F Reign Trade

JAN. 2013 No. 530 Sponsored by CCPIT Since 1956 CHINA’S F REIGN TRADE

Special report China Set Economic Goals for 2013

SURVEY China’s Health Care Reform Benefits Pharma Companies

Chui Bing Sun, Chairman of Sage International Group LTD.

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 Policies

China targets emerging sectors for quality growth Built with an investment of 430 million yuan ($68.8 million), the 5-km overpass China will strengthen opened to traffic in late 2010 and spans the its efforts to spur emerg- largest inner city wetland in China — the ing sectors for quality, Longfeng Wetland Nature Reserve, located efficient and sustainable near the city of Daqing, known as China’s first economic growth in 2013, oil production base. the country’s top econom- In the 1960s, roads were built directly on ic planner said on Dec. the wetland so people could reach the oil fields 18, 2012. Xinhua News faster, which, however, threatened the local Agency reported. ecosystem. Zhang Ping, head of Since the bridge has been constructed, the National Development birds have returned and plants are growing and Reform Commission, again. A total of 76 species of birds are cur- said China will implement favorable policies and initiate pilot programs for strategic rently living within the wetland area, including emerging industries in 2013. five species under first-level national protec- The country will further take advantage of the driving force provided by in- tion. novation by promulgating development plans for biotechnology and satellite naviga- Authorities highlighted the need to pro- tion in 2013. mote ecological progress and gave it a more It will also encourage enterprises to increase expenditures on research and de- prominent position by incorporating it into the velopment and initiate major projects on medical apparatus and instruments, high- country’s overall development plan last month end equipment and new materials, Zhang said. when the governing Communist Party of However, this is only part of the efforts to achieve a new economic growth pat- China (CPC) convened a national congress. tern, which will take enhancing the quality and efficiency of economic growth as The country has pledged to support the de- a central task, according to a central economic work conference held during Dec. velopment of energy-efficient and low-carbon 15-16, 2012. industries, new energy sources and renewable To realize the goal, China will strive to reduce its industrial overcapacity, boost energy sources, which requires huge invest- the tertiary industry, step up the exploitation of new and renewable resources and ment. improve infrastructure in rural and urban areas, the NDRC said. Govt announces measures to China invests big in ecological progress boost PV industry

A viaduct built over a wetland in northeast China’s Heilongjiang Province to The State Council, or China’s cabinet, on make way for wildlife has been described as a “green bridge” by local residents, Dec. 19, 2012 announced a range of measures Xinhua reported. intended to boost the country’s struggling

Figures

saw revenues rise 13.4 percent designed to support its western devel- 200 bln year on year to hit 2.1 trillion yuan opment strategy in 2012, the country’s The output value of China’s ($333.99 billion) between January and top economic planner said. geographic information industry November 2012. is expected to reach 200 billion 2nd yuan ($31.8 billion) by the end of 577.8 bln 2012. A second cross-border railway to China invested Kazakhstan opened on Dec. 22, 2012 577.8 billion yuan linking China’s northwest Xinjiang 2.1 trln ($91.91 billion) Uygur autonomous region and the cen- China’s catering industry in new projects tral Asian country.

2 Quotes photovoltaic (PV) industry, which has been plagued by excessive capacity and “China to continue reform and opening-up” obstacles in overseas expansion, accord- “The central ing to Xinhua. committee of our China will accelerate structural Party made the right adjustments and technological improve- decision in starting ments in the sector, as well as encourage reform and opening- mergers and restructuring among manu- up,” Xi Jinping, facturers to phase out outdated capacity, General Secretary the cabinet said in a statement released of the Communist after an executive meeting presided over Party of China Cen- by Premier Wen Jiabao. tral Committee, told China will strictly control the ap- residents and tourists proval of new projects that produce in Shenzhen during a polysilicon, PV cells and other related five-day tour of South components, the statement said. China’s Guangdong The State Council said China will Province, according to Xinhua. enhance coordination between PV “We will follow this proven path and continue to develop our country and power generators and on-grid service improve living standards.” providers, as well as encourage the ap- “We will promote reform in more fields,” he said after laying a wreath in plication of distributed power generation front of a statue of Deng Xiaoping. in local communities. “Our country’s reform has entered a crucial and delicate stage, which re- The statement said China will im- quires us to have more political courage and wisdom and seize opportunities to prove its support policies, which include enhance reforms in important sectors,” Xi said. setting on-grid electricity prices according to local conditions and subsidizing the usage of PV-generated power. “Chinese economy not to witness a hard landing” The cabinet also promised to give The Chinese economy will not witness a hard landing, Stephen Green, head more play to market forces and re- of Greater China research at Standard Chartered Bank, was quoted as saying by duce government interference in the Xinhua. sector. He said that both the central and local government projects are going up this China’s PV industry has had dif- year, compared with a decline since around 2008, and at the same time, the real ficulty selling products overseas due to credit sector is also witnessing growth, implying that investment activity will anti-dumping probes initiated by the pick up. United States and Europe.

3.4% in 2013 as the drag from exports abates, according to a forecast of the China’s oil demand will grow by 3.4 per- International Monetary Fund (IMF). cent year on year in 2013, global banking giant Deutsche Bank (DB) forecast in its report. 522.9 bln 3% China’s new yuan-denominated lending reached 522.9 billion yuan The GDP growth rate of China’s Hong ($83 billion) in Nov., down 40 billion Kong Special Administrative Region (SAR) is yuan year on year, the People’s Bank expected to pick up pace to around 3 percent of China announced.

3 Policies

Visa policy to lure extra 2m overseas tourists To make it easier for them to explore the city, information desks have already been Beijing officials are expecting at least 2 million more overseas visitors to the established around the capital as well as at the capital in 2013 as a result of their decision to ease visa requirements for foreigners airport. More printed information, including from Jan. 1, China Daily reported. travel directions to famous places of interest The new policy, which will permit visitors from 45 countries to spend 72 hours will be available on flights, Wang said. in the city without a visa, is aimed at attracting more airport transit passengers, according to Wang Yue, deputy director of the Beijing Tourism Development Com- China vows to protect foreign mittee. investors’ interests “Last year, we had 5 million transit passengers coming into Beijing, and they simply went through the airport without entering the city. China vowed to continue to protect for- “Our research shows that at least half of them would have liked to leave the eign investors’ rights and interests and their terminal and tour the city, but the visa policy in the past blocked them from doing intellectual property rights, according to a that,” Wang said. statement issued after a central economic work The new policy is expected to increase hotel bookings, as well as boost restau- conference closed, said Xinhua. rant and shopping income. The country will step up its efforts to sta- Wang said city tourism officials will be working hard to make sure what’s on bilize foreign direct investment inflows while offer will appeal to the new generation of short-term foreign visitors. expanding its outbound investment in 2013. China will also stabilize and increase its share of world markets while boosting imports to support the country’s economic restructuring and make its international payment more balanced, according to the two-day conference, one of the nation’s most important economic events.

China to develop circular economy

The State Council, or China’s Cabinet, on Dec. 12, 2012 called for development of a circular economy while mapping out future tasks for boosting the country’s green growth, according to Xinhua. Establishing a circular economy is a major strategic task for China’s economic and social Figures

20.7 percent year on output rose 10.1 percent year on year in 21.9% year to 32.62 trillion Nov. 2012, picking up from 9.6 percent in China’s fiscal revenues grew yuan ($5.18 trillion) in October and 9.2 percent in September, the 21.9 percent year-on-year to 787.1 the first 11 months of NBS announced. billion yuan (about $125.12 bil- 2012, the National Bu- lion) in Nov. 2012, the Ministry of reau of Statistics (NBS) 14.9% Finance (MOF) said. said. Retail sales in China grew 14.2 percent year on year to 18.68 trillion yuan 20.7% 10.1% ($2.97 trillion) in the first 11 months of China’s fixed asset investment rose China’s value-added industrial 2012, the NBS said.

4 Quotes development, and an important means to promote ecological progress and achieve “China’s economy to pick up in 2013” sustainable growth, the cabinet noted China’s economy is likely to grow by 7.7 percent in 2012 and accelerate to during an executive meeting presided around 8.5 percent in 2013 partly due to the nation’s pro-growth policies, accord- over by Premier Wen Jiabao. ing to a report by the National Academy of Economic Strategy under the Chinese The cabinet also urged more efforts Academy of Social Sciences. to construct a nationwide industrial sys- The country’s economy will continue to be affected by many negative factors tem that allows recycling of renewable in the near future, including the faltering recovery of the global economy, strict resources and encourages green con- property curbs and excessive production capacity, said the report. sumption. The meeting passed the 12th Five-Year Plan on the development of “China increasingly leading world economy” the circular economy, which announces “China’s impact on the rest of the world in recent years has been revolution- multiple tasks and measures for promot- ary. No longer is it possible to understand the behavior of the global economy ing the sector’s development in the 2011- without acknowledging the gravitational pull of China,” said HSBC Bank chief 2015 period, according to a statement economist Stephen King. released after the meeting. King said the world economy is increasingly led by China, and countries In the industrial sector, China will raising their exposure to China have outperformed those with low exposure to promote economical use of resources in- China, in his latest report “The Great Rotation” obtained by Xinhua. cluding energy, water and land, as well as waste exchange, the statement said. The country will also build a cyclic “China should lower M2 growth goal” agricultural system that promotes re- “The policy target for M2 growth should be set lower as China’s economy source conservation, clean production enters a stage of structural reform and demand for money and credit also drops and waste reuse, in order to improve the accordingly,” Wang Yi and Shi Chunhua, who work for the central bank’s statis- ecological environment of rural China tics department, wrote in an article published in China Finance magazine. and the efficiency of its farming, the statement added. It furthermore said that China will “China to brace for new inflationary pressure” improve the system for recycling renew- Consumer prices are likely to enter a new upward cycle in 2013, although the able resources and waste, and push for- increases will be moderate, said Hu Chi, a researcher at the State-owned Assets ward green concepts in architecture and Supervision and Administration Commission’s research center, adding that the transportation. It said the service sector government should not relax controls over inflation because price growth will should play a key role in transforming gain traction as the economy picks up. the current consumption model into a green, low-carbon one.

2.2% year on year in Nov. 2012, the NBS announced. China’s producer price index (PPI), which measures inflation at the wholesale 1.75 bln level, fell 2.2 percent year on year in Nov. 2012, the NBS said. China’s railways transported 1.75 billion passengers from January to No- 2% vember 2012, up 4.6 percent from the same period of 2011, according to latest China’s consumer price index (CPI), statistics from the Ministry of Railways a main gauge of inflation, grew 2 percent (MOR).

5 http://cft.ccpit.org www.ccpit-cft.net.cn 2013/01 No.530

Special report China’s annual Central Economic Work 08 Conference maps out economic plans, 08 China Set Economic Goals for 2013 policies and targets for 2013. 10 Highlights of the Conference 12 Communiqué on 2012 Central Economic Work Conference of China 15 China Pursues Quality and Efficient Economy in 2013 18 A Sneak Peek at 2013

ECONOMY 24 Investment-Led Growth in China: Global Spillovers 26 Data Watch on China’s Foreign Trade and Investment in the First Eleven Months of 2012 The ICCIE is where technology 48 meets culture, and culture meets novel ideas. Industrial Watch 36 Health Food Industry: Quality and Regulatory 37 3D Printing: China’s New Growth Point or End of “Made in China”? 38 Mobile Smart Connected Devices Become Mainstream 40 Auto Industry: What to Look Forward in 2013? 42 Deficient Originality in China Animation and Games Industry 44 Behind the Booming of China Art Auction Market 46 The Fusion of Culture and Technology Refreshed Chinese Traditional Culture The 23rd JCCT reached consensus 64 on bilateral trade and investment 48 When Culture Meets Creative Ideas, Technology plans for China and the U.S.

survey 50 China’s Health Care Reform Benefits Pharma Companies

REGIONAL TRADE AND INVESTMENT 56 Laos Seeks for Chinese Investment 58 Tough 2012 for Sino-EU Trade 60 Denmark, China Cooperate on Energy-efficient Construction 60 UK to Attract Chinese Investors The world’s longest high-speed rail 88 line began operating on December 62 UK Enhances Visa Service in China 26, 2012 in China. 64 Positive Results Reached at China-U.S. JCCT 66 Mexico: China’s Unlikely Challenger 68 It’s Proper Time for Chinese Companies to Invest Sponsored by (主管) CCPIT(中国国际贸易促进委员会) in Ethiopia Operated by (主办) 70 Chengdu Becomes Investment Hot Spot Trade Development and Cooperation Center of CCPIT 中国国际贸易促进委员会贸易推广交流中心

COVER STORY Published by (出版) China’s Foreign Trade Magazine 72 Life Course: Respect and Love 中国对外贸易杂志社社长 President 杨晓东 Yang Xiaodong InfoRMATION 总编辑 Editor-in-Chief 孟燕星 Meng Yanxing 副社长 Vice President 石净 Shi Jing 76 Investment Projects in Dengfeng City, Henan Province, 杨复强 Yang Fuqiang 李英宏 Li Yinghong China 编辑部副主任杨蔚 78 China Fairs & Expos Editorial Deputy Director Yang Wei 执行主编 Executive Editor 郭艳 Guo Yan 82 2013 China Market Suppliers List 编辑部 Editorial Department 竹子俊 Zhu Zijun 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 84 The National Styles in China International Fashion 英文校审 English Copyeditor 刘英波（英） Lewis McCarthy 莫雷（美）Adam Morley Week S/S 2013 经营部总经理石净（兼） Marketing Department Director Shi Jing THIS IS China 副总经理 Deputy Director 白义峰 Bai Yifeng 石林峰 Shi Linfeng 88 项目经理 Manager 游万龙 You Wanlong Travel by Beijing-Guangzhou High-Speed Train Tel:86-10-68027947 李小冬 Li Xiaodong 高嵩 Gao Song eye on china 推广部总经理李英宏（兼） 92 Waste Collection and Disposal in China Distribution Department Director Li Yinghong 项目经理 Manager 王石 Wang Shi 93 A New Leadership, a New Year, a New Opportunity? Tel:86-10-68069328 王岱凌 Wang Dailing 秘书处副主任刘晓东 Culture Council Secretariat Deputy Director Liu Xiaodong 联络专员 Assistant 王飞 Wang Fei 94 Tel:86-10-68020773 于洋 Yu Yang The Thousand Character Classic (I) 戚英杰 Qi Yingjie 石林 Shi Lin

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hina’s annual Central Economic Work Conference, usually held at the year end, is one of the nation’s most important economic events. Participated by the highest- level Party and government policymakers, it maps out economic plans, policies and targets for the next year. CThis year’s meeting, convened on December 15-16, 2012, has attracted even more attention than usual, as it not only offers in- sights into the direction of the Chinese economy in 2013, but also offered the first glimpse of the economic thinking of China’s new leadership that came to power in November, 2012. During the two-day conference, China’s new top leaders vowed to hold urban growth as one key structural growth driver while continuing reforms and sustaining proactive fiscal policies and prudent monetary policies the government exerted in 2012.

Focus of previous Central Economic Work Conferences

2001 2002 2003 2004 2005 2006 Expand domes- Maintain a Maintain a Enhance and improve Maintain the continuity Realize tic consump- stable macro- stable macro- macro-regulation, and stability of macro- sound tion and speed economic policy economic policy promote reform and economic policy and and fast up economic while making while making opening-up, and push improve the quality economic restructuring8 appropriate appropriate forward economic and efficiency of eco- growth readjustments readjustments structure adjustment nomic growth 2007 2008 2009 2010 2011 2012 Shift Bolster employ- Maintain the continuity Combat inflation Maintain sta- Push forward urban- monetary ment and domes- and stability of economic and maintain stable economic ization while deepen- policy from tic demand and policies and continue to ble and relatively growth ing reforms and con- “prudent” to reduce excessive implement the proactive fast economic tinuing proactive fiscal “tight” dependence on fiscal policy and loose growth policies and prudent exports monetary policy monetary policies Highlights of the Conference

By Cui Xiaoling

he 2012 Central Economic Work Confer- about the top-level design for total economy system ence of China set the tone for the country’s reform. The general plan is something like a road map macro economic policies in the year 2013. or a timetable. There is a continuation of policies. Still, some China will fully deepen reforms in its economy of what was said at the meeting was different from that system and open itself up more in 2013, according to Tof the previous years. the statement issued after the conclusion of the central De-emphasis of growth economic work conference. Deepening economic reform is crucial to stabiliz- This time, Chinese policymakers did not give ing growth, transforming the economic growth pattern a specific target GDP growth rate for 2013. Instead, and making structural adjustments, the statement said. they emphasized the quality and efficiency of economic The conference called for “greater political cour- growth. Stabilizing growth, adjusting structure, pro- age and wisdom” to promote further reforms. moting reform and benefiting people’s livelihood are In-depth research and studies should be done the major theme of the conference. to improve the top-level design and general plan for The government has been adopting policies China’s reforms, and a clear overall scheme, road map to stabilize growth since March 2012, trying to let and timetable should be made, the statement said. growth settle around its new potential. So far, the Urbanization government has resisted calls to take more aggressive growth-boosting measures, and may continue to do so China will actively and steadily push forward ur- in 2013. banization in 2013, with a focus on improving quality Top-level design for total economy system of the efforts, according to the statement. Urbaniza- reform tion is a historic task with the country’s modernization drive, and a main driver to boost domestic consump- Another distinct shift from previous policies is tion, it added. that for the first time in history, Chinese leaders talked China’s urban population, which outnumbered

10 that of rural areas for the first time at the end of 2011, Stable RMB exchange rate for 2013 is expected to account for 70 percent of the total population by 2030, according to the World Bank’s forecast. The statement said China will maintain a stable An increase of a single percentage point indicates RMB exchange rate. So-called “stable” should be a an addition of more than 10 million urban residents, road for a very moderate appreciation of the RMB, each of whom will spur at least 100,000 yuan ($15,892) according to Tang Yunfei, chief analyst of Founder in infrastructure investment, according to previous es- Securities Company, the biggest securities firm in mid- timates by experts. west China. In his opinion, this type of appreciation The country will incorporate the concept of eco- should be good to pressure the industrial side to upgrade logical civilization in its urbanization process in a bid to their product line so as to meet the global competition. build intelligent, green and low-carbon cities, accord- Continue to regulate the property market ing to the statement. To boost domestic consumption and improve The Chinese government will continue to tighten people’s well-being, the statement also vowed to rein- the regulation efforts for the real estates market. The force the country’s urban and rural social security net- country will step up the construction and management works. of low-income housing, as well as the renovation of More investment to boost Chinese economy run-down areas, according to the conference. next year But key words — to push the price of the real estates back to the reasonable level — disappeared The conference of 2011 only said about fueling compared with the statement of 2011. And the next the domestic consumption. But at this meeting, Chi- sentence is about the concern over the financial risks of nese leaders emphasized two sectors, both the domestic the regional governments’ financial platform. consumption and the investment. Stubbornly high real estate prices have been a China will encourage and increase both private significant source of public complaint in recent years, and public investment in 2013 to effectively bolster the forcing the government to implement a string of poli- country’s economic development, said the statement. cies to keep prices down. While encouraging and providing better guid- However, the property market has shown signs ance to private investors, the government will increase of warming in the end of 2012, as the government has public investment in infrastructure projects that will also taken measures to shore up growth. not cause repetitive construction but set foundations for Real estate investment accounts for about 13 per- long-term development and benefit people’s well-being, cent of China’s gross domestic output and one-fifth of it said. the country’s fixed-asset investment. Maintain prudent monetary policy in 2013 China has reiterated its firm stance regarding property market controls and vowed to keep tighten- China will maintain a proactive fiscal policy and ing measures in place, including bans on third-home prudent monetary policy in 2013, according to the purchases and property tax trials that have been intro- statement. duced since 2010. The country will “properly expand the amount Boost real economy of social financing to maintain a moderate increase in loan issuances” and keep the yuan’s exchange rate “ba- 2012 was a difficult year for China’s real economy, sically stable” in 2013. such as manufacturing and the steel industry. China’s The conference also mentioned guarding against firms are facing weakening demand and rising costs. potential risks in the country’s fiscal and financial sec- The statement addressed the issue. There will be struc- tors. tural tax reducing for certain industrial sectors. And China has kept a proactive fiscal policy since late the government also pledges to provide more, low in- 2008, when the country unveiled a 4-trillion-yuan terest level environment for the real economies. ($634.92 billion) stimulus package to counter the ad- Protect foreign investors’ interests verse impact of the global financial crisis. Its monetary policy has been prudent since late 2010. China vowed to continue to protect foreign investors’ The country’s annual economic growth slipped rights and interests and their intellectual property rights. to 7.4 percent in the third quarter of 2012, slowing for The country will step up its effort to stabilize seven quarters in a row. foreign direct investment inflows while expanding its To spur growth, China’s central bank twice outbound investment in 2013. trimmed benchmark interest rates and commercial China will also stabilize and increase its share of banks’ reserve requirement ratios in the first seven world markets while boosting imports to support the months of 2012. But it has since resisted further cuts, country’s economic restructuring and make its interna- preferring to use open market operations instead. tional payment more balanced.

11 Communiqué on 2012 Central Economic Work Conference of China By Xinhua News Agency

eneral Secretary of the CPC model, science and technology innova- and the industrial overcapacity has been Central Committee and tion, the reform and opening up to the aggravated; companies have rising pro- Chairman of the Military outside world, and the betterment of duction costs but inefficient innovation Commission of the CPC people’s wellbeing. capacity; there are potential risks in the Central Committee Xi Jinping, Pre- Opportunities and challenges financial sector; the conflict between Gmier of the State Council Wen Jiabao, ahead economic development and resources and members of the Political Bureau of and environment are still prominent. CPC Central Committee Li Keqiang, The conference emphasized that So, we must remain clear-minded, stay Zhang Dejiang, Yu Zhengsheng, Liu China is now at a higher standing alarmed of unexpected developments, Yunshan, Wang Qishan and Zhang point. Comprehensive analysis indi- thoroughly analyze the underlying Gaoli attended the conference. cates that China still enjoys precious causes, and adopt effective measures to Xi Jinping made a speech at the opportunities and favorable conditions address these problems. conference, analyzing the domestic for development. The economic and Forecast and plan for 2013 and international economic environ- social fundamentals have been in good ment and putting forward the general shape for a long time. There are huge The conference held that the inter- requirements and major tasks of the potentials in the domestic market. The national economic environment is still economic work of 2013. Premier Wen social productive force has solid basis. complicated and volatile; the downturn reviewed the economic work of the year The science and technology innova- of world economy will continue; trade 2012 and deployed the economic work tion capacity has been enhanced. The protectionism of various forms will for 2013 in his speech. Li chaired the country has rich human resources and resurface; there will be growing pres- conference and made a closing speech. obvious competitive edges in productive sure from potential inflation and asset Review of the achievements factors. The mechanisms of the socialist bubbles; the world economy has entered market economy have been constantly a time of in-depth transformation and The conference held that confront- improved. adjustment from the era of rapid devel- ed with increasingly daunting interna- In the meantime, China should opment before the financial crisis. tional economic environment and ardu- also be keenly aware of the following The conference noted that analysis ous domestic tasks concerning reform, facts: there are still many of international environment development, and stability in 2012, the risks and challenges for shows the basic judgment Chinese people have, under the leader- China’s development, Urbanization that China’s development ship of the CPC Central Committee which is still unbalanced, is still in a stage with great and the State Council, focused on the uncoordinated, and un- strategic opportunities theme of scientific development, seized sustainable; the conflict continues to the right. In the thrust of accelerating of the change between the slowdown the meantime, this stage of economic growth model, followed of the economic growth has undergone signifi- the keynote of making stable progress, and strengthened and improved the macro control. As a result, steady progress has been made in economic and society sectors. The economic activities have been stable at large, the growth rate of prices has dropped slowly, the fundamental role of agricultural sector has been further consolidated, and the social situation has been stable. New progress and accomplishments have been made in the transformation of economic growth

12 cant changes in nature and conditions structure, and safeguard and improve mental strategy of expanding domestic as far as the international environment people’s wellbeing. We should enhance demand, and foster a slew of consump- is concerned. The opportunities for the internal vitality and impetus for the tion growth points. We will let con- China now are not traditional oppor- economic development, keep the gen- sumption play a more fundamental role tunities such as integration into the eral price at a stable level, and achieve in economic growth, and let investment global economy, expansion of export, sustainable and healthy economic play an important role in such growth. or enhancement of investment, but new development and social harmony and We will increase and guide investment opportunities which force the country stability. by the private sector and increase the to expand domestic demand, enhance Six tasks for 2013 public investment in infrastructures innovation capacity, and change the that help lay a solid foundation, serve economic growth model. China must The conference identified the fol- long-term interests, benefit people’s have a deep understanding of those lowing major tasks for the economic wellbeing but do not cause redundancy. new opportunities, seize them, make work in 2013. We will continue to implement good use of them, and pursue greater 1. We will strengthen and im- proactive fiscal policies and prudent national interests in the ever-changing prove macro control and promote monetary policies, exercise counter- international environment. sustainable and healthy economic cyclical monetary policy regulation and In order to do well in the econom- development. We must adhere to the promote economic adjustments. We ic work in 2013, we should thoroughly strategic thinking that development is will introduce proactive fiscal policies study and implement the guidelines the absolute principle and by no means and improve the structural tax cut pol- of the 18th National Congress, fol- swerve. The 18th National Congress icy in combination with the tax reform. low the guidance of the Deng Xiaop- emphasized the need to promote sus- Local governments at all levels are re- ing Theory, the important thought of tainable and healthy development of quired to practice frugality, strictly con- “Three Represents”, and the Scientific the economy, to develop the economy trol the general expenditure, and spend Outlook on Development, center on at a sustainable rate respecting the eco- every penny wisely. We will introduce the improvement of economic quality nomic laws, to ensure the quality and prudent monetary policies and enable and efficiency, make steady progress, efficiency of economic expansion, and the policies to be more flexible. blaze new trails, make innovations, and to achieve economic growth by con- We will appropriately increase the kick off a good start. We should further stantly changing the economic growth combined scale of social financing, ap- incentivize innovation, strengthen and model and optimizing the economic propriately increase the loans, keep the improve macro control, actively fuel structure. exchange rate of RMB at a stable level, domestic demand, adjust the economic So, we will stick to the funda- and substantially reduce the financing

13 costs for the growth of real economy. We will continue to stick to the real estate regulation policies, pay close attention to the risks in the fiscal and financial sectors, and do not break the bottom line that keeps us against comprehensive and regional financial risks. 2. We will consolidate the agricultural basis and guarantee the supply of farm produce. We will consider the settlements of the issues concerning “agriculture, farmers, and rural areas” as the top priority of our Party in a long term, and by no means neglect or relax on the agricultural sector because of good harvests for consecutive years. China has 1.3 billion populations, so only are we capable of feeding our population can we maintain social stability. We will improve the comprehensive agricultural production capacities, economic laws, introduce industry- tary with the regional economic devel- strictly protect the farmlands, make specific policies, take multiple mea- opment and with industrial layout, and vigorous efforts to carry out irrigation sures, and address the root causes and accommodated with the resources and and water conservancy projects, pro- the symptoms. We will do a better environment carrying capacity. We will vide more scientific and technological job in predicting development trends identify it a major task to turn eligible services, and constantly upgrade the of industries with overcapacities and workers who have left agricultural work agricultural materials, technologies and make targets plans to adjust and solve to become urban residents and do well equipment. the problems. We will continue to in- in it. We will incorporate the concepts We will stabilize and improve the duce innovation-driven development, and principles of ecological civilization policy of strengthening agriculture, give full play to the talents and ca- into the whole process of urbanization, benefiting farmers and enriching rural pacities of entrepreneurs, facilitate sci- and take a new path of intensive, smart, areas, cherish and mobilize the enthu- ence and technology innovation, and green, and low-carbon urbanization. siasm of the farmers for agricultural enhance the innovation of products, 5. We will work harder to safe- production, and ensure the profitability brands, industrial organizations, and guard people’s wellbeing and im- of agricultural production. business models. We will reasonably prove people’s living conditions. We We will, based on the improve- arrange the productive forces, make will do well in this task in accordance ment of basic rural management system, overall plans for major projects that with the principle of “not breaking make innovations in the agricultural concern the economic lifeline of the the bottom line, highlighting the management system, and speed up the country and have significant benefits priorities, improving institutions, and development of modern agriculture. of scaled economy. guiding the public opinions”. We will We will enhance green production 4. We will advance urbanization give priority to maintaining the basic and guarantee the quality of farm pro- proactively and steadily, and improve subsistence of low-income people and duce at the source. the urbanization quality. Urbanization do well in subsidizing financially diffi- 3. We will accelerate the indus- is a historic mission for the moderniza- cult students. We will pay attention to trial restructuring and improve the tion of our country and embraces the stabilizing and increasing employment overall qualities of industries. We greatest potential for fueling domestic and do a good job in employment of will seek quality-assured, efficient, demand. young people, mainly college gradu- sustainable development respecting We will focus on improvement of ates. We will give support to small and the economic laws. urbanization quality, divert it into our micro businesses and urge large com- The key to doing this is to deepen advantages, maximize what is good and panies to shoulder social responsibility. the strategic adjustments to industrial minimize what is bad, and steer the ur- We will strengthen the development structure. We will make full use of the banization to a path of healthy develop- of urban and rural social security sys- target-driven mechanism derived from ment. We will make scientific and rea- tem, continue to improve the measures the international financial crisis, and sonable urban planning. We will make concerning the transfer of pension ac- focus on resolving the overcapacity scientific urban planning for metropo- counts, and raising the pooling level problem. lis, medium-and small-sized cities, and of basic pension insurance. We will The general principle is to respect city clusters, make them complemen- continue strengthening the develop-

