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Monday, February 28, 2011
China's Energy Consumption Rises
Source: Wall Street Journal SHANGHAI—China's energy consumption rose 5.9% in 2010 to 3.25 billion metric tons of coal equivalent, though growth of such consumption was expected to slow as Beijing promotes cleaner fuels and lowers its target for broader economic growth.
The country consumed 5.3% more coal, 12.9% more crude oil, 18.2% more natural gas and 13.1% more electricity than in 2009, preliminary data issued Monday by the National Bureau of Statistics showed.
China became the world's largest energy consumer in 2009, according to the Paris-based International Energy Agency.
Coal accounts for around 70% of China's energy mix, and the country is trying to trim that dependency by promoting use of cleaner fuels such as natural gas, nuclear power and renewables such as wind and solar energy.
Energy consumption per unit of gross domestic product, also known as energy intensity, fell 4.01% in 2010, the Bureau of Statistics said.
Premier Wen Jiabao said Sunday that government efforts to control inflation and restructure the economy would lead to slower economic growth, which should also reduce growth in energy use. China's gross domestic product rose 10% in 2010.
The government's official target for average GDP growth over the next five years will be 7% annually, down from a target of 7.5% in the past half decade, he said.
Mr. Wen also said the nation aims to reduce its energy and carbon intensity--the amount of energy used or carbon emitted per unit of economic output—by as much as 17% by 2015 from current levels, by closing enterprises that are heavy energy users, such as small power plants and steel mills.
China lowered its energy intensity by 19% between 2006 and 2010, slightly short of its original target of 20%, Mr. Wen said.
The nation has pledged to cut carbon intensity by 40%-45% by 2020 compared with 2005 levels, though it has rebuffed calls to cap the absolute level of carbon emissions.
China's ethylene production rose 32.3% to 14.19 million tons last year, the statistics bureau said.
U.S. ambassador to China decries violence against media
Source: Reuters(Reuters) - The U.S. ambassador to China, who is considering a run for the White House, on Monday condemned the harassment and beating of some foreign reporters who went to cover a planned protest gathering against the government.
It is the third time in as many weeks that ambassador Jon Huntsman has set himself publicly against the ruling Chinese Communist Party's efforts to stamp out dissent.
Lines of police checked passers-by and warned away foreign photo journalists in downtown Beijing and Shanghai on Sunday after a U.S.-based Chinese website spread calls for Chinese people to emulate the "Jasmine Revolution" sweeping the Middle East and assemble in support of democratic change.
Organizers have called for another round of protests this Sunday, according to a newly established Facebook page called "Chinese Jasmine Revolution." Facebook is blocked in China and not widely used by Chinese.
"With the global call for freedom, we sincerely put our hopes on the safety and stability of Facebook, Google and Twitter, which will facilitate China's Jasmine blooming throughout our country and bring forward the fruit of democracy," the page's founders said on their Facebook page in English and Chinese.
Before the designated protest time last Sunday, Chinese police warned foreign journalists to stay away, and many Chinese dissidents and rights activists have been detained or put under informal house arrest, apparently out of official jitters about the protest call.
An American news videographer was kicked and beaten repeatedly in the face with brooms and taken into police custody, witnesses said. Other reporters were detained by police and some were roughed up, including one from Taiwan whose hand was injured, they said.
Ambassador Huntsman, a former Republican governor of Utah who will soon leave his job in Beijing, said he had met with several of the reporters who had been detained or otherwise harassed.
"This type of harassment and intimidation is unacceptable and deeply disturbing. I am disappointed that the Chinese public security authorities could not protect the safety and property of foreign journalists doing their jobs," Huntsman said in a statement.
"I call on the Chinese Government to hold the perpetrators accountable for harassing and assaulting innocent individuals and ask that they respect the rights of foreign journalists to report in China."
Huntsman has sparred with China over rights in the past few weeks, including standing outside a Chinese court to criticize it for rejecting the appeal of an American jailed on industrial spying charges.
The European Union also said it was concerned by the harassment of reporters.
"We urge the Chinese authorities to respect the rights of foreign journalists to report freely in China ... and also to ensure their physical safety," its diplomatic mission to Beijing said in a separate statement.
"We call on the relevant authorities to clarify the legal basis for the physical obstruction and detention of foreign journalists on Sunday."
Foreign journalists are occasionally harassed or detained in China when covering sensitive stories, though mostly outside of the main cities.
China Mobilizes Against Activists
Source: Wall Street Journal By Jeremy Page and James T. AreddyChina deployed a SWAT team, attack dogs and scores of plainclothes security agents in central Beijing after anonymous online activists called for people to start a "Jasmine Revolution" for the second Sunday in a row, this time by "strolling" past designated sites in the capital and several other cities.
It was hard to tell how many people responded, as most of the sites chosen are usually crowded on a Sunday, but witnesses said there were more people than normal at the site in Shanghai, and the huge security operation in Beijing disrupted normal shopping and attracted many curious bystanders.
China has mobilized its vast state-security machine in the past few weeks to prevent the kind of unrest racking the Middle East and North Africa. Among other measures, it has detained or confined to their homes dozens of political activists and tightened Internet controls, especially on Twitter-like microblogging sites.
But while the heavy-handed response has succeeded in stifling protest, it illustrates how concerned China's leaders are about the potential for social unrest, at the same time drawing domestic and international attention to the extent of the Internet and social controls those leaders rely on to remain in power.
In another indication of concern, Wen Jiabao, China's premier, pledged in an online chat with Internet users to focus more on improving the quality of life and on government accountability. He also lowered the official economic-growth target to 7% for the next five years, from 7.5% for the past five—a signal that the government wants to focus more on the quality of economic growth than on sheer speed.
The online protest appeals have been appearing on a U.S.-based Chinese-language website called boxun.com and circulating mainly on Twitter—two sites blocked in China—meaning the appeals have mostly been visible only to wealthier urbanites with virtual private networks or proxies technology to evade Internet censors.
Police easily quashed last Sunday's call for protests at designated sites in 13 cities, including a McDonald's outlet in the popular Wangfujing shopping street in downtown Beijing. For this past Sunday, the online activists urged people to protest silently by simply "taking a stroll" at many of the same sites.
In Beijing, hundreds of security officers—including uniformed police, burly plainclothes agents with earpieces, public-security "volunteers" in red armbands, and at least one SWAT team armed with automatic rifles and body armor—were deployed to Wangfujing. They initially allowed people to move fairly freely, while checking identification papers, but later cleared out most people and blocked off a 200-meter section of the street as two street-cleaning machines swept up and down spraying water to either side.
Security officers also detained several foreign journalists, including Stephen Engle, a reporter for Bloomberg Television. The Wall Street Journal saw Mr. Engle being grabbed by several security officers, pushed to the ground, dragged along by his leg, punched in the head and beaten with a broom handle by a man dressed as street sweeper.
A spokesperson for Bloomberg couldn't be reached for comment.
The Foreign Correspondents' Club of China said in a statement it was "appalled by the attack on one of our members by men who appeared to be plainclothes security officers in Beijing." It called on the Chinese government to ensure the physical safety of all reporters and their staff while carrying out assignments in China.
Crowds of curious Chinese onlookers gathered as the street was blocked off and uniformed paramilitary police marched down either side. But while several Chinese people were seen having altercations with the police, there were no signs of actual protests.
Similarly in Shanghai, while more people than usual crowded around the designated site—the Peace Cinema, an IMAX theater along a major shopping street— there were no signs of protest. Some watched the scene from inside a Starbucks outlet next door and others snapped photos as they walked to the nearby malls.
Police tried to disperse the thick crowds by incessantly blowing their whistles and shoving some people. Others were firmly escorted along the sidewalk. The spray of water from two street-cleaning vehicles kept people moving. News photographers said they saw at least four people detained.
Groupon Starts China Service; Tencent, Alibaba's Jack Ma Among Investors
Source: Bloomberg News By Mark LeeGroupon Inc., owner of the biggest coupon website, said it started an online group-buying service in China as consumers in the world’s fastest-growing major economy increase spending over the Internet.
The Gaopeng.com website will initially cover Beijing and Shanghai before expanding to other major Chinese cities, Chicago-based Groupon said in an e-mailed statement today. Tencent Holdings Ltd., China’s biggest Internet company, and Yunfeng Capital, a private equity fund started by Alibaba Group Holding Ltd. Chairman Jack Ma, are other investors in Gaopeng, according to the statement, which didn’t provide details of the shareholding.
