Thursday, December 31, 2009

Have You Heard...

China's six saucy sex scandals of the half-decade

Source: Shanghaiist

Shanghaiist's inhouse sex scandals specialist Kenneth Tan writes about the six sex scandals that have rocked China over the last few years and given our readers a super hardon. It should perhaps be of no surprise that some of these scandals count among this website's most trafficked stories. This post promises to end your year with a blast, so read on:


6. The Li Pengfei Scandal. It's definitely true what they say — hell hath no fury like a woman scorned. In June 2008, unrequited love led a young Chinese woman to create a website, and publish all the photos of her ex-boyfriend Li Pengfei in the most compromising positions (wanking in bed, performing cunnilingus on her, etc.) in a last ditch attempt to get back at him.

The sexy pictures were published along with all the sordid details of how the little casanova was supposed to have tricked her out of her money and love in a website which attracted over 2 million unique visitors in just two months.

To back up what she was saying, she put online all the receipts of meals, gifts and airfares that she bought him, as well as a record of a thousand over text messages while they were together, from all the sweet-nothings earlier in the relationship to the really racy messages down to the nasty messages after things fell apart.

The moral of the story for all you gentlemen out there? Never piss off a lady with a digital camera. Or one that knows how to create websites.

5. ChinaBounder: The Western ScoundrelA British teacher living in Shanghai starts a blog about his sexcapades in China and other scattered thoughts about sex and sexuality in China, Mao, the Cultural Revolution, and China in general. The blog came to the attention of Shanghai Academy of Social Science psychology professor Zhang Jiehai who then penned a 5,000 character essay, calling for the masses to rise up and unveil Chinabounder (as he called himself) and kick him out of China. He accused ChinaBounder of insulting Chinese men, insulting the Chinese nation and of engaging in splittist activity.

This kicked off a online witch-hunt as internet vigilantes sought to hunt down the British man and castrate him. Mind you, this was back in the day (in 2006) before the term "human flesh search engine" was even coined. The vigilantes never managed to hunt down ChinaBounder and it wasn't until July 2008 when ChinaBounder came back with the launch of a new book with a title more incendiary than all of his sexcapades combined, Fault Lines on the Face of China: 50 Reasons Why China May Never Be Great, and revealed his name — David Marriott.

4. Kappa Girl. In November 2008, a 12 minute long sex video of a female employee working at the Kappa store in the east building of the Shanghai No.1 Department Store on Nanjing Lu spread like wildfire on the Chinese internet, unleashing a 'human flesh search engine' where netizens worked together to track her down, publishing her private information such as her name, her pictures and her QQ number.

Besieged by questions, the girl started a blog to defend herself, and to capitalise on her newfound fame. In one of her posts, she announced that she was now looking for sponsors — her rates would be RMB20,000 for a bar appearance, RMB50,000 for an underwear modelling assignment, RMB30,000 for an exclusive interview, and RMB100 per day for banner ads placed on her blog.

Shanghai police eventually found out that the person responsible for spreading the video was none other than 'Kappa Girl' herself and she was soon detained for spreading obscene content online. But that's not all, adult entertainment studio Harmony Films decided to come to the rescue to help her do what she does best and make money at the same time by offering a contract to her.

3. Zhang Ziyi and her butt-sniffing fianceThis was the first sex scandal to hit China in the year 2009 but there is technically no "sex" in it, just lots of butt-sniffing. In January, 81 pictures were released by a paparazzi photographer from X71online.com of Zhang Ziyi and her Israeli multimillionaire boyfriend Vivi Nevo canoodling on St Barth's island in the French Caribbean.

Since then, Zhang hasn't had that much of a great year. Latest rumours have it that she's involved in a dispute with a businesswoman friend who now claims she's cheated her of 200 million yuan. Her wedding plans with Nevo have also been called off and he's been seen with other women. Despite all this, Zhang can rest in the knowledge that she's been immortalised on t-shirts and remains Taiwan's most googled person in the year 2009.

2. The Deng Yujiao incident. No sexy photos have emerged from this scandal for all you perverts out there, but this was definitely a landmark in China's internet history. It all began when Deng Yujiao, a 21-year-old female pedicure worker, was arrested by police in Hubei province for stabbing and killing the director of the local township business promotions office who had tried to force her to have sex with him. Initially, Deng was charged with homicide and police refused to grant her bail.

Her case was catapulted to national prominence on the web as netizens were angered by her treatment and the corruption of government officials. After several online petitions and widespread public protests, Deng's murder charges were miraculously dropped and she was found guilty with the lesser offence of "intentional assault" although no sentence was meted out because of her mental state. All this would not have happened if the court of public opinion was not so firmly on her side and if internet activists had not gotten together to act on her behalf.

1. The Edison Chen scandal. Edison Chen's sex photo scandal needs no introduction. This was China's biggest and most salacious celebrity sex scandal ALL-TIME and involved a string of Hong Kong stars, including Bobo Chan, Gillian Chung, Cecilia Cheung and later, lesser known starlets like lesser known stars like Rachel Ngan, Mandy Chen and Candice Chan. Meanwhile mystery man named Kira continued to whet our appetites by releasing the photos in batches and issued a challenge to the police to "catch me if you can".

This subsequently led to a witchhunt which saw Hong Kong police detain a few suspects, only to release them all later after Hong Kongers took to the streets to protest the police's selective application of the law, abuse of power and scapegoat hunting.

It took two weeks before Edison Chen decided to come clean on the affair, admit the photos were his, and apologise to the ladies. He also stunned Hong Kong with his shock announcement that he was leaving showbiz. All that of course, turned out to be a show. Barely two years after the announcement, Edison is back with a vengeance — landing acting gigs, launching fashion stores and appearing on talkshows.

Here on Shanghaiist, the Edison Chen scandal is the NUMBER ONE story all-time and has singlehandedly brought a grand total of 2.8 million pervy pageviews to this site (and counting!).

Kraft Food Thrives By Catering to Chinese Consumers

Source: Forbes

Kraft finds a way to sell Oreos and other old favorites to new Chinese customers.

For years Oreo cookies were a hard sell in China. Consumers found the traditional U.S. version of the Kraft Foods cookie too sweet and, at the equivalent of 73 cents for 14 cookies, too expensive. The package was too big for small Chinese families.

Like many global companies, Kraft had to dress a signature product differently to gain acceptance in the world's most populous market. Kraft International President Sanjay Khosla can boast of success. The snack-size (and less sugary) Oreo accounted for 7.3% of the Chinese cookie market for the 12 months through September. That was one-third higher than in 2008. ACNielsen says Kraft's 22% slice of the $1.6 billion that the Chinese spend on cookies is nearly three times that of runner-up Tingyi of Taiwan. International rival Nestlé has a ninth of Kraft's share.

Cookies might seem a nutritional nightmare to American parents, but in China, beset by food-safety worries and still short on calories for its poorer folk, they can be a godsend at the convenience counter. Kraft has made another offering: Jai-Gai (translation: "good calcium"), a favorite because it promises the calcium equivalent of three glasses of milk in each 1.5-yuan (25-cent) pack.

"We view China as a market that has taught us how to focus, how to differentiate and how to innovate," says Khosla, who joined Kraft in 2007 from Fonterra Co-operative Group, a multinational dairy in New Zealand. Before joining Fonterra in 2004, Khosla spent 27 years with Unilever overseas. A new cookie r&d center at Suzhou Industrial Park, near Shanghai, will plot future treats.

