China Economy Forum

[CardSharp]

Dai Bingguo: China's Peaceful Development Is Good for America - WSJ.com

"China's Peaceful Development Is Good for America
By DAI BINGGUO
MAY 9, 2011, 9:32 P.M. ET

But first both sides need to build a relationship of equality and mutual trust.

Hillary Clinton (right) toasts Hu Jintao during his visit to Washington in January. (Reuters)

Funny how Hilary was bad-mouthing China and predicting that the collapse of the Chinese government and the people there just shrugged it off. Guess it shows how much China cares what US says now.

Hillary Clinton: China reaction a 'fool's errand' - Telegraph

 

[Brotherhood]

Tianjin eyes more FDI in 2011 - People's Daily Online May 19, 2011

The final assembly line for the Airbus A320 in Tianjin. Emerging industries, including aerospace, biotechnology and a new generation of information technology are expected to account for 30 percent of the northern port city's GDP by the end of 2015. (Photo / China Daily)

China's northern port city of Tianjin is expected to see an increase in foreign investment in 2011, partly due to the city's efforts in improving its soft environment, a senior city official said.

Yang Dongliang, executive vice-mayor of Tianjin municipality, told China Daily that the scale of foreign investment to be utilized by the city in 2011 is very likely to be "no less than" last year's, despite the stricter criteria in project selection.

The city attracted a record $10.8 billion foreign direct investment in 2010, up 20.3 percent compared with the previous year.

"Tianjin maintains strong momentum in attracting foreign investment, as investors with real strength prefer business efficiency, better services and high-level labor resources to preferential policies," Yang said in an interview during the three-day China-Europe High-level Political Parties Forum.

The city is also making efforts in building a low-carbon economy and has accordingly raised standards on project selection for investors.

In addition to high energy-consuming and high-polluting projects, low-end processing projects, largely relying on cheap labor costs, are no longer welcomed by the city.

"The strategy for utilizing investment for the next five years has been fine-tuned. We are paying more attention to investors' vision and sustainable developments, including projects that present potential benefits to the industry," Yang said.

The improvement of the soft environment is the key issue for attracting more high-quality investment, he said.

Many Fortune Global 500 companies have invested and established branches in Tianjin. And its Binhai New Area, an industrial park, has been set as an economic growth engine for the nation.

Jean-Luc Charles, general manager of the Airbus Tianjin, a joint venture between Airbus SA and Tianjin Aviation Industry Investment Company Ltd, called Tianjin a city that "never stops".

"I have been living in Tianjin for more than three years and have seen what is happening here.

"New enterprises and new buildings emerge every day; the pace of growth is visible and impressive," he said.

It took the joint venture around 18 months from constructing a factory to getting the aircraft assembly operations started in August 2008. In early June, Airbus Tianjin will be on stream to deliver 50 aircraft, he said.

Emerging industries including aerospace, biotechnology and a new generation of information technology are expected to account for 30 percent of Tianjin city's GDP by the end of 2015.

In addition, the city has aggressive plans for its service sector and urbanization, which are expected to create new opportunities for investors.

The service industry will account for more than 50 percent of the city's GDP by the end of 2015, from 45.3 percent in 2010, according to the city's 12th Five-Year Plan (2011-2015).

Tianjin will invest 75 million yuan ($11.5 million) during the next five years to build the service industry, including modern logistics, exhibitions, technology consulting services, and financial leasing, said Zhang Zhiqiang, the director of the Tianjin Development and Reform Commission.

The city also plans to spend 25 million yuan on new rural construction during the next five years, he said.

Source: China Daily

 

[Brotherhood]

Yuan may be fully convertible in "3-5 yrs" - People's Daily Online May 21, 2011

A senior economist has said China could achieve full convertibility of the yuan in three to five years - much sooner than previous forecasts.

Xiang Songzuo, deputy director of the International Monetary Institute with Renmin University of China, told China Daily on Friday that full convertibility of the yuan could be achieved within that time span, citing sources from the central bank.

It is the earliest estimate for the full convertibility of the yuan, as most other experts have said such a move was about a decade away.

The People's Bank of China, the country's central bank, declined to comment on Friday.

