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Akzo Nobel switches focus in China
By Patti Waldmeir in Shanghai
Published: November 12 2010 09:57 | Last updated: November 12 2010 09:57
China’s shift from an export-led economy to domestic consumption led-growth will make it harder for foreign businesses to compete in China, but complaints about a worsening atmosphere for foreign investment are overstated, according to Hans Wijers, chief executive of Akzo Nobel.

In an interview in Shanghai Mr Wijers said: “People seem a little bit naïve about China.

“It has its challenges but it is still very attractive. This market grows: markets in Europe don’t grow.”

The Dutch paints and chemicals company recently announced plans to double revenues on the mainland – where it is the market leader – from $1.5bn last year to $3bn in 2015.

Mr Wijers, in China to open a $375m production facility in Ningbo said complaints about rising labour costs in China, and government protectionism, were overdone.

“In the US, we don’t have a level playing field in certain markets either, it’s part of doing business in the world.


“We get more access to Chinese markets than we get to [in] Japan”.

His comments highlight the fact that foreign business in China is not unanimous in echoing high profile complaints about the investment atmosphere in China. The European Chamber of Commerce in China and several western businessmen have criticised Beijing for imposing unfair restrictions on foreign business and forcing multinationals to transfer technical know-how to Chinese companies in exchange for market access.

Companies such as Akzo Nobel are less affected by Beijing’s policies to favour so-called “indigenous innovation” than some companies in high technology and new energy.

Mr Wijers said China could become his company’s top market within five years, and certainly within a decade: currently China is Akzo Nobel’s second-largest market after the US.

Beijing’s focus on fuelling domestic consumption-led growth has created challenges for companies such as Akzo Nobel, as it adjusts from serving export demand to meeting domestic demand.

Mr Wijers said “It’s going to be a different game”.

Competing against Chinese companies would be tougher because they “understand some aspects of the Chinese market better”.

“It becomes more and more important to understand what being local implies. We have to become more Chinese,” he said,

That included using Chinese staff to fill more senior positions.

But he said competing for local staff was becoming more difficult: “There is a war for talent going on and it is not just a war between foreign companies”.

Chinese companies were becoming more competitive as employers.

A study published on Wednesday by Manpower, the US employment company, says foreign companies are beginning to lose their long-held advantage in recruiting local Chinese staff, as more Chinese senior managers choose domestic over foreign employers because they may pay more and offer better opportunities for advancement.

(fact box)
Vestas views subsidiary as Chinese company

Ditlev Engel, Vestas chief executive, said his 3,000 staff in China could be viewed as a Chinese company, writes Christian Oliver in Seoul.

Being considered part of the family in China is crucial for the world’s top wind turbine-maker, which views the country as more than a potential market. It announced in October that it would open a research and development centre in Beijing, which Mr Engel argued could help Vestas compete in a wind business that is scrambling for patents as competitively as the pharmaceuticals industry.

He said that China invested $34.6bn in clean energy last year compared with $18.6bn in the US.
 
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BBC World Service - Business - China's currency war is 'fiction'

"China's currency war is 'fiction'
Last updated: 12 November, 2010 - 17:13 GMT

The idea that China is at the front of a currency war with the dollar and euro is simply a "romantic fiction", and in fact the yuan has risen by almost 25% against the dollar over the past five years, says noted currency economist Jim O'Neill.

jimoneill226x283nocredi.jpg

Jim O'Neill, the chairman of Goldman Sachs Asset Management

The G20 summit ended with rather vague promises and delayed decisions. There had been talk of targets to settle trade and currency disputes. But the communique only promised new guidelines to identify "large imbalances that require preventive and corrective actions".

World Business News's Mike Johnson asked Jim O'Neill, the chairman of Goldman Sachs Asset Management, what the new currency guidelines might look like:

The transcript is below.

Jim O'Neill: Ah good question. You know, importantly as ambitious and as complex as that could be, importantly they're starting from a position where in my judgement global imbalances are already improving.