China is the most important country in Kraft's developing-markets division, and Khosla has built up a product development and distribution operation managed by Chinese. The division is anchored by the Oreo brand (which has been extended into wafers, soft cakes and a strawberry creme flavor) and by Tang, the usually powdered orange drink that was hot in the U.S. sometime before the first moon landing.

Tang's tipping point came after Kraft gained a clearer understanding of Chinese consumers' needs. Says Khosla: "The local business team found that children in China think water is boring, while at the same time mothers were concerned about getting their children to drink enough water. There was clearly an opportunity here."

China Resources Vanguard Plans 360 New Outlets In 2010

Source: China Retail News

China Resources Vanguard, the hypermarket subsidiary of China Resources (Holdings) Company, has opened the final outlet in its expansion plan for Guangzhou in 2009 and is looking to open around 360 new outlets in 2010.

A representative from CV Vanguard told local media that the company had opened about 100 outlets in the fourth quarter of 2009. Following the opening of its first high-end supermarket Ole in Guangzhou's Taikoo Hui, Vanguard's second Ole supermarket in the city is now the subject of negotiations. In addition, the company is planning to open a fresh-food supermarket in Guangzhou.

According to Vanguard, 2010 will be a year of rapid growth for the company and it plans to open 60 new hypermarkets and 300 standard supermarkets during the year.

China hits back at U.S. steel pipe decision

Source: Reuters

China on Thursday decried a U.S. decision to impose duties of 10 to 16 percent on Chinese-made steel pipe, the biggest U.S. trade case to date against China, and said it had been made a scapegoat of protectionist interests.

The Ministry of Commerce said it was "strongly dissatisfied with and resolutely opposed" to the vote of the U.S. International Trade Commission for countervailing duties, which Washington said were needed to balance out unfair state subsidies to Chinese makers of pipes for oil wells.

The global financial crisis and fall in demand for oil, not Chinese policies, were to blame for pressures on U.S. manufacturers, said a statement issued on the ministry's website (http://www.mofcom.gov.cn/).

"U.S. domestic industry has been seeking opportunities to win trade relief and protection, and shifted the blame for its hardships onto imports," an unnamed ministry official said in the statement. "Finding that Chinese oil well pipes have damaged U.S. industry is a mistaken step that ignores the facts."

The ministry made no mention of any tit-for-tat moves against U.S. products, but these cannot be ruled out. It urged Washington to abandon the decision at a final vote on the anti-dumping case in May.

But a lawyer representing the United Steelworkers union and U.S. companies in the case earlier told Reuters that hearing is virtually certain to also approve separate anti-dumping duties on the pipes.

The ITC vote capped a year of U.S.-China trade friction likely to extend into 2010.

U.S. companies and unions brought about a dozen trade cases against China this year, alleging government subsidies and unfair pricing practices.

President Barack Obama also angered Beijing in September by slapping a 35 percent duty on imports of about $1.85 billion of Chinese-made tires in response to what the ITC said was a surge in imports that disrupted the market.

China, in response, accused the United States of protectionism, filed a complaint against the tires decision at the World Trade Organization and began a probe into whether U.S. autos are "dumped" in China at unfairly low prices.

The United States imported $2.74 billion of "oil country tubular goods" from China in 2008, more than triple the previous year, as rises in oil prices led to increased demand for the oil well tubing and casing.

China Is Losing a War Over Internet

Source: Wall Street Journal by Loretta Chao and Jason Dean

Four months into a crusade against Internet pornography, the government is closing thousands of sites—some pornographic, some not—and tightening rules on who can register Web addresses inside China.

Foreign sites such as Facebook, YouTube and Twitter, blocked by censors in the run-up to the 60th anniversary of Communist Party rule on Oct. 1, remain inaccessible to most Chinese users. Several prominent critics of the state who used the Internet to spread their message have been detained or imprisoned.

Yet this list of casualties obscures a larger truth: The censors are losing.

The dozen or so years since the Web came to China have seen repeated rounds of crackdowns and detentions, aided by a steady growth in scope and sophistication of the government's filtering apparatus that critics dub the Great Firewall. Still, the Internet has enabled more Chinese to have more access to information today, and given them greater ability to communicate and express themselves than at any time since the founding of the People's Republic.

The censors "are winning the battles everywhere," says Isaac Mao, a blogging pioneer based in China and Chinese-Internet researcher, "but losing the war."

In 2009, Beijing lost a big battle, too, in the so-called Green Dam episode. It was the most dramatic illustration of the limits of the censors' power. The government's plan to quietly compel all personal-computer makers put Web-filtering software known as Green Dam-Youth Escort into new PCs shipped into China was indefinitely shelved, amid anger from global technology companies and Chinese citizens alike.

The government said the software was meant to block children from accessing pornography, but critics said that it was unreasonable to require a specific program for all PCs, and that the software was filtering a broad range of content, such as social and political commentary, and even health, among others.

What would have been the state's most extensive measure ever to cleanse the Web instead awakened a new segment of society to the constraints imposed on them. The Great Firewall's power used to be in the government's ability to keep its vast Internet control system under the radar of Chinese users, few of whom use the Web mainly for politics.

Now, "fan qiang"—a cyber dissident's phrase meaning to "scale the wall"—has become standard lingo for Chinese Internet users of many persuasions.

This year, the domestic backlash against Green Dam spread through the Internet, as did much lively discussion over matters long off-limits for public debate. It carried word of a young woman prosecuted for the self-defense killing of a local-government official who had tried to rape her.

In another case, it spread awareness that officials blamed the death of a man in police custody on a game of hide-and-seek with other inmates that turned deadly, which in turn led to accusations by Internet users of a cover-up. A relatively small—and growing—group of savvy Internet users have been able to able to access blocked social networking sites such as Twitter to express defiance over Beijing's Web restrictions and to share banned information.

More broadly, the Internet has given citizens a chance to discuss and organize action on sensitive issues.

"The Internet has been very important. You can express yourself; you can distribute information to change other people's views; you can communicate; you can organize," says Wan Yanhai, a prominent Beijing-based AIDS activist, who started his organization with the help of email and the Web. "In the past 10 years, it has affected people's lives so much. It has given people courage to change society."

To say that the censors are losing isn't to say they have lost. If the Communist Party's grip over information is loosening, it is far from clear whether its hold on political power in China is ultimately threatened by the trend.

To the extent authorities allow more freedom to vent on the Internet, they may even help preserve party power by providing a necessary release valve for complaints.

The Communist Party has always been acutely aware of the power of information. From the start of its rule, it barred foreign news sources, and propaganda officials tightly controlled the content of every publication and broadcast in the country. A brief period of liberalization came in the late 1980s, when college students and other members of the elite were allowed greater leeway to gather and discuss ideas. But that freedom was limited by technological and other constraints on the spread of information. The period ended with the government's crackdown on the Tiananmen Square pro-democracy demonstrations in 1989.

Less than a decade later, the Web's advent in China posed a conundrum for the party that has never gone away. Officials recognized the Internet's utility as access to the outside world and a tool for commerce, even if they fretted about its risks. From the start, they shaped plans to control it. In 1996, they said all Internet subscribers had to register with their local police bureau—a mechanism that might have seemed feasible when there were less than one million users, but quickly became untenable as the number grew to the tens, and then hundreds, of millions.

In 2003, China announced a large-scale plan to regulate the Internet called the Golden Shield Project, with the expressed purpose of letting public-security officials do online monitoring.