Wu Xiaoqiu, senior finance professor of Renmin University of China, said it is possible for China to achieve full convertibility of the yuan by 2015.

"The yuan could become familiar to global investors very soon and become a global reserve currency," he said.

The World Bank said in a report on Tuesday that by 2025 the yuan could become a major global currency together with the US dollar and the euro - echoing China's rising say in the world economy.

The dollar, the predominant global reserve currency, has had its credibility dented as the loose monetary policies of the United States damaged the interests of other countries, including China, analysts said. The euro, on the other hand, is suffering setbacks as Europe encounters financial turbulence.

Currently, the Chinese currency is not freely convertible for foreign direct investment and securities transactions, as the country is fearful of possible financial turbulence caused by abnormal capital flows.

Zhou Xiaochuan, the central bank chief, said at the Lujiazui Forum in Shanghai on Friday that when cross-border use of the yuan hits a certain level, there will be a natural demand for full convertibility.

China has been trying to improve the yuan's global clout by encouraging its use in foreign trade and investment.

Zhou's remark to "cautiously" allow the yuan to be used in cross-border financial deals would mark a further step to making it a major world reserve currency.

China launched a pilot program in 2009 to allow banks to conduct trade settlements using the yuan in four cities.

The scheme has been expanded to 20 provincial regions, with the volume of cross-border settlements reaching 530 billion yuan ($81.5 billion) in the first four months of this year, Li Bo, a senior central bank official, told the Shanghai forum.

Li added the practice of cross-border yuan-denominated trade settlement will be extended throughout China this year.

Li said the central bank is also working on rules to allow yuan-denominated foreign direct investment.

China's foreign trade volume could hit $3.9 trillion this year, with yuan-denominated trade settlements reaching $200 billion - 5.1 percent of the total trade - up from about 2.6 percent in 2010, said Anthony Lin, Shanghai general manager of Standard Chartered Bank (China) Ltd on Friday.

"Based on my understanding, the move will probably allow foreign central banks to buy Chinese government bonds and the yuan through bond-issuing in Hong Kong to invest in the mainland," said Peng Wensheng, chief economist with China International Capital Corp Ltd.

"That means more capital inflows, and that will put pressure on China's monetary policy."

Lu Zhengwei, chief economist of the Industrial Bank, also said the increased cross-border use of the yuan will increase the amount of yuan in offshore accounts, opening up the possibility of speculative activities that threaten to destabilize the yuan's exchange rate.

"The yuan's increased cross-border use is a mixed blessing. I couldn't agree more that it should be conducted cautiously."

Xiang with Renmin University said the government should regulate capital inflows and outflows to prevent risks.

"It doesn't mean China will let foreign capital come and go without any restriction. It still has regulations in place to monitor capital flows, just like other developed countries do," he told China Daily.

Source: China Daily

 

[Huan]

That map of China in the post above always bothers me when Aksai Chin is not included as part of China. Folks, we need to stop using India's or the Western version of China's borders. C'mon, I'm serious. We need to start using Beijing's version of China's borders from now on that would at least include Aksai Chin as part of the PRC.

 

[Brotherhood]

That map of China in the post above always bothers me when Aksai Chin is not included as part of China. Folks, we need to stop using India's or the Western version of China's borders. C'mon, I'm serious.

Bro, points taken, my bad, post edited. Thanks.

 

[Brotherhood]

Nanjing South station of Beijing-Shanghai high-speed railway near completion - People's Daily Online May 23, 2011

A worker walks downstairs in the Nanjing South Railway Station, one of the five major stops of the Beijing-Shanghai high-speed railway, which is near completion in Nanjing, capital of east China's Jiangsu Province, May 22, 2011. The Nanjing South Railway Station, covering an area of 458,000 square meters, or 6 times of the current Nanjing station, has reached the end of construction and is expected to be put into use in late June this year. (Xinhua/Wang Xin)

 

[Brotherhood]

Sino-African fund set to swell in five years - People's Daily Online May 24, 2011

Workers hang a banner for the FIFA World Cup from a cooling tower in Johannesburg, South Africa, in June. Chinese investment in Africa exceeded $1 billion in 2010 from tens of millions of US dollars in 2000. Provided to China Daily

The China-Africa Development (CAD) fund, the country's biggest equity fund targeting African investments, is set to expand to $5 billion in the coming five years, said Chi Jianxin, president of the fund.