Groupon’s Gaopeng.com will face competition in attracting Internet shoppers from Chinese group-buying services including Lashou.com and Meituan.com. Online retail sales in China almost doubled last year to 513.1 billion yuan ($78 billion) and will probably double again in the next two years to 1 trillion yuan, Xinhua News Agency reported Jan. 18.
Groupon, which rejected a $6 billion takeover bid from Google Inc. in December, plans to increase the number of employees at its China venture to 1,000 in three months from 120 staff, Danny Yeung, head of its Hong Kong unit, said Feb. 10.
Alibaba Group, controlled by Ma, is China’s biggest e- commerce company. The Hangzhou, eastern China-based company’s Alibaba.com Ltd. unit last week said David Wei resigned as Chief Executive Officer after an internal probe found more than 2,300 vendors used its website to defraud global buyers.
Alibaba's Fraud Scandal May Become Opportunity for Google, Global Sources
Source: Bloomberg News By Frederik Balfour Alibaba.com Ltd., owner of China’s largest online-commerce site, has been the go-to marketplace for Western companies seeking gaskets, garden gnomes and gelatin. Disclosures that its salespeople helped defraud buyers may send business to rivals Google Inc. and Global Sources Ltd.
Since Alibaba announced the scam Feb. 21, its chief executive officer and chief operating officer resigned, and the Hangzhou, China-based company has lost about $1 billion in market value. The flagship of Alibaba Group Holding Ltd., which counts Yahoo! Inc. as its biggest shareholder, also may struggle to sign up new clients, analysts said.
“This will hurt the company’s reputation and its ability to attract global buyers,” said Paul Wuh, head of Internet research at Samsung Securities Co. Ltd. in Hong Kong. “This could be positive for its competitors.”
Alibaba.com shares have fallen 13 percent in Hong Kong trading since the announcement, and three analysts downgraded their recommendations from buy to hold. Wuh, the top Alibaba analyst over the past year according to Bloomberg Absolute Return Rank, maintained his sell recommendation.
There were no upgrades. Seven of 27 analysts, or 26 percent, tracked by Bloomberg recommend buying Alibaba shares.
Alibaba declined 4 percent to HK$14.52 today, the lowest close this year.
‘Same Company’
The scandal hasn’t changed Alibaba’s prospects, said John Spelich, the company’s Hong Kong-based spokesman.
“We are the same company today that our customers have known for the last 11 years, and the whole point of the announcement earlier this week was to demonstrate our sacrosanct commitment to integrity,” he said last week. “We believe, over time, our customers will understand that.”
Alibaba.com, founded in 1999 by Jack Ma, is a business-to- business, or B2B, website. Its target audience is companies in the U.S. and Europe buying from low-cost manufacturers in China, Vietnam and Pakistan, among others. The buyers typically are too small to travel thousands of miles to meet suppliers and inspect factories.
The company operates marketplaces in Chinese, English and Japanese. Buyers use the services for free while suppliers pay an annual fee of 29,800 yuan ($4,500) to appear on the English- language website as a “Gold Supplier” for a year, Spelich said.
‘Some Bad Eggs’
The site offers tips for avoiding fraud and hosts a forum where users can notify each other of potential scammers. Alibaba also posts the names of suppliers who have been banned.
Alibaba.com may have been victimized by its own success, Wuh said. Sales more than tripled to $567.2 million in 2009 from $171.1 million in 2006, according to data compiled by Bloomberg.
That growth was fueled by company claims a third party verifies the credibility of all suppliers with paid memberships. Its database of registered suppliers almost tripled to 108,000 last year from about 30,000 in 2008, Wuh said.
The frauds recently disclosed involved vendors offering small quantities of electronics at attractive prices, with payments settled using “less reliable” methods, Spelich has said. Alibaba employees either intentionally or negligently allowed the vendors to evade authentication and verification measures, the company said.
“During that period, it was more difficult to manage and harder to check the quality of all the people on your network,” Wuh said. “There has to be some bad eggs in there.”
Google Benefits
Google Inc., the Mountain View, California-based operator of the Internet’s most-used search engine, may benefit from sellers setting up their own websites and paying to show up on Internet queries, said Muzhi Li, an analyst at Mizuho Securities Asia Ltd. in Hong Kong.
Caroline Hsu, a spokeswoman for Google in Hong Kong and Taiwan, declined to comment on how the company’s business might benefit from the Alibaba fraud.
“A big direction for us is our display and export business and helping small- and medium-sized Chinese companies who want to go global and leverage the Google platform,” she said.
Another beneficiary may be Global Sources, a Shenzhen, China-based organizer of trade shows where buyers meet sellers of electronics, toys and lingerie, among other products, analysts said. It organizes 56 shows a year in locations including India, China, South Africa, Dubai and Miami.
“You can actually go to a trade show and see the products,” Wuh said. “I see them benefiting directly.”
Third-Party Checks
The company also operates a B2B site the competes against Alibaba. Online and other media services accounted for about 66 percent of Global Source’s $174.5 million in revenue in 2009, the last full year reported. Its stock is up 19 percent this year in New York trading.
Like Alibaba, Global Sources uses contractors to vet suppliers through factory visits and checks of business registrations and credit, Chief Executive Officer Merle Hinrichs said. The company has about 260,000 sellers, primarily in Asia, and about 970,000 buyers worldwide.
“Customers may want to consider the portals they use in light of this development,” Hinrichs said. “We do far more on the front end to avoid these problems.”
The strength of Alibaba’s model has been called into doubt, said Dane Chamorro, managing director for North Asia at Control Risks Group in Shanghai. His firm does background checks for companies.
‘Lost Their Way’
“They didn’t do their homework and weren’t monitoring their own platform,” he said. “You have to devote internal resources to verify that third parties using your platform are viable and legitimate.”
Although Alibaba tries to minimize the risks to buyers by vetting sellers, the system broke down because staff colluded with fraudulent sellers to bypass that verification process, said Elinor Leung, head of Internet research at CLSA Ltd. in Hong Kong. More than 2,300 vendors were involved, Alibaba said.
Alibaba CEO David Wei and COO Elvis Lee, who weren’t accused of wrongdoing, resigned to take responsibility for the “systemic breakdown” of integrity, the company said in a statement. About 100 salespeople were involved, the company said.
Jonathan Lu, 41, who heads the Taobao.com online retailing affiliate, China’s Ebay, replaced Wei.
“We had a small number of colleagues that may have lost their way and chose another path,” Lu said in an e-mail to employees on Feb. 23, two days after the scandal broke. “We must immediately fix these mistakes to prevent future detours.”
That’s no small task, Li said. As many as 35 percent of Alibaba’s registered sellers don’t renew their one-year contracts, meaning the company needs to add about 35,000 new suppliers a year to maintain current sales.
The turnover rate at Global Sources is about the same, Hinrichs said.
The entire B2B industry will suffer from the Alibaba scam, he said.
“This kind of situation is unfortunate for the industry but more unfortunate for Chinese manufacturers, most of whom have struggled to present their products, companies and brands and to do a good job for their international buyers,” Hinrichs said.
Sunday, February 27, 2011
China's Wen Vows to Curb Graft as Police Head Off Protests
Source: Bloomberg NewsChinese Premier Wen Jiabao pledged to punish abuse of power by officials and narrow the growing wealth gap as police blanketed Beijing and Shanghai to head off planned protests inspired by revolts in the Middle East.
The root of corruption lies in a government that has too much unrestrained power, Wen said in a two-hour online interview with citizens yesterday. He promised to curtail food costs and tackle surging property prices. Wen also cut economic growth targets and said the government would focus on ensuring the benefits of expansion were more evenly distributed.
Wen’s comments came as hundreds of police deployed in Beijing and Shanghai at the site of demonstrations called to protest corruption and misrule. At least seven people were bundled into police vans near Shanghai’s People’s Square, while in Beijing several foreign journalists were forcibly removed from the Wangfujing shopping district.
China’s leaders have emphasized the country’s economic successes in their response to demonstrations both in China and in the Middle East. While the country’s economy has expanded more than 90-fold in the past three decades, Wen said rising inequality is threatening social stability.
