China's Economy - News and Projects III

[everywhere]

Shipyards bankrupt due to sluggish demand
(China Daily, June 27)

Many small-sized shipyards in China, plagued by a shortage of new orders, are on the brink of bankruptcy as a result of the sluggish world economy, a glut of vessels and soaring fuel prices.

Zhejiang Jingang Shipbuilding Co Ltd, headquartered in the Taizhou city of East China's Zhejiang province, recently filed a bankruptcy petition to the Taizhou Municipal Intermediate People's Court due to its significant loans and lack of new orders, said a public relations officer of the court, without elaborating.


Founded in 2004, the company has the ability to build four vessels with a tonnage of over 16,000 tons per year, making it the biggest export shipbuilding enterprise in Taizhou, its website says.


In February, the company had not received any orders since last year, Liu Min, a senior director at Jingang said at the time.


Most banks regard the export-led shipbuilding industry as "high risk", refusing to underwrite or extend loans to related companies.


The Jingang shipyard is only one among many similar Zhejiang-based shipyards that have suspended business and dismissed employees due to the difficult market conditions.



In June, Ningbo Hengfu Shipping Trade (Group) Co Ltd and Ningbo Beilun Sky Shipbuilding Co Ltd both filed motions to sell off assets.


Industry losses are widespread, as the volume of new orders in 2011 fell 52 percent, according to the China Association of the National Shipbuilding Industry.


In the first five months of 2012, China built ships amounting to 22.5 million deadweight tons, down 10.1 from the previous year.


New orders totaled 9.45 million deadweight tons, a drop of 47.3 percent from a year earlier. Combined outstanding orders were 134.4 million deadweight tons, down 10.4 percent from the end of 2011.

http://europe.chinadaily.com.cn/busi...t_15526125.htm

[everywhere]

a radio report from CRI:


4G Network expanding in China
(CRI English, June 26)

Hangzhou is among the 10 pilot cities in the 4G network trial operation. For example, a bus in Hangzhou can guarantee that 20 passengers can watch high-definition movies using their mobile phones or touch pads at the same time. A bus passenger says she is surprised to see such progress.

"The movie runs very smoothly without any buffers. This is really awesome!"

4G is the fourth generation of cell phone and mobile communications standards. It is a successor to the third generation standards. China has developed its own edition of 4G technology TD-LTE, or Time Division Long Term Evolution.

So far it has been recognized as one of the major international standards, though western countries are mainly using the LTE technology standard. It has more advanced technology, a higher transmission rate and more economic frequency utilization.

Besides Hangzhou, China Mobile has successfully carried out its trial operation in five other cities including Shanghai, Nanjing, Guangzhou, Shenzhen, and Xiamen. Currently the company is testing the network in another six cities: Shenyang, Tianjin, Qingdao, Chengdu, Ningbo and Fuzhou. China Mobile Vice President Sha Yuejia says their next step is to expand 4G technology to base stations in these cities.

"We will build at least 20 thousand TD-LTE base stations this year. We will construct more than 200 thousand stations starting next year."

Meanwhile, China Mobile will carry out pre-commercialization of 4G business in cities like Hangzhou and Shenzhen.



International communication companies have seized the opportunities brought by technology upgrades in China. Alcatel-Lucent Company is an international software hardware and service supplier.

The company's president Rajeev Singh-Molares says they are also competing in the mainland market.

"TD-LTE technology for Alcatel Shanghai Company is a very important part of our overall innovation strategy. So far we have more than 100 sites built around Shanghai, and we expect to have more than 600 sites built in the next few months."

According to the government, it still needs two or three years to issue a 4G license for network carriers to formally provide services to users. Cao Shumin from the Ministry of Industry and Information Technology says the industry needs to be well-prepared so that users can receive a mature, high-quality product.

"If the whole industry can grow very fast to be mature enough, then it would be easy by then to give the industry an operation license."

http://english.cri.cn/7146/2012/06/26/2702s708402.htm

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EFCA boosts cross-Strait trade after 17 months of implementation: mainland
(Shanghai Daily/Xinhua, June 27)

BEIJING, June 27 (Xinhua) -- Trade across the Taiwan Strait has boomed since an economic pact took effect 17 months ago, a mainland spokeswoman said Wednesday.

Commodity trade expanded due to tariff reductions, while the service trade has grown due to market expansion since the Economic Cooperation Framework Agreement (ECFA) took effect on Jan. 1, 2011, said Fan Liqing, a spokeswoman with the State Council's Taiwan Affairs Office, at a regular press conference.

Under the ECFA's "early harvest program," the Chinese mainland has reduced tariffs on 539 Taiwanese goods, while Taiwan has dropped duties on 267 mainland goods. Within two years, duties on these products will be completely eliminated.

Trade of reduced-tariff commodities from Taiwan to the mainland totaled 6.6 billion U.S. dollars from January 2011 to April this year, with tariff reductions totaling 273 million U.S. dollars, Fan said.

Fan said 94 percent of reduced-tariff commodities exported from Taiwan to the mainland have seen their tariffs drop to zero this year.

In the four months, imports of Taiwanese goods included in the early harvest program totaled 2.49 billion U.S. dollars, doubling from that of the same period of last year.

Exports of mainland goods included in the early harvest program to Taiwan totaled 1.47 billion U.S. dollars from January 2011 to this April, with tariff reductions totaling 38.82 million U.S. dollars.

Under the ECFA, the mainland has opened 11 service sectors to Taiwanese companies, including those related to accounting, computer services, medical care, banking, securities, insurance and film.

According to Fan, six Taiwanese accounting firms have received temporary licenses to operate on the mainland, while eight Taiwanese films have been given approval to be screened on the mainland.

Mainland companies have filed 43 applications to invest in Taiwan and two banks have been given approval to set up branches there, Fan said.

"The ECFA is only the first step. The two sides have set up six panels under the Cross-Strait Economic Cooperation Committee for follow-up talks," Fan said.

When asked to comment on Taiwan's attempts to sign free trade area agreements with other countries and regions, Fan said the mainland has never opposed economic and non-governmental exchanges between Taiwan and foreign countries.

"We are against any agreements signed between foreign countries and Taiwan that concern sovereignty," she said.

http://www.shanghaidaily.com/article...a.asp?id=79510

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China rejects EU accusations on Huawei, ZTE subsidies
(The Malaysian Insider/Reuters, June 26)

BEIJING, June 26 – China rejected European Union accusations that two top Chinese telecom equipment makers accept illegal government subsidies to undercut prices.

Huawei Technologies Co and ZTE Corp, the world’s second- and fifth-biggest makers of telecom equipment respectively, have been gaining market share from European rivals such as Ericsson and Alcatel Lucent SA because of aggressive pricing.

In May, EU diplomats said the trade bloc would like to take action against Huawei and ZTE on the grounds that they receive illegal state subsidies that allow them to sell equipment at lower prices.

“We think such accusations are groundless and unreasonable,” Shen Danyang, a spokesman for China’s commerce ministry, told a news conference today.

“Huawei and ZTE operate under a completely free market environment. Their products gain global competitiveness via the companies’ active R&D efforts,” Shen said.

The denial from the commerce ministry comes days after a Huawei board member said that the subsidies given to the Shenzhen-based company were legal and that the government didn’t help it gain business globally.

