China General News and Discussion

[ajtr]

The reality of the 'China Fantasy'​

Posted By Will Inboden Wednesday, June 16, 2010 - 1:01 PM Share

Is the "China Fantasy" starting to get deflated by reality? Three years ago, Jim Mann's provocative book of that title identified the "China Fantasy" as the dogmatic belief of many Western political and commercial elites that China's economic liberalization and growth would lead inevitably to democracy at home and responsible conduct abroad. The operative word was "inevitably" -- the assumption being that China's remarkable economic success would automatically produce a middle class that demanded greater political rights, and that China's growing integration with the global economy would produce benign and responsible international behavior. Based on this assumption, the corollary policy prescription for the West was to pursue a policy of engagement and encouragement towards China's rise.

This paradigm seems to be shifting. I recently participated in a conference in Europe on China, attended by a cross-section of policy, academic, and commercial leaders from Europe, the United States, and China, and came away struck by palpable attitude changes in at least three dimensions. Taken together, these are signposts that the previous conventional wisdom on China is coming under question:

European attitudes. Many of the Europeans present voiced a pronounced skepticism towards China, both for the Chinese Communist Party's ongoing refusal to liberalize the political system as well as for what they perceive as China's irresponsible international posture. Various reasons were suggested for this change in European attitudes from even two years ago, but the most salient one seems to be European ire over China's obstreperous conduct at last year's Copenhagen climate change conference. If Europe has a litmus test for international good citizenship, it is climate change. But China's behavior on that front seems to be prompting increased European frustration with China on other issues as well, including human rights, Iran's nuclear program, and China's military build-up.
Business attitudes. American and European business leaders with extensive China experience also expressed significant disillusionment. As one noted, whereas 5 or 10 years ago the business community was virtually unanimous in its enthusiasm for the China market and in support of closer political ties between China and the West, now the consensus is fractured. Causes for this disenchantment include widespread corruption, intellectual property rights violations, the protectionism of the new "indigenous innovation" policy, and the general restraints on private sector flourishing imposed by China's state capitalism model. To be sure, many multinational companies remain profitably invested in what is still the world's largest emerging market, and many more are eager to get in. But Google's recent exit from China may not be the only one, and some multinationals looking at China are weighing a new set of cost-benefit analyses.
Chinese attitudes. If assessments in the West are changing, so are elite Chinese attitudes. Most of the Chinese participants were from universities or think-tanks (i.e. not People's Liberation Army hard-liners), but even they displayed a nationalistic confidence and rather defiant posture towards the West, especially the United States. At its most benign, this is an understandable attitude of a proud rising power. But in too many ways it is not benign, especially considering that the Chinese participants took worrisome stances on issues such as human rights, Taiwan, Tibet, mercantilist nationalism, Iran's nuclear program, shielding North Korea, and especially the security "threat" purportedly posed by the United States.
The erosion of the "China fantasy" does not mark from a precise date, but a watershed moment ironically may have been the 2008 Beijing Olympics. Anticipated as China's grand arrival on the global stage, the Olympics were by many measures a major success -- and not just for people named "Michael Phelps." Yet surrounding the Olympics were constant reminders of Beijing's authoritarianism, whether the petulant rhetorical attacks on Tibet supporters, the draconian efforts at pollution reduction, the omnipresent surveillance, and the tight control on any voices of dissent. Put it this way -- as obnoxious are those %&*!@ vuvuzelas at the World Cup, they are also the sound of a free society. You can bet they would have been banned in Beijing.

The end of the "China fantasy" does not necessarily prescribe a wholesale shift in the free world's posture towards China -- just a more realistic one. For the United States, this has several policy implications:

Remember that "engagement" doesn't just apply to the government to government relationship with Beijing, but also to the people of China. A forward-looking China policy must include increased support for the seeds of civil society in China -- especially young entrepreneurs, religious leaders, human rights activists, students and scholars. Much more than the CCP, they are the best hope for the future of China.
Keep cultivating our alliance partners in Asia, and also build ties with emerging powers. Nations as diverse as Australia, Japan, Vietnam, Indonesia, South Korea, Singapore, and India have two things in common: they are wary of China's aspirations to regional hegemony, and they desire closer ties with the United States.
Strengthen our defense capabilities to deter China's emergence as a viable peer competitor. The problem with China's military build-up is not just that it is non-transparent, but that much of it seems designed specifically to counter American force projection and capabilities. For the United States, this means everything from improved cyber-security, command and control system protection, and anti-ship missile defense to, yes, a sufficient F-22 force to preserve air superiority.
Get our debt under control. Not that the United States needs yet another reason to tackle its mind-blowing $13 trillion debt, but the fact that China owns close to $1 trillion of it is a further concern. The debate will continue over whether this debt financing imbalance actually leaves China or the United States more vulnerable in the aggregate (see this Dan Drezner article for a thoughtful analysis), but at a minimum it is a strategic constraint on the United States.
None of this precludes continued bilateral cooperation with China on important issues, or continued support for sound investment in such a vast market. The "China fantasy" was based more on hope than experience, but the benefit of recent experiences with state capitalism is the chance to replace hope with prudence.

 

[KiranVedula]

Shanghai-Nanjing Railway Starts Operation


The high-speed railway linking eastern China's metropolis of Shanghai and Nanjing, capital of neighboring Jiangsu province, starts operation on Thursday, July 1, 2010. [Photo: Xinhua]

A new high-speed rail service intended to boost development in one of China's major economic zones opened to passengers Thursday.

