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Follow the Debate - China Economic News January 2011


Economic China

  'The expansion of these gigantic cities has been fast, disruptive and unprecedented in world history. It has also been accompanied by rapid price increases. But they have occurred primarily in the first-tier cities. Markets cannot easily price what they have never witnessed before.'


One message is clear: The Chinese government wants to foster a national transformation from "world's factory" to "world's market." 


China has been reforming itself, a process known as "crossing the river by feeling the stones." The unprecedented experience, plus the country's scale, leaves the outside world uncertain of its future.







Biz China Weekly





Graeme has been using ChinesePod since 2007

"I highly recommend ChinesePod, I haven't found any Online teaching programmes that come close."




Counting Costs

We are looking for stories that would tell us how life on the ground is responding to the rising yuan and price hikes.

Editor's note: We are looking for stories that would tell us how life on the ground is responding to the rising yuan and price hikes. We found tales of courage, resilience and of lessons learned and mastered.

There is no clearer barometer of change than a country's attitude toward money. China is no different.



China Daily   31/1/2011

China invests $608b in water projects

Massive investment planned to ensure conservation of resource

BEIJING - Efforts will be intensified to promote water conservation as well as the sustainable use of the precious resource, and the task will be a multi-trillion yuan national priority, a central policy document said.

The country will invest 4 trillion yuan ($608 billion) into projects during the next decade to improve water conservation, Chen Xiwen, director of the office for the Communist Party of China (CPC) Central Committee's Leading Group on Rural Work, said on Sunday.


The Wall Street Journal   31/1/2011

China Central Bank Pledges Vigilance

KYOTO, Japan—The People's Bank of China must be vigilant on inflation and may need to tighten reserve requirements further to address rapid capital inflows, the central bank's governor warned Sunday.

Speaking to Dow Jones Newswires on the sidelines of meetings in Kyoto, Zhou Xiaochuan pointed out that Chinese price growth slowed slightly in December, but he signalled it ...


Chinese Banks on the Prowl in Europe

Chinese financial institutions are pushing into Europe, opening bank branches, scouting for deal opportunities and even attending German banking classes, in the latest illustration of China's growing global economic clout.

China Development Bank, a giant government-owned lender, is one of four final parties eyeing a big stake in troubled German bank WestLB AG, according to people familiar with the matter.


Turkish Minister Says China Gaining Unfair Advantage

It doesn’t matter whether or not China and the U.S. are actively trying to keep their currencies low, the end result is pain for emerging markets, Turkish Finance Minister Mehmet Simsek said Saturday.

Kaixin OpEd – China accumulates 3 trillion in reserves because, the west argues, it has held its currency down artificially. No mention of hard work and thrift.

In terms of purchasing distressed ‘western’ assets as the GFC aftermath continues, then it would be in China’s interests to increase the value of the Yuan.

Actually, China wins either way.


Because of the hard work and thrift that accumulated such vast wealth.

Perhaps the ‘west’ should ponder on this rather than just complain.

As Kaixin is now saying rather repetitively, China is an opportunity, not a threat.

However, ‘western’ companies have to get off their butts to take advantage of that opportunity.  

China Makes Water a $12 Billion Priority

BEIJING—Chinese officials said water conservation will be their top agricultural priority this year and targeted up to $12 billion for irrigation and related projects, while also acknowledging the country could have to import more farm goods over the long term.

Chronic droughts have parched aquifers in China's northern plains and weighed on grain output, even as the stock of arable land is under pressure from urban encroachment amid a massive continuing population shift from country to city.



WSJ MarketWatch 30/1/2011

How to profit from consumers in emerging markets

Middle class gains strength, but inflation challenges stock investors

SAN FRANCISCO (MarketWatch) — The rise of emerging market consumers, with their young populations and higher disposable incomes and spending, has contributed mightily to the growth of China, India, Brazil and other developing nations.

Now the consumer in these fast-track economies has been knocked off the shelf, along with investors who have banked on the growing middle class.

Kaixin OpEd – Kaixin has been saying this for some time. China (and the other BRICS in the wall) are an opportunity to be seized, not a threat.

Leading businesses have already moved in that direct, others are now starting to realise the potential and are looking in the right direction at last.


The Age   29/1/2011

Well-versed economy watchers should turn their minds to Chinese steel

Think of China, think of Australia making big bucks.

YOU want to make guesses about what will happen to the economy this year? Here's a tip: forget the floods and take more notice of China.

Australia's business economists have already got the message that China dominates the rest of the world's effects on us, whereas their mates in the money markets are slower on the uptake, retaining their obsession with all things American.

China matters, first, because, with a population of 1.35 billion, it's the most populous country in the world. That gives it 20 per cent of the world's population, making it 11 times larger than Japan.

Kaixin Oped – Kaixin has noted before that with around 1.4 Bill people beavering away there is a lot of economic activity going on.

They have been beavering for the last 30 years, since Deng Xiaoping removed the shackles.

The are beavering now and they will continue to beaver.

In this respect, size does matter …

See Kaixin's - China & US Relations 'The fundamental source of power for a nation, or empire, is its people.'


A leap too far leaves China at risk
John Garnaut

After three decades of phenomenal growth, the risks to China's economy are mounting. Australia needs to take note.

Kaixin OpEd - Young John is such a media tart. He loves a good scary news story and loves to huddle in corners with earnest Chinese dissidents.

Still, I suppose it’s by nature of the professions he’s in.

Xiaosui and I were watching a show on China’s CCTV1 (yes we have satellite TV) in which a senior journalist from Germany was being interviewed. She spoke very good Chinese and had over thirty years experience reporting on all things Chinese. She had lived in Beijing all that time.

She said that she was always being approached by people with stories of doom and gloom about China. She was always being approached with people who had a gripe and people who desperately wanted to become world famous dissidents. She soon learned that there was much more the China than that. She left that side to the in-experienced and shallow. She concentrated on substantial news stories and where possible positive ones. She did not take a step back if she thought that criticism was necessary, but did not make that the theme of her reporting, as young John is hell bent on doing.

I could paint different pictures of every country depending on who I spoke to and what events I covered.

Of course it’s going to rain sometime, of course there will be a correction if the trajectory of economic growth is too high.

However you cannot write off over a billion people beavering away to make their life better.

The same goes for America where the doomsayers are circling. There are a hell of a lot of Americans working to make America a better place.

In both countries the governments are trying to manage the situation.

Kaixin has often opined that Washington and the Fed are responsible for the economic mess America is in but letting the dogs of greed off the leash. They are trying to put them back in the kennel again and getting a few bites along the way.

China is not letting them off the leash. Beijing is having a hard time stopping them barking and waking the neighbours, but they are still in their kennel.

It will be interesting the see the outcome.

Kaixin predicts that America will find a way to heal its economic wounds and China will find a way out of the problems being caused by its stellar growth.

There will be some bumps and bites along the way, but not mortal.

Kaixin does agree that Australia cannot expect to continue to sell its backyard to China at exorbitant prices. China is putting in place a wide range of sources so they can eventually apply some pressure in the price negotiations.

When and if that happens, who can tell. I’d keep an eye on my resources stocks though …


Asia Times Online   29/1/2011

China labor shortage spreads
By Olivia Chung

Thousands of companies have opened factories away from China's prosperous eastern coastline in order to cut pay costs driven up in part by labor shortages. To their dismay, they are finding in places like Guangxi Zhuang autonomous region similar pay pressures, sometimes having to offer workers better conditions than in rich Guangdong.

Kaixin OpEd – The free ride on the backs of Chinese workers is over it would seem.

This will be reflected in the price Chinese widgets.

That’s OK says the Central Bank of America, well just print some more $US’s to pay for them …



The New York Times    29/1/2011

A Hot Topic for Davos: China’s Big Challenges

SHANGHAI — The seemingly unstoppable rise of China has long been high on the agenda at the annual meeting of the World Economic Forum in Davos, Switzerland. This year, though, the discussion is likely to include a greater focus on major challenges facing the country.


What Is the Beijing Consensus?

While a lot of people at the World Economic Forum are talking about the "Beijing consensus," there is no consensus about what the China's economic growth model actually is.


A Conundrum for Hot Asian Economies

Asian economic policy makers are entering 2011 facing major policy challenges, with rising prices for food and oil producing a resurgence of inflationary pressures, especially in China.


Chasing the China Bandwagon

The United States Business and Industry Council, for example, which represents family-owned domestic manufacturing businesses, argues that President Obama should stop negotiating with China and start imposing taxes and tariffs. “We need to contain China’s economic strength and to reduce China’s military strength,” said Alan Tonelson, research fellow at the council.

Mr. O’Neill, by contrast, points to the rich earnings that multinational companies like I.B.M. are garnering from sharply rising exports to China. “The notion that China grows at everybody else’s expense is at least three years out of date,” he said.

Kaixin OpEd - The 'smart' money - those with intelligence and foresight - see China's rise and rise as an opportunity not a threat to be contained.

The smart money goes to China and actively looks for opportunies.

The smart money looks for opportunities in their own country that can link into the rise and rise of China.

The dull money simply complains and want mommy to fix things ...


Caixin Online   29/1/2011

Successful Shanxi Rail Magnate Under Scrutiny

But will high-level connections, philanthropy and fame help protect businesswoman Ding Shumiao?

Ding Shumiao is a successful businesswoman, celebrated philanthropist and so well-connected that more than 400 central government and Communist Party leaders attended a huge Spring Festival celebration in early 2010 sponsored by her coal-railway-advertising conglomerate.

So when news recently emerged that government investigators were looking into Ding's finances and railway investments, a shiver went through the highest ranks of the nation's railway and coal industries.


The Wall Street Journal   29/1/2011

Geithner: Global Inflation ‘Not High on List of Concerns’

Inflation on a global level is “not high on the list of concerns,” even though emerging markets across the world are certainly “feeling some pressure,”  U.S. Treasury Secretary Timothy Geithner said Friday.

Kaixin OpEd – Well, that’s taking responsibility isn’t it?

America unleashes a tidal wave of money into the world banking system to try and fix its own economic woes (woes self inflicted) and couldn’t give a toss about the consequences to any other country.

China is certainly concerned about the tidal wave of counterfeit money heading its way.

China will take steps to stop it.

America will bleat and bleat about unfair economic and commercial practices …. but it is of their doing!!

Actually, there is nothing new in all this ……


China Bank Outlines Global Plans

ICBC, Making First Foray Into U.S. Retail Banking, Will Keep Focus on Expansion in Emerging Markets, Chairman Says

DAVOS, Switzerland—Industrial and Commercial Bank of China Ltd. will proceed cautiously in its drive into U.S. retail banking as it expands globally, Jiang Jianqing, chairman of China's largest commercial bank, said in an interview with The Wall Street Journal.


Global Times   29/1/2011

Davos debates China's status

The 41st World Economic Forum (WEF) in Davos, Switzerland, kicked off Wednesday with delegates gathering to try and paint a comprehensive picture of the post-crisis world they now inhabit.

One of the main topics of debate is who the principal artists of this new fresco will be: the established schools of the US and Europe, or the innovative movements of the emerging world, coming from China, India and Brazil.

As these "new realities" are being discussed, cautious optimism has dominated the meeting so far, as many officials feel it is high time to look beyond the crisis and establish guidelines as global economic power shifts from West to East, as suggested by Klaus Schwab, founder and executive chairman of the WEF.

Looking at China's place in this new reality, almost half of the 1,201 CEOs of international firms polled by PricewaterhouseCoopers claimed they were "very confident" about China's growth in the 12 months to come.

China topped the poll of business leaders, with 39 percent voting it the world's No. 1 growth engine, followed by the US with 21 percent, Brazil on 19 percent and India on 18 percent, according to the consultancy's Annual Global CEO Survey published Wednesday before the WEF began.


Smaller cities must begin to evolve

The State Council has released a set of new measures to tame the property market Wednesday, which appears to have suffered most over the past 12 months. However, high house prices do not simply reflect the price of a home, but also the amount that people are willing to pay to chase their dreams in big cities.

As long as these cities still possess this broad appeal, house prices there will not fall.

There are more than 600 cities in China. In a few of them, house prices have become a real social problem. A common feature of these cities is the existence of abundant opportunities for personal growth and career development. Big cities have rich cultural scenes, rapid development and sophistication.

In comparison, some second and third-tier cities do not look like cities, despite their gleaming infrastructure.

The concentration of population in major urban areas is a global problem. For instance, the population of the Paris metropolitan area is one-fifth of the French population. However, the situation in China is much worse.

The excessive concentration of all kinds of resources in big cities has led to this skewed appeal. Despite the pains of extremely high house prices, people still view this as a necessary evil.

In big cities like Beijing, Shanghai and Guangzhou, measures to curb the housing market have become increasingly tight. But the craving for these properties lingers on as people believe these cities will become bigger with more opportunities.

The market demand being squeezed out by curbing policies may be effective, but only when small and medium-sized cities see a rapid rise in their appeal. Otherwise, such demand may return and drive house prices even higher in big cities.

China should try to increase the appeal of its second and third-tier cities.

Appeal-building means more than building houses, roads, and urban squares. These cities should possess vivid cultures, offering denizens the flavor of a big city.  They should be able to echo global trends too.

In order to weigh down house prices, a few administrative control policies are not adequate. Bringing down house prices deserves the full force of China's modernization. At the moment, China's prosperity is dominated in a few cities. Such prosperity should shine over more regions, and people's traditional ideas of life and wealth should be reshaped. This sounds utopian, but it could determine the quality of China's modernization.

China is witnessing the expansion of its high-speed railway network and the migration of job opportunities into inland areas.

This provides second and third-tier cities with an opportunity to take a share of the appeal of big cities. However, these smaller cities still lack cultural confidence, and their appeal remains invisible in the eyes of many people.

China urgently needs more smaller cities to blossom next to their larger brethren. They will set good examples, and show people what modernization really means.


China Daily   29/1/2011

Import tariffs halved on electronics

Consumers to gain as China fulfills promise to WTO: analyst

BEIJING - China slashed its import tariff on some electronic products, such as laptops and digital cameras, by 50 percent, benefiting multinational companies, including Hewlett-Packard Co (HP) and Dell Inc, and stimulating their sales in the world's fastest-growing IT market.

According to a statement posted on the Ministry of Finance's website on Thursday, the import tariff on computers, digital video recorders and cameras will fall from 20 percent to 10 percent starting Jan 27.

"The Chinese government is fulfilling its promise to the WTO," said Wang Jiping, research manager at International Data Corporation (IDC) China, an IT research company.

During his visit to the United States last week, President Hu Jintao worked for closer bilateral ties between China and the US to stimulate global economic recovery. The duty concessions may help overseas companies gain a better pricing advantage in the Chinese market.



China prospers with world after WTO accession: Minister

DAVOS, Switzerland -- China has been prospering along with the world and thus achieved a "win-win" situation since it joined the World Trade Organization (WTO) 10 years ago, Chinese Commerce Minister Chen Deming said Thursday.

The decade after WTO accession proved to be one of the best periods for China's development, Chen said during a discussion with WTO head Pascal Lamy, in front of global business, financial and political leaders at the World Economic Forum (WEF) Annual Meeting in the Swiss resort of Davos.

China to double imports by 2015

DAVOS, Switzerland - Ten years ago when China laboriously won membership of the World Trade Organization (WTO), many were doubtful. Who would be the biggest losers, they asked, China, or the rest of the world?

Looking back and reflecting on the debates on China's WTO entry during that time, the organization's chief Pascal Lamy disappointed the doubters.

Admitting that China joined under terms much tougher than those imposed on any other developing country - a "bitter pill" which turned out to be "an insurance policy against protectionism" - he concluded during an interview with China Daily. "It seems that nobody has been a loser it is win-win."

Chen pledged that the country will further open its economy, forecasting another decade of prosperity for it and the rest of the world. This will be done by encouraging Chinese companies to invest overseas, increasing foreign purchases and boosting domestic consumption.

The US is still experiencing difficulties with toxic assets, Europe is in a public debt crisis, and the emerging economies are facing inflationary pressures. That being the case, Chen said China will cooperate to help promote global economic recovery, even though the world's second-largest economy also faces severe challenges itself, not least rising inflation.

Chen also said China's imports will double during the coming five years.


'Important measures' to boost strategic emerging industries

China is mulling a slew of important measures in 2011 to raise emerging industries of strategic importance, said Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology, Shanghai Securities News reported Thursday.

The measures will guide and nurture the development of emerging industries of strategic importance, including clean energy, biotech, new materials and the next generation of information technology, said Zhu.


China, Switzerland launch free trade agreement talks

DAVOS, Switzerland - China and Switzerland formally launched bilateral talks on a free trade agreement Friday.

Speaking at the opening ceremony, Chinese Commerce Minister Cheng Deming said the agreement talks between China and Switzerland have attracted huge attention and interest from the countries' leadership and business communities.


The Age   28/1/2011

China promises to 'buy even more' overseas

China promised on Thursday to help lift global consumption, with Commerce Minister Chen Deming saying that the Asian giant plans to "buy even more from overseas".

"Our development needs to be shared, so in future we will be even more open. We will focus on Chinese companies investing overseas, buying even more from overseas," Chen told political and economic elites gathered at the annual World Economic Forum meeting in Davos.

"We want to help boost consumption overseas," he declared.


China plays Sugar Daddy to Uncle Sam
William Pesek

It's perhaps the most tantalising question in economics: When will China's yuan replace the US dollar?

Chinese President Hu Jintao delighted yuan bulls recently by calling the US dollar-dominated world a “product of the past.” Oddly, though, his signature legacy will be solidifying the US currency's place at the center of the global financial system for many years, if not for decades, to come.


Asia Times Online   28/1/2011

Hu confronts ghost of Stalin
By Francesco Sisci

A new "pro-American" spin to China's foreign policy looks set to emerge after Washington endorsed Beijing's idea of peaceful development. Should President Hu Jintao now convince the politburo to deepen trust with the US, he will be in a position to repair damage done six decades ago, when Russian leader Joseph Stalin gave technology to Mao Zedong in exchange for intervention in Korea and the loss of Taiwan.