"We expect to finish raising the fund's second phase of $2 billion by the end of this year and will kick off the third phase afterwards," Chi said in an exclusive interview with China Daily.

Based on current operations, the size of the fund may eventually exceed $5 billion, even though several conditions, such as an efficient exit channel, are required, he said.

The CAD fund was set up in 2007 as China's major investment vehicle in Africa, after President Hu Jintao pledged to establish it at the Beijing Summit on China-Africa Cooperation in 2006.

An initial sum of $1 billion was provided by China Development Bank (CDB), and the fund was planned to expand to $5 billion finally, although no specific timetable had been drawn up.

CDB will also help in the second phase fundraising, said Chi, who was the director of CDB's Investment Banking Department before his appointment as president of the fund upon its foundation.

"We expect more capital from other institutions will join in during the third round of capital raising," he said.

So far, the fund has decided to invest $1.3 billion, including $600 million that has already been invested, in more than 40 projects covering more than 20 countries on the African continent.

"We're very cautious on our investments when making decisions, " Chi said. The fund's investment focuses mainly on the processing industry, including construction materials, automobiles, and household electrical appliances, in addition to agriculture, mining, and infrastructure areas.

All the projects will facilitate more than $5 billion additional capital investment to the continent, and will provide more than 100,000 jobs, Chi said.

The fund, for instance, is in talks with Chery Automobile Co to invest in an automotive assembly plant project in Africa.

Buoyed by Chinese investors' feverish enthusiasm in Africa, China's investment in Africa surpassed $1 billion in 2010 from mere tens of millions of US dollars in 2000. Meanwhile, bilateral trade in 2010 rose to $124 billion, more than 11 times higher than in 2000, according to Xinhua News Agency reports.

The central government is urging that equal importance be given to attracting foreign investment and encouraging domestic investors to go abroad during the 12th Five-Year Plan period (2011-2015), the first time the country has emphasized overseas investment and will spur even more domestic investment to go abroad, analysts said.

"We plan to invest more in 'mega projects' within the next five years, such as transportation and harbor construction," Chi said. "As a financial investor, we're also actively seeking partnerships with domestic strategic investors for big projects."

In addition, Chi said that the fund has started adopting a mergers-and-acquisitions (M&A) strategy to curtail the investment period.

"We will seek some M&A opportunities in the future to offset the longer cycle of new projects starting from zero," Chi said.

So far, the fund has set up offices in South Africa, the continent's biggest economy, Ethiopia, which has attracted a number of projects, and Zambia. The fund is also planning to set up additional offices in countries in western and northern Africa.

Source: China Daily

 

[Brotherhood]

China Exclusive: After 3 years and nearly a billion dollars, jumbo deepwater rig delivered to CNOOC - People's Daily Online May 24, 2011

A 3,000-meter deepwater jumbo oil drilling platform was delivered in Shanghai Monday to China National Offshore Oil Corp. (CNOOC), the country's largest offshore oil producer, the latest step for China as it seeks more energy from the ocean.

It took 6 billion yuan (923 million U.S. dollars) of investment and more than three years for China State Shipbuilding Corp. (CSSC), the contractor, to build the CNOOC 981 rig for the offshore oil giant.

The platform is 114 meters long, 90 meters wide and 137.8 meters high, and weighs 31,000 tonnes. With a deck the size of a standard football field, the rig is capable of undertaking an offshore operation at a maximum water depth of 3,000 meters and drilling a length of 12,000 meters, according to CSSC.

Equipped with third-generation dynamic and global positioning systems, the CNOOC 981 can withstand the vibrations brought by a massive typhoon.

Zhang Guobao, director of the Committee of Experts with the National Energy Commission, said the successful construction of the rig would have a strategic significance for China to boost deepwater oil drilling capability and help secure national marine resources.

"It will also help achieve the goal set by our national strategic plan," said Zhang, former head of China's National Energy Administration.

China relies on imports for more than half of its oil consumption, so it's eager to diversify its energy sources on land and through deepwater drilling to fuel its robust economic growth.