“The party leadership needs to reassure the people that in the absence of political reform they can nonetheless meet the people’s rising expectations,” said Chinese University of Hong Kong’s adjunct professor of history Willy Wo-lap Lam. “The expectation for what the government should do for the people has increased” as a result of protests sweeping Arab nations.
Quality Growth
The government has set an annual economic growth target of 7 percent for the five-year period through 2015, Wen said. China’s target was 7.5 percent for the period from 2006 through last year, with actual growth exceeding that each year.
“The new five-year plan will be more about quality of growth,” said Kevin Lai, a Hong Kong-based economist at Daiwa Capital Markets. “The government is going to pay more attention to sustainable growth, environment, better distribution of income, rather than pure GDP pursuit.”
An August report by Zurich-based Credit Suisse AG put income inequality levels in China at levels not seen outside of sub-Saharan Africa. High food prices, unemployment and anger over corruption helped spark the protests that toppled Tunisian President Zine El Abidine Ben Ali, Egypt’s Hosni Mubarak and have fueled rebellion against Libya’s Muammar Qaddafi.
Oil prices in New York have surged on concern the unrest will continue to spread, disrupting supplies. Crude for April delivery rose as much as 5.4 percent to $103.41 a barrel on Feb. 24, the highest intraday price since September 2008. Libya is the largest holder of oil reserves in Africa.
Las Vegas
“China is a rich country, yet food prices are sky high,” said a 23-year-old university student in Shanghai who declined to be identified because he feared arrest. “We can’t afford to buy property, yet all the corrupt officials gamble our money away in Las Vegas.”
An open letter on the U.S.-based website Boxun.com called for people to gather in at least 27 sites around the country yesterday from Tibet to Manchuria for “jasmine” rallies, named after the uprising last month in Tunisia. “Come out and take a stroll at two o’clock on Sundays to look around,” the letter said.
The letter called for the ruling Communist Party to fight corruption, create an independent judiciary and reduce income inequality or else “exit the stage of history.” The letter said economic booms in Taiwan and South Korea were accomplished with much more equitable income levels.
Shanghai, Beijing
In Shanghai, at least 23 police vehicles were stationed around Shanghai’s Peace Cinema in the shopping area of People’s Square. Police in Beijing, which included paramilitary units and patrols with Rottweiler and German Shepherd dogs, forcibly removed several foreign journalists from Wangfujing Street at about 2:45 p.m. Police were stationed at every entrance to Wangfujing today.
The street, most of which is closed to vehicle traffic and is one of Beijing’s busiest shopping districts, did not appear more crowded than on a usual Sunday. No demonstrators were seen.
“You see how the police try to control the crowd? They spend so many resources on this, yet why does the government do so little to improve people’s livelihoods?” said a 72-year-old retired car mechanic in Shanghai, who didn’t want to be named because he feared being detained.
The China rallies were first called for Feb. 20. That day, scores of Chinese police gathered at the protest sites, which included a Beijing McDonald’s Corp. restaurant, to quell demonstrations. Hundreds of people were present at the rally, though only a handful actively participated, the Associated Press reported at the time.
Controlling Unrest
On the corner of Jinyu Hutong and Wangfujing Streets, police officers yesterday asked for passports of people who appeared foreign. Journalists were asked to show their press cards and their information was taken down in a notebook and they were reminded about the rules on interviews.
Zhao Qizheng, who heads the foreign affairs committee of the Chinese People’s Consultative Conference, said the idea that there would be a Jasmine Revolution in China was “absurd,” Xinhua reported on Feb. 24.
The government’s reaction reflects its decades-long effort to keep unrest in check through a combination of economic growth, social reforms and political repression, said Nicholas Bequelin, a China researcher for Human Rights Watch in Hong Kong.
“One of the key aspects of the Chinese system is that it does not try to suppress social demands as much as to respond to them before they turn into political ones,” Bequelin said. “Everyday politics is about how to handle social demands -- which ones to accept, which ones to channel, which ones to suppress, which ones can be ignored.”
Key comments from Chinese Premier Wen's online talk
Source: Reuters photo: Xinhua(Reuters) - China must ward off threats to stability from price rises and pressure to sharply raise the yuan currency, Premier Wen Jiabao said on Sunday.
He was answering questions on an online forum about economic and social worries.
Here are key comments from the online discussion, which was organized by China's official Xinhua news agency:
PRICE RISES AND INFLATION
"Rapid price rises have affected the public and even social stability. The Party and government have always made a priority of keeping prices at a generally stable level."
"Our country has had seven successive years of bumper harvests, it has ample (grain) reserves, we have a robust material base and we have abundant foreign exchange reserves. These all offer favorable conditions for dealing with price rises."
"There must be unwavering determination to contain investment and speculative demand in housing. We're adopting economic and legal measures, as well as when necessary administrative ones."
"I'm confident that through our efforts, we'll see results in reining in speculative and investment purchases of housing."
YUAN EXCHANGE RATE POLICY
"The appreciation of the renminbi exchange rate is in keeping with our economic needs and also in keeping with the people's interests, but we have proposed that the appreciation must be kept gradual because of the features of our external trade, with 50 percent from processed trade and over 50 percent from foreign businesses or joint enterprises."
The renminbi is another name for China's yuan currency.
"Under these circumstances, the appreciation of the yuan must take into account the ability of businesses to cope and the impact on employment."
"If the renminbi had a dramatic one-off revaluation, that would lead to many processing firms being left bankrupt or unable to do business. It would lead to orders from foreign trade companies shifting to other countries, and we would have many workers made unemployed, and most of these workers would rural migrant workers."
Wen said of foreign critics: "Let them think about that. If businesses go bankrupt, workers become unemployed and rural migrant workers go home, then what do we have to expand domestic consumption, where will increased consumption come from?" "They may not know that now close to 50 percent of rural residents' income comes from wage income. That has been a major source of improving rural livelihoods in recent years -- 240 million farmers going to cities to work."
"Therefore, we must certainly constantly advance renminbi exchange rate reform ... But we must be advance in a prudent, step-by-step, gradual way, so that our businesses can steadily adapt and overall social stability is maintained."
ECONOMIC GROWTH GOALS
"During the 12th Five-Year Plan, we have set economic growth at 7 percent (annually)."
"We're doing this because we want to make the focus of our work improving the quality and benefits of economic growth. That is, we want to use the fruits of development on people's well-being. We absolutely must not any longer sacrifice the environment for the sake of rapid growth and reckless roll-outs. That will lead to production capacity gluts and deepening pressure on the environment and resources so that economic development will be unsustainable."
China protest call smothered in police blanket
Source: Reuters By Michael Martina and Royston Chan(Reuters) - An online call for anti-government protests across China on Sunday instead brought an emphatic show of force by police determined to deter any buds of the kind of unrest that has shaken the Middle East.
Lines of police checked passers-by and warned away foreign photo journalists in downtown Beijing and Shanghai after a U.S.-based Chinese website spread calls for Chinese people to emulate the "Jasmine Revolution" sweeping the Middle East and stage gatherings in support of democratic change.
Officials from China's ruling Communist Party have dismissed the idea that they could be hit by protests like those that have rippled across the Middle East.
But a rash of detentions and censorship of online discussion of the Middle East have shown that Beijing is deeply nervous about any signs of opposition to its one-party rule.
What started as a call for protest has instead become an opportunity for the Chinese government to brandish the big and sophisticated security forces funded by rapid economic growth.
In Shanghai, police bundled away at least seven men, one of whom had been taking photos. Reuters TV filmed several policemen forcing a man in a brown jacket into a Public Security Bureau van, while other police held up an umbrella to block the view.
In Beijing, uniformed police were joined by plainclothes officers who kept shoppers and journalists moving. Men in sanitation uniforms with armbands that said "Public Security Volunteer" used brooms to sweep pedestrians along.
An American news videographer was kicked and beaten repeatedly in the face with brooms and taken into police custody, witnesses said. Other reporters were detained by police and some were roughed up, including one from Taiwan whose hand was injured, they said.
A U.S. embassy spokesman said he was "disturbed" by reports of foreign journalists being physically harassed.
"We call on the Chinese government to respect the rights of foreign journalists to report in China and urge public security authorities to protect the safety and well being of anyone who is subject to illegal harassment or intimidation," embassy spokesman Richard Buangan said.