The spat could potentially dent EU trade with China, with bilateral commerce expected to reach a record €500 billion (RM1.98 trillion) this year.

China is the EU’s second-largest trading partner after the United States. The bloc is China’s biggest. – Reuters

http://www.themalaysianinsider.com/b...zte-subsidies/



Ctrip said to complete acquisition of VeryZhun
(WCARN.com, June 27)

It is learnt from an insider on Jun. 26 that Ctrip.com International Ltd. (Ctrip), a Chinese online travel service provider, completed the acquisition of VeryZhun, a popular flight status app, at the beginning of 2012.

VeryZhun is a professional application program which provides real-time flight tracking and intelligent delay forecast for air travelers. Through VeryZhun, the users can obtain real-time status and accurate route maps of all the Chinese domestic flights.

A variety of conditions that would affect the on-time flight operation can be learnt in advance while notifications for six main types of flight status including departure, arrival, delay, cancellation, inflight turnback (IFTB) and diversion can be received immediately.

As the leading enterprise of the online travel agencies in China, Ctrip has been ahead of the rest of the industry for the last decade. However, the net profit of Ctrip has been declining recently amid the combination of the business model migration and the increasing impact from the mobile accesses.

According to the financial report of Q1 2012, the net profit of Ctrip dropped by 28 percent from the same period a year earlier. This underperformance has made business transformation and strategic layout the imminent considerations for Ctrip's senior management.

The Ctrip mobile access program was launched in February 2012 while an independent wireless business division was established.

http://www.wcarn.com/cache/news/19/19963.html

[everywhere]

Group-buying deal sparks merger speculation
(China Daily, June 28)

The Chinese Internet giant Tencent Holdings Ltd said on Wednesday its daily-deal website Ftuan is merging with Groupon Inc's China venture GaoPeng to form a new company in a move that is likely to trigger another round of merger speculation in the country's under-pressure group-buying sector.



Officials from the companies involved insisted no large job cuts will result from the "marriage", despite reports it could lead to 70 percent of GaoPeng's staff being cut.



The new combined company will form an operation with around 10 percent of the market share, which will build on the respective strengths of Ftuan in local lifestyle services, and GaoPeng in global sourcing, according to a joint statement by the firms.



Lin Ning, president of Ftuan, said: "China's group-purchasing market is shifting from one that was investment-driven to one that is now operation-focused, and the merger will give us more scale and help us deliver innovative products to customers."



Financial terms of the deal were not disclosed.



The Beijing Morning Post earlier suggested that nearly 70 percent of GaoPeng's employees are likely to lose their jobs as a result of the merger, but Lin insisted that while some integration of personnel is necessary in any new company, the merger is more aimed at expanding the operation, rather that downsizing it.



"We are planning on expanding our business and services in more Chinese cities later this year," he added.



"Group buying is only a segment in e-commerce, and as an e-commerce company, Ftuan will look at other sectors such as services based on mobile Internet.



"After a recent refinancing, we have sufficient capital reserves to support Ftuan's operation for the next three to five years," he said.



However, industry insiders believe the deal will have a small effect on the country's group-buying sector because Ftuan and GaoPeng have a combined market share stands of just 10 percent.



Yang Guoqiang, assistant to the chief executive officer of rival 55Tuan, one of the country's largest group-buying websites, said he thought the deal would spark similar mergers, in what is still considered an overcrowded marketplace.



"The market is set to see more mergers this year because the market needs integration after years of rapid expansion," he said, predicting that "only the top three companies will survive at the end of the integration".


The number of group-buying websites has continued to decline, the latest data from group-buying portal Tuan800 showed.



China's group-buying industry was worth 1.73 billion yuan ($271.89 million) in the first quarter of this year, according to the Beijing research firm iResearch.



But at least 215 group-buying websites were closed in April alone, said Tuan800, adding that the monthly trading volume was less than 1.7 billion yuan, down by 2.4 percent from March.



"More than 80 percent of the market share will be taken by at the most five group-buying websites as a result of the merger," Tuan800 predicted.
The top 10 group-buying websites now account for nearly 90 percent of the market.



The number of such sites peaked at around 5,000 in 2010 after a rash of investment into the sector.



However, the numbers quickly shrank as venture capitalists withdrew their investments amid market stagnation.



A number of websites were forced to close and those who survived tried to develop new business models.



Earlier this month, the Beijing-based LaShou Group Inc withdrew its application for an up to $100 million initial public offering, which analysts suggested was influenced by the clumsy IPO of the US Internet company Facebook Inc.



The company, which runs China's leading daily deals website Lashou.com, had in November delayed the IPO in response to "corporate developments".


gaoyuan@chinadaily.com.cn

http://europe.chinadaily.com.cn/busi...t_15528844.htm

[everywhere]

China to double its Latin trade
(Shanghai Daily/Agencies, June 28)

PREMIER Wen Jiabao wrapped up a tour of resource-rich Latin America on Tuesday by offering US$10 billion in credit for infrastructure projects and calling for a joint push to combat protectionism.

Wen proposed a free-trade deal with the Mercosur bloc and signed a series of investment accords during the trip to the region, a key source of agricultural and mineral commodities and a growing market for Chinese exports.

"The Chinese government ... will continue to offer economic assistance to countries in the region that are interested," Wen told the UN regional economic body ECLAC in Chile, the world's No. 1 copper exporter.

He said China's Development Bank would implement a US$10 billion credit program for infrastructure projects.

He also said China would create a US$5 billion fund for cooperation between China and Latin America and the Caribbean.

"We have to combat trade protectionism, broaden the mutual openness of our markets, optimize the trade structure and diversify cooperation in terms of customs and quality control," Wen said.

The premier added that China also aims to nearly double trade with Latin America in five years to over US$400 billion.

Last year, 8.9 percent of all regional exports were destined for Chinese shores and 13.8 percent of imports were made in China, as trade between China and Latin America and the Caribbean surged nearly 30 percent in the 2005 to 2011 period, according to ECLAC data.

"China wants to have more balanced trade with Latin America ... we hope that in the future we can import more types of products, including value-added products," Wen said.

The head of ECLAC, Alicia Barcena, welcomed Wen's words to improve trade ties and diversify away from commodities-based exports. "It's very interesting that (Wen) came to the region to deliver a message that China isn't only interested in Latin America's and the Caribbean's raw materials, but that it wants a long-term strategic relationship," Barcena said. "That's very good news for the region."

Fears of a hard landing in China, the world's No. 2 economy, have sent jitters through Latin America, as China's annual growth target for 2012 looks increasingly in jeopardy as demand at home falters and Europe's debt crisis worsens.

"China is also considering the possibility of negotiating and signing agreements for local currency swap agreements ... and increasing the reciprocal creation of bank branches," Wen said.

The Chinese leader also called for cooperation from regional leaders on food security and to that effect invited Latin American and Caribbean agriculture ministers to a meeting in China in 2013.

"We also propose to establish between China and the region an emergency food reserve mechanism of 500,000 tons, which will be used for natural disasters and humanitarian aid," Wen said.

http://www.shanghaidaily.com/nsp/Nat...Latin%2Btrade/

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Big Chinese firms see US sales doubling
(China Daily, June 27)

Chinese companies on the leading edge of a trend toward greater outbound investment are accelerating plans for overseas growth despite headwinds at home and the unsteady global economy.