Davos, Dakar and a ton of BRICS
By Pepe Escobar

fter the ruling classes schmooze in Davos, "the rest" will be left with the World Social Forum - to be held in Dakar, Senegal. There could hardly be a better place to discuss inequality and the current crisis in capitalism, never mind its plethora of emerging catchy-named conclaves, than Africa - where hard-baked talk is likely to produce better solutions than any "problem solving" session après-ski.


The New York Times   28/1/2011

Can India Leapfrog China?

DAVOS, Switzerland — India is trying hard not to be forgotten at the World Economic Forum amid the China-focus. The country has brought the single biggest delegation to Davos and ads for its “Inclusive Growth” slogan could be seen not just in the conference center but on public buses in Davos.


The Wall Street Journal   28/1/2011

China to Renew Bid to Curb Steel Industry's Sprawl

BEIJING—China will renew its push to reduce the production capacity of its sprawling steel industry, as its largest mills continued last year to make only limited progress in the industry's consolidation, the Ministry of Industry and Information Technology said.


Caixin Online   27/1/2011

Central and Western Provinces Plan to Double GDP

High economic growth will be the key focus for central and western regions under the 12th Five-Year Plan

(Beijing) - Despite the central government's call for economic restructuring, at least 10 provincial governments have aimed to double domestic gross product from 2011 to 2015, putting economic growth rates at the top of their agenda.

As of January 25, 26 province-level legislatures had finished annual sessions. Among those provinces, Anhui, Qinghai, Guangxi, Ningxia, Sichuan, Guizhou, Chongqing, Fujian, Heilongjiang and Yunnan plan to double GDP in five years, which is expected to culminate in a 15 percent annual growth rate.

Developed regions like Beijing, Shanghai, Hebei, Zhejiang and Guangdong, have set the economic growth rate targets below 9 percent. However, Beijing, Hebei, Zhejiang and Guangdong have witnessed rapid growth between 11 to 12 percent in the past five years.


Bad Loans Rate Down in 2010

China’s banking regulator said non-performing loans tapered down at the end of last yea


The Wall Street Journal   27/1/2011

Lenovo Chairman Sees More Chinese Investment in U.S.

DAVOS, Switzerland—The chairman of China's Lenovo Group Ltd. predicted increased investment in the U.S. from China's companies and its sovereign wealth fund as they seek opportunities in the world's largest economy despite its recent troubles.


China Daily   27/1/2011

China to remain global growth engine

DAVOS, Switzerland - World business leaders continue to see China as the engine of global economic growth despite the tremendous challenges it faces in shifting from an investment and export-led development pattern to a consumer-led one in the coming years.

Of the 1,201 global business executives surveyed in PwC's 14th Annual Global CEO Survey, 39 percent said China would remain the leading growth engine, while 21 percent cited the United States, 19 percent named Brazil and 18 percent pointed to India.


China faces serious trade disputes

BEIJING - China remained a major victim of trade protectionism during the past year, witnessing 64 trade disputes in this period, covering some $7 billion in value, China's Vice Commerce Minister, Zhong Shan, said here Wednesday.

The country faced trade disputes with both developed countries and  developing ones, which came from not only traditional sectors but also high-tech industries, he told a national conference on trade promotion.

For the short- and mid-term, China would work to maintain a stable growth in foreign trade and keep the growth rate higher than both the global level and China's economic growth, he said.

China would also strive to achieve a more balanced trade structure by boosting imports and outbound investment, to strengthen the quality and efficiency of foreign trade, he added.

China's foreign trade last year jumped 34.7 percent year on year to more than $2.97 trillion, while its trade surplus fell 6.4 percent to $183.1 billion.


Arable land to find protection in special zones

Satellite monitoring will ensure rules are followed

Beijing - The national land watchdog is requiring local authorities to establish permanent arable land protection zones with a total area of 104 million hectares to protect China's shrinking arable land and guarantee food security, authorities said.


Caixin Online   26/1/2011

The Future of Economics is in China

Nobel Laureate Ronald Coase on how the study of economics will come to be based in China through openness to new ideas

With a long-running interest in China since he read Marco Polo as a schoolboy, Nobel Laureate and University of Chicago Professor Ronald Coase encouraged his future collaborator, Steven N.S. Cheung to go to the University of Hong Kong in the early 1980s, as a launch point to study China's nascent transition toward economic reforms.

Equating "bad economics" akin to the act of staring at a blackboard, Coase now aims to promote what he terms, "good economics," with the recently-established Coase China Society. According to Coase, the field of economics still has much to investigate outside of the realm of the imaginary. "The study of the subject has to be real," says Coase.

Kaixin OpEd - Kaixin has been saying this for some time. Western Economics is struggling to cope with this new world order. Economics will evolve and the centre will be China.


The Wall Street Journal   26/1/2011

Who Will Sail Ahead in Wind Power Race?

For an indication of whether China or the U.S. will lead the way in alternative energy capacity like windmills, it helps to check which way the wind is blowing – in Washington.

Policies in Washington may dictate how long China’s reign sustains.


Chinese Banks Look to Broaden Their Horizons

China’s investment banks put their stamp on some big global deals last year, participating in multibillion-dollar fund-raising efforts involving such clients as General Motors, Russia’s Rusal and Global Logistics Properties of Singapore.


IBM to Open Big Data Center in China

BEIJING—International Business Machines Corp. agreed to cooperate with Chinese network services provider Range Technology Development Co. on the construction of a cloud computing data center in China, which IBM said will be Asia's largest in terms of floor space.

Construction of the center ...


Tencent to Launch Internet Investment Fund

BEIJING—Tencent Holdings Ltd. said Tuesday it plans to launch a 5 billion yuan ($759.5 million) investment fund to invest in online game companies and other firms.

Other investment targets for the fund include social game, mobile game, e-commerce, and new media firms, the company ...


China Daily   26/1/2011

Sino-Russian relations key to peace, security

BEIJING - Trade between China and Russia is becoming increasingly interdependent, but the two still need to do more to promote sustainable global development, experts said.

Global economy experts from the two countries took part in a videoconference on Tuesday to discuss Sino-Russian cooperation in the post-financial crisis era.

Meanwhile, China and Russia held their fifth round of strategic security talks in Moscow on Monday, led by State Councilor Dai Bingguo and Russian Security Council Secretary Nikolai Patrushev. The two countries acknowledged that in order to enhance strategic mutual trust and improve the global security situation, the two sides should chart the development of Sino-Russian relations for the next 10 years from a strategic perspective.

As Dai's trip came just days after President Hu Jintao's visit to the United States, it is widely believed that he talked with Russian officials about the results of Hu's visit.

Analysts say Sino-US relations will affect the layout of world politics and that Russia is willing to see stronger Sino-US ties, which will help stabilize its own relationship with Washington.

Kaixin OpEd – Bit ironic that …

In Kaixin’s opinion America approached China in the early 1970’s to prevent just such an alliance.

Yes, and alliance with Russia in the 21st century is different that an alliance with the USSR in the 1970’s.

However, they are two mighty nations with enormous natural and human resources. They adjoin each other geographically.

They do not have a happy history with America.

As we said, bit ironic that …


Experts call for slower economic growth

BEIJING - Although the central government has said it will try to slow the country's economic growth over the next five years, many provinces have set ambitious targets of two-digit yearly expansion when making plans for the period from 2011 to 2015.

Experts have warned that overheated economic growth might not be good for sustainable development.

According to new local five-year plans released this month, many provinces and cities have set high targets for growth of their gross domestic product (GDP), while the National Development and Reform Commission, China's economic planning body, has set the national target at a more modest 8 percent for 2011.


'Golden channel' to boost trade links

BEIJING - The Kunming-Bangkok Highway has every prospect of becoming a "golden channel" connecting China and Southeast Asia with annual trade increasing by hundreds of millions of dollars over the next few years, said an official in the capital of southwestern China's Yunnan province.

Talking about the 1,807-km road, Zhu Xiaoyang, director-general of the port office of Yunnan province, sees a promising future.

"The road has its problems, but they can be solved," said Zhu, who is also deputy director-general of the province's Department of Commerce.

Running from Kunming, through Laos to Bangkok, the road is the shortest of the four major links between China and Southeast Asia.

The road runs for 688 km in China, 229 km in Laos, and 890 km in Thailand.

It is yet to reach its ultimate goals including transporting goods worth more than $400 billion, carrying millions of tourists and shortening the travel time between Kunming and Bangkok to 20 hours.

But the road, which was opened in March 2008, could eventually become a "golden channel" connecting China and Southeast Asia, Zhu said.


China, ASEAN eye stronger ties

KUNMING / BEIJING -Foreign ministers from China and the Association of Southeast Asian Nations (ASEAN) on Tuesday agreed to further promote strategic cooperation, which analysts believe sets a positive tone for China-ASEAN relations this year.

It is in the fundamental interests of both sides to further promote China-ASEAN strategic cooperation, Foreign Minister Yang Jiechi said at the China-ASEAN foreign ministers' meeting, the first held in China.

To maintain and develop good relations with ASEAN, China is willing to work with ASEAN to implement the second five-year-plan in their strategic partnership, Yang said.

ASEAN said that it is also seeking ways to expand cooperation with China, including promoting connectivity and cultural exchanges, enhancing strategic coordination in global and regional affairs and safeguarding common interests, to promote peace, stability, development and prosperity in the region.

A common desire to further enhance cooperation was the prevailing spirit of the meeting, rather than the thorny issue of some ASEAN nations' sovereignty disputes with China over some islands in the South China Sea, as some media outlets had speculated prior to the gathering.

Yang said that both sides have similar positions on international and regional affairs and coordinate with each other to safeguard regional peace and stability.

Yang also noted that the Declaration of the Conduct of Parties in the South China Sea that the two sides jointly issued is an important contribution to promoting mutual trust and maintaining peace and stability in the South China Sea.


Volvo opens China headquarters

Volvo Car Corporation inaugurated its China headquarters in Shanghai on Jan 25, 2011 to increase its presence in the Chinese market.

It is reported that the China headquarters is similar in function to the headquarters in Sweden, and the China headquarters will directly report to Volvo Chief Executive Stefan Jacoby. With the China headquarters open in Shanghai, Volvo will officially launch its China market strategy.

Volvo China spokesman Ning Shuyong said: "The Volvo China headquarters is a branch of the headquarters in Sweden, but as China is the location of the Volvo parent company, the future Volvo China headquarters will be very different from other branches of the company. It will have more business and form a complete functional system."


GM sold more cars in China than in US last year

LOS ANGELES - General Motors Co sold more vehicles in China than it did in the United States last year, marking the first time a foreign market has outpaced the automaker 's domestic sales in its 102-year history.

GM's sales in China increased 28.8 percent to 2,351,610 vehicles in 2010, while US sales rose just 6.3 percent to 2,215, 227, The Los Angeles Times said on its website Monday.

GM recently announced that it expected to export about 900 million in vehicles and components to China over the next two years.


Foreign markets boost CNEEC

EPC contractor secured contracts for $3b last year, most from abroad

BEIJING - China National Electric Engineering Co Ltd (CNEEC) says it secured most of its 2010 revenue from overseas power station projects, representing the Chinese contractor's capacity in the international Engineering, Procurement and Construction (EPC) market.

The contractor had more than 3 billion yuan ($456 million) in revenue in 2010, up 7.46 percent year-on-year, and its profit soared by almost 50 percent to more than 130 million yuan. It secured new contracts worth nearly $3 billion last year, representing an increase of 12.89 percent.

About 80 percent to 90 percent of its projects came from foreign markets, according to the contractor.

"A diversified business portfolio is helping us expand into the global market," said Zhao Ruolin, president of the company.

CNEEC engages mainly in the construction of thermal and hydraulic power plants, and power transmission and distribution projects, in addition to environmental and energy conservation.

Chinese contractors such as CNEEC are now competing with well-known global conglomerates such as General Electric, Siemens and Mitsubishi in the international EPC market.



The Wall Street Journal   25/1/2011

ICBC’s Tip-Toe Into U.S.

In its first foray into the U.S. market, the world’s largest bank has gone for a quiet start.

Industrial & Commercial Bank of China Ltd. has agreed to buy an 80% stake in Bank of East Asia Ltd.’s U.S. subsidiary, The Wall Street Journal reports.


Prada Prods China’s Elite

The Italian luxury brand staged a fashion show in Beijing on Saturday, attempting to flash its wares in front of China’s famous and fabulously wealthy.


Canada's Crude Draws China's Interest

TOKYO—Canadian National Railway Co. and some Chinese companies are in talks about possible exports of crude oil produced in Canada's inland province of Saskatchewan via railway to a West Coast port, Saskatchewan's energy and resources minister said Monday.

"We believe this has a real potential," said the minister, Bill Boyd. Mr. Boyd didn't specify which ports or oil fields might be used, adding that the discussions are at "a very early stage."

Saskatchewan—the second largest oil-producing province in Canada after Alberta, as of the end of 2009—has recoverable reserves of 1.2 billion barrels of crude. The U.S. is the major ...


Telefonica, China Unicom Strengthen Ties

MADRID—Spain's Telefonica SA said Sunday that it will widen its strategic partnership with China Unicom (Hong Kong) Ltd., with each company investing $500 million to increase their cross shareholdings.

Telefonica said in a filing with regulators that it will raise its stake in China Unicom to 9.7% from around 8.4%, while the Chinese telecommunications firm will increase its ownership in the Spanish company to 1.37% from about 0.9%.

The Spanish telecoms giant said the strategic agreement and ...


The New York Times   25/1/2011

Avoiding Pitfalls, and Forging Success, in East-West Contract Negotiations

While Westerners often take shortcuts to get to the results assigned to them, the Chinese often expect a long, complicated negotiation process. Experts offer advice on bridging these cultural differences.


The Future of Economics is in China

Nobel Laureate Ronald Coase on how the study of economics will come to be based in China through openness to new ideas

With a long-running interest in China since he read Marco Polo as a schoolboy, Nobel Laureate and University of Chicago Professor Ronald Coase encouraged his future collaborator, Steven N.S. Cheung to go to the University of Hong Kong in the early 1980s, as a launch point to study China's nascent transition toward economic reforms.

Equating "bad economics" akin to the act of staring at a blackboard, Coase now aims to promote what he terms, "good economics," with the recently-established Coase China Society. According to Coase, the field of economics still has much to investigate outside of the realm of the imaginary. "The study of the subject has to be real," says Coase.

Kaixin OpEd - Kaixin has been saying this for some time. Western Economics is struggling to cope with this new world order. Economics will evolve and the centre will be China.


Runaway train on a collision course

Meantime, the unsustainable pattern of attempting to hold down the currency and inflation by "sterilising" the resulting surge in liquidity can continue for a while yet.

"You're trying to make water flow uphill, which you can do for a while but at some cost," says the World Bank's chief economist in China, Ardo Hansson.

Kaixin OpEd – Another article based on the assumption that the current western economic theories (or should I say hypthesis’) are right and there is not other way.

As the article above from the NYT notes, the centre of intellectual thinking for economics is shifting from the west to China.


The New York Times   24/1/2011

Maybe Japan Was Just a Warm-Up

The trade tensions with China sometimes seem like a rerun of the 1980s rivalry with Japan. But can Washington use its old strategies?

The real answer to the China challenge, like the competition from Japan in the 1980s, must come from the United States, the industrial policy thinkers say. A mix of several ingredients will undoubtedly be sought: skillful government policy, smart private-sector strategies, national investment in research and development for long-term innovation, and improved performance of the American education system. In short, all the things the United States should be doing anyway, but with an added measure of urgency because of the global competition that China epitomizes — an economic Sputnik.

Kaixin OpEd - An informed article that is well worth reading.

China is definitely NOT Japan and has approached it rise to economic power in a completely different way. Japan was always hostage to America post WWII. China prised open America in the 1970's and has not looked back.

The author, Steve Lohr, is correct in saying that America has to learn to compete with China and go back to basics. Complaining about the Yuan and crying on Washington's shoulder won't fix the problem of a stagnated economic America.

Steve Lohr is also right in saying that America has a great wealth of talent and energy in its people and corporations. Harness that and America will compete successfully with China.

Rather than see the rise and rise of China as a threat to be controlled, America should see it as an opportunity to compete: compete in business, economics, philosophy and ideals.

America became a great nation because of its ability to embrace competition. It lost a lot of that greatness when it suckled up to mummy's tit (aka GFC) and started to cry like a baby (aka Yuan).


Chasing the China Bandwagon

The recent visit of China’s president gives investors more reasons to take notice of its surging economic growth.


Superpower and Upstart: Sometimes It Ends Well

Thucydides knew fear can trap states into war. President Obama and Hu seemed to take a lesson from him last week.


China Daily   24/1/2011

Beijing to build China's first design exchange

BEIJING - Beijing is planning to build China's first design exchange to offer a platform for design trading and boost the country's burgeoning creativity industry.

"China enjoys a tremendous market for both manufacturing and consumption, and sees a growing demand for design industry and an increasing supply in this regard," Song Weizu, vice secretary-general of the China Industrial Design Association, said Sunday.

In Beijing alone, there are about 1,000 governmental design businesses and 20,000 privately-run design companies, said Song, who is also secretary-general of the Beijing Industrial Design Promotion Association.

"But there is no public platform in China for design suppliers and those in need to find each other, and the two parties have to contact each other in a point-to-point way," he said.

"That not only lowers market efficiency but also hampers industry expansion," he said.

Song said the China design exchange will open this year if "everything goes smoothly."

"Some international design companies in Britain, Republic of Korea, Italy and others have voiced interest in the design exchange," he said.