MCDONALD'S CLOSED BRIEFLY
It was impossible to tell who were simply shoppers and who had shown up to support silently the call to demonstrate.
Security was evident throughout Beijing's Wangfujing shopping street, one of the venues singled out as a protest site by the website, Boxun.com. Shoppers strolled along, but there were at least 40 public security vehicles at the south end of the pedestrian-only street.
Passage was partly blocked by construction fences that went up late in the week outside a McDonald's restaurant, which the Boxun message designated as a place for the gathering. The McDonald's was shut down on Sunday afternoon for about an hour.
"A few days ago some people were creating a stir over by the McDonald's, so they have stepped up security," said an employee at a nearby store. She said she did not want her name reported.
At least one news photographer was ordered into a police vehicle and forced to delete photos from her camera.
A similar call for protest a week ago brought out few people, and dozens of dissidents and human rights activists have been detained or warned to avoid such activities.
It is not clear who is behind the appeals for protests. The government has blocked text messages and web postings in China that contain references to jasmine.
The term "jasmine gatherings" comes from the protests in Tunisia that ousted long-time President Zine al-Abidine Ben Ali in January in what supporters there called a "Jasmine Revolution."
Milan fashion awaits Chinese design boom
Source: Reuters By Antonella Ciancio (Reuters) - Chinese designers will drive catwalk trends more than deep-pocketed Asian buyers as China's creativity becomes fashions' next big thing, top fashion executives and designers told Reuters at Milan fashion week.
Chinese newly-rich fueled a record year for sales at luxury goods makers such as LVMH, with designers such as Ralph Lauren, Ermenegildo Zegna and Prada drawing inspiration from oriental prints and crystals to cater to Asian shoppers.
"The next big issue for fashion is not China's economic boom but Chinese creativity," Italian trend-setter designer and retailer Elio Fiorucci said on the sidelines of a Dolce and Gabbana show.
"We know little about Chinese sense of beauty. Chinese designers have got talent, they know all about us and they will be the next big surprise," he said.
China is predicted to become the world's biggest luxury market with sales of $14.6 billion in the next five years, according to the World Luxury Association.
However, economists say the Chinese economy's booming growth rate is bound to ease, after capping a decade of expansion at an average annual rate of more than 10.5 percent.
MIDDLE EAST CONCERNS
Mature markets like the United States are recovering after being hit hard by the worst slowdown in decades.
"The U.S. grew more than China in January and February for us," Versace's Chief Executive Gian Giacomo Ferraris told Reuters before their womenswear show on Friday.
Swiss luxury group Richemont, British handbag maker Mulberry and Italian leather goods group Tod's are all optimistic about 2011.
But political turmoil in the Middle East, a key emerging market, could weigh on the sector, Roberto Cavalli Chief Executive Gianluca Brozzetti said.
"The first months were positive, but we can't drop our guard," Brozzetti said at the Florentine designer's show. "We are all seeing what is happening in the Middle East," he said.
Cavalli reported revenues of 176.2 million euros ($242 million) in 2010, down 6 percent on lower license royalties, but retail sales grew 28 percent as customers were back in stores.
"Beyond China? India and Latin America coud be even bigger markets, but they should cut their custom duty," Brozzetti said.
Brozzetti said Chinese designers have creativity but not enough economic power to compete with established brands.
"Their culture and creativity will certainly be appreciated in the West," he said. "But it will take time."
Saturday, February 26, 2011
U.N. council to vote on Libya but China a wild card
Source: Reuters By Louis Charbonneau(Reuters) - The U.N. Security Council plans to vote on Saturday on a draft resolution that would slap sanctions on Libya's leaders, but China's delegation was awaiting word from Beijing on its vote, diplomats said.
The draft calls for an immediate referral of Libya's violent crackdown to the International Criminal Court.
Speaking on condition of anonymity, council diplomats said China, a veto-wielding permanent member of the 15-nation body, was awaiting instructions from Beijing on how to vote. The vote is expected after the council reconvenes at 8 p.m. EST.
Several envoys said it was doubtful the Chinese would veto the resolution. They said an abstention or a "yes" vote from China would be the most likely scenario.
"They're meeting in Beijing right now to discuss the situation and how to vote," a Western diplomat told Reuters.
Germany's U.N. mission announced on its Twitter page: "Consensus on draft Libya resolution building up" and that council members hare a "shared sense of urgency." The British mission tweeted the "vote will be today."
Diplomats said there was broad agreement on the council on the need to punish long-time Libyan leader Muammar Gaddafi and others in the North African country's ruling elite for attacks that have killed thousands of civilians.
But council members were divided over whether to immediately refer the issue to the permanent war crimes court. Diplomats said a number of council members, including China, Brazil, India and Portugal, initially had reservations about the ICC language.
All except China dropped their resistance to an immediate ICC referral, as called for in the British-French-drafted resolution, the envoys said.
'CRIMES AGAINST HUMANITY'
The deadlock-breaker, envoys said, was a letter from Libya's U.N. delegation, which has denounced Gaddafi, to the president of the Security Council, Brazilian U.N. Ambassador Maria Luiza Ribeiro Viotti, confirming it backs ICC referral.
Libyan U.N. Ambassador Abdurrahman Shalgam wrote to Viotti that his mission "supports the measures proposed in the draft resolution to hold to account those responsible for the armed attacks against the Libyan civilians, including through the International Criminal Court."
The council has referred only one other case to the ICC -- the conflict in Sudan's western Darfur region. The court has indicted Sudanese President Omar Hassan al-Bashir for genocide and other crimes against humanity in Darfur.
France and Britain drafted the six-page sanctions resolution, which also calls for travel bans and the freezing of assets for Gaddafi and his inner circle, in consultation with the United States and Germany.
A version of the draft circulated to council members on Friday called for an end to the violence and said "the widespread and systematic attacks currently taking place in Libya against the civilian population may amount to crimes against humanity.
Earlier this week, Libya's deputy U.N. ambassador, Ibrahim Dabbashi, one of the first Libyan diplomats to denounce Gaddafi and defect, called on the United Nations to impose a no-fly zone over Libya to protect rebel enclaves from forces loyal to Gaddafi. That proposal is not in the resolution.
Japan Offers Rare-Earth Subsidies
Source: Wall Street Journal By Takashi Nakamichi photo: China DailyTOKYO—Japan announced a 15.2 billion yen ($185.7 million) plan Friday to cut its reliance on imports of key Chinese rare earth metals by roughly a third, underling the government's efforts to protect its manufacturers from potential supply restrictions by Beijing.
Alarmed by a temporary—but sharp—cut in imports of rare-earth minerals from China late in 2010, the Japanese government has made it a national priority to make the economy less dependent on Chinese metals.
China dominates the global market for the metals with a 97% share, and is Japan's biggest supplier. Such materials are considered crucial for Japan's export-led economy, as manufacturers use them to build some of the country's signature products, like hybrid cars and high-tech devices.
The Ministry of Economy, Trade and Industry said it will offer 15.2 billion yen in subsidies for 84 projects by companies in Japan, including Toshiba Corp. and Hitachi Metals Ltd.
If the aid is combined with expected spending by the companies themselves on the projects, the total would be 51.2 billion yen, the ministry said.
Although ministry documents didn't single out China, the main goal of the measure is to lessen Japan's rare-earth imports from China by around a third, two trade ministry officials said.
The step is in line with heightened efforts by resource-poor Japan to secure supplies of rare earth outside China. Tokyo has been trying to deepen its ties with other countries with rare-earth deposits, such as Vietnam and Mongolia.
Japan's initiatives coincide with growing concerns in the industrialized world about the security of supplies from China and the soaring prices of the metals.
China plans to decrease its rare-earth export quotas by 35% for the first half of this year after slashing them sharply for the second half of 2010. Mining companies around the world have responded by taking steps to increase production. But developing mines takes time.
The action by the Japanese trade ministry is part of a 4.85-trillion yen stimulus package enacted last November.
Rare-earth imports from China dropped sharply after a Chinese fishing boat collided with a Japanese patrol ship, renewing a territorial dispute between Asia's two largest economies. In the wake of that incident, the Japanese government budgeted roughly 100 billion yen for efforts to secure natural resources, including rare earths. No other rare-earth consuming nation seemed to be subjected to the same level of supply cuts as Japan.