Today, multiple government agencies oversee a slew of Internet controls that include regulating locally run Web sites and forcing them to filter out illegal content, such as pornography or sensitive political topics. These agencies might ask sites to provide information on users, may block overseas sites with sophisticated keyword-filtering technology, or at times even attempt to sway public opinion by planting comments on various Internet forums.

The government took more drastic measures when ethnic violence erupted in Xinjiang in July, and panic spread in part through rumors dispersed in text messages and in social media that a spate of syringe stabbings were an effort by Uighurs to infect Han Chinese with HIV. Beijing blocked Internet access in the entire province. On Tuesday, officials announced the blocks would be partially lifted, with access restored only to the Web sites of two state-run media agencies.

The vast majority of people in China use the Web for entertainment, not unlike what people elsewhere do: playing games, listening to music, getting celebrity gossip or reading about sports. That trend is encouraged by Beijing's efforts to curtain off certain subjects.

Web users in China who gain too much attention or strike at especially sensitive subjects are sometimes jailed. That's what happened to Zhao Lianhai. After his young son was sickened by tainted milk in 2008, he started a Web site to help other families and share experiences.

From a dimly lighted office in his home, Mr. Zhao compiled information from around the country into a database of children affected by the tainted formula, and published it on his Web site. He kept his instant-messaging program open at all times to keep in touch with dozens of parents to track lasting effects of melamine poisoning, and to remind them to submit medical records for his database.

Running the site and getting past government barriers on the Internet became a full-time activity for Mr. Zhao, who stopped running the advertising company he had before his son got sick. Mr. Zhao learned to outsmart China's censorship system by moving his site to different servers, using special software that circumvents government filters and registering Web domains outside of China.

"I'm not doing anything wrong, and I say that to anyone who tries to stop me," Mr. Zhao said in an interview during 2009.

Mr. Zhao's activities so alarmed officials that they detained him in November, and formally arrested him in December.

But for each critic the authorities stop, more rise. "There are simply too many people," says Xiao Qiang, a scholar who studies the Chinese Internet at the University of California at Berkeley. "They can do that to a very small group … but the approach certainly is not good enough to intimidate all the voices online."

Mr. Xiao points to the example of Liu Xiaobo, detained in December 2008 for his role in creating Charter 08, a sweeping call for political and legal reform in China. Mr. Liu was sentenced on Christmas Day to 11 years in prison for subversion. But since his detention, thousands more Chinese have signed Charter 08 through Internet sites that disseminate the document.

The government is getting better and faster in its effort to control content on the Internet, but it simply can't keep up with the proliferating moves to use the Web in more ways. In the first six months of 2009, an average of 220,995 Chinese a day started using the Internet for the first time, according to official figures. That represents 153 new Internet users a minute.

That the Internet threatens, fundamentally, the party's information monopoly is one of the few facts that China's liberal activists and its government enforcers agree on. In an essay published in December in a government magazine, Minister of Public Security Meng Jianzhu warned that the Internet "has become an important means for anti-China forces to engage in infiltration and sabotage, and to enlarge their power of destruction, which brings new challenges to the public security agencies to maintain national security and social stability." He pointed to the use of the Internet to spread word of unrest before the government has a chance to control it.

For Mr. Xiao at Berkeley, "essentially, the Internet is mainstream media. Whatever happens on the Internet, the whole nation knows, and that also gets on the government's nerves."

From his perch in California, Mr. Xiao and his team spend most of their time scanning the Chinese Web, and documenting numerous cases of dissent and criticism.

Censorship is "more sophisticated, and its capacity is very powerful, but it is full of loopholes," he says. As the government tries to close them, "the main result is to create more resistance and backlash from Chinese Internet users," Mr. Xiao says. "They are creating a whole lot more enemies to the censorship system."

Stricter laws to save lives at work

Source: By Zhao Yanrong (China Daily)

A top expert on work safety is calling for strict laws to protect laborers after the city reported a total of 63 deaths in 52 accidents on its construction sites so far this year, as a result of loose safety standards in some building companies.

The Beijing municipal administration of work safety reported 122 work-related deaths by mid-December, blaming "illegal" construction projects mostly in outlaying areas for hiring unqualified migrant workers.

Liu Tieming, president of the China Academy of Safety Science and Technology, said the city doesn't have laws that require contractors to provide training for their laborers.

"It is not enough to just tell them to put on helmets before they get into the construction sites. Most migrant workers are not well educated, and they need to take special work safety classes," he told METRO.

"The city should make laws that specifically require employers to train their workers before they go to work."

He suggests the work safety administration to classify industries in terms of work safety, with special attention paid to high-risk" areas.

According to the Beijing municipal administration of work and safety, 1,121 people have died from work, traffic and fire accidents so far this year.

From Oct 18 to Nov 30, eight died and 15 were injured in four "illegal" construction projects in rural areas.

The deaths were about 15 percent less than the city government expected at the beginning of this year.

The government hopes the work-related deaths will drop by 5 per cent every year, an important measure to assess job performance of government officials in charge of work safety, Liu said.

"No job is 100 percent safe, but giving a number of how many people could die from work each year is not scientific and objective," said Liu, adding that such performance measures can prompt officials to conceal the toll when they are nearing their "quota".

Liu credits the fall in work-related deaths this year to what he calls the change of industrial structure in the city, as the number of dangerous and high-risk jobs is on the decline due to the emergence of service industry.


Suning Appliance to purchase HK's retailer Citicall

Souce: (Xinhua)

Chinese mainland's home appliance giant Suning Appliance Co announced Wednesday it would purchase a leading consumer electronics retailer in Hong Kong, Citicall, with HK$35 million ($4.5 million).

"We plan to open 50 stores in Hong Kong within three years, and take up more than 25 percent of the market share," said Sun Weimin, president of Suning.

He said the acquisition would be completed by the end of next March.

"By then, Suning will officially enter the Hong Kong market, and take over all Citicall's products, businesses and staff," he said.

"We choose this moment to enter Hong Kong because it is a global market place, although the competition is very fierce there," he added.

Suning, headquartered in eastern Chinese city of Nanjing, runs a network of more than 900 stores in 300 cities on the mainland and employs 120,000 staff. It posted sales of about 85 billion yuan ($12.5 billion) in 2008.

In June this year, the company bought a 27.36-percent stake in Japanese electronics retailer LAOX Co, becoming its biggest shareholder.

The Hong Kong's Citicall Retail Management Ltd, founded in 1976, reports annual sales of HK$1.3 billion.

Cigarette delays China's newly launched bullet train

Source: Xinhua

Thousands of passengers were stranded in south China's Guangdong Province Tuesday after a newly-launched high-speed train was stopped by an unruly smoker, said local transportation officials.

The express, boasting a designed speed of 350-km-per-hour, connects Wuhan, a metropolis in central China, and Guangzhou City, a business hub in the southern Guangdong Province. It just opened on Saturday.

A passenger, who smoked on the No.G1048 train, triggered the alarm and delayed the train that was scheduled to leave Guangzhou at 3:00 p.m..

Several trains were sequentially stranded, until the No.G1048 train started off two hours and a half later after going through technical checks.

"Smoking is strictly forbidden on the Wuhan-Guangzhou high-speed train, even in the toilet," said a spokesman with the Guangzhou Railway Group Corporation. "It could trigger the alarm and even cause equipment failures."

However, the smoker was not caught because he had left several minutes before the alarm bell, the spokesman said.

Wednesday, December 30, 2009

Have You Heard...