Wang Yilin, Chairman of CNOOC, said the company sees the delivery of the jumbo rig as a good opportunity to strengthen its efforts in deepwater oil exploration and ensure energy security for the country.

According to CNOOC, the rig will be installed in waters of the South China Sea and begin oil and gas prospecting in July.

The South China Sea is one of the most important natural gas and oil production bases for CNOOC, which produced more than 50 million tonnes of oil equivalent in China's marine areas last year.

CNOOC plans to invest 200 billion yuan and drill 800 deepwater wells and raise its deepwater oil and gas output to 500 million oil equivalent by 2020.

China imported 84.96 million tonnes of crude oil in the first four months this year, up 11.5 percent from a year earlier, while imports of refined oil products rose 18.6 percent year-on-year to 14.25 million tonnes in the period, according to government statistics.

Source: Xinhua

 

[中国万岁-ProsperThroughCo-]

Intel joins Beijing push with executive move

By Kathrin Hille in Beijing and Rahul Jacob in Hong Kong

Published: May 24 2011 20 :47 | Last updated: May 24 2011 20 :47

Intel is moving Sean Maloney, one of its most senior executives, to Beijing as chairman of its China operations, reflecting the rise of China as one of the world’s most important markets for multinationals.

Mr Maloney, an executive vice-president who heads Intel’s architecture group in Silicon Valley in California, has in the past been mentioned as a potential successor to Paul Otellini, Intel’s chief executive.

“[It is] an unprecedented move for Intel to place one of its most senior executives in China,” the company said. “It underscores the importance of China, which is expected to become the single largest PC consumption market for Intel next year.”

The move follows the recent relocation to Hong Kong of other senior manufacturing executives.

Observers say multinationals increasingly view China as a market so crucial that they are ensuring their top executives gain a direct and thorough understanding of, and build personal relationships in, the market.

“Companies are looking at China as a second home market,” said Joseph Ngai at McKinsey in Hong Kong. This meant building relationships with government and regulators, just as they would in their home markets, he said.

In December, Caterpillar, the world’s biggest maker of earthmoving equipment by revenue, moved group president Rich Lavin from the US to Hong Kong – the first time the company put a member of its executive office in Asia.

In January John Rice, a vice-chairman at General Electric, was appointed to head the company’s global operations – all business outside the US – from Hong Kong. He was previously based in GE’s headquarters in the US.

Ford Motor was an even earlier mover, shifting its regional headquarters for Asia-Pacific and Africa from Bangkok to Shanghai in 2009, locating functional executives for the region for manufacturing, product development, purchasing and PR in China for the first time.

Analysts said there were strong logistical reasons for moving senior executives close to the Chinese market. “Face-to-face meetings are very important,” Mr Ngai said.

A recent study by the European Union Chamber of Commerce in China and Roland Berger Strategy Consultants showed that 24 multinationals, including Walt Disney, Kraft Foods and Novartis, last year announced plans to shift regional headquarters to Shanghai.

The number of multinationals with regional headquarters in Shanghai rose from 224 in 2008 to 305 in 2010, including 74 Fortune Global 500 companies, according to the Shanghai statistics bureau.

Intel said Mr Maloney would take up the new position as chairman of Intel China and relocate to Beijing for two to three years.

Ian Yang, president of Intel China, will continue to serve in his position.
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Infosys to build campus in Shanghai

May 24, 2011 4:28 pm by Girija Shivakumar

India’s global outsourcing industry, one of the most successful in the world, has been quick to recognise the potential demand and competition from its bigger neighbour, China.

Now Infosys (INFOSYSTCH:NSI), India’s second biggest software services exporter, is making its biggest ever investment outside India to set up a swanky state of the art campus in Shanghai.

Infosys plans to invest a whopping $125m to $150m on a sprawling, 15 acre site to be developed over a period of three years. The campus will be equipped with software development labs, data centres, training facilities, food courts and a 1,500-seater auditorium.

“China has demonstrated an extraordinary pace of growth. Such growth cannot be sustained unless it is backed up by scalable, easily maintainable, easily available and easily usable information systems. That is where we believe that there is opportunity in China for us,” N R Narayana Murthy, Infosys chairman (second left in picture), told the Times of India.