Chinese shipments of the metals to Japan dropped 50% year-to-year in October to 1,278 metric tons. The following month, they tumbled 75% to 633 tons, according to Ministry of Finance data. In December, they rebounded 24% year-to-year to 4,081 tons after some fence-mending by the two countries, but declined 28% this January to 1,783 tons.
Analysts suspect China's action last year was mainly a way of flexing its muscles against Japan, its biggest rival for Asian leadership. China said the disruptions weren't intentional, but were a result of domestic efforts to fight smuggling and to oversee the rare-earth industry more closely.
The companies to receive the government aid will use it to cover part of their investments in projects to improve rare-earth recycling, process ore imported from other countries, and develop alternative resources or cut the use of the metals, the ministry said.
The subsidized projects are expected to reduce Japan's annual use of rare earth metals—more than 90% of which come from China—to 20,000 metric tons over the long term, from the average in recent years of around 30,000 tons, the ministry said.
The trade ministry said it will identify other projects useful in cutting Japan's dependence on imported rare-earth minerals and other rare metals, and will spend another nine billion yen on these projects.
Toyota to recall 5,202 Lexus cars in China
Source: XinhuaBEIJING - Toyota Motor (China) Investment Co. will recall 5,202 imported Lexus cars in China to fix a malfunctioning gas-pedal problem beginning March 23, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) said Friday.
Toyota's announcement of its recall plans in China came one day after the AQSIQ, China's quality watchdog, demanded an explanation from the Japanese car maker regarding problems with the Lexus.
A spokesperson for AQSIQ on Thursday asked Toyota to "make a full explanation and provide detailed technical descriptions" following its claim that vehicles that were sold on the Chinese market were not defective.
According to Toyota's announcement, 5,202 imported Lexus RX300/350 cars manufactured between February 2003 and July 2006 will be recalled in China starting March 23 due to possible safety hazards.
If the floor carpet around the accelerator pedal is not properly replaced in the correct position, there is a possibility that the plastic pad embedded into the floor carpet may interfere with the operation of the accelerator pedal. If this occurs, the accelerator pedal may become temporarily stuck in a partially depressed position, rather than returning to the idle position, Toyota said.
Owners of the affected RX 300/350 vehicles will receive a notification by first class mail beginning March and Toyota and Lexus dealers will implement the newly announced and amended recall remedies at no charge to the vehicle owners, it said.
Since the end of 2009 to the end of 2010, Toyota had already recalled nearly 16 million products.
Toyota's sale volume in China covers 10 percent of its total sales in the world. In 2010, Toyota sold 846,000 vehicles in China.
China adopts car tax law to promote energy conservation
Source: XinhuaChina's top legislature voted on Friday to adopt a law for vehicle and vessel taxation, which aims to encourage the use of smaller engines in vehicles and vessels to reduce pollution and oil dependence. The law will go into effect on January 1, 2012.
China is currently the world's largest auto manufacturer as well as the largest auto market. Recent statistics show that China has 199 million motor vehicles on the road.
The law intends to tax cars according to engine size. Under the old regulations, the same levy was charged for all motor vehicles, regardless of engine capacities.
The annual taxes on vehicles and vessels range from 60 yuan to 5400 yuan, according to engine size as stipulated by the new law. Under the old regulations, the tax ranged from 360 yuan to 660 yuan.
Bai Jingming, the deputy director of the Research Institute for Fiscal Science under the Ministry of Finance, said that the tax differences could provide an incentive for car consumers to pick cars with smaller engine capacities to conserve energy.
Hotly-debated law
The draft law on vehicle and vessel taxation was submitted to the Standing Committee of the National People's Congress (NPC), China's top legislature, in October 2010 for a first reading. According to the first draft, only taxes on vehicles with an engine capacity smaller than 1.0 were reduced. For most Chinese car owners, they need to pay more car taxes every year.
The draft law was released in full to the public to solicit opinions. From October 28 to November 30 last year, China's top legislature received nearly 100,000 suggestions about the draft law. About 54.6 percent of the respondents asked for the reduction of the tax burden.
The second draft of the law, which was submitted to China's legislature for review on February 23, made significant tax adjustments based on suggestions from the public. According to the second draft, taxes on vehicles with engine capacities from 1.0 liter to 1.6 liters dropped from 360-660 yuan to 300-540 yuan. Meanwhile, taxes on vehicles with engine capacities of 1.6 liters to 2.0 liters dropped from 660-960 yuan to 360-660 yuan.
This means that the tax burden for owners of vehicles with engine capacities of 2.0 liters or below will not be increased from the current rate.
In China, 87 percent of cars on the road have engine capacities of 2.0 liters or below. Fang Xin, member of the NPC Standing Committee, said that the revision in the final draft of the law incorporated suggestions and opinions from all citizens and ensured that the tax burden for most car owners will not be increased.
Fidelity plans to enter the mainland via trust venture
Source: By Samuel Shen and Kazunori Takada (China Daily)SHANGHAI - Mutual fund giant Fidelity is actively preparing to enter the Chinese mainland by securing a trust company license in one of the world's fastest-growing asset management markets, a person familiar with the situation said on Wednesday.
Fidelity, which a few years ago dropped its venture talks with China's Hua An Fund Management Co, is now seeking to invest in a Chinese trust company, which will enable it to launch products on the mainland, said the source, who declined to be identified because he was not allowed to speak to the media.
A spokeswoman at Fidelity International declined to comment.
"Many foreign and domestic investors are seeking a trust company license, which will enable them to conduct a wide range of finance-related businesses," said Wei Tao, Beijing-based analyst at China Securities Co.
Subject to less regulatory scrutiny than banks or mutual fund houses, Chinese trust companies are allowed to launch a range of products to invest in stocks, bonds, infrastructure and real estate projects. Some overseas banks including Morgan Stanley and Macquarie Group Ltd have already set up Chinese trust joint ventures, in which a single foreign institution can hold up to a 20 percent stake.
The sector is attracting a new wave of foreign investor interest. The Financial Times reported on Wednesday that JPMorgan Chase & Co, in addition to Fidelity, was preparing to apply for a Chinese license.
Fidelity is hoping that by investing in a Chinese trust company, it can launch products under China's Qualified Domestic Institutional Investor scheme, which channels money into overseas capital markets.
Fidelity's star manager Anthony Bolton is well known in China. He frequently makes speeches at financial conferences on the mainland, and books promoting his investment philosophy are popular at Chinese bookstores.
Last week, Bolton's Fidelity China Special Situation Fund wrapped up a share offering, raising its targeted proceeds of 166 million pounds ($269 million), more than a third of which came from new investors.
The fund has risen about 8 percent in net asset value since its launch in April 2010.
Nuclear physicist behind China's atom bomb dies
Source: Peking UniversityPeking University, Feb. 26, 2011: Zhu Guangya, a pioneer of China’s nuclear science, passed away in Beijing on Saturday at the age of 87.
Zhu Guangya has contributed to China's breakthrough in atomic bomb and hydrogen bomb technological research, and has participated in nearly all relevant research and development programs.
Zhu was born in 1924 in Yichang, central China’s Hubei province. He attended National Central University (in Chongqing) and graduated from the Department of Physics of National Southwestern Associated University in 1945. Then, at the recommendation of Professor Wu Dayou, studied nuclear physics at the University of Michigan from 1946 to 1950, where he obtained a doctorate.
He returned to China in 1950 and taught at PKU Department of Physics until 1952 when he became director of teaching and research at Northeast China People's University in Changchun.
In 1955, Zhu began teaching the first group of nuclear physics students at Peking University. During the next 15 years, he studied reactor physics and also worked in the Second Ministry of Machine Building Industry.
As former PKU President Chen Jia’er recalled, Zhu was the youngest professor at the department. “But we adored him, because he had served in the Korean War, and he was a hero for us all,” said the student of Zhu during a recent interview.
From 1970 to 1982, Zhu worked on projects for the PLA and became vice minister of China’s Commission of Science, Technology and Industry for National Defense. In 1999, he was awarded a medal in recognition of his contribution to China's "Two Bombs, One Satellite" projects.As member of the Chinese Academy of Sciences (CAS) and the first president of the Chinese Academy of Engineering (CAE, 1994-98), Zhu served on numerous commissions and associations related to the development of science and technology. He was an organizer of the Qinshan nuclear power plant. In the 1980s, he participated in the formulation of the "863 Program," aimed at high technology development.