Chinese admiral floats idea of overseas naval bases

Source: Reuters

A Chinese rear admiral has urged the nation to set up navy supply bases overseas in an interview posted on the Ministry of Defense website after China paid ransom to free a ship held for nine weeks by Somali pirates.

China has operated patrols for a year now in the narrow Gulf of Aden, escorting Chinese and foreign ships through waters menaced by pirates operating off the Somali coast.

But coal and ore shipping lanes off the east coast of Africa have proved harder to defend. The De Xin Hai, captured 700 nautical miles east of Somalia in October, was ransomed for $4 million on Sunday.

Reflecting on the hardships endured by the Chinese patrol ships in the anti-piracy effort, Rear Admiral Yin Zhou floated the idea of bases abroad to support the vessels. (news.mod.gov.cn)

"This is entirely a matter for the country's foreign policy circles, but I feel that would be appropriate if we could have a relatively stable, fixed base for supplies and maintenance," said Yin, who is director of an advisory committee for the Chinese navy's drive to upgrade information technology.

"I think countries near any relatively long-term supply bases established by China, and other countries participating in the escort mission, could understand," he said, adding that would be more affordable than re-supplying via ship on the high seas.

Asian neighbors have been monitoring China's international deployments for signs of the country's rising global status translating into a more assertive foreign policy and presence.

China has never renounced the use of force to bring self-ruled and democratic Taiwan, which it considers sovereign territory, under its rule, and increased Chinese military activity around a series of disputed atolls and rocks in the South China Sea has worried Vietnam, Malaysia and the Philippines, which have their own territorial claims.

The Chinese navy did not call at any port during the four months of its first mission to the waters off Somalia, creating problems with straining supplies, medical care and homesickness for sailors unable to communicate with their families, the interview and other media reports have noted.

The anti-piracy mission off Somalia has been the first such long-distance projection of Chinese naval power since the Ming dynasty, 600 years ago.

Chinese ships communicated with ships operating under a multi-national anti-piracy task force in the Gulf of Aden, but did not formally cooperate with them. The deputy commander of the Combined Maritime Forces, Commodore Tim Lowe, suggested China could co-lead the grouping next year.

Yin did not suggest where the base would be. But the China Daily on Tuesday ran an interview with the Somali ambassador to China, asking for international assistance in building a coast guard.

Net access being restored in Xinjiang

Source: By Cui Jia (China Daily)

URUMQI: Internet service in the Xinjiang Uygur autonomous region will be gradually restored following nearly six months of closure after the deadly July riot in the capital, the region's information office said yesterday.

Residents in Xinjiang yesterday started to have access to two websites: xinhuanet.com and people.com.cn.

Access to even the two websites is restricted. Users in Xinjiang cannot leave comments or access the forum section on the websites, nor can they use the email services provided by the websites.

The regional government decided to lift the ban on Internet service because the overall social situation in the region after the July 5 riot, which left 197 dead and more than 1,700 injured, has become stable and the decision was approved by the central government, according to the statement.

"To prevent further unrest, the government blocked access to the Web and suspended international calls and short message services in the region 24 hours after the July 5 riot because they were vital tools used by ringleaders to instigate the riots in Urumqi," said Yang Maofa, director of the regional telecommunications administration.

Yang said considering the public's demand for email service, the authorities are planning to allow people access to some popular email service providers.

Limited service was restored in August and Xinjiang residents can freely access more than 100 region-based Web portals, ranging from banks and local government departments to entertainment and online games.

To gain access to the Internet, some people even travel regularly to Dunhuang in Gansu province, which is the closest city to Urumqi.

Yang added that the authorities are preparing to soon lift restrictions on international calls and text messages, but didn't give a timeframe.

"We know the suspension of telecommunication services has caused great inconvenience to people, and we appreciate their understanding and support to the measures from the perspective of safeguarding social stability," said Yang.

While residents in Xinjiang are not over-enthusiastic about access to just the two websites, they said it is a good beginning.

"I rarely visited those sites before the Internet was down, I don't think I'll do so now," a 25-year-old Urumqi resident surnamed Chen told China Daily. "I cannot wait for the day the Internet service is fully restored. The good news is that at least we know there is hope now."

Memet Turson, a 35-year-old businessman based in Kashgar, said: "I am disappointed that I cannot use email, which I desperately need for my business.

"But I am glad to hear that the government is gradually lifting the ban; it is a good start."

Google submits books' list

Source: By Chen Jia (China Daily)

Online search behemoth Google has supplied a list of more than 80,000 Chinese works scanned into its digital library, an association defending Chinese authors' copyrights said yesterday.

"The current list does not include books published before 1987, when China signed up with the global standards body's International Standard Book Number (ISBN) classification, which is a unique numeric identifier of books," Zhang Hongbo, deputy executive director-general of the China Written Works Copyright Society (CWWCS) told China Daily.

"We will push Google to provide a complete list before our fourth-round negotiations begin on Jan 8 next year," he said.

Last month, the CWWCS said, Google had scanned 18,000 books by 570 Chinese writers without their consent for its online library, Google Books, which is available only to Internet users in the US.

"The talks on compensation will be based on a recheck of the complete list," Zhang said.

The negotiations will prove to be a better choice for Chinese writers in protecting their copyrights.

"We don't encourage Chinese writers to sue Google individually due to the high costs involved. A united group could argue for better compensation in the campaign against copyright infringement," he said.

Mian Mian, a Shanghai-based novelist, had sued Google China earlier for copyright infringement. The Haidian District People's Court held a hearing on the case Tuesday.

Sun Jingwei, Mian's lawyer from the Beijing-based Yingke Law Firm, had told China Daily that Mian was the first Chinese writer to individually sue Google for copyright infringement, and that the case could encourage other Chinese writers to seek copyright protection.

"We respect Mian Mian's right to seek copyright protection, but we hope more writers will voice their displeasure through the CWWCS," Zhang said.

More than 2,000 Chinese writers were members of the CWWCS, he said.

Mian Mian, a writer known for her lurid tales of sex, drugs and nightlife, filed the suit in October after Google scanned her latest book, Acid House, into its library.

Erik Hartmann, the Asia-Pacific head of Google Books, had shifted base from Singapore to Beijing to handle the negotiations, according to the CWWCS.

"That indicates that Google is paying keen attention to the Chinese digital library market," Zhang told China Daily.

Marsha Wang, Google's spokeswoman in Beijing, said the company had removed Mian's works from its library as soon as it learned of the lawsuit, AP reported yesterday.

Google had no further comment on the lawsuit, the report quoted Wang.

Google's ambitious effort to make printed works available online has faced opposition from writers in the United States, Europe and elsewhere.

Hunan TV, Taobao.com set to form alliance

Source: By Chen Liminand Feng Zhiwei (China Daily)

China's biggest online retailer, Taobao.com, will set up a joint venture with broadcaster Hunan Television, in a move to expand its portfolio beyond online shopping.

The new company, with a total investment of 100 million yuan, will produce TV programs related to online shopping and set up a new platform for selling products via Taobao.com. The plan also includes using pop stars from Hunan Television's roster.

"The joint venture is our attempt to combine the Internet and television, and find a new way to develop both," said Jack Ma, founder and CEO of Alibaba Group, the parent company of Taobao.com.

Taobao.com is said to be preparing for a public listing next year, but Ma declined to comment on that.

Recently the company has been expanding its reach to fields beyond the Internet and earlier this month joined forces with Wasu Digital TV Corporation Ltd to develop a TV-based shopping channel that links viewers with Taobao.com. The program is expected to air in the first half of 2010. The company is also planning to put out several weekly magazines and develop self-branded mobile phones with online shopping applications pre-installed.