We had the latest Chinese trade data earlier this week - we've had ten months of the year - China's trade surplus is going to be not much more than 3% of GDP, which is less than half what it was three years ago. Even though the US current account deficit remains large, it is also about half the level it was three years ago. So these two that are at the core of this global issue, and by making some broad commitments, at a minimum it means there's focus on it to make sure policies in both those countries aren't geared towards making those imbalances grow further.

So, it is difficult to find the exact critieria to guide definitive current account target planning, but they're starting from a reasonably strong position of things growing in the right direction, anyhow.

MJ: So do you think, in some senses, this issue of global imbalances - some countries exporting too much, other countries not consuming enough - is that going to just simply resolve itself, for the reasons you've talked about with the Chinese allowing their currency to rise a little bit in recent weeks?

JO'N: Well, I was in Asia myself for much of the preceding two weeks, and on some of these well-used phrases that we use so much here in the UK and the States, you know, many Asian policymakers call the global credit crisis the north Atlantic crisis. You know, the world doesn't look the same as seen from an Asian lens as it does from a European or US one. And European leaders have to realise that.

The second thing is, the Chinese currency has now risen over the past five years by close to 25% against the dollar, and nearly that much against the euro as well. So - so this idea that the Chinese are at the front of some currency war is like some kind of romantic fiction of people's minds - and it's a slightly dangerous one in that as well.

MJ: And what do you think the outcome of this G20 tells us about any new balance of power in the global economy, because it seems that by no means is China being pushed around by the likes of the United States on the issue of currency strength?

JO'N: Well, I think that's certainly one of the features of it, and of course the whole advent of the G20 was done to bring in China and the other so-called BRIC nations into the centre of global policymaking.

One of the consequences of that, which is now perhaps dawning on the US and Europe, is that they're going to hear a different view and ones with a different tone and opinion. But that's the nature of the modern globalised economy and the US and others have got to realise that."
 
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China's IPO awards show patents mean profits - People's Daily Online November 14, 2010

China's industries on Saturday once again realized the value of innovation when 15 patent-holders were honored for outstanding patent inventions.

The prize winners were named at the 12th awards ceremony sponsored by the State Intellectual Property Office (SIPO) and the World Intellectual Property Organization (WIPO).

The winners included Huawei Technologies, China's leading telecommunications equipment maker, for innovations in data transfer, and the Sany Group, a major heavy construction equipment producer, for energy-saving developments for concrete pumps.

Daya Bay Nuclear Power Operations and Management Co., Ltd. won a prize for its control system of nuclear power units.

Other winners included China Petroleum and Chemical Corporation, the Xi'an-based China IWNCOMM Co., Ltd, a leading company in network security technology, and Tencent, one of China's largest internet service portals.

By the end of last year, the exploitation of the 15 patents had helped their owners, including companies, research institutes and colleges, increase profits by 16.8 billion yuan (2.5 billion U.S. dollars), according to the SIPO.

Another 181 patents were awarded prizes for excellent scientific and technological innovation.

Since the award was established in 1989, a total of 160 patents have won the top prize and another 1,178 patents received excellence awards.

"This award plays an important role in enhancing China's innovation capability," Tian Lipu, director of the SIPO, said. It also set a good example in the nationwide campaign to protect intellectual property.

According to a national development strategy plan released Thursday by the SIPO, China will reach a "comparatively high" level in terms of patent creations, commercialization, protection and management by 2020.

The country is also aspiring to have a group of core patents for emerging industries and key technologies in traditional industries within the next 10 years, with patent applications from large industrial companies accounting for 10 percent of the total.

According to the SIPO, last year, while patent applications declined in most countries amid the global economic downturn, China approved 582,000 out of 977,000 patent applications, up 41.2 percent and 17.9 percent respectively.

By the end of last year, of 1.52 million patents registered in China, 1.19 million were domestic. China had the world's fifth highest number of total patent applications.

A Thomson Reuters analysis of intellectual property earlier this month showed China was expected to lead in global patent activities by 2011, with significant rises in both the quality and quantity of patents.

By 2009, China had more than 700 patent agencies and some 6,000 patent agency workers.

Source: Xinhua
 
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Chinese leader calls for coordination in cross-strait dealings
Central News Agency

Yokohama
Lien Chan, Taiwan's presidential envoy to the Asia Pacific Economic Cooperation (APEC) forum leadership summit, said Saturday that Chinese President Hu Jintao had spoken with him about the need to deal with cross-strait interaction through coordination.