The new service, with trains running at up to 350 km an hour, will more than halve the traveling time between Shanghai and Nanjing, capital of neighboring Jiangsu Province.

The service will cover the 301-km route in just 73 minutes, carving 80 minutes of the previous time. Its 21 stops include the eight most prosperous cities in the Yangtze Delta region, including Suzhou and Wuxi.

In the initial operation phase, 92 pairs of high-speed trains will operate on the route. The Ministry of Railways plans to raise the number to 120, but no timetable has been set.

Ministry spokeman Wang Yongping said the new line would "definitely boost regional modernization" and the number of rail travelers in the region.

The line was approved by the State Council as part of the plan for railway construction in the Yangtze Delta in 2005, and construction began in 2008.

Government data shows the region, covering 2.1 percent of the country's territory, contributed more than 21.4 percent of China's gross domestic product last year.

 

[Kunal Biswas]

Chinese Police woman in Hostage situation

Chinese Police woman in Hostage situation
July 6th 2010. A Chinese policewoman (left) shot (4 shots) and killed a man (failed robbery) holding the hostage.

1 munite shooting footage
http://6.cn/watch/13289569.html
8-munite footage
http://v.youku.com/v_show/id_XMTg3ODM0MjA4.html


Τhe first shot seems to go high, but the rest.... seem to have done the job

 

[p2prada]

Wow. A Chinese "Hit girl." Good job.

 

[ajtr]

One year after riots, tension lingers in China's far West​

One year on, calm has returned to the streets of Urumqi, which is Xinjiang's prosperous capital. But tensions between the two ethnic groups still linger. Twelve months after the violence, an already segregated city is getting further divided. Han Chinese residents, who have for long settled in Uighur neighbourhoods surrounding Erdaoqiao, are moving out.

Resentment is particularly high in Urumqi, where Hans now outnumber Uighurs, and disparities between the two groups are most evident. Among young Uighurs is a widely prevailing sense that the best jobs go to Hans, and that those who don't speak Mandarin Chinese are relegated to second-class lives.

The ruling Communist Party's highest leaders met in Beijing in May to chalk out a new development plan for Xinjiang. Some important signs of change emerged from the meeting. Significantly, Beijing has, for the first time for any province or region in China, introduced a resource tax in Xinjiang. This will now force energy companies, who have gotten rich off Xinjiang's resources at little cost, to pay the local government for access to oil and gas. This is expected to substantially boost the government's revenues, which officials said would go to development projects.

For almost 10 months, Xinjiang's residents and businesses were left with no access to e-mail and allowed to view only 30 government websites in an unprecedented information black-out. Other controversial policies, however, legacies of Mr. Wang's rule, still remain in place. Among them is an emphasis on bilingual education, which requires Uighur school-children to learn Mandarin. Some Uighurs fear the emphasis on Mandarin, required for most high-paying jobs, will eventually result in the marginalisation of the Uighur language and culture.

Han Chinese tourists, who drive Xinjiang's once-prosperous tourism industry, have stayed away this year. Erdaoqiao's bylanes are deserted, even though the tourist season has already begun.

 

[amoy]

CHINA IN SPANISH BOND BUYING SPREE
By David Oakley, Anousha Sakoui , in London

China's State Administration of Foreign Exchange, or Safe, which manages the reserves under the country's central bank, were allocated up to €400m ($505m) of Spanish 10-year bonds in a debt deal last Tuesday, according to people familiar with the situation.

Safe had put in an order for about €1bn after demand from investors rose to €14.5bn in a matter of a few hours on Tuesday last week. Mike Amey, portfolio manager at Pimco, said: "The fact big Asian investors are back in the market is a big vote of confidence for the eurozone. There was strong demand for the Spanish bond. It really helped sentiment."

The Spanish deal buoyed the broader markets, helping last week's global equity rally and marking a potential turning point for the eurozone.

Of the €6bn raised, two-thirds were bought by international investors, of which 14 per cent was purchased by Asians. Safe bought about half of the Asian allocation. In a similar 10-year deal in January, Spain only sold 5 per cent to Asian investors.

Bankers say Asian investors have bought minimal amounts of eurozone bonds from southern periphery countries in the past two months amid fears the eurozone crisis could force the break-up of the single currency. Safe declined to comment.

Separately, Greece dropped plans to refinance 12-month government debt today because of fears investors would demand exceptionally high yields.

 

[Neil]

Dozens killed in landslides in China's Gansu province

Landslides and floods triggered by torrential rain have engulfed a town in north-west China, killing at least 127 people and leaving 2,000 missing.

Nearly 3,000 soldiers and 100 medics have been sent to assist local rescue teams in Zhouqu, in an isolated, mainly Tibetan region of Gansu province.

More than 45,000 people have reportedly already been evacuated from the area.

Local officials say thick mud, more than 1m (3.3ft) deep in some places, is hampering rescue efforts.

Prime Minister Wen Jiabao flew to Gansu after receiving news of the disaster. He said no effort would be spared to rescue survivors.

More than 1,400 people are believed to have been killed this year in unusually severe flooding in central and southern China.

About 1.4m homes have been destroyed, 12 million people evacuated, and 87,600 sq km (22m acres) of crops ruined, officials say.

Wiped out
The landslides happened late on Saturday following torrential rain in Zhouqu county, officials told the official Xinhua news agency.

Rock and mud slipped down several hillsides and engulfed the town of Zhouqu, which lies in a narrow valley cut by the Bailong river.