Currently, Infosys China employs nearly 3,300 people. The company plans to triple its workforce in a bid for rapid expansion.

Rangarajan Vellamore, chief executive officer of Infosys Technologies, China said:


With this large investment and enhanced capability we will aim to lead service capability out of China to the global and local markets for business transformation and operations. When this campus is completed we expect to have over 10,000 employees in Shanghai alone.

While the Chinese IT services market is growing, it is dominated by mostly global companies including Indian IT majors such as Wipro, TCS and Mahindra Satyam. With Infosys now making its biggest overseas commitment there, it seem Indian companies are bent on tightening their grip on China’s bulging IT market.

 

[Brotherhood]

China becomes world's biggest market for gold investment - People's Daily Online May 23, 2011

In the first quarter of 2011, China's gold demand grew rapidly, and China has overtaken India to become the world's biggest market for gold investment, according to the "Gold Demand Trend Report" recently released by the World Gold Council (WGC).

The report indicates that Chinese investors purchased a total of 90.9 tons of gold bars and coins in the first quarter, which is twice the amount of the same period last year and higher than India's 85.6 tons. In terms of the demand for gold investment, China is also 2 percent higher than India's 23 percent.

The report also shows that in the first quarter of 2011, China's total demand for gold was 981.3 tons, the demand for trading gold bars and coins rose by 52 percent, and the average gold prices increased by 25 percent. The sharp rise of gold purchases is basically the result of the demand for investment.

Furthermore, the gold price dropped by 8 percent at the end of January to 1,300 U.S. dollars per ounce, which also created a promising opportunity for investors. As for the growth of China's demand, the WGC thinks that since China's inflation expectations have not yet decreased, the wealth preservation function of gold is still one of the main factors behind the investment craze.

Recently lots of banks and jewelry stores in China have added gold sales services. Eily Ong, investment research manager of the WGC, thinks that the surging demand for gold in China is surely astonishing, but he thinks the trend will continue.

Although China has overtaken Indian to become the world's biggest market for gold investment in the domain of gold bars and coins, India is still recognized as the world's largest market for gold trade. Based on the quarterly report by the WGC, if jewelry consumption and other forms of personal consumption are taken into account, India's demand is still higher than China's.

In addition, as China is becoming the center for electronic components manufacturing and assembly, demand for gold in technology sectors is still on the rise.

By People's Daily Online

 

[Brotherhood]

Chinese aircraft maker to sell four MA60 to Peruvian airline - People's Daily Online May 25, 2011

AVIC Xi'an Aircraft Industry (Group) Co., maker of Modern Ark 60 (MA60) passenger planes, confirmed Tuesday that it had signed a contract to sell four MA60s to a Peruvian airline express company.

The MA60, which was introduced in the year 2000, is China's only domestically-developed regional passenger aircraft in service. Its success at home and in the international market has greatly enhanced the company's reputation, said an official with the company.

MA60 aircraft have been delivered to fourteen countries in Asia, Africa and South America and are in use on more than 100 routes, according to company statistics.

An MA60 passenger plane, which was en route from the city of Sorong to the town of Kaimana in Indonesia's West Papua, crashed into the sea at approximately 1 p.m. local time on May 7, killing all 25 passengers and crew. A preliminary investigation suggested that the cause of the crash was due to pilot error. It was the first fatal accident for an MA60.

Source: Xinhua

 

[Brotherhood]

China's mobile phone users exceed 900 million: MIIT - People's Daily Online May 25, 2011

China's cell phone user grew by 41.39 million in the first four months of 2011 to 900.39 million in total, covering nearly two-thirds of the nation's population, according to the Ministry of Industry and Information Technology (MIIT).

The number of telephone subscribers exceeded 1.19 billion by the end of April, with the number of fixed-line subscribers dropping by 2.93 million to 291.45 million, according to statistics released Tuesday by the MIIT on its website.

By the end of April, third generation (3G) mobile telecommunication users in China reached 67.57 million, 20.52 million more than that of the end of 2010.

The number of broadband Internet users increased by 9.58 million in the Jan.-April period to 135.92 million, while the number of dial-up connection users dropped by 130,000 to 5.77 million.