14 ment and management of low-income housing, and accelerate the renovation China Pursues of shanty settlements. We will guide the people to foster the idea of getting rich and improving living conditions Quality and Efficient through hard-working, so that the improvement of people’s wellbeing will not only be the direction of the work Economy in 2013 of the CPC and government but also the goal of our people. — An exclusive interview with Yao Jingyuan, Contract Research 6. We will deepen the economic restructuring from all respects, and Fellow with the Advisory Office of the State Council of China unswervingly expand the opening up. The key to achieving steady growth, changing growth model, and adjust- By Gao Chao ing structure is to deepen the economic restructuring from all respects. We will have firm confidence, build consensus, make overall plans, and work together to make progress. We will not divert from the direction for the reform of the socialist market economy, enable n 2012, in the face of the reform to be more comprehensive, worsening interna- holistic, and coordinated, and promote tional economic situa- the next round of reform with greater tion and the arduous political courage and wisdom. We will task of domestic reform, well implement reform measures al- IChina has, under the ready put in place, and introduce new principle of making prog- measures in a timely fashion in order to ress while maintaining solve pressing conflicts at the moment. stability, beefed up efforts We will work on the top-down to transform the pattern design and overall planning for deepen- of economic development, ing the economic restructuring from all strengthened and improved respects, and come up with the master macro-control at a good tim- plan, roadmap, and schedule for the re- ing, attached more importance form. We will stick to effective reform to stable economic growth, and path, respect people’s pioneering spirits, witnessed steady economic growth. practice, and creation, match the whole However, China’s economic with the parts, address root causes and development is unbalanced, uncoordi- Economic growth and CPI symptoms, and integrate the gradual nated and unsustainable. The down- stabilized in 2012 ward pressure on economic growth progress with breakthroughs. We will In the 30 years since the encourage ambitious explorations, be and industrial capacity surplus has Q : reform and opening up, China’s brave to blaze new trails, and allow trial worsened. Companies face rising pro- economy has maintained an aver- efforts. duction and operation costs and are age annual growth rate of nearly We will stabilize and expand our in lack of innovative capacity. There 10%. Compared with the previous share in the international market, let are potential risks in the financial years, China’s economic growth the import to play the supporting role sector. There is still severe contradic- slowed down significantly in 2012. in economic restructuring, and pro- tion between economic development, It is expected to decline to less mote the balance of payments. We will resources and environment. than 8%. How do you rate the eco- strengthen the protection of the rights How were the fundamentals of nomic situation in 2012? and interests of foreign investors and the Chinese economy in 2012? What the intellectual property rights, stabilize were the prominent problems? And the size of foreign capitals used, and where is the Chinese economy go- A: The 2011 Central Economic expand overseas investment. We will ing in 2013? With these questions, Work Conference identified two continue to promote multilateral and China’s Foreign Trade interviewed Yao major tasks in 2012: to stabilize the bilateral economic and trade ties and Jingyuan, Contract Research Fellow economic growth and to stabilize the work faster to implement the free trade with the Advisory Office of the State consumer price. The target for eco- zone strategy. Council of China. nomic growth was 7.5%, and that for

15 the consumer price was to keep inflation under 4%. Now at the end of 2012, we are confident that the economy could meet the 7.5% target. We have to note that China’s over 9.8% growth in the past 30 years are mainly driven by high investment of the elements of resources and high energy consumption, resulting in heavy pollution. This pattern of growth is not sustainable. In order to solve the problems of unbalanced, uncoordinated and unsustainable economic expansion, the Chinese government has taken the ini- tiative to speed up the transformation of the pattern of economic development and strengthen economic restructuring. The external environment is very grim, with the slow recovery of the world economy and the rise of trade protectionism. China’s foreign trade growth slumped to less than 6% from the 25% in 2011. In this context, Chi- na’s economic growth had been slowing down for seven quarters in a row since the first quarter of 2011. In the second half of 2012, the central government strengthened the for the price stability in 2012. Firstly, not been made in the transformation of macro-control in a timely manner, and the European debt crisis. The global the mode of economic growth and the gave more importance to stabilizing economic downturn means a weak structural adjustment. economic growth. As a result, the Chi- impact from the international market. nese economy has gradually regained its Secondly, China’s agriculture has en- Priority given to quality and expansion rate since October 2012. joyed good harvest for nine consecutive efficiency of the economy in Generally speaking, China real- years. As the basis of the consumer 2013 ized steady economic expansion in the price, stable food price means stable year 2012 against an extremely complex consumer price. Q : The Central Economic Confer- and challenging domestic and interna- In sum, we have done well in the ence proposed that China’s eco- tional economic environment. The over two major tasks in 2012 — stable economic work in 2013 should “center 7.5% expansion rate is hard-won. The nomic growth and stable prices. As said on the quality and efficiency of the rate is the best in the world, higher than at the Central Economic Work Confer- economic growth and seek prog- those of the developed countries and ence, “the economy has run smoothly, ress while maintaining stability”. emerging economies. the price increase has slowed down What is your understanding of the The CPI has been a wide concern steadily, the position of agriculture as saying? of the public in recent years. 5.5 trillion the foundation of the economy has yuan worth of loans have been issued been strengthened, and the society has A: In 2013, we will build on the since 1949 when the People’s Republic been stable in general. New progress steady progress made in 2012, leave a of China was founded, of which 2.8 has been made in the transformation of bigger space for the reform, and focus trillion yuan worth of loans were made the economic development mode, the more on the quality and efficiency of in the four years from 2008 to 2011. scientific and technological innovation, the economic growth, the structural Such a large amount of money will reform and opening up and the uplift- adjustment and the transformation of naturally have an impact on the prices. ing of people’s livelihood.” the growth mode. The new leadership However, we have controlled the in- The main problem of the Chinese has reiterated that reform is the biggest flation within 4% in the year 2012. A economy in 2012 is that the quality and dividend for China’s economic expan- stable consumer price has created room efficiency of the economic growth is sion in the future. They have expressed for stable economic growth, making yet to be improved. Chinese enterprises their determination to carry out deeper it possible to fine-tune the fiscal and above the designated scale just turned reforms to facilitate economic and monetary policies. profitable in October, 2012. Another social development. In this sense, the Of course, there are many reasons problem is that substantive progress has speed of China’s economic growth in

16 be noted the Chinese economy in 2013 dated. There have been a larger propor- face many challenges. It will see a tion of exports of high-tech products. bumpy recovery. A lot of deep-rooted Export of the seven categories of labor- contradictions and problems are yet to intensive products — textiles, clothing, be resolved. Therefore, it is important furniture, luggage, footwear, plastic to maintain the continuity and stabil- products, and toys — grew faster than ity of the government policies, adhere the total trade in the first 11 months to the principle of making progress of 2012. Export of electromechanical while maintaining stability, center on products increased by 8.2%, 0.9 percent the quality and efficiency of economic higher than the growth of total trade in growth, and deepen reform and open- the same period. China’s foreign trade ing up, instead of blindly pursuing the has made new progress in the market speed of expansion. exploration and product diversification. Export to the ASEAN, Russia, South Overview of China’s foreign Africa, Brazil, Africa and other emerg- trade ing markets has seen a steady growth. While the export growth in China’s Q : According to Customs statis- eastern coastal areas dropped, the central tics, China’s foreign trade in the and western regions exports reported first 11 months of 2012 registered rapid growth. As high as 50% growth $3.50028 trillion, a year-on-year was registered in Chongqing, Anhui, growth of 5.8%. The Ministry of Henan and other central and western Commerce of China has repeatedly parts of the country. said it was difficult to meet the for- Another point worth noticing eign trade target for 2012. How do is that the foreign trade slowdown you evaluate China’s foreign trade in 2012 has to some extent forced in 2012? What is you forecast for domestic exporters to improve 2013 should not be too fast, so as to 2013? product quality, optimize the eco- leave space for the reform, and create nomic structure and transform the conditions for the adjustment of the A: China’s foreign trade has not met growth mode, in order to reduce the economic growth mode and structure. the target of 10% growth in 2012, due economy’s dependence on external China’s economic progress in the in large part to the slow recovery of demand. Exporting companies have past 30 years has been based on two the global economy, shrinking external been prompted to optimize product dividends — the demography and the demand and the rise of trade protec- structure, increase the value-added reform. Now with the fading of the tionism. The global economy is still in through innovation, and enhance the demographic dividend, how could we a slow, difficult recovery process. In the competitiveness of China’s export increase the dividend of the reform? first three quarters of 2012, the EU products. Chinese exporters of labor- I think the fiscal policy is a break- economy underwent negative growth, intensive products, in particular, need through. The core of the reform of the Japan zero growth, the United Stated to foster advantages in technology, fiscal policy is to cut taxes, which could little expansion. In particular, the Eu- quality, brand, and services, against quickly solve the difficulties of small ropean debt crisis had a direct impact the backdrop of rising costs and and medium sized enterprises have in on China’s foreign trade. In recent tougher international competition. obtaining finance and loans, improve years, Europe has been China’s larg- Although the world economic corporate profitability, increase people’s est trading partner, largest market of expansion will continue to be slow in income, and expand domestic con- exports, and largest source of technolo- 2013 and various forms of protection- sumption. The premise of tax cuts is to gies introduction. The first 11 months ism will spring up, the global economic reduce government spending. An ef- of 2012 saw a decline of 4.1% in trade environment is likely to improve and fective way to do so is to streamline the between China and the EU. China’s foreign trade will turn for the government, and give more power to Although China’s foreign trade better. Moreover, China’s policy of the market. did not meet the target of 10% growth expanding domestic demand means 2013 is a year full of opportuni- in 2012, the growth rate was still faster an increase in imports by the country. ties for the Chinese economy. The 18th than most economies in the world. There The Ministry of Finance has recently Party Congress was concluded success- are still a number of highlights worth lowered the import tariffs for many fully, setting the target of completing mentioning. For example, China’s trade categories of goods, especially those the construction of a well-off society by structure has been further optimized. closely related to the lives of the people. the year 2020. Specific plans have been Its share in the international market has This will play a positive role in increas- mapped out, which will greatly facili- increased. The competitive edge of tradi- ing imports and stimulating China’s tate the economic growth. But it should tional export products has been consoli- foreign trade.

17 A Sneak Peek at 2013 By Stephen Green

* We now look for 7.8% growth in 2013, and a better H2 than H1; * We believe the interest rate cutting cycle has ended and expect the next move to be up, in late 2013;

* The CNY should remain stable against the USD in 2012, but appreciate mildly as the trade surplus revives in 2013-14;

* We forecast USD-CNY at 6.19 at end-2013, 6.00 at end-2014.

e expect clearer signs of the start of believe, although not to a large extent. Business a moderate recovery to emerge in is going through the difficult part of the business early 2013. We also now expect in- cycle – scrappy cash flow, rising receivables, poor terest rates to remain flat until Q4- investment appetite, and high levels of invento- 2013, versus our previous call of one more cut in ries. Today, in addition to presenting our forecast Wthe benchmark rate. We maintain our view that changes, we introduce what we think will be the China will enter a rate-hiking cycle in Q4-2013, big themes for 2013. and continue to hike in 2014. This is based on our 7-8% GDP growth view that CPI inflation will average 4% in 2013, and move above 5% y/y in H2 2013. We keep our We now expect official GDP growth for USD-CNY forecasts unchanged for 2012-13, and 2012 to come in at 7.7% (revised down from our adjust our end-2014 forecast to 6.00 from 5.83. late-2011 call of 8.1%). Actual growth could be Rather than the sudden collapse in demand a little slower– manufacturing-related proxies Beijing faced in Q4-2008, we have seen a slide are now at low-single-digit rates of growth, and in real growth momentum in 2012, particularly consumption-related proxies have also weakened in manufacturing. Actual GDP growth may in H2. The monetary stimulus delivered in Q2- now be running below the official numbers, we 2012 was measured, delivering real loan growth

18 of some 15% y/y for most of H2, but they need to go lower, banks themselves sector with looser monetary policy. the evidence is not yet clear that it has have the freedom to cut rates to 30% Interest rate reform neutralised the downward momentum below the benchmark (most loans are generated by the housing and export currently priced at flat to 10% below, it In 2012, the PBoC broadened sectors. We look for clearer signs of seems). We therefore change our view the bands around the benchmarks stabilising growth and a slow recovery on rates; we no longer look for another within which banks may lend and in H1-2013 as the business cycle turns cut in 2012. Indeed, we believe that take deposits. Banks suffered margin (see Figure 1). We estimate that offi- the next move will be up, in late 2013, compression as a result. We believe cial GDP growth in 2013 will be 7.8% as official CPI inflation pushes above the next logical step would be to use (previously: 8.7%), close to potential. 5% y/y. After one hike in Q4-2013, we an interbank rate (repo or reverse repo) Real growth in the 7-8% range should look for four more hikes in 2014. as a new benchmark — but this will be achievable over the 2013-18 period, On reserve requirement reserve take some time. The volatility of the but will depend on the implementation (RRR) hikes, again, the PBoC ap- interbank market needs to be reduced of a real structural reform programme. pears to have the interbank rate where in order for this move to take place. If We believe the real danger to China’s it wants it, at 3-3.5% for the seven- this can be achieved in 2013-14, the economy is a gradual descent into a day, and is developing the reverse repo next round of monetary policy tighten- rigid, un-competitive, and more state- into an effective liquidity-provision ing will be able to rely more on rates, dominated economy, growing only tool. The PBoC leadership appears to rather than quiet phone calls to the at 3-4% and vulnerable to shocks — believe that this is a reasonable rate for banks to tell them to stop lending. rather than a sudden, hard landing this point in the cycle. Thus, we now Keeping leverage flat induced by an investment bust. look for only one more RRR cut in The end of stimulative monetary 2012 (versus three cuts previously). For While the US and Europe are in policy 2013, we expect a slightly larger trade the midst of a painful multi-year de- surplus than in 2012, which will pro- leveraging process, China is undergo- With the loss of large net FX in- vide additional liquidity; we also ex- ing something slightly different. It is flows, there is now no natural driver of pect clearer signs of a growth rebound. not deleveraging; rather, policy makers China’s base money growth (although Thus, we expect no RRR cuts in 2013. appear to want to keep leverage lev- we suspect that the trade surplus will Of course, these decisions are not up els roughly flat, or rising only a little. rise in 2013, so there will likely be to the PBoC alone, and if the State This requires limiting credit growth to net FX inflows). We forecast that M2 Council fears a significant growth around 14-15%. It also requires keeping growth will be around 14% again in deterioration in Q4 or in 2013, it will nominal GDP growth at around the 2013 and that total bank loan growth order a cut in rates or the RRR. How- same pace as nominal interest rates. We will be around 15%. The leadership of ever, Beijing seems relatively comfort- expect nominal GDP growth of around the People’s Bank of China (PBoC) able with the growth outlook at pres- 11% in 2013. This is a different experi- seems to believe that interest rates are ent — and more wary than before of ence for China from the debt-fuelled already at an appropriate level – and if reflating the economy and the housing growth of 2009-10, but it is nowhere near as painful as what is going on in the developed world. This overall policy Figure 1: A moderate recovery in 2013 stance is occurring at the same time Real GDP growth, includes our forecasts as the downturn in the business cycle. Bosses who expanded their companies 12% by boosting assets, and by relying on cheap cash and endless top-line-sales 11% growth, now have to worry about margins, cash-flow management and over- 10% all efficiency. As the tide of cheap cash and ever-present monetary stimulus re- 9% cedes, many corporates will be found to GDP,q/qs AA have been swimming naked. We think, though, that the problems of higher 8% inventories and receivables should be Official GDP gro gradually worked through. Hopefully, 7% y/y by H2-2013, the cycle will be turning. Resolving non-performing loans 6% (NPLs) Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Banks’ NPLs and corporate re- Sources: CEIC, Standard Chartered Research ceivables have started to rise this year,

19 and they will likely become bigger competition, innovation (and the re- GDP in 2013. problems in 2013. The State Council sulting job creation), and productivity Selling state assets will need to consider a new NPL- in light manufacturing. The services resolution regime in 2013, which could sector needs the same. Former Premier Zhu Rongji involve selling commercial NPLs to Tax cuts, spending cuts and a oversaw a big sale of small state enter- the four asset-management companies slightly bigger budget deficit prises in the mid-1990s, driven by debt (AMCs) and other boutique NPL and inefficiency. These sales boosted firms, and possibly also setting up a China has been able to run small productivity growth and catalysed the dedicated loan-resolution mechanism budget deficits as the government has emergence of the private sector. Given for local-government-investment- pushed massive infrastructure spend- rising local-government debt, a second vehicle (LGIV) loans. A working cor- ing off to banks’ balance sheets. Such wave of state-owned-enterprise (SOE) porate bankruptcy regime would help. loans to LGIVs have been reclassi- sales would be welcome. There are Many banks will need to consider fied, but they remain a key quasi-fiscal important questions surrounding what recapitalisation, and some small banks risk. All of this financing needs to be will be sold and how the sales will be will need to be closed or merged. brought onto public balance sheets, or organised, but this supply-side reform Opening up the services sector sold to the private sector. 2013 could is vital to creating room for the private also be a big year for asset-backed se- sector to grow. At the same time, cen- Services are growing on the curitisation (ABS) for infrastructure tral government-level SOEs need to back of the expanding urban middle projects, assuming that price reform donate 30% or so of their profits to the class and the increased complexity of can be pushed through as well. Tax budget; until now, their dividends have China’s manufacturing. But the gov- revenues are down, and the very slow been channelled back into industrial ernment urgently needs to nurture the land market has further tightened lo- subsidies. services boom by getting out of the cal government finances. Housing market way and selling down its interests in In order to stimulate growth, the businesses such as real estate, hotels, government could consider cutting In H1-2013, the property market financial services, and entertainment. budgets for official banquets, cars and will be dominated by the absorption The sector could also do with a big holidays/study trips, as well as spend- of residential housing inventory. We regulatory clean-up and a reduction ing on domestic security and industrial expect home purchase restrictions to in the number of rules and regulatory subsidies, and return the savings to be tweaked but not eliminated, and agencies. This kind of supply-side re- households. A VAT cut would be a do not expect a significant property form will make or break the growth good way to stimulate consumption. tax to be rolled out. Such a tax would outlook for the next decade. China’s There is no shame in a 3% GDP deficit be progressive (as it would reduce the strong growth of the 1990s and 2000s if the money is well spent. We look incentive to take land from farm- came partly from intense private-sector for an official deficit of around 2% of ers) and reasonable (urban residents should pay for urban infrastructure), but the politics of introducing another tax are extremely difficult. We expect Figure 2: CNY trade-weighted value set to plateau housing prices in Tier 1 cities to rise. near 2012 highs (2010 = 100, BIS methodology) As inventories fall in the rest of the country, prices could also rise there in 110 H2-2013. An important upside risk Forecast to growth is that real-estate construction activity could bounce back in H1. 105 A few early signs–including increased land-buying appetite on the part of developers–suggest that this might 100 be possible. However, policy, buying sentiment, and the murky inventory 95 situation will determine the scale and timing of a resumption of building by developers. 90 A debate about inflation Our 2% forecast for CPI inflation 85 in 2012, which well below the market Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 consensus (3-4%) at the beginning of Source: Standard Chartered Research the year, has proven accurate–inflation should come in at 2.5% this year.

20 Figure 3: Our China forecasts, 2012-14

2009 2010 2011 2012 2013 2014

GDP growth, y/y % 9.2 10.4 9.2 7.7 7.8 7.5

CPI, y/y % -0.7 3.3 5.4 2.0 4.0 4.0

One-year loan rate, % 5.31 5.81 6.56 6.00 6.25 7.25

Budget balance,% of GDP -3.1 -2.3 -1.2 -1.3 -2.0 -2.0

Current account,% of GDP 5.2 5.1 2.8 1.9 2.7 3.1

USD-CNY 6.828 8.623 6.301 6.310 6.190 6.000

Source: Standard Chartered Research

important for people to feel optimistic about the future and the quality of government. Scrapping the one-child policy would help in this regard. The Renminbi The case for a substantial change in the value of the Chinese yuan (CNY) is very weak, we believe. Those who looked for significant CNY weakness during the global financial crisis have been proved wrong, as we expected. The PBoC only had to in- tervene a little in mid-2012. The likely current account surplus for 2012, at 1.9% of GDP, is a long way below the 10.1% in 2007. This ratio would not be noteworthy in a major developed economy, suggesting that–for the moment, at least near–the CNY is near fair value. Rebalancing towards Inflation has been largely driven by will trigger a new round of hikes from domestically led growth seems to be the food cycle, as well as lacklustre the PBoC, as noted above–one in 2013 under way and, indeed, there are signs demand. There will be much talk of and four in 2014. that China’s external competitiveness a return of inflation in 2013 – but it Adopting a “more than one has been undermined by the fast wage should be mostly benign, we believe. child” policy growth and stronger CNY of recent In 2013, CPI inflation will be driven years. While we predict little change by the pig cycle (prices are now rising), China’s demographics indicate in the CNY’s trade-weighted value easy money in the US and Europe, and that the labour force is probably al- through to end-2013, we see room for utility price reform. Metro, water, gas ready shrinking, and the expense modest CNY gains against the USD. and electricity prices for households incurred in rearing a child is likely to We project USD-CNY at 6.31 by end- all need to rise to make these sectors stifle any feared baby boom. Such a 2012 and 6.19 by end-2013 (a 1.9% sustainable; for instance, water prices change would not have an immediate CNY gain over the year), as Figure 2 for urban households need to rise by impact, but it would help to slow the shows. For 2014, we revise our USD- 50%. Wage pressures will be contained, rise in China’s dependency ratio start- CNY forecast to 6.000 from 5.830. though. We forecast average CPI infla- ing from 2030. Besides, in a difficult tion of 4% in 2013. We think it will economy, with painful but necessary (Author: Economist from Stan- breach 5% y/y in H2-2012 and that this reforms being pushed through, it is dard Chartered Bank)

21 CONOMY E Investment-Led Growth in China: Global Spillovers By Ashvin Ahuja, Malhar Nabar

A growth model dependent on capital goods, parts, and components widens. Aggregating across all 64 investment have been sending an increasing frac- economies (weighted by their PPP tion of their exports to China over shares), the impact on global growth Investment contributed around the course of the decade. In part this of a one percentage point slowdown one-half of China’s GDP growth in reflects the fact that supply chains in investment in China is just under the 2000s, with particularly large have been increasingly routed through one-tenth of a percentage point. The contributions toward the end of the China as the final stage of assembly. impact is about five times larger than decade (although, in 2011, the con- The importance of exports to China, in 2002 (estimated to be 0.02 percent- tribution of investment dipped below when assessed relative to trading part- age points). The most heavily exposed that of consumption for the first time ner GDP, shows even sharper increases economies are those that lie within the since 2005). for several economies. This ratio has, on Asian regional supply chain such as The large contribution of invest- average, quadrupled across the decade. Chinese Taiwan, Korea, and Malaysia. ment to growth in recent years in part Particularly exposed are Asian regional The results from Table 1 (estimated reflects the step increase in based on the sample years infrastructure investment covering the global financial during the 2008–10 stimu- crisis and the stimulus re- lus response to the global sponse in China) suggest that financial crisis. Invest- if investment growth declines ment as a share of GDP by 1 percentage point in Chi- increased by close to 6 na, GDP growth in Chinese percentage points over this Taiwan for example falls by period (relative to pre-cri- slightly over nine-tenths of a sis), reaching 48 percent of percentage point. Among the GDP in 2010. But increas- advanced economy exporters ingly, it appears that other of capital goods, Japan suf- forces are also contributing fers a decline of just over one- to investment growth. tenth of a percentage point Associated with these in response while growth changes in the profile of in Germany declines by a investment are important slightly smaller amount. shifts in China’s import Among commodity basket. As more of the manufacturing economies such as Chinese Taiwan, exporters, the impact of a slowdown n gets onshored, the share of machinery Malaysia, and Korea — all of which are investment growth in China is likely imports has been gradually declin- important exporters of capital goods, to be largest on mineral ore exporters ing. At the same time, with China parts, and components for final assembly with relatively less diversified economies increasingly drawing in larger volumes in China. and a higher concentration of exports of minerals and metals, their share of Effects of an investment to China. In response to a 1 percentage total imports has grown steadily. slowdown in China point slowdown in investment growth China’s importance to trading in China, the estimated effect on Chile’s partners in its supply chain has grown The impact of China’s invest- growth is a reduction of close to two- substantially over the past decade. ment-led growth on trading partners fifths of a percentage point. By contrast, These developments have had a no- has grown over time as China’s growth the larger commodity exporters such as ticeable impact on global trade flows. model tilts more toward investment Australia and Brazil with more diversi- Major exporters of commodities, and its global footprint of imports fied economies suffer relatively smaller

24 declines in growth. alized investment slowdown. Similarly, the spillover effect via manufacturing A sectoral decomposition of Chile’s growth declines by around a fixed investment in China is no longer China’s overall fixed investment into third of a percentage point in response significant. manufacturing and nontradables shows to a slowdown concentrated in tertiary Summary that the magnitude of spillovers from sector investment in China (compared a slowdown in manufacturing NFI is to two-fifths in the broader investment A rapid investment slowdown broadly similar to the effects from a slowdown described above). in China is likely to have large spill- slowdown in overall NFI. The impact The results also suggest that Chi- over effects on a number of China’s associated with a slowdown concen- na’s manufacturing investment reflects trading partners. At the macro level, trated in nontradables is considerably the influence of the global business cy- each percentage point deceleration smaller. The impact on Taiwan Prov- cle, but nontradables investment has a in China’s investment growth is esti- ince of China’s growth is around three- spillover impact above and beyond the mated to subtract between one-half fourths of a percentage point compared effect of global growth (Table 2). Once and nine-tenths of a percentage point to slightly greater than nine-tenths of a a control for global growth exclud- from GDP growth in regional sup- percentage point in the case of a gener- ing China is added to the regression, ply chain economies such as Chinese Taiwan, Korea, and Malaysia. Major Table 1. Global Crisis and Stimulus Period, 2008–11; GMM commodity producers with relatively large exposures to China such as Chile Total Investment(1) Manufacturing(2) Nontradables(3) and Saudi Arabia are also likely to - 0.13 0 -0.241** - 0.122 Lagged GDP growth suffer substantial growth declines in （0.13 9）（0.113）（0.13 9） response to an investment deceleration 0.0543*** 0.0511*** 0.0434*** China spillover effect in China. （0.0103）（0.0116）（0.00797） The spillover effects from an -0.00685 -0.00632 -0.00684 Terms of trade investment slowdown in China also （0.00430）（0.00394）（0.00424） register strongly across a range of -1.973*** -2.006*** -2.001*** Volatility of growth macroeconomic, trade, and financial （0.423）（0.378）（0.416） variables among G20 trading partners SAMPLE YEARS 20 0 8-2011 20 0 8-2011 20 0 8-2011 as well as world commodity prices. Number of countries 64 64 64 Within this group, a China FAI de- Observations 256 256 256 cline would have a substantial impact Arellano Bond test of no second order 0.11 0.28 0.12 on capital goods manufacturing econ- autocorrelation in first-differenced omies with relatively sizable exports errors (p-value) to China (in percent of own GDP) Notes: Dependent variable: Real GDP Growth, y/y percent change. Panel GMM and are highly integrated with the estimation. Robust Standard Errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1 rest of the G20 such as Germany and Japan. For economies that rely less on Table 2. Robustness Check for Global Crisis and Stimulus Period, China’s demand, such as the U.K. and 2008–11; GMM India, the spillover effects on indus- Total Investment(1) Manufacturing(2) Nontradables(3) trial production and aggregate output are moderate. Important commodities -0.0805 -0.0412 -0.0772 Lagged GDP growth exporters, such as Canada and Bra- （0.0803）（0.0949）（0.0809） zil, would experience non-negligible 0.0250*** 0.00889 0.0211*** China spillover effect spillover effects on export growth （0.00815）（0.00973）（0.00608） which would translate into somewhat -0.000646 -0.00199 -0.000725 Terms of trade significant output loss and slowdown （0.00297）（0.00280）（0.00297） in overall economic activity. Worsened -1.363*** -1.119*** -1.388*** Volatility of growth global growth prospects would be （0.276）（0.332）（0.274） reflected in asset prices and sovereign 0.696*** 0.875*** 0.684*** World growth ex China （0.0920）（0.10 9）（0.0916） bond spreads (except the U.S. for the SAMPLE YEARS 20 0 8-2011 20 0 8-2011 20 0 8-2011 latter, which points to its safe haven Number of countries 64 64 64 status). One year after the shock, com- Observations 256 256 256 modity prices, especially metal prices, Arellano Bond test of no second order could fall by as much as 0.8–2.2 per- 0.43 0.05 0.49 autocorrelation in first-differenced cent from baseline levels for every 1 errors (p-value) percent drop in China’s FAI.

