over, with steady growth in both trust loans and stock financing, the aggregate so- cial financing scale will stay substantial, greatly support- ing economic growth. In conclusion, with p r o - g r o w t h p o l i c i e s launched earlier, the fourth quarter will see a slight rise of an estimated 7.8% in economic growth, and the GDP throughout the whole year is to increase at around 7.8% in the real sense; in 2013, the eco- nomic growth is likely to slightly pick up by 8%- 8.5%.

13 China’s Foreign Trade Needs Adjustments By International Business Daily

hina’s foreign trade keeps an markets performs better than that with internal growth momentum, traditional markets; the middle and and it is expected to lead the west regions and private companies be- world trade into a new round come new driving engines of the trade of development if effective development growth. These three highlights consti- Cstrategies and promotion policies are tute the general development of China’s implemented. foreign trade in the coming years. The import and export data of General Trade grows faster than September 2012 issued by General processing trade. Since the outbreak of Administration of Customs show three financial crisis, China’s general trade changes when compared with last has grown faster than processing trade, month: the first is that the increase de- and the general trade is grabbing an in- gree of import and export is larger than creasingly large share of China’s import last month, with the growth rate reach- and export. During the previous three ing 6.3%, up by 6.1 percentage points; quarters of the year 2012, the value of the second is that the export volume hit China’s foreign trade reached 2842.47 a historical high, with export increasing billion USD, up by 6.3% on a year-on- by 9.9%, up by 7.2 percentage points year basis. The value of general trade from last month; the third is that the hit 1498.97 billion USD, up by 5.9% import is on the rebound, increasing by and 3.7 percentage higher than process- 2.4% in September. While last month ing trade. As of September 2012, the manufacturing hub” position of China, the import decreased by 2.6%. general trade has constituted 57.1% of and will increase the level of China’s There are two major factors con- China’s trade volume, 4.2% higher than industrialization development. The tributing to the notable improvement last year. The share of processing trade general trade and processing trade shall of foreign trade: the first is the time has decreased to 34.5%, 1.4% lower constitute the dual engine development point. Normally the September is when than last year. model, and the idea to replace process- the number of trade orders is the larg- China is in the process of indus- ing trade with general trade shall be est, and the market is prepared for the trialization during which the improve- avoided. Christmas, which increased the import ment of self innovation capacity is key The trade with emerging markets and export volume; the second factor to economic development at this stage. performs better than that with tradi- is the policy expectation. The quantita- General trade reflects the export and tional markets. Considering the trade tive easing financial policy of the U.S. innovation capacity of a country’s self- with major trade partners, during the will push up the raw material price and owned brand products. The expansion first three quarters, China’s trade with consumption demands in the short run, of general trade not only meets the its partners has all increased except the which also invigorates the foreign trade. needs of economic development, but European Union, Japan and India. The China’s foreign trade growth still also boosts the confidence of China’s trade with U.S. has increased by 9.1% robust trade. The noteworthy is that China’s and trade with Canada, Australia and general trade is inversely proportional New Zealand has rose by 8.7%, 7.5% It is hard to tell whether China’s to the processing trade, and manu- and 13.5% respectively. The trade with foreign trade has experienced trend facturing industry is still the leading emerging markets has kept a good mo- changes or rebounds, but in general, engine of China’s economy. Although mentum, with the trade with ASEAN, China’s foreign trade has three high- China’s processing trade is having Russia and Brazil have increased by lights in the first three quarters: the fewer advantages due to the rising costs 8.1%, 14.2% and 5% respectively. The general trade grows faster than pro- and other factors, its development is growth rate of trade with South Africa cessing trade; trade with emerging key to the consolidation of the “global hit the highest, reaching 37.1%.

14 by private firms (including collective, private-owned and other companies) reaches 877.97 billion USD, up by 18.8% and 12.6 percent higher than the overall trade. It constitutes 85.4% of the export growth and increases the export by 6.1%; and constitutes 78.6% of the import growth and increases the import by 4.1%. In the first three quarters, the share of private firms at China’s total foreign trade has increased from 27.6% last year to 30.9%. The massive rise of China’s middle and west regions, and the rapid development of private firms have created new opportunities for China’s foreign trade. “Three adjustments” and “three breakthroughs” to cope with changes of the international market These three trends show that China’s foreign trade keeps an internal growth momentum, and it is expected to lead the world trade into a new round of development if effective development strategies and promotion policies are implemented. Grab the period of strategic op- portunities for the development of Chi- na’s foreign trade. The PMI issued by the U.S. Supplier Management Asso- The European Union and Japan foreign trade almost impossible. ciation in September poses big increase ranks 1st and fourth respectively in The middle and west regions and back to 51.5, ending a three month terms of trade with China, the slump private firms become new trade growth gloomy condition with PMI lower of the trade with these two markets has opportunities. Since 2012, China’s for- than 50% line, and indicating a short- directly affected China’s trade growth eign trade has on the course of slow de- term economic recovery after the U.S. since 2012. During the first three quar- velopment, but the robust growth of the government adopts the third round of ters this year, China’s import value from middle and west regions have become financial easing policy. It is estimated the EU and Japan has decreased by 2.7% one of the highlights that encourage the that from the end of 2012 to 2013, the and 1.8% respectively. Since the trade market. During the first three quar- external environment of China’s foreign with EU and Japan constitute 14.5% ters, the export growth of Chongqing trade will improve, but the stimulus and 8.8% of China’s total trade volume, increased by 150%. The export growth policy does not solve the fundamental the trade gloom of these two markets of Henan, Sichuan and Jiangxi has structural problems of the economy of has dragged down the growth rate of increased by 62.8%, 42.8% and 39.1% the U.S. and other developed coun- China’s foreign trade by 0.5%. Although respectively. tries. The U.S. intention to control the the EU and Japan will follow the U.S. The data from January and August world through financial currency has on a new round of quantitative easing also shows provinces that top the list not changed and the world economy financial policies, the unresolved risk of of trade growth rate, including Tibet might plunge into another recession af- European debt crisis, the weak demands (183.1%), Chongqing (132.9%), Henan ter the stimulus policy accomplishes its of Japan’s economic recession, and also (64.3%), Guizhou (40.8%),Sichuan mission. Therefore the China’s foreign the Sino-Japan conflicts fuelled by the (31.4%), Anhui (26.5%), Jiangxi (24.9%) trade that is driven by external demand “diaoyu island incident”, which would and Yunnan (22.4%). will face big challenges. cool down the Japanese companies’ The vigorousness of private firms In fact, the adjustment of devel- economic investments and trade with has become another highlight of China’s oped countries could also be considered China, these factors will combine to foreign trade growth. In the first three as our strategic opportunity. The devel- make the substantial increase of China’s quarters, the trade value contributed opment of China’s foreign trade shall be

15

• in line with the market rules, and purely juggling the data should be avoided. We shall formulate the foreign trade development strategy in the long run and pay at- tention to the internal growth momentum to promote the adjustment and transformation of foreign trade structure. Zuo Xiaolei: Keep stable the foreign trade strategy and policy. Chief president consultant of China Galaxy Se- Since September, the Chinese government has intro- curities duced various measures to promote the development of foreign trade. The office of State Council has -for No difficulty in realizing 7.5% of GDP growth mally issued “Opinions of the Promotion of Foreign Trade Development”, raising 8 measures; the General There is no difficulty to realize 7.5% of GDP growth. Office of Customs issued 16 measures to stabilize The economy stays in a stable tendency, and Q4 will witness the growth of foreign trade; the Ministry of Finance the effect of policy adjustments. and the National Commission of Development and Distinct from the V-shaped reversal in 2008, the Reform have co-issued regulations to cancel the com- economy is increasing slowly and stably because of factors mission charge of customs regulation; the General including related policies, measures and structural adjust- Administration of Supervision, Inspection and Quar- ment, which is also in accordance with our previous analysis. antine has announced the exemption of legalized exit The indemnificatory housing project can help to stabilize the and entry inspection and quarantine charge for the investment, and export rebates are beneficial to the export. 4th quarter. These measures have to some extent sta- The huge consumption capability in the national holiday also bilized the market confidence. suggest immense potential domestic demands. However, a blitz of making new policies might I don’t think China’s economy is still in a continuing produce the opposite results, because the companies find downtrend or slowing down sharply. Due to the fading de- it hard to define new investment arrangement when fac- mographic dividend, changing comparative advantage and ing unstable policies or expecting new policies. In most worsening crisis in foreign markets, the two-digit growth cases the policy will have preventive or directional ef- rate cannot be seen any more. But it is reasonable from the fects and as the world economy is sliding, it is necessary point view of economic laws. to implement positive measures. But stable and long- The GDP will maintain a growth rate between 7.5% term development strategy of foreign trade will give and 8% in the future. It is a great chance for structural trans- definite signals to companies, which will better help formation, which deserves more efforts, provided that it their transformation and business layout. doesn’t influence the employment in a large scale. Make efforts to realize “three adjustments” and “three breakthroughs”: when talking about theory or real facts, China’s foreign trade development shall Peng Wensheng: respect the market rule and make three transforma- Chief economist of CICC tions, namely transformation from government-driven development model to one playing to the strength Holding on to the easing monetary policy of the market and government; transformation from the quantity expansion model to one that features the The monetary data in September is much better than quality effect; transformation from relying on tradi- expected. However, the easing monetary policy will not be tional cost advantage to developing comprehensive fac- changed due to the uncertain passive factors of monetary tor advantage. conditions. We shall make breakthroughs in three aspects: In the domestic market, the monetary conditions are the first is to transform from the assessment on data improved greater than expected. The monetary data in Sep- and quantity to quality and capacity; the second is tember is much better than expected, reflecting factors such to make and construct import and export strategy of as more fiscal deposits, more funds outstanding for foreign innovation countries; the third is to development a exchanges, backflow of financial products at the end of last foreign trade policy system with trade and industry in quarter and emerging effects of easing monetary policy since great coordination. Q2. In general, the extent of monetary conditions improve- China’s foreign trade will be shield from all ment is larger than expected. types of changes if these three adjustments and break- Considering the weak impetus of entity economy and throughs are made. No matter how the international high financing costs, the easing monetary policy will not be market changes, China’s foreign trade will have a changed in the near future. The intensified actions of reverse stable and lasting development in the global market repurchase by the central bank also prove the above judgment. with its adaptation to the market demands and social On account of such better condition, there is less possibility transformation, its concentration on quality and trust- worthiness.

16 Expert views

for the central bank to cut benchmark deposit and loan in- terest rates again in the near future. Ma Guangyuan: Well-known economic commentator

Qu Hongbin: Chief economist of HSBC The declining of the economy is slowing down, suggesting a signal of stabilizing

The central bank will stick to quantitative The statistics of the first three quarters show that policies the economy is still downward, but the speed is slowing. Compared to Q1, it decreased 0.5% in Q2, and 0.2% in Q3 It is expected to have a moderate inflationary pressure compared to Q2, which suggests the economy is stabilizing. in the future. Though the GDP growth rate may rebound Though 7.4% is far from satisfaction, it reflects an upward a little in the future quarters, it is still under the potential trend. level, which means the lower pressure of demand-pull When seeing a doctor, it is not enough to just refer to inflation. What’s more, the nine-year consecutive harvest the temperature. From a short-term perspective, the data is guarantee the abundant food supply; high inventories of improving. But other issues including structural upgrading pigs suggest space for price rising; the price of commodities are more important and worthy noticing. GDP is important, will not rise sharply due to the sluggish global economy but is not the only one that matters. We should treat the and moderate GDP growth in China. All of the above macro-economy comprehensively, not just judge by one single show that the input of inflationary pressure to domestic figure. GDP will surely rise in Q3 because of some invest- market is under control. ment projects. Ma Guangyuan points out that it is of greater Qu Hongbin indicates that the moderate inflation in importance to solve structural problems and excess capacity the future provides possibilities for continuing easing mon- of some industries. etary policies and economic growth. It is expected that the maximum can be lowered is 25 basis point, and the central bank will stick to the quantitative policies, including cut- Song Guoqing: ting the benchmark deposit and injecting liquidity through Member of the Monetary Policy Committee, and open-market operations. professor in National School of Development of Peking University

Sun Jianbo: Chief strategist of Galaxy Securities GDP below 8% may promote the adjustment of income distribution system

The economy is stabilizing and the accumulative Statistics show that incomes in China are not keeping effect of structural adjustment policies is pace with the rising of GDP. The major factor is distribution emerging policies of the national income, which may be promoted pas- sively when the GDP is below 8%. The economy in China is stabilizing, reflected by the In the past few years, the profit brought by GDP ris- statistics of September released recently. The consumption ing didn’t serve as national income, but flowed into the and industrial production is rebounding faster than the state-owned enterprise. However, the surging profit in these investment, which means the economic structure has been enterprises were not redistributed, which left little benefits adjusted. Sun says that though the accumulative effect of in general and comparative industries. Such conflict was structural adjustment policies is emerging, it is still not highlighted under the pressure of high growth and inflation. strong. In his view, the positive effect of such policies will Because of the decreasing in disposable income, as well as the continue in the next two quarters. rising of financial assets, consumers are more sensitive to the Viewing from a long-term perspective, the economy pressure of inflation and reacted fiercely to the issues like high in China will develop in the direction of transformation house prices and enlarging income gap. and differentiation. He suggests that people should con- People are looking forward to distribution policies of the centrate on the quality upgrading of exports and invest- national income, as well as approaches to cut profits of state- ments in real estate and fixed assets. In addition, the indus- owned enterprises, manipulate the monopolized industry, trial policy should match that of financial sector, so as to control the income of civil servants, and reform the tax policy, stimulate the economic vitality. etc.

17 CONOMY E China’s Impact on World Commodity Markets

By Shaun K. Roache

hina is now a major par- commodity price changes. Recent dis- History has shown that as countries be- ticipant in world commodity course related to commodity market come richer, their commodity consump- markets. The impact of Chi- developments has increasingly focused tion rises at an increasing rate before na’s economic activity and its on the role of financial speculation, eventually stabilizing at much higher policies related to strategic reserve hold- the effects of which are sometimes es- levels. This is often described as the S- Cings, trade, and the environment are timated to be the unexplained part of curve (See Figure 1). often seen as having a large impact on commodity price changes once supply But this cannot explain all of the commodity prices. In turn, these com- and demand factors are accounted for. increase in China’s commodity con- modity price changes can affect infla- However, this relies on an accurate as- sumption. China’s commodity intensity tion and the terms of trade at the global sessment of these factors, including the of demand has been growing particu- level, with possibly large effects on other changing role of China. larly fast and is now unusually high. emerging and developing economics. China is a large consumer of a Intensity is sometimes measured by Understanding the scale of China’s broad range of primary commodities. commodity consumption per capita and impact on commodity prices is useful As a percent of global production, Chi- this is shown, alongside real GDP per from a number of perspectives. First, it na’s consumption during 2010 account- capita, for China and five other G-20 can help market participants better as- ed for about 20 percent of nonrenewable economies since 1980 for energy and sess the balance of risks for prices, based energy resources, 23 percent of major 1960 for metals in Figure 2. Moving on their own evaluation of prospects agricultural crops, and 40 percent of along the line in a northeast/ east direc- in China. Second, at a broader level, it base metals. These market shares have tion traces the evolution of commodity can enhance policymakers’ collective increased sharply since 2000, mainly re- intensity forward through time, from understanding of the driving forces of flecting China’s rapid economic growth. the first year in the sample to 2009. Based on this small sample of countries, Figure 1: China’s Share of Selected Global Commodity Markets China’s energy consumption is shown to (In percentage) be relatively high given its stage of eco- nomic development. China’s role in international com- 80 ■ Imports share of global trade (2009) modity trade only matters to the extent 70 ■Consumption share of global production (2010) that it affects the relative distribution of supply and demand of different com- 60 modities across countries. For example, 50 China’s strategic policy decision to strive 40 for self-sufficiency in key grains but rely on imports of oilseeds has likely had 30 major implications for global agricul- 20 tural trade patterns. In terms of broad commodity groups, China has come 10 to play a dominant role in base metals 0 markets and, to a somewhat lesser ex- tent, agricultural raw material markets. Rice Coal Meat Com Cotton Wheat Copper Seafood In contrast, China has not yet assumed Soybeans Aluminum Crude oii Natural gas a large role in global food and energy Source: United States Department of Agriculture. United Nations COMTRADE markets although its share of world im- database. World Metal Bulletin Statistice, and author’s calculations. ports is rising gradually (See Figure 2).

20 Effects of real activity growth Figure 2: China’s Share of Global Commodity Trade rate shocks (Net imports percent of world imports) *

A shock to real activity in China 35 70 has a large and statistically significant impact on oil and copper prices, with 30 Food 60 Oil and products 25 Energy 50 Iron ore less of an effect for other commodities. Metals Soybeans A one-time 1 percentage point (unit) 20 Raw Materials 40 Cotton shock to the real month-on-month 15 30 growth rate of China’s industrial pro- duction leads to an increase in the real 10 20 price of oil by about 2½ percent after 4 5 10 quarters, with some slight moderation 0 0 thereafter. The impact of the same ac- -5 -10 tivity shock on copper is to increase the 1992 1994 1996 1998 2000 2002 2004 2006 2008 1992 1994 1996 1998 2000 2002 2004 2006 2008 real price by almost 2¼ percent after 4 quarters, again with subsequent slight Source: United Nations COMTRADE database * Commodity groups are IMF Primary Commodity Price Index-weighted. Net im- moderation in price effects. ports are calculated as commodity / imports less commodity / exports as a percent The price responses of other base of world commodity / imports. A positive (negative) number indicates that China is a metals to the China demand shock net importer (exporter). was, in general, smaller and statistically insignificant (although tin was bor- derline significant). In some cases, this of price effects from country-specific important for commodity markets. Its reflects a production response for com- demand shocks? One possible explana- role in the market and its impact on modities with higher short-run supply tion is that these shocks are perceived world trade and prices varies by com- elasticities. For example, the level of to be temporary and are accommodated modity; in particular, China has become aluminum production increases by a by changes in inventories elsewhere, the dominant importer of base metals statistically significant 0.4 percentage dampening the effect on prices. The and agricultural raw material, with a points 4 quarters after an initial activity time series properties of these shocks smaller, but growing role, in food and growth rate shock in China. In part, suggests that they are indeed partially energy markets. this reflects the large aluminum smelt- unwound quickly; the cumulative ef- I find that shocks to aggregate ing capacity in China and ready global fect on the level of commodity-specific activity in China have a significant and availability of bauxite, the main raw demand more than halves after two persistent short-run impact on the price material input for refined aluminum. quarters (i.e., for a unit shock, the cu- of oil and some base metals. In contrast, In all other cases, including crude oil, mulative change in demand is less than shocks to apparent consumption (in short-run supply elasticities appear to 0.5 percent higher). part reflecting inventory demand) have be much lower, with the production re- This rapid unwinding is also true no effect on commodity prices. China’s sponse to a China activity shock insig- of shocks to real activity in China, but impact on world commodity markets nificant in both statistical and economic in this case the additional demand is is rising but remains smaller than that terms. likely to reflect actual use of the com- of the United States. This is mainly due The impacts of real activity growth modity (and a subsequent decline in to the dynamics of real activity growth rate shocks in China on global com- world inventories, holding short-term shocks in the U.S, which tend to be modity prices are somewhat lower supply constant). In contrast, while more persistent and have larger effects than those found for the United States, commodity-specific demand shocks on the rest of the world. despite China’s increasing presence in may also represent higher consumption, Looking ahead, commodity global commodity markets. they may also reflect increased Chinese market developments will increasingly Effects of commodity-specific precautionary demand for inventories. be determined by China — the only country demand shocks If this increased demand is quickly question is how big the China effect unwound, physical supply and demand will be. Understanding how Chinese Commodity-specific demand are left broadly unchanged, which again demand for commodities will change shocks (controlling for economic activ- would dampen the price effect. This if and when its economy rebalances ity) have no major effect on commodity would be particularly true if inventory (away from investment and exports prices (either in terms of their size or holders in China were price sensitive towards consumption) remains the statistical significance). This was a con- and there is evidence to suggest that this biggest challenge for future research in sistent result across all commodities and is true, as shown next. this area. for both China and the United States. Conclusion Hence the results are not shown. (Author: from International What can explain the absence China is becoming increasingly Monetary Fund)

21 CONOMY E hina Chamber of International Com- The China Council for the Promotion of In- merce (CCOIC) is urging facilitation in ternational Trade (CCPIT) and the CCOIC, on international trade as trade protection- behalf of China’s business circles, will voice their ism is prevalent in the world. concerns and requests to safeguard their lawful In the past decade, statistics show that anti- rights and interests, Zhang said to China’s Foreign Cdumping duties and countervailing duties across Trade. the world are mainly aimed at China-made goods. Moreover, Zhang calls for the ICC to oppose And the sanctions have the tendency to shift to trade protectionism in accordance with the aim of economic, technical and new barriers in the name free trade, on behalf of the business circles around By Zhu Zijun By Zhu of environmental protection and other forms from the world, in his opening speech at the World anti-dumping and countervailing, Zhang Wei, Business Leaders (Beijing) Conference held in late Vice Chairman of the CCOIC, told China’s For- September. eign Trade in an Efforts are being interview. made for fair trade by In the solar the ICC and CCOIC. panel sector, the At the forum, the final ruling by ICC released its draft the Commerce of the ICC world Depa r tment of trade agenda in busi- the United States ness circles, which recent ly le v ied aimed at facilitating anti-dumping du- cooperation between ties ranging from business sectors and 18.32 percent to governments, jointly 249.96 percent on shaping the new world billions of dollars trade talks agenda, of solar panels and thus breaking the

Trade Facilitation Trade cells from China. deadlock in the Doha Furthermore, it set talks. countervailing duties from 14.78 percent to 15.97 Gerard Worms, Chairman of the ICC, said percent, complaining that Chinese rivals have en- that the agenda is significant in dealing with trade joyed considerable government subsidies, accord- protectionism. It needs a lot of world large econo- ing to a Xinhua report. mies to play their roles in breaking the stalemate China’s Ministry of Commerce expressed on Doha trade talks. However, the G20 seems strong dissatisfaction with the U.S. ruling, saying not to have made significant contribution to the it “signals protectionism” and “hinders the devel- elimination of trade barriers. The ICC wishes to opment of new energy.” strengthen dialogue with the G20 and urges it to Chinese enterprises should bear in mind that set an example in trade openness and improve the nowadays trade protectionism in various forms is trade environment. becoming a normal occurrence and should rest at The key content of the agenda is about agree- ease through cooperation with the government ment on trade facilitation. It is helpful to reduce and relative organizations, said Zhang. “A single trade cost by a wide margin, accelerate and sim- firm may not have the ability to deal with trade plify administrative and other official procedures, protectionism. Only by means of cooperation be- as well as build a more transparent, predictable tween government and enterprise could the result and efficient trade environment, said Lin Shunjie, be efficient.” Deputy Secretary General of the CCOIC. He said usually there are two ways for fair The draft also includes an inclusive propose

CCOIC Calls for for Calls CCOIC trade: one is through government which deals with for fair trade, which calls for the WTO to reform tariff and non-tariff barriers; the other is through the dispute settlement mechanism and let the the International Chamber of Commerce (ICC), world business circles participate in the discussion which deals with formulation of fair trade and of the rationality of the mechanism and reform trade rules among enterprises. projects in the future. The CCOIC has served as the National The CCOIC will organize member enter- Committee of the International Chamber of prises to participate in the discussion of the agenda Commerce (ICC) since China’s accession into the which may affect the formulation of intergovern- ICC in 1994. mental trade rules, said Lin.