China's telecommunication industry reported a 9.4 percent growth year- on-year in main business revenue for the first four months to 308.36 billion yuan (47.44 billion US. dollars), said the MIIT.

Source:Xinhua

 

[Brotherhood]

Three Gorges' new turbine generator starts to function - People's Daily Online May 25, 2011

Photo taken on May 24, 2011 shows the interior of the Three Gorges' underground power station in Yichang, central China's Hubei Province. The No. 32 turbine generator in the underground power station started to function Tuesday. No. 32 turbine is one of six 700,000-kilowatt turbine generators designed to be installed on the underground power station, which are expected to put into use in succession within two years. (Xinhua/Zheng Jiayu)

A technicist monitors the operation of a turbine generator at the Three Gorges' underground power station in Yichang, central China's Hubei Province, May 24, 2011. The No. 32 turbine generator in the underground power station started to function Tuesday. No. 32 turbine is one of six 700,000-kilowatt turbine generators designed to be installed on the underground power station, which are expected to put into use in succession within two years. (Xinhua/Zheng Jiayu)

Photo taken on May 24, 2011 shows a ceremony marking the functioning of the No. 32 turbine generator at the Three Gorges' underground power station in Yichang, central China's Hubei Province. The No. 32 turbine is one of six 700,000-kilowatt turbine generators designed to be installed on the underground power station, which are expected to put into use within two years. (Xinhua/Zheng Jiayu)

Technicists check the No. 32 turbine generator while it is operating at the Three Gorges' underground power station in Yichang, central China's Hubei Province, May 24, 2011. The No. 32 turbine generator started to function Tuesday. No. 32 turbine is one of six 700,000-kilowatt turbine generators designed to be installed on the underground power station, which are expected to put into use in succession within two years. (Xinhua/Zheng Jiayu)

Photo taken on May 24, 2011 shows a ceremony marking the functioning of the No. 32 turbine generator at the Three Gorges' underground power station in Yichang, central China's Hubei Province. The No. 32 turbine is one of six 700,000-kilowatt turbine generators designed to be installed on the underground power station, which are expected to put into use in succession within two years. (Xinhua/Zheng Jiayu)

 

[Brotherhood]

China to invest 30 billion yuan in basic public health - People's Daily Online May 25, 2011

China has increased per capita spending on public health services for Chinese mainlanders from 15 yuan to 25 yuan in 2011, which means the total financial investment of all levels of governments will reach more than 30 billion yuan, an official revealed at a press conference on May 24.

Qin Huaijin, an official from China's Ministry of Health, said China launched the program of basic public health services in July of 2009, and it has achieved progress so far.

As of 2010, China had established the health files for 48.7 percent of urban citizens and 38.1 percent of rural citizens; 84 percent of pregnant women and 81.5 percent of kids below 3 years old were put into system management; 57 million people aged 65 years and older received physicals; in addition, millions of various other kinds of patients were also put into the system management, including elevated blood pressure patients, diabetics and severely mentally ill patients.

Qin said the ministry issued an administrative measure on information disclosure of medical and health service units last year. It requires domestic units carrying state basic public health service programs to disclose their service items, funds standards and service targets.

However, Qin also said there are some units that provide basic public health services but do not get any funds, and some local governments even put the money for the program toward other uses, such as buying equipment and building infrastructure.

Regarding the aforementioned situations, Qin emphasized that, "China will strengthen the management for funds and complete the system for basic public service programs. Where the money goes and whether it can be used in the right places will become measures for examining all levels of governments."

By Wang Hanlu, People's Daily Online

 

[Brotherhood]

First BRT lane opens in Beijing - People's Daily Online May 25, 2011

On May 24, two buses are running on the BRT lane of the Beijing Link Road.


The first special BRT lane on the Beijing Link Road opened on May 24, which is 8.6 kilometers and 8.8 kilometers long to and from Beijing, respectively.

The 18 lines of buses running on the BRT lane will raise their capacities in rush hours in order to relieve the traffic pressure of the Beijing Link Road and the Beijing Subway Batong Line. The use of the BRT line will shorten the time from Siliqiao to Sihuidong from 20 minutes to 9 minutes and at the same time reduce the load factor of the Beijing Link Road from 135 percent to 114 percent.

On May 24, a bus is running on the BRT lan