Notes: Dependent variable: Real GDP Growth, y/y percent change. Panel GMM (Authors: from International estimation. Robust Standard Errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1 Monetary Fund)

25 CONOMY E Data Watch on China’s Foreign Trade and Investment in the First Eleven Months of 2012

By Zhao Wei

China’s foreign trade in the first eleven months of 2012 According to statistics of the Customs, China’s exports and imports in the first eleven months of 2012 reached $3.50028 trillion, up by 5.8% over the same period of 2011. Specifi- cally, exports stood at $1.84991 trillion, up by 7.3% year on year; imports $1.65037 trillion, up by 4.1%. The eleven months saw a trade surplus of $199.54 billion, increasing by 44.1%. Four obvious features are as follows: Steady increase in trade with important partners including the United States and Brick countries. From January to November of 2012, China’s bilateral trade with the United States reported 8.2% increase over the same period of 2011, 9.3% increase with ASEAN, 11.9% increase with Russia, 30.4% increase with South Africa, and 1.3% increase with Brazil. While the trade with the 58.3% and 34.8% respectively. The 2012, China’s general trade value was EU and Japan decreased 4.1% and 2.9% increasing rate in Eastern China was $1.82270 trillion, up by 4.3% year on respectively. relatively low, and that of Guangdong year, in which exports value increased Continuing significant increase Province was 6.6%. The increasing by 7.2% to $892.23 billion, while in exports of Central and Western rates of Fujian, Jiangsu, Zhejiang and imports value increased by 1.7% to China. Shandong were 4.6%, 4.2%, 3.9% and $930.47 billion. The processing trade During the first eleven months 2.2% respectively, which were all lower still witnessed a sluggish growth. of 2012, the exports in Central China than the national increasing rate in the The total value of processing trade increased with a fast pace. The ex- same period. was $1221.05 billion, up by 2.6%, in ports in Chongqing Province were 1.1 Steady increase of the expansion which the exports value rose by 2.9% to times more than the same period of rate of exports and imports under the $783.27 billion, while the imports value 2011. The exports in Anhui, Henan general trade. increased 2.0% to $437.78 billion. and Sichuan Provinces rose by 62.3%, From January to November of Steady increase in exports of me-

26 chanical and electrical products. transmission industries (1172.5%), Overseas investment and In the first eleven months of and pipeline transportation (707.2%). economic cooperation 2012, China exported $1064.54 bil- The sectors of agriculture, forestry, lion worth of mechanical and electri- animal husbandry, and fisheries China’s outbound FDI. cal products, 8.2% higher than that of made an actual use of $1.78 billion In the past eleven months, China’s last year, 0.9 percentage points higher in foreign investment, an increase of domestic investors invested directly than the growth rate of the nation’s 4.2% year on year and accounting for in 3,596 overseas corporations in 130 total exports in the same period. The 1.8% of the country’s total utilization nations and regions, with a total of total exports value of labor-intensive of foreign capital. The manufactur- non-financial outbound FDI of $62.5 products including textile, apparel, ing industry made an actual use of billion, an increase of 25% year on year. shoes, luggage, plastics, furniture and $43.97 billion in foreign investment, The investment in Hong Kong, toys increased by 7.5%, in which plas- a decrease of 7.1% year on year and ASEAN, the US, Russia and Japan tics rose 34.7% and furniture increased accounting for 44.0% of the country’s reached to a double-digit growth, 27.5%. In November, the exports of total utilization of foreign capital. In which were 38%, 31%, 13%, 41% and the above mentioned seven varieties specific, communications equipment 19% respectively. The investment in of labor-intensive products decreased manufacturing, printing and copying EU was down by 20% to $1.7 bil- 1.1%, the second negative growth since of recording media, and food manu- lion, and the investment in Australia February of 2012. facturing had much higher increasing dropped 19% to $1.6 billion. Utilization of foreign rates, which were 33.8%, 34% and Overseas-contracted projects. investment 32.5% respectively. In the past eleven months of 2012, Increase in the capital from major China’s overseas-contracted projects In the past eleven months of sources of foreign investment like the reported a turnover of $102.4 billion, an 2012, China approved the establish- US and Japan. increase of 19% year on year. $128.8 bil- ment of 22,503 new foreign-invested During the past eleven months, lion worth of new contracts was signed enterprises, a decline of 10.3% year the investment from the US was $2.91 from January to November 2012, up by on year. China utilized $100.02 billion, 6.3% up year on year. The 13% year on year. In November alone, billion worth of foreign capital, a de- amount of paid-in capital in China $15.34 billion turnover was achieved. cline of 3.6% from the same period of from ten Asia nations and regions There were 499 projects (96 more than 2011. In November alone, the number (Hong Kong, Macau, Taiwan, Japan, last year) with a newly-signed contract of newly-set-up foreign-invested en- the Philippines, Thailand, Malay- amount over $50 million, the total terprises was 2,482, down by 8.7%, sia, Singapore, Indonesia, and South amount of which reached $102.0 bil- and the sum of foreign capital utiliza- Korea) reached $85.07 billion, down lion, accounting for 79% of the new tion was $8.29 billion, down by 5.4% by 5.0%, in which the investment from contracts, and 16% increase year on year. (excluding the data of banks, securities Japan increased 11.3% to $6.61 bil- The number of projects with a contract and the insurance industry). The fea- lion, 14.2% increase from Singapore amount over $100 million was 280, tures are as follows: to $6.00 billion, and 15.0% increase 68 more than the same period of 2011. Continuing faster increase of for- from Korea to $2.69 billion. The By the end of November in 2012, eign capital utilization in service in- paid-in capital from 27 countries in China had signed a total of $970.5 dustries than manufacturing industry. EU was $5.81 billion, dropped by 2.9%, billion worth of agreements on con- From January to November of in which that of German, Holland tracting overseas projects, and realized 2012, the service industry made an and Switzerland increased by 25.8%, $641.4 billion in turnover. actual use of $47.57 billion in foreign 49.5% and 58.5% respectively. Foreign labor service coopera- investment, a decline of 2.5% over Continuing significant increase tion. the same period of 2011 and account- in paid-in foreign capital to Central In the first eleven months of 2012, ing for 47.6% of the national total. China. the number of all kinds of labor sent It was 3.6 percentage points higher From January to November in abroad was 406,000, an increase of than manufacturing industry, which 2012, the central regions made an ac- 11,000 from the same period of 2011. suggested a more obvious transfer tual use of $8.40 billion, an increase 209,000 of them were working on over- trend for foreign investment to ser- of 18.9%, accounting for 8.4% of the seas contracted projects, and 197,000 vice industry. Foreign investment in national total. The western regions of them were for labor cooperation. At real estate was down by 8.3%, while made an actual use of $7.79 billion in the end of November in 2012, there the rest of service industries saw an foreign investment, an increase of 1.1% were 810,000 Chinese working abroad increase of 2.8%. The following in- year on year and accounted for 7.8% of in total, 12,000 less than the same dustries witnessed relatively faster the national total. The eastern regions period of 2011. increase rates in the utilization of for- made an actual use of $83.83 billion in eign investment, that is, urban public foreign investment, a decline of 5.8% (Source: Press conference of transportation (2441.5%), telecom- year on year and accounted for 83.8% the Ministry of Commerce of China munications and other information of the national total. on December 18, 2012)

27 AGRICULTURE

IndustrRural workial Watchplan in 2013 ndustr i al Watch I he Central Rural Work Conference was held in Beijing Minister of Agriculture, Han Changfu, said at the from December 21 to 22, 2012, which aims to improve conference while improving the country’s basic rural system, farmers’T income growth and reduce agricultural barriers in China would focus on fostering new types of agricultural 2013, in a bid to boost development in rural areas, accord- businesses. Participants at the meeting said the government ing to China Daily. should work to create systems that are more organized when China Daily also highlighted several main conclusions of it comes to agricultural production and operation. The gov- the conference as follows: the Party’s central leadership decided ernment will also help to increase support to new types of that efforts will be made to establish a social service system for businesses like family farms and specialized cooperatives. the management of agricultural work and that more financial To ensure the profits of farmers during times of rising aid will be given to family farms and rural cooperatives. At the production costs, more work should be done on pricing same time, greater efforts will be made to turn surplus rural and balancing the supply. At the conference it was agreed labor into urban residents in an orderly manner. that rural villagers will get more subsidies for agricultural production. In addition, delegates at the conference came to an agreement that farmers’ rights will be fully protected, and land transfers should not be compulsory or restricted. The growth of farmers’ income should keep pace with, or faster than that of urban residents.

Comment The decisions made at the conference point to the importance the top authorities have attached to agriculture and the role it will play in the country’s overall economic growth. The No. 1 central document in 2013 is estimated to be related to rural issues, for ten consecutive years.

Joint China-Australia report on cooperation in agriculture

he Joint China-Australia Report on Strengthening In- networks among the commercial and research sectors. vestment and Technological Cooperation in Agricul- Both countries have also identified a number of op- Tture to Enhance Food Security was published on December portunities for cooperation that could improve productiv- 20, 2012 by several ministries from both countries. ity and expand production, including development of land It is the first time that the two governments have resources and efficient crop production, animal husbandry worked together on the project of strengthening agricultural production and processing, development of efficient tropi- investment and deepening technological cooperation, which cal agricultural products, offshore mariculture and fisher- is considered to be a good model for improved international ies, and processing of agricultural products with special cooperation by establishing a best-practice approach on this characteristics in the Australian market, as well as logistics issue. and supply-chain management, rural banking, land reme- Four aspects are elaborated in detail in this report, that diation, construction of Australian demonstration projects, is, agriculture in Australia and China, investment and tech- direct investment projects to meet requirements of Chinese nological cooperation in agriculture, challenges in bilateral customers in Chinese market. cooperation, and priorities for agricultural cooperation. Comment Australia was the 11th principal export The Report points out that the main barrier to greater destination and 5th principal import bilateral cooperation in agriculture is a mutual lack of under- sources for China in 2011. The 40th anniversary of standing of each country’s legal and regulatory frameworks, China-Australia diplomatic relations in 2012 may technical capacities and cultural norms, which will take time, be a new starting point for the cooperation in agri- patience and determination to break down by enhancing the business between the two countries. transparency of investment decisions and facilitating deeper

28 Metal

China levies anti-dumping duties on stainless steel from EU and Japan

hina’s Ministry of Commerce stainless steel tubes, which are usually announced the results of an used in coal-fired power plants. Japan Canti-dumping investigation against said China’s action is “a clear violation” the stainless steel seamless tubes last of certain provisions of the Anti-Dump- November and decided to impose ing Agreement, as well as other relevant anti-dumping duties over the prod- WTO rules, the Geneva-based WTO ucts from Japan and the European said in a statement on the same day. Union starting November 9, 2012, “China has received the consulta- which will last for five years, Xinhua tion request filed by Japan, and will reported. properly handle it according to dispute According to Reuters, the result settlement procedures under the World was a 14.4 percent duty on imports Trade Organization (WTO),” the min- from Kobe Steel and 9.2 percent on istry said in a statement on its website. supplies from Nippon Steel & Sumitomo Metal Corp in China and Japan could hold consultations on related Japan. It also targeted the European Union, with a 9.7 per- disputes within the next 60 days, according to WTO regu- cent tariff on imports from Tubacex S.A. and 11.1 percent lations. on products from Salzgitter A.G. But Japan is challenging the duties and the way China Comment This is the second-ever trade com- applied them, alleging it did not have enough evidence and plaint against China from Japan at the kept what it did have secret, shielding the companies who WTO in 2012. The rising trade frictions impelled had complained, Reuters said. Chinese government and companies to respond Japan on December 20, 2012 requested consultations actively with an aim to improve and facilitate for- with China at the WTO concerning China’s decision to levy eign trade. anti-dumping duties on Japanese exports of high-performance

Elimination of export tariffs on magnesium products from 2013

nnouncement on Tariff Implementation Plan in 2013 was released by the State Council of China on Decem- Export volume of magnesium and Aber 17, in which export tariffs on magnesium products will magnesium products in 2011 and 2012 be eliminated from January 1, 2013. (Unit: Tons) Five years ago, the government decided to place a 10 percent export tariff on magnesium ingot and magnesium 45,000 alloy due to the high pollution and energy consumption of 40,000 related products. 35,000 Due to the export tariff since 2008, the magnesium price has increased significantly in foreign market and led 30,000 to the excess capacity of this industry in domestic market. 25,000 2012 As a member of WTO, China has the liability to adjust 20,000 2011 policies according to the new situation in order to promote 15,000 international trade. 10,000 An analyst from Huatai Securities said, “Since Oc- tober of 2012, the decreasing magnesium price has made 5,000 0 it around breakeven. The elimination of export tariffs will 1 2 3 4 5 6 7 8 9 10 11 12 reduce the cost of processing enterprises and improve their economic benefits.” The efficiency of resource utilization in magnesium industry has been improved during the Comment past five years. It is time to boost the export and expand international market share of this industry.

29 ENERGY

China shale gas tantalizing for private firms Industrial Watch ndustr i al Watch

I hinese authorities have been welcoming private and foreign firms to tap the country’s vast shale gas deposits, but newC entrants have felt impeded by obstacles. The Ministry of Land and Resources, or MLR, released the results of the second round of shale gas auction on December 4, 2012. Two Chinese private firms, along with 14 State-owned enterprises, won the biddings. The second round of bidding attracted 83 enterprises to vie for 20 reserve blocks. But the MLR offered minimal geological information for each block auctioned. The MLR said on November 22 that it encourages eligible private companies to explore and exploit the country's shale gas reserves, and foreign companies can also join in through Sino-foreign partnerships. The Ministry of Finance has also promised to offer shale gas subsidies through 2015 to spur development of the resources. and a legal vacuum that fails to address the rights of smaller But private and foreign firms have found it hard to reap investors. the economic advantage of this nascent clean energy in China Qiao Dewu, deputy chief engineer with the Strategic due to the lack of geological information on the reserve blocks Research Center of Oil and Gas Resources under the MLR, said the ministry cannot and is “not obliged” to offer further Comment Despite the current enthusiasm of details on the quality of each block. shale gas exploring in China, there The aim of the bidding, according to Qiao, is not to sell are still many technical problems. Drilling and mining areas with fixed commercial value, but to attract in- exploring shale gas in the country would be no vestors to explore these untapped natural reserves. easy task and hence greater domestic and foreign Another reason that has kept private and foreign bid- cooperation on these particular projects remains ders hesitant about the auction is that authorities leveled the essential. validity period of the exploration rights for all blocks to three years.

China’s oil demand to grow by 3.4% in 2013: report

China’s oil demand growth in 2012 was its slowest in ten years. However, the report predicted that an expected improvement in economic growth prospects for next year indicates an improving oil demand picture in China. DB said China’s GDP growth should return to 8.5 percent in the second half of next year, bolstered by corporate investment and accelerated exports. The report said China is expected to bring two new strategic petroleum reserve (SPR) sites online in Southwest China’s Guizhou province, as well as another SPR site in east China’s Qingdao province. Comment As the world’s second-largest user of China’s oil demand will grow by 3.4 percent year on year crude, China imported 253 million tons, in 2013, global banking giant Deutsche Bank (DB) forecast or about 1.9 billion barrels of oil in 2011, an amount in its latest report. up 6 percent year-on-year. China’s rising oil needs Although the growth will be modest compared to previ- will not bear on the global supply, instead it will help ous years, it will make China the largest contributor to global to promote essential investments in the oil sector to oil demand on a growth basis, equal to 40 percent, the report boost efficiency and capacity. said.

30 ENVIRONMENT

Green Buildings Underway By Zhu Zijun

encourage technological innovation and promote energy-efficiency in construction, said Li Bingren, executive vice-director with the Technology De- partment of the Ministry of Housing and Urban- Rural Development, adding that currently energy consumption in buildings accounts for 30 percent of the total consumption in China. China’s rapid urbanization sees more and more high-rise construction as well as an increase in the energy used to heat and cool buildings. High-rise buildings can pose challenges regarding fire safety which the State Council addressed in Document in 2011, promoting the use of insulation materials with good fire safety properties. Multinationals are taking the opportunity to tap into China’s market. The Board of Directors of ROCKWOOL International A/S, the world’s leading provider of fire-safe and energy efficient solution, has recently approved its biggest investment to construct a world-class stone wool production facility in China. The new facility will be constructed in Tianjin with an international harbour, strong economic development and seriousness about both reducing the need ith new buildings springing up in China, the energy for energy and risks of fire. consumption of construction is also rising. Therefore, The total investment is expected to be close to the call for green buildings is more urgent than ever RMB 1 billion and, when operational by 2014, will before. have a capacity of over 120,000 tonnes of high quality Green building, also known as green construction or sustain- stone wool insulation — the biggest single stone wool able building, refers to a structure and using process that is environ- production line in the world. The site covers 400,000 W square meters and has potential for future expansion. mentally responsible and resource-efficient throughout a building’s life-cycle: from siting to design, construction, operation, mainte- State-of-the-art technology, like desulphurization, nance, renovation and demolition. will be installed to minimize adverse impacts on the China has unveiled a slew of measures for the construction of environment. green buildings. According to a document issued by the Ministry of As a non-combustible insulation material, Finance and the Ministry of Housing and Urban-Rural Develop- ROCKWOOL stone wool products help improve ment, the main objective of promoting the development of green building energy efficiency while also addressing fire buildings is that by 2020, green buildings will exceed 30 percent concerns. The insulation it provides can, over its life- of new buildings and energy consumption level in the process ap- time, save more than 100 times the energy used to proaches or reaches that of the developed countries. produce it. The ongoing urbanization indicates economic restructuring “Through our work on improving building fire and green settlements, thus bringing vast opportunities to energy- safety and building energy efficiency, we seek to make efficiency buildings, said Zhang Jun, vice president of China Ar- buildings safer and more comfortable for the people, chitecture Design & Research Group at a forum in December. He and to contribute to China’s green sustainable de- urged promotion and development of green buildings and livable velopment,” said Theo Kooij, managing director for low-carbon cities. ROCKWOOL Division Managing Director for East One important task of developing green buildings is to Division.

31 TEXTILE

IndustrLi Ning warnsial Watch of big loss for 2012 ndustr i al Watch I portswear firm Li Ning Co Ltd warned it will ings Ltd and 361 Degrees post a substantial 2012 loss based on its prelimi- International Ltd have naryS review of its unaudited consolidated accounts slashed prices to deal with for the first 11 months of 2012, as it racks up as high inventories but it much as $288 million in expenses under a plan to remains to be seen if Li buy back inventory from distributors, one of the Ning’s move will force thorniest problems facing retailers in China, ac- them to redouble efforts to cording to Reuters on December 17. reduce stock, analysts said. The plan aims to replace the older inventory The company has with newer products so as to better meet the de- seen its earnings decline mands of customers, as well as help distributor have continuously in the past stronger financial positions and better cash flow, two years. In the first reported by Xinhua. half of 2012, its revenue In 2009, the company opened 751 stores in dropped 9.5 percent year- China and its first store in Hong Kong. That same on-year to 3.88 billion year, it had more sales on the Chinese mainland yuan. Its local rival, Anta than the Germany-based sportswear company Adi- Sports Products Ltd, had das AG. 3.93 billion yuan worth of Since then, an overestimation of the market revenue in the same pe- demand for sportswear and accessories has foisted riod. large inventories on six of the largest makers of those products, including Li Ning, Anta and 361 Degrees Comment The economic slowdown has resulted International Ltd. in inflated stock levels and depressed Li Ning, executive chairman of the group, said, “The earnings for retailers of sportswear in 2012. An- results of the pilot plan have been highly encouraging. We other factor that cannot be neglected is overes- expect the combined actions to strengthen the long-term timated market demands and strategic failure. It productivity and profitability of our sales channels, which will take a long process to bring everything back will in turn support the profitable growth of our company.” to a healthy level. Other local competitors like Xtep International Hold-

Continuing sliding duties on out-quota foreign cotton

ccording to the Ministry of Finance of China, sliding zctt-cotton.com, the trade deficit of cotton yarn will be in- duties will be continued for out-quota foreign cotton creased, and the foreign trade of textile may bottom out due Ain 2013, with proper adjustment of tax rate. For the cotton to the slowdown of cotton importing. with a dutiable value of 14,000 yuan per ton or more, the Comparison of dutiable values in both 2012 and 2013 import tariff rate will be 570 yuan per ton. Higher tax rate 18000 2012 will be used for lower-price foreign cotton. 101 On the basis of the analysis from China Cotton As- 17000 2013 cent/pound sociation on December 22, tax rate will be higher for the 16000

cotton quoted between 50.6 and 101 cent per pound. 15000 Based on the Outlook Report of Cotton in 2013 by 14000 54.1 cent/pound 13000 Comment To stabilize the price will continue to be the keynote of the cotton market in the 12000 year of 2013. In spite of the current dilemma of for- 11000 50.6 eign cotton quotas, related enterprises should pay cent/pound 10000 more attention to the transformation and upgrad- 46 50.6 55 60 65 70 75 79.5 84.5 89.5 94.5 99.5 ing, as well as quality improvement. Source: China Cotton Association

32 CONSUMER

Domestic consumption a top priority for 2013

hina will continue to make the growth of domestic de- initiatives to drive consumption, including promoting energy mand a top priority to keep growth momentum on track saving and new energy vehicles, and encouraging private in- inC 2013, the country’s top economic planner was quoted say- vestment in service agencies such as nursing homes. ing by China Daily on December 18, 2012. The government will also encourage e-commerce and “The fundamental role played by consumption in bol- online shopping by upgrading logistics facilities and broad- stering economic growth needs to be strengthened, while the band networks. critical role played by investment should be well implement- Public investment will mainly cover low-income housed,” said Zhang Ping, minister of the National Development ing projects, urban infrastructure facilities, agricultural proj- and Reform Commission, at its annual work conference. ects, public affairs, energy saving and ecological projects and To improve equality and purchasing power, the govern- innovation. Private investment in the construction of infra- ment will deepen income distribution reform in 2013, with structure and public affairs will be highlighted. an emphasis on bridging the income gap and widening cov- Comment The sluggish world economy and erage of the social security system, said Zhang. weak external demand have put “There are still some structural obstacles and it will take China’ economy under high pressure. Boosting some time to raise the income of low-and middle-income domestic demand with great potential is a wise people,” he said. choice for China’s sustainable growth. In addition, the government will develop a host of new

Import tariffs lowered to boost consumption

hina will lower the tariffs on 784 imported products Jin Baisong, deputy director of the Department of Chinese starting from January 2013 as part of a major effort to Trade and Studies at the Chinese Academy of International boostC domestic consumption, the Ministry of Finance said Trade and Economic Cooperation, a think tank of the Min- on December 17, China Daily reported. istry of Commerce. The temporary adjustment will allow the products, He said the lower tariffs will boost sales from consumer grouped into five major categories, to be imported on a tax products such as milk powder and healthcare equipment. rate that is lower than the most- “In the meantime, imports favored-nation tariff, according to a of high-tech equipment will fa- statement on the ministry’s website. cilitate the technical upgrade of The new rates will take effect domestic enterprises and pave the on January 1. way for an economic transforma- Lower tariffs on products tion,” he said. closely related to people’s liveli- He Weiwen, a professor hoods, including infant milk pow- with the University of Interna- der, have been much attention. tional Business and Economics, Tariffs will also be lowered on recognized the measures could be raw materials and spare parts for the positive but the desired effect is equipment manufacturing industry far from guaranteed. and strategic emerging industries, “The major obstacle for do- such as robots used for automobile mestic consumption remains the production. high cost of distribution. Thus Resource products as well as energy-saving and emis- lowering that cost should be a main priority if the govern- sion-reduction products will also benefit from lower rates. ment is aiming to boost domestic consumption,” he said. Products that support the development of the agriculture and textile industry are also included on the list. Comment Lowering the tariffs is beneficial for The measure aims to boost imports and meet an in- Chinese consumers and foreign pro- creasing demand from domestic consumers, the ministry ducers as well. Also, it will make contribution to said. China’s imports on which China lays stress in the “The measures are in line with the call of the new lead- 12th Five-Year Plan. ership to boost imports and domestic consumption,” said

33 TRANSPORTATION

IndustrPassengerial volumeWatch hits 80m at Beijing airport ndustr i al Watch I eijing Capital International Airport, the world’s second- China’s civil aviation market targets passenger traffic of heaviest traffic airport by passenger volume, saw pas- 350 million, and about 75 billion yuan ($12 billion) will be sengerB volume surpass 80 million at the end of 2012, ac- pumped into infrastructure construction, according to Chi- cording to Xinhua. nese civil aviation authorities. The passenger volume is second only to Hartsfield- China was home to 180 airports for civil aviation use Jackson Atlanta International Airport in the United States, by 2011. To meet rising demand, the country has vowed to and Zhang Guanghui, general manager of BCIA Co, ex- build 82 new airports and upgrade 101 others during the pects the airport to take the lead in 2015 if passenger traffic 12th Five-year Plan period (2011-2015). continues to expand at the current rate. BCIA began services in 1958 and currently houses 94 Comment Crowds of passengers raise a ques- airlines that operate flights to 127 domestic and 109 over- tion to busy Beijing Airport: Can its seas destinations. service quality grow in the same speed as passen- China’s civil aviation sector has grown steadily amid ger volume? the country’s increasing interaction with the world. In 2013,

Railway investment to maintain steady growth

hina’s railway investment will maintain steady growth, with 600 billion yuan ($96.2 billion) toC 650 billion yuan to be invested in 2013, said the country’s top economic planner, Xinhua reported. Investment demand in China’s railway construction will reach 1.8 trillion yuan in the 2013- 2015 period, China Securities Journal reported on December 27, citing a report on railway development from the National Development and Reform Commission. China will continue the construction of 24,000 kilometers of railways in the next three years, which will require a total investment of 1.5 trillion yuan, Zhang Jiangyu, a transportation official with the NDRC, was quoted as saying. Zhang said he expects construction on a number of new major projects to start during the 2013- 2015 period, including 4,500 km of high-speed railways al- high-speed rails and inter-city express railways, according lowing speeds of over 200 km per hour, which will require a to the NDRC report. total investment of 500 billion yuan. China currently has more than 9,300 km of high- Although high-speed rail construction stagnated speed rails in operation. More than 6,000 km of railways after a bullet train crash near the east China city of are likely to start operating in 2013, more than 3,000 km Wenzhou left 40 people dead in July 2011, China has of which will be high-speed railways and 3,300 km will be cautiously resumed the construction and operation of conventional lines, Zhang forecast. high-speed railways in 2012. Fixed-asset investment in railways rose 3.1 percent Comment The average railway distance for Chi- year-on-year to 506.97 billion yuan during the first 11 nese is relatively short, which causes months of 2012, accounting for 80 percent of this year’s high pressure each time when Spring Festival and investment plan, according to data from the Ministry of National Holidays arrive, the travel time for the Railways. whole nation. Railway investment will continue to Nearly 4,000 km of railways will have been put into increase in the following years. operation by the end of 2012, 2,932 km of which will be

34 FINANCE

Stocks rise as economy begins to stabilize

he Shanghai Composite Index edged up 0.1 percent to 2,162.46 points on December 18, 2012 the highest closeT in more than 18 weeks, reported by Shanghai Daily. “It is certain the domestic economy is recovering and stabilizing, while the valuation of A-shares remain at a historically low level,” Shanghai Securities Co said in a market outlook report for this week. “These two factors are the main drivers of the rebounding market. Meanwhile, the regulator has said it has a plan to solve the issue of poor market liquidity due to new share debuts. This has lifted market sentiment.” Economic data was relatively strong in November and matched market expectations. in a report. The economy will expand by 8 percent in the fourth The Industrial and Commercial Bank of China, the quarter and 7.8 percent for the whole year, ANZ Bank said nation’s biggest lender, gained 0.7 percent to 4.12 yuan (66 US cents). China Merchants Securities Co jumped 1.5 percent to 9.96 yuan. Anxin Trust and Investment Co surged Comment Stocks in the financial sector rose on improved economic conditions. The the daily limit of 10 percent to 14.01 yuan. economy is stabilizing and further stock market Cement producers climbed 1.1 percent on average as reforms will be launched by the regulator. investors think demand will rise for the construction material.

PICC sells more shares after IPO

eople’s Insurance Company (Group) PICC went public in of China (PICC) on December Hong Kong on Dec 7 to raise 17P said it has issued additional shares about HK$24 billion, the big- to meet high demand after its IPO in gest IPO in the city this year. Hong Kong, reported by Xinhua. The shares rose 6.9 percent to The move will help raise an ad- HK$3.72 on the first trading ditional HK$3.5 billion ($451.61 mil- day. lion) for the mainland’s second-largest The new shares will be insurer, which means PICC raised about tradable on December 21, and HK$27.5 billion in the IPO and over-allotment. public investors will hold about an 18.44-percent stake in The firm said it had “fully” exercised its H-share over- PICC. allotment, or greenshoe option, on December 21 to issue The over-allotment was exercised by China Interna- an additional 1.0347 billion shares at HK$3.48 each, or tional Capital Corporation Hong Kong Securities Limited, the IPO price. The over-allotment is equivalent to about 15 the Hong Kong and Shanghai Banking Corporation Lim- percent of the original IPO amount. ited, Credit Suisse (Hong Kong) Limited and Goldman The greenshoe option, effective from the IPO date to Sachs (Asia) LLC, PICC said. December 29, allows underwriters to ask the firm to add Founded in October 1949, PICC was the first nation- up to 1.035 billion shares at the IPO price, according to the wide insurance company in China. It ranked 292 on the insurer’s IPO plan. Global 500 (2012) published by Fortune magazine.

Comment Greenshoe is usually adopted by newly listed companies to stablize the stock price. Whether it is implemented is determined by the stock price and market confidence. PPIC’s share price seems not to be affected by the depressed capital market and keeps rising steadily.

35 HEALTH

HealthIndustr ialFood Watch Industry: ndustr i al Watch I Quality and Regulatory By Chen Xin

n 2011, the National of health food’s product Development and Re- positioning. Also, it creates form Commission and a barrier to the effective the Ministry of Industry regulation of the industry. and Information Technology Second is the misleading Ijointly issued the 12th Five- of consumers. Ordinary Year Development Plan for health care products have Food Industry. In this plan, been advertised as panacea. the nutrition and health food The expansion of health manufacturing industry has care function and the in- been included in the national crease of the application development plan for the first range are two outstanding time, indicating a new stage of problems in illegal adver- development for said industry. tising. Third, the market As a developing indus- access of health product try that is closely related to is too low in China. It is people’s livelihood, the de- fortunate that the industry velopment path of the health regulatory authorities do food industry has become increasingly period of high-speed development. not skirt around the problems. In recent clear with continuous optimization But how can it actually achieve years, they have been making big em- of the regulatory provisions and the the rare golden era that enjoys fast and phasis on food safety, and even main- forthcoming Health Food Supervision steady development? Insiders say that taining a high intensity of investigation and Management Regulation.In recent first of all, it should ensure the quality on the problems reported. years, China’s health food industry has and safety of health products, especially But in the eyes of industry insid- enjoyed a rapid growth. According to health food. The health food industry ers, the official launch of the Health the 12th Five-Year Development Plan is growing fast, but with endless prob- Food Supervision and Management for Food Industry, by 2015, the scale of lems and complaints. On the one hand, Regulation, which is now been submit- the nutrition and health food industry many consumers do not have a clear ted for review to the State Council, will reach one trillion yuan, an increase concept of health food and suffer from seems to be a good way to solve the of 20% year-on-year, and form more lack of rational consumption; also, the problems. In fact, the introduction of than 10 enterprises whose product sales social guidance and education of health the Regulation will not only conduct revenue reach more than 10 billion products are far from enough. On the rectification of name of the health care yuan. Historical data and international other hand, low market access of the industry, what’s more important is that experience show that when a coun- health product industry and lack of cor- it will regulate the development of the try’s GDP per capita is in the phase porate integrity make the situation even industry from its original source. of developing from $3,000 to $8,000, worse. According to insiders, behind However, can the gap in the consumers of health products would in- the prosperity of the industry, the cha- health food regulatory system be filled crease their consumption patterns, and otic market environment is in urgent with the introduction of the Regula- the industry would enter a rapid growth need of rectification. He believes that tion? Many industry insiders still have cycle. Currently, China is in the rising the “chaos” in the health food market many questions: How to choose from stage from GDP per capita $4,000 to can be attributed to three categories: the approval system and the record- $8,000, with consumption pattern of First, the confusion of concept. As the keeping system? Will the stakeholder health food in China changing from distinction between health drugs and departments be willing to decentralize high-end consumer goods to dietary health food is not clearly defined, a to the main regulatory authorities? ... supplements. Many institutional inves- large number of health food have some Perhaps we should wait until the formal tors even expect that China’s health features similar to “drugs”, which has implementation of the Regulation to food industry would enter the golden led to today’s embarrassing situation see the answers.

36 ELECTRONICS

hina plans to invest in locally-invented Since Chinese researchers ventured into the 3D printing technologies to boost its sphere in late 1990s, a series of home-invented 3D Printing 3D manufacturing power, according to a additional manufacturing techniques have been Point or End of “Made in China”? China Daily report. applied to bio-additive manufacturing, ceramic Su Bo, Vice-Minister of Industry and In- forming and laser sintering. Cformation Technology, said the country should At the three-day forum, domestic manufac- establish plans and use tax incentives to speed up tures showcased their latest products from chic research and development (R&D) and application mobile phone shells, fancy attire, lamps, shoe-pads of 3D printing technologies. to complex industrial components. Unlike traditional printing techniques, 3D China’s leading researching institutes in printing is a process of making three dimensional this area include the Xi’an Jiaotong University, solid objects from a digital printer which can be Huazhong University of Science and Technol- created by laying down successive layers of materi- ogy, Tsinghua University and Beijing Long Yuan- als. It is also known as additional manufacturing. Automated Fabrication System. Cutting, bending, pressing, moulding and First invented by American scientists in assembling will no longer be necessary in the 1990, 3D printing technologies have been used manufacturing as a click of the printing button in aerospace, medical care, construction, sports, on a 3D printer will automatically produce a solid entertainment and automobile industries overseas, product based on the pre-set three dimensional according to Graham Peter Tromans, chairman : China’s New Growth data. of the Additive Manufacturing Association of the “It is a revolutionary manufacturing tech- United Kingdom. nique. Once put to large-scale production, it will However, some argue that 3D printing ease China’s pressure on energy and resources,” might be of disastrous consequences to Chinese said Su at an international forum on additional manufacturing. Rising costs and political pressure manufacturing technology, which closed in Wu- are not what’s going to rapidly change the position han on December 16. of China as a big manufacturer, according to a David Bourell, a professor of the University Financial Times report. The disruption will come of Texas at Austin, in the United States, sees great from a set of technologies that are advancing at potential in the application of additional manufac- exponential rates and converging. These technolo- turing in China. gies include robotics, artificial intelligence (AI), Even if the smallest portion of consumer 3D printing, and nanotechnology. These have goods are produced through 3D printing, the been moving slowly so far, but are now beginning market volume will be tremendous, he said. to advance exponentially just as computing does. China is the world’s biggest manufacturer. Even if the Chinese automate their factories If the technology can be put to broader use, the with AI-powered robots and manufacture 3D country’s productivity and energy- and resource- printers, it will no longer make sense to ship raw use efficiency will improve greatly, said Su Bo. materials all the way to China to have them as- President Li Peigen with the Huazhong Uni- sembled into finished products and shipped back versity of Science and Technology said that China to the U.S. Manufacturing will once again become was almost on par with developed countries in a local industry with products being manufactured R&D and application of the leading technology. near raw materials or markets. The university’s Fast Manufacturing Center has invented a 3D printer which can produce the world’s biggest product through additive manufacturing technologies.