Asia Times Online   22/1/2011

China's state giants too big to play with
By Willy Lam

China's state-owned enterprises, their special privileges and huge profits, are attracting attention from the government media and a disenchanted public. Premier Wen Jiabao has vowed "to render society more fair and just", but their relation to the ruling Communist Party means little is likely to change.


Hu's dollar frustration
By Hossein Askari and Noureddine Krichene

Chinese President Hu Jintao and French President Nicolas Sarkozy are two of the more influential critics of the international reserve currency system. Yet the same US dollar-dominated system, while acting as a tax on other countries, has also hurt the industrial structure of the United States.

Hossein Askari is Professor of International Business and International Affairs at the George Washington University. Noureddine Krichene is an economist with a PhD from UCLA.


The Google-GM summit
By Pepe Escobar

Chinese President Hu Jintao's state visit to the United States can best be seen as a summit between Google and General Motors. The US is the beleaguered car company, doggedly peddling yesterday's product to the world. China is the sexy search engine that nobody can live without. To understand this, all you need to do is watch the Wall Street head honchos fighting for a seat at the summit table.


Caixin Online   22/1/2011

PetroChina Primes Pump for Europe, Americas

Buying stakes in a British firm's refineries fits a PetroChina go-global strategy for western assets

Hunting for global profit potential, the listed arm of China National Petroleum Corp., PetroChina, has set sights on new investment targets in developed markets in the wake of a deal for refineries in Scotland and France.

Caixin learned PetroChina, which like many Chinese companies is pushing a go-global agenda, is not only entering West Europe but is cultivating an interest in U.S.-based Valero Energy Corp.'s Aruba oil refinery as well.


The New York Times   22/1/2011

China and U.S. Businesses See Gains in Deeper Ties

Referring to large American corporations, China’s president told executives that China was in many cases the “biggest source of profits in their global operations.”

Kaixin OpEd - See OpEd's above ...


China May Be Masking Its Purchase of U.S. Securities

China is a net seller of Treasury securities, according to government figures. That has raised speculation that it is channeling its purchases through British accounts.



Op-Ed Columnist
China Goes to Nixon

With Hu Jintao, China’s president, currently visiting the United States, stories about growing Chinese economic might are everywhere. And those stories are entirely true: although China is still a poor country, it’s growing fast, and given its sheer size it’s well on the way to matching America as an economic superpower.

What’s also true, however, is that China has stumbled into a monetary muddle that’s getting worse with each passing month.


The Wall Street Journal   22/1/2011

Chinese Shoppers Hitting Their Stride?

Americans shop. Chinese people save. That, at least, has been the lesson of the U.S.-China economic relationship, one borne out by a $250 billion trade gap and China’s roughly $900 billion in U.S. Treasury holdings. But a new study suggests things are changing.

Kaixin OpEd – If you believe, ‘Americans shop. Chinese people save.’ then you haven’t been to China lately.

Indeed, you don’t understand the Chinese.

Yes, they save, but they LOVE to shop.

Surely it is more prudent to spend less on shopping than you earn. The ‘west’, Americans in particular’, had a great big party thrown by Greenspan and spent far more then they earned and, for many, far more then they were worth.

That went for countries, States, Local Councils, Corporations …

Hence, the GFC.

The Chinese just increased their shopping as their incomes went up ….. but they made sure they saved a little as well.

Hence, for China, no GFC.

As China’s wealth increases you will have around 1.4 billion people who love to shop.

This may come as a surprise to many in the ‘west’ …. but that is an opportunity, not a threat.


China's ICBC Bids for U.S. Entry

CHICAGO—Industrial & Commercial Bank of China Ltd. on Friday signed an agreement here to acquire a majority stake in Bank of East Asia Ltd.'s U.S. subsidiary, becoming the first state-owned Chinese bank to make an acquisition of a U.S. deposit-taking institution.

Kaixin OpEd - And why can China afford to do that? See OpEd above ...


Chinese Agriculture Imports See Sharp Rise

BEIJING -- China's grain imports made the largest gains by far among China's commodity purchases last year, signaling higher demand and flush liquidity that analysts say is likely to pave the way for more imports this year.

Led by a surge in corn shipments from the U.S., Chinese grain imports in 2010 surged as the rise of large-scale livestock farms and a shift in diet patterns dented Beijing's policy of self-sufficiency in the sector.

China imported 1.57 million metric tons of ...


China Increases Uranium Imports

SHANGHAI—China more than tripled its uranium imports last year to feed new nuclear reactors and to raise stocks of the fuel for its aggressive civil nuclear expansion program.

Beijing aims to raise nuclear power's contribution to 5% of total generating capacity by 2020, from less than 2% now, as it is cleaner-burning than coal and oil, despite the problem of permanently storing the deadly waste.


Video: China’s Fast Growth Continues

The latest China GDP growth numbers are out, and they’re bigger than expected. On Asia Today, WSJ’s Jake Lee speaks to Heard on the Street Asia Editor Mohammed Hadi about the implications of China’s strong growth numbers, and the implication for its efforts to control inflation:


China Daily   22/1/2011

33 firms among top emerging challengers

BEIJING - Thirty-three Chinese companies have made it to the top 100 "global challengers" this year, reflecting the dynamic growth and international aspirations of China's corporations, according to a report released by the Boston Consulting Group (BCG) on Thursday.

The group identified 100 global challengers from 16 rapidly developing economies that are now playing prominent roles in global markets and also reshaping global industries.

Those 100 companies could collectively generate $8 trillion in revenues by 2020, an amount roughly equivalent to the collective revenues of the S&P 500 companies at present, said the report.

During the last decade, revenues of the global challengers rose by 18 percent annually, triple the average annual growth rate achieved by global peers, who are multinational companies that are headquartered in developed economies.

In 2009, 100 global challengers generated $1.3 trillion in revenues.


The New York Times   21/1/2011

China’s Growth Unsettles Wall Street

China’s inflation rose 4.6 percent in December, according to the latest report, which raised concerns that the central bank may raise interest rates to slow growth.


The Wall Street Journal   21/1/2011

It’s (Almost) Official: China’s No. 2

Japan doesn’t report its year-end gross-domestic product data until Feb. 16., but any suspense that remained over whether China vaulted into the No. 2 spot in the global economic rankings in 2010 is pretty much gone after figures reported by Beijing Thursday.


U.S. Financial Firms to Obama: Open China Market

As American and Chinese energy companies prepare to ink a host of deals during Chinese President Hu Jintao’s visit to the U.S., the financial services industry is reminding President Obama not to forget about their companies.

Engage China, a coalition group that represents the U.S. banks, insurers, and brokers, sent a letter to Mr. Obama urging him to press for greater market access for American firms.


Economists React: GDP Growth Up, Inflation Down

China’s National Bureau of Statistics reported Wednesday that China’s economy grew 9.8% in the final quarter of 2010. At the same time, inflation in December slowed on the back of moderating food prices. Analysts weigh in:


Video: China’s Fast Growth Continues

The latest China GDP growth numbers are out, and they’re bigger than expected. On Asia Today, WSJ’s Jake Lee speaks to Heard on the Street Asia Editor Mohammed Hadi about the implications of China’s strong growth numbers, and the implication for its efforts to control inflation:


China Dialy   21/1/2011

China, US need co-op to solve trade imbalance: Chinese minister

WASHINGTON -- China is willing to work with the United States on the imbalance of bilateral trade through communication and cooperation, Chinese Commerce Minister Chen Deming said Wednesday.

Trade imbalance is indeed "an important issue that the two sides need to have a correct perception of," Chen told reporters during Chinese President Hu Jintao's ongoing state visit to the United States.

Responding to a question that linked the trade imbalance with China's currency RMB, Chen said the two issues are irrelevant.

"I have read a lot of comments by many US think tanks and members of US Congress. They believed there should be a major RMB appreciation because of the trade imbalance between the two nations," he said.

"According to Western economics theories, currency will have an impact on the overall export of a nation. But if it is just about trade surplus or deficit between two countries, then it is not a matter of currency. Rather, it is something about trade barriers, trade liberalization and trade facilitation, which both countries need to sit down and talk about," he said.

China's trade surplus totaled 183.1 billion US dollars in 2010, of which 181.3 billion dollars was gained from the United States, meaning the Sino-UStrade imbalance has nothing to do with the currency, as China barely had a surplus with other trading partners, Chen said.

He listed three major reasons for the huge surplus.

First, part of that surplus comes from the trade surplus originally held by other countries and regions against the United States. This is a result of the globalization process.

Second, the United States still holds trade discrimination against China.

"The United States bans military items export to China and also subjects military-civilian dual-use items to very rigorous restrictions," Chen said.

Currently China is the third largest export market for the United States, and China's imports from the country is expected to further grow as it continues to implement an import stimulus policy this year. However, China is excluded from the Obama administration's list of countries and regions to which US export control will be eased, he said.

"This is apparently not in the interests of American companies and workers," Chen said. "We hope the United States could change such policy and readdress the trade imbalance between the two countries."

Third, there were some misalignments in trade statistics that both sides are currently working together to reconcile.

"We believe we should discuss the trade issues in an atmosphere of mutual trust and equality. Only in this way can we find a better solution to the issue," he said.

The minister, currently accompanying Chinese President Hu Jintao on a four-day state visit to the United States, said multi-billion deals between the two countries will be signed during Hu's visit, including Chinese purchases of US products worth a total of 24.9 billion dollars, which testifies to the importance of Sino-US trade relations.

Kaixin OpEd – Kaixin has observed for some time that China is challenging the assumptions of the western economists.

Particularly the ones that say it is: “Basic Economics 101”

Rather, China is evolving ‘Basic Economics Yi Ling Yi’ – Economics with Chinese Characteristics.

Therefore, Kaixin was interested to see the comment by Chinese Commerce Minister Chen Deming, "According to Western economics theories …”

We shall see, we shall see …

China, US reach $45 billion export deals

WASHINGTON - China and the United States on Wednesday agreed on $45 billion in US export deals and to give US companies greater access to China's $88 billion-plus government contracts market at the start of President Hu Jintao's four-day state visit.

White House officials said the agreements included a $19 billion contract to buy 200 Boeing aircraft for delivery between 2011 and 2013.

"From machinery to software, from aviation to agriculture, these deals will support some 235,000 American jobs -- and that includes many manufacturing jobs," US President Barack Obama said at a joint press conference with Hu.

Another deal involving GE builds on an existing partnership with the Chinese Ministry of Railways to bring Chinese high-speed rail technology to the United States, and for GE to manufacture locomotives for China.

The White House also announced deals in various stages of development involving Honeywell, Caterpillar, Westinghouse Electric, a unit of Japan's Toshiba Corp, and other companies. The announcements served to underscore the theme of economic cooperation struck by Hu and Obama.


China makes flurry of energy deals with US firms

Washington - China's National Energy Administration and the United States Department of Energy signed 18 deals worth $13 billion on Tuesday, ushering in President Hu Jintao's four-day state visit to the United States.

The deals coincided with the Second China-US Strategic Forum on Clean Energy Cooperation that began on Tuesday morning in Washington.

The agreements came a day after a 120-member Chinese delegation, led by Vice-Minister of Commerce Wang Chao, signed a number of agreements with businesses in Houston, Texas, worth about $600 million.

Among Tuesday's deals, Westinghouse Electric Co extended its nuclear power cooperation agreement with China's State Nuclear Power Technology Co Ltd for two years. The deal will allow Westinghouse to continue its operation of a nuclear power plant in China.


GE says China deals to bring $2b in sales

NEW YORK - Five deals that General Electric Co (GE) signed with Chinese partners this week will generate more than $2 billion of revenue over the next decade for the US conglomerate, including about $1 billion of exports from the United States, GE said on Wednesday.

GE did not provide a time frame for the revenue and a spokeswoman was not immediately available to comment.

The flurry of dealmaking comes during a four-date state visit to the United States by Chinese President Hu Jintao.

Agreements included China's final approval of a $19 billion contract to buy 200 Boeing aircraft, and agreements with Honeywell, Caterpillar and Westinghouse Electric, a unit of Japan's Toshiba.


China's economy surges 10.3% in 2010

BEIJING - China's economy grew 10.3 percent last year, up from 9.2 percent in 2009, the National Bureau of Statistics (NBS) announced Thursday.

Gross domestic product (GDP) hit 39.8 trillion yuan ($6.05 trillion) last year, up 10.3 percent year on year calculating at comparable prices, Ma Jiantang, director of the NBS, told a press conference Thursday.


China allocates 98.6b yuan to support farmers

BEIJING - The Chinese government has allocated 98.6 billion yuan ($15 billion) for farmers nationwide in a bid to maintain steady grain output and boost farmers' incomes.

The bulk of the funding - 83.5 billion yuan - is to be used in the purchasing of farm machinery such as equipment to plant seeds and reapers.

The remainder, 15.1 billion yuan, would subsidize farmers in growing crops such as rice, corn, and cotton, according to a statement released Thursday by the Ministry of Finance.

The move came as most northern Chinese regions, plagued by a months-long drought, will continue to see cold and dry weather in the next 10 days, the National Meteorological Center forecast Wednesday.


Hectares of arable land used illegally

Beijing - A senior land administrator has pledged tough measures to curb the illegal use of land, especially for the construction of real estate, luxury villas and golf courses.

Li Jianqin, director of the law enforcement and supervision department of the Ministry of Land and Resources, said on Thursday that there were a total of 53,000 cases of illegal land use across the country in 2010, which gives an indication of the scale of the challenge posed by seeking to protect this scarce resource.



China expected to be top tourist destination

MADRID - UN World Tourism Organization (UNWTO) Secretary General Taleb Rifai said Thursday he expected China to become the world's largest tourist destination within five to seven years.

Kaixin OpEd – That makes perfect sense to Kaixin. China is largely un-explored by western tourists, yet it has an almost unlimited wealth of natural beauty and culture to be explored.

Instead of making widgets and selling them to the west, people from the west will come to China and spend their money there.

That will boost domestic consumption.

And so it goes …


China Daily   20/1/2011

China's GDP grows 10.3% in 2010

BEIJING - China's economy grew 10.3 percent last year, up from 9.2 percent in 2009, the National Bureau of Statistics (NBS) announced Thursday.

Gross domestic product (GDP) hit 39.8 trillion yuan ($6.05 trillion) last year, up 10.3 percent year on year calculating at comparable prices, Ma Jiantang, director of the NBS, told a press conference Thursday.In the fourth quarter, GDP growth picked up to 9.8 percent year on year from 9.6 percent in the third quarter, after slowing from 11.9 percent in the first quarter and 10.3 percent in the second.

"In the past year, China has consolidated and boosted its recovery from the global financial crisis, and the national economy is generally operating well," Ma said.

"The country is at a key stage of turning recovery into stable growth," he said.


Hu: Foreign investors treated equally in China

President Hu Jintao extended welcome to American investment in China while meeting with Chinese and US business executives in Washington Wednesday noon, pledging continuous efforts to provide transparent, fair and highly efficient investment environment for investors including those from the United States.

The Chinese president stressed that all enterprises registered in China enjoy national treatment, adding that foreign businesses are treated equally on government procurement, the protection of intellectual property rights and the accreditation of independent innovation products.

Hu also expressed support for Chinese firms investing in the US and the confidence that the Obama administration will provide fair investment environment for Chinese companies.


Chinese bank opens 1st French branch in Paris

At the ceremony, ICBC President Jiang Jianqing and French Finance Minister Christine Lagarde jointly pressed a red button to symbolically launch the new subsidiary of the Chinese bank.

"France is very glad to welcome the biggest bank of the world, ICBC," Lagarde said during a gala diner organized in Brongniart Palace, the old Paris stock market.

According to Lagarde, the new investment from ICBC extended the existing financial cooperation between China and France, which was a recognition of Paris' financial position in the world and would benefit French employment.

Jiang said the great potential of commercial exchange between China and France, which exceeded $40 billion in 2010, encouraged enterprises from both countries to augment their mutual investment.


Chinese ODI in US to surge: Official

Analysts predict rapidly increasing investment due to mutual needs

BEIJING - China's investment in the United States will grow by more than 50 percent this year, as the US market becomes more open and transparent, said an official from the Ministry of Commerce.

Last year, China's total overseas direct investment (ODI) in the non-financial sector grew by 36.3 percent from a year earlier to $59 billion, but comparatively, the nation's ODI in the US surged by as much as 81.4 percent year-on-year to $1.39 billion, according to statistics released by the Ministry on Tuesday.

As bilateral economic relations become stronger and Chinese companies' aspiration for overseas expansion increases, the nation's investment in the US will "probably continue to grow rapidly, say by 50 percent", said Yao Jian, a ministry spokesperson.

However, what concerns China is whether the US "can further open the market to Chinese companies, offering transparent laws and reducing the possibility that the approval of proposals from the Chinese side can be delayed, or even rejected, because of so-called security reasons", he added.


The Wall Street Journal   20/1/2011

China Corporate Challengers Brawny, Not Brainy

Brawn, not brain-power, characterizes the Chinese business groups that a new report says will shake up the corporate world order.

A list of rising companies from the developing world likeliest to challenge the multinationals (pdf), published by the Boston Consulting Group on Tuesday, suggests size and government backing in China, not entrepreneurialism, may be the source of the global impact by the country’s businesses. China occupies 33 spots on the 100-strong list, against 20 from India and 13 from Brazil.


Rare Earth Quotas: Big Bark, Less Bite

China’s domination of the global rare-earths sector may be overwhelming, both in terms of its control of the world’s output as well as the amount of recent media attention. But what’s more striking in a recent semi-official data release is just how small the market really is.


Alibaba to Expand Supply Network in China

BEIJING—Chinese Internet giant Alibaba Group said it is investing as much as $4.6 billion to build a network of warehouses across China, as it looks to feed the country's boom in online shopping.


U.S. Firms Decry China's Heavy Hand

Alleged Bias by Regulators Is Likely to Be Contentious Issue Between Two Countries

SHANGHAI—Almost one half of U.S. businesses surveyed in Shanghai complained of discrimination by domestic regulators, contradicting an assertion by Chinese President Hu Jintao that the playing field is level.