"There was thunder and huge rain, and then the landslides started coming down," a resident of Zhouqu told the Reuters news agency.

"That was about midnight, so some people must have been in their homes, asleep and didn't know what was happening."

The landslides swept mud and other debris into the river, blocking it upstream of the town.

Water built up behind the temporary dam, creating a 3km (2-mile) long lake that eventually overflowed and sent waves of water, mud and rocks crashing down on the town.

The deluge flattened houses and tore several blocks of flats in half. One resident said the fifth floor of his building was submerged at one point. A small hydroelectric power station was destroyed.

Pictures from Zhouqu on Sunday showed scenes of devastation, with mud, water and wrecked cars covering the town as people searched for missing relatives.

"Many single-storey homes have been wiped out and now we're waiting to see how many people got out," Han Jiangping, a local merchant, told Reuters.

"We've had landslides before, but never anything this bad. People are trying to find their families and waiting for more rescuers."

Rescue workers told Chinese state television that the thick mud and wreckage made it impossible to use heavy machinery.

"Now the sludge has become the biggest problem to rescue operations. It's too thick to walk or drive through," said the head of Zhouqu county.

Tents, food and medical supplies are being rushed to the area, but the remote, mountainous location is making access difficult.

http://www.bbc.co.uk/news/world-asia-pacific-10905399

 

[Martian]

Shenzhen's $13,600 U.S. dollars per capita GDP in 2009

Shenzhen celebrates its 30th anniversary as China's first SEZ

http://news.asiaone.com/News/Latest%2BNews...804-230418.html

"Shenzhen's new beginning on 30th anniversary
Wed, Aug 04, 2010
China Daily/Asia News Network

SHENZHEN, CHINA - Shenzhen, China's first special economic zone (SEZ), plans to explore new economic development methods as well as improve its citizens' happiness index in its future, Shenzhen Party Chief Wang Rong said on the eve of preparing for the SEZ's 30th anniversary.

The economic zone will restructure its economic pattern and take the scientific development path to build itself into an international metropolitan, capable of competing with Hong Kong, Singapore as well as big cities in the US and Europe, Wang told reporters Tuesday at a news briefing.

He also said making Shenzhen people feel happier is another important goal besides maintaining GDP growth, admitting that compared with some inland cities, Shenzhen has not done as well in offering security for young people working in the city.

Shenzhen, which was originally a coastal village, took off economically after it was approved to become an SEZ on August 26, 1980. Now the city is among China's most developed regions and boasts a per capita GDP of $13,600 in 2009.

It is also home to some leading Chinese enterprises such as telecommunication giants Huawei, ZTE, internet company Tencent and electric car maker BYD.

Wang said he is confident that these companies will remain in Shenzhen despite rumors that some of them will move their headquarters. He believed the city still has great potential as long as its economic pattern is successfully transformed."

 

[Martian]

"China will remain a leading manufacturing economy for the next 100 years"

Chongqing, China

Chongqing at night

Economist Intelligence Unit: Chinese Manufacturing's Real Strength Will Be Higher End Products The West Loves To Make

"Economist Intelligence Unit: Chinese Manufacturing's Real Strength Will Be Higher End Products The West Loves To Make
Vincent Fernando, CFA | Jul. 19, 2010, 5:05 AM

The Economist Intelligence Unit (EIU, of The Economist magazine) believes China wage inflation fears are overdone relative to manufacturing competitiveness.

Despite massive wage inflation, China will remain a leading manufacturing economy for the next 100 years due to the economies of scale set up within the nation, the huge domestic market, plus the ability of manufacturers to move up the value chain.

The key point is that China already has more expensive labor costs than Vietnam; its real bread-and-butter of the future won't be the low-end manufacturing many people like to imagine is the heart of China's competitive advantage.

China Daily:

"A lot of people tend to think when you can just head further inland you start hitting upon these bottomless pools of surplus labor enabling you to hold costs down indefinitely. We really don't see that happening," said van Kemenade.

The analyst added that the manufacturing emerging in the major inland cities such as Chongqing did not tend to be companies seeking ever cheaper labor but often those looking to set up advanced manufacturing facilities aimed at producing goods for the China market.

"The major investment, much of it foreign, that you have seen in these inland cities has not been the type that typically follows the cheapest sources of labor. It has been fairly high value-added advanced manufacturing," he said.

They'll move into ever-higher value products, and already are."

I believe the Economist Intelligence Unit is correct in their assessment. Manufacturing plants that produce notebook computers need to move to inland cities like Chongqing. As I understand it, Shanghai has higher aspirations of becoming the financial center of China.

 

[Martian]

Retail Sales of Consumer Goods in China Will Top $2.2 Trillion U.S. dollars in 2010

Shopping mall in Dalian, China

Retail Sales of Consumer Goods in China Will Top $2.2 Trillion in 2010 - AdAgeChina - Fast Facts

"Retail Sales of Consumer Goods Will Top $2.2 Trillion in 2010
Cars Are Now a Leading Industry in China

by Normandy Madden
Published: June 09, 2010

BEIJING (AdAgeChina.com) -- Retail sales of consumer goods in China will maintain a 20% growth rate to exceed RMB 15 trillion ($2.2 trillion) in 2010, according to the Chinese Academy of Social Sciences.

The academy's latest China commercial development report said automobile sales have become a leading industry. In 2009, 13.6 million cars were sold in China and the figure may surpass 15 million units in 2010.