Based on the pre-set three-dimensional data, Cui By Xiaoling the printer can manufacture a variety of products from complicated industrial components to cook- ing utensils with metal, porcelain, plastics and sand powders, according to Cai Daosheng, a researcher with the center. Academician Lu Bingheng with the Xi’an Jiaotong University took the development of 3D printing equipment as an “indicator of the dynamic and innovation capability of an economy.” China has only 8.6 percent of the world’s total 3D printers compared to 38.5 percent for the US, he noted.

37 ICT

Industrial Watch ndustr i al Watch I Mobile Smart Connected Devices Become Mainstream

By Lynn Yu

long with the development of various types the shipment amount will close in on of personal terminal devices around the 300 million. The competition from the world, more and more terminal users will newly emerged smart devices like smart have personal computers, tablets and smart phones and tablets accounts for the phones at the same time. Huo Jinjie, general manager growth slowdown of traditional termi- ofA IDC China, explains, “there are still market seg- nal devices such as desktops and laptops ments for these three kinds of terminal devices, but it of which annual growth rate registered has become a fact that the market segments begin to only 3.8%. But, in contrast, the ship- integrate and the boundaries begin to blur. Therefore, ment amount of the tablet market IDC launches the concept of smart connected devices. stimulated by factors such as Windows At present, the market for smart connected devices RT and price competition will grow by includes personal computers, tablets and smart phones. 25.1% in 2013. By 2016, the shipment With the development of smart televisions, IDC prob- amount of smart connected devices ably will include smart televisions in the concept of on the Chinese market will reach 560 smart connected devices in the foreseeable future.” million with customers from varied According to Wang Jiping, assistant director of fields including government, education, IDC China Computer System Research Department, enterprises and consumption. Except the shipment amount of smart connected devices for desktops, the market volume of lap- on the Chinese market will approach 390 million in tops, tablets and smart phones has seen 2013 due to the fact that smart phones will continue marked growth compared with the to maintain rapid growth in the coming two years. year of 2012. Mobile smart connected IDC expects that the annual growth rate of Chinese devices have gradually become main- smart phone market will reach 44.0% in 2013 and stream. Wang Jiping believes that it has Estimated Shipment Amount of Smart Connected become a consensus to categorize smart Devices on the Chinese Market (2012-2016) connected devices according to the size 600 of the screen. By 2014-2015 when the 72.0% product performance of smart connect-

Million 500 ed devices with different screen sizes is homogenized, “integration” will be 400 the key word of the developing Chinese 426 smart connected device market. 397 Product Integration: With 300 355 300 33.1% more and more people using smart 200 208 phones and tablets, the monopoly of keyboard input will be broken up and 16.6% 100 10 12 16 19 12.3% 24 smart connected devices with touch 33 35 39 47 50 9.4% control are expected to take up 80% of 42 43 45 47 48 0 the market by 2013. In the future, more 2012 2013 2014 2015 2016 smart connected devices will incorporate voice input and somatosensory in- Desktop Laptop Tablet Smart Phone Growth Rate put. As to the storage, IDC anticipates that there will be more than 250 million Source: Quarter Tracking Report of IDC China Smart Connected Device Market (The third quarter of 2012) Chinese consumers who own two smart connected devices by 2016. But to make

38 Producer ♦ Input: keyboard; touch control; Integration voice; somatosensory ♦ Store integration ♦ Storage: personal cloud ♦ Online store integration ♦ Marketing distribution ♦ Operating systems: three ♦ PC channel integration main operating systems ♦ Consumer electronics ♦ Marketing promotion ♦ Appearance: thin; transformed ♦ Cell phones integration ♦ Transmission: 4G ♦ Operators ♦ Performance: intelligent ♦ The Internet acceleration ♦ No brand Product Marketing Integration Integration

Source: IDC, 2012

the prediction a fact, the integration of continue to lead the personal computer when the concept of smart connected storage space is a must. Personal cloud market and to expand its share in tab- devices is gradually recognized by con- storage will be a must need for con- lets and smart phones. But Apple and sumers and business clients the entire sumers. Another must is the mode of Android have taken root on the market. brand credibility will be secured. The transmission. IDC estimates that more As a result, the three main operating competition in the coming years will be than 35% of products on the Chinese systems will share the smart connected focused on economics of scale. In all as- smart connected device market sup- device market among them. pects including research, procurement, port 4G which will be incorporated in Producer Integration: It is sale and marketing, the economics of every smart connected device. It will expected that there will be over 20 pro- scale will take effect. In the coming two greatly accelerate the transmission speed ducers whose annual shipment amount to three years, brand competition will of smart connected devices. In terms will reach 300 thousand in 2012 on the be mainly between the 10 to 15 brands. of operating systems, Microsoft will Chinese market. According to IDC, Most producers will have varied products like personal computers, tablets and cell phones. Marketing Integration: Due to the different development stages of the three main smart connected devices, the marketing systems of producers are actually independent from one another, for instance, Lenovo, Samsung and Apple. IDC believes that with the integration of products and producer brand, the concept of smart connected devices will be gradually recognized by consumers. More efficiently arranged marketing resources will be crucial in winning the depth competition. IDC predicts that in the foreseeable future big producers of smart connected devices will reorganize their distributions channels including entity stores, online stores and agencies at various levels as well as other marketing activities, for instance, promotion.

39 AUTO

Industrial Watch ndustr i al Watch I

Auto Industry: What to Look Forward in 2013?

By Gasgoo

For the auto market in 2013, many Chinese manufacturers have their words to say. Gasgoo.com collected market predictions from influen- tial industry figures. Over- all, it is still a positive year ahead.

Ye Yongming, Li Feng, Shanghai GM General Manager Beijing Hyundai Executive Vice President As the automobile market enters a period of slow growth, competition between enterprises is shifting from Looking ahead to the market next year, I personally be- manufacturing to pricing. I believe that growth in the do- lieve there is an opportunity for growth to exceed ten percent. mestic passenger automobile market will be around eight There are two reason why this growth will be achieved: on percent; total sales will be between 15.2 million and 15.4 one hand, the automobile industry is becoming more mature million vehicles. I predict the Chinese economy as a whole to and organizing its resources better, allowing average auto- perform better next year than this one, with GDP growth at mobile prices to continue to decrease at a rate of two to five eight percent. However, the domestic automobile market may percent annually. On the other hand, consumers' incomes have to deal with the issue of more cities announcing policies are continuously growing, which is increasing overall buying limiting automobile sales and other problems. power and further driving demand.

40 Liao Xionghui, Dong Haiyang, Lifan Group Vice President and Lifan BAIC Sales President Motors General Manager I don’t believe that growth in the Chinese automobile The market next year will not witness large growth, but market is ‘slow’ this year. Rather, 2012 is the start of a period rather continue to maintain so-called “slow growth”. There of normal growth rates. It is highly irregular for the market to is a close relationship between the automobile industry and grow 30 percent or 40 percent annually. I believe that growth the economy as a whole. Currency inflation rates will not be rates within ten percent are normal. As for individual enter- low, average household income will not grow very fast and prises, I feel that they should enact proper pricing manage- purchasing power will weaken. As a result, prospects for ment policies. Conducting good R&D, manufacturing, price the industry don’t look very promising. Development in the control, aftermarket service and brand management work is automobile industry will be hampered by three factors: en- very important to BAIC. vironmental concerns, traffic congestion and limited energy resources. Restrictions on new registration plates in Beijing, Shanghai, Guiyang and Guangzhou have already had a di- Chen Binbo, rect effect on automobile purchases. Dongfeng Honda Executive Vice President

Growth rates for the automobile market next year will be around five percent. Furthermore, pressure on Japanese Zheng Congming, manufacturers will be even larger. The aftermath from the Guangqi Fiat General Manager Diaoyu Island incident will not begin fading away until next August.

Regarding next year's market, I personally believe that Tang Si, increased unification between cities and countryside will be a Haima Head of Sales major point of growth for the Chinese economy. 2013 will be an important growth year for the global economy, especially Looking at the Chinese automobile market, growth in major cities worldwide. China will play an important role. rates tend to cycle every four years. In 2004, 2008 and 2012, I feel the Chinese market will perform strongly next year, it experienced low points. The market reorganizing itself ev- with it being able to maintain a growth rate of ten percent. ery four years is similar to the stock market. Both visible and invisible factors will become evident during this process.

Pan Jianian, Chen Guozhang, Dongfeng Citroën General Manager Renault China Executive President

The ratio of automobiles for every thousand citizens in To date, the Chinese automobile market has experienced China is still extremely low, having not even reached the ten three major periods of rapid growth. From 2011 onwards, percent mark. Therefore, I believe that from the beginning the market entered a period of steady growth, with average to middle of next year there will be a rebound in sales. Due growth rates within ten percent. 2013 will be an exception. to the large size of the market, demand should be relatively Following steady growth of seven percent in 2010 and 2011, strong. In summary, the market should make a turnaround there will be a period of slightly escalated growth next year, next year, with steady growth rates of 15 percent being rea- with predicted rates between ten percent and 15 percent. sonable.

41 CREATIVITY

Industrial Watch ndustr i al Watch I Deficient Originality in China Animation and Games

Industry By Audrey Guo

hen we began to realize that animation games industry. In July of 2012, the could become an industry, the anima- Ministry of Culture released the Na- tion and games industry in Europe, the tional Development Plan for Anima- United States, Japan, and South Korea tion Industry under the 12th Five- has entered our market on a large scale. So China animation Year Plan (the “Plan”), specifying and“W games industry is developing under enormous pres- that efforts shall be made to promote sure,” Gao Zheng, vice director of industry division of the significant improvement of the creative Ministry of Culture pointed out at the 2012 Animation and ideas, R&D and production capability Game Industry Development Forum in December of 2012 of animation products originally cre- in Beijing. ated in China, and also to continuously In the past five years, China animation and games in- strengthen the capability of technical dustry has experienced tough time and gradually developed innovation, and build 5 to 10 famous from small to large scale, from weak to strong and from less domestic animation brands and pillar to more. According to statistics, the total output value of animation enterprises. China animation was RMB 62.1 billion in 2011. There are But, Mr. Jiang Xinghong, vice 500 national animation companies recognized by the Min- secretary of Party Committee of China istry of Culture and the Ministry of Finance, 34 of which Shougang Group, which is dedicated to are key animation companies. building China Animation and Games Nowadays, originality and brand creation are becom- City, thought that compared with the ing the focus of the development of China animation and industry of the developed countries, China animation industry is sufficient with resources including the capital funds and human talent, but are in lack of originality, strong brands and industrial chains. So he called on the industry of animation to pursue originality, and build its own brands. No original, no market “To achieve the original, what do we need? Technically, we have enough talent. But what is important is that the works they created should be full of spirit and culture deposit,” Ms Jin Man, dean of the college of opera research from Peking University. To adequately fuse culture into animation and games, designers, marketers and technical talents should have a good understanding of the spirit of culture. Mr. Zhang Hongjiang, CEO from Kingsoft, a

42 company engaged in the game industry for many years, gave an example. The latest version of Sword Net is updated with full 3D high definition picture quality, integrating Chinese traditional elements such as poem, tea and music. According to statistics, 70% of its game revenue comes from this game. It is proved that a game with culture aspects is more accepted by users. In addition, consumer research is also very important. Mr. Su Zhong, President of Daye Media Group thought that the vitality of the development of original animation and games is to create value for consumers of the total benefit is very and customers. He slow. Now, the trend has mentioned that many transferred from tradi- works in Hollywood tional online games to could be accepted webpages games and around the world, be- mobile games. Ac- cause they did vast con- cording to statistics, sumer research. the users of webpage To strengthen the are 230 million. The marketing effects integrated growth of webpages with the brands and mobile games are over 40%, even 100%. In China, integrated marketing Clearly, it is an irreversible is not a new concept. Mr. Shuai Min, trend, Mr. Zhang Hongjiang pre- GM of Beijing Kaku Media Co., Ltd “Nowadays, many animation dicted. expressed that the integrated model companies are always on the sidelines, Also, he pointed out that the total has been applied to the animation in- not paying attention to the originality back end support is transferred from dustry. A good idea could make movie, and the brand, but to the research on traditional servicers to cloud comput- TV, animation, game, or even buid the preferential policies. These kinds of ing that could enhance the ability of a theme park. For example, products companies may get the immediate ben- all games, all software and shorten the from Dream Works, Disney could take efit, but they will not achieve the long- development cycles. More important is advantage of integrated marketing to term success,” Mr. Jiang Xinghong to get to know the users, feedback. This achieve success although they are of warned. According to reports, 95% do- transfer received two digit growth every high cost. He explained by way of ex- mestic companies as OEM produce the quarter during last three quarters. ample the series of Pleasant Goat, after products for the animation and game Meanwhile, Mr. Zhang Pei, vice the TV animation formed a certain companies from Europe, the United president of Beijing Ourpalm Co., scale; the success of the movie ampli- States and Japan. Ltd. believed that the rapid growth fied the effect of the brand. Meanwhile, Additionally, Su Zhong suggested of 3G and the decline of tariffs could the authorized products promote the that to make efforts on the animation promote the booming of the internet. development of this brand. value could enhance the value chain. He noted that in 2013, it could be He pointed out that originality And he hoped that more policies could realized that single game could get is the key. Dreamwork pays attention be implemented to support the long- the profit of over RMB 30 million to the details of the original anima- term development of the animation and or RMB 50 million. More and more tion works, and then makes the works games industry. webpage games and mobile games unique, which could strengthen the Webpage game and mobile companies enter this industry. At last, brand and obtain a high box office. He game are with huge potential he made a conclusion,“Whatever web- added that originality decides the value page games or mild online games you of brand. If the company could do this, Online games reached saturation create, it is important that you do what the success will not be far away. more than ten years ago. The growth you are good at.”

43 CREATIVITY

Industrial Watch ndustr i al Watch I

Behind the Booming of

China Art Auction Market By Guo Yan

n December 4, 2012, a Looking for the value of ket of transaction of China painting piece of LANDSCAPE culture behind the collection & calligraphies is booming. Mr. Zhao by Wang Zhenpeng in the Xu, executive director of Poly Auction, Yuan Dynasty made a new Due to a series of economic poli- commented that it’s time to test the record of RMB 101.2 million in the cies that were released at the end of value of the collection of arts, because Oevening sale of Chinese classical paint- 2008, a lot of capitals paid more atten- when the market shows a downward ings & calligraphies in Poly Interna- tion on the art market. The transaction trend, the buyers are more cautious to tional Auction, which became the first price of paintings & calligraphies en- pick up the collection with a critical piece of Chinese art over RMB 100 tered the ‘over RMB 100 millions era’. attitude. In the severe economic envi- million transaction price during 2012 Although the total amount of autumn ronment, the piece of LANDSCAPE global autumn auction season. auction of 2012 is declining, the mar- transacted over RMB 100 million and

44 showed that it is a competitive collec- Protection of Chinese Art in Europe relics. “The auction companies are dif- tion and the best choice for the buyers (APACE), claimed that “the seal was ferent from other industrial companies from the point of view of the collec- looted by British and French troops since we sell products with the value tion or investment. No matter what from the Old Summer Palace of Bei- of historical culture. So what we sell is time, the artwork could stand the test jing”, and they insist that the seal was not just for profit, the most important of time. lost in 1860, when the Anglo-French factor is to protect Chinese traditional Nowadays, lots of collections are forces looted the Chinese cultural rel- culture.” full of historical and cultural value. ics in the Old Summer Palace which The return of China’s voice Many China auction companies start- was then burned down. According ed to think how to amplify their social to Mr. Yuan Shankai, former curator In recent years, the world has suf- functions and how to promote Chinese from China Imperial Palace Museum fered an economic crisis; the overseas culture behind the collections. Com- of Art, confirmed that this seal was collectors sold many art collections panies must understand the historical stolen during the sacking of the Sum- through China auction companies and value of artwork, evaluate its market mer Palace, or Yuanmingyuan. How- that boomed Beijing’s art market. In value and then fix its corresponding ever, the APACE tried several times 2006, Poly put forward the slogan that price. to negotiate with the auction house, made Beijing China’s art collection For that, Mr. Dong Guoqiang, asking for the withdrawal of the seal, trade center. According to Mr. Zhao President of Beijing Council Interna- despite this seal was auctioned finally. Xu, since the establishment of Poly tional Auction Company Ltd. believed The response of Artcurial auction Auction Company, the achievements that the price of auction collections house was different with Bonhams’ one proved that Beijing is one of the cen- couldn’t cover its cultural value. He month ago. In November of 2012, two ters of world art collection. And now gave an example. A collection of 1,292 Chinese relics that were also looted he was confident that the slogan is to ancient books from Guo Yunlou, was from the palace were withdrawn by the seize back the control of China art col- sold to a private buyer at the 2012 Bei- latter auction house in London. lection management. With the rise of jing Council Spring Auction. This auc- Behind the auctions, how to ef- China auction industry, more and more tion made more collectors realize the fectively protect or even take back the overseas Chinese collectors would like importance of Chinese ancient books. abundant Chinese historical relics lost to hand their collections to Chinese To balance the integrity and overseas should be considered by not auction companies because of the same profit for overseas Chinese just Chinese auctions but also overseas understanding of Chinese culture. historical relics auction companies. There is no law For that, Mr. Zhu Shaoliang, a in the world to ban the auction of the Chinese famous collector, approved of For China art market, another cultural relics looted from one coun- this concept. He mentioned what Mr. question that we need to consider is try. However, auction houses should Fu Baoshi, a Chinese famous painter how to deal with the transaction of comply with the spirit of international once said, that the business of Chinese overseas Chinese historical relics. and professional ethics and conven- art should “be dealt by the Chinese”. In the end of December of 2012, tions. Chairman of the Association of However many Chinese traditional another auction in France attracted Accredited Auctioneers Chris Ewbank ancient paintings, modern calligraphy the attention of all Chinese. An oval- thought that auction companies have and ancient books are in the hands of shaped imperial jade seal, dedicated to more integrity, and could get greater the Chinese, while, the West owns the the Qianlong Emperor (1735 to 1795) amount of business. modern art. With the development of of the Qing Dynasty, was auctioned During 2012 Beijing Autumn China’s auction market, and the in- on December 17 for 1.12 million eu- Auction Season, Mr. Dong Guoqiang creasing communication of the world ros (RMB 9.21 million) in Artcurial mentioned that the cultural responsi- art collections, Zhu believed that in auction house in Paris, France. Before bility of China auction companies is to the future, China will be the center of the auction, the Association for the promote the return of overseas Chinese world art collections.

45 CREATIVITY

Industrial Watch ndustr i al Watch I

The Fusion of Culture and Technology Refreshed Chinese Traditional Culture By Guo Yan

uring the exhibitions at the combination of culture and tech- cultural resources. Mr. Wu Tianyong, the 7th China (Beijing) nology is becoming a trend. Haidian director of the dept of publicity of International Cultural & district gathers over 250 technological Wuhan, said that the protection of na- Creative Industry Expo organizations and over 160 thousand tional culture is a very important task (ICCIE), “Three Mountains and Five hi-tech enterprises undertaking the for a country to settle down. From the imperialD Gardens” was exhibited at the task of building the global technology late 1990s, Wuhan started the digital booth of Haidian District, which show- creativity center from 2012 to 2020. In protection of national culture resource. cased the past lives and future planning 2011, there were 480 companies with On May 18, 2012, after the first batch of Xiangshan, Yuquan Hill, Wanshou the amount of over RMB 100 million, of national culture and demonstration Hill, the Summer Palace and Chang 48 of which were over RMB 1 billion. bases were established, the protection Chun Park. Through the digital virtual The total profits of Haidian District became more effective. “Wuhan is a recovery technology to reproduce the reached RMB 332 billion, accounting city with a history of over 3500 years brilliant garden, the visitors could enjoy for over 40% of the total expense. With and a number of intangible culture her- the perfect interactive combination of continuous development of the fusion itages such as the Yellow Crane Tower, history, ancient and modern intersec- of culture & technology, he said special Ancient Aither Platfrom, and Guiyuan tion. policies would be released. He pre- Buddisht Tempe. We establish the lo- From creative products to the dicted that in 2015, the total revenue cal data base of cultural resources, then leading enterprises, as the pioneer of of culture and creativity industry will classify what kinds of resources need- the fusion of culture and technology, reach RMB 500 billion. ing to be protected, and which need to Haidian District has transferred “inde- While, with abundant historical be developed its market value,”he told pendent innovation” into the cultural culture resources, Wuhan is dedicated China’s Foreign Trade. creativity industry. to protecting and preserving Chinese And Director Wu emphasized Mr. Meng Jingwei, deputy direc- traditional resources by means of digital that both talent training and technology tor of Haidian district, described that ways, in order to activate the national research are also important. So Wuhan

46 declared to establish the speciality of technology. More digital image technologies have been applied cultural heritage (level two) in 2009, and to large-scale activities since the Beijing Olympic Games. He the speciality of culture resource and mentioned the recent finished exhibition of the Terra Cotta culture industry in the level of master Army in Hong Kong, which Crystal CG undertook the digital and doctor. Now, two of them are ap- re-display, through video production to create a one-to-one proved by the State Council, so that the experience and let visitors enjoy the story of the Terra Cotta complete set of talent training from un- Army. Another project is the exhibition of Datong Yungang dergraduate, master to doctor has been Grottoes. Many cherished wall paintings have been preserved learned. On the other hand, some uni- so that the visitors could not enjoy. Through the digital tech- versities such as Wuhan University and nology, these valuable culture heritages reappear to the public. Huazhong University of Science and Through the production of these projects, Lu considered Technology have developed research a question what exactly the fusion of culture and technology on how to protect national culture by is. He said: “We have to mention the dynamic version of the digital technology, and realized how famous Chinese picture Riverside Scene at Qingming Festival to rebuild the cultural heritages such showed at China Pavilion at 2010 Shanghai Expo. This project as digital Dunhuang, digital Chinese cost around nine months with over 70 participators. The most chime, digital Huang Helou and digital precious exhibit of the China Pavilion, the electronic version of Museum of the Revolution of 1911. the national treasure by the renowned artist Zhang Zeduan of According to Mr. Zhao Yuhai, North Song Dynasty (1127-1279), measures 130 meters long director of Hi-tech Bureau of Ministry and 6.3 meters high, and is 30 times the size of its original. of Science and Technology, the 18th Designed by modern multimedia technics, the dynamic pic- National Congress of CPC put forward ture varies with change of lights and movements of figures,” he to promote the fusion of culture and added. “In fact, the visitors like it, not just because of the digi- technology. The scientific and techni- tal technology, but the painting is full of Chinese traditional cal innovation is the important historical culture. And the digital technology added a engine for the development of new expression to refresh the painting again.” culture that interact the role At last, Mr. Lu suggested that during the of culture and technology. process of fusion of culture and technology, To this, Mr. Lu both should keep balance. Technology is a Zhenggang, Director tool while culture is the idea and the core. of Crystal CG which Though, many visitors would like to see has been at the front more digital imaginations, he thought that of the fusion of cul- eventually technology should serve the ture and technology, culture industry and provide more tools was glad about the and channels for better presentation of the policies implemented culture heritage, and rather than ‘the sauce by the government. is better than the fish’. He mentioned that at the beginning of the establishment of the company, Crystal was defined as a science and technology company. During ten years’ development, Crystal applied the image technologies and multimedia technologies to culture promotion; now Crystal seems to be more like a culture company. For that, Mr. Lu told China’s Foreign Trade with smile: “Sometimes, when with technological companies, we define ourselves as a culture company; when along with culture companies, we confirm we are a technological company, so as to avoid direct competition.” During the interview, Mr. Lu was delighted that the related national departments have paid increasing attention on the fusion of culture and

47 EXPO

Industrial Watch ndustr i al Watch

I When Culture Meets Creative Ideas, Technology

By Cui Xiaoling

t brings culture and innovation closer to the public. It’s a very interesting show,” Mr. Li, a visitor to the 7th China (Beijing) International Cultural & “ICreative Industry Expo (ICCIE), told China’s Foreign Trade. The Expo is where technology meets culture, and culture meets novel ideas. Held every year end, the expo is where you expect to see the most innovative cultural products. Starting from December 20, the four-day event encompassed hundreds of activities including exhibitions, promotions, forums and workshops, with the main venue being the Beijing International Exhibition Center. The show is jointly hosted by the Ministry of Culture, the State Admin- istration of Radio Film and Television, the General Administration of Press and Publication and the Beijing Mu- other terminals, so that users can log Hill and Flowing Water”. nicipal People’s Government. on their account and continue watching A furniture exhibition held at the A large amount of new products, videos on any of the terminal device. event’s sub-venue, the Millenium Mu- new technological and cultural projects The video website is planning to create seum is also filled with fresh ideas. The which are originally made in China, a social network where people in the sofa is inspired by ink painting, while have attracted a lot of attention. The same neighborhood could share video the cobblestone-like clocks bring you a original cultural products have im- resources and opinions. bit of nature. And these two futuristic proved both in quantity and innovation. At another booth, modern design settings are actually two soft sofas. Creative ideas on display was mixed with traditional oriental aes- Zeng Hui, director of Gehua thetics, to provide a new lifestyle for the Creative Culture Center, said, “We’ve Creative ideas were in abundance Chinese. Several stones are stacked up gathered more than 300 pieces de- at the expo. Visitors could see some to make a modern style incense burner. signed by companies from both home commonly used items updated with Simple design and solemn color make and abroad. I hope it provides a trendy novel ideas. They could also see the it an ideal setting for Buddhist medita- place for people to enjoy fashionable integration of traditional culture and tion. It can also create a quiet atmo- cultural products.” state-of-the-art technology. sphere at home when you are drinking Asked about the way to prevent Denis Chen, Marketing Manager tea or reading a book. When you burn their creative ideas from being copied, of Qiyi.com, an online video provider, incense, the smoke generated is released Zhao Baocheng with Chun Xiang (Bei- told the reporter that the website has from both above the incense and from jing) Clay Culture Company, which used front technology to integrate mo- the bottom of the burner. This has makes cute, creative clay pieces, told bile phone, television, tablet PC and earned the gadget the apt name, “High the reporter that they were never afraid

48 of being copied. “Plagiarizers might be fund to reward enterprises with out- According to Meng Haidong, able to copy the shape, but they are not standing contribution to cultural prod- secretary-general of the Beijing Cul- able to capture the spirit.” ucts and services exports. tural Development Foundation, with- Creative ideas were also seen in Commercial banks are also en- out world-renowned brands and enter- the financial sector. The Bank of China couraged to give priority to loans need- prises, Beijing still needs to make its is one of the first banks to provide var- ed by enterprises within the industry to cultural and creative products accepted ied types of financial support for the export products and services. and recognized by the market. culture and creative industries such as “In addition, many platforms have “The capital should further in- cultural tourism, antique and artworks been built and markets developed, increase its share of cultural products and trade, animation development and cluding the China Beijing International services in the international cultural production, media program production Cultural and Creative Industry Expo, market and further increase its influ- and trade. Beijing International Film Festival and ence worldwide,” he said. Beijing boosts cultural and Beijing International Comic Animation The cultural and creative indus- creative sectors Week,” he said. tries help boost the soft power and The city now organizes more than comprehensive competitive power, and Beijing will further promote the 100 overseas cultural activities every Beijing should turn itself into a culture development of the cultural and cre- year, he said. metropolis and a platform for Chinese ative industries and enhance its role as However, despite the increasing culture to go global, he said. the city’s pillar industry and economic contribution of the cultural and creative growth engine, said Beijing Party Sec- industries to the city’s economy and its retary Liu Qi. leading position nationwide, the capital “As the major cultural center of still has great potential to be tapped. the country, the capital should continuously play an exemplary role of a city of advanced culture with worldwide influence,” he said during the 2012 Beijing Forum on Sustainable Development of Cities. The cultural and creative industry is playing an increasing role in boosting the city’s economy and the development of the industry should be placed in a very prominent position, he said. According to the Beijing Cultural and Creative Industry Promotion Cen- ter, the added value of Beijing’s cultural and creative industry has experienced sustained growth since 2005, hitting 194 billion yuan ($30.5 billion) in 2011. Software, Internet and computer service account for the biggest share, some 38.4 percent, followed by meet- ings and exhibitions that contribute 12.1 percent, and press and publishing taking up 8.2 percent, according to Mei Song, director of the center. “Culture is always the inexhaust- ible driving force for the development of city,” he said. The number of people working in the industry reached 882,000, a year- on-year increase of 7.7 percent. “More and more foreign investment is eyeing the cultural and creative industry in the city, with a total of 3,069 foreign investment projects contracted from 2006 to 2011,” he said. Beijing has come up with a special

49 China’s Health Care Reform Benefits Pharma Companies

By Richard Zhu

ith the ongoing health care reform, China’s and likely to expand greatly in the market for pharmaceuticals is dynamic and coming years.” likely to expand greatly in the coming years, “China’s commitment to health thus presenting lots of opportunities for Phar- care reform promises better care and maceutical companies, said a recent report by The Boston coverage of new patients in urban ConsultingW Group (BCG). and rural areas alike. Pharmaceutical The Chinese government has largely achieved the ob- companies that can navigate the fast- jective of its 2009–2011 program of health care reform: to emerging county-hospital and com- provide its 1.3 billion people with access to basic health care. munity health-care centers (CHCs) China invested $125 billion in this effort, with a special focus will be well positioned to reach the on the “next billion” — the 400 million urban unemployed next-billion patients,” said the report and the more than 650 million inhabitants of rural areas. which is based on an in-depth survey “Today, about 96 percent of China’s population has of hospital heads, physicians, and pa- public health care insurance, and per-capita payouts have tients throughout China. more than doubled in the past three years,” said Chun Wu, The new treatment markets a BCG partner and coauthor of the report, adding that “Not surprisingly, China’s market for pharmaceuticals is dynamic The BCG report explores the