Caixin Online   19/1/2011

2010 FDI in China Tops US$ 100 Bln

Foreign direct investment in 2010 for the first time broke the US$ 100 billion threshold, boosted by the improvement of China's domestic investment environment

(Beijing) - Foreign direct investment FDI into China reached a record high in 2010 of US$ 105.7 billion, a 17.4 percent increase from the previous year.


Robust Outlook for Chinese M&As

Strong growth is expected in Chinese M&A activity for 2011 – last year, total transactions for overseas M&A activity hit US$ 38 billion, compared to US$30 billion in 2009

(Beijing) – China has set a record in overseas merger and acquisition activities in 2010, and the momentum is expected to remain in 2011, according to PricewaterhouseCoopers.


China Strengthens Rare Earths Regulation

The Ministry of Land and Resources has designated 11 rare earth mining blocks in Jiangxi as national planning centers

(Beijing) – China has drawn-up national planning regions for rare earth and iron mines to strengthen government regulation over the development of the metals.


The Age   19/1/2011

China aims to cut 2011 lending by 10%

China's central bank aims to cut new lending for 2011 by 10 per cent from last year, state media reported on Tuesday, as Beijing fights to rein in inflation and a soaring property market.


The New York Times   19/1/2011

Op-Ed Contributor
China’s Currency Isn’t Our Problem

A stronger renminbi won’t save many jobs or help U.S. exports.

Mark Wu is an assistant professor at Harvard Law School.



The Wall Street Journal   19/1/2011

Wen Seeks Stable Pace of Lending Growth

BEIJING—Chinese Premier Wen Jiabao said China must avoid an abnormal increase in bank lending at the beginning of this year and will continue to use various monetary policy tools to maintain a reasonable amount and pace of financing in the country.


Road-Building Rage To Leave U.S. In Dust

China’s road-building has surpassed even its own ambitious plans. The Ministry of Transport said Tuesday that construction of twelve national highways has been completed 13 years ahead of schedule. Another eight highways in western China are almost complete, as well, it said.

The massive buildup of China’s highways will soon leave the U.S., the originator of the national highway system, in the dust.


Li Ning Makes U.S. Push

BEIJING—Li Ning Co. is increasing its investment and marketing in the U.S. as the Chinese sports-apparel maker attempts to become a global brand.

Li Ning will invest $10 million in its U.S. business this year and enter a joint-venture with Acquity Group LLC to expand U.S. distribution, Li Ning Chief Executive Zhang Zhiyong said in an interview Tuesday.

Acquity, a Chicago-based brand-consulting firm whose clients include General Motors Co. and the American Airlines unit of AMR Corp., is designing an ad campaign for Li Ning. The campaign, the apparel maker's biggest yet for the U.S. market, is expected to roll ...


China Daily   19/1/2011

China's outbound direct investment up 36%

BEIJING - China's outbound direct investment in the non-financial sector hit $59 billion last year, up 36.3 percent year-on-year, the Ministry of Commerce (MOC) announced Tuesday.

Total outbound direct investment in the non-financial sector had amounted to $258.8 billion by the end of 2010.

Though China's outbound direct investment grew rapidly last year, most of it went to the Hong Kong Special Administrative Region, as well as countries in Asia and Latin America, with a very small amount to Europe, the United States and Japan, said MOC spokesman Yao Jian.


Trial program for offshore funding

HONG KONG - The Chinese mainland securities regulator will begin a trial program that allows local fund houses to raise money offshore for investment in the domestic financial market, two sources said.

At least 80 percent of the money raised will have to be invested in the domestic bond market, said the sources who were familiar with the matter but were not authorized to publicly disclose the details.

"The move is based on the overall financial trend of the yuan increasingly becoming more international," one of the sources said on Monday. "The banks are already moving forward in this aspect and it's time for brokerages and securities companies to follow suit."


Trade frictions won't derail bilateral ties, ministry says

BEIJING - Trade frictions cannot smear economic and trade relations between China and the United States, and bilateral ties have been "fairly good" and "mutually beneficial", a senior official with China's Ministry of Commerce has said.

He Ning, director-general of the ministry's department of American and Oceanian affairs, also emphasized in an exclusive interview with China Daily on Monday that "stable and healthy economic relations could translate into huge benefits for both", and the Chinese government is willing to take steps to make that happen.


China Daily   18/1/2011

Hu sets vision for strong ties

President calls on US to abandon zero-sum Cold War mentality, keep liquidity at reasonable, stable level

BEIJING - President Hu Jintao on Monday praised China-US relations, highlighted recent progress in ties and called for both sides to "abandon the zero-sum Cold War mentality" for a better future.

"We both stand to gain from a sound China-US relationship, and will lose from confrontation. We should view each other's development in an objective and sensible way," Hu said in a written interview with the Wall Street Journal and the Washington Post before kicking off his state visit to the United States on Tuesday.

n the interview Hu spoke highly of progress in bilateral ties since US President Barack Obama took office in 2009, citing "close contact" between the two and practical cooperation in various areas.

But he pointed out that differences and sensitive issues remain.


FEATURE - Milestones in Sino-US relations

See Kaixin's - China & America 1972 to 1979 - Video Documentary

Landmark trip looks to futureMeeting to ease strains and focus on the big picture

BEIJING - President Hu Jintao embarks on his long-expected four-day state visit to the United States on Tuesday, with the number of bilateral and global issues on the agenda putting it firmly in the international spotlight.

Observers said the visit will not only help reset bilateral ties after a rocky year, but will also help set the direction for Sino-US ties in a transformational era.

Hu's four-day visit includes stays in Washington and Chicago. It will be the first time that Hu has paid a state visit to the US since Barack Obama took office two years ago, yet it will be the eighth time that the two leaders have met for talks over the past two years, a frequency that some White House officials have described as "rare in modern US diplomacy".

The Hu-Obama meeting will mainly focus on thorny bilateral issues including US arms sales to Taiwan and the bilateral trade imbalance, regional issues including the Korean Peninsula, and international issues including global economic governance and climate change.

Hu is also expected to meet local students and businesspeople in Chicago, Obama's hometown.


Hu: China to firmly adhere to opening-up policy

BEIJING - Chinese President Hu Jintao said Monday that China would stay firmly committed to the opening-up policy and actively and effectively use foreign investment.

Hu made the remarks in a written interview with the Wall Street Journal and Washington Post ahead of his state visit to the United States.

The use of foreign investment is an important part of China's basic state policy of opening-up, he said.

"We will actively and effectively use foreign investment, improve its structure, diversify its form, and open up more channels and sectors so as to facilitate investment," said Hu.

China would continue to improve laws and regulations concerning foreign investment, strengthen protection of intellectual property rights (IPR), promptly address the legitimate concerns of foreign companies and facilitate the growth of enterprises of all kinds in China by offering them a stable and transparent legal and policy environment, a consistent and open market environment as well as a standardized and efficient administrative environment, said Hu.

Hu said China had fully honored its commitments by abolishing all domestic laws and regulations incompatible with the World Trade Organization (WTO) rules and giving foreign companies national treatment over the past decade since its accession to the WTO.


Hu proposes 4 points to advance China-US ties

BEIJING - Chinese President Hu Jintao on Monday proposed four points to further advance China-US ties.

"We both stand to gain from a sound China-US relationship, and lose from confrontation," said Hu, who is to pay a state visit to the United States from Tuesday to Friday, in a written interview with reporters from Wall Street Journal and Washington Post on Monday.

"We should act in the fundamental interests of our two peoples and uphold the overall interests of world peace and development. We should rise up to challenges, remove disturbances, work for shared goals and promote continuous growth of our relations," Hu said.

The four points the Chinese president reiterated to advance  Sino-American relations are:

"First, we should increase dialogue and contact and enhance strategic mutual trust. Second, we should abandon the zero-sum Cold War mentality, view each other's development in an objective and sensible way, respect each other's choice of development path, and pursue common development through win-win cooperation," Hu said.

"Third, we should respect each other's sovereignty, territorial integrity and development interests and properly address each other's major concerns. And fourth, we should make constant efforts to expand our converging interests so that China and the United States will be partners for cooperation in broader areas," he went on.

Since the beginning of the 21st century, thanks to the concerted efforts of both sides, China-US relationship has on the whole enjoyed steady growth, Hu said.


China, US sign $600 m deals ahead of Hu's visit

HOUSTON - Chinese and US businesses Monday signed six agreements worth of $600 million in Texas, one day ahead of Chinese President Hu Jintao's state visit to the United States.


Great benefit for US from Sino-US trade co-opChinese market "cash cow" of the US

Since the beginning of the new year, American companies one after the other have proposed their new policies of investing in China. General Electric Company (GE) will invest more than $2 billion to sharpen its research and development in China with several new innovation centers and joint ventures; P&G has announced that they will in five years add another $1 billion in China; Ford Motor Company said they would further expand their production this year; Caterpillar Inc will build new joint ventures to boost their spare parts business in China; Starbucks has confirmed that their coffee shops in China will reach as many as 1,500 by 2015; The Carlyle Group will raise money specially to be used in China.


US companies continue to bet on China's growth

BEIJING - As the United States struggles to shake off the shadow of the financial crisis, many US companies are increasing their investments in China- betting that the country will continue to deliver high growth for years to come.

US industry giants, such as General Electric, Procter & Gamble, Ford Motor, Caterpillar, Starbucks and The Carlyle Group, have announced their plans to increase their investments in China, adding up to the expanding US commercial and industrial presence in the mainland.

According to statistics by the Chinese Ministry of Commerce (MOC), US companies had invested $65.22 billion in more than 59,000 projects in China by the end of 2010.

Analysts said China's significance to US companies had grown over the past years, as profits foreign investors could reap from the country were great.


China plans calibrated bank reserve ratios

BEIJING - China's central bank has devised calibrated reserve ratios for different banks to tighten curbs on bank lending and tame quickening inflation, Chinese media said on Monday.

Instead of setting a traditional annual loan target that has proven to be inadequate, the People's Bank of China plans to hold monthly reviews to decide the amount of cash that lenders must lock up with the central bank, newspapers reported.

In doing so, the central bank hopes to drain China's economy of a surfeit of money that drove inflation to a 28-month high of 5.1 percent in November.



Tianjin Binhai New Area to propel development

TIANJIN - The Tianjin Binhai New Area (TBNA) will serve as the circum-Bohai region's main growth engine - fueled by 1.5 trillion yuan ($228 million) in investment from 2011 until 2015 - propelling an industrial boom supporting three world-class industrial clusters, senior officials said on the sideline of the Tianjin People's Congress on Sunday.

"To better hone the economic structure and transform the development pattern, we must seek growth by cultivating three internationally leading hubs in the Tianjin Binhai New Area - namely, in the aerospace and aviation, the petrochemical and the alternative energy industries," TBNA head Zong Guoying told China Daily.

Five other bases, including those for equipment manufacturing, electronics and information industries, will be established in the TBNA. These clusters will be nationally leading in terms of scale and quality.

Tianjin Party Secretary Zhang Gaoli praised high-quality, large-scale industrial projects' role in the municipality's overall development.

Such projects have long been crucial to enabling Tianjin to guard against risks and ensure sustainable development, Zhang said.

A320 Family aircraft are put together at the Airbus Tianjin Final Assembly Line in the Tianjin Binhai New Area


The New York Times   18/1/2011

G.E. Venture Will Share Jet Technology With China

As China strives for leadership in the world’s most advanced industries, it sees commercial jetliners — planes that may someday challenge the best from Boeing and Airbus — as a top prize.

And no Western company has been more aggressive in helping China pursue that dream than one of the aviation industry’s biggest suppliers of jet engines and airplane technology, General Electric.


I.H.T. Op-Ed Contributor
Of U.S.-China Summits, Past and Present

The meeting this week between Presidents Obama and Hu won't change the world, but it may produce much-needed stability.


In China, Prepare for the Unexpected

Doing business in mainland China doesn't adhere to the usual Western rules.



The Age   18/1/2011

China's military a fragmented beast
John Garnaut

For better or for worse, even the formidable Chinese Communist Party is not finding it easy to maintain its dictatorship after the end of communism and beyond the lives of its founding revolutionaries.

Kaixin OpEd - An interesting article from someone who is on the ground. Is he seeing the real China that Kaixin is missing? China is a complex dragon and in the mix you will find the good, the bad and the ugly ...

Kaixin will stay with its focus for trying to present a positive China, while directing criticism where we think it is warranted - towards China & the 'west'.


Caixin Online   18/1/2011

One World, Divided

A report by the World Economic Forum explains how and why risks for the coming decade are closely related

It's an inescapable paradox for the coming decade: As the world grows together, it's also growing apart.

The Davos-based World Economic Forum (WEF) spells out parameters of this paradox in a report called Global Risks 2011, released on January 13. It's an attempt to thoroughly describe the interwoven landscape of potential danger. And it's not pretty.

Two risks are especially significant given their possible impacts and interconnectedness: Economic disparity and global governance failures. Serious problems in either of these areas can influence many other global risks and inhibit the world's ability to respond to trouble effectively.


China Daily   17/1/2011

China to continue proactive fiscal policy

BEIJING - China will continue its proactive fiscal policy in 2011 to improve infrastructure and people's living standards, said Jia Kang, head of the Research Institute for Fiscal Science of the Ministry of Finance.

Speaking at the China Textile Round-Table Forum Annual Conference 2011, Jia attributed the policy decision partly to the need to roll out more follow-up investment programs for the four-trillion-yuan (607 billion yuan) economic stimulus program launched by the central government to combat the global downturn in November 2008.


Discoveries fuel China's resource security

BEIJING - Chinese geologists have detected "super-thick" oil and gas-bearing stratums in the northern part of the South China Sea and identified 38 offshore oil and gas-bearing basins, a senior official said on Saturday.

Right now, China has become the biggest consumer of coal, steel, alumina, copper and cement.

More than half of the country's petroleum and iron consumption, about 70 percent of its copper consumption and 64 percent of sylvite consumption now rely on imports, according to figures released by the Ministry of Land and Recourses on Saturday.


China makes its mark in Indian market

Nation's businessmen turn away from US and Europe and look south

BANGALORE/DELHI - When Amar Babu first joined the Chinese computer maker Lenovo Group in India in November 2007, what he faced was the aftermath of a typical business failure: Lenovo's local market share had dropped by nearly a half, management had quit the company and local sales partners were demanding payment.

But that did not prevent the veteran executive from turning India into one of Lenovo's most successful overseas markets.

"If we can be a strong No 1 in China and, giving the similarity between the two countries (China and India), why can't we be the No 1 in India?" said Babu, managing director of Lenovo India.


Indian IT companies size up China

NEW DELHI - India's information technology (IT) companies started their businesses in China by serving large multinational clients in the country but now they are ramping up efforts to win more domestic companies in order to consolidate their foothold.


China gets first overseas order for LNG ships

BEIJING - China State Shipbuilding Corporation (CSSC) signed a contract with Exxon Mobil and Mitsui & Co Ltd on Saturday to build four LNG ships (liquefied natural gas), the nation's first overseas order for such an advanced carrier.

Hudong-Zhonghua Shipbuilding (Group) Co Ltd, a subsidiary of CSSC, will build the ships for Mitsui, a Japanese shipping giant.

The ships are scheduled for delivery between 2015 and 2016. The fleet will be used for shipping China's imports of liquefied natural gas from Australia and Papua New Guinea.


The Wall Street Journal   17/1/2011

Hu Highlights Need for U.S.-China Cooperation, Questions Dollar

BEIJING—Chinese President Hu Jintao emphasized the need for cooperation with the U.S. in areas from new energy to space ahead of his visit to Washington this week, but he called the present U.S. dollar-dominated currency system a "product of the past" and highlighted moves to turn the yuan into a global currency.




Hu Takes Confident Tone on Inflation

BEIJING—Chinese President Hu Jintao voiced confidence in the government's ability to fight inflation, following a central bank move to curb lending that economists think is the first of what's likely to be a series of further tightening measures this year.

Kaixin OpEd – Contrast what China’s Central Bank is doing to control inflation and what America’s Central Bank did under Greenspan and now Bernanke.

First, the clever western economists decided that house prices should not count as a measure of inflation. After all, if the price of your house goes up then you are simply becoming richer….. right??


If you only own one house then the only thing to change is the cost of running the house, in fact you have become less wealthy.

If you own more than one house, then indeed you have become richer, as long as you can capitalise and use the increase in the price of the house.

Most people only own one house and the flip side is that it all becomes artificial and makes it harder for the next generation to get into a house.

Greenspan let loose the dogs of greed in the American banking system by de-regulating the industry and turning it into a gambling casino, with the inevitable consequences.

President Bush, in a misguided desire to see everyone in America owning their own house, mandated Freddie & Fannie to lend money to anyone who wanted a house irrespective of whether they could afford it or not, with the inevitable consequences.

It was like a particularly nasty virus that was then spread throughout the world by the clever things on Wall Street who packaged the dud real estate loans and sold them throughout the world; all with the stamp of approval from Moody’s and S&P (these institutions now run around the world trying to look like serious economists instead of the Wall Street Carpet Baggers they really are).

Problem? Easy says Greenspan and his acolyte, Bernanke, open the spigots and flood the world with free money.

That works until it doesn’t.

You can only blow a balloon up so far, and then it bursts.

It’s called inflation and part of the mix is house prices.

So China’s central bank is keeping control of the banking system and draining money out of the system and pricing it correctly.

China’s central bank and the government are making sure that real estate loans only go to people who can afford them.

The government is addressing the issue by increasing the supply of land, making it hard to impossible to own more than one property, taxing the gains from any increase in the price of an investment property.

In China, the increase in the price of residential real estate is mainly fuelled by demand, not by magic tricks.

That is why President Hu is confident. He has a responsible central bank and a tightly regulated banking system.


