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04/09/2014

Businessman caught in Colombia is China’s first economic fugitive extradited from Latin America | South China Morning Post

A businessman from Zhejiang province, who was arrested in Colombia over allegations he fled the mainland after leaving debts totalling millions of yuan, was repatriated to China yesterday.

a-yiwu.jpg

The case is the first time the mainland has extradited an economic fugitive from a Latin American country, China News Service reported.

The 35-year-old suspect, whose surname was given as Wu, was arrested in Colombia on August 28, it said.

He owned a trading company in Yiwu city and reportedly fled China on a flight from Shanghai‘s Pudong International Airport on September 9, 2012.

He had allegedly left unpaid debts totalling more than four million yuan (more than HK$5 million).

Zhejiang police launched an investigation into Wu about a month later, and order for his arrest was issued in December 2012.

After cooperating with Interpol, Zhejiang police discovered in July that Wu was in Colombia, said Ding Pinglian, of the Zhejiang provincial police bureau.

Four police officers were then sent to Colombia to assist with Wu’s arrest and extradition.

Wu is expected to stand trial in Yiwu, China News Service reported.

A total of 11 people suspected of economic crime have been repatriated since the Ministry of Public Security launched a campaign to return fugitives in July, the report said.

The ministry said last month that more than 150 mainlanders suspected of economic crimes were in the United States, which had become the “top destination” for Chinese fugitives.

via Businessman caught in Colombia is China’s first economic fugitive extradited from Latin America | South China Morning Post.

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04/09/2014

Democracy for Hong Kong: Unyielding | The Economist

PRO-DEMOCRACY activists announced the start of a “new era of civil disobedience” on the night of August 31st, after China’s top legislature laid down restrictive guidelines on the kind of elections that are allowed in Hong Kong, a semi-autonomous territory. Officials in Beijing had promised to allow the election of Hong Kong’s next leader, in 2017, through universal suffrage. With the announcement China has clarified that there is a catch, a big one: the government sees itself as being under no obligation to allow open nominations for the election’s candidates. Before the announcement, Chen Zuoer, one of the officials who helped negotiate Hong Kong’s handover to mainland China back in 1997, had warned that “blood will be shed” if their opponents refuse to back down.

In a show of defiance, an alliance of activists who support fully open elections held a rally on Sunday night to declare that it would launch waves of protests, culminating in the occupation of the city’s main financial district. Their movement has been many months in the making; they call it “Occupy Central with Love and Peace”. It was first proposed nearly two years ago by Benny Tai, an associate law professor at the University of Hong Kong, in anticipation of a disappointing official interpretation of “universal suffrage”—just like the one that the central government has now given them.

Police arrested at least 22 people during protests that began on Sunday night and carried through Monday morning. The student-union president at the Chinese University of Hong Kong has announced a strike; students there will have a rally of their own on September 4th around a replica of the “Goddess of Democracy” statue that became famous for its appearance in Tiananmen Square in 1989. Other universities are expected to see strikes of their own announced in the next few days.

Many of the participants at Sunday’s rally despair at convincing the bureaucrats in Beijing to change their position—but they feel they need to put up a fight anyway. “Normal protests are no longer useful,” in the words of Agnes Chow Ting, a student protester. She led a failed attempt after the rally to “ambush” a delegation of officials from the central government.

Such actions may attract international attention but indeed, they are less than likely to sway decision-makers in Beijing. Li Fei, a deputy secretary-general of the National People’s Congress Standing Committee, told local politicians on September 1st that the committee believes Hong Kong’s police will be capable of handling any disturbance that might be caused by “a small group of people seeking to undermine Hong Kong”, as he characterises the Occupy movement.

Hong Kong’s current chief executive, Leung Chun-ying, was picked for the role in 2012 by a 1,200-member “election committee”. A reliable majority of that committee were Hong Kongers who will ever be glad to demonstrate loyalty to their counterparts in Beijing.

via Democracy for Hong Kong: Unyielding | The Economist.

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04/09/2014

Water Shortages Will Limit Global Shale Gas Development – Businessweek

If all the world’s theoretically recoverable shale gas could be developed, our supply of clean-burning natural gas would expand 47 percent—lowering both greenhouse gas emissions and energy prices, according to estimates from the Washington-based World Resources Institute.

Shale drilling in China's Sichuan Province

The hitch is that the process for extracting shale gas, called hydraulic fracking, sucks up as much as 25 million liters (6.6 million gallons) of water for each well. A report from WRI (PDF), “Global Shale Gas Development: Water Availability and Business Risks,” released on Tuesday, shows that roughly 38 percent of the world’s shale gas and oil lies buried beneath water-stressed regions. This means that extraction efforts will be difficult and expensive, as well as economically and environmentally risky.