50 emerging characteristics of China’s rapid growth, China’s 10,000 county of urbanization. By 2020, population new health-care industry, as well as hospitals hold the greatest promise for and economic growth will drive the the size and potential growth of the pharma companies, 6,000 of which emergence of “megacounties” in which pharmaceutical market. The report have earned class III, II, or I classi- about 500 cities will have disposable predicted that China’s urban hospitals fication from the government on the income per capita as high as that of will continue to be the most important basis of physician qualifications Shanghai in 2010, and battleground for pharma companies, and equipment. Spread across With the huge 650 cities will have but two other channels — county 2,000 cities and counties, these populations of more hospitals and CHCs — will prove in- hospitals are becoming an in- base of potential than 500,000. creasingly attractive to multinational creasingly important channel patients and The Chinese and local pharma companies alike. for rural patients to receive ini- rapid growth, government has stated Both offer great potential and have tial diagnosis and maintenance that county hospitals seen over 30 percent annual growth in therapy. For instance, more than China’s 10,000 should eventually ad- the last three years. As the gatekeep- 50 percent of initial hyperten- county hospitals dress 90 percent of ers for more than 650 million rural sion diagnoses occur in county hold the greatest the population’s ma- patients, county hospitals have gained hospitals. Doctors in these hos- promise jor illnesses. County the most from the country’s reform pitals are also key influencers hospitals are piloting eff orts, while CHCs have quickly be- when it comes to drug choices for pharma public-hospital reform come maintenance centers for patients and change-of treatment deci- companies. with a zero-markup with some chronic diseases; CHCs sions for some diseases, and policy on drug sales also play an increasingly important more than 80 percent of patients refill and higher treatment fees. The improv- role in initial disease diagnosis and their prescriptions in county hospitals. ing condition of county hospitals and management. County hospitals have been the the increasing affordability of drugs However, “Given the relatively biggest beneficiaries of China’s health- are driving a growing interest among limited affordability of drugs, the care reform. With continuous govern- patients in trading up to higher-priced geographic dispersion of county hospi- ment investment over the last three brands manufactured by multinational tals, and the limited number and low years, these hospitals have improved companies. price of drugs on the ‘essential drugs their capabilities and seen tremendous The report cited an example to list’(EDL) used in CHCs, pharma growth in the total number of beds and explain this. Of all the hypertension companies will be forced to tailor their physicians. patients who have switched drug pre- game plans in order to serve China’s The reports showed that in 2008, scriptions in 2010 and 2011, close to 60 next billion,” the report suggested. China’s largest county hospitals had percent switched from a local to a mul- The expanding county about 300 beds and 150 physicians tinational brand. Rising patient vol- hospitals each; now the largest ones can have umes and per patient spending, as well as many as 550 beds and 200 physi- as the trading-up trend, are making According to the report, with cians. Moreover, China’s counties are county hospitals increasingly attractive the huge base of potential patients and themselves growing rapidly because to pharma companies. As a result, pharmas are investing in sales, marketing, and training of physicians and staff. The survey showed that drugs from Bayer and As- traZeneca are already present in about 30 percent of China’s counties. In some drug categories, multinational players have achieved leadership positions, especially in the larger, more developed counties. But overall, the market is quite fragmented and dominated by local pharma companies. The top ten companies account for only about 15 percent of the total market share, and Novo Nordisk is the only multinational pharma company that is ranked among the top 20 companies in the county hospital market. Despite its potential, the county hospital market presents a number of challenges. While growth is imminent,

51 these rural hospitals are much more geographically dispersed and are characterized by much wider regional varia- tions and uneven development than city hospitals. Drug reimbursement poses another barrier in the near to medium term, especially for expensive drugs from multinationals. About 40 to 60 percent of county hospital patients are covered by medical insurance offered through the New Rural Cooperative Medical System (NRCMS), which has a patient self-pay ratio as high as 80 percent for outpatient services (compared with 20 percent, on average, for city dwellers covered under Urban Employee Basic Medical Insurance, or UEBMI), and per capita payouts as low as RMB 200 (compared with RMB 1,500 for UEBMI). In the future, in- generics and mature products with The potential market of CHCs comes in small towns and counties will lower price premiums,” said Carol grow faster than in large urban areas, Liao, a BCG partner and coauthor The report showed that China’s but the drug affordability gap relative of the report. CHC market is small, about one-tenth to cities will remain, as will the gap Furthermore, the report advised the size of the city hospital market, but between UEBMI and NRCMS premi- that segmenting the different markets it holds considerable potential because ums and benefits. can also strengthen margins. Like of the increasing treatment by these fa- The county hospital market has city hospitals, county hospitals vary cilities of patients with chronic diseases long been the turf of local Chinese phar- greatly in size and sophistication. such as diabetes and hypertension. Sales ma companies. In BCG’s recent projec- Hospitals in the larger counties treat of drugs for chronic conditions are now tion sampling of drug sales in county far more patients and sell two to four as much as one-quarter of equivalent hospitals across China, 19 of the top times more drugs than hospitals in sales in city hospitals, and by 2020 are 20 companies in terms of sales volume less developed areas. Brand selection expected to reach one-half of city hos- were Chinese. Local players usually have is also greater in large county hospitals’ equivalent 2010 sales. better coverage of the county hospital pitals, with two to three brands per Many of the CHC heads inter- market than multinational companies, molecule. Given the geographic dis- viewed by the survey were quite opti- as well as better economics due to a low- persion of county hospitals in general, mistic about the future growth of their cost sales force and a large, affordable a cost-effective commercial model centers, attributing it to growing out- portfolio of generics well suited to the that easily adapts to local demand and patient reimbursement for unemployed market. economics is critical. urban dwellers and government policies Advices for pharma companies Meanwhile, local pharma compa- that have resulted in lower drug prices nies will also face strong competition in CHCs than in city hospitals. In the context of the fierce compe- from multinational companies, which The survey found that besides tition with local players, multinational are flexing their sales and marketing purchasing a growing volume of drugs, pharma companies that hope to win muscles in the county hospitals and CHCs and their doctors are play- in the county hospital market have to starting to introduce selected off-patent ing an expanded role in the diagnosis adapt their portfolios and commercial originator or branded generics. and management of chronic diseases. models. “To compete more effectively Instead of just refilling prescriptions, “To succeed, multinationals against them, local companies must CHC doctors are making some ini- will need a broad range of products catch up on physician education and tial diagnoses and are participating that can be tailored to local markets, services as well as brand marketing,” in disease management, and they are with a special focus on low-price said the report. influencing the brands chosen in drug

52 There are currently around 8,000 CHCs and 25,000 smaller community health-care stations in China.

treatments. Close to 80 percent of hy- mirror those of the city hospitals. and fragmentation is the first hurdle pertension patients who regularly visit With the top ten pharma com- that pharma manufacturers face as they CHCs have switched prescriptions panies accounting for one-third of the seek to establish and expand their pres- since their initial diagnosis, and half total CHC market value, this market ence. There are currently around 8,000 have switched more than once. CHC is more consolidated than the city hos- CHCs and 25,000 smaller community doctors report being responsible for pital market, and the penetration of health-care stations in China. The about half of these shifts. In addition, multinational-brand drugs is higher, es- number of CHCs is expected to rise the data indicates that more people have pecially in the larger cities, where major through 2015 as many class II hospitals switched from local to multinational multinationals are already investing in and below convert to CHCs. brands in China’s 30 richest cities. sales, marketing, and training. The survey noted an even bigger According to government policy, According to the survey, Bayer, problem is the evolving drug policies CHCs must use either the national AstraZeneca, and Pfizer reps are pres- for CHCs. Many of these, such as the or the applicable provincial version ent in 30 to 50 percent of CHCs in the mandatory use of EDL drugs, zero- of the essential drugs list. However, 40 wealthiest cities in China and have markup requirements, and policies that the survey found that achieving 100 spent the largest amounts on CHC result in insufficient government sub- percent EDL compliance is virtu- physician training. According to the sidies, lack consistency or are impos- ally impossible, since EDL drugs CHC physicians in the survey, 40 to sible to implement fully. But the tender are of insufficient variety to meet all 50 percent of the CHCs in these cities policy being designed and implemented patient needs, and government fund- have at some point received training in each province is the biggest chal- ing doesn’t fully compensate for rev- support from those companies. Out- lenge for pharma players. Even when enue losses resulting from the zero- side of the top 40 cities, coverage and brands don’t participate in EDL bid- markup policy. From 2010 to 2012, spending by multinationals are signifi ding, they can still be considered and some cities allowed the use of non- cantly smaller, and less than 10 percent used in non-EDL sectors of a city or in EDL drugs, although sales were not of CHCs report receiving any attention county hospitals. Manufacturers must to exceed 30 percent, and some cities from these companies. make painful tradeoff s between com- supplemented the national and pro- Despite the growing number of peting for the EDL by offering drugs at vincial EDLs with city-level EDL CHC patients and the rapid growth of low prices (which are driven even lower drugs. In Hangzhou and Hefei, for CHCs, the survey showed, this market by provincial EDL-tender policies) and instance, non-EDL drugs are permit- presents even more challenges than the keeping prices high and being excluded ted, and drug usage patterns tend to county hospital market. Its sheer size from the CHC market. It is expected that the national EDL will be expanded late in 2012 or early in 2013. For multinationals and locals that get their products listed, winning becomes a volume play that depends on gaining access to the provinces with the greatest potential or the highest tender prices. “To succeed, companies must identify their key strategic advantages, such as scale, manufacturing capability, and quality, and actively influence and shape China’s EDL-tendering policies in key provinces to favor those advantages,” the report advised, adding that “It’s also important to prioritize the target provinces, taking a pass on those where coverage is minimal or relationships are lacking.”

53 ase S tudy c

Analysis on US Zeroing Methodology in Antidumping Investigations

By Liu Yajun

eroing is a methodology in the calculation of margins of dump- is not against the Antidumping Agree- ing by the United States Department of Commerce (USDOC) ment and GATT. which disregards the amounts by which export prices for cer- Consistency analysis of zeroing tain transactions are above the normal value in the process of methodology under the WTO establishing an overall margin of dumping. In other words, the USDOC rules Zwill regard the amount by which the exports prices are below the normal value as positive dumping margin and those above the normal value as As to the substantive issue of the zero instead of negative dumping margin. consistency analysis of zeroing meth- If zeroing is applied, it is more likely for a product under investiga- odology, the key to this question is tion to be regarded as “dumped” and imposed higher antidumping du- whether the product should be taken as ties. Therefore, zeroing has been challenged by many WTO members at a whole in the antidumping investiga- the Dispute Settlement Body (DSB). tions. The basic issue in the cases relating to zeroing The United States argues that there is no textual support for the view In the cases involving zeroing methodology, the controversies be- that Article 2.4.2 of the AD Agree- tween the applicant members of WTO and the United States, which ment obligates Members to offset posi- is the defendant in almost all these cases, are mainly focused on one is- tive and negative dumping margins. sue: whether zeroing is inconsistent with GATT 1994 or Antidumping The text of Article 2.4.2 of the AD Agreement? Agreement provides: “Subject to the In US-Measures relating to zeroing and sunset reviews (DS322), provisions governing fair comparison in Japan argues that the zeroing procedures and the standard zeroing line paragraph 4, the existence of margins prevent the United States from calculating a margin of dumping for the of dumping during the investigation ‘product” as a whole on the basis of a “fair comparison”, as required by phase shall normally be established on the AD Agreement and the GATT 1994. The United States argues that the basis of a comparison of a weighted there is no obligation in the AD Agreement to calculate one margin of average normal value with a weighted dumping for the “product as a whole”, therefore the application of zeroing average of prices of all comparable ex-

54 port transactions or by a comparison considered that since Article 9.3 of the AD Agreement refers to Article 2, of normal value and export prices on “under Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of a transaction to transaction basis. A the GATT 1994, the amount of the assessed anti-dumping duties shall normal value established on a weighted not exceed the margin of dumping as established for the product as a average basis may be compared to prices whole”. of individual export transactions if In cases such as US-zeroing (DS294) and US-zeroing (DS322), the authorities find a pattern of export the DSB held the same opinion that the zeroing methodology in US prices which differ significantly among antidumping investigations are WTO rules inconsistent. In US-zeroing different purchasers, regions or time (DS322), Appellate Body clearly stated that “A product under investiga- periods, and if an explanation is provid- tion may be defined by an investigating authority. But “dumping” and ed as to why such differences cannot be “margins of dumping” can be found to exist only in relation to that prod- taken into account appropriately by the uct as defined by that authority. They cannot be found to exist for only use of a weighted average to weighted a type, model, or category of that product. Nor, under any comparison average or transaction to transaction methodology, can “dumping” and “margins of dumping” be found to ex- comparison.” ist at the level of an individual transaction.” In accordance with this provi- In recent judicial practices, such as the US-Anti-Dumping Mea- sion, three methods of comparison can sures on Shrimp (DS 402) and US-Anti-Dumping Measures on Shrimp be used in antidumping investigations, and Diamond Saw blades (DS422), the panels recommended that the namely, W-W (weighted average normal Dispute Settlement Body request the United States to bring its measures value with a weighted average of prices) into conformity with its obligations under the AD Agreement. comparison, T-T (transaction to transac- The future of zeroing methodology tion) and W-T (weighted average normal value with individual transaction). Although the DSB has for several times concluded that zeroing is In W-W method, zeroing is obvi- inconsistent with the WTO antidumping rules, we can not reach a con- ously prohibited because all comparable clusion that zeroing has been terminated or is going to be terminated. export transactions should be taken The United States still holds strongly that WTO antidumping rules do into consideration in order to get an not prohibit the application of zeroing in accordance with the text of rela- average of export prices. But in T-T and tive WTO treaties. W-T methods, the text of Antidump- In Doha Round, the WTO members decide to take the reform of ing Agreement does not state clearly antidumping rules as a subject of the Doha Development Agenda. Both whether zeroing is allowed. the United States and the members who are against zeroing have tried to It is necessary to study the relative change the rules of antidumping. The United States made efforts to make articles in GATT and Antidumping zeroing legal and the members against zeroing tries to exclude the use of Agreement to judge whether zeroing is zeroing in antidumping investigations. permitted in T-T and W-T comparisons. On Nov.30, 2007, the Negotiation Group on Rules published a In the context of GATT, dumping chairman text (TN/RL/W/213), which prohibits the application of zero- is defined as “products of one country ing in W-W comparison but legalizes the application of zeroing in both are introduced into the commerce of T-T and W-T comparisons. another country at less than the normal This text has been criticized by many members of WTO and in a value of the products”. later chairman text (TN/RL/W/236), the newly-added article 2.4.3 has Article 9 of Antidumping Agree- been removed. ment further provides that antidumping The Negotiation Group on Rules added a special explanation to this duty is imposed on the product being chairman text stating that “Delegations remain profoundly divided on this investigated. issue. Positions range from insistence on a total prohibition of zeroing irre- Both the two articles stress that spective of the comparison methodology used and in respect of all proceed- antidumping measure is targeting at ings to a demand that zeroing be specifically authorized in all contexts.” a product instead of a transaction. This explanation shows that it is still too early to predict the end- Therefore, it is required by the WTO ing of zeroing. Since the Ministerial Conference has stated that the aim antidumping rules that all the transac- of the reform of antidumping rules is to clarify and improve disciplines tions of the product under investiga- while preserving the basic, concepts, principles of these agreements, it is tion should be considered in all three not likely to change Article 2.4.2 of the Antidumping Agreement and methods of comparison, not just in prohibit the use of zeroing without the consent of the United States. W-W comparison. The antidumping Therefore, the future of zeroing can not be predicted but it is sure duties are imposed on the product level that there will be many cases against zeroing if the United States still instead of the transaction level. sticks to its zeroing methodology in antidumping investigations. Several DSB cases also support this concept. In EC-bed linen and (Author: PhD and Professor and Vice Dean of the School of US- soft lumber V, the Appellate Body International Law of the Northwest University of Politics and Law)

55 ASIA-PACIFIC

investment opportunities in Laos are agriculture and forestry, electricity generation, mining and tourism, and the Lao government encourages investors to develop special economic zone, export processing zone, industrial park, tourism zone, duty free zone and ICT zone. As one of the fastest developing countries in the world, Laos has made great achievements in economic and social development. During the period

egional T r ade & I nves t men of 2001 to 2011, the gross domestic

R product (GDP) of Laos doubled with the annual growth of 7.3 percent. Laos had its economy boosted in 2012 through growth driven by the construction, services, industry and agriculture sectors on the supply side, according to a recent report released by Ambassador of Laos to China Somdy Bounkhoum at the seminar the World Bank. In recent years, the rapid development of economy, the continuous improvement of infrastructure, and rich mining and hydroelectric resources Laos Seeks for in Laos have attracted more and more Chinese investors, said Xu Ningning, executive secretary-general of China- Chinese Investment ASEAN Business Council Chinese Secretariat. By Richard Zhu He proposed that by making use of the China-ASEAN preferential policies, Chinese investors should take fter accession into the WTO legislation will have to be supplemented the opportunities and actively cooperate in October 2012, Laos is ex- and upgraded. The import and export with Laos. pecting more foreign invest- procedures will be brought in line with He said Chinese products like farm ment, thus bringing plenty of international best practices,” he said. machinery products, chemical fertilizer, opportunities for Chinese investors. Located in the heart of GMS/ light industrial machinery, engineering ADespite the land-locked condition, ASEAN, Laos has plentiful natural machinery, home appliances, building Lao PDR has considerable potentials resources, a large area of fertile ag- materials can find markets in Laos. for trade development as it is sur- ricultural land, varieties of tourism Data shows that so far Chinese rounded by fast-growing large markets development sites, while having virtu- investment to Laos totals $3.3 bil- of China, Thailand and Vietnam, said ally no damaging natural disaster, said lion, ranking the third. In the first 10 Somdy Bounkhoum, Ambassador of Khampanh Sengthongkham, Minister months of 2012, the bilateral trade vol- Laos to China, at the Lao Investment Counselor of the Lao Embassy to ume between China and Laos reached Promotion Seminar held in December China at the seminar, when referring to 1.37 billion, up 42.8 percent year on in Beijing. the comparative advantages of Laos to year, far above China’s average foreign “We have adopted the strategy to attract investments. trade growth rate of 6.3 percent. make Laos a hub of transit trade in the And also, Laos is one of the most The Chinese investors are mainly region in accordance with the imple- politically stable countries in the region in the sectors of hydro power, infrastruc- mentation of the Greater Mekong Sub- with socio-economic and financial sta- ture, mining and agriculture sectors, region (GMS) projects,” he added. bility and high security. Furthermore, Khampanh told China’s Foreign Trade. According to Somdy, the Lao the low labor costs in Laos and the As for Chinese companies willing Government has made significant ef- GSP privileges given from 42 countries, to invest in Laos, “They need to study forts to improve investment climate and coupled with liberal laws and regula- the Lao Investment Promotion Law first facilitate cross border trade. tions have created favorable business for right understanding before starting “We will continue to improve the and investment environments, accord- the investment and contact Lao Em- business environment, especially the ing to Khampanh. bassy in Beijing for preparations before regulatory framework. Trade related He advised that the sectors with going to the field,” Khampanh said.

56 ule R

68 EUROPE

Tough 2012 for Sino-EU Trade

By Wang Xi, Zheng Tong

he Euro Crisis, which EU decreased by 3.6%. is getting increasingly From Chart 1, we can see serious in the year just that there is a slight increase of egional T r ade & I nves t men passed, has an enor- the Sino-EU trade from Janu-

R mous impact on the economic ary to August, and a drop from Tcooperation between China August to October in 2012. and EU. During the first half The overall level is actually far of 2012, China’s export to EU below that of previous years, has been experiencing a negative however. growth, thus changed the EU’s Why tough 2012? largest trade partner status to China. It’s reasonable to say that, Firstly, China’s export the deep-rooted EU crisis may to the European nations has be the hurdle for Sino-EU trade started to take on a negative cooperation in the days to follow. growth. From the Chart 2, we Tough 2012 can see that ever since 2011, nancial assistance to EU, and China’s China’s export to EU have sunk into a During the first half of last year, FDI to EU has been creeping up, sharp slump, which is, largely the con- the economic downturn, especially on- which have drawn much attention and sequence of the euro zone’s debt crisis. going EU crisis have made it extremely also strengthened the base for bilateral Since the beginning of 2012, the Sino- tough for China and European coun- trade. EU and Sino-US trade growth started tries to go further, in realms of trade From last year, there has been a diverge, with Sino-EU trade growth and economy. It’s not hard to see that slump in the Sino-EU bilateral trade. hovering at around zero. the bilateral have been experiencing an According to the statistics given by The most prevalent reason un- obvious slump and EU’s FDI towards the China Customs, the overall trade derlying the phenomenon is the Euro

China have shown shrinkage conse- volume between the twothou sinand July dollars is ap- Debt Crisis. The crisis started when quently. However, on the other hand, proximately 48 billion dollars,55000000 indicat- several European countries like Greece, there are sparkles between the Sino- ing an 8.9% decline on a year-to-year Ireland and Portugal began to suffer a 50000000 EU cooperation. For instance, leaders base. In addition to that, the export serious deficit. Instead of relieving from on the two sides made frequent visits volume from China to45 0EU00000 is 29.37 the desperate situation when EU and towards each other and have reached a billion dollars, a 16.6%4 0decline.000000 From IMF lend a hand, it started to spread

series of consensus aiming at promoting January to July, the overall3500000 0export to to countries like Spain and Italy, trig- bilateral trade. At the same time, China China increase about 7.8% on a year-to- gering the bank crisis at the same time. 30000000

has taken a leading role to provide fi- year base, among which the export1 2 to 3 The4 Euro5 6 Crisis7 impacted8 9 the0 economy1 -0 -0 -0 -0 -0 -0 -0 -0 -0 -1 -1 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2

Chart 1 Sino-EU trade volume in 2012 Chart 2 Sino-EU & Sino-US trade growth 2011- 2012

thousand dollars 55000000

50000000

45000000

40000000

35000000

30000000

1 2 3 4 5 6 7 8 9 0 1 -0 -0 -0 -0 -0 -0 -0 -0 -0 -1 -1 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 Source: China Customs Source: China Customs

58 EUROPE

Chart 4 Trend of trade volume from 2012.1-1012.10 Chart 3 Trade growth by month on month rate thousand dollars

Source: China Customs Source: China Customs

so much that it indicated an overall de- billion dollars in 1972 when the two growth since the 2009 international cline of individual consumption and in- countries started to establish diplomatic financial crisis. From the beginning of vestment, which cut down the demand relations to 169 billion dollars in 2011. this year, EU’s real investment to China for foreign goods and services. As one The trade situation between China and continued to decline further. Accord- of the most important trading partner Britain, France, Italy and Netherland ing to the data collected by China’s with EU, start-up economy like China is of medium level compared to that Ministry of Commerce, from January suffered a lot consequently. See Chart 3. of Germany. The overall level is rather to October, 2012, FDI of the EU 27 Besides the debt crisis, we should flat with volume fluctuates between countries to China was 52.36 billion also consider the changing situation in approximately 3~6 billion dollars. And dollars, a 4.95% decline on a year-on- China. The labor cost is on an increase the pessimistic trade volumes with year basis. Among this, France, which so that China is losing the comparative countries like Greece, Denmark, Por- was once China’s top 10 foreign in- advantages in the sector. The apprecia- tugal and Ireland have been experienc- vestment supplier, decreased its FDI tion of RMB and the rising prices of ing a downturn as the consequences of to China sharply since 2011, and has industry materials also weaken China’s the declined consumption and invest- removed from the top 10 list of foreign comparative advantages to some extent. ment led by the Euro Crisis. investment for China. Secondly, China’s export to EU in Thirdly, exports of most com- To conclude, it’s not difficult to the traditional markets has also shown modities to EU began to shrink. From foresee that the Sino-EU trade condi- a sign of weakness. Germany, Holland, 2011, exports of major commodities tion will still be similar if the EURO Britain, France, Italy and Spain are towards European nations decreased Crisis continues. A nation’s trade de- China’s 6 major conventional markets. sharply. In 2012, China’s export of most pends heavily on the current situation From the beginning of 2012, however, goods dropped down. According to the of itself and its co-partners. So, as a China’s export to these 6 countries data collected by EU, from January to result of the serious lack of aggregate shrunk sharply. According to statistics March in 2012, among its top 10 im- demand caused by the European eco- given by China’s Customs, for the past port from China, most of them showed nomic downturn, we can expect that 10 months the trade volume between decreases of different level ,except for a the overall trade level has great spaces China and these 6 nations have been slight increase in realms of plastic, rub- for improvement when the crisis is 20305 billion dollars, a 7% decrease on ber and optical, medical devices, with over. For the time being, however, a year-on-year basis. See Chart 4. a decline of 3.8% in electromechanical when China itself is also experiencing It’s obvious that Germany has the goods on a year-on-year basis; at the an economic downturn, with its GDP most prominent figure in terms of trad- same time, 6 kinds of labor-intensive data below 8% for the first time within ing volume with China, with average merchandise, including textile, apparel, recent years, its trade volume with EU monthly volume of 14 billion dollars furniture, toy, shoes, bags, and trans- countries, except Germany, would most in 2012. One of the reasons for this portation appliances have altogether probably follow the current trend well phenomenon is that Germany is the experienced a negative growth. until another round of economic boom country that boasts probably the best Fourthly, the investment coopera- comes up. economic performance under the back- tion between China and EU is mingled ground of Euro Crisis. And to analyze with both hope and concerns. In 2011, (Authors: Wang Xi, associate from a historical perspective, the Sino- the real investment of EU to China was professor of Central University of Fi- Germany trade has been in a stable and 63.5 billion dollars, a 3.7% decrease on nance and Economics; Zheng Tong, upward state, from the initial 0.275 a year-on-year basis, a second negative undergraduate of CUFE.)

59 EUROPE

he UK is wooing Chinese investment to spur its economy against Denmark, China Cooperate the background of the slow recovering world economy. Premier Wen Jiabao and Prime Minister on Energy-efficient TDavid Cameron agreed earlier that China and the UK should be “Partners for Growth” to make full use of the clear complementarities Construction between the two economies in a way that benefits mutual economic development. egional T r ade & I nves t men By Richard Zhu China’s “Go Global” strategy will seek

R to support Chinese economic development by helping to boost domestic innovation and research capabilities through accessing advanced technology and technical expertise. It hina and Denmark are collaborating on energy-efficient will also support China’s objective of growing construction, with the ongoing urbanization and the into international markets and building global trend of green buildings in the world. brands — all these are areas in which the UK So far, Denmark’s cooperation with China on en- has world leading expertise and have given ergy matters has been developing rapidly with focus on renewable Chinese companies who have already invested Cenergy, energy-efficient construction projects as well as R&D. in the UK a competitive edge in the interna- The Danish Minister for Climate, Energy and Buildings, Mar- tional market. tin Lidegaard visited Beijing in December 2012 and met with fellow Gavin Little, managing director for Chinese ministers and energy sector executives. investment development in UK Trade & In- “With China’s extreme growth rates, it’s crucial that the con- vestment (UKTI), visited China in December sumption of resources is as limited as possible. It is in China’s own 2012 to meet with some Chinese companies interest, and in the long run it has significance for the entire world’s on investment issue, and tried to create a pipe- climate, since reducing buildings’ energy consumption is one of the line of high quality inward investment and most effective ways to reduce CO2 emissions,” said Lidegaard. build strategic relationships with investors. In China’s major cities, housing is shooting up at an unprec- “UK has favorable Tax rates, transpar- edented rate. So many new housing developments are underway that ency in doing business and more headquarters China currently accounts for nearly half the square meters of hous- than many other European markets. All of ing being built worldwide. Realizing this, China is striving to make these make the UK a leading destination to housing as energy efficient as possible. In May, China announced invest in Europe,” Gavin told China’s Foreign its goal that before 2020, some 30 percent of the country’s new con- Trade in an exclusive interview. struction projects should be energy-efficient buildings. According to the UK Embassy to China, The co-operative agreements with China are part of the Dan- the UK is one of the most open economies ish Government’s focused efforts to share Denmark’s green energy in the world to inward investment, including and climate solutions and energy regulatory system with high- Sovereign Wealth Fund investment. It ranked growth economies. 7th last year in the World Bank’s Ease of Do- Denmark has some of the world’s tightest requirements for en- ing Business report and has the fewest barriers ergy efficiency in buildings. The country’s on-going efforts to reduce to entrepreneurship in the world, according to energy consumption have created a solid base of experience and an the OECD. array of proven solutions, Lidegaard said. More and more Chinese enterprises are “It means a lot when a country as large as China wants to im- eyeing the UK’s market by making use of its prove energy efficiency. And even though we are a small country, favorable investment environment, either for we can really make a difference,” said Lidegaard, adding that “We expertise, manufacturing capability or tech- have the experience and know-how that is sought out by the Chi- nology. nese authorities, and Danish companies have solid competences and Recently, there have been a number of world-class solutions to build energy-efficient structures, renovate Chinese investments in the UK, including for energy efficiency and deliver energy-efficient building materials.” state-owned Bright Foods’ purchase of a 60 During his travels, Lidegaard also visited the China National percent stake in Weetabix for £1.2 billion Renewable Energy Centre, which has established a close collabora- deal, CIC’s investments in both Thames Wa- tion with the Danish Energy Agency. With input from Denmark, ter (£500m) and Heathrow (£257m), as well the centre will be publishing a plan for implementing renewable en- as Huawei’s announcement of a further £1.3bn ergy in China by 2050 with detailed roadmaps for biomass, biogas, investment in the UK, creating up to 700 biofuel and solar energy. jobs.

60 EUROPE

UK to Attract Chinese Investors By Richard Zhu

The UK’s relative openness to Chinese investment puts it in a strong position in contrast to the more pro- tectionist stances taken by some other countries. As such, the UK and China two-way investment is growing. Data from the UK Embassy showed that by 2010/11, the UK was the largest EU investor in China with almost $19 billion. More and more Chinese businesses are investing in the UK and there have been 20% increases year on year from mainland China since 2005. And the pace is picking up. China was the third largest source of investment projects to the UK, an increase of 55% year on year. Likewise, the UK is the largest EU investor in China with almost 121 billion RMB ($19 billion) at end 2011/12 and the UK had invested 3.7 billion RMB ($580 billion) in the first half of 2012. A new trade organization, the recently announced a new Energy Bill, which will bring huge opportu- UK Chinese Business Association nities for large scale investment in power generation and across domes- (UKCBA), was formally launched in tic supply chain. As the UK has legally binding target of reducing car- London in December, pledging to work bon emissions by 80% by 2050, it provides potential Chinese investors for development of economic and trade with policy certainty they wanted. relations between the two countries, As for challenges ahead for Chinese investors willing to invest Xinhua News Agency reported. in the UK, “The critical thing is that the investors should talk to the “The current Chinese investments UKTI to decide which sector best fits their needs, so that they can truly to the UK are very broad, from the in- identify the opportunities in the UK where we can help and match up dustry of automobile, jewelry to medi- with our specialists and associated support network, and secure the best cine,” said Gavin. chances of success,” Gavin advised. “And Chinese investors in the UK The UKTI offers free UK-wide investment advice and support are increasing every year,” said Alister for Chinese companies. In 2011, it supported over 1,400 investment Jones, deputy director and head of in- projects across the UK, helping firms understand property, employ- vestment policy of the UKTI. ment, tax, visa and other issues. It also helps companies export from the According to Gavin, the UK has UK once they are established. It has offices across the world, including identified £250 billion of investment those in Beijing, Shanghai, Guangzhou and Chongqing. into UK infrastructure that needs to be “Another thing is that the investors should plan and start early, delivered over the next ten years, with work with UKTI early and identify potential partners,” Gavin added. increased private-sector investment op- The UK Embassy advised Chinese investors to do an in-depth portunities in projects that include en- market research into the investment environment and seek govern- ergy generation, transmission networks, ment support and professional business services. airports, rail, digital communications, “Though all businesses come with certain risk, the company in the and waste and water treatment. right sector with right plan has opportunities to grow,” Gavin said to And the UK government has China’s Foreign Trade.