U.S. Presses China for Deals

In Meeting, Obama and Hu to Talk Business, as They Aim to Show Tight Bond, Score Points Back Home

WASHINGTON—The U.S. is pressing China to buy tens of billions of dollars in U.S. aircraft, auto parts, agricultural goods and beef to build goodwill when the two countries' leaders meet Wednesday.


The New York Times   17/1/2011

China Raises Loan Reserves to Control Inflation

The move by China’s central bank, which was expected, is part of an effort to drain excess money from the economy and tame rising prices.


Solar Panel Maker Moves Work to China

BEIJING — Aided by at least $43 million in assistance from the government of Massachusetts and an innovative solar energy technology, Evergreen Solar emerged in the last three years as the third-largest maker of solar panels in the United States.

But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China.

Evergreen Solar plans to close its main American factory, in Devens, Mass., seen here in September, and lay off 800 workers.


Kaixin OpEd – Surely the focus should be on producing clean green energy for the world.

America used to crow and crow about the benefits of re-locating their major corporations to anywhere in the world that offered a competitive advantage. It was capitalism writ large they yelled from the roof-tops.

Low wages?? … who cares!

Child labour?? …. who cares!

Environmental degradation … who cares!

Now America complains and wants to take its bat and ball and go home. These pesky Chinese are really serious about producing clean green energy.

American politicians just like to talk about it.

And you will find the wages in China are indeed fair. You will not find any child labour. Now, you will not find environmental degradation from the new industries, China is addressing what it acknowledges is a real issue in China.

So perhaps America and it corporations would like to dust off their capitalist credentials and compete.

Perhaps American politicians could become serious about supporting clean green industries .... oh, I forgot, they squandered America's wealth ..... woops .....

See Kaixin's - GREEN CHINA


China’s Galloping Wind Market

A manufacturer estimates that more than three times as much wind power capacity was installed in China last year than in the United States.



The Wall Street Journal   15/1/2011

China Central Bank Raises Reserve-Requirement Ratio

BEIJING—China's central bank said Friday it will raise banks' reserve-requirement ratio by half a percentage point, following six such increases last year, in the government's latest move to curb inflation.


Americans See China as No. 1

Which country is the world’s leading economic power?

Almost half of Americans (47%) think it’s China, according to a poll by the Pew Research Center for the People & the Press, while only 31% think the United States is still out front.


China Daily   15/1/2011

China raises bank reserve ratio by 50 points

BEIJING - The People's Bank of China (PBOC), or the central bank, said Friday that it would lift the banks' reserve requirement ratio by 50 basis points as of January 20.

After the hike, Chinese major banks will have to set aside 19 percent of their reserves and small and medium banks will have to keep 15.5 percent of their deposits as reserve, a record high for the country's deposit-taking institutions.

According to the PBOC's latest figures, the reserve ratio hike will tighten another 350 billion yuan ($53.1 billion) of banks liquidity as the outstanding yuan-denominated deposits in China stood at 71.82 trillion yuan ($10.9 trillion) by the end of 2010.


China's GDP growth forecast to slow down: WB

World Bank predicts economy to expand by 8.7%, drive Asian boom

BEIJING - The country's GDP growth rate will slow to 8.7 percent this year from 10 percent in 2010, and a key challenge in 2011 will be to ensure that anti-inflationary measures do not "significantly" reduce growth, the World Bank said on Thursday.


The Australian   14/1/2011

China launches trial to free yuan for overseas investment

CHINA has launched a pilot program to let domestic companies take Chinese currency overseas to make investments.

The move, part of its effort to make the yuan a global currency, came as the central bank set the currency's reference rate at a new high against the US dollar.


The Age   14/1/2011

China to drive Asian growth, World Bank says

China's rapid growth should slow to 8.5 per cent this year from 10 per cent in 2010 but the world's second-largest economy will remain the focus of Asia's expansion, the World Bank said on Thursday.


US warns China on protectionist 'folly'

US Commerce Secretary Gary Locke on Thursday warned China against repeating the protectionist "folly" Western countries pursued in the wake of World War II, as he urged Beijing to make meaningful trade reforms.


Asia Times Online   14/1/2011

Nation of 'wusses' gets wake-up call
By Benjamin A Shobert

An offhand comment by Pennsylvania Governor Ed Rendell has struck a nerve in the American psyche. Rendell saw a lack of national fortitude behind a decision to cancel a football game due to a blizzard, adding this "wussiness" helped explain why those pesky Chinese are beating the United States at a game it invented - national economics.


Tajikistan find a game changer
By Robert M Cutler

The discovery of the equivalent of 50 years' worth of domestic gas consumption in Tajikistan's Sarikamysh field, along with the development of the Rogun Dam, could soon make the country an energy exporter - and add more urgency to Uzbekistan's efforts to diversify its export partners.


Caixin Online   14/1/2011

Part I: For Chery, Deep Pockets Stall IPO Progress

Investors have waited years for a public listing, but the automaker already has plenty of government and bank capital

(Wuhu, Anhui) Like anxious drivers stuck at a traffic light, private equity investors with stakes in China's largest domestic automaker Chery have been waiting since 2008 for a public listing go-ahead.

It's been a long stall, and some wonder whether they'll ever get a green light.


Part II: Red Ink No Problem for Subsidized Chery Auto

R&D spending and government support help the Chinese automaker buck traditional business formulas

To drum up sales, Chinese auto giant Chery often changes product names. A crossover model known as the V5 was once called the CROSS, and before that went by the name Eastar CROSS.


The Wall Street Journal   14/1/2011

Locke Presses China to Open Its Markets

WASHINGTON—U.S. Commerce Secretary Gary Locke called Thursday for China to follow through on its pledges to open up its market to foreign firms, seeking to ensure that next week's state visit by Chinese President Hu Jintao leads to lasting results.

... the two economic rivals would benefit by pursuing "cooperation over confrontation."


World Bank: Inflows Not Cause of China Inflation

BEIJING—China's inflation shouldn't be blamed on capital inflows, said a senior economist at the World Bank, instead attributing it to expansionary monetary and fiscal policies as well as surging food prices.


Americans See China as No. 1

Which country is the world’s leading economic power?

Almost half of Americans (47%) think it’s China, according to a poll by the Pew Research Center for the People & the Press, while only 31% think the United States is still out front.


Toyota Tries to Break Reliance on China

Company Seeks to Develop Electric Motor Without Costly, Tightly Controlled Rare Earth Metals

Toyota Motor Corp. is striving to develop a new type of electric motor to escape a simmering trade conflict involving China's grip on a rare mineral.

The Japanese auto maker believes it is near a breakthrough in developing electric motors for hybrid cars that eliminates the use of rare earth metals, whose prices have risen sharply in the past year as China restricted supply. The minerals are found in the magnets used in the motors.

All electric motors rely on magnets to make them work. The new motor Toyota is working on is based on the very common and inexpensive ...


Health Insurers' China Puzzle

A Decade After Beijing Loosened Rules, Global Firms Struggle to Tap the Market

BEIJING—Almost a decade after China loosened restrictions on foreign insurers, some of the biggest Western health plans are still trying to figure out how to take advantage of the burgeoning market.

WellPoint Inc., the largest U.S. insurer by members, says it will plunge into China's private-insurance market in the next few months, but UnitedHealth Group Inc. and British United Provident Association Ltd., or Bupa, the biggest health insurer globally by members, are holding back.


Fosun Starts Investment Fund with Prudential Financial

BEIJING—Fosun International Ltd. announced a $600 million joint investment fund with Prudential Financial Inc. of the U.S., the latest move by one of China's biggest privately owned conglomerates to establish itself as an international investor.

The fund will invest in both Chinese companies and foreign firms that have significant business opportunities in China, the two companies said at a press conference Thursday. Fosun will contribute $100 million to the fund through its wholly owned subsidiary, Shanghai Fosun High Technology (Group) Co., and will be responsible for making the investment decisions. Prudential Financial will provide the remaining funds as a limited ...


Asia Today: China Eases Investing Rules

South Korea lifts interest rates in a surprise move, and China's private-equity sector starts to open up. WSJ's Andrew LaVallee speaks to Heard on the Street Asia Editor Mohammed Hadi about these stories.



China Daily   14/1/2011

US, China should cooperate: Locke

WASHINGTON - The United States and China must seize the "great opportunity" of cooperation to solve the common challenges facing the world today, said US Commerce Secretary Gary Locke on Thursday.

"We can be certain that it will be a better future if the Chinese and American governments pursue cooperation over confrontation in the economic sphere," Locke said at a luncheon hosted by the US-China Business Council in Washington.

The commerce secretary said he witnessed the explosive growth that has taken place in China during the past two decades. He is also optimistic about China's growth in the future.

"The United States welcomes this growth, because it's good for the people of China, it's good for the global economy, and it's important for US companies," he said.

He noted that China's growth provides opportunity for the US companies which offer world-class products and services. Those products and services can improve the quality of life for the Chinese, while providing jobs for American workers back home.

According to the US Commerce Department, China is one of the top destinations for American exports, behind only Canada and Mexico. And the United States is the number one national market for Chinese exports.

Locke said that since China formally joined the WTO in 2001, it has made important progress in opening its market.


China's GDP growth forecast to slow down: WB

World Bank predicts economy to expand by 8.7%, drive Asian boom

BEIJING - The country's GDP growth rate will slow to 8.7 percent this year from 10 percent in 2010, and a key challenge in 2011 will be to ensure that anti-inflationary measures do not "significantly" reduce growth, the World Bank said on Thursday.


New rules for China's overseas contractors

BEIJING - The Chinese government will introduce new guidelines to strengthen its efforts in improving and regulating the performance of overseas project contractors, a move that will help companies establish their brands, said a vice-minister of commerce on Wednesday.

"Chinese overseas project contractors should strive to maintain a balance between quantity and quality in developing overseas contracted projects. So they can build their brand and forge their edges in the long term," said Chen Jian, vice-minister of commerce.


Beijing's pension system to cover foreigners

Foreigners working in Beijing will be covered by the municipal's pension system, Beijing Business Today reported Thursday, citing the 2011 working plan of the Beijing Bureau of Human Resources and Social Security.


Affordable housing strains local govts' coffers

The central government's ambition of building more government-subsidized apartments nationwide this year will truly test local governments' finances.

The country plans to build 10 million subsidized apartments in 2011, almost twice as many as last year's target of 5.8 million.

Affordable housing strains local govts' coffers

The total investment by all levels of government will increase to 1.4 trillion yuan ($212 billion), or 20 percent of the country's total annual real estate investment.

But it will be a great financial burden for local governments, which will likely fail to meet the target because of a lack of funds.



The New York Times   13/1/2011

Geithner Lists Concerns Ahead of Chinese Leader’s Visit

In a speech, Mr. Geithner said that changes by Beijing in its exchange rate and in its handling of intellectual property were “fundamentally in China’s interest.”


Rising Chinese Inflation to Show Up in U.S. Imports

The 5.1 percent rise in Chinese consumer prices in November understated the actual inflation rate, which economists said might be twice as high.


The Wall Street Journal   13/1/2011

Geithner Warns China on Access to U.S. Market

WASHINGTON—Treasury Secretary Timothy Geithner said China's rapid economic ascent is a "growing source of concern" and warned Beijing it risked expanded access to the rich U.S. market unless it revamped its policies.


U.S. Export Financing Challenges China

Ex-Im Bank's New Loan Model, Matching Beijing's Cheap Terms, Helps Push a Deal With Pakistan for GE's Trains

WASHINGTON—The Export-Import Bank of the U.S. is taking on China's export machine, in a deal designed as a model for developed nations to challenge China in markets around the world.


Shanghai Loosens Rules for Foreigners in Private Equity

BEIJING–China's commercial center, Shanghai, will make it easier for foreigners to invest in the private-equity sector, a move that could give the nascent homegrown industry a boost even as it further opens a potentially lucrative market to outsiders.


China Daily   13/1/2011

Beijing seeks assurance on assets in US

Hu's visit hailed as 'one of the most important' in history of bilateral ties

BEIJING / WASHINGTON - Beijing on Wednesday asked Washington to assure the security of its financial assets in the country, as the United States is likely to further press China to revalue its currency during President Hu Jintao's visit there next week.

"Regarding the security of China's assets in the US, if the US side can offer a positive statement on that then of course we'd welcome that. It's an issue we're paying attention to," Vice-Foreign Minister Cui Tiankai said at a news briefing on Hu's visit.


Sino-US economic ties benefit both sides: Geithner

WASHINGTON - The economic relationship between the United States and China "provides tremendous benefits" to both nations, US Treasury Secretary Tim Geithner said here on Wednesday."China presents enormous economic opportunities for the United States and for the world," said Geithner at the Johns Hopkins University in Washington ahead of Chinese President Hu Jintao's state visit to the United States next week.

"This state visit takes place at a time of important transition for the world economy, for the Chinese economy and, of course, for the American economy," Geithner said.

China to sell 30b yuan of book-entry T-bonds

BEIJING - China's Ministry of Finance (MOF) said Wednesday it will sell 30 billion yuan ($4.53 billion) of book-entry Treasury bonds this week.

The one-year bonds have a fixed annual interest rate of 2.81 percent, the ministry said in a statement on its web-site.

The bonds will be sold from Thursday to next Monday and become tradable on the exchange markets from next Wednesday.

Interest on the bonds will be paid when the bonds mature on January 13, 2012.


Yuan hits new record high at 6.6128 per USD

BEIJING -- The Chinese yuan strengthened to a record high against the US dollar on Wednesday to reach 6.6128 per dollar.

The central parity rate of the Chinese currency, also known as the renminbi (RMB), was set 88 basis points lower than Tuesday's 6.6216, according to the China Foreign Exchange Trading System.

China's central bank announced on June 19, 2010, it would further reform the yuan exchange rate formation mechanism to improve its flexibility.


Required reserves ratio may rise: Experts

Banking experts said the central bank may raise Chinese commercial banks' required reserve ratio to tame surging domestic liquidity and inflation, China Securities Journal reported Wednesday.


Caixin Online   13/1/2011

How to Fight Inflation in China

Running a balance of payments surplus with an exchange rate peg has sent the economy skidding into an untenable situation marked by rising inflation

Inflation in China exceeded five percent in November 2010 for the first time since the early summer of 2008. The People's Bank of China (PBC), China's central bank, raised interest rates twice and have taken other steps to restrain inflation. In early January, Prime Minister Wen Jiabao vowed to bring down inflation through price increases.

Policy-makers in China face a dilemma: they want to reduce the pressures in the economy to reduce inflation, but are not willing to cut employment, especially in export industries. Yet the major source of inflation is the large export surplus.


China Daily   12/1/2011

China's forex reserves reach $2.85 trillion

BEIJING - New yuan-denominated lending in China reached 7.95 trillion yuan ($1.2 trillion) last year, the People's Bank of China (PBOC), the central bank, said Tuesday.

The figure was 1.65 trillion yuan less than the 2009 level of 9.6 trillion yuan, said the bank in a statement on its website. But it has overshot the government's full-year target of 7.5 trillion yuan.


The Wall Street Journal   12/1/2011

Economists React: China Trade Surplus

China Customs data released Monday showed the country’s trade surplus fell to $13.08 billion last month, a nine-month low, from $22.9 billion in November. The full year surplus also declined for the second straight year. Analysts weigh in:



U.S. Steel Maker Frames China Building Change

A U.S. metal processor is betting China can be convinced to add a little flexibility to its famously rigid rules on housing construction.

Columbus, Ohio-based Worthington Industries Inc. last week announced plans for a joint venture that will build plants in China to make lighter, more environmentally friendly construction steel aimed at China’s residential construction market.

Kaixin OpEd – China’s rise has taken many people in the west by surprise.

2008 was China’s coming out party and the world went ….. yikes!

Now things are settling down and it is starting to be seen as an opportunity rather than a threat.

Not without its problems, not without its issues ….. but on balance, an opportunity, as this American firm has realised.


The New York Times   12/1/2011

Chinese Foreign Currency Reserves Swell by Record Amount

The Chinese government has been printing renminbi at a furious pace to buy the dollars and euros pouring into the country through trade surpluses and foreign investment.


Caixin Online   12/1/2011

Bank Lending Exceeded Annual Target

China's banks lent lavishly in 2010

(Beijing) -- Chinese banks lent a total of 7.95 trillion yuan in 2010, above the annual target of 7.5 trillion yuan, putting additional pressure on Beijing to control credit growth.



China Car Sales Hit 18 Mln in 2010

China's auto industry association said it expects China's 2011 growth rate for auto production and sales to be 10 to 15 percent

(Beijing) - China saw both its car production and sales breaking 18 million units in 2010, setting a world record, according to the China Association of Automobile Manufactures (CAAM).


PetroChina to Set Up European Oil Refining JVs

PetroChina said that the ventures will engage in oil trading and refining in partnerships with the Grangemouth refining plant in Scotland and Lavéra plant in France

(Beijing) -- China's leading oil producer PetroChina reached an agreement with British oil major INEOS Group to set up joint ventures in Europe as part of the Chinese oil company's steps to expand its operations in the international oil refining market.


Caixin Online   11/1/2011

China to Invest 500 Bln Yuan in Power Grids

Major investments will be channeled into the expansion of the electrical power grid system, with the addition of several connecting lines between regions

(Beijing) -- China plans to invest 500 billion yuan in the construction of ultra-high voltage (UHV) electricity transmission systems in the coming five years, according to the country's power transmission company, State Grid Corp.

See Kaixin's - GREEN CHINA


Structure and Balance for the Euro Area Ensemble

Solving euro area imbalances must be based on the strengthening national fiscal frameworks, better enforcement of basic fiscal standards and stronger market discipline.


SOEs Net Profits Hit New High

China's state-owned companies expanded quickly in 2010

(Beijing) - China's state-owned enterprises recorded a combined 1.07 trillion yuan in net profits, about 50 percent higher than last year's figures, according to State-owned Assets Supervision and Administration Commission (SASAC).