Online shopping is another bright spot, particularly for sales of home appliances. The value of online shopping accounted for 2% of total consumer goods sales in 2009, up from 1% in 2008. That figure is expected to double again by the end of this year to reach RMB 500 billion ($73.2 billion)

Source: Asia Pulse"

 

[Martian]

"China is the largest software market in Asia/Pacific"

Xiamen, China

"Xiamen Software Park, the Silicon Valley in Haixi Zone"

China's software industry revenue up 29.1% in H1

"China's software industry revenue up 29.1% in H1
(Xinhua)
Updated: 2010-07-27 10:04

BEIJING - Revenue in China's software industry rose by 29.1 percent year on year to 604.8 billion yuan ($89.34 billion) in the first half of 2010, the Ministry of Industry and Information Technology (MIIT) said Monday.

The speed of the growth was 6.4 percentage points higher than the same period last year, said a statement on the MIIT website.

Further, export volume of software grew by 22.7 percent to $10.33 billion in the first six months, but the speed of the growth was 6.4 percentage points lower than the average level of the industry, the statement said.

Furthermore, outsourcing services provided by the country's software industry rose by 38.8 percent to $1.23 billion, though the growth speed was 25.7 percentage points lower than the previous year.

However, experts note that the development of China's software industry remains unbalanced. The eastern regions finished 529.3 billion yuan of software business revenue, about 87.5 percent of the country's total business volume."

"Xiamen Software Park is divided into four functional areas: Information Technology Technical Support Area, ACG Area, Software R&D and IC Design Area and Administrative Area."

"The entire park caters to 40,000 employees."

Gartner says China will be World's Fastest Growing Enterprise Software Market Through 2013

"Gartner says China will be World's Fastest Growing Enterprise Software Market Through 2013

Manufacturing, Financial Services, Telecommunications and Government Remain Top Spending Sectors

Hong Kong, SAR China, March 18, 2010 —  China's enterprise software market is forecast to maintain its strong performance, with an estimated compound annual growth rate (CAGR) of 14.6 per cent from 2008 to 2013 – the highest growth rate in the world, according to Gartner, Inc. Despite current global conditions, the software market in China is expected to rebound to an annual growth rate of 14.8 per cent in 2010. Gartner analysts said that the increasing globalization of the Chinese economy is leading to a growing need for modern software with the latest features and improved functionality.
...
According to Gartner's latest forecast[1], in 2010 China will for the first time surpass US$6 billion in [enterprise] software revenue in 2010. China is the largest software market in Asia/Pacific, and the country is forecast to account for 27 per cent share of the region's revenue in 2010, the equivalent to 2.7 per cent of the total worldwide software market share. By 2013, China's share of the software market in Asia/Pacific is expected to reach 30 per cent, representing US$9.4 billion in revenue or 3.3 per cent of total worldwide software market revenue. Compared with mature countries in the Asia/Pacific region such as Australia (with 21 per cent share of regional spending in 2010), the software market in China is still relatively young and evolving.

The top four major vertical industries in terms of software spending are manufacturing, financial services, communications and government. Gartner estimates that in total these industries account for 60 per cent of total [enterprise] software spending in China."

 

[Armand2REP]

Retail sales for the first half of 2010 have averaged 18% growth, not 20% and they dropped last month. So much for CCP's "prediction."

 

[Martian]

China and Taiwan have caught up with U.S. advanced five-axis machine tools

Advanced high-precision five-axis machine tool fabricating an engine block

"Foreign companies in China and Taiwan have caught up with U.S. technical capabilities, rendering stringent U.S. export controls moot." (see first paragraph in news article)

Let's do the math. From the seventh paragraph, 45 foreign companies produce advanced five-axis machine tools in the BRIC+Taiwan countries. "China has 20 indigenous five-axis machine tool companies; Taiwan has 22." 45 - 20 (in China) - 22 (in Taiwan) = 3 left in Brazil, Russia, and India combined.

For comparison, "there are six American companies dedicated to producing five-axis machine tools." (see fourth paragraph in news article)

U.S. Precision Machine Tool Industry Is No Longer A Global Competetitive Force

"U.S. Precision Machine Tool Industry Is No Longer A Global Competitive Force

March 5, 2010 Volume 17, No. 4
By Richard A. McCormack
[email protected]

U.S. producers of some of the most technologically advanced machine tools are in trouble, according to an assessment by the Department of Commerce. Sales of high-precision five-axis machine tools are declining. U.S. share of global exports is in a free fall. Foreign companies in China and Taiwan have caught up with U.S. technical capabilities, rendering stringent U.S. export controls moot. U.S. companies are being purchased by foreign rivals. A lack of training programs has created a shortage of skilled workers able to use the complex machinery. Commercial and U.S. government customers prefer foreign machine tools. Export controls are hampering foreign sales. The entire U.S. machine tool industry spends only $1 million a year on research on five-axis machine tools.

These are some of the findings from a "Critical Technology Assessment" conducted by the Commerce Department's Bureau of Industry and Security.

U.S. producers of five-axis machine tools had sales of $253 million in 2008, down 11 percent from 2005 sales of $284 million. That was before the U.S. machine tool industry suffered a meltdown in 2009, when domestic consumption tumbled by 60.4 percent, according to the Association of Manufacturing Technology.

Sales of five-axis machines to domestic customers from U.S. producers declined by 19 percent from 2005 to 2008, from $242 million in 2005 to only $195 million in 2008. There are six American companies dedicated to producing five-axis machine tools, and at least 20 in China. Five-axis tools are used for the production of precision components in the aerospace industry, in making gas and diesel engines, automobile parts, and throughout the medical, textile, oil, glass, heavy industrial equipment and tool industries. "Many other industries are discovering the advantages of these machines," says the Bureau of Industry and Security (BIS).