61 EUROPE

UK Enhances Visa Service in China By Richard Zhu

he UK Home Of- visa guides for Business Visi- fice has introduced tors and ADS agents and their egional T r ade & I nves t men a package of further customers, establish a Business R enhancements to the Network in China with dedicated UK visa service to meet the Embassy staff to assist businesses Tgrowing needs in China, which with their UK visa requirements is a priority growth market for and to work more closely with the tourism and business visitors. business community to ensure our Continuing strong de- service offer meets their needs. mand for visas underscores the In addition, the Office will UK’s popularity amongst the launch a new online visa train- Chinese as a place to visit and ing module for the Brit Agent do business. Demand for visitor network in China so they can visas has increased almost 80 better assist Chinese customers percent since 2009 and there is wanting to travel to the UK. And no sign of this growth slowing the Office will provide a mobile as the post-Olympic effect be- biometric service which will be gins to take hold. available to applicants who wish In response to this growth to have their biometrics taken and feedback from Chinese at a location more convenient to customers, a further, specially them, rather than visiting a visa tailored, package of visa service application centre. Meanwhile, enhancements will be intro- the Office will also improve the duced by the UK Home Office online application process includ- over the next six months. ing the introduction of optional The enhancements fol- online payments and translated lowed a visit from the UK Border better service to the growing number of application forms. Agency’s Chief Executive, Rob White- Chinese travelers,” said Andrew Key, “We have already introduced a man to China in December 2012. He British Embassy’s Deputy Head of number of enhancements and our pro- met a range of businesses and tour Mission. cessing times show we provide amongst agents in Beijing and Shanghai to dis- According to the new enhance- the fastest service of any country, but cuss the visa service. They also further ments, priority visa eligibility has been we recognize that there is always more complemented a range of enhance- expanded to include Tier 4 students we can do. We’re committed to making ments already implemented in the past and across all eligible categories. Those sure customers from China get the very 18 months such as the express visa with previous Schengen travel may also best service possible at every step of the service, online applications and the now use the service. A passport pass- process and that is why we are intro- expansion and refurbishment of several back service will be provided for busi- ducing a further package of enhance- visa application centers. ness travelers and ADS tourists which ments over the coming months,” said These improvements reflect the allows customers to keep their passport Rob Whiteman, UK Border Agency special importance placed on visitors while their visa is being processed. This CEO. and investors from China. means they can travel or apply for an- The UK visa service is already “China is already a key market other visa if they need to, reducing the delivering well within its service stan- for tourism and business travel to the time it takes to get two visas. A simpli- dards, with 50% of visas processed UK, and is growing in importance by fied ADS process, including shortened within 5 days and 97% within 15 days. the day. We warmly welcome Chinese on-line application form and stream- And, contrary to popular belief, it is not visitors to the UK for business, tour- lined requirements, will be introduced. difficult to get a visitor visa to the UK ism, study and family visits. We are Moreover, the Office will launch with 95% of those who apply being suc- working continually to provide an ever two new step-by-step Chinese language cessful.

62 NORTH AMERICA

Positive Results Reached at China-U.S. JCCT

By Lesley Cui egional T r ade & I nves t men he 23rd Joint Commission transfer and technology cooperation telecommuni- R on Commerce and Trade are the autonomous decisions of en- cations equip- (JCCT) was held in Wash- terprises. China will not make this a ment. ington, D.C. on December precondition for market access. If de- Civil 18-19. The annual meeting was co- partmental or local documents contain Aviation Tchaired by Chinese Vice Premier, language inconsistent with the above C h i n a Wang Qishan, acting U.S. Commerce commitment, China will correct them committed to Secretary, Rebecca Blank, and U.S. in a timely manner. engage in dis- Trade Representative, Ron Kirk. The Government procurement cussions with two sides covered a wide range of top- t h e U n i t e d ics, and reached consensus on bilateral China’s definition of government States on mea- trade and investment plans. procurement in its Government Pro- sures related to fleet planning associ- Provided below are key results curement Law is narrower than the ated with the civil aviation industry. from this year’s JCCT, according to the definition in the WTO Government Trade, agricultural, and U.S. government website. Procurement Agreement (GPA). Ac- investment issues Intellectual property cordingly, China recognized that some Chinese government procurement Strategic Emerging Industries rights, localization of IPR & (SEIs) technology projects are for public service and that some enterprises, including some state- The Chinese Government clari- Copyright — State-Owned En- owned enterprises, procure in the pub- fied that it will provide foreign enter- terprise Software Legalization lic interest. Understanding that many prises fair and equitable participation China confirmed that it requires enterprises are for profit with diversi- in the development of SEIs, including state-owned enterprises under the fication of ownership, including being the 20 major projects announced on authority of the China Banking Regu- publicly listed, China and the United May 30, 2012 by Premier Wen. latory Commission and central state- States will conduct consultations, un- Medical Device Pricing owned enterprises directly supervised der the GPA framework and through China committed that any mea- by the State-Owned Assets Supervi- bilateral dialogues, focused on projects sures affecting pricing of medical sion and Administration Commission for public service and on the entities devices will treat foreign and domestic of the State Council to purchase and that procure in the public interest. manufacturers equally, and that China use legitimate software, including but Regulatory obstacles will take into account comments from not limited to operating system and of- the United States on this issue, includ- fice suite software. Testing and Certification for ing how to improve transparency. Judicial Interpretation on In- the China Compulsory Certification Value-Added Tax (VAT) termediary Liability (CCC) Mark China confirmed that a Ministry Building on an existing JCCT China confirmed that eligible of Finance-led delegation would hold commitment to develop a Judicial In- foreign-invested testing and certifica- discussions with the United States, terpretation making clear that those tion entities registered in China can beginning in the first half of 2013, in who facilitate online infringement will participate in CCC mark-related work order to work toward a mutual under- be jointly liable for such infringement, and China’s review of applications standing of China’s VAT system and China announced that its Supreme from foreign-invested entities will use the concepts on which a trade-neutral People’s Court will publish a Judicial the same conditions as are applicable to VAT system is based. Interpretation on Internet Intermedi- Chinese domestic entities. Draft Smart Terminal Regula- ary Liability before the end of 2012. ZUC Encryption Algorithm tions Localization of Intellectual China agreed it will not mandate China confirmed that it will take Property and Technology any particular encryption standard for the views of all stakeholders into full China reaffirmed that technology commercial 4G Long Term Evolution consideration in regard to the regulation

64 NORTH AMERICA

community about licensing procedures. In the fall of 2012, the exchange was expanded to include the U.S. and Chinese business communities, and a robust discussion was held over specific concerns of businesses with administrative licensing in both countries. Both the United States and China agree to continue this work in 2013 with the goal of facilitating commercial activity impacted by administrative licensing. Trademark — Bad Faith Trade- mark Registrations The United States and China agree to continue close communications and exchanges through the existing channels to promote the work in developing solutions to the issue of bad of information technology and telecom- hold the 3rd Environmental Industries faith trademark registrations. munications hardware, operating sys- Forum in 2013 during the China In- Trade Statistics tems, applications, app stores, and other ternational Environmental Protection In the Statistics Working Group related services. The United States and Exhibition and Conference in Beijing. meeting on November 13, 2012 in China will continue to discuss this issue U.S.-China Legal Exchange Hangzhou, China and the United at the working level as China works to The U.S. Department of Com- States agreed to expand the reconcili- revise and improve the current draft. merce and China’s Ministry of Com- ation exercise to include services. The Agriculture merce successfully led the 2012 U.S.- two countries agreed to exchange sta- The U.S. Department of Agri- China Legal Exchange, during which tistical data and information on cover- culture (USDA) affirmed new access representatives from the Government age, definitions, and methodologies to for pears in the Chinese marketplace of the United States informed members support this effort. The reconciliation through a commitment to allow re- of the Chinese business, legal, and aca- will begin in 2013 with an examination ciprocal trade between the two coun- demic communities in Harbin, Beijing, of travel and transportation statistics tries beginning in 2013. Addition- and Guiyang of recent developments in and then be expanded in 2014 to two ally, USDA and China’s Ministry of specific areas of U.S. commercial law. other services categories. Agriculture made a commitment to a To promote greater U.S.-China trade, Standards and Information biotechnology pilot program, which the U.S. representatives described de- Technology could provide greater cooperation in velopments in the U.S. legal regimes The United States and China the approval process for new products. governing electronic commerce and agreed to hold a technical dialogue in Regulatory Data Protection intellectual property rights under the Spring 2013 to discuss approaches to To promote scientific advance- recently-enacted America Invents Act improving cybersecurity in critical in- ment and to establish effective regula- and intellectual property enforcement frastructure. tory data protection, China agreed to developments. Both sides agreed to Spectrum Roundtable define new chemical entity in a manner convene the 2013 Legal Exchange in On September 5, 2012 officials consistent with international research the United States, and to work together from China and the United States and development practices in order to promptly to agree on the topics of the convened the third annual U.S.-China ensure regulatory data of pharmaceuti- exchange and the cities in the United Spectrum Roundtable to discuss their cal products are protected against un- States where it will take place. respective plans to make additional fair commercial use and unauthorized Administrative Licensing spectrum available for advanced wire- disclosure. In April 2012, the United States less services. Of particular note was Cooperative activities and China launched a joint exchange discussion of both sides’ efforts to on administrative licensing rules, make more spectrum available for use Environmental Industries Fo- focusing on the use of technology to by unlicensed devices on a technology rum facilitate licensing procedures and on neutral basis, particularly in the 5 GHz The United States and China will methods used to educate the business band.

65 LATIN AMERICA

Mexico: China’s Unlikely Challenger

egional T r ade & I nves t men By Cui Xiaoling R

t Siemens’ high-voltage equipment plant about two hours’ drive from Mexico City, workers move about the polished floor, assembling and testing parts of circuit breakers for use in electrical substations, ac- Acording to a Financial Times report. Until a few months ago, the 160 parts for these enormous devices were assembled in India or China. But today, the assembly is carried out in Mex- ico. By March in 2013, most of those 160 parts, which currently come from Germany and Asia, will be produced there too. The company has also chosen Mexico as the location for a new surge- arrester project instead of investing to expand production in China. “We are moving towards local hubs,” explains Claude Steffen Raab, general manager of the Ger- man company’s high-voltage division in Mexico. “The idea is to respond more quickly to each of our markets.” The shift in production at Siemens is part of a little publicized manufacturing revolution in A decade ago, about 90 per cent of the coun- Mexico taking place across a range of industries try’s exports went to the U.S. In 2011, that from cars and aircraft to refrigerators and comput- figure fell to less than 80 per cent. Suddenly, it ers. For the first time in a decade, Latin America’s seems, Mexico has become the preferred centre second-largest economy has become a credible of manufacturing for multinational companies competitor to China. looking to supply the Americas and, increas- A competitor to China ingly, beyond. Mexico’s newly-found competitiveness has During the first half of this year, Mexico ac- become so clear that Marco Oviedo of Barclays counted for 14.2 per cent of manufactured imports concludes: “After lagging Chinese manufacturing into the US, the world’s largest importer. In 2005, exports for a decade, Mexico has taken the lead Mexico’s share was just 11 per cent. Surprisingly, post-2008-09. We believe this change is likely to China, which gained huge chunks of the US im- be structural and persistent.” port market for many years, has started to lose Go back to the beginning of the century and ground. From a high of 29.3 per cent of the total none of this seemed possible. Back then, as China at the end of 2009, it has now shrunk to 26.4 per burst on to the global stage following its accession cent. to the World Trade Organisation in 2001, Mexico While winning a bigger slice of the US seemed to be in serious trouble. market, Mexico has diversified its customers. For much of the rest of Latin America, China

66 LATIN AMERICA

was a giant customer of agricultural and mineral to HSBC, Mexican wages were 391 per cent higher commodities. By contrast, Mexico saw China as an than those of China a decade ago. Today, they are unstoppable competitor that produced exactly the just 29 per cent more. Experts predict that Chinese same sorts of inexpensive manufactured goods at a wages will even overtake those of Mexico within tiny fraction of the cost. five years. Against that backdrop, it is hardly surprising Mr de la Calle argues that demographics are that Mexico was the last WTO member to vote for behind this. China is experiencing a squeeze in its China’s accession — a vote that it gave only after a working-age population. long and bitter negotiation. By contrast, more than half of Mexico’s 112m Embraces trade and openness population is under 29, so there will be an abundance of cheap labour until at least 2028. “Right But several important shifts have taken place now, you have to look at Mexico and conclude that since then that have improved Mexico’s compara- it has the best demographics in the world,” said Mr tive advantages, giving it a new and dynamic role as de la Calle. a global manufacturer. The first is that Mexico has At the same time, Mexico’s plentiful working embraced trade and openness like few other coun- population is becoming more skilled. According tries in the world. to UNESCO, the number of engineers, architects Its free trade agreements with 44 countries — and others in disciplines related to manufacturing more than twice as many as China and four times graduating from Mexican universities has risen more than Brazil — have given companies based in from almost 0.4 per 1,000 people in 1999 to more Mexico the ability to source parts and inputs from than 0.8 today. To set that in a regional context, a wide range of nations, often without paying duty. the number for the US over the same period has Partly as a result, the sum of Mexico’s imports remained roughly flat at 0.6 per 1,000. and exports as a percentage of its gross domestic Skilled workers are providing an increasingly product, a strong indicator of openness, rose to 58.6 attractive environment for high-tech companies – per cent in 2010. In the case of China, it was 47.9 Mexico has in recent years become a world leader in per cent, and just 18.5 per cent in the case of Brazil. the production of computers and mobile telephones – HSBC in Mexico City estimated recently that the as well as for car companies, almost all of which are figure for Mexico could increase to as much as 69 now using Mexican engineers to design parts. per cent this year. Unlikely to replace China There is also an increased confidence inspired by agreements, particularly the 1994 North Ameri- None of this means that Mexico is going to can Free Trade Agreement, which binds Mexico replace China as the world’s first choice for manu- with the US and Canada. facturing, the Financial Times report concludeds. Strong competitive edges With more than a quarter of the share of US imports, the Asian colossus outpunches Mexico in Thanks to a 2,000-mile border with the US, terms of volume. and extensive rail and road links, it is not only It also has deeper supply chains than Mexico. cheap but fast and easy to ship goods north. Ship- From the manufacturing hub of Ciudad Juárez on ments from China to the US typically take between the Texan border to Querétaro in central Mexico, 20 days and two months. From Mexico, they take a international companies say that they have trouble week at most and usually just two days. finding local suppliers for parts and packaging. For many industries operating in today’s cost- And of course, Mexico is not without its prob- conscious environment, “Made in Mexico” is be- lems. While the country is making strides in its at- coming a serious consideration in their attempts to tempts to diversify, it is still heavily beholden to the shorten supply chains, which potentially allows them ups and downs in the U.S. to cut costs because quicker delivery time means that But perhaps the most alarming concern of they can minimise the amount of money invested foreign investors and the general population alike is in inventories. As Bruno Ferrari, Mexico’s economy the deterioration in security. minister, told the Financial Times recently: “The So far, the violence has had little impact on proximity that Mexico offers industry allows compa- multinationals, which generally operate in safe in- nies to reduce their financing costs.” dustrial parks around the country. But there is no Rising labour costs in China have presented guarantee that organized crime will not start to try Mexico with an additional opportunity. According to extort large foreign companies in the future.

67 AFRICA

It’s Proper Time for Chinese Companies to Invest in Ethiopia — An Interview with Ambassador Extraordinary and Plenipotentiary of Ethiopia, H.E. Seyoum Mesfin

By Fu Ligang egional T r ade & I nves t men R

n 2003, Ethiopia held the forum on China- Africa Cooperation. In the January of 2012, a “It is win-win for both Chinese and new African Union headquarters was opened Ethiopian companies” in Addis Ababa, Ethiopia, which was called Our two governments have seen a “China’s gift to Africa” with the cost of US$200 : continuousQ growth in bilateral economy and million. Ethiopia plays an important role between I technology cooperation since 1971. Up to now, China and African countries. In recent years, both China has completed around 13 sets of projects countries have developed rapidly. Chen Deming, in the areas of highway, veterinary station, pow- Chinese Minister of Commerce once mentioned er station and water supply in Ethiopia. Could that China plans to increase the trade volumes with you introduce major investment opportunities Ethiopia to US$3 billion by 2015. Recently, China’s and preferential policies of Ethiopia so as to at- Foreign Trade interviewed H.E. Seyoum Mesfin, the tract more FDI (Foreign Direct Investment) from Ambassador Extraordinary and Plenipotentiary of Chinese companies? Ethiopia and he shared his opinions about the bilateral economy, culture and tourism. A: Bilateral economic and trade relationship Close relationship since ancient times has developed rapidly since 1996. The total volume reached US$100 million in 2002, and in 2008 Q: The relation between China and Ethio- the number attained US$1 billion. Now, China is pia has developed rapidly and steadily since Ethiopia’s largest trade partner. The products that Ethiopia and China established the diplomatic China exports to Ethiopia are shoes, clothes, digi- relation in 1970. What do you think of the rela- tal exchange telecom, tires and so on. Meanwhile, tionship between China and Ethiopia in those Ethiopia exports to China are leather, cotton, and years? aluminum and so on. A: Both China and Ethiopia are ancient nations with glorious civilization. In the ancient time, China and Ethiopia established the economic ties. And now, especially in recent years, the relation has improved greatly in the aspects of politics, economy education and cultural exchange, at the same time it also has promoted the friendly cooperation between China and African countries. In addition, both sides support each other on international affairs. Such as in the fields of climate change in UN, Ethiopia and China made the joint efforts to promote the dialogues and negotiation with the developed countries. Because of the position in the UN, China plays an important role in promoting the developing countries to participate more in international affairs. Besides, China is a member of G20, and Ethiopia would like to build partnership between G20 and African countries.

68 AFRICA

At the same time, China has improved the scale and expanded the fields of the investment in Ethiopia, especially in the aspect of manufacture. By the end of 2009, up to 113 Chinese companies had invested in Ethiopia with the amount of US$283 million according to the statistics from the Ministry of Commerce of China. We establish many industrial zones and welcome more Chinese companies to establish companies and factories there. And Ethiopian government also provides preferential policies and encourages more FDI. In the future, we will establish more in- dustrious zones. Besides, China also provides loans for Ethio- pia, and the support could help Ethiopia improve the infrastructural construction and investment environment. China not only provides the support of fund but also the advanced technologies for Ethiopia. And both sides could share the experiences. This is most welcomed, and we hope the cooperation will be continuous in the future. It is win-win for both Chinese companies and Ethiopia’s companies. Another aspect is that Ethiopia is the first choice for Chinese volunteers to serve. They come to Ethiopian villages and communities to help in the fields of education, medical treatment, industry technologies and culture exchange. We welcome these young volunteers to come here. Through these exchange activities, we can communicate and know each other better. Abundant tourism resources

: Ethiopia is characterized by abun- danceQ of tangible and intangible heritage. Could you please introduce the tourism industry in your country, and the cooperation in tourism between our two countries? of a living rock. They are described by most travel writers as the eighth Wonder. The churches were A: To be honest, we don’t have much coop- registered under the list of World Heritage Site in eration in tourism with China, but tourism in Ethi- 1978. opia is very potential. Nowadays, more and more Secondly, Ethiopia is a unique country. Many Chinese tourists consider Ethiopia as a tourism des- are only seen in Ethiopia but not anywhere else. tination because Ethiopia is a stable and beautiful You will be amazed by wildlife and endemic ani- country. mals such as elephants, giraffes, lions, etc. There are Firstly, the historical sites and heritages in our deserts, canyons, gorges, and a wealth of beauti- country are worth visiting. Ethiopia is an ancient ful waterfalls, lakes and rivers. It all combines to nation with great civilizations. We have many an- make Ethiopia a country of breathtaking scenery cient cities where there are so many historical heri- that changes constantly from one region to another. tages such as old castles. These heritages are listed More than 800 species of birds are found in Ethio- by UNESCO, not only natural heritage, but also pia, of which twenty-eight are found exclusively in human heritage. Such as the Rock Hewn Churches the country. There are also 103 separate mammal of Lalibela, they were curved in the 12th and 13th species, seven of which are endemic. Centuries. It is believed that the carving of all the With the number of Chinese tourists increasing, churches took some 24 years. Archaeologists say it we welcome more and more Chinese tourists to visit would have taken the work of 40,000 work forces African countries, especially Ethiopia, and enjoy the to carve these churches, courtyards and caverns out unique sceneries here.

69 Regional Trade & Investment in terms of airport and also the fourth platform platform fourth the also and airport of terms in markets, super as stores. such franchised and markets wholesale sectors various from of goods consumer fast-moving of analysis chain supply the the on focuses logistics city of field the in cooperation strategic The Chengdu. with study Logistics for aCity of Understanding dum a be Chengdu.” in tions also opera and current consolidate to us for purpose hub growth growth our serve will “This that adding Supply Chain, China of DHL director managing Yin, a Zou said invest facility,” to new government and partners work our we with so enhance capacity, to want manufacturing also domestic and west, to east from moving clients and customers increas from demand have ing we to because need do facility, we our feel upgrade we but already, Chengdu center. distribution new a warehousing build to 8,000-square-meter million 260 RMB invest will DHL which, to according Chengdu, of District reported. ICS TV Shanghai-based 17, December on Ceremony Signing Project & Roundtable Enterprises ing Lead Shanghai at the billion, 12.4 RMB of nearly investment total agri the and with industries, service culture manufacturing, logistics, in mainly Chengdu, with agreements investment favorable and climate. investment economy developing rapidly its C ZhuBy Zijun Investment Hot Spot Becomes Chengdu 70 “Chengdu is the fourth transportation hub transportation fourth the is “Chengdu Memoran signed DHL 2012, in Earlier “We have operation capabilities in Xindu with agreement an signed DHL signed companies foreign and domestic 17 foreign enterprises, benefiting from from benefiting enterprises, foreign an and become domestic for spot hot has investment Province, Sichuan China’s southwest of capital hengdu, LOCAL - - - - - way, aviation and highway, speeding up the the up freight and passenger speeding important of construction highway, and aviation way, of rail of channels construction transportation the comprehensive accelerating Program, is Chengdu Development Western China’s of in agriculture China. modern and services, modern manufacturing, modern industries, hi-tech for base predominant the also the is It in region. western communication and transportation for hub a as well commerce, as and technology & science logistics finance, of center a be to cil China. is and Western in pole growth economic an development becoming of era new a entered has Air China ceremony. at the Division port JCDecaux of CEO Bartoux, erry Thi said city,” impressive and dynamic the for vision have people and Chengdu, in interesting very is it us for China, in economy of terms in ment and most international competitiveness. international most ment and develop fastest the with places investment the become have zones development state-level two the Now, investors. the of requirements ferent dif to cater Each which focuses, own Zone. their has park Development Technological & Economic Chengdu and Zone Development al ment zones, namely Chengdu Hi-tech Industri reported. Agency News Xinhua 2013, 22, September from starting China west south in Chengdu and London between flight administration. security and rights, erty prop intellectual of protection services, ment govern resources, human power, and energy its improving also is Chengdu And nodes. shifting Chengdu now has two state-level develop state-level two has now Chengdu direct new a open will Airways British implementation the since decade a After Coun State the by designated is Chengdu city the years, 2,300 of history a With ------LOCAL

Data shows that till October 2012, electronic information, automobile machinery, Chengdu has approved of 181 new foreign in- new energy, new material, finance, commerce vestment projects, with the paid-in investment and trade. reaching RMB 7.29 billion, up 17.25 percent At present, the quantity, amount of invest- over the same period of 2011. The growth rate is ment and industry field of Fortune 500 compa- 20.7 percent above that of the national average nies settled in Chengdu is ranked No. 1 among level which dropped 3.45 percent in the period. central and western cities. In 2012 alone, more than 400 projects have in- On April 9, 2012, Fortune announced that vested more than RMB 243 billion in the city. the 12th Fortune Global Forum will be held in Chengdu has been attracting leading com- Chengdu in 2013. panies. According to the State Administration In October 2010, Forbes issued a report, in of Foreign Experts Affairs, in 2011, 11 Fortune which Chengdu was ranked No. 1 among the 4 500 companies including Flextronics Interna- listed Chinese cities projected to have the fastest tional Ltd., AXA Group, KFW Bankengruppe development in the next 10 years in the world. settled in Chengdu, the largest number in recent According to the survey report on global years. Meanwhile, the World’s Top 500 com- investment environment released by the World panies that had already settled in Chengdu, in- Bank in 2007, Chengdu has become “a bench- cluding Groupama SA and Dell, have increased mark city for investment environment in inland their investment and upgraded the levels of their China”. branches in Chengdu. Also a report by the Nobel laureate in eco- By the end of 2011, 207 Fortune 500 nomics, Dr. Robert Mundell, and the celebrated companies settled in Chengdu, including 160 Chinese economist Li Yining showed that foreign enterprises and 47 domestic enterpris- Chengdu has become an “engine” of the West- es. The investment fields are mainly advanced ern Development Program, a benchmark city manufacturing industry and high-end service for investment environment in inland China, industry, involving dozens of industries like and a major leader in new urbanization.

71 Life Course: Respect and Love — Chui Bing Sun, Chairman of Sage International Group LTD.

By Echo Zhao

e once worked in world-class accounting firms including Arthur Andersen and Ernst & Young; He became a portfolio manager and managed a $1 billion portfolio at age 25; HHis success in a rare $150 million arbitrage in the first year of trading was selected as a study case of MBA programs in Harvard Business School; He was once the youngest founding partner of a billion hedge fund at age 26; He established his first listed company in Hong Kong at age 29, and a second one in the following year; And to most people’s surprise, he entered the taboo industry. He is Mr. Andy Chui Bing Sun, currently the Chairman of Sage International LTD., which principally engages in the development of the professional death care services, funeral parlor, and cemetery operations in Greater China Region. Why he chose the unglamorous “taboo” industry as career rather than “bling-bling” financial industry which he was already good at? China’s Foreign Trade got a chance to interview this smart young brain to find more stories behind. Be a history creator “If I have to choose between a history recorder and a history creator, I’ll definitely vote to be the history creator,” Andy said in smile but firmly. His life is full of new chapters already. Andy moved to Hong Kong with his mother from the mainland when he was only 7. Childhood time was not carefree there, but full of efforts and hopes. At age 17, he went to the United States and started a new life again, as an accounting major student in Binghamton University. Studying of accounting was hard, but Andy performed well, and found his personal interest was more on finance. “Accounting resembles the recorder of the history, which requires conservativeness. While, it’s not exactly what I was looking for in my career to some extent, I’d rather make history instead,” he said. And he made it. He graduated with “summa

cum laude” the highest distinction in the first year in the hedge fund business, his class, obtained the CPA (Certified Andy kept working for the entire year Public Accountant) license, and got his without getting a day off, nearly 12 hours first job in Arthur Andersen. One year every day. Moreover, after spending the later, Ernst & Young appreciated this daytime in the company, he read lots of young man’s intelligence and diligence related books at night. Through veryhard and had Andy joined in their team. working, he learnt to be modest, as well “However, my dream was still in as gained sophisticated. To people’s surprise, this time finance,” Andy said, “Accounting All things are dif- around he selected another most ig- lacks excitement to me, but the ficult before they become nored industry: the professional death knowledge and experience in I'd rather easy. One year later, he care products and services, a taboo in- accounting helped me to build a make history embraced the chance to dustry in Chinese culture. solid foundation to understand prove his ability. Focus- Respect every life various reports of companies in instead ing on one of the most the following investment career.” of being ignored convertible se- “I first got in touch with the Andy quit accounting a history curities, he discovered a taboo industry when doing a hedge industry, at the time when ev- new loophole in its struc- fund project in the U.S. for Service eryone thought he was doing recorder. ture and developed a true Corporation International (SCI), the well. “Tough time for me at the arbitrage in the world of national-wide provider of funeral goods beginning though. My univer- modern finance. When and services in America. The U.S. has sity wasn’t on the list of the Ivy League he became a portfolio manager of $1 many financial products and services that many job hunters refused my ap- billion portfolio, he was only 25. Asked in the funeral industry, but in China, plication to fund companies because of about how to discover the new way by as an industry, it is far from being ma- their bias,” Andy mentioned his difficult the students from Harvard Business ture,” remarked Andy. “I’m willing to time. “But I was lucky to meet Mr. School, Andy commented himself as try something which others won’t do Scott Roth, who was a successful inves- “green”, which forced him to concentrate but needs to be done,” he said. tor and without such prejudice. He gave on the most fundamental things. “Being alive and dead are the me a chance to prove ‘Yes, I can’.” Roth In 2004, the promising financial natural phases of every creature. End spoke highly of Andy’s smartness, and industry in Asia attracted his attention, could be another form of start. Every later became his mentor. and Andy returned to Hong Kong. life can’t escape from that. If we can’t Finance industry was of much After experiencing the Asian financial avoid, why not just face it directly? I more challenges than Andy thought. markets, he found it less mature that the just want to show my respect to every Working with the elite in the industry, strategies employed in the US market life, from beginning to end.” When Andy started to sense the pressure and wouldn’t work. Then, he left the hedge asked about the reason why he chose find that he was lagging behind in speed fund business and started to seek for new the taboo industry, he explained his and professional knowledge. “However, challenges once again. “I just hoped to thoughts. “Few people want to serve I enjoyed challenges,” he said. During create a history,” Andy said. for the death care industry. In China,