Lien, who met Hu on the sidelines of the summit, said that the Chinese president told him by way of example that the two sides of the strait could discuss Taiwan's participation in the international community, such as Taiwanese civic groups participating in non-government organizations.

If both sides can discuss such matters through "communication and coordination, " they can avoid unnecessary attrition and solve problems in an appropriate way, Lien cited Hu as saying.

Lien was asked later if Hu's remarks were referring to a recent cross-strait row over Taiwan's name at the Tokyo Film Festival last month during which the Chinese delegation leader asked Taiwan to use the name "Taiwan, China" or "Chinese Taipei, " which was flatly rejected by Taiwan.

Lien noted that for a long time, such spats have taken place at non-government organization events.

Lien said he expressed clearly his stance to Hu that no matter what, " Taiwan should not be excluded."

He said that Taiwan has participated in many non-government organizations, even more than China, and that Taiwanese people hope that such participation can proceed smoothly.

Lien also met with other APEC leaders that same day and paid tribute to Chilean President Sebastian Pinera on leading the rescue efforts to save 33 miners trapped underground for more than two months.

Lien also expressed concern about Indonesia's volcanic eruption to Indonesian President Susilo Bambang Yudhoyono, who spoke of the close economic cooperation between the two countries, such as a project to jointly develop the island of Morotai.

Lien also congratulated some newcomers to the APEC meeting, including Australian Prime Minister Julia Gillard, who was elected in June. (By Lin Ye-fong and Lilian Wu)
 
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The following new 3-day-old video already has 258,377 views. It performs an excellent job in explaining the U.S. government's "Quantitative Easing" in understandable terms.

The video is relevant to China, because the United States has accused China of currency manipulation to gain an unfair trade advantage (e.g. to sell Chinese goods at a lower price on the world market). However, as Goldman Sachs' Jim O'Neill has noted, China's currency has actually appreciated by 25% during the past five years (e.g. Chinese goods cost 25% more on the world market than five years ago).

Instead, it is the U.S. that has been engaged in currency manipulation. The federal government has printed $2.6 trillion dollars in the last two years to depress the value of the U.S. dollar.

YouTube - Quantitative Easing Explained
 
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bladerunner said:
Some economists like krugman etc still claim that the yuan is undervalued considerably, some even siuggest its undervalued by another 30% or so.

Paul Krugman and his ilk are well-known China-bashers. It is easy to blame someone else for America's problems. Paul Krugman and his fellow demagogues use China as a convenient scapegoat. An objective person would ignore their extremist views.

Let's examine a more reasonable assessment of China's currency. Let's look at the complaint by some members of the US Congress in 2005.

Asia Times Online :: Asian news and current affairs
"Sep 21, 2005 - US President George W Bush and Chinese President Hu Jintao met at a New York hotel on September 13 on the eve of a UN summit they attended. .... Some members of the US Congress claim that the yuan is undervalued by at least 30% to 40%. US Federal Reserve chairman Alan Greenspan and ...
From Asia Times Online :: Asian news and current affairs"

Since 2005, China's currency has appreciated by 25%. That is pretty close in redressing the 30% to 40% undervaluation claimed by "some members of the US Congress" in 2005. After an appreciation of 25%, it is disingenuous for China-haters to keep claiming "another 30%" undervaluation. No fair person will buy that story.

Indeed, at the G-20, the other 19 countries refused to accept the U.S. position that China's currency is being manipulated and undervalued. The U.S. is isolated and alone in claiming "another 30%" undervaluation.

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G-20 summit: G-20 rejection leaves U.S. to go it alone - latimes.com

"G-20 rejection leaves U.S. to go it alone
G-20 summit leaders refused to assist the U.S. when they rejected a U.S. proposal to set limits on trade surpluses and deficits, and also turned down a U.S. effort to force China to raise the value of its currency.

By Don Lee, John M. Glionna and Christi Parsons, Los Angeles Times
November 12, 2010|1:30 p.m.