Yet "only a handful of U.S. producers actually manufacture five-axis machine tools in high volume and most generate less than 10 percent of their annual net finished machine tools sales from five-axis machine tool business lines," according to the market and technology research report from BIS.

U.S. producers of five-axis machine tools exported only $58 million worth of equipment in 2008. In a tally of global exports of all machine tools, the United States -- with exports of $740 million -- accounted for only 4.3 percent of global exports in 2007.
...
BIS also assessed foreign producers of five-axis machines. It found that not one of the 45 companies that are indigenous to Brazil, China, India, Russia and Taiwan use U.S. technology, parts, components or materials. China has 20 indigenous five-axis machine tool companies; Taiwan has 22. None of these companies have to deal with the types of export restrictions facing American firms. As a result, these companies are able to produce all the machine tools that are in demand in China and Taiwan, plus they are "able to produce in sufficient quantity to export to other LRCs," says BIS.

One of China's five-axis machine tool makers has 24 distinct models. China now has 28 companies capable of building more than 1,000 CNC machine tools. There are 130 Chinese companies with annual capacity of more than 100 machine tools. The country is now supplying most all of its own demand, with only 10 percent of the market being supplied through imports. "In 2005, approximately 59,600 units of CNC machine tools were produced in China," according to the BIS report. In 2007, the combined amount of CNC metal-cutting and forming tools produced in China was 126,268, more than double the amount produced in 2005. China is now supplying its own demand for five-axis machine tools used throughout its military.

The BIS quotes the Export Compliance Working Group of the American Chamber of Commerce in the People's Republic of China as saying: "Given the existing domestic and joint venture development and the foreign availability of high-level machine tools, U.S. companies could not make a material contribution to China's military development. China's military demands are already satisfied by domestic and foreign supply."

The United States exported 515 five-axis machine tools between 2005-2007, and only 12 of these went to China. DMTG, China's largest producer of machine tools, exports products to more than 100 countries.
...
The report is located at U. S. Bureau of Industry and Security defenseindustrialbaseprograms/osies/defmarket researchrpts/final_machine_ tool_report.pdf."

 

[Martian]

China to Have World's Second-Largest Fiscal Revenue

At current exchange rates, China's fiscal revenue for this year will total approximately $1.28 trillion U.S. dollars.

China to Have World's Second Largest Fiscal Revenue- Economic Observer News- China business, politics, law, and social issues

"China to Have World's Second Largest Fiscal Revenue
By Xi Si
Published: 2010-07-02

News, Page 4, Issue 475, June 28
Translated by Tang Xiangyang

China is expected to collect a government revenue of eight trillion yuan this year, giving it the second largest fiscal revenue in the world. America has the largest.

While the growth rates of fiscal revenues of developed countries have been around one percent or even negative in the first five months of this year, China's growth rate has been 30.8 percent.

By June, many provinces had already gained half of their planned annual fiscal revenue, one month ahead of schedule. "China should not have a problem in achieving a revenue growth of 10 percent in the second half of this year," an official with the State Administration of Taxation (SAT) said.

Ensuring that the increasing fiscal revenue will be used to improve the livelihood of ordinary people is an issue the Chinese government must deal with.

Eight Trillion Yuan!

China collected a government revenue of 3.547 trillion yuan in the first five months of this year, 836.2 billion yuan more, a 30.8 percent increase, from that of the same period last year, and 200 billion yuan more than the total amount of the first half of last year. The world has been taken by surprise by the huge amount of fiscal revenue China has managed to gain despite the financial crisis.

The amount of fiscal revenue China earned in June is not known. But, according to an official with the SAT, based on statistics from the first half of June, June's growth rate will decrease, but will not reach zero.

Officials with the Ministry of Finance said fiscal revenue would experience a high growth rate in the first half of this year and growth would slow in the second half.

Based on conservative estimates, China will gain a fiscal revenue of over 4.3 trillion yuan in the first half of this year and its total revenue for the year will exceed eight trillion yuan. Earlier this year, China released its budget which showed its plans to collect 7.4 trillion yuan in fiscal revenue.
...
Cutting the Cake

The cake is getting bigger and bigger; there has been continual discussion on how to divide up the slices of China's fiscal revenue. Though the government has been putting more into social security, health care and education, people are still not satisfied with the growth rate of these types of investments.

The first task of the income distribution reform project drafted by the National Development and Reform Commission (NDRC) is to increase the amount of fiscal revenue that is spent on improving China's social security system."

 

[Martian]

China is the 3rd largest and fastest-growing export market for U.S. products

Exports to China surge, no thanks to the yuan - Aug. 3, 2010

"Exports to China surge...
by Sheridan Prasso, contributing editor
August 3, 2010: 10:20 AM ET

FORTUNE -- U.S. exports to China remained surprisingly resilient throughout the recession, holding steady last year while dropping nearly 20% to the rest of the world.

Even better news? U.S. exports to China rose 39% in the first five months of this year, to $38.5 billion, according to a new study [see http://www.uschina.org/public/exports/2000_2009/full_state_report.pdf] from the US-China Business Council (USBC), which tracks exports by state. Those numbers put the value of U.S. exports on track to exceed a record $90 billion this year. U.S. exports to China totaled $69.6 billion in 2009, more or less equal to the 2008 figure of $69.7 billion. They've already risen 330% since 2000, when China joined the World Trade Organization, compared to rising only 29% to the rest of the world.