The Wall Street Journal   11/1/2011

Economists React: China Trade Surplus

China Customs data released Monday showed the country’s trade surplus fell to $13.08 billion last month, a nine-month low, from $22.9 billion in November. The full year surplus also declined for the second straight year. Analysts weigh in:


U.S. Steel Maker Frames China Building Change

A U.S. metal processor is betting China can be convinced to add a little flexibility to its famously rigid rules on housing construction.

Columbus, Ohio-based Worthington Industries Inc. last week announced plans for a joint venture that will build plants in China to make lighter, more environmentally friendly construction steel aimed at China’s residential construction market.

Kaixin OpEd – China’s rise has taken many people in the west by surprise.

2008 was China’s coming out party and the world went ….. yikes!

Now things are settling down and it is starting to be seen as an opportunity rather than a threat.

Not without its problems, not without its issues ….. but on balance, an opportunity, as this American firm has realised.


China Trade Surplus Narrowed in December

BEIJING—China said its trade surplus narrowed for the second consecutive year in 2010, data that could strengthen the country's case that it is gradually reducing the external imbalances that have inflamed tensions with trading partners.


Chinse City Allows Direct Foreign Investment

SHANGHAI—The eastern Chinese city of Wenzhou has launched a pilot program that allows residents to invest directly overseas, a small step toward greater liberalization that is part of a broader easing of currency controls that could help ease pressure on the yuan to appreciate.



The New York Times   11/1/2011

China, U.K. Sign $4 Billion in Deals

LONDON—U.K. and Chinese companies signed deals valued at £2.6 billion ($4 billion) in the energy and automotive sectors Monday, the British government said.


China's Trade Surplus Decline Suggests Less Reliance on Exports

The data came little more than a week before President Obama, whose administration has been pushing China to strengthen its currency, was to meet with his Chinese counterpart, Hu Jintao.


Global Times   11/1/2011

Shanghai to be pilot to invite foreign investment to Chinese PE funds

Shanghai is set to become China's first city to allow foreign traders to invest in the country's private equity (PE) under a pilot program, but within a total amount of $3 billion, the China Securities Journal reported Monday.

The pilot program will permit foreign PE fund managers – who meet certain criteria and pass the approval process – to build up a joint-venture equity investment company with Chinese companies.

They can also obtain a currency conversion quota, exchanging foreign currencies into yuan and investing directly in Chinese companies or yuan-denominated funds.

The amount of foreign participation in the PE fund will be subject to the approval of the State Administration of Foreign Exchange, according to reports.

The $3 billion will be invested in China in three batches, and the first chance will be offered to the Carlyle Group, the Blackstone Group and the First Eastern Group.

Analysts said that the new program will allow foreign investors into the emerging Chinese mainland PE, creating opportunities for them to profit from China's lucrative merger and acquisition sector and the Nasdaq-style market that are currently out of their reach, according to reports.

Under current regulations, foreign-invested companies are not allowed to use their capital for real estate and equity investments, or to convert their foreign capital into yuan for local investment, because of China’s capital controls.


China Daily   11/1/2011

UK firms eager for Chinese markets

British businesses interested in views of China's visiting vice-premier

LONDON - UK businesses hope that China will continue opening its markets to foreign investors, said a senior British business leader as Vice-Premier Li Keqiang visits the country.

"What British businesses would like to hear (are) his views in terms of China being open to foreign business - in particular UK businesses - and that they are welcomed to continue to invest in China," said Stephen Phillips, chief executive of the China-Britain Business Council (CBBC).

He added that UK businesses would also be interested in Li's views on "the outlook for the Chinese economy against the backdrop of the global economic environment".


China, Britain ink $4b deals

LONDON - China and the United Kingdom are determined to strengthen trade ties, as the two countries inked 2.6 billion pounds ($4 billion) worth of deals on Monday, the second day of Vice-Premier Li Keqiang's UK visit.

Li held talks with British Prime Minister David Cameron and Deputy Prime Minister Nick Clegg in London. The topics discussed covered international security and climate change, which the UK and China have worked closely together on.

A total of 15 deals were signed, including a deal on China sending two pandas to Edinburgh Zoo in Scotland, and a commitment by Jaguar Land Rover to increase sales to China. Others cover finance, energy and climate change.


Chinese citizens spent $48 billion overseas in 2010

BEIJING - Chinese citizens with stronger yuan in their pockets were estimated to have spent $48 billion abroad in 2010, an increase of 14 percent from one year earlier, a research group reported on Monday.Chinese mainland tourists were expected to make 54 million outbound trips last year, up 15 percent year on year, the China Tourism Academy said in its annual report on the national tourism industry.

Stronger purchasing power and the appreciation of the Renminbi helped boost overseas trips, the report noted.

Private trips made up about 90 percent of the total, as the government tightened checks on business trips funded by public money.


China 2010 foreign trade up 34.7%

BEIJING - China's foreign trade in 2010 jumped 34.7percent from a year earlier to $2.97 trillion, with its trade surplus falling 6.4 percent to $183.1 billion, the General Administration of Customs (GAC) said Monday.


Double standards of Western companies

For months, the West has been attacking China for tightening control of its rare earth exports.

The assault is likely to escalate, as China recently announced it would slash its rare earth export quota by 37 percent for the first half of 2011. China is also introducing more stringent environmental standards for the rare earth industry, which are likely to send many small businesses in the industry into possible bankruptcy.

The country's environmental concern is fully justified. Its actions taken in the past months, and those to be taken in the months to come, are totally legitimate.

During the months of debate, few in the West have talked much about the appalling environmental degradation and health hazards caused by China's rare earth industry.

See Kaixin's - GREEN CHINA


Asia Times Online   11/1/2011

China’s lucre won’t end EU arms embargo
By Trefor Moss

Although some European Union officials are pushing for an end to the bloc's arms embargo on China, such suggestions will probably remain just talk. The ban will likely continue unless China makes substantial progress on human rights, or Beijing forces Europe's hand by threatening to withdraw its financial support.



The Wall Street Journal   10/1/2011

J.P. Morgan: China Is Key

HONG KONG—J.P. Morgan Chase & Co. executives say the firm's newly approved securities venture in mainland China is the latest piece in its growing Asian-Pacific platform and a critical part of a push to globalize the U.S. bank.

The joint venture, approved by China's securities regulator last week, will allow the Wall Street bank to underwrite stocks and bonds in mainland China.

"Our access in China will help cement our franchise in Hong Kong and globally," Zili Shao, chief executive in China for J.P. Morgan, said in an interview.

Mr. Shao has been overseeing the securities partnership with Shenzhen-based First ...


How Wall Street Blew It in China

Wall Street has managed to firm up its foothold in the burgeoning Chinese securities industry. But its best chance to negotiate major access into China's capital markets may have passed it by a decade ago.


China's Li Visits U.K.

LONDON—Chinese Vice Premier Li Keqiang arrived in Edinburgh Sunday, kicking off a four-day visit to the U.K. aimed at strengthening the two nations' political and commercial ties.

"We hope in this visit to strengthen cooperation with Britain, pushing forward a political partnership...and an economic relationship that's beneficial for both parties,"


China Daily   10/1/2011

Economists see US decline, China's ascension

DENVER - To hear a number of prominent economists tell it, it doesn't look good for the U.S. economy, not this year, not in 10 years.

Leading thinkers in the dismal science speaking at an annual convention offered varying visions of U.S. economic decline, in the short, medium and long term. This year, the recovery may bog down as government stimulus measures dry up.

In the long run, the United States must face up to inevitably being overtaken by China as the world's largest economy. And it may have missed a chance to rein in its largest financial institutions, many of whom remain too big to fail and are getting bigger.


Li's visit to boost Sino-UK relations

BEIJING - Vice-Premier Li Keqiang arrived in Scotland on Sunday, starting his four-day visit to the United Kingdom aimed at boosting mutual political and trade ties.


China's 2010 tax revenue up 22%

BEIJING - China's tax revenues rose 22.6 percent to 7.74 trillion yuan ($1.17 trillion) in 2010 compared to one year earlier, the State Administration of Taxation announced on Sunday.


China Daily   8/1/2011

Vice premier meets German President

BERLIN - Visiting Chinese Vice Premier Li Keqiang met with German President Christian Wulff on Friday to upgrade relations between the two countries.

Li said China-Germany relations have been achieving new progress in recent years, particular last year when bilateral trade is expected to exceed $140 billion, about one third of the total trade volume between China and the European Union (EU).


Chinese slowdown good for inflation control: Amundi

NEW YORK - China will lead an economic slowdown in Asia this year -- but that's good news for investors, as it should avoid bigger inflation problems in the region, fund managing company Amundi said on Thursday.

Markets are expected to be choppy in 2011 as Beijing adjusts policy to fight inflation, but a foreseeable end to its monetary tightening cycle later this year could boost the return profile of Greater China's equity market, Amundi said.

"Investors should welcome, not fear, a slowing Chinese economy in 2011," Ray Jovanovich, who helps manage more than 650 billion euros at the fund manager, said in a letter to investors.

Asia is on the opposite side of most developed economies such as the United States, where deflation remains the main threat, Jovanovich said.


China OKs JPMorgan, Morgan Stanley joint ventures

HONG KONG - Chinese regulators gave approval on Friday to the banking joint ventures of JP Morgan Chase & Co and Morgan Stanley, bringing the banks a step closer toward operating securities businesses in China that they, and other banks, have long sought.

For JP Morgan, the approval allows it to make its maiden entry into the Chinese securities market, where foreign banks seek the ability to underwrite securities in the rapidly growing stock and bond markets. The bank will link up with First Capital Securities Co, a Shenzhen-based brokerage and hold 33 percent of the venture.


China mulls policies to spur imports

China is set to launch a basket of policies to promote the country’s imports in the first half of 2011 in a bid to reduce the country’s trade surplus, the 21st Business Herald reported Friday.

These policies will focus on promoting imports of advanced equipment and technologies.

Government agencies in charge of foreign trade are discussing how to adjust the Catalogue for Technologies and Products Encouraged to Import, a document jointly issued by several ministries in 2009, the newspaper reported.

Winding down import tariffs, subsidizing companies that import high-end technologies or equipment, and simplifying import processes are the main goals of these policy shifts.

Looser forex control and lower import tariffs would be the most important two parts in these policies, according to Zhou Shijian, former vice-president of China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters.


Chinese economist sees 5-6% yuan rise in 2011

BEIJING - The yuan is expected to rise between 5 and 6 percent this year against the US dollar, Li Daokui, an adviser to China's central bank, was quoted as saying in a local newspaper.

"My personal view is that the yuan will rise by 5 to 6 percent this year in a controlled and gradual manner," said Li, one of three academics on the central bank's monetary policy advisory committee.

Li's comments were reported by the Xiaoxiang Morning News on Thursday. He had made the remarks in a speech on Wednesday at an event sponsored by the newspaper in Changsha, the capital city of China's central Hunan province.

Li said China will steer its monetary policy in a modest and gradual way, and that investors should not rule out the chance of more interest rate rises in 2011.

He added that China's economy will grow at least 9.5 percent this year, and that inflation will hit 4 percent. This means economic growth will largely be on par with last year's pace, while inflation picks up from 2010's 3.3 percent.



The New York Times   8/1/2011

JPMorgan and Morgan Stanley Win Approval to Expand in China


The two firms are the latest global banks to win the right to form joint ventures to underwrite stock and bond offerings in China.


Caixin Online   8/1/2011

Lower Mortgage Interests Back

Mortgage loan policies have reportedly been relaxed at the beginning of 2011

Homebuyers in China are now being offered a 30 percent discount on mortgages rates by commercial banks after a brief suspension of the policy, according to Beijing-based media reports.



Mines, Power Plants in a Chinalco Survival Strategy

China's biggest aluminum producer is pursuing vertical integration to save money and hopefully sidestep risk

Having extracted itself from a sea of red ink, China's leading aluminum concern Chinalco is now busy building an upstream investment portfolio as a bulwark against future threats.

Recent additions to the portfolio of state-owned Chinalco include stakes in rare earth and coal mines in China as well as an iron ore project in West Africa in a partnership with Anglo-Australian mining concern Rio Tinto.

Chinalco is also preparing to enter the electricity generating business by building power stations in several parts of northern China, said the company's general manager, Xiong Weiping.


Asia Times Online    8/1/2011

China outward bound through Myanmar
By Brian McCartan

Myanmar occupies an important position in Beijing's ambitious plans to construct a high-speed rail network linking China with the economies of Southeast Asia and beyond. If completed as planned, it would be the largest infrastructure project in history. Different gauges used by rail systems in Myanmar and other countries are a significant obstacle to a project first proposed in the 1960s.

The Wall Street Journal   8/1/2011

EU Aims to Seal Deal With Beijing

Chinese leaders are stepping up their courtship of cash-strapped European countries such as Spain, pledging to buy their bonds and expand business ties. Yet China watchers caution that despite the warm diplomacy, Beijing won't save the euro zone.

Kaixin OpEd – It’s interesting isn’t it ….

America and its top shot economists got the world into the GFC. China is getting the world out of the GFC.

Yes, it’s an economic opportunity for China.

But why is that?

Think about it.

Which county was prudent and saved trillions of dollars. Which country squandered its wealth and handed over its economic destiny to the Wall Street spivs.

See Kaixin's - 'Tai Gui le' by Graeme


The Wall Street Journal   7/1/2011

Failed EU Bid Deals Another Blow to Beijing

BRUSSELS—A Chinese firm Thursday dropped its $1.3 billion offer for Dutch cable-wire maker, dealing another setback to Beijing's efforts to acquire European companies in key industrial sectors—and a sign that Chinese investment in Europe is taking on heightened political sensitivity.

The decision came as European Union's industry commissioner, Antonio Tajani, stepped up his campaign to give the EU the power to block foreign takeover attempts.

"I am totally against protectionism—Chinese, Russian, Brazilian, American investment, the door is open," Mr. Tajani told reporters at the French Finance Ministry in Paris. "But we have to make sure it's not a front for ...

Kaixin OpEd - Have you seen what China is doing in Europe lately? Buying bonds, lots of bonds and investing where it can. Saying no to your friendly invstment banker is not a good option. Particularly if you have suffered a bout of GFC.


The New York Times   7/1/2011

Behind China's Charm Offensive in Europe

Chinese officials have stepped up their vows of support for Europe in the past several weeks, and have grown increasingly vocal about pledging to help Europe contain a sovereign debt crisis and accelerate a recovery.

See OpEd above


The Age   7/1/2011

China to buy euros 6b of Spanish debt

Chinese Vice Premier Li Keqiang has said Beijing is willing to buy about 6.0 billion euros ($A7.9 billion) worth of Spanish public debt, Spanish newspaper El Pais reported on Thursday, citing government sources.

Li told Spanish Prime Minister Jose Luis Rodriguez Zapatero during a meeting in Madrid on Wednesday that China "was willing to buy as much Spanish debt as its Greek and Portuguese debt holdings combined, that is some six billion euros," it said.


Caixin Online   7/1/2011

Inflation to Impact Stock Market in 2011

Past experience has shown a correlation between inflation and stock markets, according to Nomura

(Beijing) -- Inflation concerns may lead to a downturn in the stock market, according to Nomura Securities.

Wu Haifeng, head of the A-shares research department at Nomura, said inflation expectations will likely to drag down the stock markets.

"Any round of falls in share prices would be an opportunity to buy as it would bring safe returns in the long term," said Wu.

People's Daily Online Prepares IPO

People's Daily Online is expected to earn 70 million yuan in net profits in 2010 and the figure is likely to hit 100 million in 2011

(Beijing) -- People's Daily Online Co., website operator of China's state-run newspaper People's Daily, plans to raise up to 800 million yuan in an initial public offering (IPO) in Shanghai, to become China's first publicly-listed online news portal.


Asia Times Online   7/1/2011

China on patents overdrive
By Raja Murthy

China has set a goal of registering 2 million domestic patent applications annually by 2015, which could lead to an annual patents transactions worth US$15 billion. One Western expert describes the target, designed to improve the country's competitiveness, as "mind-blowing".


 China Daily   7/1/2011

China's central bank reaffirms to tame inflation

BEIJING - The People's Bank of China (PBOC), or the central bank, reiterated Thursday that it would give higher priority to stabilizing prices this year.

The central bank plans to make its micro-control policies more targeted and effectively manage liquidity to bring the monetary conditions for price hikes under control, said the PBOC in a statement posted on its website.



Counting Costs

We are looking for stories that would tell us how life on the ground is responding to the rising yuan and price hikes.

Editor's note: We are looking for stories that would tell us how life on the ground is responding to the rising yuan and price hikes. We found tales of courage, resilience and of lessons learned and mastered.

There is no clearer barometer of change than a country's attitude toward money. China is no different.


Factory jobs go a-begging

GUANGZHOU - Liu Jingchun, a 28-year-old packing worker from Xiamen, Fujian province, has just rejected a job offer that would have paid him 1,500 yuan ($227) a month - and a 500 yuan bonus - if he stayed on for at least three months.

He is confident that another better-paying job will come along in a very short time, thanks to a severe labor shortage facing China's coastal region.

"The wages are rocketing up due to the shortage," Liu said at the Xiamen Employment Service Center.

"And I don't want to live with five others in the dormitory offered by the company. Three others at the most."

Liu's confidence is not uncommon, especially among the locals, as factories in the country's manufacturing hub continue to face labor shortages, exacerbated by next month's Spring Festival holidays.

Stanley Lau, deputy chairman of Federation of Hong Kong Industries, said: "I can say that many Hong Kong-funded manufacturers have begun to see a labor shortage several months ago, or even in the entire year."


Great Wall Motor sales up 77% in 2010

SHIJIAZHUANG -- Chinese private-run automaker Great Wall Motor Co on Thursday said it posted strong annual sales growth of 77 percent, as it manufactured 397,300 vehicles last year.