Zhu Guangya always kept a low profile, wrote Nobel laureate Lee Tsung-dao in a memoir about his classmate. “But Zhu is a real scientist, a scientist with a strategic vision.”Friday, February 25, 2011
Have You Heard...
- U.S. envoy's name blocked in latest run-in with China
- China evacuates 12,000 from Libya, sends frigate
- Huawei Says It's No Threat to U.S. Security, Invites Probe on Any Concerns
- Aviation sector has high hopes for next 5 yrs
- Volvo to Invest Up to $11 Billion in Five Years, Plans Exports
- Pirelli to Invest 300 Million Euros in China as Car Sales Surge
U.S. envoy's name blocked in latest run-in with China
Source: Reuters(Reuters) - China has blocked a microblog search of the Chinese name of the U.S. ambassador after he was seen near a pro-democracy gathering, the latest in a series of run-ins between a possible U.S. presidential candidate and the Communist Party.
China has tightened control over the Internet in the wake of the unrest sweeping through the Middle East, underscoring the party's anxiety over the easy spread of information that might challenge its one-party rule.
The online censorship coincides with a rash of detentions after an overseas Chinese-language website, Boxun, spread a call for "Jasmine Revolution" gatherings to press the Communist Party to make way for democratic change.
Ambassador Jon Huntsman, a fluent Mandarin speaker tipped as a Republican U.S. presidential candidate, was spotted in a crowd at a pro-democracy gathering outside a McDonald's on Beijing's Wangfujing shopping street on Sunday.
U.S. officials later said he accidentally came across the gathering while out shopping.
A video posted on YouTube showed him talking to an unidentified person on the street, a block away from Tiananmen Square, the center of pro-democracy demonstrations which were crushed by the military in June 1989.
Besides Huntsman's Chinese name, "Hong Bopei," searches for the Chinese translations of "Egypt," "jasmine," "jasmine revolution" and "Hillary Clinton" prompted a message saying the results could not be found on the microblogs of Chinese Internet portal Sina.com.
Authorities are particularly worried that people who use online microblogs -- 125 million and growing -- could use them to mobilize.
U.S. Embassy spokesman Richard Buangan said the embassy was aware that "some Chinese domestic Internet sites" were restricting searches of Huntsman's Chinese name.
"We urge China to respect internationally recognized fundamental freedoms, including freedom of expression, and the human rights of all Chinese citizens," Buangan said.
Last week, Huntsman stood outside a Chinese court and criticized it for rejecting the appeal of an American jailed on industrial spying charges.
Days earlier, Huntsman posted messages on a Twitter-like Chinese microblog service, asking readers their opinions on a speech by Secretary of State Hillary Clinton about Internet freedom.
His messages were deleted by censors.
Huntsman's chances of running for the Republican presidential nomination appeared to increase early this week when a group advocating his candidacy launched a fund-raising effort.
China has launched its most severe crackdown on dissidents in recent years in response to the Jasmine protests, rights group Chinese Human Rights Defenders said on Friday.
Five people have been detained on charges of "endangering state security" charges, the group said.
In Taipei, Taiwanese protesters threw flowers at a motorcade carrying China's top envoy to the island and tried to deliver plastic jasmine flowers and jasmine juice to him as he visited Taiwan's strongly pro-independence south.
Search results for Huntsman and Clinton could still be found on less popular Internet chatroom Tianya.cn and another Chinese microblogging site run by Sohu.com.
The Chinese microblog feed of Huntsman on Tencent Holdings' QQ, another Chinese website, was still accessible.
Last week, China's Internet censors deleted U.S. Embassy posts promoting Clinton's speech on Internet freedom from microblogs.
It is unclear whether their removal was ordered by the government or censored by the company that hosts the microblogs, Sina.com, which cooperates with the government under Chinese law to scrub content that is deemed illegal.
Twitter itself is blocked in China, along with Facebook and other websites popular abroad.
And access to the professional networking site LinkedIn was disrupted in China beginning on Thursday, following online calls on other sites for more gatherings every weekend in China.
Chinese officials and state media, which have been muted on the unrest in Egypt, have stressed repeatedly that the idea that China could succumb to the kind of unrest rocking authoritarian governments across the Middle East is absurd.
China evacuates 12,000 from Libya, sends frigate
Source: Reuters By Royston Chan and Tom Miles photo: China Daily
(Reuters) - China has evacuated 12,000, or about one third, of its citizens from turmoil in Libya, many of them workers for Chinese-run projects in the oil-rich nation, official media said on Friday.
The mass evacuation, supported by a Chinese naval frigate, is the latest test for a government that has encouraged firms to seek business across the developing world, often in conditions considered too difficult or poorly paid for Western firms.
Relieved workers arrived on a charter flight to Shanghai on Thursday. Some told Reuters they had been working at a university construction site in the eastern city of Tobruk that was attacked by armed looters.
Local staff told them to leave the increasingly dangerous conflict pitting opposition forces against long-time leader Muammar Gaddafi.
"We were lucky because we managed to rent eleven cars and all 83 of us got in with our luggage. Then we made our way to the Egyptian border," said 33-year-old construction worker Mao Yanjun.
China's Ministry of Commerce has said 75 Chinese companies have operations in Libya, including the state-owned energy giant CNPC, parent company of PetroChina Co Ltd.
"China has suffered large-scale direct economic losses in Libya, including looted work sites, burned and destroyed vehicles and tools, smashed office equipment and stolen cash," the ministry said in a statement on Thursday.
ROBBED BY GANGS
The statement said some Chinese had been injured but there were no reports of deaths.
Zhong Chenyun, a manager at Sinohydro, said he and his colleagues had been stranded and robbed.
"All I have left is what I am wearing. My personal and company goods that I brought to Libya were all robbed by gangs with weapons. Our safety could not be guaranteed," he said.
Nearly 1,000 Chinese crossed over into Tunisia on Wednesday, and a Maltese ship capable of carrying more than 2,000 people arrived to evacuate Chinese nationals from the port of Benghazi on Thursday. It is expected in Malta later on Friday, the state-run Xinhua news agency said.
In 2010, Chinese trade with Libya was worth $6.6 billion, a rise of 27 percent on 2009.
Vietnam said it had evacuated about 1,300 of its citizens from Libya out of 10,482 living and working there.
Vietnamese in unaffected areas of Libya would "try to continue to work and remain where the are," the state-run Vietnam News quoted the Minister of Labor, Invalids and Social Affairs on Friday as saying.
Huawei Says It's No Threat to U.S. Security, Invites Probe on Any Concerns
Source: Bloomberg NewsHuawei Technologies Co. said perceptions that the Chinese phone-network equipment maker threatens U.S. national security are unfounded and invited the government to probe the company about any concerns it may have.
“Over the past 10 years, as we have been investing in the United States, we have encountered a number of misperceptions that some hold about Huawei,” Ken Hu, chairman of Huawei’s U.S. operations, wrote in an open letter on the company’s website. “We sincerely hope that the United States government will carry out a formal investigation on any concerns it may have.”
The comments come a week after the company withdrew its purchase of Santa Clara, California-based 3Leaf Systems’s patents, in compliance with a recommendation by the Committee on Foreign Investment in the United States. China’s Ministry of Commerce said last week the move was regrettable and that U.S. intervention on Chinese companies’ investments in recent years has affected trade cooperation between both sides.
Unfounded perceptions about Huawei include claims of close ties with the Chinese military, allegations of financial support from the Chinese government, and threats to national security, Hu wrote.
Huawei has been trying to expand in the U.S. for the past three years and has been thwarted repeatedly as U.S. lawmakers raised opposition about security risks from the Chinese company. Prior to 3Leaf, Huawei failed in bids to acquire companies including 3Com Corp. in 2008 and 2Wire and Motorola’s wireless business last year.
’Serious Risk’
Huawei’s possession of 3Leaf’s technology “could pose a serious risk” to U.S. computer networks, five U.S. lawmakers wrote to Obama this month.