22 Hurun: China’s Rich Are Getting Poorer

By Audrey Guo

n a year when the Shanghai Stock of the Wahaha Group has regained the choice for Chinese-language internet Exchange fell 23%, 469 of the top berth he held in 2010 and becomes search services. Baidu has a market cap Hurun Top 1000 saw their wealth only the third person in 14 years to re- of over US$50bn. shrink, 291 saw their wealth grow, tain the crown. Zong tops the Hurun Yan Bin, 57, of Reignwood, is 114 stayed the same and there were 150 Rich List 2012 with a personal fortune fourth again with US$7.9 billion, and is Inew faces and 37 individuals saw their of US$12.6 billion, based on his 80% the second member of the drinks indus- wealth shrink by over 50%. holding of soft drinks brand Wahaha, try to make the Top Five. Yan holds the There were 251 dollar billionaires which last year reported net profits of Chinese rights for the Red Bull energy in China ranked this year, down 20 on over US$1bn. drink and has this year invested into a last year, but still hugely up on six years 58-year-old Wang Jianlin’s wealth US$200 million property in London, ago when there were only 15 billion- jumped 44% to US$10.3 billion, bounc- which he is planning to turn into a hub aires. ing Wang into second place. Earlier for Chinese business people in Europe. The average wealth of the Hurun this year, Wang shook up the enter- Last year’s Number One, Liang Top 1000 is down 9% to US$860 mil- tainment industry with the announce- Wen’gen saw his share price drop, result- lion, but still almost double that of 2008 ment of a US$2.6bn acquisition of US ing in a fall to fifth place. Liang is one of when it was US$439 million. cinema chain AMC Entertainment, the only seven individuals on the Hurun Solar, textiles and retail have been the largest international acquisition by Rich List that has been appointed as the hardest hit this year. Entertainment, someone from the Hurun Rich List to delegate to the 18th Party Congress, the IT, natural gas and property developers date. Wanda’s core business remains its once in a decade leadership change. The sitting on large landbanks, have had a property arm, particularly its shopping Sany Group, in which Liang owns 58%, good year. malls, which continue to spring up all has contributed seven individuals to this Rupert Hoogewerf, Hurun Report over the country and last year turned year’s Top 1000, more than any other Chairman and Chief Researcher said, over US$16bn. single company. This past year, Liang “Although this year has seen some sig- Robin Li Yanhong, 44, is in third purchased a German machinery builder nificant wealth bloodletting, it is worth place again with a net worth of US$8 for US$400 million, in the largest Sino- remembering that these entrepreneurs billion, based on his 16% of Baidu. German acquisition to date. are still up 40% on two years ago and Google’s withdrawal from the Chinese Liu Yongxing, the richest man in almost ten times ten years ago.” market two years ago has allowed Baidu 2001, jumped two places to sixth this year ‘Drinks King’ Zong Qinghou, 67, to cement its position as the number one with a total wealth of US$7.1 billion. Hurun Rich List 2012 - The Top 10 Wealth US$bn Company Source of Wealth 1 ↑ Zong Qinghou & family 12.6 Wahaha Drinks 2 ↑ Wang Jianlin 10.3 Wanda Property, cinemas 3 - Li Yanhong 8.0 Baidu Search engine 4 - Yan Bin 7.9 Reignwood Red Bull, property, investments 5 ↓ Liang Wengen 7.3 Sany Heavy machinery 6 ↑ Liu Yongxing & family 7.1 East Hope Aluminium, feed 7 ↑ Ma Huateng * 6.5 Tencent IT 8 ↓ Wu Yajun & family 6.0 Longfor Property 9 ↓ Xu Jiayin 5.5 Evergrande Property, Soccer Team 10 ↑ Chen Lihua * 5.4 Fu Wah Int’l Property Source: Hurun Rich List 2012 sponsored by Hainan Clearwater Bay of Agile ↑ Rank increase yoy, ↓ Rank decrease yoy, - No Rank change yoy, * New to Top 10

23 CONOMY E Data Watch on China’s Foreign Trade and Investment in the First Three Qs of 2012

ports value increased by 3.6% to $769.19 China’s foreign trade in the billion. The total value of processing first nine months of 2012 trade was $982.94 billion, up by 2.2%, in which the exports value rose by 3.0% According to statistics of the Cus- to $630.94 billion, while the imports toms, China’s exports and imports in value increased 0.9% to $352.0 billion. the first nine months of 2012 reached Steady increase in exports of $2.84247 trillion, up by 6.2% over the mechanical and electrical prod- same period of last year. Specifically, ucts; slight increase in exports exports stood at $1.49539 trillion, up of labor-intensive products. by 7.4% year on year; imports $1.34708 In the first nine months of the trillion, up by 4.8%. The nine months year, China exported $854.83 billion saw a trade surplus of $148.31 billion, worth of mechanical and electrical increasing by 38.5%. Four obvious fea- products, 8.3% higher than that of last tures are as follows: year, 0.9 percentage points higher than Steady increase in trade the growth rate of the nation’s total with the United States; decline in exports in the same period. The total trade with the EU and Japan. exports value of labor-intensive prod- From January to September of the ucts including textile, apparel, shoes, year, China’s bilateral trade with the Shen Danyang, spokesman of the luggage, plastics, furniture and toys United States reported 9.1% increase Ministry of Commerce of China increased by 6.9%, 1 percentage point over the same period of last year, 8.1% higher than August. In September, the increase with ASEAN, 14.2% increase exports of mechanical and electrical with Russia, 37.1% increase with South China was 4.3%, and that of Guang- products increased 8.6%, 5.2 percentage Africa, and 5.0% increase with Brazil. dong Province was 6.4%. The increasing points higher than August. The exports While the trade with the EU and Japan rates of Fujian, Jiangsu, Zhejiang and of the mentioned seven varieties of la- decreased 2.7% and 1.8% respectively. Shandong were 4.9%, 4.0%, 3.0% and bor-intensive products increased 14.9%, Continuing sharp increase in -0.2% respectively, which were all lower 12.6 percentage points higher than that exports of Central and Western than the national increasing rate in the of August. China; slow increase in Eastern same period. China. Steady increase of the ex- Utilization of foreign investment During the first three quarters pansion rate of exports and im- of 2012, the exports in Central China ports under the general trade; In the first nine months of 2012, increased 21.5% and 43.4% in West- sluggish growth in exports and China approved the establishment of ern China. The exports in Chongqing imports of processing trade. 18,025 new foreign-invested enter- Province were 1.5 times more than the From January to September of this prises in non-financial fields, a decline same period of last year. The exports in year, China’s general trade value was of 11.7% year on year. China utilized Anhui, Henan and Sichuan Provinces $1.49897 trillion, up by 5.9% year on $83.42 billion worth of foreign capital, a rose by 69.9%, 62.8% and 42.8% respec- year, in which exports value increased decline of 3.8% from the same period of tively. The increasing rate in Eastern by 8.3% to $729.78 billion, while im- last year. In September alone, the num-

24 use of $6.22 billion in foreign invest- ment, a decline of 1.8% year on year and accounting for 7.4% of the national to- tal. The eastern regions made an actual use of $70.22 billion in foreign invest- ment, a decline of 5.6% year on year and accounting for 84.2% of the national total. Overseas investment and economic cooperation China’s outbound FDI. In the past three quarters, China’s domestic investors invested directly in 2,941 overseas corporations in 126 na- tions and regions, with a total of non- financial outbound FDI of $52.52 bil- lion, an increase of 28.9% year on year. The investment in Hong Kong, Russia, ASEAN, Japan and the United States reached to a double- ber of newly-set-up foreign-invested en- eign capital. In specific, the communi- digit growth, which were 50.8%, 35%, terprises was 2,248, down by 6.4%, and cations equipment manufacturing and 27.6%, 22.2% and 14.3% respectively. the sum of foreign capital utilization sheet glass manufacturing had much The investment in EU was down by was $8.43 billion, down by 6.8% (ex- higher increasing rates, which were 30.3%, and the investment in Austra- cluding the data of banks, securities and 67.2% and 178.35% respectively. lia dropped 40%. the insurance industry). The features are Narrowing decrease in the Overseas-contracted projects. as follows: investment from several devel- In the past nine months of this Slight increase of foreign oped countries. year, China’s overseas-contracted proj- capital utilization in service in- During the past nine months, the ects reported a turnover of $76.02 bil- dustries excluding the real es- paid-in capital from 27 countries in EU lion, an increase of 14% year on year. tate. was $4.83 billion, dropped by 6.3%, in $93.41 billion worth of new contracts From January to September, the which that of German, Holland and were signed from January to September, service industry made an actual use of Switzerland increased by 29.1%, 38.9% up by 0.3% year on year. In Septem- $39.48 billion in foreign investment, a and 142.3% respectively. The amount ber alone, $7.56 billion turnover was decline of 1.8% over the same period of foreign investment from the US achieved, down by 21.5%. of last year and accounting for 47% of decreased 0.63% (that of the first eight By the end of September, China the national total. Specifically, foreign months was 2.9%) and reached to $2.37 had signed a total of $935.1 billion investment in real estate was down by billion during the past nine months. The worth of agreements on contracting 5.62%, while the rest of service indus- total amount of the investment from overseas projects, and realized $615.0 tries saw an increase of 1.6%. The fol- Japan was $5.62 billion, up by 17.0%. billion in turnover. lowing industries witnessed relatively The amount of paid-in capital in China Foreign labor service coop- faster increase rates in the utilization of from ten Asia nations and regions (Hong eration. foreign investment, that is, retail and Kong, Macau, Taiwan, Japan, the Phil- In the first nine months of 2012, wholesale (6.7%), construction indus- ippines, Thailand, Malaysia, Singapore, the number of all kinds of labor sent try (27.8%), information transmission, Indonesia, and South Korea) was down abroad was 313,000, an increase of computer services and software industry by 4.9%, in which the investment from 5,000 from the same period of last year. (32.8%). The sectors of agriculture, for- Singapore increased by 21.7% to $5.24 161,000 of them were working on over- estry, animal husbandry, and fisheries billion, while Hong Kong dropped by seas contracted projects, and 152,000 made an actual use of $1.25 billion in 8.7% to $52.08 billion. of them were for labor cooperation. At foreign investment, a decrease of 10.3% Continuing significant in- the end of September, there were a total year on year and accounting for 1.5% of crease in paid-in foreign capital of 866,000 Chinese working abroad, the country’s total utilization of foreign to Central China. 68,000 more than the same period of capital. The manufacturing industry From January to September, the last year. made an actual use of $36.95 billion in central regions made an actual use of foreign investment, a decrease of 7.5% $6.99 billion, an increase of 16.5%, and (Source: Press conference of year on year and accounting for 44.3% accounting for 8.4% of the national to- the Ministry of Commerce of China of the country’s total utilization of for- tal. The western regions made an actual on October 19, 2012)

25 I ndustr i al Watch Metal

Steel stockpiles fall markedly in China

ccording to Mysteel on Oct. 19, an industry information pro- Avider, the social inventories of five major steel varieties in twenty-six staple markets in China decreased 468,000 tons to 12.706 million tons, suggesting an expanding decline rate since the national holiday. “It was hard to deliver 100 tons per day several months ago. However, 2,000 tons can also be possible recently,” said Liu Hongye, owner of an steel company in Guangzhou. Some people are becoming more and more confident easing the market controls in the near future”, says Zeng about the steel industry because of the surging rise of steel Jiesheng, manager and senior researcher at Mysteel Re- price and sales volume. According to the data on Mysteel search Institute. until Oct. 11, 88.28% of 145 blast furnaces in Tangshan While, Xu Xiangchun, chief information officer have been on working. at Mysteel, said that the situation might improve in the Some experts express their worries about much se- fourth quarter, as China’s infrastructure projects will help verer imbalance between demand and supply due to the fuel demand for steel, which will in turn drive up prices blind resumption. and enhance profitability. Though the fortunes of 20 industrial clusters and The rebound of the property market is more than 50 upstream and downstream industries are Comment limited, and the demand for steel con- directly associated with the property sector, it is the iron tinues to be on the downside. Blind production and steel sector that faces the maximum impact. “Even resumption and rising prices may become major though housing transactions have improved somewhat threats to the industry, which push the whole in- and some developers have announced new projects in the dustry into a vicious circle. last two months, there seems to be no immediate sign of

US to keep anti-dumping duty on China silicomanganese

he US government determined on Oct. 11 it would from China, it has been the fourth five-year (sunset) review maintain the existing anti-dumping duty on silicoman- since June 10, 1991 when the duty was first introduced. As Tganese from China and Ukraine, despite Beijing’s repeated a result of ITC’s affirmative determination, the existing calls for Washington to drop protectionism, reported by orders will remain in force. The duty margin runs at 139.49 Xinhua on Oct. 12. percent. The US International Trade Commission, ITC, said Trade tensions due to US protectionism against China in a ruling that revoking the current anti-dumping duty have been simmering throughout the entire election year as orders on silicomanganese from China and Ukraine would both presidential candidates use China as a punching bag. be likely to lead to continuation or recurrence of material The Ministry of Commerce of China has repeatedly injury within a reasonably foreseeable time. urged the United States to abide by its commitment against Silicomanganese, a ferroalloy with high contents of protectionism and work together with China and other manganese and silicon, is typically used in the manufacture members of the international community to maintain a of stainless steel. With regard to imports of this product free, open and just international trade environment.

Comment Trade tensions with China are a particularly sensitive issue as the United States is trying to boost its exports to revitalize a flagging economy and slash the unemployment rate. Fair com- petitions in the market economy globally are of great significance.

27 ENERGY

China to control coal production due to shrinking demand Industrial Watch

ndustr i al Watch he central government is asking major coal produc- prices drop to a severely low level, it will harm both the coal I tion regions to keep annual coal output growth below industry and its downstream industries,” he said. 4T percent due to shrinking demand and declining prices, in Affected by less coal demand and increasing hydro- a move to help the industry become sustainable, a senior of- power generation, China’s coal prices this year have declined ficial said, reported by China Daily October 12. from 787 yuan ($123) a ton to 626 yuan a ton with a 20 The government aims to keep the total coal output un- percent drop from May to August, according to figures from der 3.65 billion metric tons with a growth rate of less than 4 cqcoal.com, a coal information website in China’s major coal percent, said Wu Yin, deputy director of the National Energy trading port Qinghuangdao in Hebei province. Administration at the China International Forum on Coal Prices increased a little in September because of grow- Industry. ing demand from power plants. However, analysts said that According to figures from local governments, the Inner prices may still fall in the fourth quarter because of the macro Mongolia autonomous region produced 680 million tons of economy and large coal stockpiles in power plants. coal during the first eight months, 11.5 percent up year-on- “Coal inventories in power plants are at a high level at year. present,” said Dai Bing, senior analyst at coal.com.cn, an on- Another major coal producer, Shanxi province’s coal line coal trading platform. “Major power plants’ coal inven- output in the first eight months totaled 604 million tons, 7.69 tories totaled 84.64 million tons, up 37.2 percent compared percent up compared with the same period last year. with last year.” Wu said that China’s coal output has seen rapid growth Inventories can last for 25 days on average for those since the beginning of the year, but that coal consumption power plants, 10 days more than in the same period last year, is slowing down and inventories are increasing, which led to which will lead to less coal purchases and lower prices, he huge prices drop in the past three months. said. “The coal prices’ fall to a reasonable level is helpful to Although the outlook is not rosy for the coal industry, solve the contradiction between increasing coal demand for officials said it is a good chance for companies to diversify power generation and tight coal supply. However, when the coal usage and adjust the production structure. Wu said the country will continue to see mergers and acquisitions in the coal industry, and the elimination of small-scale coalmines which don’t own advanced technolo- gies or meet safety requirements.

Comment China imported 185 million tons of coal in the first eight months, up 46.3 percent year-on-year, according to customs data. Increased coal shipments to China create more pressure for domestic stocks. China may contin- ue to see coal supply growth exceed demand for a period of time.

New CNOOC oil fields begin operation

hina National Offshore Oil Corp Ltd, China’s largest Production in the first half totaled 160.9 million barrels, offshore oil producer, said on October 18 that produc- down 4.6 percent year-on-year, according to the company’s Ction has started at two of the company’s newest oil fields in semi-annual report. the South China Sea, Xinhua reported. Comment China imported 28.97 million tons of re- One of the fields now has four wells in operation with a fined oil and 200.38 million tons of crude peak daily output of 3,960 barrels, CNOOC said in a state- oil in the first nine months this year, according to ment. China Customs. Meanwhile, China invested 151.6 bil- The other field currently has nine operational wells and lion yuan in oil and natural gas production from this is expected to achieve a peak daily output of 5,870 barrels in January to September, an increase of 7.4% year-on- 2013, the statement said. year, State Statistic Bureau says. China’s thirsty for The company aims to meet a production target of 330 to oil will speed up its exploration and production. 340 million barrels of oil equivalent this year.

28 ENVIRONMENT

China to launch supportive policies for PV industry

uthorities are working market, according to Meng Xiangan, to boost the domestic vice president of the Chinese Renew- Aphotovoltaic (PV) industry by able Energy Society. launching a variety of supportive The NEA is also drafting a policies, Xinhua reported, cit- subsidy policy for certain areas of the ing a report in the edition of the distributed PV grid. The policy would Shanghai Securities News on create retails subsidies of 0.4 to 0.6 Oct. 19. yuan ($0.06 to 0.09) per kilowatt- “Policies will be unveiled hour, the report said. when they are mature,” the re- The PV industry has been suf- port said, citing sources from the fering since late last year as a result of National Energy Administration slumping demand and declining poly- (NEA). silicon prices. Recent anti-dumping “The general goal of the and anti-subsidy investigations from upcoming policies is to expand domestic demand, promote the United States and European countries have also weighed company mergers and encourage industrial innovation,” the on the industry. report cited the sources as saying. The NEA said in September that it plans to launch a Comment The PV industry is suffering from distributed power generation project that is seen as a measure internal and external pressure. Sup- to boost the domestic PV industry. portive policies, including boosting domestic con- The State Grid drew up a proposal on Oct. 18 regarding sumption, will be beneficial for the development the conditional exemption of PV grid-connected fees, which of the industry. will help to break a bottleneck that has trapped China’s PV

China launches new census on environmental protection

hina on Oct. 16 launched the fourth census on its en- renewable database for the industry and publishing investiga- vironmental protection industry in an effort to prepare tive reports. scientificC data for the nation’s policymakers, according to the The census will be jointly carried out by the MEP, the Ministry of Environmental Protection (MEP), Xinhua re- National Bureau of Statistics and the National Development ported. and Reform Commission. The census will cover the manufacturing and operation Similar projects were carried out in 1993, 2000 and of environmental protection products, resource recycling and 2004. environmentally friendly products in 2011. The results of the new census are scheduled to be re- Services related to the environmental protection indus- leased in the first half of 2013, according to the MEP. try, including the operation of environmental protection fa- China’s environmental protection industry has been cilities and the construction of environment-related projects, growing rapidly in recent years. Revenues from the indus- will also be included in the census. try’s output topped 1.1 trillion yuan (about $175.6 billion) in In order to get a clear picture of the environmental pro- 2010, government data showed. tection industry, the nation urgently needs this census, Wu A development program of the sector in the 12th Five- Xiaoqing, vice minister of the MEP, said at a launch cer- Year Plan (2011-2015) period forecasts the value of the in- emony on Oct. 16. dustry’s output will hit 4.5 trillion yuan in 2015. The industry’s focus is transitioning from manufactur- The value of services related to the sector is forecast to ing to service, said Wu, adding that the market had de- reach 500 billion yuan, according to the program. manded higher quality and improved delivery capacity in the sector. Comment Environmental protection is upgrading Wu said upgrading the industry by linking all its seg- in China with the sector moving from ments through environmental services is a major task for the manufacturing to service. In the future, services next step. are projected to play a major role in the industry. The nationwide project is aimed at establishing a lasting,

29 TEXTILE

IndustrChina isi alto be Watch the future of the luxury-apparel market ndustr i al Watch I ain & Co. released its major is the ability to promote the annual report on the global brand as part of culture and art, luxuryB goods market on Oct. 15, not merely methods to control which pointed out that China, costs and prices,” the chairman including Hong Kong, Macau of Eve Group, Xia Hua said and Taiwan, accounted for al- on Hurun Report Anniversary most half of all Asian markets, Celebration on Oct. 19. according to Business Insider. What’s more, the com- It also indicated that luxury bination between e-commerce apparel made up 26% of the mar- and luxury apparel has been ket share, coming second to the highlighted in recent years. 27% for luxury accessories. Due Many Chinese internet giants to the import taxes, 56 percent of like Sina, Tencent and Netease Chinese luxury consumption is have launched their luxury done overseas, and British media shopping platforms, and ap- even coins a new word — “Peking Pound” — to describe parel has been one of the fastest-growing categories of online Chinese huge purchasing power. advertising in China. “We should find ways to attract the consumption of As China has increasingly sophisticated consumers luxury goods in China. Stimulating domestic demands, shifting from overexposed logo brands to absolute quality reducing trade surplus and meeting the needs of consumers products, national apparel brands are embracing greater pos- are all major factors to be considered,” said by Chen Dem- sibilities to be known world widely with cultural added val- ing, the minister of the Ministry of Commerce, according to ues. Chongqing Evening News on Oct. 8. Apart from the reform in taxes and business models, China is expected to get rid of the label of knockoffs, and Comment Famous for customized cheongsams, cultivate local high-end apparel brands. Many national ap- Rui Fu Xiang has set a good example parel enterprises have already been on the way to be interna- for national brands in the severe international tional. competition. Improving the brand value is viewed To attract consumers from the high-end apparel mar- as an effective way to boost the domestic luxury- ket, Metersbonwe launched a sub-brand named Me & City apparel market, for instance, enhancing customer in 2008. However, the lucrative endorsements of American experience, achieving operational excellence and movie star didn’t prevent it from losing money until 2011. proposing innovative positioning. “What we should learn from the foreign apparel brands

Mexico challenges Chinese textile and clothing support

exico has accused China of breaking World Trade Or- in recent years, and there is no evidence showing that Chinese ganization rules by giving tax breaks and other favor- textile products cause serious impact on those of Mexico,” Mable deals to its own clothing and textile businesses, Reuters one partner of Allbright Law Offices, Fu Donghui said. “Ev- reported on Oct. 15. ery WTO member has the right to challenge. China should Mexico filed a complaint with the WTO saying China be aware of this tendency in the future and better wield the was effectively subsidizing Chinese companies in those sec- WTO regulations in the economic exchange.” tors by exempting them from income taxes, value-added taxes and municipal taxes. Under WTO rules, China has 60 days Comment Under the multilateral dispute settle- to resolve the dispute by explaining its actions. ment mechanism, there have already It was Mexico’s fourth WTO complaint against China, been many cases between developing countries, a competitor in many sectors including clothing and textiles. which is still new for China. Since it is inevitable, It should be noticed that this is the first separate WTO com- it is of great significance to study from this begin- plaint against China from a developing country. ning. “The growth rate of China’s textile exports is decreasing

30 CONSUMER

Apple to open sixth China store in Beijing

pple Inc. is expected to open a new store in downtown Beijing, its third in the city and sixth on the Chinese mainland, on Oct. 20, the company said Aon Oct. 17. The new store, which will reportedly be the largest Apple store in Asia, will be located on Wangfujing Street, a bustling commercial area. An Apple spokesman declined to say whether the company will offer the iPhone 5 to the mainland market after the store opens. Apple’s iPhones and iPads are immensely popular among young Chinese. But with only five authorized Apple stores in the country, copycats have sprung up to meet market demand. Last year, police in southwest China’s city of Kunming busted 25 stores that were using the company’s logo and selling counterfeit Apple products.

Comment The popularity of iPhones and iPads among Chinese is increasing. To meet their demands, a new store of Apple in Beijing may be not enough. Other major cities should also be considered.

Online sales boost success of mobile phone companies

he explosive growth of China’s e-commerce industry has to Huawei’s Vmall.com, customers can find the product on led mobile phone sellers, both at home and abroad, to 360buy.com and Alibaba Group’s Tmall.com as well. shiftT their attention to online channels, and analysts say the Seeing the great potential of online channels, Huawei change may signal a revolution in the mobile phone industry. even set up an e-commerce business unit this year. Xiaomi Corp, a Beijing-based mobile phone manufac- ZTE Corp, the world’s fourth-largest mobile phone turer that dreams of success like that enjoyed by Apple Inc, vendor by shipments, will earn 300 million yuan ($47.6 mil- has received a lot of attention by selling devices through the lion) in revenue from selling mobile phones online this year, Internet since Aug 16, 2011 - the date that Xiaomi intro- up from 10 million yuan last year, said He Shiyou, the com- duced its first handset model. Xiaomi is the first major Chi- pany’s executive vice-president. nese mobile phone company that has adopted e-commerce ZTE started to use e-commerce channels to promote channels as its major product distribution platform. mobile phone sales in 2010, He said. By Aug 16, the company had sold 3.52 million Mi-One About 30 million mobile phones are expected to be devices, the first generation of Xiaomi mobile phones. Seven sold online in China this year, up 68 percent from 2011, ac- out of every 10 Mi-One were purchased online, according to cording to a report issued by SINO Market Research. The the company. growth rate is more than 10 times that of mobile phones sold After Xiaomi’s huge success in online marketing, most in offline outlets during the period, the report estimated. mobile phone brands in the Chinese market have thronged The online sales will account for 10 percent of total to the e-commerce market to compete for Web buyers. handset purchases this year, up from 2 percent two years ago. Huawei Technologies Co Ltd, the world’s second- It is expected to increase to 15 percent next year, the report largest telecom equipment maker, which in recent years said. looked for the terminal business to be its new revenue driver, launched a business-to-customer e-commerce website (www. Comment The large number of Internet users vmall.com) in March to sell its own consumer electronics, in China, coupled with an increasing especially smartphones. consumer acceptance of e-commerce, is driving In early July, the Shenzhen-based company intro- the online sales surge of mobile phones. The on- duced the 2,499-yuan ($397) Ascend D1, the first Huawei line competition is to be more fierce. smartphone that can be purchased only online. In addition

31 AUTO

Chinese own auto brands experience positive sales growth in Sept

.62 million vehicles were sold in China in September, 301,800 units, increasing 9.2 percent from the previous jfdaily.com reported on October 17, citing figures from month but falling 7.6 percent from the previous year. A the1 China Association of Automobile Manufacturers total of 2.82 million commercial vehicles were sold in the (CAAM). The number is 8.2 percent higher than that of country over the first three quarters of the year. the previous month and 1.8 percent lower than last Sep- However, September proved to be a good month tember. 1.66 million vehicles were manufactured during for domestic own brand manufacturers, whose passenger the month, 10.6 percent higher than last month and 3.7 automobile sales totaled 561,900 units, growing 26.6 percent higher than last September. percent from the previous month and 7.5 percent from CAAM analysts attribute the year-on-year sales de- the previous year. Domestic manufacturers held a 42.7 cline in September to the poor performance of Japanese percent share in the passenger automobile market. Own automobile manufacturers, reported by Gasgoo. Decreas- brand sedans constituted 281,100 of those sales, and ing sales of commercial vehicles was also cited as a key made up 30.3 percent of all sedans sold in the country. factor. Own brand manufacturers’ share in the sedan market has Total vehicle sales and production numbers for the increased 6.8 percent from August and 3.2 percent from first nine months of the year totaled 14.09 million units last September. and 14.13 million units. The two figures represented year- A total of 4.57 million own brand passenger automo- on-year growth of 3.4 percent and five percent, respec- biles have been sold from January to September, represent- tively. ing year-on-year growth of 2.6 percent. The growth rate is Passenger automobiles accounted for 1.32 million of slightly less than the industry average of 4.3 percent. 2.09 all vehicles sold in September and 1.35 million of all those million own brand sedans were sold over the nine month manufactured. Passenger automobile sales slipped 0.3 per- period, constituting 26.9 percent of all sedans sold in the cent from last September to this September. SUVs were country. the only vehicle type whose sales experienced positive By comparison, sales of Japanese branded passenger year-on-year growth. automobiles fell a full 39.3 percent from September 2011 Commercial vehicle sales in September totaled to September 2012.

Comment Following a month of Chinese demonstrations protesting the disputed Diaoyu Islands, Japanese brand vehicle sales dropped significantly. Japan’s top three carmakers - Toyota, Honda and Nis- san - all produce in China and said they will scale back production in the country following a sales slump sparked by the backlash. FAW Toyota has revised its annual sales target for the year from 50,000 units to 30,000 units. Honda Motor Co Ltd and its China joint ventures sold 33,931 vehicles in the country in Sep- tember, down 40.5 percent from a year earlier, Reuters reported. IHS Global Insight predicts that Japanese brands will lose about a fifth of the market share through the end of 2012, amounting to about 200,000 units. IHS predicts Japanese automakers could lose another 100,000 in China sales in 2013. However, the loss of Japanese automakers’ market share in China would benefit European, U.S. and Korean automakers, as well as Chinese domestic auto manufacturers.

China’s State organs to use new-energy autos

total of 23 electric cars will be used among 11 State organs vehicles in order to boost the development of new-energy auto- in a pilot program to promote new-energy vehicles for mobiles. Aofficial use, according to a statement from the Ministry of Sci- According to the statement, China Potevio, a high- ence and Technology, or MST, on October 16, China Daily tech telecommunications manufacturing enterprise, will be in reported. charge of the operation of the electric cars, including car main- The 11 departments include the MST, the Government tenance, charging facility support and business services. Offices Administration of the State Council, or GOASC, the In June, the State Council issued an outline to promote National Development and Reform Commission, the Ministry the application of new-energy cars and develop the country’s of Finance, the Ministry of Culture and the Ministry of Land new-energy automobile industry. and Resources, the statement said. Comment The Chinese government is speeding the An official with the GOASC said that the office will pace of development in the industry. further enhance the proportion of electric cars in government

33 ELECTRONICS

IndustrUltrabooksial ‘areWatch the future’ ndustr i al Watch I ltrabooks will become mainstream in the future and, The new Microsoft Corp Win- within two years, about 80 percent of the laptops will dows 8 is used by a Chinese PC haveU touch screens because of the coming Windows 8 op- brand Lenovo IdeaPad Yoga 13. erating system, said Yang Xu, president of Intel China, ac- The world’s and China’s larg- cording to China Daily. est PC maker, Lenovo Group Ltd, The ultrabook is a launched its latest ultrabook in China concept introduced in 2011 on Oct 12. The new product is able to by the semiconductor giant swivel its screen 360 degrees, turning Intel Corp. The concept is to a normal laptop into a tablet PC. The produce a notebook comput- company said it will be available on er designed to provide similar Oct 23 in China starting at 6,999 yuan or superior functions as a standard ($1,109). laptop but thinner, lighter and with a longer battery life. “Last year there were only a few ul- Comment The touch-screen ultrabook is the trabooks in the global market but this year we will see more industry trend and will dominate the than 140 ultrabooks,” said Yang. He said the new type of market in the near future. It is very likely to reclaim product will boost sales in the PC industry and many cre- territory lost to mobile Internet devices such as ative models will be produced in the future to redefine the tablet PCs and smartphones, especially to Apple concept of traditional laptops. Inc’s iPad.