"Taobao.com is no longer satisfied with the growth of its customers online and is trying hard to reach more potential customers by covering different media platforms," said Cao Fei, an analyst with research firm Analysys International.

Taobao.com now has 180 million registered users, which make up almost half of the 380 million Internet users in China.

While venturing into television may help diversify the company's services, it remains to be seen whether Taobao.com can prosper in the field, said Cao.

McDonald's Aids Re-construction Of Four Schools In Sichuan

Source: China Retail News

The re-construction of four primary schools that were destroyed during the 5.12 Sichuan earthquake in 2008 will be completed by the end of 2008 and one of the major contributors for the re-construction is McDonald's.

Located in Pingwu county in Sichuan province, the new school building of Yetang Primary School has recently been completed and put into use. In addition, three other primary schools — Ronghua, Xingan, and Shuitianxiang — in this county will also be completed before the end of 2009. These new school buildings are reported to be able to withstand an earthquake with a magnitude of eight on the Richter scale.

According to reports in local media, the re-construction of the four primary schools cost CNY20 million, of which CNY16 million was donated by Ronald McDonald House Charities China.

Since the occurrence of the Sichuan earthquake on May 12, 2008, McDonald's China and Ronald McDonald House Charities China have provided earthquake relief support in various sectors, including funds, food, and medical first aid facilities. So far, the international fast food giant has donated food and money to the value of over CNY21 million for the disaster areas.

Fired worker sues Carrefour market

Source: By Xie Yu (China Daily)

Saleswoman claims supermarket chain exploited suppliers' workers.

French supermarket chain Carrefour is facing a lawsuit in Beijing for allegedly exploiting their suppliers' saleswomen.

Sheng Yucang, a 34-year-old saleswoman from Shandong province, filed the lawsuit against Carrefour in Fengtai District People's Court, asking for social security compensation and overtime pay.

"I am not doing this for myself, I am doing it for all the saleswomen exploited by these foreign-owned supermarkets," said Sheng, who is back in her hometown in Shandong and asked her lawyer to submit the lawsuit to the court on her behalf yesterday.

Sheng was hired by daily-use chemical brand Walch in early 2008 to promote products in a Carrefour branch in Beijing's Fengtai district, but actually spent a large amount of her time loading goods and cleaning up for Carrefour.

She was paid 1,600 yuan ($235) a month.

Sheng said she did not sign a contract with Walch or Carrefour until last December.

She was fired this April, when she was six months pregnant.

"I heard a Carrefour official tell a Walch director that I am not suited to working there as I am pregnant," Sheng told China Daily via phone.

"Then the director sumoned me and asked me to leave. She said if you want to stay you have to get an abortion," Sheng said.

Sheng said the department selling daily chemicals has about 60 workers and only three or four of them had signed contracts with Carrefour and the rest are all salespersons of different brands.

"We do what Carrefour employees do loading and uploading goods, cleaning up you know, it is very physically demanding, but you have to put up with it or you will lose your job," she said.

Lawyers estimate there are more than 1 million supermarket saleswomen in China facing the same fate as Sheng.

Beijing Carrefour could not be reached for comment yesterday.

Beijing Zhicheng law firm, a government-funded migrant workers' legal assistance and research center, acted for her, and they discovered Sheng's experience was not an isolated case, but shows the "hidden rule" of the supermarket industry.

"Many supermarkets do not sign contracts with these saleswomen, not to mention paying social insurance or overtime. They just push the responsibility to the suppliers like Walch, but work these saleswomen like horses," said Tong Lihua, head of the law firm, noting that it is a disguised employment relationship introduced from overseas.

Similar cases happen in domestic markets like Wu Mart and Merry Mart.

But a labor relationship actually exists between the supermarkets and these saleswomen, he said.

Take Sheng as an example. First, she was promoting Carrefour goods as the suppliers had sold their products to Carrefour. Second, Sheng's work like cleaning up, loading and unloading was directly assigned by Carrefour administrators. Third, Sheng was wearing a Carrefour uniform during work.

However, Sheng's demand was denied by a labor arbitration committee in Beijing, as she could not provide written material to prove a labor relationship between her and Carrefour.

Dong Baohua, a law professor of East China University of Politics and Law, said there is still a slim chance for Sheng to win the lawsuit.

"The disguised employment relationship is still an academic term," he said.

"And since Sheng has a clear labor relationship with Walch, which hired her, paid her and fired her, there is hardly a legal rule that would count Carrefour in."

"I did not slack off a bit after pregnancy," said Sheng, who has lost her job and is taking care of her 4-month-old baby in a village in Shandong province.

She dare not rest even if she was pregnant, as she knew the Carrefour watcher was monitoring and could ask Walch to fire her at any time.

Sheng said she often had to stand and work from 3 pm to 4-5 am when she was on night shift.

Sheng's husband now works as a taxi driver in Beijing, earning about 2,000 yuan a month.

The mother said it was a tough decision to have this child as they knew it is expensive to raise a child in Beijing, but she did not expect to lose her job for this.

Another 16 saleswomen hired by Beijing "Prince Milk" to promote the product in the Wu Mart, Merry Mart and Ikelong supermarkets who have similar experiences as Sheng also filed their cases to the labor arbitration authority yesterday.

Former Caijing Editor Launches New Magazine

Source: Wall Street Journal by Ian Johnson

BEIJING -- Hu Shuli, one of China's best-known editors, has launched a new magazine after disputes over money and editorial policy caused her and most of her staff to leave her old magazine.

Ms. Hu, the 56-year-old journalist who turned Caijing into China's most aggressive publication, will take the helm of New Century News, a small magazine run out of an economics institute in the remote island province of Hainan, according to a statement from the organization that owns the publication.

Turning New Century News into another Caijing will be a challenge. The magazine will be launched quickly -- a trial version is due out Jan. 4 with regular newsstand sales slated one week after -- but the magazine is an unprofitable academic journal. Although Ms. Hu brought over 70 of her staff with her, it's also unclear if the magazine's owner, the China Institute for Reform and Development in Hainan, will have the clout to protect Ms. Hu should she tackle controversial issues.

That has been Ms. Hu's trademark over the past 20 years. She was known as a muckraking journalist at Worker's Daily, a party-run newspaper that for a while tackled sensitive issues. In 1998, she and Wang Boming, a reform-minded scion of a powerful family, launched Caijing, bringing it to international prominence with articles on corruption and a government cover-up of the SARS pandemic in 2003.

The two split this past October after Ms. Hu said Mr. Wang failed to give her magazine the political protection it needed to aggressively report the news. She also said Caijing had been a cash cow for Mr. Wang's SEEC Media Group and was starved of funds. Mr. Wang denied the charges, saying he had given the magazine the cover it needed to make its scoops. He has continued to publish Caijing with a new staff.

The new publication might be obscure but it gives Ms. Hu something she badly needed to restart her publishing career: a "kanhao," or publication number, which is essentially a government license to run a publication. The number of kanhaos is strictly limited by authorities and getting one was seen as one of Ms. Hu's main challenges.

Ms. Hu wasn't available for comment but, according to staff members, she told staffers today that she has enough funding to turn New Century News into an aggressive, national magazine. Her staff has been paid regularly over the past two months and has been working in rented offices in Beijing's Central Business District.

Tuesday, December 29, 2009

Have You Heard...