California, Washington, Texas, and Louisiana topped the list of exporting states, sending primarily computers and electronic equipment, farm crops, and chemicals to Chinese shores, according to the USBC report. Transportation equipment and waste and scrap materials rounded out the list.

Ohio, Pennsylvania, Illinois, and Michigan also remained among the top 15 exporting states to China. "Even with a global recession, American businesses and American workers continue to benefit from expanding opportunities to sell high-value manufactured goods to the China market," says USCBC President John Frisbie. "China is the only major trading partner to which U.S. exports are growing fast enough to meet the President's goal of doubling exports in the next five years."

China is now the third-largest export market for U.S. products and the fastest-growing by far. Export growth to the other top U.S. export markets in the 2000-2009 period -- Canada, Mexico, Japan, and Britain -- has been significantly slower, the USCBC says."

 

[Martian]

China's ICBC is world's most-profitable bank

From left: Bank of China, ICBC, and Citibank towers in Hong Kong

China Construction Bank is world's second most-profitable bank

World's most-profitable banks for 2009

World's-largest bank market-capitalization

Chinese banks turning into modern global financial giants - The China Post

"Chinese banks turning into modern global financial giants
Updated Tuesday, July 20, 2010 1:12 pm TWN, By Grace Ng, The Straits Times/Asia News Network

BEIJING -- Chinese folklore claims the world's first modern bank — complete with credit issuance and central bank regulation — originated in the early 11th century, amid flourishing cross-border trade during the Yuan dynasty.

Almost a millennium later, a rising dragon economy wants to show off to the world its modern banking giants, just as it did with other inventions from the printing press to gunpowder — which the Middle Kingdom claims credit for and which the West capitalized on.

And everyone is watching in awe.

China has the world's most profitable bank, four of the world's top 10 banks by market value, some of the world's largest bank loan books — and now, one of its newly listed banks may claim the title of the world's largest initial public offering.

With the debut of Agricultural Bank of China (AgBank), which raised US$19.2 billion, in Hong Kong and Shanghai last week, China's five state-owned listed behemoths are now squarely dominating the global banking domain.

By their sheer asset size, these lenders have ruled the roost for a few years.

The combined assets of Industrial and Commercial Bank of China (ICBC), China Construction Bank Corp (CCB), Bank of China (BOC), Bank of Communications and AgBank totaled 43 trillion yuan (US$6.3 trillion) as of the end of March.

This accounts for half of the domestic banking sector and is roughly the size of China's gross domestic product last year.

Their meteoric rise has confounded market watchers worldwide.

In just two decades, they have transformed themselves from debt-ridden basket cases financing wastrel state-owned enterprises, into some of the world's most profitable outfits.

ICBC, for instance, topped The Banker's annual rankings as the world's most profitable bank, with pre-tax earnings of US$24.5 billion last year, followed by CCB with US$20.3 billion.

It is an impressive show of earnings power, even if their internal controls and systems may still not be on a par with those of the West.

"The irony is that 10 years ago, China's banks were among the weakest in the world and today they are among the strongest, however primitive their system," Pieter Bottelier, an economics professor at Johns Hopkins University and former World Bank official, told Newsweek last year.

Chinese banks have also become significantly more sophisticated in recent years.

While retail lending activities still make up the bulk of revenue — up to about 80 percent for the rural-focused banks — they are moving into areas like corporate and investment banking by recruiting aggressively and occasionally poaching whole teams from Western banks.

ICBC recently recruited banking star Zhang Hongli — former chairman of Deutsche Bank's China operations — as deputy president, to beef up its investment banking operations.

Meanwhile, BOC's investment bank is making a name for itself in Hong Kong. It was one of eight underwriters for Hong Kong-listed UC Rusal's US$2.55 billion flotation in January.

And five Chinese banks — both state-owned and state-linked ones — are in the top 10 core investment banking revenue earners in Asia excluding Japan, according to data tracker Dealogic.

The only area in which these state-owned banks have no foothold or state-boosted advantage is private banking.

"Which rich person in China is so stupid that he would let a state-owned bank manage his money?" asked one Hong Kong banker who declined to be named.

"But for investment and corporate banking, some of the bigger players like ICBC may well be keen rivals to Goldman Sachs and JP Morgan for Asian mandates in the next five to 10 years," he added.

For foreign investors, Chinese bank stocks may look like a must-have part of their portfolios, to tap China's heady economic growth over the coming years.

Chinese Academy of Social Sciences research fellow Yi Xianrong said: "Chinese banks are profitable and they are a much safer bet than Western bank stocks

"At the very least, when you say the Chinese banks are too big to fail, you know it's true — the Chinese government will never let them fail."

Yet even with China's top-three listed banks all posting record first-quarter earnings, and AgBank saying before its IPO that it expects a 40 percent jump in first-half net profits compared to last year, to 46 billion yuan, Chinese bank shares have had a rough year in the stock markets.

Some are hovering near 52-week lows, while their price-to-book ratios have fallen to less than two since April.

This is lower than other Hong Kong-traded bank shares such as Hang Seng Bank, which are trading at more than three times their book value.

It is because of this that some analysts have turned bullish on Chinese bank stocks. CCB's attractive valuation has won it "buy" or "overweight" ratings from the majority of analysts recently polled by Starmine, a company that tracks the performance and calls of equity analysts.

But others are worried about the risks of rising non-performing loans at Chinese banks.