Reporting from Seoul, South Korea —
The Group of 20 summit ended Friday with a declaration of broad principles but no commitment to immediate action, signaling that the United States will have to go it alone in dealing with its fragile economy and near-double digit unemployment.

In their final declaration, leaders of the world's most powerful economies pledged to work together and to refrain from protectionism and competitive devaluation of currencies. They also agreed to take steps to promote growth in low-income countries.

But when it came to specifics, a U.S. proposal to set numerical limits on trade surpluses and deficits was rejected. Leaders of the world's 20 biggest economies pledged only to develop "indicative guidelines" to assess imbalances in the first half of next year.

They also refused to endorse a U.S. effort to force China to raise the value of its currency.

"Any sense of global solidarity looks to have been yesterday's story," said Tim Condon, chief economist at ING Financial Markets in Singapore.

Essentially, that left the administration — along with American workers, families and businesses — to shoulder the challenge and the likely pain of trying to solve the nation's economic problems on its own.

"Obama is now in a position where he must be prepared to act unilaterally to reduce the trade deficit and to shore up U.S. industrial and technological competitiveness or risk losing not only the presidency in two years, but also the American dream," said Clyde Prestowitz, a former Reagan administration trade negotiator and now president of the Economic Strategy Institute in Washington.

There are several possible scenarios going forward.

One is that the exporting giants, including China, Germany, South Korea, and Japan, could change their positions: If U.S. economic growth remains low, unemployment high and incomes stagnant, consumers could cut back on their purchases of imported goods — a development that could hit the exporting nations hard because there is no alternative market right now to absorb their output.

If demand for their products drops, the leaders who humbled Obama in Seoul might decide it was in their interest to do more to bolster the U.S. economy.

Another possibility is that American consumers will return to their free-spending ways — as a recent surge in imports suggest they might. That will mean more credit-card and other debt, as well as a potential for another financial crisis, unless consumers' spending power also accelerated. With unemployment seemingly stuck near 10% and businesses guarding their profit margins, a hefty round of salary increases looks like a long-shot.

A third possible scenario, and perhaps the most likely, is that the U.S. economy will continue to struggle, growing slowly in an atmosphere of high joblessness and belt-tightening for government and ordinary Americans alike.

Certainly there are things Obama and the federal government could do to brighten future prospects.

Many economists believe the United States could bolster its competitiveness in the global economy by investing more in research and education. But the benefits would be relatively long-term and would take new federal spending.

Given the prospect for partisan gridlock between the White House and emboldened congressional Republicans, such spending seems unlikely.

Even without congressional approval, there are other tools Obama could use.

He could cite China as a currency manipulator, if Beijing doesn't move more quickly in adjusting its undervalued yuan, setting in motion a process that could lead to sanctions. His administration could apply tariffs unilaterally on certain imports, or undertake a "Buy American" program, as Ohio has essentially done for government business.

But such actions are fraught with political as well as economic risks. As British Prime Minister David Cameron warned Thursday, they could lead to a dangerous return to what happened in the 1930s when trade barriers, currency wars and other selfish actions by countries prolonged the global depression.

Although nations now have the tools to reduce the intensity of the standoff, the possibility of a currency war "absolutely" remains, said Brazilian Finance Minister Guido Mantega upon the conclusion of the two-day summit.

Canada's Prime Minister Stephen Harper expressed similar concern, saying, " G-20 credibility does depend on showing results ... we cannot get out of this with beggar-thy-neighbor policies."

Obama sought to put an optimistic face on prospects for the future.

"Sometimes I think naturally there's an instinct to focus on the disagreements," the president said, when in fact "in each of these successive summits we've actually made progress."

He said there was not a lot of discussion about the Federal Reserve's recent plan to pump $600 billion into the U.S. financial system — effectively printing billions of dollars to spur U.S. growth.

The move has been widely criticized by other countries as a tactic to suppress the value of the dollar to help American exporters compete, though currency and other policies in the leading exporting nations are also designed to help their own economies.

America's large public debts and fiscal deficits also drew fire, especially with fiscally conservative nations such as Germany, which resisted U.S. pressure for high-saving nations to step up their consumption. Even stalwart American allies United Kingdom and Canada were reluctant to support stronger U.S. language in the declaration on rebalancing, given their own domestic commitments to fiscal restraint despite resistance from their people.