73 less, even worse, no leading companies, infancy, with entry and cultural barri- exquisite brochures, aiming to com- full of misconception and black-box ers, Andy has made up his mind to be memorate and show respect. Some of operations here. However, more room is one of the forerunners to revolutionize the stories are also reproduced by the left to create and explore as a result.” this industry. Promoting more and more youngsters and will be performed on “Actually from business point of personalized services and products, like stage in Hong Kong early next year. view, the death care industry is a very well-known “Sage’s Dignity Choice, By doing so, Andy hopes the stable industry yet offers good potential,” a Preneed product” in Greater China younger generation could learn precious pointed out by Andy. “The death toll in Region, he has never ceased to inno- experiences from the elderly, and people China is nearly 10 million per year, ten- vate. “Maybe it will take many years to pay more attention to their beloved par- fold than that of the U.S.” change, but I’m willing to take the first ents while they are still alive. “Passing The most difficult step forward in the indus- on valuable experiences from genera- obstacle lies in the cultural try,” he said. tions to generations is a win-win activity levels. “Most people are still Love for all both for the young and the elderly. Sil- unfamiliar with our own Silver industry ver industry requires our efforts, because traditions in terms of funeral requires our “To make money, of it is not only a business, but also a life ceremonies, which are now efforts, because course the financial industry course to us. We as an enterprise, are regarded as showing off to will make much easier and willing to share more social responsibili- some extent instead of la- it is not only quicker money. But what ties,” he said. menting. Personalized and a business, I am doing now isn’t just China is stepping into an aging customized services are also but also a life about money, more about society. The care for the senior requires one of the key points of our course to us. respect and love for all. We more efforts and time. “Rather than future development.” witness the end of life, then giving the senior an expensive funeral Andy’s biggest dream we’ll cherish life more when ceremony, they much more prefer to is to set a fair industrial we are still alive.” As a receive attention and love when they are environment and sound industrial stan- young man, Andy’s view on life is much alive. We hope to do more of the public dards. People label this taboo industry deeper than his contemporaries. “I am charity jobs in this area,” Andy added. as “profiteering” due to its inefficiency now doing a lot of charity projects.” Aiding students in rural areas is and loopholes. “It is not appropriate to When knowing more about senior another charitable focus of Andy. In- take advantage of consumers at their people, Andy took it upon himself to stead of donating to other foundations, difficult times,” stressed Andy, “Besides care the elderly in their later life by vari- he chooses to do this all by himself. “The the improvement of services, we are ous caring activities. For example, Sage studying condition of the students in also endeavoring to build a good brand Dignity Club is a club allowing its el- the rural areas is sub-standard, beyond image, from the style and decoration of derly members to learn about healthcare, the privilege’s imagination. We have do- buildings and cemeteries, to the well- entertainment, funeral planning, and nated a building with modern teaching designed products. Price transparency socializing. Another meaningful event facilities like computers in a small town is of great significance, as well as good is Life Story, which has attracted many of Gansu Province. The best return I brand image. In death care business, Hong Kong movie stars to participate got was the smile on the children’s face,” I hope that one day people will select in as well. The Life Stories of elders are Andy said in the same smile, as warm as suitable goods and services freely.” told to young generations through face the winter sunshine on his face. Though this industry is still in its to face interviews, and then printed into What’s more, he provided financial support to students from needy family by means of education grants. In addition, the construction of a health center in Guizhou is under the way this year. Being benevolent as he is, Andy always endeavors to improve the living quality of others, both physically and psychologically. He emphasized, “It cannot be fulfilled in one day, but needs my lifelong dedication.” With respect and love, Andy is creating his own history. A sage is one who can embrace both benevolence (Ren) and wisdom (Zhi), so is Sage International Growp LTD., which is named after the essential ideas in The Analects of Confucius. This is what Andy believes, and exactly what he does to change this “taboo” industry. 74 utilization. After the completion of the project, it will fill the domestic gap with its technology and products. It is

ON nfoRMATI expected that the annual output value can reach up to 4.2 I billion RMB with 500 million yuan of profit and tax. Total investment: RMB 4.1 billion Approaches to cooperation: Sole Proprietorship, Joint Venture Investment Projects 1. Project organizer: Henan Yongdeng Aluminum Co., Ltd. 2. Contact: Wang Feng in Dengfeng City, 3. Tel: +86-371-62952881 Henan Province, China 4. Email: [email protected]

Name of project: Shaolin Zen Martial Theme Park and Name of project: Auto parts project with annual output Animation Base Project of 5 million pieces Project overview: The project consists of a theme park and Project overview: Main product of this project, namely, an animation base. The theme park is planned to include a aluminum automotive parts, has advantages of light weight, holiday village, a performance square which is also an arena, good heat dissipation, elegant feature, etc., which are the a martial artist hall of fame, a Kongfu museum, etc. An urgent need in the improvement of roads and aluminum rate animation center will be established at the animation base of automobiles. With the rapid development of automobile on the basis of Zen and martial arts of Shaolin Temple. The industry, this product has great potential in domestic and construction of the project is divided into three phases. In the foreign market and its prospect is promising. With an annual first phase, we will spend 250 million yuan building the first output of 10 million tons of aluminum-silicon-titanium al- theme park, the holiday village and the animation studio. loy, the city of Dengfeng plans to make good use of its raw During the second phase of the project we will invest 300 material advantages to build a production line which has million yuan in the second theme park and boutique hotel. an annual output of 5 million automobile parts, including 2 In the third phase the latter part of the construction of theme million pieces of automobile wheels, 1 million pieces of au- parks will be completed. After completion, this project can tomotive engine parts, 1 million car shell parts and 1.5 mil- bring about an annual income of 210 million yuan. lions of electric bicycle wheel hubs. After the completion of Total Investment: RMB 606 million the project, the annual output value is expected at 1.2 billion Approaches to investment: Sole Proprietorship, Joint yuan and the profit is estimated at 120 million yuan. Venture Henan Yongdeng Aluminum Co., Ltd. 1. Project organizer: Henan Shaolin Intangible Asset Total investment: RMB 633 million Management Co., Ltd. Approaches to cooperation: Sole Proprietorship, Joint 2. Contact: Qian Daliang Venture 3. Tel: +86-371-65582651 1. Project organizer: Henan Yongdeng Aluminum Co., Ltd. 4. Email: [email protected] 2. Contact: Wang Feng 3. Tel: +86-371-62952881 4. Email: [email protected] Name of project: Songshan historical and cultural elements protection and restoration project Project overview: The Songshan Mountain area is one Name of project: Casting aluminum-silicon alloy project of the most significant birth places of Chinese civilization. with an annual production capacity of 200,000 tons Songshan Mountain is believed to be the “Holy Mountain” Project overview: The project makes use of the advan- of the Chinese culture. In order to restore its long history tages of rich low-grade bauxite, kaolin and other resources and rich cultural resources, we plan to carry out this project. and power plant coal ash of the city of Dengfeng to achieve What we will do includes: Complete the construction of an annual output of 40,000 tons of high-silicon initial alloy the Cultural Relic Museum of Songshan Mountain, facili- and 160,000 tons of alloy aluminum containing 30~38% ties in Songshan Mountain tourism base, the Central China silicon and 55~63% aluminum; at the same time, in ac- Folklore Museum, Songshan Mountain Museum (including cordance with the principles of comprehensive utilization the preservation of Shaoshi Towers), the academy of Chinese of resources and energy saving, 2 sets of clean combustion ancient civilization in Zhengzhou University, the reinforce- circulating fluidized bed generators (300,000 kilowatts ca- ment of the World Cultural Heritage “Between the Earth pacity for each) will be constructed as supporting facilities, and the Heaven” architecture complex, the “Between the and the fluidized bed furnace slag will be mixed into raw Earth and the Heaven” park, the preservation of intangible materials of electrothermal alloys to realize comprehensive cultural heritage, the restoration of 72 temples, the enhance-

76 INVESTMENT ment of connection between scenic spots, the cultural en- tended training camp, five-star hotel and Spa, meditation, richment in scenic areas, the restoration of the Sacrifice Altar recuperation, conference centers, etc.), shopping and cater- of Zhou dynasty and the project of making it the cultural ing center (we plan to build an area of 10 million square landmark, the institute of Chinese ancient civilization in meters with boutique shops, the shop of the international Songyang academy, the construction of the Cultural Park of brand outlet, international restaurants, bars, etc.), Dengfeng Dayu, the research institute of Taoism in Zhongyue Temple, Bookstore, library in Songshan Cultural Theatre, Dengfeng the geological museum in three legendary sovereigns village, International Middle School, infrastructure in Songshan the establishment of the scenic area of Shaoshi Mountain, Cultural Industrial Park, Songshan Geological Carnival the Astronomy Museum, the restoration of ancient village, (including “time traveling tunnel”, relaxation and new the environmental improvement of Luya Waterfall, Eight recreational experience, learning, dining and shopping), Dragon Lake and Nine Dragon Lake. the second phase of Zen Music ShaoLin Grand Ceremony Total investment: RMB 18.637 billion (tourist center, temple-style hotel, Zen Street, vegetarian Approaches to cooperation: Sole Proprietorship, Joint restaurant, etc.), the live-action performance of Buddhist Venture Ritual in Holy Mountain of Chinese culture, Songshan 1. Project organizer: the Municipal Government of Dengfeng Sunset Red Cultural Industrial Park, ecological park on 2. Contact: Lü Wei phoenix peak, the cultural museum for workers, medita- 3. Tel: +86-371-62863900 tion and health preservation (including relevant products, 4. Email: [email protected] meditation hotels, meditation teahouse, health preserving club, traditional Zen medical service, Zen experience, etc.), Taoist meditation and health preserving (an integration of medicated cuisine, qigong, medicated bath, health preserv- Name of project: Dengfeng tourism new city construc- ing and recreation center, and a Taoist health preserving tion project club), medical tour (including medical service, vacation, Project overview: The project includes infrastructure in recuperation, recreation, education. Shaolin Zen and Martial Art cultural industrial Park, Shaolin Total investment: RMB 4.659 billion film and television base, the head office of Shaolin cultural Approaches to cooperation: Sole Proprietorship, Joint Venture club, the International Center of Martial Art, the Interna- 1. Project organizer: the Municipal Government of Dengfeng tional Zen, Martial Art and Medical Center of Education 2. Contact: Lü Wei and Communication, meditation center, Henan Shaolin 3. Tel: +86-371-62863900 Center of Cultural Research and Communication, Interna- 4. Email: [email protected] tional Transmission Center of Chinese Language in Shaolin base(Confucianism Academy), Shaolin Temple Museum, Buddhist Museum, Shaolin Hospital, the reconstruction and expansion of Shaolin Martial Arts School, Kongfu sightseeing Name of project: Daye Industrial Park Project of Dengfeng (the Shaolin International Communication Center of Kongfu, Project overview: The Park is located in Daye Town of the International Kongfu Contest Ring, the view corridor for Dengfeng with a planned area of 7.5 square kilometres. At watching Kongfu performance), Kongfu performance (develop present, the park has attracted 47 enterprises, of which 21 a new kind of Kongfu performance that is active, and a new are above-scale enterprises, forming an industrial cluster brand of Kongfu performance with the combination of still- based on electric power, abrasives and refractories. Where- ness and activity, of Zen and martial arts), Kongfu innovation in, the abrasive production capacity of Dengfeng takes 28% (Dengfeng Shaolin Animation Center), New Town Residen- of that of Henan Province and 20% of China’s total capac- tial Architecture, Tourism town, Jinpeng ecological park, and ity. Relying on its leading industries, the park will focus 5-star hotels in Shaolin scenic spot. on optimization and upgrade of industrial structures and Total investment: RMB 18.637 billion regards the introduction of high-end abrasives, high-end Approaches to cooperation: Sole Proprietorship, Joint Venture fractories and new materials as its priority, aiming to forge 1. Project organizer: People’s Government of Dengfeng the park into an important provincial production base of 2. Contact: Lü Wei new type of fractories and new materials as well as a na- 3. Tel: +86-371-62863900 tional production base of high-end abrasives. 4. Email: [email protected] Total Investment: RMB 9.12 billion Approaches to cooperation: Sole Proprietorship, Joint Venture 1. Project organizer: Administrative Committee of Daye Name of project: Cultural tourism industry transforma- Industrial Park tion and upgrading project 2. Contact: Han yingxu Project overview: The project includes Baisha Lake 3. Tel: +86-371-62943139 Comprehensive Recreation Center, Eco-Sports Park (in- 4. Email: [email protected] cluding the international Martial Arts Gym, ski resorts, eco tours, fruit enjoyment tours, flower garden, the CS ex- (Source: Department of Commerce, Henan Province)

77 Frequency: Yearly Center, No.6 Beisanhuandong Road, Venue: China International Exhibi- Chaoyang District, Beijing, China,

ON nfoRMATI tion Center 100028 I Add: Rm 380, 4F, Hall 1, Tel: 86-10-84606672 China International Exhibition Fax: 86-10-84606597 Center, No.6 East Beisanhuan Web: www.build-expo.com Road, Beijing, 100028 Tel: 86-10-84600666 The 2013 Beijing Wood Door Fair Fax: 86-10-84600669 Date: March 15-March 18, 2013 China Fairs Email: gaoqian314@126. Venue: New China International Ex- com hibition Center Exhibits: Solid wood door, molded & Expos The 13th China Beijing door, laminated wood door, partition International Kitchen Cabinet, Wall door, etc. Cabinet, Partition Wall and Wood Add: 4th Floor, No.1 Hall China In- Products Fair ternational Exhibition Center, No.6 Hardware Tools Date: March 15-March 18, 2013 Beisanhuandong Road, Chaoyang Frequency: Yearly Dist, Beijing, China, 100028 2013 China International Hardware Fair Venue: China International Exhibi- Web: www.build-door.cn Date: March 12-March 14, 2013 tion Center Tel: 86-10-84494457 Frequency: Yearly Exhibits: kitchen cabinet and integrated Venue: Yuxi International Convention kitchen, closet, wood products, etc. 2013 The 20th China Beijing Interna- and Exhibition Center Add: China International Exhibi- tional Building Decorations & Build- Exhibits: Hardware products, etc. tion Center, No.6 Beisanhuan East ing Materials Exhibition Tel: 86-23-43762216 Rd, Chaoyang Dist, Beijing, China, Date: March 15-March 18, 2013 100028 Frequency: Yearly Tel: 86-10-84494460 Venue: China New International Ex- Furniture, Household Decora- Fax: 86-10-84494457 hibition Center tions, Floor Decorations Email: [email protected] Add: China International Exhibi- tion Center, No.6 Beisanhuan East 2013 China Quanzhou International The 2013 Beijing Kitchen and Bath- Rd, Chaoyang Dist, Beijing, China, Brick Technology and Equipment Ex- room Appliances Fair 100028 hibition Date: March 15-March 18, 2013 Tel: 86-10-64630548 Date: March 5-March 8, 2013 Frequency: Yearly Fax: 86-10-84540980 Venue: Quanzhou Exhibition Center Venue: New China International Ex- Email: [email protected] Add: Rm 210 Kangren Building Hux- hibition Center in Street Quanzhou, Fujian, 362000 Exhibits: Bathroom appliances and The 19th China Construction Decora- Tel: 86-595-22774799 auxiliaries, etc. tion Industry Fair Fax: 86-595-22771411 Organizer: China B&D Exhibition Date: March 15-March 18, 2013 Web: www.qzzjz.cn Co., Ltd, Beijing Zhongzhuanghua- Frequency: Yearly gang Exhibition Co., Ltd. Venue: China New International Ex- The 12th China International Wall Add: China International Exhibition hibition Center Paper& Decoration Textile Expo Add: China International Exhibi- Date: March 15-March 18, 2013 tion Center, No.6 Beisanhuan East Frequency: Yearly Rd, Chaoyang Dist, Beijing, China, Venue: China New International Ex- 100028 hibition Center Tel: 86-10-64630548 Add: China International Exhibi- Fax: 86-10-84540980 tion Center, No.6 Beisanhuan East Email: [email protected] Rd, Chaoyang Dist, Beijing, China, 100028 The 14th China International Floor Tel: 86-10-64630548 Covering and Carpet Fair Fax: 86-10-84540980 Date: March 15-March 18, 2013 Email: [email protected] Frequency: Yearly Venue: China New International Ex- The 8th China International Floor hibition Center Heating System Exhibition Add: China International Exhibi- Date: March 15-March 17, 2013 tion Center, No.6 Beisanhuan East

78 FAIR & EXPOS

Rd, Chaoyang Dist, Beijing, China, Frequency: Yearly inqiao Jiangbei, Chongqing, 400020 100028 Venue: Chongqing International Con- Tel: 86-23-67745022 Tel: 86-10-64630548 vention and Exhibition Center Fax: 86-23-67753176 Fax: 86-10-84540980 Exhibits: Agricultural production Email: [email protected] Email: [email protected] bases, agricultural products, processing enterprises, etc. 2013 China West International Ma- Add: 27 Floor, Dihaomingdu, Chen- chine Tool and Mould Industry Exhibi- tion Auto tools and Fittings jiaping, Gaoxin District, Chongqing, China, 400039 2013 Guangzhou International Auto- Tel: 86-23-68670183 mobile Manufacturing Technology & Fax: 86-23-8988396 Equipment Exhibition Web: [email protected]

Energy and resources, Mining Industry, Metallurgy, Welding, Electric Power Fuzhou International Wind Power In- dustry Conference & Expo 2013 Date: March 11-March 13, 2013 Venue: Fuzhou Jinshan Exhibition Center Exhibits: Wind power generation Date: March 11-March 13, 2013 Date: March 3-March 5, 2013 unit, fan manufacturers, power grids, Venue: Chongqing International Con- Venue: Guangzhou International transmission and distribution equip- vention and Exhibition Center Convention and Exhibition Center ment, etc. Exhibits: Metal and associated equip- Exhibits: Automobile parts, etc. Add: Rm 605, Building 6#, Chongq- ment, etc. Add: No.5 Huacheng Road, Zhujiang ing Jia Yuan, Bobaoshan Nanlu, Shi- Add: A3609 Hongdingguoji, Guany- New City, Tianhe District, Guang- jingshan District, Beijing, 100043 inqiao Jiangbei, Chongqing, 400020 dong, China, 510620 Fax: 86-10-68660512 Tel: 86-23-67745022 Tel: 86-20-38106261 Tel: 86-10-68666067 Fax: 86-23-67753176 Fax: 86-20-38106200 Email: [email protected] Web: www.signchina-gz.com 2013 China West International Ma- Email: [email protected] The 15th China International Shading chine Tools and Mould Industry Exhi- & Construction Energy-Saving Exhibi- bition tion Date: March 11-March 13, 2013 Agriculture, Fishery, Animal Date: March 15-March 18, 2013 Venue: Chongqing International Con- Husbandry Frequency: Yearly vention and Exhibition Center Venue: China New International Ex- Exhibits: Metal and associated equip- 2013 Anhui International Livestock hibition Center, Beijing ment, etc. Feed Trade Fair & Livestock, Poultry Add: China International Exhibi- Add: A3609 Hongdingguoji, Guany- and Aquatic Product Breeding and tion Center, No.6 Beisanhuan East inqiao Jiangbei, Chongqing, 400020 Processing Technology and Equipment Rd, Chaoyang Dist, Beijing, China, Tel: 86-23-67745022 Exhibition 100028 Fax: 86-23-67753176 Date: March 5-March 7, 2013 Tel: 86-10-64630548 Email: [email protected] Venue: Hefei Gymnasium Fax: 86-10-84540980 Exhibits: Feed materials, feed addi- Email: [email protected] The 9th China International Air-Con- tives, feed products, etc. ditioning, Ventilation and Heat-Pump Organizer: Hefei Chuangbo Exhibi- 2013 China West International Forg- Products and Technology Expo tion Co., Ltd. ing, Stamping, Precision Forgings Ex- Date: March 15-March 17, 2013 Tel: 86-551-2664086 hibitions Frequency: Yearly Fax: 86-551-2678744 Date: March 11-March 13, 2013 Venue: China International Exhibi- Email: [email protected] Venue: Chongqing International Con- tion Center vention and Exhibition Center Add: Rm 380, 4F, Hall 1, China 2013 Chongqing Western China Inter- Exhibits: Metal and associated equip- International Exhibition Center, national Agricultural Products Fair ment, etc. No.6 East Beisanhuan Road, Beijing, Date: January 8-January 11, 2013 Add: A3609 Hongdingguoji, Guany- 100028

79 Tel: 86-10-84600666 magnetic services and consulting, data 2013 The 6th Cross-strait Boat Indus- Fax: 86-10-84600669 acquisition and information tech- try Expo

ON nfoRMATI Email: [email protected] nology services, global positioning Date: March 29-March 31, 2013 I systems-GPS, explosion-proof equip- Venue: Xiamen International Confer- The 13th China International Radiator ment, etc. ence and Exhibition Center Products and Accessories Exhibition Host: Beijing Zhenwei Exhibition Exhibits: Shipping manufacture, ship- Date: March 15-March 17, 2013 Co., Ltd, China Petroleum and Petro- ping manufacture materials and fit- Frequency: Yearly Chemical Equipment Industry Asso- tings, shipping technology and service Venue: China International Exhibi- ciation, China Council for the Promo- system, etc. tion Center tion of International Trade Chemical Add: Rm 26C, Qiaowang Building, Add: Rm 380, 4F, Hall 1, China Industry Sub-Council No.295 Jiahe Road, Xiamen, Fujian, International Exhibition Center, Add: Rm 801, Building E. Kaixu- China No.6 East Beisanhuan Road, Beijing, ancheng, No.170 Beiyuan Road, Cha- Tel: 86-592-3119622 100028 oyang District, Beijing, China, 100101 Fax: 86-592-3119768 Tel: 86-10-84600666 Tel: 86-10-58236588 Email: [email protected] Fax: 86-10-84600669 Fax: 86-10-58236567 Email: [email protected] Email: [email protected] 2013 The 7th China Foshan Interna- Commodities tional Metal Industry Fair 2013 Hebei (Shijiazhuang) Spring Fes- Transportation, Logistics, Stor- tival Folk Goods Expo Date: March 18-March 20, 2013 age Frequency: Yearly Date: January 14-January 21, 2013 Venue: Foshan International Confer- The 12th China International Auto Venue: Shijiazhuang People’s Confer- ence and Exhibition Center Accessories Commercial Expo ence Center National Flag Square Exhibits: Brand special equipment, Date: March 12-March 14, 2013 Exhibits: Candy, wine, food, daily stainless steel, strips, steel pipes, etc. Venue: China National Agriculture goods, gifts, garment, etc. Add: Rm 1606, 13 Fuhua Road, Fos- Exhibition Center Host: Shijiazhuang Government han Guangdong, China Exhibits: Auto products, auto refit- Commodity Trade Fair Management Tel: 86-757-83284305 ting, auto parts refitting, etc. Office; Shijiazhuang Municipal Indus- Fax: 86-757-83284326 Add: Rm 505, A Building, Beihuan trial and commercial Union; Shijiaz- Web: www.cz-exhibition.com Center, No.18 Yumin Road, Xicheng huang Commerce Union Email: [email protected] Dist, Beijing, China, 100029 Organizer: Shijiazhuang People’s Tel: 86-10-82250016 Conference Center, Shijiazhuang 2013 The 7th China Stainless Steel In- Fax: 86-10-82254766 Shangmao Exhibition Co., Ltd. dustry Exhibition Web: www.yasn.com.cn Tel: 86-311-86720871 Date: March 18-March 20, 2013 Email: [email protected] Contact Person: Mr. Zheng1 Frequency: Yearly Contact person: Qiu Shuai Venue: Foshan International Confer- Las Vegas Market 2013 ence and Exhibition Center Date: January 28-February 1, 2013 Exhibits: Brand special equipment, Frequency: Yearly stainless steel, strips, steel pipes, etc. Year of the first event: 2005 Add: Rm 1606, 13 Fuhua Road, Fos- Venue: Beijing Museum of Natural han Guangdong, China History Tel: 86-757-83284305 Exhibits: Bedroom furniture, office Fax: 86-757-83284326 furniture, kitchen furniture, living Web: www.cz-exhibition.com room furniture, bathroom furniture, Email: [email protected] children’s furniture, indoor decoration material, and hardware. The 10th China International Offshore Host: Organizing Committee of Las Oil and Gas Exhibition 2013 Vegas Market Date: March 22-March 24, 2013 Organizer: China Council for the Frequency: Yearly Promotion of International Trade Venue: New China International Ex- Construction Industry Sub-Council hibition Center Add: Rm 125, South Building of Exhibits: Offshore oil equipment and Ministry of Construction, No.9 San- technology service, gas and pipeline lihe Road, Haidian District, Beijing, equipment, log digitalizing and log- China, 100835 ging, oilfield construction equipment, Tel: 86-10-88372582

80 FAIR & EXPOS

Fax: 86-10-88372582 duction machinery, in vitro diagnostic Fax: 86-10-84540980 Email: [email protected] devices, precision technology, medical E-mail: [email protected] Contact Person: Li Haixia electronics, raw materials for every application, packing & sterilization equipment, plastics/disposable devices Medical Care, Health Care and diagnostic equipment Founded in: 2005 2013 China Chongqing International Frequency: Yearly Health Industry Green Industry Expo Host: CCPIT Shanghai Sub-Council, Chongqing International Convention Canon Communications LLC and Exhibition Centre Organizer: E21 Magicmedia Co., Ltd Duration: December 23-December Address: Room 307, No.28, Jinling 25, 2013 West Road, Shanghai, China, 200021 Organizers: Chongqing Ganghua Tel: 86-21-63870211 Exhibition Co.,Ltd., Chongqing Gan- Fax: 86-21-63853791 ghua Exhibition Co.,Ltd. Contact Person: Xuandong Cheng Address: No.167, Stone Street, Shap- Web: www.medtecchina.com ingba District, Chongqing Email: [email protected] Tel: 86-23-86156500 Fax: 86-23-86156500 2013 The 11th Medical Appliance Contact: Ms Huang (86-15923519466) Technology Equipment (East China) Email: [email protected] Exhibition Duration: February 26-February 28, China Medical Appliance (Shandong) 2013 Expo Frequency: Yearly Date: March, 2013 Venue: Xuzhou International Conven- Automation Frequency: Yearly tion & Exhibition Centre Venue: Jinan Shungeng Convention & Address: Room 234, 2rd, Xuzhou In- The 17th China (Guangzhou) Interna- Exhibition Center ternational Convention & Exhibition tional Factory Automation & Instru- Add: No.182, Werier Road, Jinan, Centre ment Exhibition (CHIFA) 250001 P.C.: 221008 Duration: March 4-March 7, 2013 Tel: 86-531-82076576 Tel: 86-516-83873366/83873055/832 Frequency: Yearly Fax: 86-531-82075676 00789/83876758 Sector: Indsustry automation control E-mail: [email protected] Fax: 86-516-83200058 system and equipments, apparatus and E-mail: [email protected] instruments, etc. China International Adult Toys & Re- Web: www.fairwindow.com productive Health Exhibition (ADD/ The 13th Northwest Medical Appara- Add: No.117. Liuhua Road, Guang- China Adult-Care Expo) tus (Lanzhou) Expo zhou Duration: March 8-March 10, 2013 Date: March 2013 Tel: 86-20-26080422/26081669 Frequency: Yearly Frequency: Yearly Fax: 86-20-86663416-02 Venue: Shanghai International Exhi- Venue: Lanzhou Municipal Sports E-mail: [email protected] bition Center (INTEX) Exhibition Hall Sector: Adult toys, reproductive Web: www.yfexpo.com healthcare products, medical treatment Tel:86-931-8113839/2937036/ Energy, environment protection apparatus, videos and CDs. 13088737023 Add: 6, Beisanhuan East Road, Bei- E-mail: [email protected] 2013 China(Chongqing) International jing, China, 100028 Wind Energy Science, Technology and Tel: 86-10-84600368 Equipment Construction Exposition Fax: 86-10-84600767 Construction, City planning, Venue: Chongqing International Con- E-mail: [email protected] Construction Materials, Deco- vention and Exhibition Centre rations Organizer: Chongqing Hao Feng International Medical Equipment Exhibition Service Co., Ltd. Design & Technology Exhibition and China International Building Decoration Address: 22-1, 22-2, Hongqihegou, Conference China (MEDTEC CHINA & Building MATERIALS Exposition Jiangbei District, Chongqing 2013) Duration: February 29- March 3, Tel: 86-23-86622282 City: Shanghai 2013 Fax: 86-23-67715170 Venue: Intex Shanghai Venue: China’s Int’l Exhibition Center Contact: Yang Zhi Sector: Assembly equipment and pro- Tel: 86-10-64630548 Email: [email protected]

81 We possess a giant of distribution and service webs in 120 countries and ON NFO RMATI I regions in the world and occupied Company name: China Nation- the first place in China low voltage al Materials Industry Import & electrics from 1995 to 2003. We also Export Corporation have set up over 600 marketing organizations at home and the market With 20 years of development, occupancy has been raised uninter- China National Materials Industry 2013 ruptedly. Import & Export Corporation (Sinoma Sassin International Electric Co., Import & Export), as a subsidiary of Market Ltd. has been pointed to produce China National Materials Group Cor- high quality high and low voltage poration, has become an integrative China complement electrics by the State import & export corporation dealing Suppliers List Economic Trade Committee and the specially in mineral products, high-tech State Power Company. products, profound processing technologies and large mechanical equipments. Add: No. 2588 Jinhairoad, Pu- Presently we have established coopera- dong District, Shanghai, China tion and trade relationships with cus- Tel: 86-21-50210890/50219970 tomers from more than 100 countries Fax: 86-21-50217333 and regions and gained great reputation both at home and abroad. Company name: Sassin Inter- As the trade platform of China national Electric Co., Ltd. National Materials Group Corpora- Company name: China Elec- tion, Sinoma Import & Export is Sassin International Electric Co., tronics Zhuhai Co., Ltd. mainly characterized by the three Ltd. is one of the largest industrial dominant industries and six kinds electric manufacturers in China and is Established in 1987, with 22 years’ of national level core technologies a boundless international enterprise, development, China Electronics Zhu- owned by the Group Corporation. which specially develops, manufac- hai Co., Ltd. has become a diversified The three dominant industries are the tures and sells the world leading level group enterprise of the business of manufacturing of non-metal materi- high and low voltage electrics and international trade, property invest- als, engineering and construction ser- element, transmit distribution equipment, processing, manufacturing, the vice of non-metal materials and non- ment, power equipment, instrument bonded warehouse as well as high and metal mining. new technology products. Since its es- and meter, building electric, Automa- Add: tion, wire and cable, electricity and tablishment, the company has achieved 13F, Yuhui Building (A), electric equipment etc. conspicuous success in import and No.73, Fucheng Road, Haidian Dis- The enterprise has won seven export. In 2007, the company’s annual trict, Beijing, China import and export volume reached $160 Tel: 86-10-68619000/68619100 international attestations of ISO9001 Fax: CE, CB, German VDE, China million. 86-10-68710718/68710719 Compulsory Certification(CCC). The main export products of the And solely enjoyed WIPO protection. company include several hundred kinds of products of five categories of audio and video products, home appli- Company name: Guangzhou Ti- ances, digital products, batteries and ger Head Battery Group Co., Ltd. telephones, including GSM mobile phones, mp3 and mp4 players, DVD Guangzhou Tiger Head Bat- players (portable ones, and those for tery Group Co., Ltd. is a professional vehicles), mini audio systems, satel- battery manufacturer and operator of lite TV receivers, mobile air condi- the largest scale among Chinese dry tioners, air purifiers, electric heaters, battery enterprises. Its sales volume, telephones, LCD TV sets and small export volume and foreign exchange kitchen appliances. earning all rank the first place in the country’s same trade. The Company Add: 6/F CEIEC Building, No. was successfully incorporated on May 1082 Jiuzhou Avenue, Central Jida, 25, 2005. Its principal part is Guang- Zhuhai, Guangdong Province, China zhou Battery Factory, which was set up Tel: 86-756-3266888 in 1928 and became the first enterprise Fax: 86-756-3368833 that owned the self-operated import &

82 SUPPLIERS

is also honored with “Chinese Well- Asia. Golden Field purchases the quali- known Trademark”. fied raw materials from carefully select- CNC products cover all areas. It ed suppliers, ensuring finished goods is the first level network supplier for reach international standards. Fifteen China Sinopec, China Petroleum and fully automated production lines China Three Gorges project. CNC guarantee the output at least 500,000 products are not only popular in China, units per month. ISO 9001 QC pro- but also welcome in Europe, the Mid- cedures are being adopted in every step dle East, and more than 50 countries at any factory, and nearly 3,000 well- and regions. CNC is one of the most trained employees and experienced en- famous export brands in Zhejiang gineers make Golden Field’s products Province. CE, UL and FCC approved. R&D CNC passed ISO9001 interna- Based in Korea and Singapore Innova- tional quality management system tion is the focus of Golden Field’s re- certification, ISO14001 environmen- search and development. tal management system certification, OHSMS18001 occupational health Add: Tingshang Ave, Tingshang and safety management system certifi- Industrial Zone, Houjie Town, Dong- export business right in Chinese bat- cation, and cleaner production system guan , Guangdong Province, China tery industry in 1984. certification. All the leading products Tel: 86-769-85758788 The company’s main products are obtained CCC, some of the products Fax: 86-769-85587456 “555”, “Tiger Head” and “TIHAD” obtained CE certifications and the In- brand all kinds of dry batteries, lead- ternational Electro Technical Commis- acid storage batteries, Ni-MH batteries, sion CB certifications, and all products polymer Li-ion batteries and some bat- have been guaranteed by People’s Insur- Company name: Shanghai tery-related appliances. The trademark ance Corporation of China on quality Metals & Minerals Import & “Tiger Head” of the company has won responsibility. Export Corporation the “Chinese Well-known Trademark” and “Chinese Export Top Brand”, and Add: Changcheng High-tech Shanghai Minmetals was founded the trademark “555” titled the “Famous Industrial zone, North Baixiang, Wen- in 1949. Over the past 60 years, Shang- Trademark” in Guangdong province. zhou, Zhejiang Province, China hai Minmetals has gradually grown up Moreover, the company has gained Tel: 86-577-61989999 from an export-import company found- ISO9001:2000 Quality Management Fax: 86-577-61891122 ed under the national plan at that time System Certificate and ISO14001:2004 to a large-scale comprehensive state- Environment Management System owned enterprise comprising interna- Certificate. The company pays much tional and domestic business, futures attention to its internal management Company name: Golden Field business, logistics & manufacturing. and technical reform. Industrial CO., Ltd. We managed more than one thousand kind of products. Main lines Add: 568 Huangpu Road, Guang- Golden Field is a main provider include ferrous metals, nonferrous zhou, Guangdong Province, China of PC cases and power supply units metals, minerals, a large variety of Tel: 86-20-85525623 in mainland of China, and it is also a hardware, metal products, scrap met- Fax: 86-20-85539959 manufacturer of other computer periph- als, petrochemical products, food, oil, eral components like keyboards & mice, textile and light industrial products, speakers. Founded in 1993, Golden etc. The ISO management system en- Field has sales office worldwide, R&D sures standard and precise operation of Company name: CNC Electric departments in China, Korea and Sin- all business transactions to maximize Equipment Group Co., Ltd. gapore, and three manufacture plants customer satisfaction. The ERP based in Mainland of China. Golden Field is business operation platform has inte- CNC Electric Group is a large committed to best quality, best service grated and monitored all the key busi- and leading industrial electrical and technology innovation. Because ness process. equipment supplier. The Group was of products’ good performance and Founded in 1988, and approved as Golden Field’s good service, she has got Add: No. 757 Guangfu Road. non-regional enterprise by China 40% share of the domestic market and Shanghai, China State Administration for Industry and established 28 branches nationwide. Tel: 86-21-63815858 Commerce in 1997. We mainly pro- Meanwhile, Golden Field has Fax: 86-21-63806600 duce intelligent and energy-efficient many clients and partners from the U.S., industrial electrical equipments. CNC Europe, Middle East and Southeast (Source: Canton Fair Online)

Feature Lifestyle

The National Styles in China International Fashion Week S/S By Guo Yan 2013

HUA·SONG NE·TIGER Collection was held in Beijing Hotel on October 25th, 2012. The theme of this collection was HUA·SONG. The conference held the spirit of Through the Old to the New, Combining the East and West. It integrates the elegance and simple style of Song Dynasty with international trend 2013, which brings soft color and touch. With the melody of Guqin, NE·TIGER led the new fashion of national costume and showed the culture of Chinese haute couture design and valuable handicraft.