Microsoft eyes hardware, online services as future

icrosoft Corp Chief Executive puting,” or web versions of its Office Steve Ballmer has signaled a applications, but Ballmer’s new em- Mnew direction for the world’s largest phasis suggests an acceleration away software company, pointing to hard- from its traditional business model of ware and online services as its future, selling installed software. taking a page from long-time rival “This is a significant shift, both Apple Inc, according to Shanghai in what we do and how we see our- Daily. selves - as a devices and services com- Ballmer’s comments in his an- pany,” he added. nual letter to shareholders published Alongside the shareholders’ let- on October 9 suggested that Micro- ter, Microsoft’s annual proxy filing, soft may eventually make its own which deals with the shareholders’ phones to build on its forthcoming own-brand Surface tab- meeting and other governance issues, showed that Ballmer, let PC and market-leading Xbox gaming console. 56, got a lower bonus than he did last year, partly for flat “There will be times when we build specific devices for sales of Windows and his failure to ensure the company specific purposes, as we have chosen to do with Xbox and provided a choice of browser to some European customers. the recently announced Microsoft Surface,” Ballmer wrote. He earned a bonus of US$620,000 for Microsoft’s Ballmer, who took over as CEO from co-founder Bill 2012 fiscal year, which ended in June, down 9 percent from Gates in 2000, said the company would continue to work the year before, according to documents filed with the US with its traditional hardware partners, such as Dell Inc, Securities and Exchange Commission. His salary, low by Samsung and HTC, but he made it clear that Microsoft’s US standards for CEOs, was flat at US$685,000. role in the so-called “ecosystem” was changing. Comment Microsoft seeks to copy the success of “It impacts how we run the company, how we develop Apple Inc, whose massively successful new experiences, and how we take products to market for iPhone and iPad demonstrated tight integration of consumers and businesses,” he wrote. high-quality software and hardware and made Win- Microsoft already makes money from providing ser- dows devices feel clunky in comparison. vices online, such as access to servers to enable “cloud com-

34 ICT

Google pushes way into mobile advertising

he US search engine giant Google Inc Advertisement requests in the mo- has been trying to push its way into mo- bile sector through Google’s products in- bileT advertising in China as the country ex- creased by 120 percent from July 2011 to pects to overtake the United States to be the July 2012 in China, and the country has world’s biggest smartphone market this year, become one of Google’s top five countries according to China Daily report on October by advertising request volume, according 22. to the company. Mobile advertising is one of the few It’s not known how much mobile ad- high-key strategies announced by Google vertising contributes to Google’s total rev- China, which, being low-key in itself, shrank enues. However, Jim Friedland, an analyst its business portfolio in the country in Sep- with US-based financial services company tember amid a declining market share. Cowen Group Inc, estimated earlier this The company intends to increase its year that mobile advertising accounted footprint in the mobile advertising sector for 3 percent of Google’s total revenues in with its solutions that enable advertise- 2010, 7 percent last year, and will almost ments to be shown on mobile applications, double to 13 percent in 2012, according Web pages, mobile search results and on- to a report by technology website Tech- line videos. crunch.com.

Comment As an increasingly large number of people turn to their mobile devices to access the Internet and use mobile applications, it’s possible that the mobile advertisement will help Google to im- prove its performance in China. However, user experience of mobile advertisement is still not satisfactory and mobile advertising is still weaker than PC advertising in its ability to generate revenues, even in devel- oped Internet markets.

Huawei, ZTE hit back at ‘biased’ US market report

he US congressional report against Huawei and ZTE Chinese telecommunication companies, including Hua- is based on rumors and aimed at impeding competition wei and ZTE, have gained global market share rapidly in fromT China, according to the companies. recent years and that has caused “admiration, jealousy, and Both Huawei and ZTE claim to have been open and doubt” in some quarters, said Dai. transparent during the year-long investigation and said they Most European countries are far more open to both were disappointed after the House of Representatives’ intelli- companies and they have participated in many infrastructure gence committee warned American companies to avoid buy- projects there. ing from them, according to China Daily report on October Huawei is well established in the UK, where it provides 11. telecommunication equipment to key domestic companies The report, unusual in that it is a government action such as British Telecom. And in Germany ZTE is involved against two individual companies from China in a highly in building the national broadband network. competitive global industry, reflects political anxiety at the Although some media reports have suggested that Eu- rise of Chinese companies operating in the US. ropean countries could follow the lead of the US in restricting It “employs many rumors and speculation to prove non- both companies’ activities, Dai said Europe in general is open existent accusations”, Huawei, the world’s second-largest to them. network equipment vendor, said in a statement posted on its website. Comment Despite the wide media attention given “We have to suspect that the only purpose of such a to the report, its direct impact on the report is to impede competition and obstruct Chinese ICT companies is small, since system products only companies from entering the US market.” account for a small part of their businesses in David Dai, a spokesman for ZTE, said, “We tried to the United States, with the bulk of the their prof- mitigate the doubts of the US by offering objective third par- its coming from end products such as mobile ties to test our credibility during the investigation. We were phones. disappointed with the result, although it did not surprise us.”

35 FINANCE

IndustrCSRC restartsial Watch IPO approval procedures ndustr i al Watch I ccording to Global Times report, The tently cleared over 10 IPOs each China Securities Regulatory Com- week, Zhang Xin, an analyst with Amission (CSRC) gave the green light on Shanghai-based Guotai Junan September 28, the day before the country’s Securities, told the Global Times. financial markets closed for an eight-day holi- The approval pace lost momentum day, to Beijing Zhongkuang Environmental in July and then stopped completely Protection Science and Technology Co Ltd in August and most of September to launch an initial public offering (IPO) on amid concerns that the f lood of the ChiNext board at the Shenzhen Stock new listings was diluting liquid- Exchange, according to an announcement on ity in the sluggish equity market, the CSRC’s official website, a move which Zhang explained. ends the regulatory body’s two-month sus- During the third quarter, pension on new IPOs, the longest halt on new offerings since mainland boards saw 43 new public listings which together July 2009. raised 26.79 billion yuan ($4.26 billion) in financing, down The CSRC also announced on September 28 that it 24.6 percent and 30 percent respectively quarter-on-quarter, would resume the examination of IPO applications for main both three year lows, according to figures from the CSRC. boards starting from September 26, when it will review list- As of September 6, China had 758 domestic companies in ing plans from Chongqing Gas Group Corporation Ltd and the IPO pipeline awaiting regulatory approval to list, accord- Shenzhen Suntak Circuit Technology Co Ltd. ing to a recent report in the China Business News, citing Between July 2009 and June 2012, the CSRC consis- CSRC figures.

Comment CSRC may reopen the door to new listings, but experts doubt whether China's securities regula- tors intend to issue approvals with the same frequency seen in recent years. With a bearish and low-expectation mainland stock market, CSRC will probably be more cautious and selective with new offer- ings even though it is on their schedule.

China’s slowing forex reserves growth ‘desirable’

xperts said the slowed growth of China’s foreign ex- strong, double-digit change reserves since the end of last year is conducive to growth since 2001, driv- Erelieving the yuan’s appreciation pressure and is thus desir- en by galloping economic able for China, reported by Xinhua. growth, a trade surplus The People’s Bank of China said in a statement that and booming foreign the country’s foreign exchange reserves, the world’s largest direct investment. In stockpile, rose to $3.29 trillion at the end of September from October 2006, the figure $3.24 trillion at the end of June. The September figure grew crossed the threshold of 2.76 percent over that at the end of the same month last year, $1 trillion for the first but it was dwarfed by the 20.9-percent year-on-year growth time. The figure ex- seen in September 2011. ceeded $2 trillion in April 2009 and hit the 3-trillion mark Zhao Qingming, a financial expert with the University in March 2011. However, year-on-year growth has dropped of International Business and Economics, said the slowing sharply since December 2011 due to slowing economic of foreign reserve growth is desirable, as it will reduce appre- growth and the government’s measures to steer toward more ciation pressure for the yuan and maintain a relatively stable balanced trade. Zhao forecasts that the country’s foreign re- exchange rate. serves will see small fluctuations in the future instead of the China’s foreign exchange reserves had maintained constant rapid growth seen in the past decade. Comment In the past decade, China has gained a large sum of foreign exchange reserves, so large that how to use it properly becomes a problem. Overseas investment, expansion of import, risk con- trol are good ways to release the pressure.

36 Independent Credit Rating Agency Established

By Zhu Zijun

n international indepen- dent credit rating agency was established in Beijing on Oct. 24, which aims for a system of comparable, global credit ratings.A The new agency, named Uni- versal Credit Rating Group, was sponsored by three of the world’s in- dependent credit rating agencies from China, USA and Russia, namely Dagong Global Credit Rating, Egan- Jones Ratings, RusRating respec- tively. “The global credit crisis has highlighted the importance of credit ratings on human society, and has demonstrated that flaws in the cur- rent international credit rating system Presidents of RusRating, Dagong Global Credit Rating and Egan-Jones Ratings jeopardize human prosperity and development. The current system no longer meets the credit about the strengths and weaknesses of borrowers. Whilst rating needs of the world,” said the Beijing Declaration listening to analysts from different countries and cultures signed by the three agencies. may lead to a broader understanding, there is also a need for Human civilization is in an economic era dominated by global standards and comparable credit ratings,” said Richard credit and debt financing. Prosperity and sustainable devel- Hainsworth, president of RusRating, adding “the vital task opment are indissolubly linked with impartial credit ratings, is to obtain a common global vision from diverse national the Declaration explained. insights.” The declaration calls for establishing a new type of According to the Declaration, the Universal Credit international credit rating system which follows the inher- Rating Group is a multilateral independent credit rating ent requirements of credit rating and which is aligned to the agency comprised of private organizations whose responsi- common interests of human society. bilities do not conflict with credit rating, and which do not “We live in a global economy that is dominated by cred- represent the interest of any particular country or group. it relationships and debt financing. It is vital to the prosperity The mission of the group is “to promote the reform of of all nations that credit ratings provide comparable informa- the international credit rating system and construct a new tion about borrowers in all countries,” said Guan Jianzhong, international credit rating system which reflects the laws president of Dagong Global Credit Rating. governing the development of our credit-based economy and “Overly optimistic credit ratings have led to an econom- stands for the common interests of the mankind” and “to de- ic crisis, almost to a catastrophe that was only avoided thanks velop new international credit rating criteria, establish an in- to unprecedented central bank interventions. The credit rat- dependent international supervision system for credit ratings, ing system urgently needs to be reformed,” said Sean Egan, disseminate impartial rating information around the world.” president of Egan-Jones Ratings. The new agency is targeted to establish a new inter- “Investors around the world are recognizing that their national credit rating system and operational mechanism best interests are served when there is a variety of views within five years, said the Declaration.

37 AGRICULTURE

Industrial Watch ndustr i al Watch I

Can the Golden Year Be Far Behind? By Zhao Wei

nce I gave a salmon to the chef of a famous discussion on the hot issue in the agricultural sector. Japanese restaurant in Beijing, he didn’t Huge consuming market know what to do with a knife in his hand, let alone cooking,” Han Yang told the re- The vice president of Beijing Agricultural Investment porter, who is the director of the marketing department of Fund, Ma Tianjiao, shared the following data: 1 acre can “ODalian Hoto Ecology Agriculture Co., Ltd. Specialized feed 1.6 persons in 2010 in the whole world, but the amount in breeding and transporting rare fishes, Hoto has become of people is estimated to be 4 in 2050; the world population a leading enterprise in this industry. Famous for achieve- is forecasted to be 9.1 billion in 2050, up by 36%, which ments in areas of oil, tourism, shipping and real estate, means nearly doubled food demands. Dalian Haichang Group Co., Ltd expanded its business to Zhang Hongyu, the Director of Department of In- high-end aquatic products in 2009 which is now known as dustrial Policies and Laws of China’s Ministry of Agricul- Hoto. ture, said on the Fair, “China is facing a surging trade defi- As a leading enterprise in IT industry of China, Leg- cit in the foreign trade of agricultural products. The trade end Holdings announced its modern agricultural business volume of the import and export of agricultural products in 2010. was 155.7 billion RMB in 2011, in which 94.9 billion was In March of 2012, the State Council released a docu- from imports and 60.8 billion from exports.” ment named “Opinions on supporting leading enterprises Different with the market limitation encountered by in the industrialization of agricultural sector”, in which it industrial products, agricultural products is facing a market said China would push forward the construction of stan- dominated by the seller because of the certain degree of dardized production bases and use the clustering effect to food shortage. From a long-term perspective, the future promote development in the sector. development has a tendency of high cost and high price Are the above phenomena suggesting an upcoming because of modernization and industrialization. Therefore, golden period for the investment of China’s modern agri- it is of great opportunities and possibilities in such process. culture? The huge consuming market attracts more and more peo- At the 4th China Agriculture Investment and Fi- ple’s attention to agribusiness, no matter what industry they nancing Fair held on September 27, experts from various are previously in. areas, including the department of policies and laws, banks Insistent upgrading demands at home and broad, security companies and agricultural enterprises, came together in Beijing and had a profound Propelled by the problems such as food safety, the

38 transformation and upgrade of agricultural enterprises are will benefit from the financial reform in the following becoming more and more imperative under such circum- aspects. First, direct loans from rural banks are helpful stance. to expand the business scale. Second, agricultural insur- “The fundamental operation mode of agricultural ance will be put into practice in the near future. Third, companies is autarkical small-scale farming, which makes it agricultural commodity futures like eggs and pork will difficult to lay down uniform quality standards and imple- effectively help to control risks brought by periodic fluc- ment them under effective supervision in every channel tuation of prices. Fourth, more and more investment among 220 million peasants in China,” Ma Tianjiao said. banks are endeavoring to build professional team on the To solve this problem, enterprises should have clear posi- area of agribusiness. tioning of their core competence, so as to make profits in Opportunities in the sluggish economy long-term and risky investment. “More and more people are seeking quality, safety as Yang Yi, the manager of COFCO Agricultural well as taste,” which requires agricultural business to con- Industrial Investment Fund Management Co., Ltd., centrate on the quality of product itself, as well as the im- said, “Though the economic downturn in the U.S. led provement of added values, explained by James Campbell, to the depression of many sectors, the retail industry the Head of Agribusiness of ANZ China. Ma Tianjiao also was not adversely influenced as a matter of fact, be- shared her opinions on this issue, “From annihilating pov- cause people felt so down that the consumption of beer erty to being well fed, and then to eating safely, the upgrade surged greatly.” of the agricultural products structure will be accelerated Presently, a lot of hot money has flowed into Chi- due to people’s increasing demands on quality and safety.” na’s agricultural industry due to the infinite opportuni- What’s more, innovative business model and market- ties and potentials in the future development. Investors ing channels are also worth noticing. Han Yang shared Ho- are making efforts to add more values to the traditional to’s experiences on the Fair, “Besides technical support in agricultural products, in the meanwhile, the attempt to producing and transporting, we have built unique distribu- combine modern business model like e-commerce and tional channels such as high-end gifts service, preservation the traditional agricultural industry has never ceased. and refrigeration equipments in collaborated restaurant, The demands of safe and high-quality food of people chefs training courses and so on.” have put great pressure on the transformation of Supportive policies and reforms agricultural enterprises, which at the same time have also provided chances to be innovative The “Opinions” released by the State and original. Council this year have pointed out obvi- Just as Mao Changqing said, in his ous directions of the future development point of view, China’s agriculture had of agricultural enterprises, in which gone into the accelerating period of financing and listing are encouraged. modernization since 2005, and would The financial reform is also trying embrace a golden period for invest- to provide better and stronger sup- ment in the next ten to fifteen years. port in the process of industrialization of agricultural companies. According ← James Campbell, the to Mao Changqing, the chief analyst Head of Agribusiness of of Citic Securities, the agricultural sector ANZ China

The 4th China Agriculture Investment and Financing Fair 2012

39 CREATIVITY

Industrial Watch ndustr i al Watch I

Information Design Boosts

Smart City By Audrey Guo

ur cities are producing environment and security from the terms issues inevitably, for instance, the numerical data and infor- of “design changing city” and “design migration workers versus the static mation on a daily basis. As changing life”. household and the social security part of the city, how could The idea of “big design development, system, the increasing number of we understand the changing city faster big data service and big city” is to let the private cars on the road versus the old andO make our life more convenient? big design (information design) play a capital’s closed traffic network that The answer is “Information Design”. It leading role, coordinate the new trend of lacks service design, the downgraded could summarize the city information the big data development and the produc- air quality, more ubiquitous macro and make the real-time data more di- tivity of digital innovation, to promote infrastructure but no micro walkable rectly visible to the urban authority, and the construction of geocity to a new level. area. also could make quick reactions and How does the urban city make smarter Now, Beijing has evolved from provide immediate services. The infor- in the digital age? Yang Lei, Director of Digital Beijing to Smart Beijing. The mation design is able to help change the the CMoDA said, “Geocity Smart City Digital Beijing makes the metropolis urban public service, improve life, and is not only a combination of network and become a terra-data generator. In the enhance the city quality. Changing the cloud computing, but also tapping of the era of Big Data with the booming city and our life through the informa- great potential of big data era through big social media and the internet, mas- tion design will make our city smarter. design (information design) to enhance sive data couldn’t make the traditional As the feature exhibition for Bei- people’s awareness and play to the people’s data analysis ways ref lect the data jing Design Week 2012, Geocity Smart wisdom, to make the complicated city quantity. Therefore, how can we col- City — International Information system smarter, and better serves Big lect the various geo, spatial, social and Design Exhibition displays the impacts City, leading to an ultimate lift in social urban data, and then help us to pen- of visual information on the future de- well-being.” etrate the urban issues? The answer velopment of the city and industry from The GeoCity model was developed lies in the city’s own data treasures. the angle of information design for by Ars Electronica FutureLab (Austria). According to the Global Agen- the first time, and shows bright future GeoPulse Beijing is the model’s first da Councils Reports 2011–2012, of “big design development, big data Asian application after Linz and Berlin Data visualization is a supporting service and big city”. GeoCity Smart and is a collaboration of Ars Electronica tool to map the world as a complex City is the point of departure to provide Solutions, CMoDA CoINNO Lab and system. It’s powerful to digest tons of a holistic way to view and understand Design Beijing Lab at the Information data. For example, millions of pieces complex urban issues via data visualiza- Art and Design Department of Tsinghua of data can be processed and trans- tion and information design. It studies University. lated into 30 seconds of 3D anima- urban mobility via mapping population, In Beijing, a fast growing interna- tion, zipping the decades into a short transportation, telecommunication, tional metropolis, there are many urban moment.

40 GeoPulse Beijing Audi Connected City — Fei Jun and Li Xinlu An interactive book, a from Digital Media Studio of CAFA touch screen computer, three This work features a so- projections and seven screens cial network game equipment could well display the dynamics designed by Fei Jun and Li of Beijing city. Geocity is the Xinlu for the Geocity Inter- first-of-its-kind model applica- national Information Design tion in Asia, to solve compli- Exhibition. Unlike traditional cated urban problems through computer games, this work efforts from various sides. The uses a LED screen to create real-time data about transporta- a virtual recreation micro city experimental space, including tion, population, environmental supermarket, cinema, cafeteria and other recreational places. quality and weather is updated The more interesting part is that the audience could pose activ- on the loop video, exposing the ity information with newly downloaded APP program, such audience to an information ex- as organizing auto club friends to visit the virtual city to have plosion. The interactive board a cup of coffee, watch a movie or have a racing car contest they and the projection wall would make us like the final BOSS of have been dreaming of. Also the work is still about the concept the science fiction movies, to get the firsthand information of game, but the network of the internet or the car, the collabora- Beijing and make the wisest decisions. tion between society communication and transportation reflect the future trend of the technological development. Plasma jet — Brad Miller (Australia) The best part of the Cucoloris Call-board — Ars Electronica Fu- work is that when the tureLab (Austria) audience stands in front China has very delicate of the big moving equip- paper-cutting art and Austria ment, their any gestures has magical cucoloris call- could initiate the pulse board—Shawgram. This and change of the plasma innovation equipment was jet on the big screen. highly popular at the 2012 With the stereo sound Austria Ars Electronica Fes- around us, the infrared introduction camera and the network tival. It is like a fast camera and it only takes 15 seconds to could capture every moving gesture of us, and display inter- print the sticky notes featuring the image of audience after active images immediately. These brilliant and colorful magic the audience makes amusing pose in front of the sensitive lines actually reflect our movement. It could be like a whirl- plate. These notes could be posted on the public board, with wind, grid or radioactive flower. Chang a gesture and explore bubble notes expressing personal feelings and opinions about the information beauty with Brad Miller and his Australian the exhibition and city construction. It is interesting interac- team. tive equipment that could voice public opinions. What is the smart city in your mind? What do you expect of Beijing’s fu- Time Adjustment — Brad Miller (Australia) ture? What could we do to make our city a better place? Then The internet net- you can leave your image and voice here! work functions as both an information receiver Microblog City #Position# — Xiang Yan- and feedback provider, dong, Tang Yihu, Zhang Wentao (China) and this work makes Microblog city is a plat- use of the character- form that features a virtual city istics to display China created by images of all CMo- with image, sound, DA. The audience could ex- video and various other press their opinions: #position# means. Each scene on the big screen is selected from ev- + contents, to make interac- ery corner of Beijing during the “Geocity” feature exhibi- tions. Later they will receive a tion. Ancient or modern, this scene might be intangible feedback note with the position in a far place, but sometimes it is just around us. When of the virtual world, and the image and ID of the audience will standing in front of the work, the audience could move appear on the big screen. When the number of messages reaches right or left to enlarge or shorten the image, or play the a certain level, a virtual architect will appear in the city. The au- video slower or faster. Visible, tangible and audible, these dience could position themselves at the city, to convey a message scenes could make the audience feel like walking through to other people: no matter in the real or virtual world, the spatial the time channel and discover the connection between relationship among different groups of people is spontaneous and past and future. hardly depict able, but also definite and inseparable.

41 HEALTH

Industrial Watch ndustr i al Watch I Confidence in the Market

By Jeff Crowther

hina’s dietary supplement help gauge growth year on year etc., it invest and prosper. NBTY recently industry has been expanding certainly isn’t the only barometer to use reported to China Daily that they have at an estimated 20 percent to judge how successful the industry introduced over 200 products to the per year with no signs of is or will be. We can simply look at China market including their flagship slowing down. It is currently valued at the amount of global investment and brand Nature’s Bounty and their top $15.9 billion, which is the official figure growing interest. TSI Group has final- selling sports nutrition brand Met-Rx. fromC China’s Health Care Association. ized the purchase of Yessamin Health NBTY’s China office reported their However, the industry lacks transpar- Company, Ltd., a Norwegian invested 2011 sales hit over $79 million. ency and is riddled with both gray contract manufacturing facility in Nan- New Hope Natural Media has and black market activities that make tong, Jiangsu Province, China. Amway invested in helping Chinese suppliers obtaining an accurate figure difficult. (China) announced in September it understand U.S. import and industry Insiders estimate that the real figure is is investing 600 million RMB ($94.5 regulations with its market quick start certainly higher than this because the million) to build its largest overseas programs held in cities across China. official number only takes into account production base in the Economic and They also published the Engredea products that are registered as health Technology Development District in Monograph China paper, which helps products with China’s State Food and Luogang, Guangzhou. And these are global companies make sense of China’s Drug Administration (SFDA) and just two of many stories we can use. complicated dietary supplement indus- have approved claims. The figure does In addition to these investments, try. not reflect products that are legally im- COFCO a large Chinese state owned Although the industry is grow- ported as food or those that are sold il- enterprise has invested over $500 mil- ing and has huge potential, there are legally on a variety of popular websites. lion to build a state of the art nutrition a number of issues that need to be ad- Currently, there are many prod- research facility to explore ways in dressed before China’s dietary supple- ucts in the market, which are approved which to nutritionally enhance foods ment and overall natural health product as and sold as food without claims. So with dietary ingredients. market can be declared a true winner, the figure must certainly be higher. Holland and Barrett (NBTY) meaning transparent regulations every- CNutrInfo Ltd, a consulting company opened its first health food store in one can follow. in Guangzhou, put the market at $44.4 Shanghai this year with hopes of open- First off the regulations are in dire billion, which would crown China the ing another 16 by year-end. need of an overhaul. largest market for dietary supplements World Health Store (WHS) a Second is consumer education. outpreforming the U.S. by over $14 health food store carrying a complete Because the earliest dietary supple- billion. I feel this assessment is a bit line of dietary supplements, sports nu- ments to enter the market were from too ambitious and guestimates the real trition, aromatherapy, packaged organ- pharmaceutical companies, and were number is some where around $20 bil- ics etc. has two stores in Beijing and sold in pharmacies and registered as lion. Again, because there is so much two in Shanghai. WHS is the pioneer OTC, most view them as being similar gray market activity going on, it is im- of the traditional “western” health food to drugs and have the ability to treat or possible to say with any certainty what store concept in China and as such has cure disease. Furthermore, the current the true figure is. gained the attention of many invest- regulatory system continues to treat Fifteen, twenty, forty billion are ment firms looking to capitalize on them in this way. just numbers thrown around by indus- China’s growing health food industry. try professionals doing the best they Both NBTY and GNC have (Author: Executive Director of can to put a number on the market. been in the market for at least the past U.S.-China Health Products Asso- Although knowing the number can six years or so. They both continue to ciation)

42 China to Top the World’s Smartphone Market By Lynn Yu

ith staggering consumer demand for affordable smartphones, China will claim as the world’s largest smart- phone market this year and will also take over the US to be a state-level market with the largestW mobile phone shipment across the world. According to the IDC’s Quarterly Report on Global Mobile Phone Market, this year China will possess a 26.5% portion in the world’s total smartphone shipment, and the US 17.8%. The IDC’s Quarterly Report (Q2 of 2012) on China’s Mobile Phone Market, the Chinese mobile phone market saw a total shipment of around 86 million units in the single second quarter, up 10.4% year-on-year. It’s noteworthy that the shipment of smartphones rose 25.6% over the previous quarter, accounting for 51.3% of the total mobile phone mar- ket and exceeding that of the feature phones for the first time. This year, China’s smartphone shipment “Looking at the region features, we predict that will reach 185 million units, almost double that in the smartphone demand will shift to the below 3rd- 2011 and thus China’s smartphone user base will tier cities. After continuous rapid growth, the smart- definitely exceed 300 million, said Huo Jinjie, IDC’s phone market in the 1st-tier cities will slow down. vice president for Asia Pacific and general manager On the contrary, as demand for low-price phone for China. IDC has also predicted that in 2016 the models and high-end models symbolizing elite status Chinese smartphone market will occupy a market remains large, the smartphone market in the below share as high as 72% in the total mobile phone mar- 3rd-tier cities will accelerate to develop,” said Yan ket. Zhanmeng, IDC China’s senior analyst in charge of “The Android smartphone, sold at a price lower mobile phone market research. than USD 200, will become a main force driving “As the smartphone shipmentt ramps up gradu- china’s future smartphone market. As the smartphone ally, just like other traditional IT products, China’s manufacturers are striving harder for market shares, smartphone market expanding beyond the 1st-tier the price of low-end smartphones will fall to below cities will become a major force driving the smart- USD 100. The home-grown smartphones with opera- phone market development. With a population tor subsidies will further attract more mobile phone accounting for 87% of China’s total, the 5th- and users to turn to smartphones, which will push up the 6th-cities’ mobile phone markets are far from being shipment of smartphones. Looking into the future, saturated. Against the background that the Chinese mobile phone users’ favoring over the 4G network in smartphone market is fast expanding into the medi- the later period will become another factor driving the um- and small-sized cities, nudging into the domes- smartphone market, said Wong Teck-Zhung, Senior tic 5th- and 6th-tier cities will become the key for the Analyst of IDC Asia Pacific mobile market research. smartphone manufacturers to succeed,” added Wang