Some of China's best-known brands plan to double sales in the United States over the next few years, executives said at a June 14 forum in Atlanta on Chinese investment.


For Sany Heavy Industry Co, a construction-equipment manufacturer from China's Hunan province, rapid expansion has become the rule rather than the exception.


The company started as a small workshop in Changsha in 1989 and has grown into a prime example of China's global expansion. Sales of equipment such as concrete-pump trucks, cranes and excavators shot to $12.7 billion in 2011 from $1.5 billion in 2007.


"We are the pump king of the world," Tang Jianguo, president of subsidiary Sany America, said at the conference, China's Global Outlook.


Although less than 10 percent of sales come from overseas, Sany in 2007 embarked on an aggressive US expansion, investing $60 million to build a plant in Peachtree City, Georgia, just 35 miles (56 kilometers) from Atlanta.


Sany spent 525 million euros (about $663.2 million) to buy German manufacturer Putzmeister Holding early this year, solidifying the Chinese company's position atop the global concrete machinery market. The acquisition will lead to a restructuring of US operations and "synergies" resulting in improved customer service, Tang said.


"We can build our capability in terms of R&D, manufacturing and customer support in this facility," he said of the Georgia plant. In October 2011, Sany announced it would invest an additional $25 million to create a research-and-development center there.



It will eventually be staffed by 300 hydraulic and mechanical engineers, executives said.


Though Sany is a relative newcomer in the US, Hisense USA Corp has been biding its time for more than a decade, gradually learning about sales and distribution channels in the highly competitive American consumer-electronics sector.


Now, China's largest maker of flat-panel televisions is hoping its efforts will pay off in the potentially lucrative US market, where it currently claims less than 1 percent market share.


The company, based in Qingdao, Shandong province, plans to shift from mainly an original-equipment manufacturer to a recognized brand in its own right through the efforts of its US subsidiary, also based in the state of Georgia.


A complete rebranding, including a new logo, website and consumer-focused marketing strategy, is crucial to hitting the target of a near-doubling of TV sales to $400 million by 2013, said JoAnne Foist, marketing director for Hisense USA.


"From a marketing perspective, it's a golden opportunity. It's like a startup: How do you build a brand from essentially nothing to something? But we already have all the resources behind us," she said.


Hisense hopes to join the ranks of what Foist called "Tier Two" brands such as Panasonic and Sharp, eventually breaking into the upper echelon of TV makers - Samsung, LG and Vizio.



The company is studying the successes of those manufacturers, all of which were unknown to US consumers not very long ago, Foist said.


Hisense has made some key moves to build its brand in the US. Hisense Group Chairman Zhou Houjian in 2010 became the first Chinese executive to give a keynote speech at the Consumer Electronics Show in Las Vegas.



Hisense USA is working with the Massachusetts Institute of Technology to develop localized products including TVs with 3-D capabilities and voice and gesture recognition.


Shenzhen-based telecommunications equipment giant Huawei Technologies Co, with $32.4 billion in global revenues in 2011 and operations in over 140 countries, has the opposite problem: It's well-known, but sometimes for the wrong reasons.


Though Huawei is a private company owned by employees, many Americans think it's a state-owned enterprise, a mis-perception that has thwarted some expansion plans in the past, said Kevin Qi, senior vice president for the company's US arm, based in Plano, Texas.


Sprint Nextel Corp dropped Huawei from the bidding for a major smartphone contract in 2009 after the US government voiced concerns about cyber security and the company's suspected ties to the Chinese government.


The US has more reason to welcome than to fear Huawei, Qi suggested, saying the company pays $6 billion a year to American vendors and directly employs 2,000 workers, about 70 percent of whom are hired locally.



Maintaining openness to Chinese firms in the US is the key to continuing this positive impact, he said.


"We are playing the game by the rules," Qi said. "A company's strategy can materialize only if the business environment of the country will allow the company to do so."


Another Shenzhen tech powerhouse, ZTE Group, has faced similar "bumps along the way" - it, too, was excluded from the Sprint deal - but feels the "positives greatly outweigh any negatives" of working in the US, said Cheng Lixin, CEO of ZTE (USA) Inc.


ZTE, already the world's fourth-biggest maker of handsets, saw global smartphone sales jump 45 percent during the first quarter of 2012, said Cheng, who echoed Qi's comment that open communication is crucial to ensuring further Chinese investment.


The company is implementing what Cheng calls its ACW strategy (America-China- Worldwide) - buying key components in the US to meet demand for quality, tapping manufacturing-cost efficiencies in China and then selling affordable, enhanced-connectivity phones internationally.


ZTE has 10 offices in the US, including one in Atlanta, and has introduced 35 handset models with US-based partner AT&T Wireless since 2007.


These giants were early entrants, but Chinese investment in the US is still in its infancy, said Dan Rosen, a partner with New York consulting firm Rhodium Group and the keynote speaker at the Atlanta conference.


Chinese companies make up less than one-third of 1 percent of investment in the US, the world's largest recipient of foreign direct investment, according to Rhodium's China Investment Monitor.


But since the mid-2000s, things have taken off. US investment from China doubled each year from 2006 to 2010, reaching $5.2 billion before dropping to $4.5 billion in 2011.


The biggest potential hindrances to this trend continuing are "policy misgivings" among government officials and the public, both of whom are often skeptical of Chinese investors' motives, Rosen said.


States courting Chinese prospects should educate them about these possible speed bumps, and the US should stop demanding concessions for American firms in China as a prerequisite to approving Chinese investments, he said.


"We argue as ferociously as we can in DC that reciprocity should have nothing to do with the American reaction to Chinese money," Rosen said. "If other people want to put money in your economy, the answer is yes, regardless of whether they let you put money in their economy."


Xie Yunliang, China's acting consul general in Houston, said high-level visits such as Vice-President Xi Jinping's US trip in February and channels including the Strategic and Economic Dialogue are important to maintaining success in the commercial relationship between the world's two biggest economies.


Since China's accession to the World Trade Organization in 2001, US exports to China have increased 468 percent. US companies have invested $67 billion in the country during that time, and Chinese firms now have the ability to return the favor, Xie said.


"Chinese firms are getting increasingly enthusiastic about investing in the US," he said, pointing to conference speakers as examples of these aspirations. "They presented their companies well in English and know how to interact with their Western counterparts. I have confidence in them."


Chinese multinationals aren't alone in seeking US opportunities. Smaller companies including Shanghai motor manufacturer Techtop Group and Hong Kong-based lighting provider SMC LED Corp, both privately held, are dipping their toes in the market through sales before diving in with new plants.


Chinese manufacturers as well as US companies headed to China should realize that cross-border success relies on the ability to understand business culture, not just personal interactions, said Ni Jian, chief operating officer in the US for SMC LED.


"It's not how you use chopsticks and how you eat Chinese food. It's how you deal with the customers and how you deal with their requests," Ni said.



Organized by the Georgia China Alliance and Georgia State University's Confucius Institute, the investment conference took place at the Carter Center, a nonprofit institution founded by former US president Jimmy Carter.


Carter, a Georgia native and a former governor of the state, worked with then-Deputy Premier Deng Xiaoping, architect of the modern Chinese economy, to normalize relations with China in 1979.