The repeated rejection of investment by Huawei in cases from 3Com to 3Leaf shows that the U.S. is using security concerns as a pretext to reject investment by Chinese companies, Yao Jian, spokesman for China’s Ministry of Commerce said Feb. 17. This “has influenced Sino-U.S. cooperation,” Yao said.
“As far as the investment activities of Chinese enterprises in the United States, it’s clear that there are many cases where the United States is using a security review to refuse investment by Chinese companies,” Yao said.
The U.S. should increase the transparency of the approval process and give Chinese companies investing in the U.S. “fair treatment,” Yao said.
Cloud Computing
3Leaf, founded in 2004, developed technology for cloud computing that lets businesses and government agencies move applications and programs such as e-mail to remote networks owned and operated by a third-party.
Huawei is China’s largest maker of phone network equipment, and ranks second globally only to Stockholm-based Ericsson AB, according to Redwood City, California-based Dell’Oro Group. Huawei’s share of the global market for mobile phone network equipment almost doubled to 21 percent in the third quarter of 2010, from 11 percent in the third quarter of 2008, according to Dell’Oro Group. Ericsson’s share was 34 percent in the third quarter.
Still, Huawei has had difficulty penetrating the U.S. In 2009, combined revenue in North and South America accounted for only 12 percent of Huawei’s total sales of $21.8 billion, spokesman Ross Gan said in November. China accounted for about 33 percent, other Asian markets 20 percent, and Europe, the Middle East and Africa accounted for 35 percent.
Aviation sector has high hopes for next 5 yrs
Source: By Xin Dingding (China Daily)45 airports will be built, 700 planes to join the fleet as blueprint drafted
BEIJING - China plans to invest 1.5 trillion yuan ($228.2 billion) in the aviation industry, building 45 airports and adding 700 new commercial planes, over the next five years to meet surging demand, a top regulator said on Thursday.
The figure is half a trillion yuan more than that for the previous five years, Li Jiaxiang, head of the Civil Aviation Administration of China (CAAC), told a news conference.
By 2015, the country is expected to have 220 commercial airports and its fleet size will expand to more than 4,500 planes, according to Li.
"The ability of the civil aviation sector to serve the national economy and the public will be further strengthened," Li said.
The country currently has 175 commercial airports in operation and keeps more than 2,600 aircraft in its fleet, he said.
In the next five years, the commercial aircraft fleet, which stood at more than 1,600 in 2010, will expand by some 700 planes, a scale similar to the growth in the past five years.
The number of commercial airports will increase by 45, mostly regional, in the next five years, compared with the 33 new airports completed in the past five years.
Despite concerns over losses reported by many regional airports, the construction process will be speeded up over the next five years, he said.
Li admitted that 130 out of the 175 airports reported "a rather small amount" in losses last year, totaling 1.68 billion yuan. But "regional airports are public infrastructures, and their construction should not be profit-driven", he said.
Besides, regional airports have brought large economic and social benefits to local communities, which "is why many local governments are still willing to subsidize their operations, despite losses", he said.
The airport in Huai'an, Jiangsu province, which opened for operations in 2010, has attracted 61 foreign-invested companies to settle in the city, while an airport in remote Tengchong county in Yunnan province boosted local tourism, with the county's GDP rising 56 percent since it opened in 2009.
Also, after a magnitude 7.1 earthquake shook Yushu in Qinghai province, killing 2,687 people, the local airport played a major role in disaster relief. Airlines transported nearly 3,000 injured people for treatment and prevented the death toll from rising further, he said.
As proof of the enthusiasm of local governments to develop civil aviation, he said top officials from 29 provinces and regions visited the CAAC last year to discuss building airports and opening new routes.
Li Lei, a civil aviation analyst at CITIC China Securities, said the increase in the number of airports will also benefit the entire industry.
"With more airports built, it will drive market demand for civil aviation."
Besides building more airports and increasing the fleet, the CAAC will also take measures to strengthen airline competitiveness in the international transportation market over the next five years, Li Jiaxiang said.
He cited statistics saying that foreign airlines are gaining an upper hand in the country's lucrative international travel market.
Statistics showed domestic airlines account for only 46 percent of China's international passenger market and less than 30 percent of China's international cargo market.
The administration will boost the industry's overall strength by nourishing large-scale aviation hubs and super-network carriers, he said, without elaborating.
Some analysts have expressed concerns that State-controlled airlines are too well-supported and resourced, but Li noted that the CAAC encourages the development of privately owned airlines as well.
China has 43 airlines - eight privately owned or controlled and 35 State-controlled. Of these, 16 are joint ventures.
The CAAC will soon accept three applications for establishing private airlines, he said.
Demand for air traffic is booming as the world's second-largest economy roars ahead on near double-digit growth and increasingly affluent Chinese people travel more frequently.
A total of 267 million air passenger trips were recorded in China in 2010, up 15.8 percent from the previous year, official figures showed.
Domestic airlines reaped profits totaling 35.1 billion yuan in 2010, accounting for 60 percent of the world's total, CAAC statistics showed.
The rapid development has benefited foreign aviation industry players as well, amid a huge demand for aircraft and airport facilities, according to Li.
Of the 200 billion yuan in commercial deals China made in November when President Hu Jintao visited France, 104.1 billion yuan was spent on civil aviation-related goods.
Also, when President Hu visited the United States in January, $19 billion out of the total $45 billion in commercial deals was spent in the aviation sector.
Volvo to Invest Up to $11 Billion in Five Years, Plans Exports
Source: Bloomberg NewsVolvo Cars, the Swedish automaker acquired by Zhejiang Geely Holding Group Co., plans to invest as much as $11 billion worldwide over the next five years to tap rising demand in markets including China.
Volvo is also working to win government orders and is considering making cars in China for export, Chief Executive Officer Stefan Jacoby said today in an interview in Beijing.
“It is obvious that at some point manufacturers will export from China,” Jacoby said. “We, as a global premium brand with European heritage, have a very good opportunity to be owned by a Chinese enterprise and to utilize our manufacturing capacities here.”
Premium marques including Volvo, Audi AG and Daimler AG are expanding in China, the world’s biggest automobile market and second-largest economy, as rising incomes and economic growth boost spending. The Swedish brand, whose chief executive presented its China strategy this afternoon in Beijing alongside Geely Chairman Li Shufu, is counting on increasing Chinese demand to help double sales to 800,000 vehicles in 10 years.
Shares in Geely Automobile Holdings Ltd., the group’s Hong Kong-listed unit, were unchanged at HK$3.30 as of 3:12 p.m. local time. The stock has lost 2.9 percent in 2011.
Discount Effect
“There is no doubt about the super importance of the Chinese market to Volvo,” said Yu Bing, an analyst with Pingan Securities Co. in Shenzhen. “The vital question lies with whether Volvo would be able to avoid any discounts in its brand’s premium value because of the takeover by a Chinese homegrown carmaker.”
Volvo, which Ford Motor Co. sold to Zhejiang Geely in August for $1.5 billion, aims to sell 200,000 cars in China by 2015, up from 30,522 in 2010, Jacoby said today. Volvo also plans to increase its dealers in China to more than 220 by 2015 from the current 106, according to the company.
The carmaker is working to increase sales to the central and local governments in China, Jacoby said.
“Being owned by a Chinese enterprise offers us additional opportunities in getting into the government fleet business,” he said.
Volvo will invest in a new plant in the city of Chengdu, southwestern China, and will continue to consider setting up a plant in Daqing in northeastern China, the company said. Shanghai will serve as Volvo’s China headquarters and center for product development, design and sourcing.
Geely produced its first car, a subcompact, in 1997 and was the eighth-biggest automaker in China last year.
Economic growth and government incentives boosted China’s vehicle sales 32 percent to 18.1 million in 2010, making the nation the world’s largest auto market for a second year.
Volvo’s main rivals boosted their China sales last year. Volkswagen AG’s Audi sold 227,938 cars in China, up 43 percent from 2009. Daimler AG’s Mercedes-Benz more than doubled sales to 148,400, while Bayerische Motoren Werke AG sold 168,998 units, an 87 percent gain.
Pirelli to Invest 300 Million Euros in China as Car Sales Surge
Source: Bloomberg NewsPirelli & C SpA, Europe’s third- largest tiremaker, will invest about 300 million euros ($415 million) in China over the next three years to tap rising demand in the world’s biggest vehicle market.