"I think it was always clear that the G-20 would be able to do little concrete on the imbalances, and it has indeed kicked the problem down the road," said Raghuram Rajan, a University of Chicago finance professor and former chief economist at the International Monetary Fund, which the G-20 has enlisted to help assess economic imbalances.

"The reality is that every large country will do what it thinks is best for its own agenda, and any help they offer one another will be indirect," Rajan said. "In the medium term, these agendas could converge, but the medium term is too long for political comfort."

Ethan Kim of the Los Angeles Times Seoul bureau contributed to this report."
 
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A potential solution to the problem of printing trillions of dollars by the U.S. government is to bypass the U.S. dollar and resort to Yuan-based trade. Unfortunately, this process takes time.

AFP: China official suggests wider use of yuan: report

"China official suggests wider use of yuan: report
(AFP) – 3 hours ago

yuanbasedtrade.jpg

China should reduce its dependence on global reserve currencies, a central bank official has been quoted as saying.

BEIJING — China should reduce its dependence on international reserve currencies, which have contributed to an "unstable" world monetary system, a central bank official was quoted Monday as saying.

Jin Zhongxia, deputy director-general of the People's Bank of China's international department, told a weekend forum that wider use of the yuan currency to settle accounts would help cut risks, the state-run China Daily reported.

"The existing international monetary system, centered on a small number of reserve currencies, is quite unstable," Jin was quoted as saying.

Jin expressed concerns about the dollar, whose value has been falling for three months, and US Federal Reserve moves to buy 600 billion dollars of government bonds to boost domestic growth, which could further drive down the dollar.


Over-printing of reserve currencies "places emerging economies in a dilemma," he said.

Chinese officials have repeatedly expressed concern over the Fed plan, warning it could lead to a flood of speculative investment funds into emerging economies.

Economies that peg their currencies to reserve currencies will thus face an increased risk of fund inflows, capital market bubbles and inflationary pressure, Jin said.

Those whose currencies float freely, on the other hand, face risks posed by exchange rate fluctuations, rising trade costs and variable economic conditions, he said.

Cross-border trade settlement in yuan effectively reduces the risks posed by exchange rate fluctuations to China's trade partners, Jin said.

China plans to boost yuan-denominated cross-border trade with other countries 10-fold to a fifth of its total trade, or more than 2.5 trillion yuan (376.7 billion dollars), the paper said, citing Jin, who did not specify a target date.

By the end of September, cross-border settlements in yuan amounted to 197.1 billion yuan between Chinese companies and 43 economies.
"
 
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Taikonaut in space

Chinese Female Taikonaut Identified

"Chinese Female Taikonaut Identified
by Tony Quine
Onchan, UK (SPX) Nov 16, 2010

wangyapingtaikonaut.jpg

Whilst China has not given official details of when it intends to send Captain Wang or her unidentified colleague into space, several statements from leading officials (including Yang Liwei, the first Chinese in space) strongly suggest that they are aiming for the two- or three-person Shenzhou 10 mission, which is currently planned to dock with the Tiangong 1 orbital module in late 2012.

Sources in China have confirmed the identity of one of the two female Air Force pilots currently vying to become China's first woman in space.

Captain Wang Yaping, 32, a Transport Pilot in the People's Liberation Army Air Force (PLAAF), and another currently unidentified colleague were selected in March, from a pool of fifteen female candidates, and joined five male jet fighter pilots to form China's second taikonaut group.

Wang had been widely identified in the Chinese media as one of five pilots from the province of Shandong included in the group of fifteen female candidates, but Chinese space officials had refused to name any of the seven new taikonauts actually chosen, even though the names of their fourteen colleagues, selected in 1996 and 1998 are widely known.

However sources in China, close to the Chinese manned space programme, have recently confirmed that Wang is now being trained at the Chinese Astronaut Training Centre, near Beijing, with another woman pilot.