Its growth pace far exceeded that of the entire industry, it said in a statement.


China goes on to develop its market: Vice-Premier

BERLIN - Visiting Chinese Vice-Premier Li Keqiang said here on Thursday that China will implement a more active strategy of opening up, making the Chinese market more open, fair and better regulated.Li made the remarks at a dinner with German and Chinese business representatives, after meeting with German Economy Minister Rainer Bruederle earlier in the day.

"Our general idea is, in the new era China will take a more open attitude to the outside world," Li said.

Against the backdrop of globalization, China will pursue a more active strategy of opening up, continuously attracting and using foreign technology, management expertise, high-quality personnel and investment, Li said.

He also said that the Chinese government will continue to promote free trade and investment and welcome more German companies to invest or establish new businesses in China, especially in areas like energy efficiency, environmental protection, high technology, modern agriculture and service industry, as well as new industries with strategic significance.

China will give equal treatment to both domestic and foreign enterprises and establish a more fair market, he added.



Government offices to purge pirated software

BEIJING - China will strictly enforce the ban of unauthorized software in government offices in 2011, authorities have said.

Government offices to purge pirated software

Central government offices have until the end of May, while local offices have until the end of October, to ensure all software installed in their offices is licensed, State Intellectual Property Office spokesman Wang Ziqiang told a news conference in Beijing on Thursday.

Software will be classified among fixed assets in future government procurements, a Ministry of Finance notice said in late 2010. This will ensure exclusive use of authorized software over the long term, because offices under the State Council conduct annual checks of fixed assets, Wang said.

The State Council's Government Offices Administration will soon adopt additional relevant regulations, he added.


Substandard dairy companies face closure

BEIJING - The country's top food-quality regulator on Thursday required all domestic dairy companies to renew their production licenses this year or face closure.

The move is the latest bid to ensure food safety following a scandal over melamine-tainted baby formula that killed six babies in 2008.

"The review aims to push forward large-scale production in the industry and improve the quality and safety of dairy products," Zhi Shuping, director of the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), said at a national conference in Beijing.

He said small plants with low quality standards and poor production facilities would be shut down.

To increase the transparency of food safety, Zhi also said the administration will hold news conferences every month, and local bureaus are required to meet the press at least once every three months to publicize quality inspection results.



Caixin Online   6/1/2011

China to Invest 700 Bln Yuan in Railways

A total of 70 railway projects will be launched this year, including 15 high-speed railway projects and inter-city lines

(Beijing) -- China has set aside 700 billion yuan for infrastructure construction in its railway system in 2010, in an aim to extend the operational high-speed lines to 13,000 kilometers.


The Age   6/1/2011

China likely to use yuan on inflation

A stronger exchange rate is likely to be one of the tools China uses to curb inflation in the first quarter, a government economist said on Wednesday, as Beijing tries to stem a flood of liquidity.


Asia Times Online   6/1/2011

China still fully coupled

The emergence of China, and through its efforts much of East Asia, relatively unscathed from the financial crisis suggests a decoupling of Eastern and Western economies. That is unlikely with the Chinese economy still determinedly reliant on exports to the United States - even as indebted Americans find their incomes squeezed further by fiscal hawks in Washington.


The Wall Street Journal   6/1/2011

World Bank Endorsement for Yuan Bonds

The offshore yuan market is starting off the year with some high-powered endorsement.

The World Bank, which is triple-A-rated, becomes the first body to issue yuan-denominated debt offshore in 2011, raising 500 million yuan, or US$75.9 million. The two-year bond matures in January 2013 and pays a yield of 0.95%. The issue was arranged by HSBC Holdings PLC.



China, Spain to Sign $7.3 Billion in Deals

MADRID—Chinese Vice Premier Li Keqiang Wednesday reiterated Beijing's pledge to support Spain in a meeting with the country's prime minister, José Luis Rodríguez Zapatero, as the two countries began signing $7.3 billion in deals.


FedEx Adds India-to-China Cargo Air Route

FedEx Corp. has added a direct air-cargo route between India and China, a move it said is aimed at serving booming regional trade growth.

The new cargo flights, which began ...


First Solar Plans Inner Mongolia Project

BEIJING—U.S. solar panel maker First Solar Inc. said it is working with China Guangdong Nuclear Solar Energy Development Co. to revive a project to build what it expects to be the world's largest solar-energy plant in China's Inner Mongolia region.


Setting a Direction for China's Capital Markets

The next step in the development of China's capital markets, says the chairman of the China Securities Regulatory Commission, must focus on fostering market mechanisms that promote institutional reform.

Shang Fulin spoke with Qiao Xiaohui and Li Delin, reporters for Caijing magazine, a business and finance publication based in Beijing.

Caijing: China's securities market has introduced margin trading, stock-index futures and other risk-management tools in recent years. After the international financial crisis, how will the commission consider and promote innovation and development in capital markets?

Shang Fulin: Innovation is the power source of financial-market development, but excessive financial innovation and ...


Tricky Dick's Lesson for China

Richard Nixon was full of surprises, not least when he shook hands with Mao Zedong in Beijing in 1972. The previous year, Nixon imposed price controls at home to stamp out inflation, another surprising move from a Republican president. The president's visit transformed Sino-American relations, but it is those price controls Beijing should be recalling right now.

It is worth remembering Nixon's decrees proved unsuccessful.


China Daily   6/1/2011

World Bank issues its first-ever yuan bonds

HONG KONG - The World Bank said it is issuing its first-ever bond denominated in China's currency, the yuan, in Hong Kong, as the country promotes international use of its currency, also known as the renminbi.


China signs $7.5b deals with Spain

Li pledges to help EU tackle its debt problems as he starts European tour

MADRID / BEIJING - China and Spain signed $7.5 billion worth of agreements on Wednesday, a welcome boost for Spain's recession-hit economy.

Visiting Vice-Premier Li Keqiang also vowed to help Europe beat its debt crisis, as he started his three-nation European tour.

Li told a breakfast meeting of Spanish and Chinese business leaders in Madrid that the signed agreements and contracts cover 16 programs.

The deals reportedly involve the banking, energy, transport and telecommunications sectors. According to the Spanish daily El Mundo, they include Spanish flight simulator manufacturer Indra, and the Spanish branch of Vodafone. It was not clear whether the deals included the purchase of Spanish bonds.

Li said prior to the trip China will buy more of the country's treasury bonds "depending on market conditions".

Spain's finance minister told Li on Tuesday that Chinese investors played an important role in stabilizing financial markets and suggested the two countries join in developing markets in Latin America.


China wants Germany to open up market

China wants to develop the untapped purchasing potential of its domestic consumers and hopes Berlin will support the expansion of Chinese companies in Germany, a top Beijing official said on Wednesday.

Chinese firms should have the chance to further boost some $1 billion in investments in Germany, Vice-Premier Li Keqiang wrote in a guest editorial in the Sueddeutsche Zeitung ahead of his three-day visit to the country later this week."We are encouraging robust, creditworthy Chinese companies to invest more abroad," he wrote.

"We would be happy if ...the conditions for Chinese companies could be improved for investments and business start-ups in Germany."

Li reaffirmed Beijing would support the European Union in sorting out its sovereign debt crisis, and raised the hope that the EU might ease restrictions for high-tech products to China, which he said would create balanced and sustainable trade relations.


Despite tight credit, banks' profits to grow

BEIJING - Chinese commercial banks earned unprecedented profits in 2010, and are projected to secure a profit growth rate as high as 20 percent this year, said officials and analysts.

Yang Zaiping, deputy head of the China Banking Association, said Chinese banks' profits in 2010 will exceed 800 billion yuan ($120.8 billion), setting a historical record.

Guo Tianyong, a professor with the Central University of Finance and Economics said the figure will certainly exceed 900 billion yuan and might even reach 1 trillion yuan.

In 2009, the profits of Chinese banks totaled 668.4 billion yuan, a 14.6-percent increase on 2008. For the same period, assets reached 78.8 trillion yuan, up 26.3 percent year-on-year.

The rapid growth in profits was mainly attributable to the expanding scale and rising difference between lending and deposit interest rates, said analysts.

In 2010, the net interest margin of 16 listed Chinese banks rebounded by 11 basis points on average, it said. In addition, fast growing intermediary business with a 35.1 percent year-on-year in revenue growth also helped the banks gain more profits.

It predicted the growth rate of banks' profits in 2011 may slow down to between 15 and 20 percent, mainly due to the country's tightening monetary stance and shrinking new yuan loans, said the report.

To tame inflation and stabilize economic growth, the Chinese government has put suppressing inflation at the top of its agenda for 2011 while shifting its monetary stance to "prudent" from "moderately easy", which analysts said means tighter policies.

Analysts predicted the amount of the new yuan loans would be reduced to around 7 trillion yuan this year from 7.5 trillion in 2010.

"The banks will raise lending interest rates to compensate for the negative effect brought by the declining credit scale. But as the government liberalizes deposit interest rates gradually, the interest margin may not be big enough to offset the shrinking credit," said Guo, predicting banks' profits will grow by 10 percent this year.

Although the growth rate will decline in 2011, it will still be a rapid clip, said the Bank of Communications. The Guotai Junan Securities predicted if the regulators won't require higher provisions for the banks, profits would even reach 21 percent.


Major rail line to open in mid-June

Beijing-Shanghai high-speed link to slash travel time to four hours

BEIJING - The landmark Beijing-Shanghai high-speed rail line will open in June, months ahead of schedule, the Minister of Railways Liu Zhijun said on Tuesday.

China joins elite offshore energy club

CNOOC's oil and gas output exceeded 60m tons last year

BEIJING - China has joined the world's elite club of offshore oil producers after China National Offshore Oil Corp (CNOOC) announced that its oil and natural gas output surpassed 60 million metric tons in 2010. The country's largest offshore oil explorer's oil and gas production last year totaled 64.13 million metric tons of oil equivalent, of which 50 million was produced domestically, said its president Fu Chengyu on Tuesday.

"It marks a milestone that China has become one of the world's largest offshore oil producers after the United States, the United Kingdom, and Norway ... And the marine petrochemical industry will boost the country's energy supply," Fu said.

China's surging energy demand has led the nation's foreign oil dependence ratio to reach a new high of 55 percent in 2010.

"We estimate that 60 percent of China's oil consumption will be imported by 2020," said Wang Jiacheng, a researcher at the Academy of Macroeconomic Research under the National Development and Reform Commission.

Consequently, offshore oil exploration, which is still at an early stage, has become a major factor in quenching the nation's thirst for the natural resource.


Caixin Online   5/1/2011

Fortunes Due and Fitting
By Andy Xie

The allocation of risks and rewards meted out this year in the global marketplace augurs much of the same from last year

This year may start out looking like the last, dipping down later and then resurfacing with hope. Like last year, 2011 will be a year of transitions. What's kept the global economy stable – fiscal and monetary stimulus in the West and asset bubbles in the developing world – may also act as a catalyst for the next crisis. The timing for that crisis will likely occur in late 2012.


China Allows Exporters to Keep Foreign Earnings Overseas

The new measure signals loosening controls on foreign exchange

(Beijing) – China said December 31 that exporters will be allowed to keep their foreign revenues overseas from January 1, in a move to expand a trial program effective since October 1.


The Wall Street Journal   5/1/2011

World Bank Issues Its First Yuan Bond

NEW YORK—The World Bank issued its first bond denominated in the Chinese yuan, borrowing 500 million yuan ($75.9 million) over two years.

The triple-A-rated World Bank said in a statement that the decision to borrow in the Chinese currency signals its strong interest in supporting the growth of the yuan market. The bond, which matures on Jan. 14, 2013, has a ...


Doubts on China’s Grain Productivity

One of China’s oldest worries is that the country might stop being able to feed itself and start to depend on imported food.

China’s domestic production of grains seems increasingly inadequate to meet its demand, in part because of its aging agricultural labor force.

In these days of rising wealth, the problem isn’t whether China will actually starve. It’s how long it can sustain its declared aim of self-sufficiency in grain–a long-standing keystone of Communist Party agricultural policy.


China Daily   5/1/2011

Chinese vice premier arrives in Spain for visit

MADRID - Chinese Vice Premier Li Keqiang arrived here Tuesday at the start of a three-nation tour to Europe.

During his stay in Spain, Li will hold talks with Spain's Second Deputy Prime Minister, Elena Salgado, and meet Spanish King Juan Carlos, Prime Minister Jose Luis Rodriguez Zapatero and Foreign Minister Trinidad Jimenez.

China and Spain have forged a comprehensive strategic partnership, which has developed steadily in recent years. Li and Zapatero are expected to attend a ceremony on Wednesday during which both sides will sign documents on trade and economic cooperation.

Spain, the fourth largest economy in the euro zone, is currently plagued by both the international financial crisis and its own sovereignty debt crisis.

The Chinese government has said it would support a package of financial stabilization measures from the European Union (EU) and the International Monetary Fund (IMF), and their practical actions to help some EU nations to tide over their sovereign debt crises.

Spain is the first leg of his three-nation tour, which will also take him to Germany and Britain.


Country wows world with engineering

BEIJING - The country surprised the world with its engineering and technical feats in 2010, when it completed several monumental projects high in the sky, deep in the seas and in-between.


Domestic innovation crucial to prosperity

China's impressive leaps in technological innovation in 2010 support the policy of promoting indigenous innovation's development and show the country is capable of breakthroughs.

The country needs to cultivate indigenous innovation to ensure reliable sources of technology, improve exports' quality and realize sustainable development.

An important characteristic of the Chinese economy since the reform and opening-up has been a reliance on technology transfers. The model has been successful but is becoming less efficient.

Transfers have become more difficult with globalization and China's World Trade Organization ascension.

Multinationals have been reluctant to transfer technology for fear of Chinese enterprises becoming strong competitors. So, local companies must become self-reliant in core technologies' development.


China unveils new rules against monopoly pricing

BEIJING - China's competition law enforcement authorities Tuesday published new regulations to crack down on anticompetitive, monopolistic-type behavior, amid the country's efforts to ensure competitive markets.

The regulations against monopoly pricing will take effect from Feb 1, a National Development and Reform Commission (NDRC) statement said.

China implemented its first anti-monopoly law on Aug 1, 2008.


The Age   4/1/2011

China allays inflation fear
Li Yanping, Beijing

CHINA'S inflation may cool after manufacturing growth slowed in December because of a tighter monetary policy and closures of energy-wasting and polluting factories.

The data signalled progress in Premier Wen Jiabao's campaign to rein in prices, which included an interest-rate increase on Christmas Day after an economic recovery fuelled by record bank lending.


Asia Times Online   4/1/2011

China BRICS up Africa
By M K Bhadrakumar

Extension of the BRIC acronym with South Africa's inclusion to the bloc of emerging economic titans holds distinctly political tones. Other "growth economies" had better claims to join, but the decision to legitimize South Africa as a future global power can be seen as a decision by China, the group's dominant economy, and Russia to challenge United States strategies in Africa and the Indian Ocean.

Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.


The Wall Street Journal   4/1/2011

China Says Spain Debt Buys to Continue

MADRID—China supports Spain's economic reforms and will continue buying Spanish government debt, Chinese Vice Premier Li Keqiang wrote in a newspaper editorial, the latest sign of China's growing role in protecting the stability of the European Union, its largest export market.

Kaixin OpEd – So which country do you think is becoming China’s new best friend??


Soybeans Are Ancient; Oil Is Not

The source of tofu and soy sauce–soybeans–is an ancient food in China. But what makes the soybean particularly important today, both to the Chinese diet and to an economy facing price pressures, is cooking oil.

Edible oil is arguably the most vital ingredient in Chinese cooking and that means Chinese households are feeling the creep of inflation each time they grease the wok.


China Daily   4/1/2011

China will continue to buy Spanish debt

MADRID  - Chinese officials have faith in Spain's financial system and will continue to take part in government debt auctions, China's vice premier Li Keqiang wrote in an editorial in El Pais on Monday.

"China is a responsible, long-term investor in the European financial market and particularly in Spain, and we have confidence in the Spanish financial market, which has meant the acquisition of its public debt, something which we will continue to do in the future," Li wrote.


Unions push for collective wage move

Negotiation mechanism to 'help cut labor disputes and boost pay'

BEIJING - The national trade union federation is planning to introduce collective wage negotiation in all enterprises over the next three years, to reduce labor disputes, a senior union official said.

Zhang Jianguo, head of the collective contract department under the All China Federation of Trade Unions (ACFTU), said his organization will make it a priority to boost the negotiating power of grassroots trade unions.

"Nationwide experience has suggested that collective wage negotiation not only reduces labor disputes, but also helps workers' wages rise. It is also conducive to sustainable development of enterprises," he told China Daily.


Curbing inflation high on China's economic agenda in 2011

BEIJING - Chinese President Hu Jintao, in a recent speech made while celebrating the New Year with political advisors, reiterated China's stepped-up efforts to stabilize prices in 2011.

A week earlier, Chinese Premier Wen Jiabao, in a live chat over radio with listeners on Dec 26, was seeking public confidence in his government's ability to contain inflation in the world's second largest economy.

China's consumer price index (CPI), a main gauge of inflation, rose to a 28-month high of 5.1 percent year on year in November.
Over the past two months, China has repeatedly stressed its resolution and introduced a series of measures to stem inflation.

The price-stabilizing bid, which carries significance not only in economic terms but also in safeguarding social stability in China, has begun to bear fruit and will continue to weigh high on government's agenda for 2011, analysts and officials said.


The New York Times   3/1/2011

China Quietly Extends Its Footprints Deep Into Central Asia

While China is seizing the spotlight in East and Southeast Asia with its widening economic footprint and muscular diplomacy, it is also quietly making its presence felt on its western flank, once primarily Russia’s domain.

Chinese officials see Central Asia as a critical frontier for their nation’s energy security, trade expansion, ethnic stability and military defense.


When Innovation, Too, Is Made in China

A new Chinese government document offers a glimpse into how the nation intends to engineer a more innovative society.