China's top 10 economic news in 2009

Source: Global Times

China's top 10 economic news were selected by senior editors from 17 Chinese major 17 media agencies and domestic economists Monday in Beijing.
The news are ranked chronologically:

1 China economy leads the recovery from the economic downturn

China's economy lead economic recovery from the financial crisis worldwide, and the target of 8 percent GDP growth planned for this year is achievable as a result of a proactive fiscal policy, moderately loose monetary policy and extension of the economic stimulus package.

From January 14, the Chinese government launched a series of plans to adjust and reinvigorate key industries including autos, steel, shipping, petrochemical, textile industry, nonferrous metal, equipment manufacturing, IT and logistics.

The government's measures also include the subsidies for autos, motorcycles, home appliances.

Also, China's unemployment rate in urban areas was controlled within 4.6 percent.

2 Investment in reforming the medical system

On January 21, China's State Council passed a long awaited medical reform plan which promised to spend 850 billion yuan ($123 billion) by 2011 to provide universal medical services to the country's 1.3 billion people.

According to the restructuring plans, within the next three years the authorities will provide basic medical security to all Chinese in urban and rural areas, improve the quality of medical services, and make medical services more accessible and affordable for ordinary people.

3 Cross-border yuan settlement starts

On April 8, China's State Council announced a pilot program to allow exporters and importers to settle cross-border trade deals in yuan in five cities including Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan.

In July, the central bank issued detailed measures to regulate the pilot program for cross-border trade settlement and 365 companies in the five cities formally agreed to operate the business of cross-border settlements in yuan by the central bank.

4 China Nasdaq-style GEB launched

The 10-year wait for China's Nasdaq-style Growth Enterprises Board (GEB) finally became a reality on October 23 when it was launched in Shenzhen. The first batch of 28 companies started trading on October 28.

By December 28, a total of 36 companies met the requirements of high gross margins, high rates of return (ROE) and high growth of operating revenues and high technological innovation, and were listed on the GEB.

5 Shanxi Province undergoes massive restructuring of coal
industry

In 2009, Shanxi Province started massive restructuring of coal industry by letting small coal mines merge into large-scale companies, mostly State-owned.

By the middle of November, 95 percent of coal-mining companies have signed official transfer protocols and the total number of coal mines was cut to 1,053 from 2,598. Also, the number of coal-mining companies was reduced to 130 from about 2,000.

6 Chinese mainland, Taiwan signs financial cooperation agreement

On November 16, the Chinese mainland signed three memorandum of understanding (MOU) with Taiwan on the cooperation on banks, securities and futures, and insurance.

This move is a practical step for cross-strait financial cooperation.

7 China's auto sales, output makes it No.1 in the world

China's auto sales and output both exceeded 12 million units in the first 11 months and the sales and output for the whole year is expected to exceed 13 million units to overtake the US to become the largest car manufacturing and consuming market, according to figures released by the China Association of Automobile Manufacturers (CAAM) on December 7.

8 New loans in 2009 hit record high

In the first 11 months, China loaned out 9.21 trillion yuan, 5.06 trillion yuan more than the same period last year, according to the figures released by People's Bank of China on December 11.

Both the loan amount and the growth pace of loans this year hit a record high.

9 China to curb rising housing prices

China's State Council said on December 14 that the government will take measures to rein in excessive growth in property prices.

The government also said that it will seek to speed up building houses for the low-income population, aiming to help 15.4 million more poor households solve their housing problems by 2012. Also, the government will reinforce regulations and stabilize market expectations.

In addition, a sale tax break on homes bought over two years earlier will expire and the full taxation period will return to five years from the start of the next year.

10 Chinese enterprises step out in international
mergers

Chinese enterprises entered into a number of international mergers in 2009.

On December 23, Ford Motor said that the company has reached an agreement on some key aspects with Chinese Geely Automotive on the latter's bid for Volvo; Geely also claimed that the final buying agreement will be signed in the first quarter of next year.

Wuhan Iron and Steel (Group) Corp., a major iron and steel company in central China, signed an agreement with Australian Centrex Metals Ltd (CXM) in July for a joint development of iron ore mines in southern Australia and other projects.

Yanzhou Coal Mining, China's fourth-biggest coal producer, takes over Australian coal miner Felix Resources at an acquisition price of A$3.5 billion for all of Felix Resources' shares.

Second probe to moon next year

Source: By Xin Dingding (China Daily)

China plans to launch Chang'e-2, the country's second lunar probe, at the end of 2010, space authorities announced yesterday.
The design and production of Chang'e-2 is complete, and the lunar orbiter is undergoing ground tests, the State Administration of Science Technology and Industry for National Defense said yesterday in a news release.

Chang'e-2 is expected to test the soft-landing technological capability for the Chang'e-3 and provide high-resolution images of the landing area, the administration said.
"Progress on six key technologies of Chang'e-2 has been made, including the lunar capture, orbit control and research on high-resolution stereo camera," the administration's spokesman said.
Ye Peijian, chief designer of the nation's first lunar probe, had told China Daily earlier that the launch was expected in October.

The administration said that Chang'e-3, the country's lunar lander and rover, is also well on the way toward liftoff. The project is now in the prototype stage.

Chang'e-2 and Chang'e-3 are part of the second phase of the country's lunar exploration program, which consists of three stages - "orbiting", "landing" and "returning".

Ye said earlier that Chang'e-3 is likely to be launched before 2013. The country's first lunar probe, Chang'e-1, was launched in October 2007 and ended its 16-month mission on March 1 this year.

Meanwhile, China's manned space project is also likely to see a breakthrough next year, a top scientist said.

Qi Faren, chief designer of the Shenzhou spacecraft, told Guangzhou Daily on Sunday that Tiangong-1, or Heavenly Palace-1, a spacecraft that will test docking technology and prepare for the future construction of space laboratories, will be launched by the end of next year at the earliest.

According to the official website of China's manned space program, www.cmse.gov.cn, the launch date of Tiangong-1 is set between late 2010 and early 2011.

Within two years of the launch of Tiangong-I, China will launch Shenzhou-VIII, Shenzhou-IX and Shenzhou-X spaceships, to dock with Tiangong-1, the website said.

Two space laboratories, Tiangong-II and Tiangong-III, will follow, and China aims to build its own space station by the year 2020, the website said.

China became the third nation - after the US and Russia - to send people into space when Yang Liwei went into orbit aboard the spaceship Shenzhou-V on Oct 15, 2003. Three other astronauts were sent to space in Shenzhou-VII and carried out the country's first space walk in September 2008.

Shen Liping, deputy chief designer of China's manned space program, was quoted by Guangzhou Daily as saying on Sunday that China's first woman astronaut will be able to fly to outer space sooner than the targeted 10 years.

Microsoft pegs China search market as top priority

Source: Reuters

China is a vital market for Microsoft's Web search business, as it chases leaders Baidu Inc and Google in the world's biggest Internet market, the world's largest software maker said.

Since launching its English-language Bing search site in June, Microsoft has been gaining steady share in the United States, with 10.3 percent in November versus 17.5 percent for Yahoo and 65.6 percent for dominant player Google, according to comScore.

Microsoft hopes to get off to a similar fast start with its Chinese-language Bing site, which is still in its beta phase following a low-key launch in June.

"Microsoft is committed to the China market and the search market in China is the most important strategic market for Microsoft," the company said on Tuesday in emailed responses to questions from Reuters.

"We specially set the search technology center in China to get a deeper understanding of what Chinese users need, to be able to deliver the best product to them."