Captain Wang was born in the prefecture of Yantai, in Shandong province, in April 1978. Her mother and father are farmers and she is reported to have two sisters. She is married to another PLAAF pilot, Zhao Peng, and probably has a child, as Chinese officials have previously said that only women who have already given birth would be considered for the taikonaut programme.

There are relatively few female pilots in the PLAAF, and as a result their career progress and any notable exploits are often reported in the Chinese media, and Captain Wang has featured in a number of such stories.

She is known to have joined the PLAAF as a cadet in 1997, one of 37 members of the so called '7th Generation' of female pilots, and graduated from Aviation University and flight school in 2001 with the rank of First Lieutenant.

In 2008, she was one of six female pilots who took part in relief flights after a major earthquake in Sichuan Province and later that year, she was reported to have been involved in flights related to cloud seeding and weather modification for the Olympic Games in Beijing. She has over 1,100 flying hours on her log book.

Whilst China has not given official details of when it intends to send Captain Wang or her unidentified colleague into space, several statements from leading officials (including Yang Liwei, the first Chinese in space) strongly suggest that they are aiming for the two- or three-person Shenzhou 10 mission, which is currently planned to dock with the Tiangong 1 orbital module in late 2012."
 
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Microsoft to enter China's second-tier city - People's Daily Online November 16, 2010

Microsoft China's Jinan branch office, in Shandong Province, will be put into operation next month at the soonest, according to the China Business News citing information from the Jinan Bureau of Commerce Saturday.

The move marks the first time for Microsoft to open a branch office in a second-tier city in China.

In October, Microsoft China had signed a memorandum of understanding (MOU) with the Jinan municipal government on the project, and the two sides are now actively promoting it, said Liang Xubin, chief economic manager of Jinan Bureau of Commerce.

Liang did not disclose the project's registered capital, but said the branch will play as a platform enterprise in Jinan which will in no time, attract related firms to the city.

"In five-years time, Microsoft will attract over 40 IT and outsourcing companies to Jinan, creating job opportunities for 15,000 people, and bringing revenues of up to 5 billion yuan ($748 million) to the city," added Liang.

"Inviting companies like Microsoft to Jinan will help the city boost its outsourcing business and may further promote Jinan to be a first-tier city," he said.

Source: Global Times
 
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Moving from GDP to PPP - People's Daily Online November 16, 2010

China will join the International Comparison Program next year. That means the country's GDP can be converted to purchasing power parity (PPP) based on internationally-accepted methodology, allowing the economy to be compared with others on a more objective basis, the financial news website Caing.com said on Monday.

An inter-minister coordination team headed by the National Bureau of Statistics and the Ministry of Finance was formed recently to coordinate the move, it reported.

Source:China Daily
 
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c919a.jpg

A frontal view of China's COMAC C919 large-body jet.

c919b.jpg

Welcome aboard for a guided tour of the C919!

c919fresized.jpg

C919 cockpit includes HUD displays for the captain and co-pilot.

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A closer look at the C919 cockpit instruments and controls.

c919d.jpg

The seats are spacious and comfortable.

c919gresized.jpg

Visual displays are available for entertainment or business.

China throws down the gauntlet to Boeing, Airbus

"China throws down the gauntlet to Boeing, Airbus
David Pierson
November 17, 2010

BEIJING: China aims to reshape the global aviation industry with a home-grown airliner, a direct challenge to the supremacy of Boeing and Airbus, the world's only makers of large commercial aircraft.

The Chinese government has staked billions of dollars and national pride on the effort, with help from big US companies.

Commercial Aircraft Corporation of China has orders for 100 single-aisle C919 passenger jets from Chinese airlines and international customers. The orders were signed yesterday at the Zhuhai air show in southern China, the state-owned Comac said in a news release.

Customers included Air China, China Southern Airlines and China Eastern, and the aircraft leasing company GE Capital Aviation Services of the US.
No details were given on how many planes each customer ordered or the prices that would be paid.

The partnership with US companies will be on display this week at the air show, where a full-scale mock-up of the 156-seat C919 will be revealed. It is scheduled for production by 2016. The fuselage will carry the Comac name but inside the most crucial systems will bear the trademarks of some of the biggest names in Western aviation.