Elegance& Tranquility & Calmness CHUHETINGXIANG Chu Yan Collec- tion was showed in Beijing Hotel on October 26th, 2012. The inspiration of CHUHETINGXIANG· Chu Yan S/S 2013 came from Chinese traditional culture. With high quality fabrics, exquisite craft and rich colors, the design reappears the handicraft skills of Chinese traditional dress. Attaching importance to the details and showing love and care for the human soul, the designers are passing on Chinese elegance, tranquility and calmness by the dress. Embedding the environmental idea of stained vegetation into the fashion design, they are trying to present the peaceful, calm and simple temperament over a restless, fast-paced and luxurious-pursued social atmosphere. All the collections are gorgeous and plain, quiet and lively with beauty based on the harmony and need-oriented. 84

Feature

Light in the dark The work of Sheguang Hu is enriched by royal style. It is gorgeous and full of tension. Integrating the culture essence of the West and the East, the bold color, fashion modeling with prac- ticability, the design offers us an unlimited imaginary space. The design concept is just like a wild horse running on the vast grassland with no end. The delicate fabrics such as wild match of suede, mink and jeruk, elegant combination of silk and kitwear bring a stun- ning feeling to the audience.

Dazzling Nichang It shows the technology development and modern design achievement of easten Asian countries dazzling, beautiful and colorful traditional dress, which reflect the perfect combination of civilization with a long history and modern ideas of fashion. The designs convey the creative concept diversification of dress culture to the world, display cultural context of harmony in different as well as legendary creations of traditional dress in modern society.

Feature Lifestyle

Shangri-La Colorful fashion horse follows the idea of “Freedom, Nature and Confidence” to blend the diverse ethnic cultural elements into the design style of urban fashion by presenting the ethnic costume in Sichuan and Tibet area and the bright color of the architecture on the silk clothing. All of these are trying to explain Shangri-La’s vigor and purity with amounts of embroidery, printing and handwork.

Looking for the past stories By reviewing the modern history of Chinese dress to look for the dress languages and stories in the past, the designers adopt contemporary artistic concept to demonstrate the theme: Birthday party in Sum- mer Place, Yangching School, Shanghai Bund and so on, presenting modern people’s new trend of artistic life. These collections are designed by Mr. Wu Xuekai, Mr. Wu Xuewei and Mr, Zhang Zhaoda.

Movie

Love Stories Cinema of Institut français de Chine Cinema Theater French films with Chinese (and sometimes English) subtitles Fidelity card: RMB 100/5 films + 1 free (Students: RMB 50) More information on activities: www.institutfrancais-chine.com/ www.faguowenhua.com

The Lovers on the Bridge Mademoiselle Chambon Jet Lag

France, 1991 France, 2009 France, UK, 125’,Drama, 101’, Ro- 2002 Romance mance 91’, Comedy, Directed by: Directed by: Romance Leos Carax StéphaneBrizé Directed by: Cast: Juliette Cast: Vincent Danièle Thomp- Binoche, Denis Lindon, Sandrine son Lavant Kimberlain Cast: Juliette French with French with Binoche, Jean Chinese subtitles Chinese subtitles Reno French with Chinese & Eng- lish subtitles This film is a love story between Jean, his loving wife and son two young vagrants: Alex, a would be live a simple, happy life. At his son’s circus performer addicted to alcohol and homeroom teacher Madamoiselle- At Charles de Gaulle Airport in sedatives and Michele, a painter driven Chambon’s request, he volunteers as Paris, a beautician on her way to a new to a life on the streets because of a failed substitute teacher and starts to fall for job in Mexico accidentally meets a cook relationship and an affliction which is her delicate and elegant charm. His who is on his way back from America. slowly turning her blind. Michele be- ordinary life between family and work Labor strikes, bad weather, and pure luck comes increasingly dependent on Alex starts to falter. cause the two of them to share a room as her vision deteriorates further. overnight at the airport Hilton hotel. My Favorite Season Mélo Bad Faith

France, 1993 France, 1986 France, 127’, Romance 112’, Romance Belgium, 2006 Directed by: Directed by: 88’, Comedy André Téchiné Alain Resnais Directed by: Cast: Cath- Cast: Sabine RoshdyZem erine Deneuve, Azéma, Fanny Ar- Cast: Cécile Daniel Auteuil, dant, Pierre Arditi De France, Ro- MartheVillalonga French with schdyZem French with Chinese & English French with Chinese & English subtitles Chinese & Eng- subtitles lish subtitles

Old woman Berthe leaves her Two old friends, Marcel and Pierre, Ishmael is Muslim, Clara is Jewish. house to live in her daughter Emilie’s get together one evening for a meal and They have remained together for four one. Emilie and her brother Antoine to reminisce on old times. Marcel is fun-filled years without incidence. When have fallen out three years ago and have now a world famous virtuoso violinist Clara discovers that she has become not seen each other since, but Emilie whilst Pierre has settled down for a quiet pregnant with Ishmael’s child, however, invites him for Christmas. Memories life with his wife, Romaine. From this the couple’s carefree romance threatens will come up, and will be depicted both first meeting, Romaine and Marcel fall to grow complicated as they struggle Berthe’s destiny and the strange rela- madly in love and have an affair. Their with how to reveal the development to tionship between Emilie and Antoine. problem is what to do about Pierre... their traditional-minded parents.

87 THIS IS HINA

Travel by Beijing-Guangzhou Hebei High-Speed Train Beijing By Lesley Cui Baoding

he world’s longest high- Baoding speed rail line, which spans over half of China, Baoding City is a medium- began operating on De- sized industrial city in Hebei Prov- cember 26, 2012, further cementing ince. It is about 150 kilometers Tthe country’s high-speed railway northeast of Beijing. About a mil- Henan development ambitions. lion people live in the urban area, Running at an average speed and 11 million live in the area under of 300 km per hour, the new route its government’s jurisdiction in out- cuts travel time between Beijing lying suburbs, towns, and villages. Hubei and Guangzhou from over 20 hours People in Baoding are proud to about eight. of their history. In Chinese mythol- A second-class seat on the new ogy, the area of Baoding was said to high-speed line costs 865 yuan (138 be where Sovereign Yao was from. U.S. dollars), while a sleeper on the In the Spring and Autumn Period Hunan old line sells for around 430 yuan. (770 B.C. to 476 B.C.), the Jin built This high-speed train passes a city in the area of Baoding. In the many cities of tourism and business dynasties afterwards, the city was interests. This issue of This Is China usually a capital of at least a region. takes you to Baoding and Shijiang- The Yan and Zhongshan kingdoms zhuang cities along the North of the had their capitals in the area. The railway. name of “Baoding” means protect- Guangdong

Baiyang-dian

88 The Great Wall

Tianqiao Waterfalls

Laiyuan Yesanpo

ing and stabilizing. The city pro- mountains in the western part with tected nearby Beijing and helped the Great Wall running through keep the area under control. The them. There are the summer resort city was made a prefecture in the Laiyuan, where the average tem- Yuan (Mongolian) Dynasty and perature in summer is 21 degress, the Ming Dynasty. In the Qing and the national scenic spot, Ye- Dynasty, the mansion of the ruler sanpo, which is full of wild interest of Zhili Province was in Baoding. and brimming with an exotic atmo- Since then, Baoding has often been sphere. There is a vast expanse of either a political, economic, or cul- fertile land on the plain in the east. tural center for Hebei Province, or Baiyang-dian, “the North China an army headquarters. During the Pearl” is bright-colored and spar- early ages of the establishment of kling. Besides, there are Anguo, the People’s Republic of China in “the Capital of Herbs” and Fuping 1949, Baoding acted as the capital Tianqiao Waterfalls, the largest city of Hebei Province. waterfall group in North China. Lying along the east foot of the There are also lots of places of northern part of Taihang Moun- historical interest. For example, the tains, the terrain of Baoding inclines Ancient Lotus Lake Garden in the from the northwest to southeast and city center used to be an institu- is mainly comprised of the western tion of higher education during the mountain area and eastern plain. reign of Emperor Yongzheng of the Among all the natural re- Qing Dynasty. It was one of the sources, there are lots of green famous gardens of that time. 89 THIS IS HINA

In addition, there are other places of cultural and historical interest like the Han Dynasty Tombs in Mancheng County (154 B.C.-113 B.C.) that are famous for the suits made of jade pieces that were sewn together with gold wire and the Mausoleums of the Qing Hebei Dynasty (1730-1915, Yixian County) Beijing where 4 emperors of the Qing Dynasty were buried. Baoding is located in the centre of the Bohai Rim Economic Area which includes Beijing, Tianjin and Shijiaz- huang. One of the largest employers in Baoding is China Lucky Film, the Shijiazhuang largest photosensitive materials and magnetic recording media manufacturer in China. And, Yingli group, 2010 World Cup sponsor, is headquartered in Baoding. It is a world top 10 solar panel Henan Cangyan Mountain manufacturer. More renown companies include ZhongHang HuiTeng Wind- power Equipment Co., Ltd (wind tur- Shijiangzhuang bine) and Baoding Tianwei Group Co., Hubei Ltd(transformer). Shijiazhuang, the capital of Hebei The most famous local specialty Province, is a young industrial city. food is Lü Rou Huo Shao (Donkey It was an unimportant town until the Burger). Most local people eat Lü Rou building of the Zhengtai and Jinghan Huo Shao. People put minced donkey railways saw it become an important Hunan meat into a wheat cake and thus Lü regional transport hub. Captured by the Rou Huo Shao is made. The baked People’s Liberation Army (PLA) under wheaten cake tastes crispy, and the meat the leadership of the Communist Party is tender. Delicious and inexpensive, a of China (CPC) in 1947, it was the Lü Rou Huo Shao only costs around cradle of the new China, and for three 3 RMB. There are other specialties of years housed the headquarters of the Baoding like Lu Zhu Chicken (boiled CPC. Guangdong chicken with thick gravy) and Bing Nowadays it is the capital and Tang Hu Lu (Ice-Sugar Gourds). main economic center of Hebei Prov-

Shitou Village 90 Zhengding ince. Shijiazhuang is the largest phar- marceutical base in China and is aslo an important center in the textile, IT, manufacturing and chemical industries. In 2007, it was listed as one of the top 15 economic powers in China. According to the latest census figures, Shijiazhuang has a population of 2.19 million in the city proper, with a further 7.4 million people living in its 20 affili- ated counties. It’s a modern city that’s in the process of building many new apart- ment buildings, shopping malls and re- Zhaozhou Bridge newing its image. There are a number of sightseeing places in the area, both natural and his- late 2nd century BC. toric. Most are not located within the city Cangyan Mountain. It is 90 minutes proper. drive from Shijiazhuang City. There is Pilu Monastery (Vairocana Monas- a pavilion built on a bridge over a gorge tery) in the Shanjing Village in the north- that was filed in the final scenes of the western suburbs of Shijiazhuang. It was Oscar winning film Crouching Tiger built in the Tang dynasty and underwent Hidden Dragon. major restorations under the Yuan and Shitou Village. A perfect example Ming dynasties. The main hall contains a of Chinese stone architecture, with an stone pedestal with excellent Tang carv- excellent local temple Qingliang pavilion ings as well as murals from the Yuan- built in the late Ming-Early Qing period Ming period. (16th-18th centuries). Martyrs’ Memorial (Lieshi Lingyu- Niangzi Guan. For those who re- an), dedicated to Norman Bethune, Eric ally love old towns, the dusty coalminers’ Liddell and Dwarkanath Kotnis. Niangzi Guan town has two major attractions: a small Zhaozhou Bridge in Zhao County. but impressive section of the internal It is a great masterpiece of Chinese civil Great Wall, separating Shanxi from He- engineering. Created around 600 CE un- bei, a site of major battles from the sixth der the Sui dynasty, it survived numerous century on; and a beautiful village built floods and earthquakes, and is considered on a stream, with private watermills run nowadays as the oldest stone single arch by many villagers. bridge in the world. Ancient town of Zhengding. It Hebei Provincial Museum. It is a features numerous beautiful sites, most must see and contains expositions from specifically the Longxing Temple, built in two major discoveries of the recent de- Pilu Monastery the Tang dynasty, which features a huge cades: the tomb of King of Zhongshan 22m high bronze Buddha statue donated from the late 4th century BC, and the by the Song emperor in the 11th century. royal tombs of prince and princess of the It is also home to four unique ancient pa- Han principality of Zhongshan from the godas. 91 Collection, separation and recycling ever, due to the high moisture content of China’s waste (from organic matter), the heat produced Given the vast land area, population size during this process often can’t be utilized. Nev- and housing ranging from hutongs to high-rises, ertheless, as of 2006 there were 70 “official” there is not surprisingly a huge amount of varia- MSW incinerators operating in China, treating tion in municipal solid waste (MSW) manage- approximately 33,000 tons of waste per day. The ment across China. Complicating the flow of use of incinerators has risen in the last ten years rubbish from household to disposal/treatment due to subsidies from the government (for the site is the extremely large informal sector com- electricity generated), large investments from the prising scavengers and recyclable waste collec- private sector, and the space saving aspect when tors. There are around two million people in compared to landfills. Incineration is not without China whose livelihoods depend on collecting its environmental concerns though, and the toxic and selling waste. The average Chinese house- emissions and hazardous solid waste by-products hold doesn’t separate recyclables. Beijing house- need to be dealt with appropriately. holds only sorted and separated 15% of their Composting rubbish, so these collectors, by loading their tri- cycles to the gunnels with cardboard, cans, and What happens to the rest of the rubbish plastic bottles, help divert this valuable waste that is not tipped down a big hole or thrown into from simply being landfilled. The problem with a fire? A small amount (2.9 million ton in 2009) this system, however, lies in implementing and

By Esta Chappell goes to composting facilities around the country. regulating any official recycling system, not to However, in order for composting to be sustain- mention the health and hygiene issues associated able as a waste treatment option, there has to with scavenging through rubbish for a meager be suitable source separation of organic matter, living (the selling price for a used aluminum can infrastructure for transporting it to treatment is only 0.12 RMB). facilities and finally, and Landfills most importantly, a market for the end product. 80-90% of the re- Fortunately, the Chinese maining MSW is then government is looking disposed of at one of the into the process of divert- 324 “official” landfill ing organic waste from sites across the country. landfills. If you do not frequent To the future landfills (and in China it’s rather difficult to get A lthough China access), then imagine an now produces more area the size of 20 foot- MSW than any other ball fields, the air thick country, they do not have with flies and the stench their heads buried in the of rot, and in some cases farmed animals such as sand. It is clear that the type of waste being pro- pigs or cattle, foraging for food scraps. The ma- duced is changing, particularly in urban areas. jority of these sites, and all of the unauthorized What was once primarily organic waste is now a dumping sites, do not meet national Chinese complex array of oil-based plastics and electronic standards, let alone international standards. It waste all mixed in with left over noodles and was not until 1991 that the first sanitary landfill bamboo chopsticks. However, policy changes to meet pollution standards was built in Hang- such as banning plastic bags and increasing pro- zhou, Zhejiang Province; it is now a tourist at- ducer responsibility will help to relieve the bur- traction called Tianziling Landfill. Standards for geoning amount of waste going to landfills. With landfills include requiring adequate lining sys- a growing environmental awareness in China, Waste Collection Disposal and Waste in China tems, leachate collection and treatment systems, there is more pressure on waste treatment and and some form of gas collection. If lacking these disposal sites to clean up their act, and ensure systems, landfills can have significant environ- standards and regulations are complied with. mental costs. So before buying those individually wrapped Incinerators eggs, or upgrading the phone you purchased last year, think about that toxic, stinking hole in the Incineration involves the combustion of ground that is the “land of far far away”. waste items into ash, flue gas and heat, the latter of which can also be converted to energy. How- (Original source: eChinacities.com)

92 A New Leadership, a New Year, a New Opportunity?

s we look ahead in 2013, one managed on a national scale remains to be thing is certain. China now has seen. Increasingly the single child policy By Lewis McCarthy enough presence and financial is being relaxed, Now, if two only-childs clout to make a great impact marry, they are able to have two children both economically and politically. Never- together. In addition, the government are Atheless many onlookers point to various considering gradually raising the retire- domestic and societal problems such as an ment age so people are able to work for aging population and environmental dam- longer to relieve the burden of supporting. age as things that may constrain progress While China are by no means the only for the country. Perhaps these “problems” country that must tackle an aging popula- offer opportunity to international compa- tion, cultural and Confucian ideals put nies. pressure on children to take care of their As everyone reading this will be parents and extended family as they grow aware, towards the end of 2012 China old. went through a once in a decade leader- Realising this predicament has en- ship transition. Xi Jinping is now the man ticed some international companies al- tasked with leading the country in what ready, the South China Morning Post may prove to be the most important de- notes that Waterbrook Lifestyle Resorts sues are not only providing cade in China’s modern history — charac- of Australia have entered the aged care socially positive goods but terised by China’s re-emergence as a global home market in China. They are not the also ones both Chinese heavyweight. only international company to do so and as consumers and government There has been much talk about those the middle-kingdom moves nearer to this desire and back. It seems selected in the politburo and often they are problem, it is likely many more companies the country is a fantastic evaluated as a conservative bunch, how- will take note and look to “invest in the prospect for ecofriendly ever, as they are now beginning to settle aged.” companies and as China is into their new roles, policies and ideas will The environment is another great still very much a developing begin to form. Whatever these plans may concern for China (and the world) over the and industrializing country, be, we can be confident in reasoning that next ten years. It is common to see Chi- the environmental market many will address domestic issues previ- nese cities towards the top of lists of heav- is only in its infancy stage. ously mentioned, as frankly, the issues are ily polluted cities. Time Magazine ranked While many compa- too big to ignore. Linfen and Tianying as two of the world’s nies enter China with the As a result, these present a wonder- worst cities for pollution. Elsewhere hopes of grasping a share of ful opportunity to foreign companies. It residents of Ningbo in Zhejiang recently its 1.3 billion market-pop- is tempting to be sidetracked by China’s showed unwillingness to have a chemical ulation, identifying trends enormous consumer base and growth in factory expanded there due to environ- that the country is chal- industries such as luxury goods and tour- mental and health concerns. lenged by rather targeting ism. Instead, confronting the tribulations Yet despite the many complications attributes that the country China faces might offer different and -ex that have risen in tandem with China’s possesses may prove profit- ceptional growth paths for businesses — industrialization, the state is often praised able. some are beginning to realise this and reap for its innovative approach to dealing with It is in all likeliness reward. this issue. For instance, the country is at- that these industries will One of China’s largest emerging tempting to build various eco-cities across continue to see growth over challenges is its aging population. As a the country around developed locations the next ten years and over consequence of pro-birth ideas during the such as Shandong, Tianjin and Chengdu the course of 2013 public Mao-era and the more recent single child and enlisting foreign help from Singapore and business incentivizing policy as a result, the country is faced with to America to do so. policies should begin to a large age imbalance. How this will be Firms that tackle environmental is- emerge.

93 ulture The Thousand Character Classic (I) C qiān The Thousand Character Classic (千字文) is an ancient Chinese poem used as a primer for teaching Chi- nese characters to school children. It contains exactly one thousand unique characters and is composed of 250 phrases of 4 characters each. It is said that Emperor Wu of 千 the Liang Dynasty (502-557) commissioned 周兴嗣 (Zhōu Xīngsì) to compose this poem for his prince to practice calligraphy. The writing of characters in the original ver- zì sion was selected among the calligraphies of 王羲之 (Wáng Xīzhī), one of the finest calligraphers in China. It was sung in the same way in which children learning Latin alphabet writing do with the “alphabet song”. The characters of the poem were sometimes used to represent 字 the numbers from 1 through 1000. The poem can be divided into four parts according to its topic focus. The first part is to tell the history from wén the very beginning. The second part is setting principles on how to behave in daily life. Then it describes the life in the capital city and upper class in the third part; and rural and citizens’ life in the fourth part. Culture column will share the special unique 1000 characters this and next two 文 issues.

Part 1 History

※ 天地玄黄，宇宙洪荒。 ※ 云腾致雨，露结为霜。 ※ 海咸河淡，鳞潜羽翔。 tiān dì xuán huáng, yǔ zhòu yún téng zhì yǔ, lù jié wéi shuāng hǎi xián hé dàn, lín qián yǔ xiáng hóng huāng When clouds are formed, the rain The seas catch salt where rivers The darkling skies and yellow is made, When dew drops freeze, the pour, The scaled submerge, the feath- earth, Amid great chaos had their birth. frost is laid. ered soar. ※ 日月盈昃，辰宿列张。 ※ 金生丽水，玉出昆冈。 ※ 龙师火帝，鸟官人皇。 rì yuè yíng zè, chén xiǔ liè zhāng jīn shēng lì shuǐ, yù chū kūn gāng Lóng shī huǒ dì, niǎo guān rén huáng Then Sun and Moon their courses The Goldsand streams in gold The dragon master, the fire fan, ran, Then stars were set and round they abound, From Kunlun mountains jade The bird-name giver, the King of span. is found. Man. ※ 寒来暑往，秋收冬藏。 ※ 剑号巨阙，珠称夜光。 ※ 始制文字，乃服衣裳。 hán lái shǔ wǎng, qiū shōu dōng jiàn hào jù què, zhū chēng yè shǐ zhì wén zì, nǎi fú yī shāng cáng guāng Then words appeared the things to Then cold and heat arrived by The best of swords is Giant’s Might, note, Then clothes were made the body turns, With reaping, keeping, man's The best of pearls is Bright-at-night. to coat. concerns. ※ 果珍李柰，菜重芥姜。 ※ 推位让国，有虞陶唐。 ※ 闰余成岁，律吕调阳。 guǒ zhēn lǐ nài, cài zhòng jiè jiāng tuī wèi rang guó, yǒu yú táo táng rùn yú chéng suì, lǜ lǚ tiáo yáng For fruit the plum and apple are To men of worth the power passed The extra days in leap years strewn, great, And mustard and ginger are down, First Yao, then Shun; each hand- It's yin and yang that call the tune. loved on the plate. ed the crown.

94 ※ 吊民伐罪，周发殷汤。 ※ 爱育黎首，臣伏戎羌。 ※ 鸣凤在竹，白驹食场。 diào mín fá zuì, zhōu fā yīn tāng ài yù lí shǒu, chén fú róng qiāng míng fèng zài zhú, bái jū shí chǎng Ji Fa of Zhou and Yin’s first king, Got They loved and taught their men. The phoenix sang on a bamboo rid of tyrants peace to bring. Therefore, All tribes to them allegiance slope, The white colts grazed on the swore. pasture of hope. ※ 坐朝问道，垂拱平章。 zuò cháo wèn dào, chuí gǒng píng ※ 遐迩一体，率宾归王。 ※ 化被草木，赖及万方。 zhāng xiá ěr yī tǐ, shuài bīn guī wáng huà pī cǎo mù, lài jí wàn fāng They sat at court and cupped their Till far and near, and one by one, All plants were in the king's good hands, And talked on ways to honor They all were under the Heaven’s graces, Reaching far to the farthest their lands. Son. places.

Part 2 Principles

※ 盖此身发，四大五常。 ※ 墨悲丝染，诗赞羔羊。 ※ 资父事君，曰严与敬。 gài cǐ shēn fà, sì dà wǔ cháng Mò bēi sī rǎn, shī zàn gāo yáng zī fù shì jūn, yuē yán yǔ jìng The four root elements make our While silk being dyed old Mo And wait on your parents, and form, The five prime virtues set our deplored, The fleecy lamb in Poetry's sovereign too, With greatest care and norm. adored. deference due.

※ 恭惟鞠养，岂敢毁伤。 ※ 景行维贤，克念作圣。 ※ 孝当竭力，忠则尽命。 gōng wéi jū yǎng, qǐ gǎn huǐ shāng jǐng xíng wéi xián, kè niàn zuò shèng xiào dāng jié lì, zhōng zé jìn mìng In reverence think we're bred with Learn from the worthy and the On filial duty best you try, While care, What shame, great shame, this sublime, And guide your thinking with for the nation ready to die. form to impair! theirs to chime. ※ 临深履薄，夙兴温凊。 ※ 女慕贞洁，男效才良。 ※ 德建名立，形端表正。 lín shēn lǚ báo, sù xīng wēn qìng nǚ mù zhēn jié, nán xiào cái liáng dé jiàn míng lì, xíng duān biǎo You fan the mat, you warm the The fair admire the chaste and zhèng bed, Like who’d on thin ice gingerly pure, The gents must follow the wise Good virtues bring with them tread. and sure. good fame, And noble forms will look the same. ※ 似兰斯馨，如松之盛。 ※ 知过必改，得能莫忘。 sì lán sī xīn, rú sōng zhī shèng zhī guò bì gǎi, dé néng mò wàng ※ 空谷传声，虚堂习听。 Be sweet as orchid’s endless scent, And when we slip we mend our kōng gǔ chuán shēng, xū táng xí tīng And firm as pine trees hardly bent way, And what we learn we keep for Through empty valleys far goes aye. sound, Cross hollow halls the voices ※ 川流不息，渊澄取映。 resound. chuān liú bù xī, yuān chéng qǚ yìng ※ 罔谈彼短，靡恃己长。 As constant as the rivers’ flow, wǎng tán bǐ duǎn, mí shì jǐ cháng ※ 祸因恶积，福缘善庆。 As clear as limpid pools will show. Refrain from talking how they huò yīn è jí, fú yuán shàn qìng fail, Nor feel so sure that you'll prevail. Disasters follow evil trade, And ※ 容止若思，言辞安定。 kindness with good luck is paid. róng zhǐ ruò sī, yán cí ān dìng ※ 信使可覆，器欲难量。 Behave with prudence or good xìn shǐ kě fù, qì yù nán liáng ※ 尺璧非宝，寸阴是竞。 thought, And speak with words in Whatever you promise, never chǐ bì fēi bǎo, cùn yīn shì jìng calmness wrought. break it, And be so tolerant that none A foot-size jade's no treasure in will make it. life, A moment's worth an earnest strife. (To be continued)

95 诚征来稿，优稿优酬 ule R 诚征来稿，优稿优酬 Wanted! Wanted!

Wanted! 诚征来稿，优稿优酬 China’s Foreign Trade

China’s ForeignContributions Trade to China’s Foreign Trade Contributions to

China’s Foreign Trade is a monthly magazine in English on economics and foreign trade. It combines recent business news with the opinions of various industry experts. Since its debut in 1956, China’s Foreign Trade has been an important bridge for the promotion of international cooperation, economic exchange and foreign tradeContributions between China and to the rest of the world. Building the Magazine has always been a cooperative effort and we need your input. If you have a great idea or other information related to economics or international trade that you are free to share and feel would be of interest to others, please forward it with your detailed contact information to us via E-mail: [email protected]. Your contribution can be as simple as a tip for solving a difficult implementation issue or as complex as an essay clarifying the aspects of a new policy, but please write around 1,200 English words for one article. See the list of our columns and recently published articles for ideas about what we are looking for. Also, if there is anything that you would like to read from our magazine, please let us know. Let’s share and build a better magazine together! Your contributions to China’s Foreign Trade are more than welcome! Editorial Department of China’s Foreign Trade Magazine

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