"The banks lent heavily to the property sector and to fund local government projects in the stimulus measures last year. These areas may face problems this year, and the banks will face significant risks," said finance professor Mei Jun of Renmin University.

As the big state-owned banks push on with their ambitions to expand operations abroad, especially in emerging markets from Africa to Latin America, there are also concerns about whether they are overstretched and overly exposed to global financial sector risks.

"Chinese banks are now shielded because they are focused on the domestic market, where the government can help protect their market share," said Professor Li Jiming of Zhejiang University City College's business school.

Their risks will rise as they expand abroad, "but it is the price they must pay — and want to pay for world domination," said Hong Kong-based analyst Charlie Chu."

 

[Daredevil]

Jai Ho to the Chinese capitalism and greed.

87 school children fall sick in China after eating yoghurt

PTI, Sep 4, 2010, 05.29pm IST

BEIJING: Eighty seven children at a kindergarten have fallen ill in China's northwest Gansu Province after apparently consuming yoghurt.

The children at a school in Lanzhou city developed symptoms including stomach distress, vomit and fever.

A panel of experts ruled out the possibility of food poisoning, but they said the incident could be related to yoghurt provided at the kindergarten early yesterday afternoon, official Xinhua news agency reported.

All the sick children were being treated at a local hospital. Forty of the 87 hospitalised children have been discharged from the hospital.

Product safety scandals persist, despite the Chinese government's repeated vows to tighten up the apparent lax supervision of its giant food industry.

Huge amounts of the industrial chemical melamine were found in 2008 to have been illegally added to dairy products to give the appearance of higher protein content.

The scandal was blamed for the deaths of at least six infants and for making 300,000 others ill in China.

 

[nitesh]

one more lie:

BBC News - Chinese pilots lied about flying records

 

[Ray]

China is making a mistake buying foreign bonds.

There is a good chance that they will be left with mere scraps of paper since the Western countries' recovery does not seen to be observed on the horizon!

 

[Martian]

Chinese Offshore Development Blows Past U.S.

There is more good news from the New York Times. The most important fact from the article is that China co-designs, builds, and retains the intellectual property right to its wind turbines and related technologies. "All of China's top five turbine manufacturers have worked with foreign engineers yet retained the intellectual property rights on the technologies."

image via CleanTechnica

Chinese Offshore Development Blows Past U.S. - NYTimes.com

"Chinese Offshore Development Blows Past U.S.
By MANUELA ZONINSEIN of ClimateWire
Published: September 7, 2010

As proposed American offshore wind-farm projects creep forward -- slowed by state legislative debates, due diligence and environmental impact assessments -- China has leapt past the United States, installing its first offshore wind farm.

Several other farms also are already under construction, and even the Chinese government's ambitious targets seem low compared to industry dreaming.

"What the U.S. doesn't realize," said Peggy Liu, founder and chairwoman of the Joint U.S.-China Collaboration on Clean Energy, is that China "is going from manufacturing hub to the clean-tech laboratory of the world."

The first major offshore wind farm outside of Europe is located in the East China Sea, near Shanghai. The 102-megawatt Donghai Bridge Wind Farm began transmitting power to the national grid in July and signals a new direction for Chinese renewable energy projects and the initiation of a national policy focusing not just on wind power, but increasingly on the offshore variety.

Moreover, "it serves as a showcase of what the Chinese can do offshore ... and it's quite significant," said Rachel Enslow, a wind consultant and co-author of the report "China, Norway and Offshore Wind Development," published in March by Azure International for the World Wildlife Fund Norway.

Planned to strategically coincide with the World Expo in Shanghai, which is being fed electricity from the offshore farm, China is ready to show the world what its own homegrown wind technology can do.

All of Donghai Bridge's 34 turbines, 3 MW capacity each, were built by Sinovel Wind Group, China's largest wind turbine manufacturer, though designed in cooperation with American Superconductor. The Beijing-based company began building the farm at the mouth of the Yangtze River Delta in September 2008. CCCC Third Harbor Engineering Co. Ltd., also based in Beijing, installed the turbines, completing construction in February 2010. Shanghai's Zhongtian Technologies Submarine Optic Fiber Cable Co. Ltd. manufactured the 78 km of submarine cable.

Powering 200,000 households while reducing CO2

In China, one key challenge will be developing foundations for the soft seabed commonly found off the coast of the East China Sea, especially since "most offshore wind farms that will be developed in China will be intertidal," said Gerald Page, managing director of Equinox Energy Partners, a venture capital firm in Beijing.

The $337 million project, located 8 to 13 km (about 5 to 8 miles) from the coast, was erected on soft seabed conditions using a multi-pile foundation structure. About eight to 10 legs are placed on concrete piles, on top of which are stacked a concrete tack and then the turbines. Shanghai Investigation, Design and Research Institute conceived the foundation.

During low tide, the turbine foundations are exposed; during high tide, they become submerged in about 5 meters (16 feet) of water. Unlike in Europe, which is much more focused on developing deepwater (greater than 50 meters, or 164 feet, deep) turbine technology, China is exploring unique foundation technology and demonstrating innovative pursuits.

The farm is expected to eventually generate an annual 267 million kilowatt-hours of electricity -- enough to power 200,000 Shanghai households. China's government claims that annually, the wind farm will cut use of 100,000 tons of coal, reducing carbon emissions by 246,058 tons.

Currently, the wind farm's capacity is equivalent to only 1 percent of the city's total power production of about 18,200 MW, which is generated mostly from traditional fuel-based sources, according to China Daily, the state-run English-language daily newspaper in Beijing.