Honeywell International will supply power units, computing systems, wheels and brakes. Rockwell Collins will handle navigation systems. GE Aviation is building the avionics. Eaton Corp is involved with fuel and hydraulics. Parker Aerospace of Irvine is responsible for flight controls.

Powering the aircraft will be two fuel-efficient engines built by CFM International, a company co-owned by GE and the French conglomerate Safran.

While global supply chains are common in the aviation industry, for this project China has required foreign suppliers to set up joint ventures with Chinese companies.

By one estimate, air passenger traffic in China is projected to expand by nearly 8 per cent a year for the next 20 years. The country plans to build 70 airports by 2020.

The plane follows the 70- to 110-seat ARJ21 as the second modern commercial airliner to be developed in China, a source of huge pride for the country's economic planners, who are determined to become global players in industries such as commercial aircraft.

The ARJ21, also being built by Comac, has a backlog of about 240 firm orders and options, mostly from domestic carriers but also from GE Capital Aviation Services and Lao Airlines.

Los Angeles Times, Associated Press"
 
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Foreign investment in China rises 7.9pc
Agence France-Presse in Beijing
5:04pm, Nov 16, 2010

Foreign direct investment in China rose 7.9 per cent year-on-year in October, the government said on Tuesday, indicating confidence in China's economy continued to improve after a slight lull.
China attracted US$7.66 billion in foreign investment last month, commerce ministry spokesman Yao Jian told reporters.

Foreign investment had slowed sharply in August, rising just 1.4 per cent year-on-year compared with an increase of 29.2 per cent in July and 39.6 per cent in June.

But in September it picked up again, increasing 6.1 per cent year-on-year.

Yao said foreign companies pumped US$82 billion nto China in the first 10 months of the year, up 15.7 per cent from the same period last year.

He pointed out that expansion of the nation’s domestic market was among the factors lifting FDI.

“Foreign investment is shifting from export-oriented sectors to the domestic market and from manufacturing to service industries,” he said.

The data includes investment by overseas companies in industries such as manufacturing, real estate and agriculture but excludes money put into banks and other financial institutions.
 
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Embraer Sees Rail Competition As A Boon For E-Jets

By Leithen Francis
ZHUHAI

Embraer170and190family-Embraer.jpg


Embraer China forecasts that the country will take delivery of 950 regional commercial aircraft over the next 20 years.

For the period 2010-2029 there will be 505 91-120 seat aircraft delivered, 425 61-90 seat aircraft and only 20 30-60 seat aircraft, says Embraer China, which announced its forecast at Airshow China.

Embraer has a joint-venture, with China’s Harbin Aircraft, that assembles 50-seat Embraer ERJ-145s for the China market. But production is due to end in the coming months and Embraer has applied for approval to switch the Harbin factory’s production to Embraer 190s.

Embraer VP marketing for China, Guo Qing, says “the high fuel price [means] the 50-seat aircraft are more expensive to operate so the 50-seat market in China is limited over the next 20 years. A lot of the 50-seater demand will move to 70-seats.”

He also says: “The major market over the next 20 years will be the 100 seaters.”

Guo says: “There’s a lot of 150-seat aircraft flying in China that are not achieving the optimum passenger load factor. Many have a passenger load factor of less than 60%” so these routes would be better served with regional aircraft such as the E-190, he says.

But in China there are still many impediments holding back the growth of regional aviation.

Guo says commercial aircraft that weigh 25t or less are subject to a 23% tax but aircraft that weigh more than 25t, such as the Airbus A320, are only subject to a 5% tax. He also confirms that some congested airports in China encourage airlines to operate larger aircraft in an effort to relieve congestion.

Another concern among Chinese airlines is that the development of high-speed rail in the country will take passengers away from the airline industry.

But in its forecast, Embraer China anticipates that high-speed rail will have no adverse impact on Embraer’s sales. It says high-speed rail development will be confined to major trunk routes currently served by large commercial aircraft.

Embraer China also says as passenger volume declines on major trunk routes - due to rail competition - some airlines may look to increase frequency on these routes by deploying regional aircraft. “Smaller aircraft may be instrumental in offering a competitive mode of transport to rail,” it says.
 
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