44 Jiping, Deputy Director of IDC China’s Personal IT coverage of the 4G network and the popularity of System Research Department. data sharing packages will drive up the number of “China’s smartphone shipment exceeding that smartphone users. Smartphone has become the first of the US does not mean that the US smartphone choice for the large-scale operators and in the mean market is stagnating. Taking up a considerable por- time, regional and pre-charging operators are also tion in the mobile phone shipment, the US smart- competing to offer tailored service packages. phone market is likely to keep growing but at a With a relatively low popularity slower speed. As there emerges a large number of of smartphones in Asia Pacific, new smartphone users and many a regular user hopes the Indian smartphone market to upgrade their mobile phones, the smartphone promises great potential for market in the US still promises potential for growth,” growth. The low-end smart- said Ramon Llamas, IDC’s senior analyst in charge phones, featuring double of mobile phone techniques and research projects on SIM cards and local appli- development trend. cations and sold at around “Apart from China and the US, some other USD 100, will swiftly inject countries may also emerge as the major players in vigor into the Indian smart- the smartphone shipment market in the five years phone market. Despite the fact to come. As manufacturers are competing fiercely to that the vast majority of Indian expand customer base and market share, such fast- consumers cannot afford the expen- growing countries as Brazil and Russia will become sive 3G packages, IDC has predicted the most heated markets,” said Kevin Restivo, IDC’s that operators offering cheaper data service packages, senior analyst in charge of the project Report on the considerable subsidies, services into the 2nd- and 3rd- Global Mobile Phone Market. tier cities as well as the ever popularity of 3G and 4G China’s smartphone market commands this year will push up the user base of smartphones. Afford- the largest smartphone shipment across the world, and able service packages will become another significant it will keep growing mainly in terms of low-price mo- factor driving up the number of Indian smartphone bile phones. Although the large smartphone shipment users. is a piece of good news, this also means lower Average Thanks to the strategic investments from mo- Sales Value (ASV), slimmer profit and more throat- bile operators, smartphone manufacturers and the cutting competition. During the prediction period, as supervisory departments, the Brazilian smartphone the number of smartphone users multiplies in other market will keep expanding. Since operators focus on emerging smartphone markets, the Chinese smart- increasing Average Revenue per User (ARPU), de- phone market will undoubtedly dominate a declining mand for smartphones will see a rise and the smart- market share in the global smartphone market. phone manufacturers also hope to gain more profits Due to mobile phone upgrading and fea- by offering such products. Meanwhile, the Brazilian ture phone users turning to smartphone, the US government will exempt taxation over smartphones smartphone shipment is to pick up. In addition, the and will also protect the local manufacturing busi- launching of low-price phone models, the widening ness from being impacted by overseas counterparts. The above-listed factors, coupled with steady end- user demand, will push up the smartphone shipment in the years to come. Due to high subsidies offered by operators and a rise in long-term contracted users, the UK has be- come one of the fastest-growing smartphone markets in West Europe. During the prediction period, the offering of LTE and a package of new services attract- ing smartphone users, the shipment of smartphones will keep increasing. In addition, the declining HSPA equipment price will also attract feature phones users to turn to smartphones. In the later prediction period, however, as penetration into the smartphone market will become saturated and operators will begin to seek alternatives for subsidized models, growth in the smartphone market will slow down.

45 ase S tudy c

Protectionism or Rule of Law A Comparison between US and PRC National Security Review? Regime —

By Liang Tao

series of recent news might PRC national security review regime. Circular 10, which, for the first time, make people think that Origin and history requested notification and review of an the U.S. was intentionally inbound M&A transaction that might throwing fuel on its increas- In the U.S., the Committee on affect China’s “national economic ingly tense economic relationship with Foreign Investment in the United security”. In 2008, the PRC Anti- AChina. On September 28, 2012, the States (“CFIUS”), an inter-agency Monopoly Law was enacted, requiring U.S. President Barack Obama blocked committee chaired by the Treasury a broader “national security” review an acquisition of four wind farms by Department, is in charge of review- when national security is involved in Ralls Corporation, a Chinese-owned ing foreign acquisitions of the U.S. an undertaking concentration. In Feb- corporation affiliated with Changsha- businesses to determine whether the ruary 2011, the General Office of the based Sany Group. Further on acquisitions would impair the U.S. na- PRC State Council issued the Notice October 8, 2012, the U.S. House of tional security. CFIUS was created in on Launching the Security Review Representatives released an investiga- 1975 in reaction to investments from System for Mergers and Acquisitions tive report accusing China’s two larg- the Middle East. In 1988, as a result of Domestic Enterprises by Foreign est telecom equipment manufacturers, of Japanese investments, the President Investors (“Notice”), which formally Huawei and ZTE, of posing threat was authorized to block foreign invest- established the national security review to the U.S. national security. Actu- ments following CFIUS investiga- system for inbound M&A transac- ally, before the issuance of this report, tion. In 2007, in the wake of Dubai tions by foreign investors. MOFCOM Huawei had been constantly chal- Ports World’s acquisition of a firm subsequently released implementing lenged by the U.S. government due to that managed several major U.S. sea- provisions (the “Provisions”) in August national security concerns arising from ports, the CFIUS review process was 2011. Under the Notice and Provi- Huawei’s acquisition of the U.S. busi- significantly reformed by the Foreign sions, an inter-ministerial joint confer- ness. Investment and National Security Act ence (“Joint Conference”) was set up These days, there are various (“FINSA”), expanding the scope of to whom MOFCOM must report any points of views regarding the national national security reviews and signaling proposed M&A transaction that falls security issue in connection with trans- greater scrutiny. within the scope of the national secu- pacific mergers and acquisitions. Some In China, the notion of “national rity review. people claim that the U.S. national security” was not introduced in its Initiation of security review security review of foreign acquisition is foreign acquisition review regime until just a cover for protectionism. It would 2006. In that year, the Ministry of CFIUS process is ostensibly based make sense if we could put aside the Commerce (“MOFCOM”), together on a voluntary notification system, crossfire of finger pointing and run an with five other government authori- permitting parties to a transaction to objective comparison between US and ties, promulgated the M&A Rules or decide whether to initiate a CFIUS

46 review. CFIUS does not set any speci- transaction within 15 days. The entire al security risks to the U.S., and shall fied deal value or criteria serving as CFIUS process therefore can take up be frozen and suspended for the Presi- thresholds for notification. However, to 90 days. In the above-mentioned dent’s review and decision. To chal- either CFIUS or the U.S. President Ralls case, CFIUS submitted the deal lenge such findings and orders, Ralls is authorized to unilaterally initiate a to President Obama who subsequently unprecedentedly filed a lawsuit against review of any deal that could result in vetoed the deal. CFIUS and then added Obama as a foreign control of any entity engaged China’s national security review defendant when the President blocked in interstate commerce in the U.S. procedure will start upon a voluntary or this deal at a later time. This is the first A covered transaction that has mandatory filing. The MOFCOM will time in 22 years an U.S. President has been notified to CFIUS, without being complete a preliminary review within blocked a foreign investor on national found any unresolved national security 15 working days. If the deal falls security grounds. concerns, is eligible for a “safe harbor.” within the scope of a national security Two lessons we can learn from On the contrary, a covered transac- review, the MOFCOM will, within 5 the Ralls case are (i) the location of tion that CFIUS has not reviewed and working days, submit the application to an acquired property can be the criti- cleared does not qualify for the safe the Joint Conference. The Joint Confer- cal factor in a national security review harbor, and CFIUS has the authority ence then has 5 working days to solicit even if the business itself is entirely ir- to initiate review of the transaction on opinions from the relevant government relevant to any national security issue; its own, even after the transaction has authorities, which should submit writ- and (ii) notwithstanding the CFIUS been concluded. That’s exactly what ten opinions to the Joint Conference process is voluntary, less than 10% of happened in Ralls’s case. within 20 working days. all foreign acquisitions is reviewed, China’s national security review If no concern arises, the Joint and much less deals are blocked, process for acquisition by foreign in- Conference will notify MOFCOM CFIUS may review closed deals uni- vestors may be initiated by any of the in writing within 5 working days. On laterally and retroactively. Addition- following three ways: (i) the foreign in- the contrary, if any relevant authority ally, the fact that the President’s veto is vestor can voluntarily file an application still has any national security concern, not subject to judicial review under the for review with MOFCOM; (ii) the the Joint Conference will initiate a FINSA casts a shadow over the future local MOFCOM will report the trans- special review process, which may take of Ralls lawsuit. action to MOFCOM and mandatorily 60 working days, in order to make a Observations require the foreign investor to file an decision or further submit this deal to application for review with MOFCOM State Council which is not subject to According to 2011 CFIUS An- if national security concerns arise; or any time limit to make a final decision. nual Report, 6 deals initiated by (iii) concerned government authorities, Significance of Ralls Case Chinese investors had been subject industrial associations, competitors and to CFIUS review in 2010, while the upstream and downstream enterprises Most of CFIUS cases relate to U.K., Canada and Japan had 26, 9 and can submit a request to MOFCOM to foreign acquisition of the U.S. “critical 7 deals respectively. It appears that conduct a security review if they believe technology” or “critical infrastructure”, we cannot simply assume that Ralls’s a deal falls within the scope of national such as Huawei’s acquisition of 3Leaf’s acquisition was reviewed and blocked security review. cloud computing technology in 2010 merely because the purchaser was Chi- Procedures and Dubai Ports World’s acquisition of nese, since CFIUS had reviewed more U.S. seaports in 2006. However, the deals initiated by British and Canadian CFIUS review process generally Ralls case is apparently an exception. who are traditional allies of the U.S. starts when the parties to a transaction In March 2012, Ralls acquired However, due to the non-trans- file a voluntary notice with Treasury four Oregon wind farm projects from parency in decision making, recent ac- Department. After Treasury Depart- an U.S. company. For the purpose of tions taken by CFIUS and U.S. Presi- ment decides that the filing is in good this acquisition, Ralls obtained the ap- dent might not be purely interpreted order, it circulates the filing to the proval from the U.S. Federal Aviation as a result of rule of law, especially other CFIUS members to commence Administration and the U.S. Navy against the background that Romney a 30-day review period. After this 30- respectively, though U.S. Navy had and Obama continue arguing over day period, all CFIUS agencies should mentioned that one of the four wind who would be tougher on China im- either approve the proposed deal or farms is in the restricted military air- mediately before a general election. By decide that a 45-day investigation is space. Notably, the Ralls acquisition the way, can you imagine the responses necessary, as any CFIUS agency can was closed without filing with CFIUS. of the U.S. senators and congressmen separately seek a further investigation. Thereafter, in June 2012, CFIUS if MOFCOM or State Council blocks Upon a 45-day investigation requested Ralls to file a voluntary IBM or Boeing from doing such kind period, if any CFIUS agency still has notification. Per this request, Ralls of deal in China? unaddressed concerns, CFIUS will filed with CFIUS, and consequently send a report to the U.S. President received CFIUS’s findings and orders, (Author: lawyer with an inter- who should either permit or block the saying Ralls’s acquisition posed nation- national law firm in Beijing)

47 ase S tudy c Commerce Branch of CCPIT Launches International Trade Accountant Tests By Cui Xiaoling

Management Committee, issued the National Standard GB/T 28158-2011 on the occupational classification and qualification management in the field of international trade, which was made ef- fective on July 1, 2012. The Standard di- vided international trade personnel into four categories - business operations, documents, accounting and translation. It also divides accountants in the field of international trade into four grades – starter accountant, assistant accountant, accountant and senior accountant. With a view to implementing the Standard and training accountants in international trade, the 2012 Seminar on the Training of International Trade Accountant was held on September 20. The seminar was held by the Commerce Branch of China International Trade Promotion Committee (CCPIT), to- gether with the Xiamen Netinnet Edu- cation Science and Technology Limited ince its entry into the WTO in The rapid growth of China’s for- Company. 2001, China’s foreign trade has eign trade as well as the increasingly Present at the seminar were Ren maintained rapid growth of over tense trade relations means higher re- Guiying, deputy director of the Center 20% year on year, hitting $3.6 quirements of the nation’s accountants of Commercial International Exchanges trillion in 2011. And the proportion of in the field of international trade. For and Cooperation in Commerce and SChina in the world trade has increased example, accounting is an important Training of SASAC, Wang Xi, deputy from 4.3% to 10.4%, making it the part in the prevention and defense of director of the Education and Training world’s largest exporter and second larg- anti-dumping cases. Lack of favorable Department of the Commerce Branch est importer. accounting information is the biggest of CCPIT, Dong Xiaobo, Vice Presi- Along with the significant expan- obstacle for Chinese enterprises to win dent of the Chinese Society of Business sion in foreign trade, China has been anti-dumping lawsuits. Besides, unfa- Accounting, Li Yiyang, former director facing a large number of frictions with miliarity with the introduction of ac- of the Adult Continuation Education its trading partners, mainly in the area counting proof puts Chinese companies Office of the Ministry of Education of anti-dumping. Statistics show that at a disadvantage. of China, Jia Chunxia, vice president China was made defendant in 14% the Standards on occupations in of the Business Accounting magazine, world’s anti-dumping cases, the larg- international trade unveiled Zhang Sida, Chairman of Xiamen est rate among all countries. The anti- Netinnet Comapny, Wang Tingting, dumping cases involved almost all cat- In order to enhance the compe- director of the Accounting and Finance egories of China’s export commodities, tence of people working in the field Department of Xiamen Huaxia Voca- and most of the imposed anti-dumping of international trade, the State Ad- tional College, Chen Niandong, deputy tariff rates were high enough to block ministration of Quality Supervision, director of the School of Management the Chinese enterprise from the markets Inspection and Quarantine of China, of Minjiang University, and Kang Rong, they used to have a good share of. and China National Standardization editor of Tsinghua University Press.

48 International trade accountant ternational trade accountants and senior Vocational Skills Competition and tests initiated international trade accountants will be other influential competitions. carried out in compliance with the na- “The company’s major clients With a view to meeting the de- tional standards. It will also cover the are colleges for the moment. Next, we mand of the economic development latest international trade accounting will expand in the market of train- for international trade accountants, practices, such as “anti-dumping” ac- ing schools and institutions,” Zhang the Commerce Branch of CCPIT, in counting. Sida, Chairman of Netinnet told the cooperation with Xiamen Netinnet According to Wang Xi, the ex- reporter. Zhang is very optimistic about Company, established the Interna- amination center will also give full play the future of the company. His confi- tional Trade Accountant Test Center, to CCPIT’s advantage in foreign ex- dence is derived from the strength of and the International Trade Accoun- changes and cooperation, by conducting the company and the corporate culture, tant Training and Test Administra- bilateral mutual recognition of the cer- but also from the huge market. “On the tion Office. tification in international trade account- one hand, the demand for accounting “In Hong Kong, it is often said ing with the United Kingdom, Taiwan talents is huge; on the other, the school ‘accounting is the language of busi- and other foreign financial accounting education is not kept up with the real ness’, meaning that corporate decision institutions, to enhance the interna- needs of the enterprises, giving birth to makers, the management, investors or tional influence of the certifications of a huge market of training. The training bankers must have the basic knowledge the Test. business is not affected by the economic of accounting,” Wang Xi said, “we can As the executive director of the crisis. People are more likely to increase also say that the international trade Test Center and the Training and Ex- input in training in the economic down- accounting is the language of interna- amination Office, Cai Lihuang, Direc- turn,” said Zhang. tional business. People engaged in inter- tor of Education of Xiamen Netinnet, Participants in the seminar dis- national business should have the basic shared her thoughts on the training and cussed ways to enhance the training of knowledge and skills of international testing of international trade accoun- international trade accountants. While trade accounting.” tants, particularly on how to use state- agreeing that with China’s economic “The training and examination of-the-art technology to enhance the and social development, the industries program is authoritative, practical and competence and abilities of accountants. have more urgent demand of interna- international,” Wang Xi told the re- Training of hands-on tional trade professionals, they gave porter. accountants their opinions and advices in the re- The Test includes three categor- gard. ies - the Assistant International Trade When asked about the reason for “At present, vocational school Accountants, International Trade choosing to partner with Xiamen Ne- training is still departed from the real Accountants and Senior International tinnet, Wang Xi said Netinnet is the needs of the companies. A lot of the Trade Accountants, with target appli- leading enterprise in China engaged in graduates in accounting have never cants being college students of account- accounting education software develop- even seen a check. Vocational education ing, international trade and interna- ment, with the largest market share in should be integrated with the industries tional business, professionals engaged the country. It has over 800 undergrad- and businesses, and provide practical in international trade accounting and uate, vocational and vocational institu- training,” said Li Yiyang. He praised financial management, people preparing tion users. More than 3 million students Netinnet’s software as very practical to work in international trade account- have used its software on an accumula- and offering schools an excellent tool of ing and financial management, and tive basis. education. Li stressed that the CCPIT’s those working in places related to inter- The distinctive features of Net- training and examination program must national trade, such as export-oriented innet software is high-quality simula- cover the most advanced accounting manufacturing enterprises, import and tion and practicality. It simulate in three knowledge and practice. export trading companies, trade promo- dimensions the real working environ- Wang Tingting, expressed her tion agencies and banks involved in the ment, business processes and accounting hope that the exam training office international settlement. documents. “This ensures that our test should integrate online software and of- Training and examinations of as- is not just an examination, but stresses fline materials, enhance the practicality sistant international trade accountant practice and application,” Wang Xi told and operability of the textbooks, so as includes two subjects - the practice of the reporter. to ensure that students obtain hands-on international trade and the practice of In addition, Netinnet has devel- knowledge and skills after getting the international trade accounting, which oped advanced cloud learning platform. certification. involve not only the traditional settle- Students do not need to load the soft- Jia Chunxia and Chen Niandong ment of international trade, export tax ware, and can learn accounting online both suggested that real corporate cases rebates, but also content on SMEs’ through a browser. No operating costs should be included in the training, in overseas expansion capital, the shift will be incurred. Netinnet has been order to enhance the students’ ability from turnover tax to value-added tax, appointed platform provider for the ac- in executive judgment and decision- etc. Training and examinations of in- counting skills segment of the National making.

49 ASIA-PACIFIC

More Uncertainties to the Sino-Japanese Economy By Hu Wenxiu egional T r ade & I nves t men R

n September 11, the Japanese government an- the Ministry of Commerce said that Japan’s illegal “island nounced its intention to “purchase” the Diaoyu purchase” farce will undoubtedly impair the Sino-Japanese Islands so as to implement the so-called “na- ties. As the Diaoyu Islands disputes keep escalating, the bilat- tionalization”. Sino-Japanese relations were once eral trade between Japan and China ranging from tourism to depicted as “remote politics yet close economic ties”, now the Japanese household appliances and autos has been negatively JapaneseO government’s move has been considered ‘rash’ by affected during this period. some observers and has allegedly impacted every and each From January to July, Japan welcomed a large number domain of the bilateral economic trade between the two coun- of 1.19 million Chinese tourists, a considerable consump- tries. However, statistics recently published by the General tion base for the Japanese tourism. Over 60,000 round-trip Administration of Customs shows that in September the Sino- tickets have been cancelled by Chinese people, according Japanese trade volume totaled USD 30.084 billion, down 4% to statistics from Japan’s two major airlines. During the year-on-year, while up 8% month-on-month. Many experts “golden holiday” of the Chinese National Day, approxi- regard that the import & export commodities delivered in mately 100,000 Chinese tourists canceled travel plans to September were from orders earlier, and the Sino-Japanese Japan, which significantly hit the Japanese tourism, said the geopolitics factors have not yet exerted impact, which may re- Japanese TV station TBS citing statistics from the Japanese veal in the fourth quarter. Ministry of Land, Infrastructure, Transport and Tour- Many fields are impacted by the so-called ism, according to the Japanese official statistics. The soured purchase of Diaoyu Islands Sino-Japanese relations will wield impact on the Japanese tourism and its commercial effect has been likened to the In a recent conference, Shen Danyang, spokesman from violent Japanese earthquake in 2011. The Japanese brands are leading the household appliance sector. However, the ever escalation of the Diaoyu Islands disputes has substantially dragged down the sales volume of the Japanese household appliance brands since August. In Gome and Sun- ing stores, Japanese color TV brands such as Sharp, Sony, Panasonic and Toshiba slumped sharply in sales ranking, Nanfang Daily re- ported on August 28. Suning’s statistics in August shows that in its stores, the Japanese color TV market has been nibbled up by the Korean brands as well as the home-grown brands represented by TCL and Skyworth. Moreover, Panasonic and Toshiba have been forced out of the top 10 on the sales list. The Diaoyu Islands disputes hurt the domestic consumers and thus the sales of the Japanese household appliance brands are affect- ed; in the mean time, what cannot be ignored is that the Japanese brands lack innovation and

52 ASIA-PACIFIC their marketing approaches are quite conserva- economic trade, a new risk will be posed to tive, said Lu Renbo, research specialist in the the global economy. The whole world cannot household appliance sector. afford the consequences incurred by pro- As for the auto market, the China As- longed Sino-Japanese disputes, said Christine sociation of Automobile Manufacturers pub- Lagarde, head of IMF. lished data on October 10 that in September China still is one of the important the Japanese brand passenger vehicles saw a profit sources for Japanese sales slide of 40.8% in China. Toyota wit- enterprises nessed sales volume of 44,000, a sharp drop of 48.9% year-on-year; Honda’s sales in China The overall economic situation assess- slashed 40.5% to 34,000 with a daily sales ment in September issued by the Japanese production decrease of 76,000 by 35.3%. government was “stagnating recovery”, while “The gloomy sale of Japanese auto October’s assessment is to be “downward brands is attributed on the one hand to the trend”, if so it will be the third time Japan de- worsening Sino-Japanese relations and on the grades its economic assessment during three other hand to the aftermath of the destruc- consecutive months, according to reports by tive Japanese earthquake,” said Cui Dong- Nikkei. In 2011, Japan’s imports from China shu, Deputy Secretary General of the China reached USD 183.4 billion and its exports to Passenger Car Association. In last July and China was worth USD 161.4 billion; Japan’s August, the Japanese auto enterprises can- trade volume to China accounts for a portion celed production vacation due to great sales of 20.6% in its total foreign trade, according As for the auto in China and a high year-on-year base. How- to statistics from JETRO. If Japan fails to market, the China ever, Cui said that in the current Chinese auto make up with China in terms of the island market, the best sellers are the autos sold at disputes, its exports will probably be seriously Association around RMB 100,000, but the Japanese auto influenced and even the real economic growth of Automobile brands are not very competitive in this aspect. objective which was already lowered to 2.2% Manufacturers The impact also begins to show in the in mid July cannot be achieved. published data on economic domains. At the international fi- According to the statistics published nancial conference held in the wake of the fi- recently by the Ministry of Commerce, Japan October 10 that nancial crisis, China always plays a significant invested a total of USD 100 million in China in September the and indispensable role. Vice Minister of Fi- during the first three quarters, achieving a Japanese brand nance Zhu Guangyao and Deputy Governor year-on-year rise of 17%. Some Japanese ex- of the People’s Bank of China Yi Gang will perts remarked that the majority of the Japa- passenger vehicles lead delegations to attend the upcoming 2012 nese enterprises rely on the overseas markets saw a sales slide of autumn annual conference held by IMF and as their important profit source, in particularly 40.8% in China. the World Bank in Tokyo. But the four state- the Chinese market. Many Japanese sectors run banks—Industrial and Commercial Bank like the Japanese electronics sector are reaping of China, Agricultural Bank of China, Bank profits mainly from the Chinese market. As a of China and China Construction Bank all result, once China resorts to economic sanc- determined earlier not to attend this year’s an- tions, the Japanese enterprises will without nual conference. question bear the brunt. Their non-attendance of this year’s Supposing Japan’s Foreign Direct Invest- annual conference held by IMF and the ment (FDI) was not successful in China, the World Bank is apparently related with the Japanese sectors, which are going through deterioration of the Sino-Japanese relations. transition and restructuring, will be con- The Agency France Press attributed this as a fronted with severe challenges to survive, protest against the island disputes. It is note- said Mei Xinyu, researcher from the Chinese worthy that the worsening Sino-Japanese Academy of International Trade and Inter- relations have concerned the global economic national Cooperation under the Ministry of sphere. Statistics from IMF shows that in China. As China is among the few economic 2011 the world’s 2nd and 3rd largest economy powers which possess high economic growth China and Japan registered a GDP of USD and import growth as well as stable macroeco- 7.298 trillion and USD 5.869 trillion respec- nomic stability, sectors or enterprises aiming tively, accounting for around 10.48% and at dominating the global market will neces- 8.43% respectively in the global economy. If sarily go to failure if they cannot manage to the two economic powers China and Japan, nudge into the fast-growing Chinese market. with a total economic portion of nearly 19% At the same time, last year’s destructive earth- in the world’s total, have problematic bilateral quake and the resulted losses in consumer base

53 ASIA-PACIFIC egional T r ade & I nves t men R

and market share have forced many Japanese Cooperation under the Ministry of China. technique- and capital-intensive enterprises The current economic turbulence be- to consider transferring at least part of their tween Japan and China brings uncertainties to production capacity to the overseas markets. their shared economy. China shall uphold two Although they were reluctant to favor the basic principles for handling the Sino-Japanese Chinese market as their production relocation economic and trade ties, of which the first and destination, many enterprises are not able to foremost is that the government is supposed afford being excluded from China and relo- to deal with economic exchanges between the cation there provides important access to a two countries in accordance with the exist- heated investment destination. ing rules, namely the international rules and The current However, Mei also reminded that we contracted duties, and within the scope of the economic should keep a cool head over the recent boy- Chinese laws and policies, said Ma. “Govern- turbulence between cott of Japanese products. Only equipped with mental-level sanction is a double-edged sword, fully-developed advanced manufacturing can only leading to losses at both sides, whereas Japan and China China afford to boycott Japanese products in the market force may avoid mutual hurt,” Ma brings uncertainties some relevant domains without hurting itself. explained, “Bringing the market force into to their shared China must still progress forward in advanced full play is not only an approach for China to manufacturing. assimilate its counterpart but also a soft ap- economy. The straining Sino-Japanese relations proach for self preservation.” As far as Ma is have caused some Japanese enterprises to concerned, localization is crucial to transna- quicken their “de-Sinification” pace by divert- tional investments, which embraces multi- ing the investment and manufacturing sites relations between the transnational companies to some other countries such as the Southeast and the local governments, communities, con- Asian countries, Japanese media reported ear- sumers as well as employees. Once national lier. Japan may reinvest some labor-intensive citizens’ feelings are hurt, consumers’ choice businesses to Southeast Asia, but the Chinese preference will inevitably be affected and the market cannot be completely replaced. Not transnational enterprises will have to spare only because the Chinese market boasts of more cost in treating their relations with the vast land, a full range of infrastructure and local governments and communities. If the abundant human resources, but also because Sino-Japanese relations remain strained, the that the Japanese investments in China usu- Japanese transnational enterprises will face ally involves an entire industrial chain, which a rising cost in investing in China, and their is not easy to be transferred at a large scale, competitiveness will be then blunted with said Ma Yu, Director from the Foreign In- poor operating efficiency; consequently, these vestment Department of the Chinese Acad- Japanese enterprises may put pressure on the emy of International Trade and International Japanese government.