On a visit to China in 2011, Carter saw firsthand the capacity of Chinese firms to invest in the US. He was impressed by a Huawei video conferencing system that enables conversation as if people were sitting across the table from each other.



Halfway around the world, the former president chatted with Huawei's office in Atlanta, Carter Center president John Hardman recalled.

http://usa.chinadaily.com.cn/epaper/...t_15518376.htm

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Bonds set for China's local government
(Shanghai Daily/Xinhua, June 28)

CHINA'S Ministry of Finance yesterday said it will issue 47.8 billion yuan (US$7.59 billion) worth of bonds on behalf of local governments next month, in a bid to ease financing pressures and create more funding channels for them.

On July 9, the ministry will auction off 23.9 billion yuan in three-year local government bonds on behalf of Beijing, the Ningxia Hui Autonomous Region and provinces of Qinghai, Shanxi, Fujian, Heilongjiang and Jiangsu, according to a statement on its website.

The ministry will also issue 23.9 billion yuan in five-year bonds on their behalf on July 16, the statement said.

Except city governments of Shanghai and Shenzhen and provincial governments of Zhejiang and Guangdong, other local governments are barred from issuing bonds directly.

http://www.shanghaidaily.com/nsp/Bus...2Bgovernments/



Overseas funds back Xiaomi
(Shanghai Daily/Xinhua, June 28)

CHINESE smartphone maker Xiaomi Corp has secured US$216 million during its latest round of financing, the company's founder and president said.

Lei Jun said the funding came from "leading international investment firms" but did not say who they were.

He also said Xiaomi has no plans to go public over the next five years, the China Securities Journal reported yesterday.

Xiaomi, which only started to sell smartphones in October 2011, has made efforts to produce high-end smartphones at affordable prices. The company's flagship Xiaomi Phone smartphone costs about 1,999 yuan (US$314) or less than half the price of an Apple iPhone 4.

Xiaomi has moved 2.7 million units so far, despite requiring customers to buy the phone in advance through the company's website due to its limited production capacity. Lei said the firm may sell 5 million of the phones by the year's end.

Last December, Xiaomi secured funding of US$90 million through a venture capital fundraising that attracted several foreign investors, including IDG Capital and Temasek Holdings.

http://www.shanghaidaily.com/nsp/Bus...back%2BXiaomi/

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Opportunities abound for multinational companies
(China Daily, June 28)

CEOs, officials discuss the global economy and China

China is providing a broad market and plenty of development opportunities for multinational enterprises, Chairman of the National Committee of the Chinese People's Political Consultative Conference Jia Qinglin told a gathering of CEOs last week in Beijing.


At the opening ceremony of the fifth International CEO Roundtable of Chinese and Foreign Multinational Corporations, Jia, who also a member of the Standing Committee of the Political Bureau of the CPC Central Committee, said the Chinese government "has made efforts to create good policies for the economy to increase stably and relatively fast".


Thirty CEOs from the world's top 500 companies, as well as more than 400 delegates of companies from both home and abroad, participated in the meeting that discussed the latest topics in the economies of both China and the world.


"China's reform and opening-up is the process of multinational companies collaborating and developing with the Chinese economy. Cooperation between multinational companies and their Chinese counterparts has been expanding and producing more profits," Jia said.


During a closed-door CEO meeting on multinationals in China on June 23, Zheng Wantong, vice-chairman of the CPPCC and chairman of the organizing committee, said China has established large-scale and completed industrial categories after 30 years of fast development.


He added that "China still has plenty of market opportunities for cooperation with multinational companies because the country's overall level is not that advanced" and needs further modernization and transformation over the long term.


A range of opportunities are available in strategic emerging industries including new energy, new materials, energy saving, environmental protection and biomedicines. Rich potential is also available in modern service industries including finance, logistics, exhibitions, technological services and business and trade services.


By the year of 2015, China's high-end equipment manufacturing industry are projected to have sales revenues surpassing 6 trillion yuan ($942.6 billion), with the environmental protection industry expected to reach 2 trillion yuan.


Over the next five years, imported service revenues are projected to surpass $1.25 trillion.


Zheng said he anticipates that multinational companies can boost bilateral cooperation to achieve more mutual benefits and play a greater role in China's industrial restructuring.


Support for foreign investment


The State Council has recently released guidelines on further implementing foreign investment that encourage foreign investment to focus on high-end manufacturing, high-tech, modern services, new energy and environmentally friendly industries.


Foreign investment is also encouraged for central and western regions rather than already flourishing coastal areas where multinational companies are concentrated and fiercely compete with each other.


The guidelines also stipulate that procedures for foreign investors in China should be simplified to cut costs and increase efficiency.


All levels of local governments have also been tasked with creating a favorable environment including supporting policies and more convenient services to better utilize foreign investment.


Jia said he hopes the meeting with its influence will make greater contributions to the world economy and the sustainable human development.


The meeting also had themed seminars on multinational companies' corporate social responsibilities, and closed-door meetings on food and medicine safety, and between CEOs from China and South Korea.


Contact the writer at xuxiao@chinadaily.com.cn

http://europe.chinadaily.com.cn/busi...t_15525851.htm

[everywhere]

Home is where business is
(Shanghai Daily/Xinhua, June 28)

MORE overseas Chinese chose to return home and start their own business on the Chinese mainland amid the global economic downturn because of favorable government policies and a better environment here for new business than in foreign countries.

More than 186,200 overseas Chinese returned to work or start a business in the mainland last year, a sharp increase of 38 percent from a year earlier which was the strongest in the past decade, the human resources and social security ministry said.

Li Gen, chairman of Dalian Tianqu Technology Co, said that compared with Australia, "starting a business is easier in China because of favorable government policies, more access to capital and closer cultural links."

He was among more than 1,800 oversea Chinese who attended the CHINAOCS International Talents Fair in Dalian in Liaoning Province.

Li returned from Australia last year after getting a master's degree in 2007. He is now working for a mining company where he is developing an online platform in China to trade second-hand vehicles. The government gave him a 2 million yuan (US$317,460) grant for his project.

In 2008, the central government launched the "Thousand People Plan" to attract high-level professionals back. So far, over 2,260 people have gained from the program which offers important posts and government funding for business in areas such as science, finance, art and management. There are also preferential policies at provincial and city levels.

Another returnee is Zhang Jianjun, a doctorate degree holder from Canada, who said: "There are much more opportunities in China, why not come back?"

http://www.shanghaidaily.com/nsp/Bus...business%2Bis/

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New package of policies for HK to increase economic ties
(Shanghai Daily/Xinhua, June 28)

CHINA will further promote the development of the offshore yuan market in Hong Kong as part of a new package of policies for city ahead of the 15th anniversary of its return to China.

The move comes ahead of President Hu Jintao's three-day visit to Hong Kong tomorrow to mark the anniversary.

The package covers increasing cooperation in overseas investment, education, tourism, science and technology between China's mainland and the city, as well as cooperation between Hong Kong and Guangdong Province, the central government said yesterday.

The Chinese government will encourage joint ventures between the Shanghai and Shenzhen stock exchanges and their Hong Kong counterpart, and allow the listing of exchange-traded funds in Hong Kong and the mainland.