China's Internet market is a hot spot for global search companies looking to expand overseas, but localization issues and tough domestic competition have made it tough to crack for global titans such as Yahoo, eBay and Amazon.

China is home to the world's largest Internet market by users at more than 350 million.

China's search market was worth 2 billion yuan ($293 million) in the third quarter, up 38 percent, with homegrown leader Baidu well ahead with 63.9 percent followed by Google at 31.3 percent, according to research firm Analysys International.

"Google is taking a big share of (the China market), roughly 30 percent but it is not yet threatening Baidu. Bing is still very far away," said Credit Suisse analyst Wallace Cheung.

Analysys analyst Jin Naili said users will need time to try out and get used to Bing before it has any chance of becoming a serious rival to any of the established players.

But she added that since Microsoft launched Bing's China beta version in June, the number of users who have visited the site at least three times a month has increased 30 percent as of October.

"Within one or two years, there could be large changes in China's search market," she said.

Alibaba.com Buys Chinese Website Domain Name Registrar

Source: China Tech News

In the midst of a clampdown in China on domain name registrations, Chinese business-to-business online company Alibaba.com has completed its share purchase agreement of a local website domain name registrar.

Alibaba has completed the expected share purchase agreement with China Civilink (Cayman), which operates in China as HiChina Web Solutions, a website domain name registration and web services firm. This was the first of a two phase deal with Alibaba.com acquiring 85% of HiChina now, and the option to acquire another 14.67% equity interest from HiChina's founders pending HiChina reaching certain performance targets.

The total consideration of both phases is CNY539.98 million in cash.

Chinese domain name supervision organization China Internet Network Information Center announced that starting from 21:00 on December 14, 2009, it closed domain name registrations for individual users who are not purchasing domains on behalf of companies or organizations. It is still unclear how this will impact HiChina's revenues.

Prior to this sudden announcement, China's central television station criticized domain name registration service providers and agencies for false, inaccurate or incomplete information in the registration process. In response to the criticism, CNNIC said it has implemented an examination and punished three domain name registration service providers and agencies, including some of HiChina's rivals such as Zhengzhou Dahuang Network Development Company, Beijing Xinnet Digital Information Technology Company, and Beijing Blinux Network Technology Company.

Chinese Banks Look Set to Keep Up High Levels of Lending in 2010

Source: Wall Street Journal By Dinny Mcmahon

BEIJING—China's banks are gearing up to extend their flow of credit into next year to keep the economy humming, analysts say, a trend that could add to the financial challenges already facing the industry in the aftermath of a historic lending spree in 2009.

China's government hasn't announced a target for lending next year. But analysts who cover the industry expect new loans in 2010 to total seven trillion yuan to eight trillion yuan, or $1.03 trillion to $1.17 trillion. That is somewhat lower than the volume this year, when the state-owned banks responded to official economic-stimulus efforts with one of the biggest credit expansions in history, more than doubling new loans to a 9.2 trillion yuan in the first eleven months. But the expected 2010 volume would still be far above levels of previous years. New loans in 2007. for example, totaled about 3.6 trillion yuan.

To prepare for the continued lending binge, Chinese banks are expected to raise tens of billions of dollars through equity and debt issuance, the analysts say. The funds are needed to bolster capital levels that haven't kept pace with the explosion in loans.

Some offerings have already begun—China Construction Bank Corp. sold 20 billion yuan of 15-year subordinated bonds this month—and analysts say that, depending on how the central bank enforces its capital-adequacy rules, the total amount of fund raising could top that of 2006, when several of China's biggest banks had initial public offerings.

How the Chinese and global economies perform in the coming year could easily cause analysts to adjust expectations. And the government faces some pressure to exercise restraint on the flow of credit into the economy, given concerns that recent increases in consumer prices could flare into inflation. But with demand for China's exports expected to remain soft, the government will need banks to continue lending at a reasonably quick pace.

"In 2009, the economy needed the credit to avoid the recession," says Victor Wang, banking analyst at UBS in Hong Kong. "But now, a strongly recovering economy will naturally need credit to keep going."

But while that may help keep the economy bubbling along, the new loans may also fuel the potential size of bad-debt problems that banks will have to deal with in coming years.

China's banks used to be, in effect, lending arms of the government. That led to an enormous pile of nonperforming loans that, by the late 1990s, rendered most state banks technically insolvent. In response, Beijing stripped nearly $200 billion of rotten debt off the banks' books and injected tens of billions of dollars more in capital. It also pushed the banks to adopt risk-based lending systems, an effort that made major progress in recent years.

But with the economic downturn last year, the government told banks to open the credit floodgates. About a quarter of new loans in the first nine months of the year went into infrastructure, but riskier manufacturing and property investments accounted for about 5% a piece. Even the infrastructure investments may give cause for concern in coming years, given that many local governments that sponsored the projects were already in a weak fiscal position.

While it's impossible to know now how much of that credit might go bad, analysts say that with such enormous volumes of lending, it is only a matter of time before more loans start souring. "The question is, how long does it take for non-performing loans to go up," said Dorris Chen, a banking analyst at BNP Paribas in Shanghai.

Analysts say it is difficult to forecast exactly how much equity banks will likely have to sell in the coming year, although they expect the government to manage the process cautiously so that it doesn't spook investors. The China Banking Regulatory Commission has told banks to maintain "core capital," mainly consisting of equity capital and retained earnings, above 7% of loans, but analysts say that could be lifted to 8% to 9% in the coming year as part of Beijing's efforts to cushion banks from the effects of future bad debts.

Some banks, such as Shanghai Pudong Development Bank Co. and China Merchants Bank Co., had already slipped below the 7% core capital-adequacy ratio the regulator requires of them. In October, China Merchants' shareholders approved a plan to raise up to 22 billion yuan through a rights issue, but the plan is yet to be approved by the regulator. According to a report from Citi Group, the rights issue should lift the bank's core capital above 8%. A spokeswoman from Pudong Development Bank said the issue was too sensitive to comment on at this time. China Merchants also declined to comment.

The banking regulator has been tight-lipped about its plans for next year, but discussion of the fund-raising issue has swirled. On Monday, a Chinese newspaper cited Li Fuan, the China Banking Regulatory Commission's director general of the supervisory cooperation department for banking innovation, as saying banks will likely have to raise 500 billion yuan in capital this year, a figure that it said included an anticipated initial public offering from Agricultural Bank of China Ltd. When contacted by a reporter, Mr. Li said he never cited an exact figure, but analysts say the figure is within the realm of possibility.

Ms. Chen from BNP Paribas says that, excluding Agricultural Bank's expected IPO, banks may have to raise around 360 billion yuan in 2010, with that figure evenly split between debt and equity sales.

With China's midsize banks in a weaker capital position than the country's biggest banks, analysts say most of the capital raising from equity will likely be in the domestic A-share market.

Analysts say Industrial & Commercial Bank of China Ltd. and China Construction Bank will have little need to raise capital in 2010, although Bank of China Ltd. may have to if the required core capital level is raised above 9%. China Construction Bank declined to comment, while ICBC and Bank of China didn't immediately respond to requests for comment.

Chinese government cracks down on illegal forexes

Source: Global Times by Cong Mu

As the government strives to cool China's excessive asset prices, foreign exchange regulators have stepped up measures to curb the cross-border flow of capital through illegal foreign exchange transactions.

As of November 31, the State Administration of Foreign Exchange (SAFE), in alliance with other departments, had cracked down on 10 illegal private banks this year, some of which had a maximum daily turnover of over 10 million yuan ($1.5 million), the Xinhua News Agency reported Sunday.