54 ASIA-PACIFIC

ndonesia is targeting to attract more invest- Statistics showed that last year, foreign ment from China to spur its economy, on direct investment (FDI) in Indonesia reached the back of its improving investment envi- $27.39 billion, surpassing the set target. In the

ronment and promising economic potential. first quarter of this year, the FDI soared 32.8 Seeks Indonesia “I call on Chinese entrepreneurs to be far percent. Moreover, Indonesia has $150 billion bolderI in investing in Indonesia, taking into reserve and low inflation rate. account its positive economic outlook match- Earlier this year, Indonesia received in- ing those of BRICS countries,” said Mr. Imron vestment grade rating from two international Cotan, Indonesia Ambassador to China at the agencies for its economy’s soundness and proved Seminar Investment Opportunities in Indonesia resilience. held on Oct. 11 in Beijing. Further, Indonesia, as a member of the “the “The combination of Indonesia’s positive trillion club” due to its total GDP, has a huge GDP growth, improving investment climate, sta- market with its 240 million people. The middle- ble macro-economic policies and political stability, class population is also burgeoning, signifying a has made Indonesia a very attractive destination strong domestic consumption. for foreign investors,” he added. “Therefore, the Indonesia market presents According to Imron Cotan, the Master opportunities for Chinese business wanting to Plan on the Acceleration and Expansion of In- tap into the significant domestic consumption donesia’s Economic Development 2011-2025, of- base,” said Imron Cotan. “Chinese products are ficially launched by Indonesian President Susilo widely available in Indonesia. Relocating produc- Bambang Yudhoyono in May 2011 has opened tion plants to this market is highly recommend- up more possibilities for Chinese investors to in- able not only in order to lower the cost of produc- vest in the various projects contained therein, in tion, but also to shorten the line of distribution.” for the fields of infrastructure, energy and mining, In order to attract FDI, the Indonesian gov- agribusiness, special economic zone and tourism. ernment has consistently improved its investment

The Master Plan is an economic accelera- climate through policy reform packages covering Investment Chinese tion program aimed to develop the six economic key areas of concern of private investors, such as corridors in Indonesia. The Plan needs around taxes, customs, investment frameworks and the $600 million (RMB 3.8 trillion). financial sector, Imron Cotan said. Indonesian economy, the largest in South- Furthermore, the government offers special east Asia, is maintaining steady growth these economic zones where overseas companies will years. A report by the World Bank said that In- enjoy preferential treatment, ranging from cor- donesia’s economy would remain resilient against porate income and land taxed reduction to non- threats posed by stalling economic recovery in fiscal incentives. Investment over $100 million the United States and Europe. The report fore- will be tax-free for 10 years. casts that Indonesia’s economy will expand to 6.1 Xu Ningning, Executinve Secretary-Gen- percent this year and 6.3 percent next year, ac- eral of China-ASEAN Business Council Chi- cording to Xinhua. nese Secretariat, suggested Chinese enterprises understand more about Indonesia, such as the relative economic policies and industrial plan- ning and the key industries to attract FDI, and enter the country to grasp business opportunities with the preferential policies of China-ASEAN free trade area. According to Xu, China’s trade volume with Indonesia rose 11.9 percent from January through August compared with the same period last year. In the first seven months of this year, investment ZhuBy Zijun from Chinese enterprises amounted to $340 mil- lion, up 341 percent year on year. Now Indonesia is the second largest investment destination for Chinese enterprises in the ASEAN. China is Indonesia’s biggest trading part- ner, with total trade between the two countries Tourists from Beijing and Shanghai in Bali, totaling $60.5 billion last year, the Jakarta Post Indonesia. reported.

55 EUROPE

Beijing, Copenhagen Enhance Co-op on Sustainable Cities By Richard Zhu

“The two cities have boasted enormous potentiality to cooperate in sustainable city planning and construction. By signing the MoU, it will give rise to strong impetus for both sides to carry out practical communication and cooperation in relevant areas, from which citizens of respective city will surely benefit,” Chen added. China is shifting to green economy under the 12th Five-Year Plan. Denmark, as one of the first-movers in the global green growth arena, can benefit commercially from China’s rapid green transition. The collaboration between the two cities will involve Danish and Chinese enterprises. “I believe a more sustainable growth in China can turn out to be an advantage to Danish companies because of the tech- nologies and solutions we have developed in our effort to create a green economy,” Karsten Dybvad, CEO of the Confederation of Danish Industry, was quoted as saying by Xinhua. “While we in Copenhagen can make good use of in- novative Chinese technologies, for instance, electric buses, Chen Gang, Vice Mayor of Beijing, and Frank Jensen, Mayor Copenhagen has shown good results in integrated planning, of Copenhagen, signed a Memorandum of Understanding in where we combine the way the individual building is con- Copenhagen. structed with the energy supply and the infrastructure for transport. It’s good for the environment, the economy and the quality of life,” said Frank Jensen. ith its economic restructuring, Beijing is “Beijing serves as the Chinese political and cultural putting more efforts on sustainable devel- centre as well as the hub for international exchanges. The city opment and enhancing cooperation with has been built over 3000 years and served as the country’s Copenhagen of Denmark, which has its ad- capital over 850 years. Meanwhile, Beijing is also a world- vantages in this sector. renowned historical city with splendid culture and an ex- WRecently, Chen Gang, Vice Mayor of Beijing, and Frank traordinary Olympic city. In recent years, Beijing has been Jensen, Mayor of Copenhagen, signed a Memorandum of Un- committed to industrial reconstructuring and transformation derstanding in Copenhagen. With the memorandum, the two of economic development mode, striving hard to realize sus- cities promise each other a close collaboration on sustainability tainable development of the city,” Chen pointed out. in planning and construction. According to Chen, next year, a number of electric busses The memorandum is the first result of the Sister City from China will be tested in the Copenhagen public transport Agreement between the two capitals, signed in Beijing in June. system. The Chinese supplier has cleverly solved the problem of “It is a great honor for Copenhagen to welcome Vice storing enough energy for a full-length bus, beneficial not only Mayor Chen Gang so soon after our two cities became Sister for the quality of air and noise, but also for the climate. Cities,” said Frank Jensen, adding “There is a great potential And a restructuration of the heating system in Niujie com- in collaboration on planning and construction.” munity in Beijing, carried out by the Danish company Danfoss, “Copenhagen is a city of great importance in Northern resulted in a significant increase on temperature, saving 31.2% Europe and serves as the most developed region in Denmark of the electric power as well as 13.1% of the heat energy. in terms of commerce, emerging manufactural industry, ser- A chairman at Deputy Director General Level from vice industry, and foreign trade. Recently, Copenhagen has each city will be responsible for a working group that will made magnificent progress in practicing the idea of urban meet at least once a year to advance dialogue and coopera- sustainable development and accumulated plenty of experi- tion and involve enterprises from both sides, according to the ences,” said Chen. Denmark Embassy in China.

57 NORTH AMERICA

U.S. Buy American Provisions —Invalid trade protectionism in deeper globalization egional T r ade & I nves t men R By Li Xiaoxue; Xiao Yan

protectionist “Buy American” provision which imposed a general requirement that any public building or public work project funded by the new stimulus package must use only iron, steel and other manufactured goods produced in the United States. Such provision was also seen in the American Jobs Act 2011. Section 4 of the act, with the heading “Buy American — Use of American Iron, Steel and Manufactured Goods”, con- tains a directive that none of the funds made available by the American Jobs Act may be used for “the construction, alteration, maintenance, or repair of a public building or public work unless he United States has been in Buy American provisions all of the iron, steel, and manufactured economic depression since goods used in the project are produced the onslaught of the financial ARRA (American Recovery and in the United States.” crisis in 2008, with jobs as Reinvestment Act of 2009) included a The United States was once the the top concern of the country’s people （

and government. Job creation is also T %） the focus of debate during this Ameri- United States’s monthly unemployment rate can Presidential election. The unem- 12.0 ployment rate has been above 8% since 2009, according to the statistics of U.S. 10.0 Department of Labor. To stimulate 8.0 the economy and increase the employ- ment rate, the White House issued 6.0 a slew of Acts, such as the American Recovery and Reinvestment Act of 4.0 2009 and the American Jobs Act of 2.0 2011. In these acts, were included Buy Americans Provisions, which is a stark 0.0 trade protection measure. This policy is controversial both in the United 2011.11 2010.11 2011.01 2011.07 2011.03 2009.11 2011.05 2011.09

States and outside the country, since it 2012.01 2010.01 2012.07 2010.07 2012.03 2010.03 2012.05 2010.05 2012.09 2010.09 2009.01 2009.07 2009.03 2009.05 is said to be counterproductive in job 2009.09 creation. Source: United States Department of Labor, Bureau of Labor

58 NORTH AMERICA

firm supporter and executor for free trade. The members, on February 3, 2009, President painful lesson learned by the Americans from the Obama stated that the Buy American Provisions Smoot-Hawley Tariff of 1930, was that a rush were “a mistake” as they would send a protec- of “beggar-thy-neighbor” policies would hurt tionist message to the world and risk a trade the interests of all trade members finally. The war. As a result, he wanted “to see what kind of U.S. was one the most important proponents of language we can work on this issue.” On Feb- GATT. After the original Buy American Provi- ruary 16, 2010, the United States and Canada sion in the 1930s, the U.S. made similar provi- agreed on exempting Canadian companies from sion in 1980s only in a limited public fields and Buy American provisions in ARRA which limited contract volumes. However, after fifty would have hurt the Canadian economy. There years of supporting free trade and globalization, are some exceptions for the Section Four of the it seems that the U.S. is turning its trade policy Jobs Act, which states that if using all-American from free trade to protectionism. products increases the cost of the project by Implications of the provisions more than 25 per cent, the requirement will be waived. So too if the goods needed for the proj- This turn would not benefit the economic ect aren’t manufactured or available in the U.S. growth or increase jobs. A policy brief from the Similar provisions in the past Peterson Institute for International Economics, a Washington-based think tank, concludes that A review of American trade history shows The effect of the Buy American provisions would violate US that Buy American Provision is the child of the trade obligations and damage the US reputation, economy depression and happened after almost the provisions with very little impact on US jobs. every recession in the United States’ economy. is that jobs The effect of the provisions is that jobs would As far back as in the 1930s, together with would be be lost across the entire manufacturing sector while the Smoot-Hawley Tariff of 1930, the Buy lost across only a small number of jobs are gained in iron and American Act of 1933 signed by President steel and a few other industries. Hoover in his last days in office, required the the entire Gary Clyde Hufbauer and Jeffery J.Schott United States government to prefer U.S. made manufacturing in a Peterson Institute report calculated the products in its purchases. sector while positive impact on steel industry jobs of the There was similar act in 1980s — the provisions. They estimated that the additional “Buy America Act” which came into effect only a small US steel production fostered by the Buy Ameri- in 1983. It is not to be confused with the one number of jobs can provision will amount to around 0.5 million mentioned above. This one applies only to are gained in metric tons. This in turn translates into a gain mass-transit-related procurements valued over iron and steel in steel industry employment equal to roughly US$100,000 and funded at least in part by 1,000 jobs. In the giant US economy, with a federal grants. By then, the GATT had been and a few other labor force of roughly 140 million people, 1,000 there for over 30 years since 1948. Since the industries. jobs is a very small number. The reason that GATT provides a framework for trade rela- only a very limited amount of jobs were created tions, the multinational trade relationship is, the iron and steel industry is very capital in- couldn’t be destroyed as easily as in the 1930s. tensive, and the industry has been going down The government provisions could not violate not just since the financial crisis but almost 20 GATT or GPA. So the government limited years ago. the provision to specific purchasing depart- The negative job impact of foreign retali- ments and product categories. ation against Buy American provisions could The Buy American provisions in the Re- easily outweigh the positive effect of the mea- covery Act and Jobs Act are a signal that there sures on jobs in the US iron and steel sectors will be more and more reciprocal trade retali- and other relative industries. ations in the future, especially in the back- In response to the Buy American mea- ground that multinational trade system met a sures, other countries had mapped out their lot of difficulties in the Doha Round and the own echo and retaliation strategies, particularly world economy is in a recession. Canada and the European Union. European Commission trade spokesman Peter Power told (Authors: Li Xiaoxue, Doctoral Stu- journalists in Brussels that the United States dent of China Institute for WTO Studies, will not get away easily with expanding “Buy University of International Business and American” protectionist measures as part of its Economics; Xiao Yan, Associate Profes- economic rescue plan. sor with Central South University of For- After strong opposition from the trade estry and Technology)

59 LATIN AMERICA

China, Latin America

to Diversify Co-op By Cui Xiaoling

egional T r ade & I nves t men the two economies is about commodi-

R ties, mostly raw materials and agricultural products. China mainly import oil, iron ores, metals, agricultural products, and food, while exporting electromechani- cal, textile products, toys, and other light industry products. Trade imbalances and unreasonable trade structure have caused frictions from time to tome. In order to offset its trade sur- plus, China has been increasing its in- vestment in Latin America, with di- rect investment reaching $54 trillion in 2011. The bulk of the investment goes to the energy and infrastructure sectors. Most of the projects brought to the summit by Latin American com- panies are infrastructure construction, such as Columbia’s road construction and renovation project, Argentina’s sub- way transformation, wind energy, and solar energy projects, Chile’s highway hina and Latin America, two Dominated by commodities construction and transformation, power of the fastest growing econo- transmission, airport reconstruction mies in the world, are in- China and Latin America trade and tourism real estate construction creasingly important market has grown phenomenally since 2000, projects. and investment sources of each other, reporting an annual expansion rate “We were given the contract reshaping the global economic outlook of 20.5%. It hit $442 trillion in 2011, to design and build Columbia’s G3 C according to Luis Alberto Moreno, to some extent. Coal-fired Power Station at the end However, their cooperation is too President of the Inter-American De- of 2010, the first of its kind that Chi- much reliant on commodities and raw velopment Bank. China takes 21% nese companies have ever undertaken materials of low added value. And that of the imports and exports of Latin in the country. With a contract value pattern proves to be unsustainable, es- America, third only to North America of 1.5 billion yuan, the Station cov- pecially amidst the ongoing economic and Europe. ers an area of 68.5 hectares, with downturn. “The need from China for raw ma- an installed capacity of 185 mw,” In order to find ways for trade and terials, food and energy has stimulated Li Yanfei, general manager of the investment between the two economies the development of Latin America to a Overseas Engineering Company of to develop sustainably, thousands of in- great extent, which explains why Latin China United Engineering Corpora- dustrialists, government officials, people America has shown good resilience in tion, told China’s Foreign Trade. “This with chambers and trade promotion the face of the economic crisis,” said proves the progress Chinese com- organizations, gathered in Hangzhou Osvalso Rosales, Chief of Internation- panies have made in power station China from October 16 to 19, to partici- al Trade and Integration Division of design, management, equipment and pate in the Sixth China - Latin Ameri- the Economic Commission for Latin construction. In order to better fit can Business Summit. They were eyeing America and the Caribbean of the into the local environment, we local- diversification and high added value United Nations. ize to a great extent and invest in the trade and investment for a solution. However, 90% of the trade between local community.”

60 LATIN AMERICA

Trade between the two sides needs to be transformed away from reliance on commodities and raw materials,to dependence on innovation, industrial upgrade and international business.

To be diversified China’s urbanization drive also aimed at furthering cooperation be- means great opportunities for Latin tween China and the Inter-American Roaring trade between China America. China’s urbanization rate is Development Bank, and supporting and Latin America has witnessed a just over 50%. The urbanization pro- the economic and social development slowdown, against the backdrop of a cess is to be accelerated. Latin Ameri- in Latin America and the Caribbean. gloomy world economy, despite the can corporations can not only provide Besides, three fund management com- fact that the two places have main- urbanization expertise, but also pro- panies were set up for the China - Latin tained strong growth. vide green building materials, renew- American Equity Investment Platform. “This is a sign that trade be- able energy, waste utilization, garbage Since joining the Inter-American tween the two emerging economies disposal products and technology. Development Bank in 2009, China and needs to be restructured and up- Besides, “trade in service between the bank cooperated in trade financing, graded,” said Wan Jifei, President of the two sides account for a low propor- energy infrastructure, investment fund, China Council for the Promotion of tion, compared to that between devel- small loans, personnel exchange and International Trade at the meeting. “It oped nations. There is huge potential other areas, according to Moreno. Chi- should be transformed away from re- for corporations of the two countries to na’s capitals have provided lasting pow- liance on industrial commodities and expand trade in such services as finance, er for the Latin American economy to raw materials with low value added, tourism, culture, software development, grow, and at the same time have made to innovation, industrial upgrade and to name a few,” said Abulaiti Abudur- it convenient for Chinese enterprises to multinational business.” exiti, Vice Chairman of the National invest in infrastructure projects there. His view was echoed by Alicia Committee of the China People’s Po- As to the RMB internationaliza- Barcena, Executive Secretary of the litical Consultative Conference. tion in Latin America, Moreno said Economic Commission for Latin “Giving priority to Asian na- that China has already signed or imple- America and the Caribbean of the tions in developing strategic relations, mented currency swap agreements with United Nations. She said that the has become the consensus of Latin Argentina, Brazil and other nations. rapid development of Chinese econo- American nations,” said Barcena. She He believes, as China continues to be my has brought the longest period of believes that by 2017, the economy of the world’s economic engine and Latin economic growth in Latin America Southern nations would outweigh that America better recognizes RMB, the and has helped lift a great number of of the countries in the North. And yuan is expected to gradually partici- people out of poverty. But amidst the Latin America and China will be the pate in the bilateral trade settlement. new economic climate, the two sides most dynamic places. That is why such The Sixth China - Latin Ameri- need to have a long-term vision, and organizations as the Latin America can Business Summit was held by transfer the fruits of the last economic and Caribbean States Community, China Council for the Promotion cycle into sustainable driving forces and Latin America Pacific Alliance, of International Trade, the People’s based on knowledge and technology. are increasingly drawn to China. Bank of China, Hangzhou Municipal China’s rapidly expanding do- Stronger financial support People’s Government and the Inter- mestic demand provides immense American Development Bank. Over opportunities for Latin America to With trade and investment between 1,000 people from 260 enterprises of expand exports. “The Chinese people, the two sides going from strength to 30 Latin American countries and 500- who are getting wealthier, have more strength, China and Latin America has plus Chinese enterprises, attended diversified demand for goods, services gone further in the financial cooperation. the meeting. About 1,500 separate and brand name products. China’s im- During the summit, the People’s meetings were held between the en- ports will hit $1 trillion in five years,” Bank of China, which is the central terprises, resulting in a total contract said Wan Jifei. “I hope Latin Ameri- bank of the country, and the Inter- value of $10 million, and hundreds of can companies enter the Chinese mar- American Development Bank signed million dollars in intentional contract ket in an early time and bring more a memorandum of understanding on value. The past five summits were held food, wine and other products suited establishing a China, Latin America in Santiago, China Harbin, Bogota, to the taste of the Chinese.” and the Caribbean co-finance fund, China Chengdu, and Lima.

61 AFRICA

Pay in, then Save in By Lo Wing

* Africa has seen increased trade settlement in the CNY, with Nigeria joining the market in January 2011. egional T r ade & I nves t men * Africa meets the criteria for CNY trade-settlement; above-trend growth is forecast.

R * African trades settled in the CNY should reach USD 15bn by 2015; South Africa, Nigeria are key markets. * As CNY internationalization continues, Africa has the potential to pioneer CNY ‘reserve-ification’.

hina is exerting its influence US dollar (USD), the euro (EUR), CNH. Corporates in Nigeria will also on African markets, starting British pound (GBP) and Japanese yen be able to buy the CNH from Nigerian with rapidly expanding bilat- (JPY), to become one of the tradable banks, including Standard Chartered, eral trade, gradually extend- currencies in Nigeria’s International for trade-settlement purposes, making ing to capital flows, both in the form Foreign Exchange Market (IFEM) Nigeria the first African country with a ofC foreign direct investment (FDI) and starting from 1 January 2011. The CNY managed currency to allow this. infrastructure financing. This provides is also regarded as a trade-settlement Why Africa? an opportunity for the Chinese yuan currency, so Nigerian corporates are (CNY) to play a more significant role in now allowed to purchase USD with Close trade links with China African markets. Paying for goods and trade documents invoiced in the CNY. While the trade figure may suggest services in the CNY may be an impor- This means that Nigerian banks that a positive outlook, in reality, the growth tant first step. have access to the CNH market in potential of CNY trade settlement may CNY trade settlement is taking Hong Kong are able to quote the Nige- be undermined by the unbalanced nature place in Africa rian naira (NGN) directly against the of China-Africa trade itself – consistently With the cross-border trade settle- Chart 1: Commodities dominate China’s African imports ment scheme in Hong Kong and the USD bn new CNH market, CNY trade settle- ment is already taking place on the African continent. The first CNY trade settlement transaction in Africa debuted in South Africa in January 2010. Since then, banks in other African countries such as Kenya, Uganda and Zambia have joined the market and started of- fering CNY trade settlement services in their respective markets. Although the market is still at an exploratory stage and the transaction flows remain negligible, mainly limited to small and medium-sized enterprises (SMEs), this new market has already aroused interest among business communities in Africa. In December 2010, the Central Bank of Nigeria (CBN) released a cir- cular, announcing that the CNY would join 13 other currencies, including the Sources: UNCTAD, Standard Chartered Research

62 AFRICA

Chart 2: Ex-commodity trade is highly unbalanced liberalise their FX markets will be an im- China-Africa trade USD bn portant factor in determining the pace of CNY development in Africa. Table 1 shows that, after Nigeria’s recent advancement, the majority of African markets with significant trade volumes with China are ready to use the CNY as a trade settlement currency — CNH nostro account arrangement is allowed and CNY-denominated trade documents are eligible for FX purchase. CNH liquidity providers Hong Kong is currently the only designated offshore CNY financial centre to help facilitate the interna- tionalisation of the CNY. Any CNY trade settlement transactions in other markets beyond Hong Kong entail a nostro account arrangement with one of the participating banks in Hong Kong. Therefore, CNH liquidity providers are Sources: China Customs, Standard Chartered Research limited to the following two types: • Banks in Africa which have a more than 90% of China’s total imports CNH, allowing corporates in those Af- nostro account arrangement with par- from Africa are primary products. In rican countries to have access to CNH ticipating banks in Hong Kong 2009, 64% was fuel trade and 24% was liquidity. The decision by the CBN to • International banks which have ores and metals. Historically, the USD include the CNY in its list of tradable a presence in African markets and, are has been the dominant pricing currency currencies is a benchmark move in Af- at the same time participating banks in in the international commodity markets, rican markets, not only because it opens Hong Kong, such as Standard Char- especially for oil and metal trades, which up the access to the CNH in Nigeria, tered Bank are less likely to shift to being denominat- but also, it provides a model for other With the number of both types of ed in the CNY in the near future. When African countries with a managed cur- CNH liquidity providers currently lim- commodities are excluded, Africa runs a rency regime (such as Angola and Ethi- ited, rapid expansion of CNY offshore huge trade deficit with China, amounting opia), to mull the feasibility of access to trading in Africa may not materialise just to USD 55.4bn in 2010. the CNH in their markets. yet. However, given the market potential, China-Africa trades are cur- Africa’s CNH market much more scale is likely in the future. rently settled in a third currency CNH users for trade settle- Currently, the USD and EUR are The development of Africa’s CNH ment purposes the major international trade settlement market depends greatly on the dynam- Since commodity trades are un- currencies in African economies. Using ics of the market players. Looking at likely to be settled in the CNY in the a third currency for trade settlement the trade components and the trade near future, what is left of China-Africa subjects both ends to additional foreign- settlement arrangement, the key mar- trade is largely one-sided, with Africa exchange risk and transaction costs. In ket players below will determine the importing manufactured goods from the case of China-Africa trade, given scale and growth prospects of Africa’s China. Therefore, the most plausible us- the increasing significance of China’s CNH market. Although rapid growth ers of the CNY for trade settlements are trade across African countries, the CNY may not be realised in the very near the exporters of manufactured goods in should be able to act as the common term, medium-term prospects are still China and their counterparts in Africa. trade settlement currencies in Africa considered favourable. Both sides will have different incentives and help eliminate FX risks. African central banks to settle trade in the CNY: The majority of African cur- Although many African markets Exporters in China — They have rencies are traded offshore have liberalised their current accounts, a natural desire to settle trades in the Prior to the CBN’s announcement capital-account restrictions persist in CNY to eliminate FX risk and minimise allowing the CNY to become tradeable some markets. Unlike Chinese FX con- transaction costs. Currently, exporters in Nigeria’s domestic FX market, most trols, which aim to curb CNY apprecia- in China can either receive their export major African currencies, as shown on tion pressure, many African central banks proceeds in Hong Kong by opening a Table 1, had already been traded off- impose FX regulations in a bid to prevent CNH account, or register to become shore; i.e. two-way cross-rate quotes are their currencies’ depreciation. Therefore, a Mainland Designated Enterprise feasible with the freely traded offshore African central banks’ willingness to (MDEs), entitled to make use of the

63 AFRICA

Table 1: Key African currencies and their policy openness to CNY trade settlement egional T r ade & I nves t men R