In April, China more than tripled the quota for RMB Qualified Foreign Institutional Investors to 70 billion yuan (US$11 billion), a program that allows the Hong Kong units of financial companies to invest offshore yuan in the mainland's capital markets.

Meanwhile, market watchers said yuan-denominated bonds sold in Hong Kong may double to 300 billion yuan this year from 2011. The city has been a vital offshore yuan market and testing ground for China's external financial policies.

"The yuan has become the world's third-biggest trading currency," ANZ China said in a weekly report yesterday. "In the first four months, the value of cross-border trade settlement in yuan jumped 17 percent in Hong Kong from the same period of last year to 748 billion yuan. Meanwhile, yuan-backed foreign direct investment topped 75.4 billion yuan in the first five months, which is as much as 25 percent of total inbound investment in the period."

Moving forward to promote yuan exposure in the offshore markets, China will also improve the development of offshore yuan products in Hong Kong to support trade and investment settlement in the currency, facilitating long-term investment from the city in the mainland's capital markets.

To further boost economic and trade cooperation, the central government will sign another appendix agreement to the Closer Economic Partnership Arrangement with Hong Kong, and push firms from the mainland and the city to invest abroad together.

The link between Hong Kong and neighboring Guangdong Province also got a boost.

Hong Kong colleges are encouraged to set up educational institutions in the province. Youth centers will be set up in Guangzhou and Shenzhen to expand exchanges between students from both sides. Hong Kong financial institutions are allowed to set up consumer finance companies in the province, especially in Shenzhen, while a pilot financial reform program will be implemented in the Pearl River Delta region to promote cooperation between the city and the province.

China UnionPay yesterday said its accumulated yuan-backed bankcard transaction value has totaled nearly 330 billion yuan in Hong Kong by the end of last month.

http://www.shanghaidaily.com/nsp/Bus...onomic%2Bties/

[everywhere]

Bank of China's Taipei branch officially opens
(China Daily, June 27)

TAIPEI - Bank of China officially opened its Taipei branch Wednesday, making it the first Chinese mainland bank to start commercial operations in Taiwan.

A grand opening ceremony was held in downtown Taipei and attended by Wu Poh-hisung, honorary chairman of the Chinese Kuomintang, Chiang Pin-kun, chairman of Straits Exchange Foundation, and Li Lihui, president of Bank of China, as well as senior executives from the island's major financial holding companies and other distinguished guests.

"The Taipei branch opening marks a major step in Bank of China's development as well as a milestone in deepening economic and financial cooperation between the mainland and Taiwan," said Li, while addressing the event.

He said Bank of China will follow the banking rules of both the mainland and Taiwan and contribute more to cross-Strait economic and financial cooperation through its corporate banking, personal banking and other services.

Services currently available at the branch are mainly those associated with corporate finance.

As the first mainland bank to establish cooperative relations with Taiwan banks and offer services to Taiwan business people, Bank of China has entered into business cooperation agreements with 10 Taiwanese banks and established corresponding banking relationships with 29 Taiwan banks, according to Li.

Li said the total credit that Bank of China has offered to Taiwan-funded companies over the past three years is worth more than 160 billion yuan ($25 billion), and the bank plans to arrange 200 billion yuan more in credit to support the development of Taiwan-funded companies over the next three years.

http://europe.chinadaily.com.cn/busi...t_15526830.htm



Road machine sales plummet
(Shanghai Daily/Xinhua, June 27)

CHINA'S sales of road pavers and bulldozers fell nearly 30 percent year on year in May due to a decrease in the number of infrastructure construction projects.

Sales of loaders and excavators nationwide were also down 25.77 percent and 23.92 percent, respectively, Shanghai Securities News reported yesterday, citing data from China Construction Machinery Business Online, an industrial information provider.

The report said last month's sales drop was caused by a contraction of investment in transportation facilities. Analysts predicted that the nation's investment in road and railway construction will decline in 2012.

It said sluggish sales might squeeze less competitive companies out of the market and lead to more mergers and acquisitions by heavyweight firms.

http://www.shanghaidaily.com/nsp/Bus...les%2Bplummet/

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Xinhua Insight: Multi-metal mine with world-class deposits rises in Qinghai-Tibet plateau
(Shanghai Daily/Xinhua, June 29)

LHASA, June 29 (Xinhua) -- A multi-metal mine in the birthplace of Tibetan King Songtsen Gampo has the potential to be among the world's 50 biggest mines of its kind by deposits and may generate an annual product value of 4.5 billion yuan (about 712 million U.S. dollars) by the end of 2015, Chinese prospectors have announced.

Medrogungkar county, home to the Jiama Copper Gold Polymetallic Mine, about 68 kilometers from Lhasa, may dethrone Dexing in east China's Jiangxi province to become the country's biggest copper town in 10 years, said Jiang Liangyou, board chairman and Party secretary of the owner of the mine, Tibet Huatailong Mining Development.

The projections were based upon the initial prospecting finished by Huatailong in 2010 within a land area of nine square kilometers, Jiang said. The company's mining permit covers a total area of 144 square kilometers at an altitude of 4,000 to 5,407 meters.

"The prospecting results are subject to independent third-party verification overseas," he said. "If verified, it would propel the mine into its second-phase expansion."

According to the expansion feasibility report that has already been completed, the subsidiary of the China Gold International Resources Corp. Ltd. (TSX:CGG; HK:2099) would expand its daily processing capacity from the current 6,000 tonnes of ore to 40,000 tonnes since the end of 2015 for 70 years.

"Phenomenal changes will be brought to Tibet's economic and social development, because, after the expansion, Jiama Mine may generate tax revenue equivalent to one-sixth of the current fiscal revenue of the government of Tibet autonomous region," said Jiang.

Official statistics show that Tibet took in record-high tax revenue of 9.663 billion yuan in 2011, up 91 percent year on year. Last year, Medrogungkar became the first Tibetan county to rake in tax revenue of more than 200 million yuan. Also last year, Huatailong posted revenues of about 660 million yuan from its main business and 140 million yuan in profits, and the company paid 118 million yuan in taxes.

First-phase production started in July 2010 with a total investment of 3.5 billion yuan, and the largest copper gold polymetallic mine in Tibet specializes in the exploitation and processing of six metals -- namely, copper, lead, zinc, gold, silver and molybdenum.


INDUSTRIAL WEATHERVANE

Located within the Gangdise Copper Metallogeny Belt in central Tibet, the Jiama project has been developing amid disputes. Before the mining area was taken over by Huatailong under the state-owned China National Gold Group Corporation (CNGG) in late 2009, a dozen private miners were caught up in a rat race for the rich ore supplies, ignoring their responsibilities to the local community and environment.

Ensuing public complaints forced the regional government to suspend the operations of the private miners, re-examine the local mining industry and seek a proper way to develop Tibet into "a reserve base of strategic resources" as the central government had required in January 2010.

Although nine key mining zones, including Jiama, had been officially designated as such years before, the local mining industry contributed to less than 3 percent of the region's total gross domestic product and was heavily criticized for jeopardizing the ecology and environment of the "roof of the world."

"As the only mining company parented by a centrally-administered enterprise in Tibet, Huatailong has been challenged to lead the industry by the regional government, blazing an appropriate trail to honor its social responsibility in Tibet and bring local residents long-lasting benefits through environmental protection and community-building efforts," said Sun Zhaoxue, general manager of CNGG.

