Archive for February, 2013


* A Silicon Valley Campus with Chinese Characteristics

Reuters: “Like most of China’s high-tech manufacturers, Semiconductor Manufacturing International Corp. is located in an outsized and relatively isolated technology park.

But unlike the bulk of China’s electronics manufacturers, which set up cramped dormitories and massive dining facilities to manage legions of workers who come to do basic assembly, SMIC’s campus is actually pleasant.

Located within walking distance of its production facilities, apartment buildings in SMIC’s residential zone are brightly painted and framed by well-manicured trees. A short stroll across a canal leads to an area populated by villas that seem more suited to an American Sun Belt suburb than a technology park in Shanghai’s Pudong district.”

via A Silicon Valley Campus with Chinese Characteristics – China Real Time Report – WSJ.


* China nears approval of $16 billion domestic jet-engine plan

Xinhua: “China’s cabinet may soon approve an aircraft engine development program that will require investment of at least 100 billion yuan ($16 billion), state-run Xinhua news agency quoted unidentified industry sources as saying.

A woman walks past the Aviation Industry Corporation of China (AVIC) headquarters building in Beijing October 30, 2012. REUTERS/Jason Lee

China is determined to reduce its dependency on foreign companies like Boeing Co (BA.N), EADS-owned Airbus (EAD.PA), General Electric Co (GE.N) and Rolls Royce Plc (RR.L) for the country’s soaring demand for planes and engines.

So far the domestic aerospace industry has failed to build a reliable, high-performance jet engine to end its dependence on Russian and Western makers for equipping its military and commercial aircraft.

Xinhua on Thursday quoted an unidentified professor at the Beijing University of Aeronautics and Astronautics (BUAA) with knowledge of the project as saying the investment would be used mainly for research on technology, designs and materials related to aircraft engine manufacturing.

The project was going through approval procedures in the State Council and may be approved shortly, the professor was quoted as saying.

Participants in the project include Shenyang Liming Aero-Engine Group Corp, AVIC Xi’an Aero-Engine (Group) Ltd (600893.SS) and research institutes including the BUAA, Xinhua reported.

Aviation Industry Corporation of China (AVIC), the country’s dominant military and commercial aviation contractor, had lobbied the government to back a multi-billion dollar plan to build a high-performance jet engine.”

via China nears approval of $16 billion domestic jet-engine plan: Xinhua | Reuters.


* New top diplomats in China signal focus on U.S., Japan, North Korea

Reuters: “China is signaling that it is keen to get on top of troubled ties with the United States, Japan and North Korea with the likely appointment of two officials with deep experience of these countries to its top diplomatic posts.

Chinese Foreign Minister Yang Jiechi attends a joint news conference with his Russian counterpart in Moscow February 22, 2013. REUTERS/Maxim Shemetov

Current Foreign Minister Yang Jiechi, ambassador to Washington from 2001-2005 and a polished English speaker, is tipped to be promoted to state councilor with responsibility for foreign policy, three independent sources said. China has only five such councilors and the post is senior to that of foreign minister.

Yang, 62, will likely be replaced as foreign minister by Wang Yi, China’s ambassador to Japan from 2004 to 2007 and a one-time pointman on North Korea. Both will be appointed during March’s annual full session of parliament, the sources said.

“Yang Jiechi will be in the driving seat, he knows a lot about Sino-U.S. relations,” said Jean-Pierre Cabestan, a China expert at Hong Kong Baptist University.

“China-Japan is high on the list (too) … With Shinzo Abe and the LDP back in the saddle in Tokyo, I’m sure they’re a bit concerned about the right wing twists of domestic politics and Japanese foreign policy as well.””

via New top diplomats in China signal focus on U.S., Japan, North Korea | Reuters.


* Apple Acts to Crack India Market for iPhone

WSJ: “Apple Inc.  is overhauling its iPhone operations in the crucial Indian market, attempting to chip away at Samsung Electronics Co.’s  dominance by adjusting to the country’s retailing rules and convoluted distribution process.


But the Cupertino, Calif., company still has a long way to go.

That’s no small matter as Apple’s growth slows in the U.S. and other mature markets. India is poised to become the world’s third-largest smartphone market this year, behind China and the U.S., according to Strategy Analytics.

Apple doesn’t have any of its own retail outlets in India and relies on distributors and resellers, such as this Croma store in Mumbai.