Sources: African central banks, China Customs, Standard Chartered Research

cross-border trade settlement quota Potential market depth which is China’s top trading partner through Hong Kong to receive proceeds in Africa, is only expected to take 5% in China. This arrangement may limit We expect China’s imports settled of the total CNY trade settlement rapid expansion in CNY trade settle- in the CNY to expand to more than 8% market, because its trade with China ment for general China-Africa trade at in 2011 and 12% in 2012, reaching 22% is dominated by oil. the present stage. by 2015. Assuming that CNY trade set- Africa can be a possible market Importers in Africa — Using the tlement for Africa will keep pace with for CNY regionalisation CNY as a trade settlement currency still this global average, while taking into subjects them to FX risk, especially w consideration the FX controls and de- In the long run, the potential use hen the CNY is appreciating. However, velopment of banking infrastructure, we of the CNY in Africa is not only limited some of this risk can probably be offset expect CNY trade settlement volume to trade settlement of general exports. by the benefit derived from better nego- in Africa to reach at least USD 15bn Two additional uses are possible: tiation with Chinese exporters in terms by 2015 — 8% of total Sub-Saharan The CNY as a commodity-pricing of invoiced amounts, while Chinese Africa’s China-Africa trade and 2% of currency — For various historical rea- exporters enjoy the benefits of receiving CNY trade-settlement volume. sons, the USD has long been the major export proceeds in the CNY. The wid- CNY trade settlement in Africa commodity-pricing currency. How- ening product ranges in CNH markets may contrast with other regions, where ever, China’s increasing importance in could help Africa’s importers hedge China’s imports are more likely to be global commodity trade makes pos- their underlying FX risk. settled in the CNY than its exports, sible a gradual shift of pricing com- The trade flows may require more given expectations of CNY appreciation. modities into the CNY. As the report thought, as they may cause offshore China’s exports to Africa will account suggests, commodities not linked to CNH to f low back into the onshore for more than 80% of total China-Africa benchmarks traded on international market, which goes against the intent of trade settled in the CNY and its imports exchanges are likely to be the first to the Chinese government to encourage will take the remaining 20%, mainly move away from the USD, such as iron CNY outflows. However, we believe owing to the dominance of commodities ore, metallurgical coal and steel. This this will be of little concern to the Peo- in China’s imports from Africa. type of trade has already happened ple’s Bank of China (PBoC) at present: In terms of regional distribu- between China and Africa: the first- first because the proportion of African tion, South Africa will be the key ever CNY trade settlement in Africa trade in terms of China’s total trade market for CNY trade-settlement was an intra-company import of steel is still small (less than 5% in 2009); business, accounting for 44% of total from South Africa by a Chinese state- second, the Chinese government is cur- market share, followed by Nigeria owned steel company. rently likely to encourage more trades with 19%. This is driven by economic Base metals are likely to be next, settled in the CNY in order to increase size, which generates strong demand especially those commodity trades domi- its use in international markets. for capital goods from China. Angola, nated by China, such as copper. A higher

64 AFRICA

Chart 3: CNY trade settlement to increase in Africa, mainly with China’s rates to invest abroad in the CNY. Also, exports to Africa at the third BRICS Summit (comprising China-Africa trade settled in the CNY, USD bn Brazil, Russia, India, China and new joiner South Africa) in April 2011, the five countries signed an agreement to use their own currencies to issue credit or grants to each other. These possible developments are in line with China’s intention to increase CNY circulation in the international markets. At the same time, it constitutes the significant potential of the CNY in Africa. Africa is the third-largest beneficiary of Chi- na’s FDI after Asia and Latin America, with FDI stock reaching USD 9.3bn in 2009. China has also provided Africa with foreign aid in form of grants, in- terest-free loans and concessional loans, especially for infrastructure financ- ing. According to the White Paper on China Foreign Aid Policy released by Sources: Standard Chartered Research the Chinese government in May 2011, nearly 46% of total China foreign aid in 2009 was channelled to Africa. The Chart 4: Trajectory of trade-settlement potential market share in 2015 CNY could be a powerful tool as China Percentage of China-Africa trade settled in the CNY exerts its economic influence in Africa from trade flow to capital flow. CNY reserve-ification could first take place in Africa Commodity export proceeds and foreign aid are the key funding sources of foreign-exchange reserves for many African countries — Angola and Ni- geria build their reserves through oil export proceeds, while Uganda and Tanzania still rely on foreign grants to keep a balance-of-payments surplus. Receiving these two capital f lows in the CNY will drive a need for African countries to keep part of their reserves in CNY-denominated assets. In June 2010, the CBN’s Director of Reserves Management Department, Lamido Yuguda, mentioned that the CBN is considering holding a part of its reserves in the CNY to preserve the value of the nation’s external reserves, although this Sources: Standard Chartered Research may not be the case yet. As the CNY internationalisation process continues, with more opening-up of China’s capital level of CNY convertibility is necessary currency of capital f low — Another account and a higher degree of CNY to achieve this. Should this shift in the potential way that the CNY could play convertibility (currently a key constraint), commodity-pricing currency take place, a bigger role in Africa is to act as the Africa has the potential use the CNY to it will give a strong boost to CNY circu- denomination currency of capital flows, build up its reserves to ultimately achieve lation in Africa, especially in the major such as FDI and foreign aid. We think CNY ‘reserve-ification’. ore and metal exporting markets, such as this could be realised in the near future. South Africa and Zambia. Since January 2011, the Chinese gov- (Author: Economist from The CNY as a denomination ernment has allowed Chinese corpo- Standard Chartered Bank)

65 Regional Trade & Investment outlet of the Pearl River and in the geometric center of the the of center geometric the the at in and located River is Pearl it the of outlet kilometers, square 803 of area planned services. management social in innovation for zone pilot a and hub, service hensive compre world-class a industries, modern service-based tive produc of highland a become to set is It urbanization. new of model a and area to the of circle is living it quality a into Macau, built be and Kong Hong connecting and mainland Macao special and Kong Hong comprehensive of Guangdong, zone between cooperation demonstration a be to positioned 10, Oct. on held briefing news a influence. and competitiveness China’sen international hance and openness economic of and pattern new Kong a Hong shape of Macao, prosperity and stability long-term tate facili Delta, River Pearl the of transformation the promote Guangzhou following other important plans for the province. for the plans important other following central the development,socioeconomicGuangdong’s by for government made plan strategic another marks Guangzhou. plan of The District New Nansha of Development the N District New Nansha Pilot Zone State-level 66 The district has solid foundation for the plan. With a With plan. the for foundation solid has district The Zhu to According The development plan for plan development The for Plan the approved Council State the September, In administrative operation with nearby Hong Kong and Macau. Hongand Kong nearby with operation co strengthen to Province, Guangdong of capital South in built be to is zone, pilot State-level new a District, New ansha LOCAL regions. Based on Guangzhou and the the and Guangzhou on Based regions. Xiaodan, the governor the district is strategically strategically is district the China’s 2012-25 of Guangzhou, the the Guangzhou, period Guangdong at Guangdong aims to aims - - - - - port such moves, said Fan Hengshan, a senior official with with Commission. Reform and Development official National the senior a Hengshan, Fan said moves, such port to sup policies corresponding and formulate will government the growth, drive to mechanisms creative with experiment raised. be will personnel senior skilled highly and personnel, managers R&D of ratio about The GDP. for total account its of will 25% Service boosted. influence and ness competitive international its with enhanced, further be will environment living the and center.People’s vation well-being of inno highland scientific world-class a and industrial services an producer advanced into built be will It system. tural infrastruc advanced more a with development, cioeconomic formed. be will Macau Hongand dong, Kong Guang between cooperation for zone demonstration the of of standard framework basic A improved. continuously be living will people the the while Macau, and Kong Hong with fostered be will cooperation Closer 43%. reaching rate cov erage green the with optimized, further be will environment ecological its while strengthened, be will district new the of function service comprehensive the 2015, by plan, the Under (CEPA). Macau and Kong Hong Guangdong, between Agreement Partnership nomic Eco Closer of implementation the for zone pilot a is district high-end Moreover,and the place. in put been have projects demonstration platforms research technological national of group a 1980s, busi the in close cooperation Since them. with established ties ness has district the similarity, linguistic Urban Livable 2011. United Nations in World” the by of the Districts Most “the of award golden the granted district was the environment, living picturesque a With meters. square 38 to amounted has space park green per-capita while percent, 41 reached has coverage green The resources. logical of consisting highways. and network railways aviation, transportation, water transportation full-fledged a boasts It openness. and development economic for foundation the consolidating further thus capacity, industrial overall strong miles nautical Macau. 38 from miles 41 Hongand Kong nautical from is it River, Pearl the of sides both clus on city ters the of linkage crucial a As Delta. River Pearl Pan to be Built in The region will be granted certain rights to pilot and and pilot to rights certain granted be will region The so its in breakthroughs have will district the 2025, By 2015-25. and 2012-15 phases: two covers plan The with Macao and Hong Kong near located Furthermore, eco and endowment natural with is blessed district The up built has district the development, of years With By RichardBy Zhu ------LOCAL

eijing is deepening economic cooperation Beijing has leapt from 9th to 1st place in Economic with Macau, by means of the first trade Clout this year, and also ranks in the top 5 in all fair with the special administrative region. but one of the indicator’s component variables, ac- Beijing, Macau to Amid the sluggish world economy, cording to the 5th edition of Cities of Opportunity, Beijing and Macau have been actively exploring a report released by PwC and the Partnership for Bnew ways of developing exchanges and cooperation. New York City. The economic and cultural exchanges have been At the fair, 16 contracts valued of RMB 2.57 maintaining a steady growth. billion were signed among 32 enterprises, signify- The first Beijing-Macau Trade Fair held in ing great cooperation potential for the two cities. September was a joint effort by the governments The fair was highlighted by the city govern- of Beijing and Macau with the help of industrial ments’ efforts in pushing for the development of and commercial enterprises. Following the Beijing- its competitive industries; Tourism, trade and Hong Kong and Beijing-Taiwan trade fairs, this exhibitions, became the key fields for contracts at fair is positioned to be a strategic cooperation plat- the fair. Relative government departments of the form between Beijing and Macau. Beijing aims to two cities have signed a long-term strategic frame- build a world class city, while Macau eyes the status work. of a world tourism and leisure centre. “Group action” in traditional industries is also The fair is to promote the two cities’ coopera- improving. For a while, real estate and manufactur- tion in service trade, tourism, exhibition, cultural ing have been the focus of the two cities’ coopera- creativity, city management, among others and it tion but with imbalance in the bilateral trade and will meet the demand of the socioeconomic de- investment. However, among the contracts at the Co-op Economic Boost velopment of the two cities, according to Chui Sai fair, there were Macau’s projects of new energy ho- On, Chief Executive of Macau. tel and large commercial plaza in Beijing and also The fair is a major initiative for the two cities Beijing’s investment in new real estate in Macau. to implement the central government’s strategic Another highlight is that further cooperation plan and opens a new chapter for closer ties be- in the emerging industries is on the horizon. Of the tween Beijing and Macau, said Wang Anshun, 16 contracts, cultural creativity projects account for Acting Mayor of Beijing. 13 (81.3 percent of the total). This is in line with The city is building a “People’s Beijing, High- Beijing’s goal of technological and cultural innova- tech Beijing and Green Beijing” and seems to be tion and Macau’s strategic position of moderate abundant in opportunities. In the 2012 rankings, economic diversification. By ZhuBy Zijun

Beijing and Macau signed contracts in tourism and trade.

67 For a Brighter Future — Dr. NG Kai Lun, Chairman of the Board of Smart Group International

By Echo Zhao

r. Ng Kai Lun has built a worldwide business empire since 1989. During his twenty-three years of in- vestment experience, Dr. Ng assumed Dthe responsibility in promoting the cul- tural and economic exchanges between China and other foreign countries, and improving the image of Chinese com- panies and merchants. Bearing a sustainable develop- ment concept in his mind, Dr. Ng not only concentrates on doing business, but also devotes himself to programs for the public’s benefit. Dr. Ng says what he has done, and what he is doing now are all for the next generation. In his view, it is of greater importance to teach them how to succeed than to give them a ready fortune. It is his insightful concepts and perseverant efforts that contribute to his achievements. Brand building: bridging China and the world When referring to Smart Group International, Dr. Ng says he is always trying to make a predominant and powerful brand, with an attractive commercial value. Though his great grandfather went abroad as a railway construction worker long ago in the United State, Dr. Ng has never forgotten his roots in China. With a strong affection for his mother- land, Dr. Ng always says he represents the image of Chinese entrepreneurs wherever he goes around the globe. If misunderstandings about China arise, he would explain patiently about the Chinese culture and endeavored to col- laborate in a friendly way. Dr. Ng hopes foreign companies will regard Smart Group as a qualified Chinese enter-

70 Delivering a Speech Awarded by Mr. Ou with Sun Yat-Sen Overseas Foundation

Knowledge can prise, and believe in its expertise and reputa- education. Due to his personal experience, alter one’s fate, tion. Dr. Ng knows well about the importance “ Having noticed the bottleneck of Chi- of learning, as well as overcoming the dif- while education nese enterprises’ development, Dr. Ng began ficulties encountered in learning abroad. By can change the to make efforts to bridge China and the world helping others to get qualifications without future of the together by enhancing mutual understand- going overseas, Dr. Ng gradually proved nation. ings. his ideas that education was the aim of do- —Dr. Ng Kai Lun Six years ago, Dr. Ng started his invest- ing business; in the meantime, it was also a ment career in the mainland. Having rich great opportunity to cultivate talents. investments and management experiences in “An outlet is determined by the mind,” foreign markets such as within Hong Kong Dr. Ng said, “the best way to change the and Canada, Dr. Ng introduced modern man- mind is to learn from the best.” His goal is agement models and advanced ideas into the to get people inspired about creative busi- ” market of mainland China. When some Chi- ness ideas, new concepts, strategies and nese companies were making profits by reduc- models by means of absorbing from his ing the cost, Dr. Ng taught his partners how speeches and watching video on courses to build a reliable brand by improving quality given by related experts. In his opinion, it is and marketing efficiency. One of the keys to of great significance to pass on experiences his success is his professional faculty team from generation to generation. with international backgrounds. These people As his business grew, Dr. Ng invested know well about what Chinese companies most of the money to set up educational lack and need; therefore, they can provide per- foundations, including Smart Group Cul- sonalized suggestions to help them in brand ture and Education Foundation, PDI building, both financially and strategically. Institute for Entrepreneurs Society, Smart In Dr. Ng’s mind, understanding is the SOHO Multi-Cultural Business Gen- very basis of cooperation. His mission is to eral Association and his other businesses. build high quality Chinese brands that oper- “The aim of doing business is not to make ate with integrity around the world. money unceasingly, but to foster younger Education: the aim, as well as the entrepreneurs,” Dr. Ng said. In the courses approach and activities provided by the foundation, successful businessmen would share their “Knowledge can alter one’s fate, while experiences in hopes to inspire other entre- education can change the future of the na- preneurs. tion,” Dr. Ng told the reporter. What’s more, education is an invest- When Smart Group International was ment with high returns because talents are incorporated in Hong Kong in 1989, it was the most important factors for the success a small consulting company specialized in of an enterprise. Keeping these beliefs in his

71 mind, Dr. Ng has done a lot in educa- so on. This reflected the exploration of tions such as the Red Cross in Britain tional investment during the past years. e-commerce several years ago. In addi- and the Lions Club International. Technological media: efforts to tion, an interactive channel was created When becoming a successful entrepre- facilitate people’s life for foreigners, aiming to provide a bet- neur, Dr. Ng dedicates himself in pay- ter understanding of China. ing back the society. By the founding When most Chinese people were To relieve people’s pressure from of China Capital Social Fund Union making a living by traditional trade living and working, Dr. Ng and his with branches concentrating on differ- patterns, Dr. Ng introduced computers team had worked together to create ent areas, Dr. Ng is trying to promote to enterprises twenty years ago. When an innovative music product, “Nine- the concept of fund culture in order to people were benefiting from the inter- Dimension Music”, which aimed to influence more and more people. net, Dr. Ng began to explore the deeper resonate with blood so as to refresh and When talking about future plans, integration of traditional lifestyles and keep balance of human bodies. As a re- Dr. Ng said, he is hoping to build an modern technology. When people were sult of stimulating, the potentials of the advanced TV network in rural areas, enjoying the results of modernization brain could be fully released. where, in his view, is the origin and and globalization, Dr. Ng started to “Business is realized on the basis essence of traditional Chinese culture. study approaches to relieve the pressure. of endless creative ideas,” Dr. Ng said. Through the network, people can get Dr. Ng’s unique insights and accurate Technology provides various possibili- related information about the commu- judgments along with constant innova- ties for innovation, and Dr. Ng will nity in which they are living, and gain tion have facilitated people’s lives with keep excavating the potentials to make important knowledge on the aspects of modern technology. everyday life more convenient. agriculture, education, entertainment The first thing he did when he Charity: the destination, also the and so on. came to the mainland China six years starting point What’s more, he wants to demon- ago was to cooperate with ChinaCnTV. strate the splendid culture by making com. With his advanced experience in “The purpose of business is to a movie series named “Red Earth”, as developed countries, Dr. Ng, together make money, and the purpose of mak- well as to attract people’s attention to with his team, began to construct a ing money is to foster the next genera- the demands and problems in the devel- “triple play” and tried to unlock the full tion.” Aside from the title of “angel opment of these rural areas. By doing potential of network convergence. investor”, Dr. Ng is also a philanthro- so, Dr. Ng hopes to reserve and pro- Later, Dr. Ng began to develop pist with concerns for environmental mote such original ecology of Chinese comprehensive channels related to protection, health care, education, etc. culture, at the same time, he wishes to people’s daily lives, such as shopping, Since a teenager, Dr. Ng has make a contribution to improve the liv- education, entertainment, finance and served in multiple charitable organiza- ing conditions of people in rural areas. A brighter future for both the company and the world During the past six years in main- land China, Smart Group International has engaged in the investment of edu- cation, technological media, environ- mental protection and the silver indus- try, forming an effective and influential service platform with organic systems. In the next few years, Smart Group International will continue to make ef- forts in these areas with a total budget of 3 billion RMB. Maybe some people are not look- ing forward to further investment in such a sluggish economic environment. However, the situation is totally dif- ferent in Dr. Ng’s eyes. He said with a long-term developmental plan, it is the proper time for investment. It is such unique insights that make Smart Group Sixth Anniversary of Smart Group International in China International outstanding and Dr. Ng successful.

72

伍启伦博士在 华资国际集团 在华投资六周 年庆典上致辞 为了明天，为了下一代 —专访伍启伦博士，美国华资国际集团董事局主席

本刊记者 赵炜

1989年，伍启伦博士创业伊始。时至今日， 直在努力打造一个拥有实力和商业吸引力的国 他 已 成 功 勾 勒 出 一 个 世 界 级 的 商 业 版 图 。在 过 际品牌。 去23年的投资经历中，伍启伦博士一直以促进 早年间，他的曾祖父作为修筑铁路的工人 国内外经济和文化交流为己任，以树立华企和 移居美国，如今时代巨变，伍启伦却从未忘记自 知识可以改变一 华商的良好形象为目标。 己的根在中国。怀着对祖国深深的热爱，伍启伦 个 人 的 命 运 ，教育 “ 可 持 续 发 展 ，是 伍 启 伦 的 商 业 准 则 。为 此 ， 总是说，不管走到世界的哪个角落，他始终是 可以改变整个民 他不仅投身商海，而且积极献身公益。伍启伦 个代表着中国形象的华商。如果在商业交流中 族的将来。 博士说，他做这一切都是为了下一代的年轻人。 遇到文化冲突，他会耐心地向别人介绍和解释 —伍启伦 在他看来，授人以鱼，不如授人以渔，传授给 中国的文化和传统，希望华资展现在国外合作 年轻人创造财富的经验，远比把现成的财富赠 伙伴面前的是华企的专业与实力。 予他们重要得多。正是这种高瞻远瞩和执着坚 为了帮助更多的中国企业打破瓶颈，真正 ” 持 ，让 伍 启 伦 逐 步 走 向 成 功 。 实现“走出去”，伍启伦开始尝试促进国际间交 流 ，增 强 国 内 外 了 解 。 打造品牌：让世界了解中国， 六 年 前 ，伍 启 伦 博 士 首 次 来 大 陆 投 资 。拥 让中国走向世界 有 多 年 在 海 外 市 场 投 资 的 成 功 经 验 ，伍 启 伦 试 谈到华资的发展轨迹，伍启伦博士说他一 图把现代的管理模式和先进的商业理念引进大

73 陆。当许多本土企业在通过降低成本的方式来 实现盈利时，伍启伦告诉他的合作伙伴，如何通 过提高质量和有效营销来打造可信赖的品牌。 他的成功还有一个秘密武器，那就是拥有国际 化背景的优秀团队。这些来自世界各地的精英 有 开 阔 的 视 野 和 丰 富 的 经 验 ，他 们 能 及 时 定 位 中国企业“走出去”过程中存在的障碍，进而给 出有针对性的建议，并从金融和策略等多方面 给予支持。 在伍启伦博士看来，互相了解是合作的基 础。在打造高品质高信誉的品牌之路上，他从未 懈怠。

教育投资：是目标，也是手段 “全球华商联联合 总会”向伍启伦 国际企业家专业研究院、华网商联（全球）俱 博 士 颁 发“ 世 界 华 “知识可以改变一个人的命运，教育可以 人慈善事业家领 改变整个民族的将来。”伍启伦博士如是说。 乐部、华网多元文化商业联合会等。伍启伦说： 袖奖” 1989年，从海外学成归来的伍启伦，在香港 “做生意的目的并不是为了一味地赚钱，而是为 成立了一家专注于教育的小公司。在加拿大、美 了培育更多下一代年轻的企业家。”因此在由各 国、英国等各地的求学经历，让他深感教育改变 种教育基金会提供的培训课程和交流活动中， 命运的强大力量，同时也让他下定决心帮助因贫 成 功 的 企 业 家 会 分 享 自 己 的 经 验 ，希 望 以 此 来 困或其他原因而不能出国深造的莘莘学子。通 激励并启发更多的人。 过代理加拿大的知名高校，伍启伦帮学子们实 此 外 ，教 育 也 是 一 种 高 回 报 的 投 资 ，不 仅 可 现了在香港便可学习海外课程，并拿到相应证 以帮助他人，也可以提升自身的软实力，因为人 书的梦想。经过多年的努力，伍启伦更加坚信， 才是企业最核心的竞争力。这样的信仰和理念， 做企业需要终生学习，同时，教育也可以为企业 使得伍启伦做生意时始终重视教育，重视知识 提 供 发 展 的 源 动 力 ，即 优 秀 的 人 才 。 的传递。 “思路决定出路，”伍启伦说，“改变思路 科 技 媒 体 ：让 生 活 更 便 利 的最好方法就是向成功者学习。”为了培养更多 拥有国际化视野的优秀人才，提升国家与企业 二十年前，当大多数人还在通过传统的手 在 国 际 舞 台 上 的 竞 争 力 ，伍 启 伦 组 织 大 批 全 球 段谋生时，伍启伦博士便在企业里引入了尚未大 知名的经济学家与成功企业家，开展各式各样 规 模使 用的电脑；随后，当许多人享受着网络时 做生意的目的并 的研究与培训课程。通过演讲、视频、交流会等 代带来的新奇时，伍启伦开始着手探索如何让 “不 是 为了一 味 地 全方位的教育，他希望人们能够获得先进的管 传统的生活方式更好地与现代科技相结合；当 赚 钱 ，而 是 为 了 培 理知识，提高思考及沟通潜能，因为在他看来， 人们在品尝现代化与国际化带来的巨变时，伍启 育更多下一代年 知识只有代代相传，才能在不同的环境中焕发 伦开始研究如何帮助人们在快节奏的转变中减 轻的企业家。 生生不息的活力。 缓压力。带着独特的视角和敏锐的判断，伍启伦 —伍启伦 随着教育投资规模的扩大，伍启伦投入更 敢为人先，一直在探索如何让科技服务生活。 多的资金和精力建立了多种教育基金会，包括 六年前，华资国际集团来到大陆的第一次 ” 74 亮相，便是在与中国网视合作的项目中。带着在 个国际性社会福利机构，如加中环境保护基金 发达国家投资的专业经验，伍启伦和他的团队 会、全球精英环保能源新科技基金会、中国银 开始倡导三网融合，并努力开发网络融合带来的 发 产 业 基 金 会 等 ，并 在 大 陆 成 立 华 资 中 国 公 益 巨大潜力。除此以外，打造“互联to物联”网服务 事业促进基金联盟，将公益事业以科学有效的 平台，提供“物联网智能化解决方案”，也是整 方式继续推进。 个团队一直以来的奋斗目标。 谈到未来的发展规划，伍启伦将目光转向 随 后 ，伍 启 伦 又 建 立 了 中 国 网 视 商 务 频 道 ， 了中国农村，在他看来，广袤的农村地区蕴含 包含购物、企业培训、影视娱乐、文 着最传统最质朴的中国文化。他希望建立先 化 教 育 、健 康 美 容 、商 贸 投 资 等 多 个 进的农村网视，让农民及时获得与他 领域，他也正是多年前对中国电子商 生意，就是生生 们的生活息息相关的讯息，通过高 务 模 式 探 索 的 先 行 者 之 一 。还 有 互 动 “不息的创意。 科技进行学习和娱乐活动。 视频国际服务，彰显着他在促进国内 —伍启伦 此外，伍启伦还希望拍摄以《红 外交流中做出的努力与成果。 土地》为题的系列电影，全方位展示 为了减轻人们在现代快节奏的生活和工作 中 国 的 农 村 地 区 ，一 方 面 可 以 拉 动 旅 中产生的压力和负面情绪，伍启伦博士和他的 游，促使更多的人了解中国最朴实的传统文化， 团队共同努力，开发出一种创新型的潜能开发音 另一方面也可以呼吁更多的人关注农村发展过” 乐产品，9D音乐。音效师透过混音软件的运用， 程中存在的问题，从而借助更多人的努力，改善 将音符、音波及音频，在声轨上拼贴、排列、剪 农村生活条件，提升农民生活水平。这是他的美 接、扭动出一个九次元音乐时空。多元的、超越 好心愿，也是他接下来奋斗的目标和方向。 常规声频、无限旋律变化的音乐会与人体血液 慈 善 ，是 伍 启 伦 做 生 意 的 最 高 追 求 ，却 也 只 产生共振，从而释放压力，平衡身心。在伍启伦 是他回馈社会的始发站。 看来，科技不仅可以带来物质上的革新，也可以 未来的展望 带来精神上的愉悦。 “生意，就是生生不息的创意”，伍启伦 在华投资的六年时间里，伍启伦博士带 说。先进的科学技术给创新提供了无限的可能， 领着华资国际集团在教育、科技、环境保护、 基于这样的认识，伍启伦会继续探索高科技能 银发产业等多个领域探索出了创新有效的新 为人们带来的便利。 模式，并将华资打造成一个具有品牌优势的 国 际 性 服 务 平 台 。在 未 来 的 几 年 里 ，华 资 将 投 慈善：是终点，也是起点 资30亿人民币，继续提升并深化现有领域的 除 了“ 天 使 投 资 人 ”，伍 启 伦 博 士 也 被 人 称 服务水平。 作“慈善大使”、“爱心大使”。 许多人不看好现有经济形势下的投资前 少 年 时 期 ，伍 启 伦 便 致 力 服 务 于 英 国 红 十 景，伍启伦则不然。在他看来，目前正是投资的 字会、国际狮子会、香港童军总会、交通安全服 好机会，可以借助社会转型的契机更好地规划 务队等多家福利机构，他投身的公益领域包括 未 来 的 发 展 。正 是 这 种“ 独 具 慧 眼 ”，让 华 资 集 环境保护、卫生保健、教育等方方面面。取之社 团走出了自己的创新模式，也让伍启伦获得了事 会，用于社会，在事业稍有成就之时，伍启伦便 业上的成功。 着手回馈社会，努力宣传基金文化，用实际行动 品 牌 创 富 、持 续 创 新 、投 身 公 益 ，这 是 伍 启 带动更多的人投身公益事业。如今，他已创办多 伦 博 士 坚 定 的 信 念 ，更 是 他 付 出 的 实 际 行 动 。

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“Civil Diplomat” between China, Indonesia —An Interview with Jackson Leung Sze Mau, Chairman of Golden Island Cable Company

By Wang Lili, Zhu Zijun

r. Jackson Leung Sze Indonesia in 1940, Leung is a third- Mau, Chairman of Gold- generation overseas Chinese. His en Island Cable Company grandfather went to Indonesia for a liv- based in Hong Kong, ing at the end of the 19th century. Like though in his seventies, seems full of other overseas Chinese, the Leung fam- Menergy and is still working hard in his ily have the virtues of diligence, thrift, company. enduring adversity and running business Half a century ago, he was the after accumulating a little wealth. young boy who presented the bouquet With strong attachments to the on behalf of the nation to Premier Zhou motherland China, Leung received his Enlai during the Asian-African Con- education in a Chinese school. Leung ference held at Bandung in 1955. Later, clearly remembered that in late 1949, in his youth, he became a pioneer for he returned to school after a holiday the reform and opening up in his moth- and find that the school was newly erland — China. painted, with photos of Mao Zedong, As a businessman with philosophy Liu Shaoqi, Zhou Enlai and Zhu embedded in his entrepreneurship, he De on the wall. He learned from the is also a civil diplomat who furthers the headmaster and teachers that the Peo- economic ties between China and his ple’s Republic of China was founded. birthplace Indonesia. He was so excited to think that over- Leung presented a bouquet to Pre- Present bouquet to Former seas Chinese finally had the protection mier Zhou Enlai. Premier from the Chinese government and people. Leung has cultivated patriotism The Asian-African Conference since childhood. Born in western Java, held in Bandung, Indonesia in 1955

Leung helped to build the China-Indonesia Friendship Village.