The company will double capacity at its factory in Jining, Shandong province, to 10 million tires a year within the next two years, Chairman Marco Tronchetti Provera said in an interview with Bloomberg TV in the Chinese city yesterday.
Pirelli expects Asia sales to grow 20 percent this year, up from a previous estimate of 15 percent, helped by rising demand for more expensive vehicles in China, Tronchetti Provera said. China’s overall vehicle sales surged 32 percent last year, helped by economic growth and government stimulus measures.
“For us, what’s important is the high-end, expensive cars,” he said. “We are not looking for the mass market.”
The Milan-based tiremaker may get 10 percent of sales from China within two years from 7 percent how, he said. The company also plans to invest $210 million by the end of 2012 to build a new plant in Mexico.
The tiremaker in November said earnings before interest, taxes and restructuring costs will climb to as much as 11.5 percent of revenue in 2013, from about 8.8 percent last year.
The price of rubber, used to make tires, will peak this year, Tronchetti Provera said. Pirelli is working to reduce its use of natural rubber to offset costs that hit a record this month.
Pirelli fell 1.1 percent to 5.66 euros yesterday in Milan. The shares rose 40 percent last year, the sixth-best performance on Italy’s benchmark FTSE MIB.
The company completed the spinoff of its real-estate unit, now called Prelios SpA, in October and it also sold Pirelli Broadband Solutions to concentrate on tires.
Thursday, February 24, 2011
LinkedIn site disrupted in protest-wary China
Source: Reuters By Chris Buckley(Reuters) - Access to the networking site LinkedIn was disrupted in China on Thursday, following online calls on other sites for gatherings inspired by protests against authoritarian regimes across the Middle East.
It was not immediately clear whether the blockage on domestic Chinese internet lines of LinkedIn, one of the few foreign networking sites not previously blocked by Beijing, was due to state censorship.
The disruption, however, comes in the wake of a rash of detentions in China after an overseas Chinese-language website, Boxun, spread a call for "Jasmine Revolution" gatherings to press the Communist Party to make way to democratic change.
Attempted demonstrations in Beijing and elsewhere on Sunday were tiny and swiftly extinguished by swarms of police.
A rash of detentions and censorship of online discussion of the Middle Eastern protests suggests Beijing remains nonetheless nervous about any signs of opposition to one-party rule.
The idea that China could succumb to the kind of unrest rocking authoritarian governments across the Middle East was absurd, a senior Chinese official said.
"The idea that a Jasmine Revolution could happen in China is extremely preposterous and unrealistic," said Zhao Qizheng, former head of the government's information office, according to a report on Thursday in the Wen Wei Po, a Hong Kong-based newspaper under mainland Chinese control.
"In a city of 15 million people, to have a few people standing around has no practical significance," said Zhao, apparently referring to the fizzled protest in Beijing.
"But we're also sure that there are a few people who hope that some kind of turmoil will break out in China."
LinkedIn has no reputation as a magnet of dissent.
Long-term disruption to the site would exclude the company from the world's biggest Internet market by number of users -- about 450 million and growing. That could hurt its planned initial public offering in New York and anger the United States, which has criticized Chinese Internet censorship.
Last year, Beijing feuded with Washington after Google complained of censorship and online hacking coming from within China.
DETENTIONS, "JASMINE" BLOCKED
Zhao's remarks were Beijing's highest-level public response so far to online calls for "Jasmine Revolution" protests.
Few think China's ruling Communist Party faces a fate similar to the overthrown leaders of Tunisia and Egypt.
China's rapid economic growth has diluted discontent about corruption and inequality. It has also enabled sharply higher funding for domestic security, arming police with sophisticated surveillance equipment and intimidating hardware.
Relatively few people in China can see the online calls for protests, which have circulated mostly on overseas websites blocked by Beijing. Facebook and Twitter are blocked too.
But Beijing gets jittery about any signs of organized opposition to the party, and officials are on edge ahead of the annual meeting of the national parliament in early March.
Authorities have hindered the spread of information in China and detained dissidents. The Chinese word for "jasmine" has been blocked in searches of popular Chinese websites.
Human Rights in China, an advocacy group based in New York, listed 29 rights lawyers and dissidents detained, confined, searched or questioned by police or government agents since February 16, although it is unclear how many were targeted because of the Chinese Communist Party's fears of the calls for gatherings.
Some detained activists have been later released. In other cases, their families have no idea of their whereabouts.
"We haven't had any word about where he is," said Qiu Danrong, whose husband Liu Anjun was bundled into a van by men in plain clothes on the weekend. Liu runs a group that helps petitioners who come to Beijing to press complaints.
"It's impossible to find out anything, so we just have to wait and wait for any news or until he's let out," said Qiu.
Factbox: Who's who among China's investment banks
Source: Reuters(Reuters) - China's upstart investment banks in the southern boom town of Shenzhen outshone their larger rivals in Shanghai and Beijing last year, helped by an unprecedented fundraising frenzy on the Shenzhen exchange.
Following is a brief introduction of China's top IPO deal makers in 2010 and their astute rainmakers behind the scenes.
PING AN SECURITIES
Ping An Securities, a unit of Shenzhen-based Ping An Insurance, topped China's IPO league table in 2010 for the first time with 38 deals and deal proceeds of $5.14 billion.
Ping An Securities' investment bank division is headed by Zeng Niansheng, a lawyer-turned-banker who is in his late thirties.
Described by the Chinese media as a pragmatic and low-profile person, Zeng moved his way up at Ping An after he joined the company in 2000 as a business manager at the investment bank department.
For all IPO mandates, Ping An's investment bank department will follow a "five-step" process which keeps the time to market of a new IPO within six months to a year, according to Chinese media reports.
GUOSEN SECURITIES
Controlled by Shenzhen Investment Holdings Corp, Guosen Securities clinched 31 A-share IPO deals in 2010 with a combined deal value of $4.82 billion.
Guosen Securities president Hu Jizhi, an economist by training, led a restructuring of Guosen's investment bank operations when he took over the reins of the company in 2004.
Hu installed a performance-linked incentive scheme at Guosen and encouraged internal competition by breaking the investment bank operations into many small business units.
Two years ago, Hu launched an aggressive hiring program at Guosen at a time when financial institutions around the world suffered heavy losses due to the global financial crisis.
The former deputy general manager of the Shenzhen Stock Exchange also boosted Guosen's equity research department at a time when other Chinese brokerages were shutting down their research operations.
HUATAI SECURITIES
Headquartered in Nanjing, in eastern China's Jiangsu province, Huatai Securitie made headlines last year when it raised 15.5 billion yuan ($2.36 billion) via its listing on the Shanghai Stock Exchange.
Jiangsu Guoxin Investment Group Ltd, the investment arm of the Jiangsu provincial government, owns 24 percent of Huatai Securities, company data showed.
Huatai Securities is headed by 41-year-old Zhou Yi, who had worked in the telecommunications sector until 2006 before he was appointed president of Huatai in 2007.
CHINA INTERNATIONAL CAPITAL CORP (CICC)
China's most venerable investment bank suffered several high-profile exits of key staff as it ended last year a decade-long partnership with Wall Street bank Morgan Stanley.
Morgan Stanley sold its 34.3 percent stake in Beijing-based CICC to four investors including U.S. private equity firms TPG Capital and Kohlberg Kravis & Roberts.
Media-shy CEO Levin Zhu, son of former Chinese premier Zhu Rongji, faces an uphill task now to re-energize the bank with the new shareholders.
CICC dropped to third place in managing Asian IPOs in 2010, as its market share shrunk to 4.7 percent from 16.1 percent.
CITIC SECURITIES
Shenzhen-based Citic Securities, China's first and biggest publicly traded brokerage firm, was one of four underwriters for the Shanghai portion of Agricultural Bank of China's $22.1 billion IPO last year.
Citic Securities Chairman Wang Dongming, a 58-year-old veteran banker, is credited with building the firm into a financial behemoth and the crown jewel of its state-owned parent Citic Group.
Last year, France's Credit Agricole announced that it was in talk with Citic Securities for a partnership which could create a global equity broker with over 350 analysts worldwide.
A U.S.-trained economist, Wang worked at the investment bank division of Canada's Scotiabank before he returned to China in 1992 -- two years after China reopened the Shanghai Stock Exchange.
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