Apple is sidestepping wireless carriers to seize greater control over marketing in India and offering no-interest loans to lure lower-income consumers. The company has also boosted staff in India by 30% to 170 employees in the past six months. And it is ramping up the introduction of other products, with the Apple TV video-streaming gadget expected to reach stores in coming weeks, people familiar with the matter say.

The result is that Apple shipped more than 252,000 iPhones to India in the quarter through December, more than triple the number in the previous three months, according to research firm Canalys.

Yet Apple accounts for just 5% smartphone shipments to India, compared with 40% for market leader Samsung. The South Korean company surged ahead by making India a high-priority market earlier than Apple did and offering a range of phones based on Google Inc.’s  Android software that start at just over $100. An older generation iPhone sells for around $500 while the latest model starts at nearly $850.”

via Apple Acts to Crack India Market for iPhone –


* Chinese Intellectuals Urge Ratification of Rights Treaty

NYT: “More than 100 Chinese scholars, journalists, lawyers and writers urged their national legislature on Tuesday to ratify a major human rights treaty, in the latest challenge from intellectuals seeking to curtail arbitrary Communist Party power.

Flag of the Chinese Communist Party 贛語: 中國共產黨黨...

Flag of the Chinese Communist Party  (Photo credit: Wikipedia)

The petition calling on the party-controlled National People’s Congress to ratify the International Covenant on Civil and Political Rights came a week before the congress holds its annual full session, which is to install Xi Jinping as China’s president, succeeding Hu Jintao.

Copies of the document appeared on Chinese blogging Web sites and Internet forums, but were often often removed and quickly reappeared. It was unclear whether government censors demanded the removals.

The proposal “was originally intended for a Thursday release through a prominent Chinese newspaper,” David Bandurski, a researcher at the China Media Project of Hong Kong University, wrote in a comment on a translation of the petition. “Authorities, however, learned of the letter by late Monday and the authors had no choice but to release it to the public” on Tuesday, Mr. Bandurski wrote, citing unnamed sources.

Ratification of the treaty would “promote and realize the principles of a country based on human rights and a China governed by its Constitution,” the petition said. “We fear that due to the lack of nurturing of human rights and absence of fundamental reverence and assurances for individuals’ freedom, rights and dignity, if a full-scale crisis breaks out, the whole society will collapse into hatred and brutality.”

The call, also circulated by e-mail, carried the names of 121 backers, including several who said they lived in Hong Kong or Macau.

The petition was the latest display of the demands for political change confronting China’s new leadership. Several people who signed it said they hoped to press Mr. Xi and his colleagues to live up to vows of greater respect for the rule of law and citizens’ rights that Mr. Xi and other officials have made since he became Communist Party leader in November, when Mr. Hu retired from that post.”

via Chinese Intellectuals Urge Ratification of Rights Treaty –


* IKEA Meatball Scandal in China: It’s Not What You Think

WSJ: “At the risk of beating a dead horse, China Real Time feels compelled to update readers on the latest flare-up in the global meat contamination scandal from the Chinese point of view.

According to a report in the state-run China Daily on Wednesday, the Swedish meatballs that furniture retailer IKEA sells in China have stirred controversy– not because they were found to contain equine DNA like some of the company’s meatballs in Europe, but because it turns out they’re made in China.

Agence France-Presse/Getty Images

This picture taken on Feb. 25, 2013 shows meatballs at IKEA department store in Brno, the Czech Republic.

“I thought the meatballs were imported from Sweden,” the China Daily quoted Jiang Tong, an IT worker in Beijing, as saying. “I don’t think I will order such meatballs in the future.”

IKEA’s spokeswoman did not respond to requests for comment. China Daily said the meatballs at IKEA’s China outlets do not contain horsemeat, as the company gets its meatballs, made with beef and pork, from a manufacturer based in China’s coastal Fujian province.

News of horsemeat turning up in beef products sourced in Europe has spread across the globe in recent weeks, hurting the reputations of some of Europe’s biggest food producers. The Wall Street Journal reported on Monday that IKEA has removed meatballs from many of its cafeterias after traces of horsemeat were found in a batch in the Czech Republic.”

via IKEA Meatball Scandal in China: It’s Not What You Think – China Real Time Report – WSJ.


* Pfizer Seeks Alliances in China

WSJ: “New York-based Pfizer Inc.,  the world’s largest drug company, plans to forge more alliances in China as pharmaceutical companies combat shrinking margins in one of the world’s fastest-growing health-care markets.