76 Leung took part in the com- memorations of the Asian-African Conference.

was a result of changes in the situations touching moment in my life. Whenever 2000. He had won the biddings for in Asia and Africa and the burgeoning I think of that moment, I feel inspired numerous times in renovation projects movements of national independence by Premier Zhou’s warm smile, noble of the mainland in the field of commu- after the World War II. It marked the character, and patriotism.” nications, making significant contribu- beginning of the cooperation between Concerns for the homeland tions to the industry’s development. Due Asian and African countries. It is a to his efforts, foreign exchange valued at milestone in China’s history on the China’s economy ushered in a new billions of U. S. dollars was saved. Also, world stage. At such an important mo- chapter with the reform and opening- Leung led the first Business Delegation ment in history, Leung, outstanding in up policy since 1978. As pioneers of of the Heavy Industries of the Republic conduct and academic achievement, was economic reform and opening up of of Korea to China in late 1980s. He has chosen to present a bouquet to Premier the market, overseas Chinese funded been a pioneer in introducing Korean Zhou Enlai, and received care and en- enterprises were the first to invest in investment to China. couragement from Ali Sastroamidjojo, China and made the largest amount of When Hong Kong was to return Prime Minister of Indonesia. This investment. Overseas Chinese not only to the motherland 15 years ago, Leung enviable experience planted the root of brought in funds and projects, but also was so excited that he, together with patriotism into the mind of Leung. advanced technology and management. his colleagues with the Hong Kong Since 2010, Leung, as an im- They are the most active and enthusias- Overseas Chinese General Association, portant witness of the Asian-African tic supporters of the reform and opening organized various activities for the cel- Conference, was invited by the Foreign up. Leung is the most outstanding one ebration themed around the return. The Ministry of Indonesia and the Asian- in this regard. Leung always has a sin- influential activities included artistic African Conference Museum, to tell cere heart for the motherland. performances, music works collection, people, especially young people, about Leung is a calm, low-profile, de- and even a Yangge dance (popular folk that period of history. cent and philanthropic businessman. He dance) to welcome the the People’s Lib- Leung published the Chinese ver- is good at doing research and listen to eration Army troops. sion of the handbook of the Museum of the suggestions of the team. During the “I have the responsibility and Asian-African Conference according to interview with China’s Foreign Trade, duty to unite overseas Chinese to do information provided by the museum, he mentioned theories on practice and something for the return, by using my with a view to revitalizing solidarity contradictions for many times, and he identity as a patriotic businessman in between Asian and African nations, is good at finding the major contradic- the civil organizations,” Leung wrote in and to strengthening friendly exchanges tions. Knowledge in philosophy has an article for the 10th anniversary of the between China and Indonesia. contributed to his success in business. return of Hong Kong. Recalling the time when he pre- Leung, with his rich experience Moreover, Leung has always been sented f lowers to Premier Zhou and in communications cables, has been a one of the first to help whenever he shook his hands at the Bandung Con- pioneer in China’s communication in- knew his motherland was suffering. ference, Leung said, “That was the most frastructure development during 1982- And he would do his best to call for

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Leung contributed to China’s communications during 1982-2000.

other overseas Chinese to offer support. volunteer for the Beijing Olympics. Niheng Village, Aceh Besar County, During the SARS outbreak in Leung said, “My intention is simple, I Aceh Province, Indonesia. Covering 2003, Leung donated RMB180, 000 want our future generations to know an area of ​​22.4 hectares, the village worth of drugs, resources, and 3,000 that this generation has made contribu- has a total of 606 two-bedroom hous- sets of SARS isolation gowns, protec- tions to the country.” es, each of 42 square meters. Made tive caps, shoe covers and other protec- Leung was awarded the title of of brick and concrete, the houses are tive equipment. Besides, he organized Outstanding Person in Promoting the resistant to 8- magnitude earthquakes, the president and members of the Hong Olympics by the Beijing Municipality 11-scale typhoons, and are equipped Kong Association for Promoting Peace- for his outstanding contributions. “It was with heat insulation. The houses take ful Reunification of China to donate such a great surprise. I didn’t expect it.” on the traditional local style of “Aceh tens of thousands sets of protective Leung was invited to be present at house” and some modern features at clothing to Hong Kong, Taiwan, Shan- the parade in honor of the 60th anniver- the same time, conforming to the local dong, Hebei and other provinces. sary of the founding the People’s Repub- religious habits. Leung is most commendable lic of China on October 1, 2009. Asked In addition, the village includes for his devotion to the Beijing Olym- about this experience, he said proudly, schools, nurseries, shops, clinics, halls pic Games. After Beijing’s successful “The motherland didn’t forget us.” and gyms and other public buildings and Olympic bid in 2001, Leung, as a mem- Bridge between China and community roads, drains, water towers, ber of the People’s Political Consultative Indonesia electricity and other supporting ameni- Conference of Beijing, actively liaised ties. Now it has become one of Indone- with overseas Chinese people and asso- As a Chinese born overseas, Leung sia’s most unique tourist attractions. ciations to raise funds for the construc- is not only attached to his motherland Concerning business, Leung is tion of Olympic venues. China, but also active in promoting worried about the fact that many Chi- In order to raise as much funds trade relations and exchanges between nese enterprises only care about imme- as possible, he proposed many dona- China, Indonesia, Malaysia, Singapore, diate profits. He calls on businessmen to tion plans. One of the plan was that the Republic of Korea, Japan and other have long-term vision, and be honest. In anyone who donate US$100 for the Asian countries. fact, his success in business owes greatly construction of venues can have his or When the South Indian Ocean to his foresight, and consideration for her name engraved on a monumental tsunami ravaged Indonesia in 2004, the whole picture. brick. This plan was widely accepted Leung immediately participated in Chinese Premier Wen Jiabao set a by overseas Chinese. the North Sumatera Chinese Societies new target of achieving US$80 billion Leung also actively promoted Disaster Relief Committee organized in bilateral trade volume by 2015, at the Beijing Olympics overseas. He took full by the 65 Chinese social organizations meeting with Indonesian vice-President advantage of his connections, and called in the Province of North Sumatera. Boediono at the China-Indonesia Stra- on religious, clan, alumni associations, Thanks to his efforts, the China-Indo- tegic Business Dialogue held in Jakarta and overseas Chinese groups in South- nesia Friendship Village was founded on April 30, 2011. Leung has full confi- east Asian countries to participate into in July 19, 2007, under the aid of China dence in meeting the target. the Olympic Games. Thanks to his ef- Charity Federation, China Red Cross Today, Leung is still traveling forts, over 52,000 people donated to the and the China Hydropower Engineer- back and forth between China and In- Olympic Games. Everything he did was ing Group Corporation. donesia. He is striving to promote trade purely out of love for his motherland. It’s A groundbreaking ceremony of the cooperation and friendly exchanges be- fair to say Leung is the most dedicated village was held on May 18, 2006 in tween the two nations.

78 Chinese Style Holidays

t first glance public holidays Saturday to the Sunday a week later, and in China appear very different are scheduled to take into account the By Lewis McCarthy to Western ones, for example long distance the migrant workers may mid-autumn festival and face so allowing them to spend almost a tomb-sweeping festival do not figure in full week at home. Athe Western calendar but do so promi- Visiting family is not limited to nently in China. However, the way in migrant workers of course, professional which Chinese spend their time during friends of mine tell me how much they these holidays is rather similar to the look forward to returning to their homes, West and can be split into three catego- hundreds of miles away from Shanghai, ries: spending times with family; leisure and recount the enormous feasts and fes- and shopping; travelling and tourism. tivities that take place when the extended Particularly in the days leading up family gets together. to a public holiday, anyone who has spent Still, by my own experience, it time in a large city in China will prob- seems that the Chinese love to spend and ably notice that the general ‘atmosphere’ shop on holidays just as much as we do of the city changes over this time. The back in the West. The streets may seem The Chinese hustle and bustle of the metropolis begin relatively less busy, but shopping malls love to spend to slow down (moderately, this is China and department stores overflow with cus- after all!) and lengthy-winding queues tom and trade. The commercialisation of and shop on begin to form, stretching from the train- Western holidays also seems to be catch- holidays just ticket outlet all the way down to the end ing on. I was staggered to see the amount as much as of the street. Likewise, train and bus sta- of people celebrating Christmas last year we do back in tions are abnormally overcrowded as peo- in Nanjing — you could barely move in ple jostle to purchase a ticket of transport the business hub of Xinjiekou. As a sign the West. by any means away from the city. of China’s burgeoning middle class and These sights offer startling examples the spending power they now have, one not only of the volume of migrant work- local resident explained me “Chinese ers in China, but also alarmingly the people just want to have fun, they now level dependence the metropolises rely have money and Christmas is an excuse upon them. It also illustrates the mean- to spend it.” I would have to agree, ‘fun’ ingfulness and purpose of national holi- would certainly describe the light-up days, for many migrant workers these reindeer ears that were proving popular ‘breaks’ might be the only times in which at the time. home countries to see their they are able to travel home to spend What really emphasised that the families and friends. time with their parents, children and ex- Chinese “now have money” was that sev- So it seems whatever tended families. Due to the enormity of eral of my colleagues used their holidays the occasion, Chinese and the country, the journey home can be ev- to travel the middle kingdom and abroad. Westerners spend their ery bit as long and uncomfortable as the Sanya, Thailand and the Philippines all holidays in similar fashion, aforementioned queues as some may have proved hot destinations. This was partic- whether it is spending time to take up standing positions on trains or ularly interesting as it was similar to how at family banquets over buses for several hours at a time. many Western friends chose to spend Spring Festival or Christ- Some journeys can even last more their time off, using the break as an op- mas or visiting an exotic than a day. This is the reason why busi- portunity to visit some of China’ tourist location and shopping mall nesses in China require staff to work regions such as Beijing and Guilin, as during summer vacation, on weekends before and after the pub- well as the beach holidays mentioned people just want to enjoy lic holidays. The breaks usually run above. A few even travelled back to their their time off work.

79 Group, which can be used for hydropower development. 4. Contact: Chen Fengwei

ON nfoRMATI 5. Tel: 86-451-82622713 I 6. Fax: 86-451-82622713 7. E-mail: [email protected] - Investment Projects Name of project: Corn, Soybean Superfine Powder Proj- ect in Bayan County Content and scale of project: Annual production ca- in Heilongjiang Prov pacity of 30,000 tons of superfine corn powder and 30,000 tons of superfine soybean powder. ince, China Project overview: Bayan County is among the na- tional top 100 counties of food production, with a total cultivated area of 3.40 million mu. The annual planting Name of project: Green Quick-frozen & Frozen and capacity of corn is 1.70 million mu and that of soybean Dried Foods Processing Project of Longjiang Forest Industry is 1.3 million mu, and the annual production capacity of Group high quality corn is 1 million tons and that of soybean is Content and scale of project: Annual outputs of 500 0.2 million tons, including commodity corn of 0.8 mil- tons of frozen and dried vegetable products. lion tons and commodity soybean of 0.15 million tons. Project overview: In the vast forest areas of Longjiang Bayan County is very convenient in traffic, with S101 Forest Industry Group, more than 2,200 species cold- Provincial Highway running through the territory from and temperate-zone-growing plants are growing, includ- east to west (9.5 km), westbound to Harbin and eastbound ing Korean pine, oak tree, Manchurian ash, Manchurian to Kiamusze, and the Ba-Xing Highway running through walnut, etc. The harvest of 4.1 million cubic meters of the territory from north to south (13 km), northbound to wood each year can result in harvesting & timber pro- Suihua City. This project uses bio-fermentation technol- ducing residue of 1.23 million cubic meters and wood ogy and enzyme technology to make corn and soybean processing residues of 1.394 million cubic meters, which denatured and protein denatured and adopts the superfine can be used for the development of sawn timber, ply- powder processing technology and modern high technol- wood, furniture, wood products, pulp and paper, forest ogy for function and quality upgrade of corns and soy- products and so on. Forest is rich in edible wild herbs, beans. This project is an agricultural products deep pro- mountain herbs, wild fruit, edible fungus and other or- cessing one, and is in line with national industrial policy. ganic materials to provide healthy food for mankind. The products are corn and soybean superfine powder, Investment and source: Total investment of the project which can be widely used in the production of all kinds of is US$14.11 million, with the ratio of bringing-in investment foods. The annual market demands are expected to reach negotiable. 5 million tons, thus the project will have a huge market Estimated economic benefit: After the project is com- potential and very promising prospect on investment. pleted and reaches the designed capacity, the annual profit Estimated investment and source: Total investment after tax will be RMB18.9 million. of the project is US$50.72 million, including US$33.16 Brief introduction to domestic investor: for fixed assets and US$17.56 for circulating funds. 1. Name of investor: China Longjiang Forest Industry Cooperation means: Cooperation, sole proprietorship Group Estimated economic benefit: After the project is com- 2. Address: 66 Wenchang Street, Nangang District, Har- pleted and reaches the designed capacity, the estimated an- bin City Postcode: 150008 nual production value will reach RMB577.82 million, the 3. Present enterprise status: It is the largest state-owned tax and surtax on product sales will be RMB63.34 million, forest area and forest industrial base, and ranks the fore- and the annual income tax and the annual profit will be front of the state-owned forest areas in terms of the forest RMB46.34 million and RMB146.75 million respectively. cover rate, which is 80%, with an operating forest area of Brief introduction to domestic investor: 10.09 million hectares (nearly a quarter of the total area of 1. Name of investor: Investment Promotion Bureau of Heilongjiang Province). The forest area of Heilongjiang Bayan County Forest Industry Group is rich in resources, with an aver- 2. Contact: Bao Zengbiao age altitude of over 800 meters. There are more than 30 3. Tel: 86-451-56058955 Fax: 86-451-56058955 mountains with altitude of over 1,000 meters. The clean 4. E-mail: [email protected] wind energy with cut-in wind speed of over 7 meters per 5. Website: www.byzsj.com second can be utilized to develop the wind power genera- tion project with the annual capacity of 5 million kilo- watts. There are more than 100 large and small rivers and Name of project: 500,000t/y Corn Integrated Deep Pro- lakes in the forest area of Heilongjiang Forest Industry cessing Project of Heilongjiang Fuhua Group

82 INVESTMENT

Content and scale of project: The annual processing 6. Fax: 86-452-5759254 capacity is 0.5 million tons. It is necessary to construct 7. E-mail: [email protected] fermentation plant, grind plant, extraction plant, as well as purchase production equipment and subsidiary facilities. Project overview: Corn Integrated Deep Process- Name of project: Corn Starch Comprehensive Processing ing Project of Heilongjiang Fuhua Group is one of first Project in Qiqihar City batch projects introduced by Fuhua China International Content and scale of project: It would output 0.1 mil- Eco-Industrial Park (Gannan); moreover, it is also a lion tons of corn starch, 5 thousand tons of germ crude high-tech and industrialized project of Heilongjiang oil, 9 thousand tons of albumen powder, 4 thousand tons Fuhua Group led by corn deep processing. The main of germ cake, 18 thousand tons of starch residue per year. products are anhydrous citric acid, maltodextrin, sugar Project overview: The semi-manufactured goods of powder, maize germ oil, and compound feed. Cur- starch has excellent applications in many industries, rently, State Development and Reform Commission involving in medicine, food, printing and dyeing, drill- (SDRC), Provincial Department of Land Resources, ing, fire extinction, enamel, and spinning. Just corn Provincial Environmental Protection Agency and other starch, the gap of output has still been millions of tons. relevant organizations have approved their applications In addition, by-products of corn starch processing for the establishment of the project. The complemen- have also higher nutrient and economical values. For tary constructions for plants have provided services for example, corn germ can be used to produce corn oil, roads, electricity, water, communication and smooth which can produce hydrogenated oil by hydrogenation; surface. The construction area of fermentation plant in corn cake produced from oil manufacture can produce main building is 27 thousand sq.m., which has been protein feed; corn peel can be processed to nutrient closed, windows and plastered external walls are also yeast and, addition agents of bio-fiber; zein can pro- completed. The foundation of extraction plant has tect from moisture and oxidation to extend shelf life as completed, the construction area of two-floor office coating agent in food industry; glutamic acid and corn building is 2,800 sq.m., the chimneys (60m) of auxil- color extracted from corn protein powder can be used iary boiler plant have been constructed, 30 thousand as raw materials in food industry for food color, addi- sq.m. of concrete pavement in the plant have been tion agents, butterine, margarine and sweet; there are laid and the enclosure is also built. All manufactur- abundant soluble amino acids and various biotins in ers for production equipment have been investigated. corn steep-water, which can be used as nutrient source Estimated investment and source: Total investment of in fermentation industry; concentration steep-water to the project is US$52.709 million, with the ratio of bring- corn steep liquor with 70% of solid content, of which ing-in investment negotiable. there are 45% of protein, 20% of mineral substance, Cooperation means: Joint venture, cooperation 18% of lactic acid; steep-water processed by alkali Estimated economic benefit: After the project is completed, can produce sediment, dry the filter cake can produce the annual sales income will reach RMB836.36 million, albumen powder for extracting phytin, a important and the annual profit and the annual tax will be RMB89.65 raw material for producing inositol; mix corn peel million and RMB41.92 million respectively. and steep-water to produce compound feed; DDGS Brief introduction to domestic investor: can be used to produce whole drying protein feed. 1. Name of investor: Heilongjiang Fuhua Group Investment and source: Total investment of the project 2. Address: Gannan County, Qiqihar City Postcode: is US$35.139 million, with the ratio of bringing-in invest- 162100 ment negotiable. 3. Present enterprise status: Heilongjiang Fuhua Group is Cooperation means: Sole proprietorship Estimated eco- a group enterprise based in Xinshisi Vilage, Yinhe Town, nomic benefit: After the project is completed and reaches Gannan County in Heilongjiang; which is based on agricul- the designed capacity, the annual sales income will reach ture and technology industrialization, led by intensive pro- RMB350 million, and the annual profit will be RMB60 cessing of farm and sideline products. This large-size state- million. owned enterprise integrated agriculture, forestry, herding, Brief introduction to domestic investor: machinery, processing, travel and real estate. The company 1. Name of investor: Investment Promotion Bureau of was found in 1992 with RMB0.12 billion of registered Tailai County Postcode: 162400 capital. It was entitled “High-tech Enterprise of Heilongji- 2. Present enterprise status: Heilongjiang is the main ang” in 1998, “National Leading Enterprise of Agriculture producing region of corn, Gannan County and its sur- and Industrialization” and “First-batch Standardized Travel rounding areas are high-yield areas of corn. Just the yield Place” by National Tourism Administration in 2004. At of Gannan are more than 0.5 million tons, which provides present, Fuhua Group own 35 subsidiaries through the sufficient guarantee for raw materials. County with 1,800 employee and RMB1.1 billion of to- 3. Contact: Liu Xianbin tal assets. Bank credit rating has reached up to AAA. 4. Tel: 86-452-8232221 4. Contact: Sun Guang 5. Fax: 86-452-8225652 5. Tel: 86-13634526111 6. E-mail: [email protected]

83 Fax: 86-21-62895703 Web: www.iecsy.com Host: Shenyang International Exhibi- 2012 The 4th China (Dongguan) ON nfoRMATI tion Company I International Mould & Metal- Tel: 86-24-23256988 working Exhibition Fax: 86-24-23256988 Date: November 14-No- Email: [email protected] vember 17, 2012 Contact: Li Nan City: Dongguan Venue: Guangdong Mod- 2012 Northeast China (Shenyang) Gov- China Fairs ern International Exhibi- ernment Procurement and Energy Sav- tion Center ing and Emission Reduction Exhibition Frequency: Yearly Duration: November 1-November 30, & Expos Exhibits: Machine tools, steel and 2012 other raw materials, surface treatment City: Shenyang and coating, etc. Venue: Shenyang KeXueGong Con- Tel: 86-21-63045419 vention Center Agriculture, Fishery, Animal Fax: 86-21-64181136 Exhibits: Government procurement Husbandry Email: [email protected] supplies, saving products, etc. Year of the first event: 2006 2012 China Yiwu International Forest 2012 China International Industry Fair Product Fair Frequency: Yearly Duration: November 1-November 5, Organizers: Shenyang International Duration: November 1-November 4 2012 Exhibition Company City: Yiwu City: Shanghai Add: 1-8-1, Jingwei Building, No.32 Venue: Yiwu International Exhibition Venue: Shanghai New International East Yunji Alley, Shiyiwei Road, Hep- Center Expo Center ing District, Shenyang, 110003 Exhibits: Bamboo and wooden home Exhibits: CNC machine tools and Tel: 86-24-23256988 article, Bamboo and wooden art crafts, metal processing, industrial automa- Fax: 86-24-23256988 Bamboo and wooden daily-use goods, tion, environmental technology and Contact: Li Nan Forest food, Flower and gardening equipment. Web: www.iecsy.com products, Forest leisure products, For- Add: Yan An Mid Road No.837, Email: [email protected] estry machinery. Shanghai Year of the first event: 2008 Tel: 86-21-62892666 2012 China International New Energy Frequency: Yearly Fax: 86-21-62895703 Car Industry Technology Meeting and Add: Dep. No.301 Binwang Road, Trade Fair Meihu Exhibition and Convention 2012 Northeast China Energy Saving Duration: November 10-November Centre, Yiwu, Zhejiang Province, Exhibition 12, 2012 322000 City: NanJing Tel: 86-579-85415001, 85415255 Venue: NanJing International Exhibi- Fax: 86-579-85415244 tion Center Contact: Manager Sun, Manager Chen Year of the first event: 2010 Web: www.forestryfair.com Add: A-G,19 Floor, Jin Ling Yu Jing Email: [email protected] Office Building, No.333, Tai Ping South Road, NanJing Tel: 86-25-84521101-807 Energy and resources, Mining Fax: 86-25-84692610 Industry, Metallurgy, Welding, Contact: Ms.Geng Electric Power Email: [email protected]

2012 China International Industry Fair The 12th China International lubricat- Date: November 2012 ing oil, Grease and Refining Technology City: Shanghai Exhibition Venue: Shanghai New International Duration: November 22-November Expo Center Date: November, 2012 24, 2012 Exhibits: CNC machine tools and Venue: Shenyang International Con- City: Shanghai metal processing, industrial automa- vention and Exhibition Center Exhibits: Automotive lubricant prod- tion, environmental technology and Exhibits: Government procurement of ucts and automotive chemical mainte- equipment, etc. supplies, energy saving products, etc. nance products. Tel: 86-21-62892666 Frequency: Yearly Year of the first event: 2000

84 FAIR & EXPOS

Frequency: Yearly Fax: 86-371-63576816 Organizers: SINOPEC Lubricant Contact: Shi Weitang The 8th China (Shenzhen) International Company, PetroChina Lubricant Email: [email protected] Touch-Screen Exhibition Company, Council for the Promotion Duration: November 24-November of International Trade Shanghai, IN- 26, 2012 TEX Shanghai Co.,Ltd. Electronic Intelligence City: Shenzhen Add: No.55 Lou Shan Guan Road, Venue: Shenzhen Convention & Ex- Room 801-804, New Hongqiao 2012 Dalian International Electronic hibition Center Building, Shanghai, 200336 Industry Exhibition Organizers: Shanghai Kuozhan Ex- Tel: 86-21-62952137; 62951404; hibition Services Co.,Ltd. 62956677 Add: Rm 602, 5th Building, Wangzu Fax: 86-21-62780038 City, 251 Lane, Caoxi Road, Xuhui Contact: Liu Jun District, Shanghai, 200235 Web: www.interlubric.com Tel: 86-21-64841166 Email: [email protected]; intexlj@ Fax: 86-21-64843366 sh163.net Contact: Fei Xiong (+86-15921091892) Email: [email protected]