China’s Big Zhang

November’s anti-inflation efforts haven’t stopped everyone from obsessing over rising prices.


The Wall Street Journal   3/12/2010

Wall Street Warms to China Story

Visiting China was considered an indulgence for most financial executives just a few years ago.

But when Berkshire Hathaway Inc.'s Warren Buffett, J.P. Morgan Chase & Co.'s James Dimon, Kohlberg Kravis Roberts & Co.'s Henry Kravis and Carlyle Group's David Rubenstein all visited China in recent months, the trips were seen as something else entirely: crucial steps to keep their respective companies growing.

China has been important to global economic growth for years, of course.

That's all changing. China is opening its markets, slightly loosening the reins on its currency, and is emerging as a key to the future of almost every Wall Street firm.

Kaixin Oped – There is a lot of money in China and a lot of people who want to spend money.

China is still has the historical divide between country and city.

In the ‘west’ ‘rural’ is seen as a sort of utopia.

In China ‘ rural’ has been, and still is to a large extent, seen as banishment.

City in China meant education and a high standard of living. Rural in China meant poverty and a subsistence standard of living.

Xiaosui and western Kaixin talk about Mao in this context. Mao came from the country. As western Kaixin has come to understand China a little more he starts to understand Mao’s policies as particularly ‘country China’. He now quips, “You can take the boy out of the country, but you can’t take the country out of the boy.”

Just a thought …

The first thirty years of China’s transformation was accomplished in the cities, rural was left behind. Indeed, rural China provided much of the labour for this economic transformation.

That was a necessary focus, and it has been spectacularly successful.

Over the last 10 years or so that focus has been slowly changing to rural China. Indeed the economic transformation of rural China is one of the central planks of the next 5 year plan.

If the cities are the head of the dragon, then rural China is the body of the dragon, and a big fat dragon it is.

Kaixin has opined before that the economic and entrepreneurial potential within rural China is enormous. It will drive the other major change of focus in China well into the 21st century; from andexport driven, and dependent, economy to one focused on domestic consumption, throwing off the shackles of that export dependence.

The spending power of city China is enormous, now.

The spending power of rural and city China, the head and body of the dragon, is almost un-imaginable.

That is why the powerful CEO’s are heading to China. They are not powerful CEO’s for nothing.

They have vision.


Cooking Oil's Surge Shows How Inflation Hits Chinese

SHANGHAI—These days, Liu Chuansheng nervously scouts five locations before he buys cooking oil, illustrating how a sudden spike in the price of the Chinese kitchen's most vital ingredient has become close to a national crisis.

Kaixin OpEd – Oh good, thinks the WSJ. China has not followed America’s economic model, so China must be wrong.

Sounds like a teenager to Kaixin.


China Expands Easing of Capital Controls on Exporters

BEIJING—China eased capital controls on exporters' foreign-currency earnings this weekend—a move that over time could damp inflationary pressures and slow growth in the massive foreign-exchange reserves that have made Beijing a heavyweight global investor.

The move, an expansion of a program that allows exporters to keep their foreign-currency earnings overseas instead of changing them into yuan, was announced Friday and took affect on Saturday.

Chinese exporters get almost all their revenue in dollars and other foreign currencies. In the past, they could use some of that money to cover foreign-currency costs such as imported materials for their factories, but they ...


IPOs, the Recovery: Starring China

After two years of subpar IPO activity in most of the world, 2010 saw the biggest offering come forth as the pace began to pick up—and there is optimism the trend will continue into 2011.


China Seeks Higher Payout From State Firms

BEIJING—China detailed plans to make state-owned companies turn over more of their profits to the government, the latest move in a struggle between leaders of the powerful state sector and proponents of using their earnings to fund more social spending.



CCTV9 Dialogue - 30 Minute Current Affairs Discussion   3/1/2011

The New Asian Hemisphere

Kishore Mahbubani was appointed Dean of the Lee Kuan Yew School of Public Policy on August 16, 2004 after having served 33 years in the Singapore Foreign Service.

His new book, The New Asian Hemisphere: the Irresistible Shift of Global Power to the East, was published in 2008. The premise of this book is simple: If representative democracy is the best known form of governmance for nations, then it's also the best form for the world. His book sends one message to the West: Please give up in dominating the world.


China Daily   3/1/2011

Special: Meeting China's Ministers

At the threshold of the new year of 2011, the start of China's 12th Five-Year Plan (2011-2015), a developing China is dealing with some challenges, as it maintains its fast-paced growth. Looking into the future, China Daily interviewed some of the country's top officials to talk about China's achievements and its blueprint of to-dos.


The economic forecasts to keep in mind in 2011

China will enhance and improve macroeconomic regulation to ensure stable and healthy economic development, according to a statement released on Dec 12 after the annual Central Economic Work Conference.

Next year's macro-regulation should basically be proactive, stable, prudent and flexible.

The focus will be on better handling the relationship between stable and relatively fast economic development, economic restructuring and controlling inflation expectations in an active and stable way, the statement said.



China to see Asia challenges in 2011, analysts

Beijing - China's relationship with neighboring countries in Asia will be a focus of the country's foreign affairs agenda in 2011, Chinese analysts predict.

It is believed that there are going to be continuing challenges for Beijing in Asia as a whole - ranging from security to new forms of cooperation.

"Regional security will remain a top issue for China," Zhai Dequan, deputy secretary-general of the China Arms Control and Disarmament Association told China Daily.

Citing ongoing and extensive media coverage of the tensions on the Korean Peninsula, and the uncertainty of the resumption of the Six-Party Talks, Zhai said the situation is nerve-racking.


Obsolete way of measuring trade inflates surplus

BEIJING - Measuring global trade in line with the principle of "the country of origin" fails to reflect the complexities of global commerce where the design, manufacturing and assembly of products involve several countries, experts said.

"It is not always true that goods exported by a country are wholly made by that country," said Tu Xinquan, associate director of China National Institute of WTO at the University of International Business and Economics.

Therefore, the trade surplus between two countries can not be simply interpreted as one benefiting more than the other from the trade," Tu said.

Using the iPhone as a case, a research paper released by the Asian Development Bank Institute (ADBI) earlier this month showed that conventional trade statistics greatly inflated bilateral trade deficits between a country used as export-platform by multinational firms and its destination countries.

The paper said trade statistics in both China and the US consider the iPhone a Chinese export to the US, even though it is entirely designed and owned by a US company, and is largely of parts produced in other countries.

The entire $179 estimated wholesale cost of each iPhone is credited to China, while the country is only responsible for the last step of making the iPhones -- assembling, the value of which accounted for just 3.6 percent, or $6.5 of the total cost, according to the paper.


Sino-Russia pipeline opens

Flow of oil solidifies countries' cooperative economic relations

MOHE, Heilongjiang - Some 42,000 tons of crude oil passed through an oil pipeline linking Russia's Far East to Northeast China in the first 24 hours since it began operating on Saturday, an industry insider announced.

The pipeline, which originates in the Russian town of Skovorodino in the country's Amur region, enters China via the county of Mohe and ends 927 kilometers south in the city of Daqing.

"The operation of the China-Russia crude oil pipeline is the start of a new phase in China-Russia energy cooperation," Yao said at the launch ceremony on Saturday.

The pipeline will improve the structure of the nation's energy imports and promote economic development, he said.

Yao Wei (C), general manager of the Pipeline Branch of Petro China Co Ltd (PBPC), pushes a button to make the pipeline begin operating at a plant in Mohe county, Northeast China's Heilongjiang province, Jan 1, 2011.


High-tech industrial zones take lead in industrial innovation

BEIJING - China's 56 leading high-tech industrial zones have led the country's industrial innovation, playing an important role in the nation's social and economic development, a government statement said on Jan 1.

The statement came from the Ministry of Science and Technology's Torch High Technology Industrial Development Center.

The center is in charge of China's "Torch Program", which started in 1988 to boost Chinese industrialization through advanced science and technology.


Caixin Online

A Coal Seam Surfaces

Chinese oil major CNOOC is attempting to turn the talk of domestic coal-bed methane exploration from plenty of hot air to white hot deals

(Beijing) -- China National Offshore Oil Corporation (CNOOC) said it plans to spend 1.2 billion yuan to acquire a 50-percent stake in China United Coal Bed Methane Co., Ltd. in its bid to enter the Chinese coal bed methane (CBM) industry. The acquisition has won support from the State Council, China's cabinet.

See Kaixin's - GREEN CHINA


A Post-Mortem of the Euro Crisis

Looking back at the year that transformed the topography of the euro area

On a global level, the past year will be recalled as the year when the world economy began to recover from the crisis. Output and trade bounced back, unemployment stopped deteriorating and capital flows to the emerging economies resumed. Inflation also made a come-back, not least in China.

But 2010 will also be remembered as the year when the European crisis erupted.


Pricing Fracas Leads to Coal Shortage

Chinese power plants have been staging brown outs, with some functioning only days of coal inventory – why the shortages aren't from the price of transportation

Already down to mere days of thermal coal inventory, a manager at a power plant in Anhui Province has been left completely empty-handed without a single thermal coal contract for 2011.

"We want to sign the contracts, but the coal producers don't," said the unnamed Vice General Manager in Anhui Province on December 22, with only three days of inventory left.




The Age   3/1/2010

World on high alert as China inflation soars

Ominously, outrage is growing in the People's Republic over rising prices, writes Malcolm Moore.

CHINA could be hit by inflation of 7-8 per cent in the next two months, panicking Beijing's policymakers into dramatically raising interest rates, economists have warned.


Runaway China puts on brakes

Ambrose Evans-Pritchard London

THE yuan yesterday strengthened beyond 6.6 to the US dollar for the first time since 1993 on speculation that China will allow the currency to advance in an effort to tame inflation.

The slowdown suggests the authorities are at last gaining traction in their ever-more zealous efforts to stop overheating, though many analysts say the credit bubble has already gone too far to avoid trouble this year.

Kaixin OpEd – What pejorative terms these hacks use.

‘ …panicking Beijing's policymakers’

‘ … ever-more zealous efforts’

These hacks are sitting at the feet of economists from the west, waiting for pearls of wisdom to drop from above.

I have to tell you, that is not a pearl of wisdom, it’s a dibble of spit.

These are the same western economists who either caused the GFC or completely failed to see it coming.

They now rush around, the masters of hindsight, and tell the China how to fix everything from their supposed economic problems to how to wipe dribble from their chins.

China has got it right so far …. it’s a fair assumption that China will continue to get it right.

China is fully aware that the worst thing it could do would be to listen to the advice from western economists.


Economic China

  'The expansion of these gigantic cities has been fast, disruptive and unprecedented in world history. It has also been accompanied by rapid price increases. But they have occurred primarily in the first-tier cities. Markets cannot easily price what they have never witnessed before.'


One message is clear: The Chinese government wants to foster a national transformation from "world's factory" to "world's market." 


China has been reforming itself, a process known as "crossing the river by feeling the stones." The unprecedented experience, plus the country's scale, leaves the outside world uncertain of its future.




China Themes

Green China  

Economic China

Yuan Revaluation & Internationalisation

China Real Estate





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Set in Zanzibar in 1910, it is the story of two people from different worlds falling in love. Susan immerses herself in Zanzibar. Asim falls in love with this woman from the nation that killed his wife. Susan is a spy. Asim is the chief advisor to the Sultan of Zanzibar. Germany and France are holding secret negotiations to form a Pan European alliance, which would isolate Britain and destroy her power. Susan and Asim are caught up in all this and their love is finally dashed on the cold, hard reality of international high politics.



Available on Amazon's Kindle $4.99 - Over 400 Pages





 Chapter One


'A maharaja’s ruby cast on a Persian carpet by the blackest of hands'



Their souls danced, honouring his promise.

The ancient dhow stirred in the soft morning breeze. Like a sleepy lion, it began to move through the water, snuffling about the other boats on the harbour; some scurrying, some at anchor, some darting before a brief gust of wind. The lateen sails a bustling panorama of blood-red and sun-bleached white.

Aft, the woman's eyes searched the skyline, drinking in the architecture of Stone Town, the heart of Zanzibar; its jagged, cluttered silhouette so familiar, so much a part of her soul.

Abruptly, her eyes ceased their restless searching, jagged by an invisible hook, transfixed by the grand buildings on the northern shore, Beit-al-Ajaib, the House of Wonders, Palace to the great Sultan of Zanzibar. The distinctive architecture captured in the tropical light: coconut white outlined by contrasting shadow plays of pepper black.

A smile, ever so slight, started to play on the edge of her mouth then disappeared. A memory that should have been fond instantly turned to sharp unbearable pain. Her eyes hardened and moved on.

Without warning the captain threw the rudder over. Stumbling, the woman barked her shin on a wooden box, a rough-hewn coffin. She recoiled, knocking over an untidy stack of cane baskets. Imprisoned in the baskets, rusty cockerels, their scruffy heads straining through the latticework, snapped at her, cried out to her; their raucous din overwhelming her, drowning her.

Dimly, through the fog of noise, the strident swearing of the sailors in Kiswahili seeped into her conscious. Understanding, she smiled mirthlessly.

The coffin had been carelessly stowed, a chore, rather than a labour of respect or love.





London 1910


“Hello, who are you? I am Oliver, is Edward at home?”

The words were spoken by a tall, impeccably dressed young man as he rushed into Edward’s flat shaking off surplus water and calling for whisky while shoving his umbrella into a stand. It was a blustery, grey, bitterly cold February afternoon in the heart of London. He brushed a curl of soft auburn hair from his forehead and smiled charmingly.

Susan laughed, her hazel eyes dancing with the exhilaration of the new. “Yes, he is having a bath. I think he is trying to get warm. I’m Susan, Susan Carey, his sister.”

“Ahhh yes, from Australia. How do you do?” said Sir Oliver, smiling broadly and offering his hand. He noticed the laughter in her eyes, and the depth, particularly the depth, intensified by jade flecks that made them striking and alluring. “So, you have arrived, good trip I trust.”

“I am very well thank you, and yes, it was a good trip,” replied Susan.

He laughed and glanced at the sitting room, “whisky?”

“Oh, I’m sorry, please come in…….. that was silly of me, after all, it is your flat.”

Oliver smiled and gestured for Susan to lead the way. He followed her into the room, and after helping himself to a generous portion of whisky, walked over to the fire.

Shortly after, Edward, wrapped in a huge ruby-coloured dressing gown and wiping soap from his ear strode into the room. He was of similar age to Oliver, late twenties, well built, if slightly podgy, with dark auburn hair and a full moustache. Susan looked up and smiled to herself, she could see now where he had picked up some of his new mannerisms.

“Thought I could hear voices. I see you two have met, no need for introductions then.”

As he was speaking, Edward walked to the side table and grabbed a whisky decanter by the neck. He glanced at Oliver who nodded. A long finger snaked into one of the tumblers followed by the distinctive clink of crystal. He swept the decanter off the table and carried it to where Oliver was sitting. After pouring the whisky, he sank into a lounge chair and sipped from his glass, enjoying the warm glow as it spread through his body.

Suddenly he sat up exclaiming, “Sorry sis, would you like something to drink?”

“Kind of you to remember, but no thank you, and yes, Oliver has already inquired.”

Edward nodded and sank back into his lounge chair.

They chatted, tentatively at first, getting to know one another. Edward had not seen Susan for two years and was unsure how his sister would take his new relationship. Oliver was intrigued by Susan. An attractive, self-assured young lady of high intelligence with a degree was a rare find. And, as fate would have it, she was also a trained and experienced teacher. He suggested a picnic at Oxford, which was met with ready acquiescence. Arrangements were made for the following Sunday.

“I’ll see if the Rolls is available,” mused Oliver. “Must ring father, haven’t spoken to him in ages.”

Oliver, Sir Oliver Marchmaine, was an unaffected young man of intense intelligence who saw life as a great adventure to be lived to the full. He was also unyieldingly loyal to his country, England, which is why he had joined Military Intelligence on leaving Oxford.

It was 1910 and Europe was stirring. It was a time full of interest, intrigue and danger. The European chessboard was becoming increasingly complex, the moves more subtle. A time when an unexpected move or feint could have profound consequences.



Regaining her balance, the woman’s eyes were drawn, hesitantly at first, resisting back to Beit-al-Ajaib. She wondered if it was still the same. Still the same centre of power and intrigue that had been so much a part of her life all those years before; that had defined her life.

She remembered those first few moments, remembered standing in the foyer of the palace, .………… remembered the breathtakingly beautiful Persian tapestry ........

The sea breeze stirred her clothes. She smiled a little sadly, and in her mind the tapestry gently swayed. Two small apparitions ran giggling up the stairs: two small exquisitely rich burkas disappearing along the first floor landing. Childish squeals of mischief and joy left in the air.......

“Move to seaward, you accused of Allah! Move!”

Her thoughts were clawed back to the dhow, the captain crashing the tiller over to avoid another boat on the crowded harbour. The woman instinctively ducked her head to avoid the heavy boom as it swung over her, the rusty cockerels squawked their raucous indignation, their heads straining through the latticework, relentless.

The collision avoided, the dhow continued on its way. The cacophony dying down to the occasional command by the captain or the cry of a seagull.

The woman's thoughts returned to Beit-al-Ajaib

  …………. laughing and giggling, girls of seven or eight. A door on the first floor slammed and all sounds of them disappeared. Silence. The woman smiled. She could see herself, a young woman, dressed plainly, unselfconsciously, her sexuality tantalisingly just out of reach, hidden beneath the thin veil of her clothing. She remembered standing alone in the foyer, looking around, perplexed. Asim came through a door to the left of the tapestry.


The woman started and looked around. Then, realising, was cold again. Alone again. Alone, rocking to and fro to the rythm of the sea. Alone, beside a rough-hewn coffin.






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Graeme has been using ChinesePod since 2007

"I highly recommend ChinesePod, I haven't found any Online teaching programmes that come close."