“We’re open for collaboration,” said Wu Xiaobing, Pfizer’s country manager for China, noting that he is looking for partnerships in the research, manufacturing and marketing of drugs. “If we were alone, it would take such a long time to make our drugs accessible to patients.”

Foreign drug makers are increasingly turning to local partners to expand their access in China, among Asia’s most promising pharmaceutical markets. They are also facing a big wave of patent expirations globally.

Pfizer already has a joint venture in the world’s second-largest economy with Zhejiang Hisun Pharmaceuticals to develop generic drugs, which dominate China’s pharmaceutical sales. Pfizer also has a minority investment in Shanghai Pharmaceuticals Holding Co.,one of China’s largest drug distributors, and its animal health division has a JV with China’s Jilin Guoyuan Animal Health Co. for animal vaccines.

Meanwhile, Merck & Co , the world’s second-largest drug company, recently formed a joint venture with China’s Simcere Pharmaceutical Group  to develop and sell drugs.

“You can expect to see more momentum going forward,” said Jin Wang, a Shanghai-based partner at McKinsey & Co. “Both multinationals and locals are excited by the growth potential in this market, and they are all facing limitations in terms of their portfolio and capabilities, so they’re teaming up.”

via Pfizer Seeks Alliances in China –


* Measures curb illegal ivory trade in China

Today the elephant, tomorrow the rhino and the day after sharks (fin).

China Daily: “China’s strict registration and management system can effectively keep illegal ivory from entering the domestic market, experts say.

Measures curb illegal ivory trade in China

According to Jin Yu, a researcher at Northeast Forestry University, China has launched an information control system stricter than the standards of the Convention on International Trade in Endangered Species of Wild Fauna and Flora, also known as CITES.

Seized elephant tusks are displayed by customs authorities in Hong Kong in October. Ivory smuggling has fallen due to strict law enforcement in China in recent years. [Provided to China Daily]

CITES is an international convention that regulates the ivory trade, and monitors ivory stockpiles, consumption and products.

“On every finished product, there is an ID card with information regarding the product’s appearance, size and digital code, which can be used to obtain further information, including its original material, from an online database,” she said.

“It’s the only way to prove an ivory product is legal and should always be carried when selling or transporting ivory.

“Any trade without such a certificate can be identified as illegal.”

However, lack of expertise and experience may cause inaccurate surveys and reports that lead to allegations that the market has ivory products from illegal sources, Jin said.”

via Measures curb illegal ivory trade in China[1]|


As China matures and its labour policies and pay improves, it will become less competitive for low-cost production. The question is: can China move up the manufacturing value chain fast enough to avoid the predictable problems it will face?

See also:

China Daily Mail

China Trade UnionAs Chinese labour becomes more expensive and a disaffected migrant workforce increasingly stays home, an increasing share of China’s export manufacturing business is drawn to cheaper venues in Southeast Asia.

But this is only the tip of a very large iceberg.  The rise of labour protest in China and the systemic problems which underlie it are one of the main challenges facing the country as modernisation proceeds.

Labour protest have increased rapidly over the past decade.  Incidents of mass protest in China increased by an average of 20% per year between 1993 and 2005, with an average increase in nationally arbitrated labour disputes of 20.6% per year between 2000 and 2007.

Increasingly, labour protests take the form of chain-reaction strikes, in which a single strike will lead to others throughout an industry or geographic area.  In 2010, a strike at a Honda plant  led to a cascade of strikes throughout…

View original post 1,269 more words


* Migrant workers invited to prominent holiday gala

Xinhua: “Four migrant workers were invited to a high profile gala on Saturday evening, which was once mainly reserved for distinguished intellectuals.

Chinese leaders Xi Jinping, Li Keqiang, Zhang Dejiang, Yu Zhengsheng, Liu Yunshan, Wang Qishan and Zhang Gaoli were present at the event organized by the Communist Party of China (CPC) Central Committee to mark the upcoming Lantern Festival.

New guests to this year’s show also include representatives from different sectors and model workers.

Liu Yunshan hosted the gala and in his speech highlighted the contribution of intellectuals and ordinary workers to the country’s achievements and called for joint efforts from ordinary workers in all walks of life to contribute to the nation’s great rejuvenation.

China has 260 million migrant workers by 2012. They usually leave their hometown to seek employments in urban areas.

The Lantern Festival falls on Sunday this year and traditionally marks the end of the Spring Festival season.”

via Migrant workers invited to prominent holiday gala – Xinhua |

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