"The answer, in our mind, is to build Jiama into a large,environmentally-friendly mine equipped with leading technologies," he said.


JIAMA MODEL

People have traditionally associated mineral exploitation with pollution and environmental degradation. How far Tibet could go with its mining industry would depend on whether mining companies could strike a balance between instant wealth and sustainable development, corporate profits and benefits for local residents, said Teng Yongqing, general manager of Huatailong.

"If these balances were not achieved, regardless of the rich mineral resources Tibet may boast, turning this region into a reserve base of strategic resources would be just a pipe dream," said Teng.

What Huatailong has been doing in Jiama over the past two years has been summarized as the "Jiama Model" by the Ministry of Land and Resources, and many of its domestic industry peers have visited the place in hopes of learning from Huatailong's experiences.

"The golden rule we have been following here is to always be responsibility-aware and harmony-aware. You can never be careful enough with these issues. We have had bitter lessons," said Teng.

To ease the hostility among local residents, Huatailong spent more than 32 million yuan on land compensations and another 3.5 million yuan to make up for herders' livestock losses at the hands of the former irresponsible miners.

more: http://www.shanghaidaily.com/article...a.asp?id=80033

[everywhere]

China business sentiment index rises a little in June
(Shanghai Daily, June 29)

CHINA'S business conditions improved in June at the slowest pace so far this year due to a credit crunch and increased payrolls, the latest MNI China Business Sentiment Indicator showed.

Market News International, a unit of Deutsche Boerse Group, said the index, which measures overall business conditions, fell to 53.21 from 54.40 in May, the lowest level for the headline index since last December.

The final June result is a slight increase over last week's flash reading of 51.92, the lowest since January 2009, MNI said today.

An index figure above 50 indicates business activity is growing or improving. A figure below 50 means contraction.

Input prices continued to moderate while interest rates paid by companies fell sharply this month. Interest rates are expected to continue falling in the next three months as Beijing has moved to ease its monetary control, MNI said.

http://www.shanghaidaily.com/nsp/Bus...e%2Bin%2BJune/



China to properly deal with request for WTO panel on rare earth: spokesman
(Shanghai Daily/Xinhua, June 29)

BEIJING, June 29 (Xinhua) -- China will carefully study the request of the European Union, the United States and Japan asking the World Trade Organization (WTO) to form a panel to resolve a dispute over rare earth "export restrictions," a spokesman for the Ministry of Commerce (MOC) said Friday.

"We have received the request from the U.S., EU and Japan, and will properly handle the issue according to WTO dispute settlement procedures," Shen Danyang, the spokesman, said in a statement on the MOC website.

In light of the rare earth issue, Shen said, China has reiterated many times that the country's policy on rare earths is aimed at protecting environmental resources and achieving sustainable development in the industry.

"We have no intention of protecting our domestic industry through means that will distort foreign trade," he said in the statement, stressing that China has always honored WTO rules and actively fulfilled its commitment to the WTO.

http://www.shanghaidaily.com/article...a.asp?id=80002



Profits of China's major companies slide 5.3 pct in May
(Shanghai Daily/Xinhua, June 29)

BEIJING, June 29 (Xinhua) -- Profits of major companies in China hit 390.9 billion yuan (61.8 billion U.S. dollars) in May, down 5.3 percent from the same period last year, the nation's top statistical authority said Friday.

The profits were also lower than the 407.6-billion-yuan level in April.

During the first five months, the profits of companies with annual revenues exceeding 20 million yuan each stood at 1.84 trillion yuan, down 2.4 percent year on year, data released by the National Bureau of Statistics (NBS) showed.

State-owned and state-controlled enterprises saw their profits fall 10.8 percent from one year earlier to 560.1 billion yuan in the first five months, while private companies' profits grew 18.1 percent to 550 billion yuan.

During the period, stock-holding companies saw profits dip 0.4 percent to 1.08 trillion yuan, while collectively-owned enterprises reported a 9.9-percent fall in profits, which totaled 29.1 billion yuan.

Meanwhile, foreign-funded enterprises and those from China's Hong Kong, Macao and Taiwan also saw profits drop 13.7 percent to 427.2 billion yuan, the data showed.

Out of 41 industry categories, 26 reported a year-on-year increase in profits, 13 saw profits fall, one returned to profitability and one fell into losses, said the NBS in a statement.

Computer, communication and electronic equipment manufacturing saw industrial profits slump 16.5 percent, and the chemical raw materials and chemical product manufacturing industries suffered a 23-percent drop in profits, according to the NBS.

The total revenues of the major companies in the first five months hit 34.5 trillion yuan, up 11.9 percent year on year, the data showed.

http://www.shanghaidaily.com/article...a.asp?id=80001

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Project aims to win China low-carbon investment
(Shanghai Daily/Xinhua, June 29)

BEIJING, June 28 (Xinhua) -- An international research project was launched on Thursday in Beijing to explore how China can better attract and manage investment in low-carbon initiatives.

"Financing plays a critical role in fighting climate change, with capital as its key factor," said Wu Changhua, greater China director of the Climate Group, the independent not-for-profit organization that initiated the scheme, titled Shaping China's Climate Finance Policy.

Aiming to influence policy making, it will conduct systematic research from an international perspective, she explained.

Sponsored by the British Foreign and Commonwealth Office, research will be jointly conducted by the Climate Group and the Research Center for Climate and Energy Finance at China's Central University of Finance and Economics.

It will explore key issues of financing the low-carbon sector, including its capital requirements, sourcing, fund management and how to attract social capital.

Climate finance is important to the UK, to China and to the rest of the world. It is an area in which the UK and China can develop mutually beneficial cooperation, said John Edwards, a counsellor of the British Embassy in Beijing with responsibility for climate change, energy and knowledge economy issues.

"Only if we marshal private and public funds to support low-carbon development, can we stop dangerous climate change and secure the long-term economic and social goals of both our countries," he said.

The UK would like to offer its private sector expertise on low-carbon finance and the government is committed as "it is important for the whole world that China succeeds," according to Edwards.

The Climate Group works internationally with government and business leaders to come up with policies and technology to cut global greenhouse gas emissions.

Tony Blair, former British prime minister, is one of the group's initiators.

http://www.shanghaidaily.com/article...a.asp?id=79981



China to spend 175 bln yuan to safe drinking water in rural areas
(Shanghai Daily/Xinhua, June 29)

BEIJING, June 29 (Xinhua) -- China will invest 175 billion yuan (27.5 billion U.S. dollars) before the end of 2015 to ensure safe drinking water in rural areas, a government official said Friday.

Li Guoying, Vice Minister of Water Resources, made the pledge at an ongoing bi-monthly session of the National People's Congress (NPC) Standing Committee, citing a State Council report on a five-year plan for improving rural drinking water quality. The report was deliberated by legislators on Thursday.

According to the report, the central government will subsidize 68 percent (about 118.8 billion yuan) of the total investment, while another 22 percent of the funds will be allocated by local governments and 10 percent will be assumed by rural residents, Li said.

Local residents will be charged an average of 54.6 yuan annually, according to the report.

Li said subsidies in eastern and central China are typically less than those for the country's less developed western areas. In Tibet, for example, the central government will bear all of the costs, Li said.