Transportation, Logistics, Stor- age Electrical Apparatus, Heating, China (Guangzhou) International Au- Air-conditioning tomobile Exhibition China Hi-Tech Fair ELEXCON 2012 City: Guangzhou Duration: November 1-November 30 (CHTF ELEXCON 2012) Venue: China Import and Export Fair City: Dalian Duration: November 16-November 21 Complex Venue: Dalian Xinghai Convention City: Shenzhen Duration: November 1-November 30 and Exhibition Center Venue: Hall 2, Shenzhen Convention Exhibits: vehicles, Auto parts & Ac- Exhibits: Electronic equipment, elec- & Exhibition Center cessories tronic production, processing, form- Exhibits: Electronic Components, Year of the first event: 2003 ing, maintenance equipment assembly, Materials & Assembly Frequency: Yearly sealing equipment, etc. Year of the first event: 2004 Add: No.117 Liuhua Road, Guang- Organizers: Chinese Institute of Frequency: Yearly zhou, 510014 Electronics, China Chamber of Add: 2201, International Chamber of Tel: 86-20-86669126 Commerce for Import and Export of Commerce Center, Fuhuasan Road, Fax: 86-20-86681629-04 Machinery and Electronic Products, Futian District, Shenzhen, 518048 Contact: Liu Shaopu The People’s Government of Liaoning Tel: 86-755-88312522 Web: www.autoshow-gz.com Province, Dalian Municipal People's Fax: 86-755-88312533 Email: [email protected] Government Dalian, Huazhan Exhi- Contact: Xu Weihai bition Services Co.,Ltd. Web: www.elexcon.com Add: No.18 Huizhan Road, Dalian Email: [email protected] Chemical Industry Tel: 86-411-66663625 Contact: Shan Hongliu (+86- 2012 3rd Central (Zhengzhou) Chemical 13591821816) Beauty and Cosmetics Exposition Email: [email protected] Duration: November 1-November 30 2012 China (Nanjing) International City: Zhengzhou The 15th China International Hi-tech Beauty and Cosmetic Expo Exhibits: Coal chemical, petrochemical, Electronic Exhibition Date: November 2012 salt chemical, agricultural chemicals, dye Date: November 2012 Venue: Nanjing Exhibition Center coatings, chemical equipment and tech- City: Shenzhen Exhibits: Beauty skin care products, nology, chemical industry informatiza- Venue: Shenzhen Convention and body health products and equipment, tion construction and high-tech chemi- Exhibition Center cosmetics, detergent and personal care cal industry zone construction, etc. Exhibits: Electronic components, products, etc. Year of the first event: 2009 electronic materials, electronic equip- Host: Jiangsu Province Beauty Salon Frequency: Biyearly ment, etc. Association, National Beauty Salon Add: Room 6418, No.115 Wenhua Web: www.elexcom.com Association Road, Zhengzhou, Henan Province, Tel: 86-755-88312522 Tel: 86-25-87716579 450003 Fax: 86-755-88312533 Fax: 86-25-87715521 Tel: 86-371-63576588 Email: [email protected] Contact: Han Zhe

85 Haidian District, Beijing, 100037 Email: [email protected] Fax: 86-10-88082034 Textile and Clothing ICE 2012 Beijing International Condi- ON nfoRMATI Email: [email protected] I The 12th China (Yiwu) International Contact: CHEN Xing ments, Food Ingredients and Additives Socks, Knitting and Dyeing Machinery Mobile: 13683554888 Expo Exhibition Duration: November 14-November Date: November 2012 16, 2012 Venue: Yiwu International Expo Center Jewelry, Watches and Clocks, City: Beijing Frequency: Yearly Glasses Venue: National Agricultural Exhibi- Exhibits: Knitting machinery, dyeing tion Centre machinery, clothing machinery, trade- Hong Kong Optical Fair Exhibits: Spices, food and ingredients, mark printing machinery, etc. condiment manufacture, distribution Web: www.yiwutex.com enterprise etc. Tel: 86-852-25163363 Organizers: Beijing Condiment Fax: 86-852-25165024 Industry Association, Heilongjiang Email: [email protected] Condiment Industry Association, Contact: Liu Pei Ying YongGong International Exhibition (Beijing) Co.,Ltd. Add: Room 1-2105, Lishuijiayuan, Fur, Leather, Shoes Liulitun, North Chaoyang Park Road, Chaoyang District, Beijing, 100026 2012 The 4th China (Shijiazhuang) Tel: 86-10-57106016 International Leather Fur Exposition Fax: 86-10-65918902 Duration: November 18-November Duration: November 3-November 5 Contact: Guo Lin(+86-13681560624) 20, 2012 City: Hong Kong City: Shijiazhuang Venue: Hong Kong Convention and 2012 The 4th Shunde Tea Expo Venue: Shijiazhuang International Exhibition Center Date: November 2012 Expo Center Exhibits: Invisible glasses, frames and Venue: Shunde Exhibition Center Frequency: Yearly mountings, lens, etc. City: Shunde Exhibits: Leather fur garments, leath- Organizers: Hong Kong Trade De- Frequency: Yearly er, fur, PU, PVC synthetic materials, velopment Council Exhibits: Jingdezhen porcelain, tea luggage, leather goods, leather goods, Tel: 852-1830668 sets, tea therapy, tea painting, carving, leather chemicals, leather metal prod- Fax: 852-28240249 wood furniture, etc. ucts, leather equipment and related Email: [email protected] Web: www.0769tea.com support materials, etc. Tel: 86-769-23025387 Tel: 86-10-87109877 Fax: 86-769-21666752 Fax: 86-10-87109874 Food and Additives, Bever- Contac: Jin Xin Email: [email protected] age, Drinks, Seasonings, Dairy Contact: Du Tieping HKTDC Hong Kong International Products Wine Fair 2012 China Fisheries & Seafood Expo Date: November 2012 Construction, City planning, Duration: November 1-November 3 Venue: Hong Kong Convention and Decorations City: Qingdao Exhibition Center Venue: Qingdao International Con- Frequency: Yearly The 18th China International Garden vention Center Exhibits: Alcoholic beverage, wine and Landscape Construction and Exhi- Exhibits: Seafood products, seafood production and logistics, wine prod- bition processing equipment, aquaculture ucts and appliance, etc. Date: November 21-November 23 products and supplies, fishing equip- Tel: 86-852-22404056 Venue: National Convention Center ment, associated services. Fax: 86-852-28240249 Frequency: Yearly Year of the first event: 1996 Email: [email protected] Exhibits: Landscape planning, con- Frequency: Yearly struction, maintenance, management, Add: 8th Floor, Building No.20, green roofs, water feature design and Maizidian Street, Chaoyang District, Hotel, Catering, Tourism water protection, tourism develop- Beijing, 100125 ment, planning, urban landscape, etc. Tel: 86-10-59194405 2012 Asian Food & Wine Exhibition Web: www.c-us-ld.cn Fax: 86-10-65918986 and Hotel & Catering Equipment Ex- Add: China Architectural Culture Contact: Zhang Xiaoying hibition Center Building, No.13, Sanlihe Road, Web: www.cafte.gov.cn Duration: November 2-November 4

86 FAIR & EXPOS

City: Macau Web: www.iccie.cn creative industry gathering area, de- Venue: The Venetian Macau Resort Tel:86-10-6806669-8021 sign, cultural tourism and tourist com- Hotel, Exhibition Centre Fax: 86-10-68066969 modities, galleries and art, etc. Organizers: Koelnmesse Internation- Email: [email protected] Year of the first event: 2006 al Exhibition Co., Ltd (Singapore) Contact: QI Wei Frequency: Twice Yearly Tel: 853-28710300 Add: 2nd Floor, JianBang Business Fax: 853-28590309 2012 Jiangsu Chemical Cleaning Prod- Hall, 19 South Lishilu, World Trade Web: www.wineandgourmetasia.com ucts and Packaging Exhibition Centre, Xicheng District, Beijing, Email: [email protected] Duration: November 24-November 100045 26, 2012 Tel: 86-10-6806669-8021, 8012 The 8th International Hotel Equip- City: NanJing Fax: 86-10-68066969 ment & Supplies Exposition and Ca- Venue: NanJing International Exhibi- Contact: Qi Wei,Wang Luocheng tering Equipment, Food & Beverage tion Center Web: www.iccie.cn Exhibition Organizers: Jiangsu Hairdressing and Email: [email protected] Duration: November 23-November Beauty Association, China Beauty 25, 2012 Association, NanJing Zhongfang Ex- City: Macau hibition Co.,Ltd., NanJing Zhongfang Venue: The Venetian Macau Resort Exhibition Co., Ltd. Hotel, Exhibition Centre Add: Room 2506, Hong An Build- Organizers: Coast International Ex- ing, No.127, Ji Qing Road, NanJing, hibition Co., Ltd. 210006 Tel: 853-28710300 Tel: 86-25-52315808 Fax: 853-28590309 Fax: 86-25-52315918 Web: www.hotel-exhibition.com Contact: Luo Yun (+86-13705181783) Email: [email protected] Label Expo Asia Duration: November 29, 2012 Packaging, Paper, Printing and City: Shanghai publication Venue: Shanghai New International Expo Center 2012 The 28th Asia International Exhibits: Label printing machinery, Stamp Exhibition materials and related. Duration: November 11-November Year of the first event: 2003 15, 2012 Frequency: Biyearly City: Wuxi Add: Room 1108, Grand Gateway Entertainment, Leisure Venue: Wuxi Taihu International Tower 1, No.1 Hongqiao Road, Exhibition Center Shanghai, 200030 The 7th China International Leisure Organizers: National Bureau of Tel: 86-21-64484890 Industry Exposition (CLI) Stamps, People’s Government of Ji- Fax: 86-21-64484880 Duration: November 4-November 7, angsu, China Post, China Stamping Contact: Hu Wei 2012 Collection Association, People’s Gov- Web: www.labelexpo.cn City: Hangzhou ernment of Wuxi Email: [email protected] Venue: Hangzhou Peace International Tel: 86-510-82837777 Exhibition & Convention Center Web: www.wuxistamp2011.com Exhibits: Leisure industry Email: [email protected] Education, Training, Culture Year of the first event: 2006 and Art Frequency: Yearly ICCIE 2012 Organizers: Hangzhou Municipal Date: November 2012 The 7th China Beijing International People’s Government,China Council Venue: China International Exhibi- Cultural & creative Industry Expo for the Promotion of International tion Center Duration: November 10-November Trade Hangzhou Sub-Council Frequency: Yearly 13, 2012 Add: 6th Floor, Tianming Building, Exhibits: News publishing and copy- City: Beijing No.286 Tiyuchang Road, Hangzhou, right trade, film and television broad- Venue: China International Exhibi- 310003 casting, cultural and creative heritage tion Center Tel: 86-571-85174905 and museum-related products, design Exhibits: News publication and copy- Fax: 86-571-85068893 creativity, galleries and art, animation right trade, radio, film and television Contact: Gong Liang games, sports industry, ritual and leisure and cultural relics and museum related Web: www.cli-expo.com goods, urban sculpture, graffiti art, etc. cultural creative products, culture and Email: [email protected]

87

movie Lifestyle

The Fifth EU Film Michael Although to the outside world Mi- chael seems to lead a perfectly normal Festival is coming life, he secretly keeps a 10-year-old boy, Wolfgang, locked in his soundproof base- By Audrey GUO ment. One day Wolfgang throws boiling water into Michael’s face, but he does

Austria/2011/96mins not succeed in escaping. Severely injured, Director: Markus Michael drives off but dies in an accident. his year, the festival is Schleinzer Will Wolfgang be rescued? bigger and better than ever before. The 2012 edition features 26 mov- ies from all over Europe along with Something More About Love aT selection of short films in four cities: Beijing, Tianjin, Chengdu, Shenzhen. In addi- 1945. The true story of Dr Ivan tion, for the first time, an EU Film Festival online will Rumenov, a Bulgarian surgeon ban- be held every day in China from November 2012 until ished to a faraway seaside town where January 2013. This means that more European films he meets Dikran, a pleasant young Ar- could reach more audiences than ever. According to the menian photographer. Gradually, Dr. introduction from Androulla Vassiliou, Commissioner Rumenov wins the hearts of his new for Education, Culture, Multilingualism and Youth Bulgaria/2011/93mins fellow townsmen, and a number of al- European Commission, even more importantly, this Director: Magdalena luring pleasures occur… year’s festivals are organised in the framework of the Ralcheva EU-China Year of Intercultural Dialogue. The Year is the first concrete outcome of both parties’ decision to dedicate one pillar of their cooperation to people-to- people contacts, and cinema can clearly contribute to Turquaze a better mutual understanding between Chinese and European people. Three Turkish brothers, who re- The motto in the European Union is “Unity in turn back to the Belgian city of Ghent Diversity”, and this festival is a wonderful example of after they bury their father in Istanbul, cooperation among our 27 Member States, providing a find themselves torn between two lands unique opportunity for the Chinese audience to experi- and cultures, with roots in neither. The ence the most recent, successful and exciting films the trio slowly redefines family dynamics European Union has to offer. Androulla thought that and their own identity and finds new cinema can build bridges between peoples. Chinese Belgium/2010/96mins Director: Kadir Balci happiness and love. people love European cinema, and yet only a hand- ful of European films are shown in Chinese cinemas each year due to various constraints. And she knew how much Chinese cinema is acclaimed and enjoyed throughout Europe. Encouraged by this film festival, she had the confidence to work with the Chinese au- Lessons of a Dream thorities to foster cultural exchanges and bring more European films to China in the near future. In 1874, Oxford graduate Konrad Let’s enjoy the magic of European cinema on the Koch is hired as one of the very first Eng- silver screen. lish teachers at a strict German school for The European Union Film Festival is organised boys. In order to stir up some enthusiasm by the Delegation of the European Union to China for the foreign language, Koch resorts to in cooperation with the European Union Chamber of unusual means and introduces his stu- Commerce, supported by the State Administration of Germany/2011/113mins dents to a curious sport that comes from Film, Radio & TV and the EU Members States. Director:Sebastian Grobler Britain: football.

88

movie

Hard Goodbyes: My Father Letters to Father Jacob

In 1969, Elias is a boy with an Leila, a prisoner serving a life interest in astronomy. On the eve of sentence, has just been pardoned and his departure for a business trip, Elias’ released from prison. She works at Fa- father promises to be back in time to ther Jacob’s house where she reads let- watch the moon landing on TV with ters from people seeking help from the his son, but dies in an accident. Elias blind pastor. Jacob’s life is shaken when

Greece/2012/113mins refuses to accept his father’s death and Finland/2009/75mins the letters stop coming and Leila must Director: Penny Panay- creates an imaginary world, in which Director: Klaus Haron decide either to help or to leave him. otopoulou his father is alive.

9 1/2 Dates The Runway

David is a hot shot writer in Bu- Ernesto is a pilot from Colombia dapest. When his rich girlfriend dumps whose plane crashes in a remote Irish him and his publisher sues him for fail- village. He befriends Paco, a 9-year- ing to deliver a new book, his glory days old boy who speaks some Spanish. Paco end. The publisher gives him an ulti- introduces Ernesto to the entire town matum: he has to write a book within as a hero, encouraging people to help Hungary/2008/100mins 10 days to get his money and reputation Ireland/2011/101mins rebuild his plane. In reality Paco keeps Director: Tamás Sas back. The topic: Why are there so many Director: Ian Power a secret about Ernesto’s real identity. lonely young women in Budapest?

Quartier Lointain The Phoenicians

Thomas, in his fifties, returns to A documentary that portrays the his hometown. Standing in front of his Phoenicians, the sea-faring nation that mother’s grave, he passes out and be- established trading and commercial comes again a 14-year-old boy. Thomas routes across the Mediterranean and will discover the reason for the depar- that challenged the Roman Empire. ture of his father. With the heart of an Luxembourg/2010/98mins adult, Thomas will be unable to per- Malta/2005/30mins Director: Sam Garbarski suade him to stay and will understand Director: Chris and Mau- the reason why he disappeared. rice Micallef

Sonny Boy Simon and the Oaks

In 1920, Waldemar goes to study Going against his father’s wishes, in the Netherlands from Suriname. He Simon strives for a good education. is discriminated against for his dark At school he meets Isaac, the son of a skin. Rika is the only one who accpets wealthy Jewish bookseller who fled per- him. The two fall in love, but when secution in Germany. The two boys and World War II breaks out they are sepa- their families’ lives are woven together. Netherlands/2011/130 rated and the only witness of their love Sweden/2011/122mins Growing up, Thomas feels different mins will be their young son. Director: Lisa Ohlin from his family and he begins to ques- Director: Maria Peters tion his identity.

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movie Lifestyle Three Colors: Blue Switzerland, Poland, France, 1993 100’, Drama, Music, Romance Director: Krzysztof Kieslowski Music & Cinema With: Juliette Binoche, Charlotte Véry, Cinema of Institut français de Chine Cinema Theater Benoit Régent French films with Chinese (and sometimes English) subtitles Fidelity card: RMB 100/5 films + 1 free (Students: RMB 50) Blue is the story of Julie who loses More information on activities: www.institutfrancais-chine. her husband, an acclaimed European com/www.faguowenhua.com Friday 11/09 – 19:30 composer and her young daughter Saturday 11/10 – 15:00 Friday 11/16 – 17:00 in a car accident. The film’s theme of Wednesday 11/28 – 19:30 liberty is manifested in Julie’s attempt to start life anew free of personal com- mitments, belongings grief and love. She intends to spiritually commit suicide by withdrawing from the world. However, the reality created by the people who need and care about her and the music around which the film revolves heals Julie and draws her back to the land of the living. Same Old Song France, Switzerland, England, 1997 120’, Musical Comedy Director: Alain Resnais The Ballad of Genesis and Lady Jaye With: Sabine Azéma, Pierre Arditi, André France,USA, 2011 Dussollier 72’, Documentary Director: Marie Losier Odile and Camille are two sis- Saturday 11/10 – 19:30 ters living in Paris. Odile is frustrated An intimate, affecting portrait of Sunday 11/11 – 17:00 in her dull marriage to Claude, who the life and work of ground-breaking Monday 11/12 – 19:30 shows no enthusiasm in her desire to performance artist and music pioneer buy a new apartment. Camille, study- Sunday 11/11 – 15:00 Genesis Breyer P-Orridge (Throbbing ing for a doctorate in an arcane subject, suffers from a panic Friday 11/16 – 19:30 Gristle, Psychic TV) and his wife disorder. The lives of both women are up-ended when three Sunday 11/18 – 17:00 and collaborator, Lady Jaye, centered men enter their lives. Nicholas, an old flame of Odile, re- around the daring sexual transforma- turns to Paris to buy an apartment for his family, although tions the pair underwent for their ‘Pandrogyne’ project. he himself has marital problems. Simon meets and instantly falls in love with Camille, keeping from her the fact that he is an estate agent who works for the unscrupulous Marc, Les Chansons d’Amour who also has designs on Camille... France, 2007 100’Musical Comedy Director: Christophe Honoré Glenn Gould: Hereafter With : Louis Garrel, Ludivine Sagnier, Chi- France, 2006 ara Mastroianni 90’, Documentary Director: Bruno Monsaigon Julie’s boyfriend Ismaël lives with Friday 11/09 – 17:00 her; rather than worry about the time A retrospective of the life and Friday 11/23 – 17:00 he spends with his colleague Alice.Julie work of Glenn Gould, Hereafter syn- invites Alice to join them. The three thesizes an incredible wealth of archi- walk the streets of Paris, party, read, and sleep together.

Wednesday 11/07 – 19:30 val material from various sources, some Sometimes it’s lighthearted, sometimes there are jealou- Saturday 11/10 – 17:00 of it previously unreleased. Made as if sies. Then death strikes. In various ways, those left come to Saturday 11/17 – 15:00 narrated by Gould himself, Hereafter terms with the departure and absence of a loved one: show- is a window opened to the world of a ing concern, eating together, attempting new relationships, true musical genius, whose magic touches us from beyond trying to “be there” for the other. Then, the spirit returns the grave. and new commitments are possible.

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ON STAGE in Beijing in Polish Culture Opening concert of the China National Symphonic Orchestra Date: 19:30, Friday 2nd November Venue: Beijing Concert Hall Artists: Krzysztof Penderecki, Sa Chen

Concert of Agata Szymczewska and Justyna Danczowska Date: 19:30, Saturday 4th November Venue: Central Conservatory of Music

Exhibition of Rafał Olbinski and Joanna Sarapata paintings Date: 19:30 Saturday 4th November Venue: Agricultural Exhibition Center

Exhibition of Polish Graphics (duration 5th - 12th) Date: 15:00, Monday 5th November Festival Festival Venue: Qinghua University Academy of Fine Arts

Closing concert of the China National Orchestra Date: 19:30, Wednesday 7th November Artists: M. Dworzynski, Wu Muye Venue: Beijing Concert Hall

Concert of Polish Sinfonia Iuventus Orchestra Concert of Krzysztof Jablonski Date: 19:30, Wednesday, 31st October Date: 19:30, Friday 9th November Venue: China National Center of the Performing Arts Venue: Forbidden City Concert Hall

91 THIS IS HINA

Xishuangbanna — A Land of Magic and Dreams By Lily Wang

n the language of Dai ethnic group, Xishuangbanna means “a land of magic and dreams”, and when it comes to tourism, this autonomous pre- fecture in China’s Yunnan province lives very much up to its name. Location IXishuangbanna is the southernmost prefecture of Yunnan Province with the city of Jinghong and the counties of Menghai and Mengla under its juris- diction. Of Xishuangbanna’s 19184.45 square kilometres of territory, tourist and scenic resorts make up 1202.13 square kilometers, and nature reserves oc- cupy a total of 2064.6 square kilometres. The region, though surprisingly far from the equator and at a relatively high altitude, has a rich tropical flora and a typical tropical rain forest in the

92 lowland areas. Based on ecological characteristics, floristic composition and habitats, the primary vegetation in Xish- uangbanna can be organized into four main types: tropical rain forest, tropical seasonal moist forest, tropical montane evergreen broad-leaved forest and tropical monsoon forest. During the Han Dynasty, Xishuangbanna was subor- dinate to the Yizhou commandery, after which control passed to the Kingdom of Shu. In the 12th century, a Tai Lue kingdom was established in this area. During the Yuan Dynasty, Xishuangbanna was reorganized as the Cheli Commandery and the local leaders are recognized as tusi. Many of the leaders adopted the Chinese family name Dao. The name Xishuangbanna also emerged during the Ming Dynasty. The Xishuangbanna Dai people rec- ognized the Qing Dynasty, as with previous Chinese states, as “Muong Haw”, which is traditionally rendered as “the Heavenly Dynasty”. They adapted Chinese place names to their local language by adding “Muong” in front; for example, Dali was “Muong Tali”. Xi- shuangbanna’s border with Burma was formally de- marcated in the 1890s. In 1953, the People’s Republic of China established the Xishuangbanna Dai Autonomous Region and ended the tusi system. Minority people have lived on this land for genera- tions. The distinctive natural environment here has created unusual customs and traditions. All over the region, even today, Dai houses can be seen. These bamboo structures

93 THIS IS HINA raised on stilts deter floods and dan- and the dancing herb whose leaves gerous animals, allowing many people rotate gently. Then there is mysterious to inhabit one house safely, often along fruit which reverse tastes, turning sour with all their animals. to sweet. Hunting is still the main source Species of trees that go back a mil- of income, in conjunction with farm- lion years are still propagating them- ing. In terms of culture, the Dai people selves. The King of Tea Trees, which dress in spectacular colour and furs, authorities say is at least 800 years old, and dancing and singing are popular contitues to sprout, adding extraordi- ways to pass the time. nary splendor to the homeland of the Popular destination in winter famous Pu’er tea. In Xishuangbanna, there is a saying: even a single tree can The prefecture is one of China’s make a forest and an old stalk can blos- most popular travel destinations in som and beat fruit. winter and teems with tourists seek- Kindom of elephants ing a warm and humid climate. With an average year-round temperature of To the Dai people, the elephant about 20 degrees Celsius, Xishuang- is the symbol of good luck, might and banna is home to expansive subtropical longevity. rainforests and wild animals such as The wild elephants of Xish- elephants and peacocks. uangbanna mainly live in the Wild The prefecture is nicknamed Aer- Elephants Valley, at the juncture of the ial Garden for its luxuriant and multi- western and eastern part of Menyang layered primitive woods and tropical natural reserve. Located in the Sanche- rain forests, which are teeming with he forest park of Mengyang nature re- animals and plants. serve, about 50km away from Jinghong, Within thick and boundless for- wild elephant valley is among the must- ests wild elephants and oxen ramble see sights in Xishuangbanna. about, with peacocks in their pride, gib- Elephants roam freely in the dense bons at play, and hornbills whispering. forest where tourists are transported Renowned as a huge natural zoo, in golf carts to observe the habitats of Xishuangbannas rain forest and mon- various wild animals. soon jungles provide a habitat for more It has 70 wild elephants ap- than 500 species of terrestrial verte- proximately which frequent the stream brates. Over 300 species of birds, 40 through the tropical rainforest for species of amphibious animals and 60 drinking, bathing and spraying water species of reptiles, including the boa upon one another, hence the name “the constrictor. Wild Elephant Ravine”. There are “ho- Among animals for world pro- tels in the tree”, dwellings built on tree tection are elephants, white-breasted trunks for the convenience of the activ- black woodpeckers, leopards and Ben- ity to view wild elephants. galese tigers. Tourists can stay in the tree dwell- Thirteen species of wild life enjoy ings and wait for the arrival of a herd of state protection, including loris, the wild elephants, breath in fresh air, view gibbons, the red-necked cranes, the the tropical rainforest, and meanwhile brown-neck horn-bills, and the green listen to twitter of birds and clear, me- peacocks, which to the Dai people are lodious gurgling of the stream. a symbol of peace, happiness and good In the valley, there is an observa- fortune and whose graceful postures tion tower, especially built for tourists. can put professional dancers to shame. The best time to see these impressive The region has 5000 kinds of plants or beasts is at dawn or dusk. There are cur- about one-sixth of the total in China. rently 300 elephants living in the dense This has earned it the renown sobri- forest in Xishuangbanna, known locally quet - Moonstone on the Crown of the as the “kingdom of elephants.” Kingdom of Plants. The Xishuangbanna primeval for- Among these are such fascinat- est park is another stop for visitors with ing ones as the color-changing flower an adventurous spirit. The park com- whose colors change three times daily bines wildlife exhibitions, including a 94 peacock-breeding base and monkey training center with presentations of exotic minority culture in forms of stage performances by local Dai people and ethnic food, all compacted in a natural rainforest. In addition to its rich wild life, Xish- uangbanna is also known for its religious influence. Bordering Myanmar to the south- west and Laos to the southeast, the prefec- ture has more than 500 Buddhist temples and pagodas scattered across its mountain- ous landscape. They serve as the venue where local Dai ethnic people gather for traditional celebrations like the Water Splash Festival and Dai ethnic minority New Year. Homeland of Pu’er Tea Pu’er tea has been famous in the world. But do you know the home of Pu’er tea is Xi- shuangbanna? Why it is called Pu’er tea? That’s because Pu’er city is a distribution center for the tea. So it has the name of Pu’er tea. In mountains of Xishuangbanna, grows many wild tea, some have been more than a thousand years old. The trunk is 3.8 meters in girth and 34 meters in height. All the tea businessmen were shocked by these old tea trees. Xishuangbanna tea tastes strong. It is famous for high quality and was once tribute tea to the royals of the Qing Dynasty. Today in Xishuangbanna, Yiwu, JiNuo Shan, NanNuo Shan, Bulang Shan, Banzhang and Xiding are popular tea areas. Pu’er tea has become another pillar industry in Xishuangbanna. “Tropical Fruit Kingdom” Xishuangbanna is one of several tropi- cal fruit production bases of China. Special climate and excellent natural environment for the cultivation and production of tropical fruits provide a good condition. A Wide variety of wild fruits provide species resource for the ori- gin of the fruit varieties, biological evolution, plant breeding research and genetic resources of species. Xishuangbanna has coconut, ba- nana, pineapple, lychee, longan, jackfruit, orang, egg yolk fruit, buffalo heart fruit, man- go, anti-season watermelon, melon, pomelo, passion fruit, etc. There are many kinds of fruits every- where, such as on the side of the road and in the courtyard. Among the many tropical fruits, the early, middle and late maturing fruits are available. In spring and winter you always can taste fresh fruit in Xishuangbanna. No matter what season you set foot on this paradise, you can enjoy yourself in this fresh fruits “kingdom”. 95

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