The regulators also destroyed 17 online and offline illegal foreign exchanges, in addition to the destruction of the "underground" banks, involving a total of $3.5 billion, according to SAFE, which published the report on its website.

Li Youhuan, a researcher at the Guangdong Academy of Social Sciences, told the Shenyang-based Chinese Business Morning View Monday that the inflow of hot money has surged since June, and the increasing speed has been the highest since 2002. He did not provide specific figures.

According to a survey of the irregular flow of overseas fund to the mainland by Li and his colleagues in August, over $300 billion in foreign money slipped into the country through the illegal private banks, and a considerable amount was invested in the red-hot property market. The survey polled over 30 "underground" bankers.

According to data released by the Shenzhen municipal department of land and resources, average housing prices rose nearly 100 percent from 11,000 yuan ($1,611) per square meter in January to 21,661 yuan ($3,171) in October.

If the hot money flow is unchecked, the loose monetary and fiscal policies adopted by governments around the world could lead to another major financial crisis in five to seven years, and the impact will be felt most severely in emerging markets, Li said.

SAFE said that it will take more stringent measures to check the authenticity of foreign currency exchanges and payment and will organize ad hoc strikes in the regions where "underground" banks and online foreign exchange speculations are rampant.

Monday, December 28, 2009

Have You Heard...

Foreign Supermarkets In China Get Poor Environmental Rating

Source: China Retail News

The international environmental group Greenpeace has released its latest "Supermarket List for China" which shows that foreign-funded supermarkets such as Wal-Mart, Tesco, and Ito-Yokado rank at the bottom of the list in terms of green initiatives.

There are a total of 15 supermarkets on the list. Of these, Carrefour, Hyper Market, and Auchan have received more positive comments due to their efforts in controlling the use of pesticides in the fruit and vegetable processing process and the sale of food containing genetically modified ingredients — in addition to their commitment to making further improvements — while Wal-Mart, Tesco and Ito-Yokado rank at the bottom of the list.

Wang Weikang, the food and agriculture project director of Greenpeace, told local media that the supermarkets that rank at the bottom of the list did not take any adequate action in supervising the quality of the food products they sell, nor did they make any promise to improve. According to Wang, Wal-Mart did not provide any information on the questionnaire regarding gradually banning the use of pesticide or committing to no genetically modified food, nor did it provide any of the necessary information on its Chinese website — even though it has already made a commitment to British consumers on not providing genetically modified food. In addition, there is no such information either on the Chinese language website of Ito-Yokado though the information is offered on the Japanese language website of the company.

So far, supermarkets ranked at the bottom of the list have responded saying that they have always abided by the local laws and regulations and have adopted product quality standards that are up to, or higher than, the local government requirements.

Crackdown on Internet piracy yields results

Source: (China Daily/Xinhua)

China has made notable progress in its crackdown on Internet piracy and copyright infringement following a campaign lasting several months.

A total of 541 Internet copyright infringement cases have been investigated and 362 illegal websites have been closed since the nationwide special clampdown was jointly launched in August by the National Copyright Administration of China (NCAC), the Ministry of Public Security and Ministry of Industry and Information Technology, the NCAC said in a statement.

Police have confiscated 154 web servers and ordered websites to delete 500 examples of infringing content. Fines imposed on websites involved in Internet piracy topped 1.28 million yuan during the campaign.

NCAC publicized 10 Internet piracy cases, ranging from pirated works of literature to unauthorized music, movies, TV series and illicit games.

Online sellers of the pirated book "Zhu Rongji's Answers to Journalists' Questions", which contains the former premier's answers in media interviews and speeches delivered overseas, have been fined or received warnings.

Other cases were either transferred to public security departments for further investigation or to people's courts for public prosecution, the NCAC said.

Wang Ziqiang, an official from NCAC, said at an Internet copyright protection forum held in Beijing that works of literature, films, TVs and games were key targets of the country's crackdown on Internet piracy in 2009.

"The rapid development and wide application of Internet technology is changing the way information is spreading, and also leading to more diversified piracy and copyright infringement activities," Wang said.

The Chinese government has kept a close eye on the protection of intellectual property rights on the Internet, supervising a total of 3,029 major websites in China including Baidu and Sina.

On August 20, the website controller of "Tomato Garden", which provided downloads of pirated software including Windows XP, was sentenced to three-and-a-half years in jail and fined 1 million yuan. It was the country's first criminal case of Internet piracy.

In an investigation into illegal video and visual websites by the State Administration of Radio Film and Television, several famous Bit Torrent (BT) websites were closed because they were operating without a license. The campaign acts as a warning to all the video and visual websites in the country, the authorities said.

BTChina is among those influenced BT websites. On the home page of a website called "TianTian BT", there is also a notice saying it has annulled all links for downloading material and couldn't offer programs, online playing or even transmitting because it didn't possess the relevant license.

Some websites for video sharing, online video and other features said they were troubled by the copyright issue even though they have obtained the license. They said the action taken by the State Administration of Radio Film and Television will have a huge impact on the video industry.
The global anti-piracy trend brings the BT industry into center stage. Because much content is pirated, the huge stream of file sharing resulting from using free BT is regarded as the "waste water" of the industry. According to advertisers, the value of BT websites resides in the stream, which is gained by pirating legal videos. The closing of BT websites delivers a blow to the streaming data of video websites and is good for the legal ones.

The country has also made great progress in patent applications in the IT field, according to the government.

The Ministry of Industry and Information Technology (MIIT) said at the end of September of 2009 that 980,000 patent applications were filed by IT businesses, up 180,000 or 22 percent from 2008.

Computer and automation, measuring and testing and radar navigation are among the nine technologies in the IT field with the fastest growth in patent filings. In addition, companies on the mainland engaging in communications, PC production, and the making of batteries and household appliances are susceptible to innovation awareness and harvest many patents accordingly.

Although the IT industry saw a rise in intellectual property in 2009, the intrinsic weakness of certain technologies remains unresolved.

More effort should be made to implement an anti-piracy strategy, bolster intellectual property rights-related works, advocate bold innovation and constantly beef up companies' ability in terms of the creation of intellectual property rights and their application, said Lou Qinjian, vice-minister of MIIT.

Tainted milk official in new role

Source: By Chen Jia (China Daily)

A government minister who lost his job over last year's tainted baby formula scandal has been appointed deputy head of a department leading China's war on porn.

Li Changjiang, 65, former head of the top quality agency, is now vice-director of the National Office Against Pornographic and Illegal Publications.

He was in Jiangsu province for his first campaign last Thursday and Friday, said a report in Southern Metropolis Daily yesterday.

Li resigned as minister of the General Administration of Quality Supervision, Inspection and Quarantine days after the Sanlu milk scandal was exposed last September.

The State Council had made a statement that the quality administration had to bear "supervision responsibility for the milk food contamination".

The tainted formula killed six children and led to more than 300,000 more suffering urinary tract problems, such as kidney stones.

Wang Yukai, a professor at the Chinese Academy of Governance, yesterday said he believes Li's appointment is in line with the official accountability regulations.

However, Dong Shiliang, a father in Yunnan province whose 2-year-old son became ill after drinking tainted milk, said he felt "angry and helpless" after hearing the news of Li's appointment.
"My boy is still suffering as he has a stone still in his body, and Li bears responsibility," he told China Daily yesterday.

"The government should have asked the victims' families about Li's comeback first."