The number of rural residents who lacked access to safe drinking water dropped by 221 million from 2004 to 2010, Du Ying, vice minister of the National Development and Reform Commission, said at the Wednesday session.

However, legislators have admitted that improving the quality of drinking water in China has been challenging, particularly in rural areas. As many as 298 million rural residents still lack safe water, according to the report.

China amended its drinking water quality standards in 2006, increasing the number of water quality indices to 106.

"By the end of 2015, the 106 quality indices will be implemented in all provincial capitals and municipalities," Minister of Health Chen Zhu cited the report as saying.

http://www.shanghaidaily.com/article...a.asp?id=80032

[everywhere]

LONDON, June 29 (Xinhua) -- A leading economic expert has recommended that China deepen and widen its economic overhaul to create a stable platform for the reform of its financial centers in the coming 10 years.

Paola Subacchi, the research director of international economics at the Chatham House think-tank in London, is to deliver her advice on financial reforms at the Lujiazui Forum which started in Shanghai on Thursday.

Among attendees at the Forum are representatives from the People's Bank of China and China's Regulatory Commissions for banking, securities, and insurance.

Before her departure for Shanghai, Subacchi told Xinhua that China has a very strong banking sector, but less developed capital and bond markets and therefore, reforms to strengthen these areas would benefit China.

Without a mature financial sector with enough liquidity, the capital account can never be fully opened up, which makes financial reform a necessity for China, she said.

"You can allow inflows and outflows only when you feel that your domestic stability cannot be jeopardized by sudden events and a sudden shock, so you need a mature financial sector."

Reforms of currency, exchange rate and interest rate should all go hand in hand, she said, advising a broad set of reforms and a progressive approach to avoid presenting a risk to China.

"The gradualist approach of the Chinese authorities is such that I don't think there will be a leap forward, to make things ready before 2020 because of the risk in this process. This is a policy-driven process. There is a lot of policy discussion and debate," the economist said.

She said that the goal of building Shanghai a major financial hub by 2020 provided a viable timeframe for the reform.

"Ten years is a reasonable timetable for completing this reform. It is a step-by-step reform, it has started and it will continue. In the last year there have been significant steps for more liberalization," she said.

An opening up of the financial sector would see four major financial centers -- Shanghai, Hong Kong, Taipei, and Shenzhen -- as its pillars.

Hong Kong has already enjoyed a status as a major global financial center, and over the past two years it has quickened the pace to become a major center for China's yuan.

Subacchi advised that China also look for more connections with fellow BRICS nations -- Brazil, Russia, India and South Africa.

Shenzhen, a regional and domestic center, has a strong advantage in small and medium enterprises (SME) and should continue developing its market for SMEs, Subacchi said.

There is no doubt that Shanghai will eventually become a major international financial center, but when this happens it "depends on the opening up of the capital account," she said, suggesting Shanghai authorities explore ways to beef up foreign investors confidence in its financial system.

http://www.shanghaidaily.com/article...a.asp?id=79984

[everywhere]

US exempts China from Iran sanctions
(China Daily USA, June 29)

WASHINGTON - U.S. Secretary of State Hillary Clinton on Thursday announced Washington's decision to exempt China and Singapore from sanctions over imports of Iranian oil, citing their "significant" reduction of purchases from the Islamic republic.


"Today I have made the determination that two additional countries, China and Singapore, have significantly reduced their volume of crude oil purchases from Iran," the top U.S. envoy said in a written statement.


She said as a result, financial institutions in the two Asian countries will be eligible for exemptions from U.S. sanctions for a renewable period of 180 days.


Under the National Defense Authorization Act (NDAA) signed by U. S. President Barack Obama late last year, foreign financial institutions, whose governments still purchase Iranian crude oil as of June 28, will be denied access to the U.S. financial market.


"Today marks an important milestone in the implementation of the NDAA and U.S. sanctions toward Iran," Clinton remarked. " Following the president's determinations on March 30 and June 11 on the availability of non-Iranian supplies of oil, as of today, any foreign financial institution based in a country that has not received an NDAA exception is subject to U.S. sanctions if it knowingly conducts a significant transaction with the Central Bank of Iran for the sale or purchase of petroleum or petroleum products to or from Iran."


A total of 20 economies, including Japan, India, Malaysia, the Republic of Korea, South Africa, Sri Lanka, Turkey, Taiwan and 10 European countries, have got the U.S. waiver.


"Their cumulative actions are a clear demonstration to Iran's government that Iran's continued violation of its international nuclear obligations carries an enormous economic cost," Clinton said, pointing to the sharp drop in the republic's oil exports from some 2.5 million barrels per day (bpd) in 2011 to about 1.5 million bpd at present, with lost revenues of 8 billion U.S. dollars every quarter in real terms.


The UN Security Council imposed four rounds of sanctions on Iran between 2006 and 2010 over its refusal to halt its nuclear enrichment program, which Western countries suspect could be used to develop nuclear weapons. Despite Iran's insistence that its nuclear program is for civilian use only, the United States and European Union (EU) have imposed extra sanctions of their own and continued expansion of the sanctions.

more: http://usa.chinadaily.com.cn/world/2...t_15533702.htm

[everywhere]

China, MERCOSUR eye 200-bln USD trade in 2016
(Shanghai Daily/Xinhua, June 30)

MENDOZA, Argentina, June 29 (Xinhua) -- China and South American trading bloc Mercosur pledged here Friday to further promote economic cooperation and trade and to lift bilateral trade to 200 billion U.S. dollars in 2016.

The target was announced in a joint statement between China and Mercosur, or the Common Market of the South, which was released during the 43rd Mercosur summit that concluded here on Friday.

In order to achieve the goal, the two sides will continue to make concerted efforts to diversify their trade and raise the trade volumes between China and Mercosur members in a balanced manner, said the statement.

Meanwhile, China and and Mercosur agreed to facilitate two-way investments and pursue cooperation conducive to enhancing the capabilities of their respective financial institutions.

They will also boost information exchanges on laws, regulations and policies related to their economic cooperation and trade, according to the joint statement.

While vowing to step up cooperation in multilateral frameworks, the two sides expressed their worries about the impasse in the Doha round of World Trade Organization talks, and called for the continuation of negotiations.

The Doha talks should strive to produce an ambitious, comprehensive and balanced agreement that takes into account the interests and needs, especially those in the agricultural sector, of developing countries, they said in the statement.

In addition, the two sides agreed to convene a meeting of government representatives between China and Mercosur members and to organize training courses and symposiums as well as other cooperation programs so as to implement the joint statement.

They also expressed shared concern over the uncertainty and instability of the global economic situation stemming from the crises in developed economies, and pledged to jointly fight trade protectionism and guarantee the predictability of multilateral trade systems.

Established in 1991, Mercosur has four full members -- Argentina, Brazil, Paraguay and Uruguay. Paraguay was not allowed to attend the Mendoza summit after its membership was suspended due to the impeachment of Paraguayan President Fernando Lugo.

Chinese Ambassador to Argentina Yin Hengmin took part in the summit on behalf of the Chinese government, marking the first time that China was invited to attend a Mercosur summit.