Construction of the Donghai project's second phase, on the west side of the bridge, has been approved by authorities. It, too, is projected to produce about 100 MW. An additional four farms surrounding Shanghai are currently under negotiation, and the city hopes to complete 13 wind farms by 2020, with the majority of the expected 1,000 MW capacity supplied by offshore wind farms.

An industry's itch to expand

The "Development Plan on Emerging Energies" released July 20 outlines wind production goals through 2020 by the Chinese government.

According to the plan, offshore wind power is expected to reach 30 gigawatts, and coastal provinces were required to start drafting offshore wind-grid implementation plans. This includes Liaoning, Shandong, Jiangsu, Shanghai, Zhejiang, Fujian and Guangdong provinces. In the next three to four years, according to the Azure-WWF report, in total, 514 MW should be installed along this coastline. As of March this year, pipelines accommodating 17 MW were already installed between Donghai and a pilot wind project in Bohai Bay near Tianjin.

The expected long-term cumulative pipeline, at 13.7 GW, is nearly halfway to the estimated 2020 goal, but this doesn't necessarily mean that the Mandarins are fully behind renewable technologies and warmly welcoming a greener future.

"The top-level people are cautiously optimistic," explained Andrew Grieve, a senior researcher at J Capital Research, an equities research company based in Beijing. "They are far more optimistic on the local and provincial level."

Behind closed doors, industry insiders hear buzz and speculation that coastal provinces' plans far exceed the existing Chinese central government's plans.

Grieve stressed that the real force for wind comes from manufacturers that are itching to expand the market. "Comparatively speaking," he said, "the central government is the most conservative of the lot."

All this is without official numbers, as the 12th Five-Year Plan (for the 2011-2015 time period) has still not been formally unveiled. It remains in final draft form, and though the original release date was slated for March, approval keeps moving backward. Analysts expect the implementation date should, at the latest, arrive on Jan. 1, 2011.

The central government's aim was to hit 10 GW by 2010, a goal that was quickly surpassed.

"Industry is either going to take their number and beat it, or government is going to have to step in and calm down growth," Grieve said. Rumors support the latter, but given historical trends, the former would seem more likely.

The Azure-WWF report describes the offshore wind energy generation potential in China as huge -- calculated as 11,000 terawatt-hours, similar to that of the North Sea in western Europe.

"China has the largest wind resources in the world, and three-quarters of them are offshore," Barbara Finamore, director of the Natural Resources Defense Council's Beijing office, told Scientific American.

The existing industry is nowhere near that large. As Grieve explained, "apart from the 1 gigawatt of bids this year, there are no central government national targets for offshore wind, although possible national targets of 5 gigawatts by 2015 and 30 gigawatts by 2020 have been suggested." The provincial government-proposed provincial offshore development plans amount to 10.2 GW by 2015 and 22.7 GW by 2020.

The growth in China's wind manufacturing market remains focused on the domestic market -- for now. Dheeraj Choudhary, who runs Parker Hannifin Corp.'s Global Renewable Energy business unit, said "60 to 70 percent of wind turbine market growth has come from domestic manufacturers, and not the international guys."

Joanna Lewis, an assistant professor of science, technology and international affairs at Georgetown University who works as a China program adviser to the Energy Foundation, agreed: "No one has nearly as much capacity [as China] installed in the world." As a result, there is still "very strong demand for wind turbines in China, and they're not at stage where supply exceeds demand."

Eyeing markets abroad

Talk to wind turbine and technology experts and manufacturers, and they see a day not too far off when Chinese-produced (and in some cases, Chinese-invented) turbines will service foreign markets.

Anthony Fullelove, project manager for North Brown Hill Wind Farm, based in Sydney, Australia, expects that his country, as well as Europe and the United States, will see a sharp increase in turbines sourced from China -- as the technology rises to meet global standards and prices drop -- to make wind farms viable especially in a generation sector without a carbon price.

"Turbine manufacturers in China are starting to look for markets abroad upon seeing Chinese market getting tighter and tighter, with more companies selling in China," Lewis added.

For the time being, Chinese manufacturers still work hand in hand with foreign engineers and designers. But that is starting to shift.

"Reliance is much lower," noted Choudhary. Instead, Chinese manufacturers look to foreign companies to provide subsystems and components. All of China's top five turbine manufacturers have worked with foreign engineers yet retained the intellectual property rights on the technologies.

Meanwhile, as China moves forward with installing water-based wind farms as well as developing its domestic technological know-how, not a single offshore wind turbine is in use in the United States.

Though the 130-turbine Cape Wind project, in Nantucket Sound off the coast of Massachusetts, has received federal approval, several potential regulatory and judicial hurdles lurk. Similarly, the Rhode Island Public Utilities Commission recently approved a power purchase agreement proposed for the Block Island farm off of Rhode Island, which would start with an initial eight turbines as a model, yet Attorney General Patrick Lynch (D) has vowed to appeal the decision to the state Supreme Court.

When discussing the creation of an Atlantic Offshore Wind Energy Consortium in February, U.S. Interior Secretary Ken Salazar said it currently takes seven to nine years for offshore wind project to receive approval. At this point, Cape Wind is moving into its 10th year of negotiations.

In comparison, China's Renewable Energy Law was implemented in January 2006. By November 2007, the Bohai model turbine was installed. So important was the Donghai farm to the Chinese Communist Party, it footed the bill to ensure the project would be completed in time for Expo 2010 in Shanghai, during which time China has the eyes of the whole world watching."