Yin said China's attendance in the meeting and the release of the Sino-Mercosur joint statement demonstrated a new development stage of ties between the two sides and served as a milestone in China-Latin America relations.

http://www.shanghaidaily.com/article...a.asp?id=80195

[everywhere]

China's wine industry posts 6.35% profit surge in Q1
(China Economic, June 18)

Recently, the National Bureau of Statistics of China and the China Alcoholic Drinks Industry Association published relevant statistics about the economy operation of the wine industry.

According to statistics, since the beginning of this year, with rising material and management cost and imported wine endeavoring to grab the market, China's domestic wine market has been operating stably, industrial output continued to grow at a steady pace, and profit margin has been further expanded.

The first quarter is conventionally a dull season for the wine industry. Nonetheless, China's wine market still managed to maintain a steady growth trend. Statistics show that in the first quarter of this year, China's wine industry achieved revenue of RMB 9.875 billion Yuan, an increase of 9.92 percent compared with the same period of last year, with profit of RMB 1.441 billion Yuan, an increase of 6.35 percent compared with the same period of last year.
Experts believe that the steady growth of domestic wine has been greatly benefited by the huge consumption market in China. According to statistics, the annual growth rate of China's wine market has been over 20 percent since 2006.



In 2011, consumption of wine in China approached 1.6 billion cases, elevating China from the 7th to the 5th in terms of the world's largest wine consumption country. It is estimated that the value of China's wine market will exceed RMB 100 billion Yuan in 2013.

In the meantime, the increment of imported wine has been staying at high level, causing great pressure on domestic wineries. Some wineries have even suffered the loss of dealers and consumers. The development of domestic wine companies are being placed in a "reversed pressure" mechanism.



In the first quarter of this year, the volume of China's imported wine reached 128,800 kiloliters, an increase of 8.8 percent compared with the same period of last year. With ever greater pressure from imported wine, the three biggest wine companies in China, namely Great Wall, Changyu, and Dynasty, have been accelerating their channel construction and integrating domestic and foreign wineries resources, making vigorous efforts to improve the companies' competitiveness.

Zhang Hui, technology director of COFCO Global Wineries Group, told the reporter that COFCO Great Wall, on the basis of integrating global resources and wine making technologies, had taken steps further to improve the development model of wineries group, promote the internationalization of Great Wall wine, and improve the international competitiveness of its brand.

In recent years, COFCO Great Wall wine has stringently followed relevant standards of international wine organizations, establishing traceable systems throughout the entire industrial chain "from the farm to the table" that covers such links as grapes planting and picking, wine making, and storage, and building a number of unique wineries groups around the world.

Currently in China, Great Wall owns five major production areas on latitude 40��n that is the world's golden wine making belt, including Hebei's Shacheng, Changli, and Penglai, Ningxia's Helan Mountain, and Xinjiang's Tianshan. It has established numerous wineries groups in China, including Chateau SunGod, Chateau Junding, and Chateau Huaxia.



Overseas, Great Wall has successfully acquired Chile's Biscottes and Ch?teau de Viaud in Bordeaux, France, making it the first Chinese wine company to establish "global wineries group".



In the future, Great Wall is also planning to acquire well-known wineries in California in USA and in Australia, to further enhance the international quality of Great Wall wine.

"In order to convert resources in the production areas into actual market share and company competitiveness and do better in the international market, we need to make breakthroughs in such aspects as brand, technology, and product quality", said Zhang Hui.

In last August, Great Wall appointed world renowned winemaker Michel Rollands as the company's principle winemaker, extensively integrating COFCO Great Wall's global resources with advanced winemaking technologies through a model of "a international winemaking team + global wineries group".


Presently, breakthroughs have been achieved in the cooperation of the two parties. In the next half of this year, the Great Wall global wineries series products and the Michel Rollands series products will be put on the market, including premium products that are made in Great Wall's Chateau SunGod, Chateau Junding, Chateau Huaxia, Chateau de Viaud in France, and Biscottes in Chile.

Experts believe that, judging from the performance of the market in recent years, the market share of wine from premium wineries has been growing rapidly and is becoming the main trend of the future development of China's wine.

A series of internationalized and high-quality products will provide significant momentum to Great Wall's globalization strategy and become the new engine of the internationalization of the Great Wall brand.

http://en.ce.cn/Insight/201206/18/t2...23417158.shtml

[everywhere]

WASHINGTON, June 29 (Xinhua) -- The United States, China, and the European Union held their third trilateral summit on consumer product safety here Friday, vowing closer cooperation and coordination to ensure and improve product safety.

The meeting was attended by chairperson of the U.S. Consumer Product Safety Commission (CSPS) Inez Tenenbaum, EU Consumer Affairs Commissioner John Dalli and the vice minister of China's General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), Sun Dawei.

The summit participants exchanged opinions and information concerning seamless surveillance, tracking and traceability, as well as safety information dissemination on consumer products.

The three parties decided to outline specific steps required to move towards a seamless surveillance model of product safety enforcement involving cooperation between relevant product safety services, said a joint statement released at the meeting.

In addition, research on relevant standards in the field of consumer products of shared concern by the three parties would be continued, according to the joint statement.

The three parties should strengthen seamless surveillance over the whole supply chain of international consumer product trade on the basis of mutual trust, said Sun at a joint press conference following the talks, adding that China would continue its efforts to improve product safety.

The trilateral cooperation on product safety was aimed at protecting the interests of consumers, Tenenbaum noted. Enhanced international regulatory cooperation could improve the safety of products reaching consumers, she added.

The first trilateral summit on consumer product safety was held in Brussels in 2008, while the second meeting was convened in Shanghai in 2010.

http://www.shanghaidaily.com/article...a.asp?id=80176

BRITISH private equity firm 3i Group Plc yesterday said it is cutting more than 160 jobs, or about a third of its employees, and closing offices in a cost-saving effort to overhaul its global business.

It will shut down offices in six cities, including Shanghai and Hong Kong, in addition to a further reduction of staff in another six offices.

The company estimates the measures will reduce operating costs by more than 40 million pounds (US$63 million) by March and a further 45 million pounds in 2014.

http://www.shanghaidaily.com/nsp/Bus...Blocal%2Bunit/

THE China story is still very interesting to international investors even though a number of United States-listed Chinese companies have suffered selloff due to scandals such as accounting fraud over the past years, according to the operator of the New York Stock Exchange.

"Investors really like the China story they are just wary, they would like to be sure that the particular company they invest in doesn't have the challenges that we've seen in the last couple of years," Larry Leibowitz, chief operating officer of NYSE Euronext, said in an interview yesterday on the sidelines of the Lujiazui Forum in Shanghai. "I think they're just coming out of a period where they didn't feel very good."

A crisis of confidence has hit US-listed Chinese stocks, from Internet firms to mining companies, in recent years with investors pocketing gains by profiting from an earlier run-up in share prices.

"We saw the same thing happen in the US after the Internet bubble, and we have come through other periods where stocks have had problems that are not that similar, and it just takes investors a little while," Leibowitz said.

Chinese companies need to help investors understand the story and where growth and profits are coming from. "When that happens, investors are very happy to invest in these companies," he said.

Leibowitz also expects the US IPO market to regain momentum in the fall after a dull June, in the aftermath of Facebook Inc's disappointing debut last month and amid concerns over the worsening European debt crisis and slowing US growth.

http://www.shanghaidaily.com/nsp/Bus...l%2Binvestors/