China has the world’s largest estimated deposits of shale gas (1,115 trillion cubic feet), according to studies by the U.S. Energy Information Administration. Yet China is also one of the world’s most naturally water-stressed nations: It is home to a fifth of the world’s population but only 7 percent of its freshwater resources. WRI’s team compared maps of China’s potential shale plays with available water and found that 61 percent of China’s shale lies in arid regions. (China recently slashed in half its mid-term projections for shale gas development, from a goal of over 60 billion cubic meters annually to 30 billion cm by 2020.)

via Water Shortages Will Limit Global Shale Gas Development – Businessweek.

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04/09/2014

China Fights Local Budget Corruption With ‘Economic Constitution’ – Businessweek

Revising a budget law, as China’s National People’s Congress just did, sure doesn’t sound very sexy. But Sunday’s move is a crucial step toward fixing some of China’s biggest economic challenges: controlling runaway local debt; curbing rampant official corruption, and stemming the spread of socially destabilizing land seizures.

The Shanghai skyline

The amended law that now requires local governments to publicize their annual budgets is so important that some are calling it the “Economic Constitution,” the China Daily reported on Sept. 1. The revision “will prove a milestone in China’s fiscal history, as it will make the government’s collection of taxes and fees and distribution of its fiscal money to become more law-based and transparent,” the English-language paper reports.

Until now, the finances of China’s tens of thousands of counties, townships, and villages have been split into budget and extra-budgetary funds. With much of the financing falling in the murkier off-budget category, “government departments have a great leeway in managing government funds, which can possibly lead to corruption and abuse of public funds,” the newspaper explains.

via China Fights Local Budget Corruption With ‘Economic Constitution’ – Businessweek.

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04/09/2014

Japan PM Abe appoints China-friendly lawmakers to key posts | Reuters

Japanese Prime Minister Shinzo Abe picked two veteran lawmakers with friendly ties to China for top party posts on Wednesday in an apparent signal of hope for a thaw in chilly ties with Beijing and a summit with Chinese leader Xi Jinping.

Japan's Prime Minister Shinzo Abe walks into the Prime Minister's official residence in Tokyo September 3, 2014. REUTERS/Yuya Shino

The change in executives in Abe’s Liberal Democratic Party (LDP) is part of a broad leadership rejig, including a cabinet reshuffle, aimed at strengthening party unity and polishing Abe’s image 20 months after he surged back to office.

In a move welcomed by Tokyo stock market players, Abe drafted Yasuhisa Shiozaki, 63, a proponent of an overhaul of Japan’s Government Pension Investment Fund (GPIF), to head the ministry of labor, health and welfare, which oversees GPIF.

The fund is finalizing plans to boost the weighting of domestic stocks in its portfolio.

Abe also gave women almost a third of the posts in his 18-minister cabinet to show his commitment to promoting women as part of his “Abenomics” growth strategy.

But he retained core cabinet members such as Chief Cabinet Secretary Yoshihide Suga, Finance Minister Taro Aso, 73, Economics Minister Akira Amari, 65, and Foreign Minister Fumio Kishida, 57, signaling policy continuity.

Abe’s new line-up faces a number of challenges, including how to repair ties with China that have been frayed by rows over disputed territory and Japan’s wartime history, and whether to go ahead with a planned sales tax rise next year despite signs the economy is faltering.

via Japan PM Abe appoints China-friendly lawmakers to key posts | Reuters.

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01/09/2014

China imposes harsher punishment to ensure workplace safety – Xinhua | English.news.cn

China’s top legislature on Sunday adopted a revision to the Workplace Safety Law which imposes harsher punishment on offenders.

Members of the Standing Committee of the National People’s Congress adopted the revision through a vote at the bi-monthly legislative session held from Monday to Sunday.

The amendment further increased fines for enterprises involved in serious workplace accidents from the maximum of 5 million yuan (810,000 U.S. dollars) proposed in its original draft to 20 million yuan.

The quadrupled fine cap is stated in an added article which stipulates fines ranging from 200,000 yuan to 20 million yuan, depending on the losses incurred in the accident.

Under the old Workplace Safety Law, fines for enterprises violating the law were no more than 100,000 yuan or below five times the income earned from illegal operation.

Managers in charge of such enterprises who are found to have failed in their duty to ensure safety will also now be fined between 30 and 80 percent of their annual income corresponding to losses in the accidents.

This is a massive raise compared with the former law, under which managers faced fines between 20,000 yuan and 200,000 yuan.

The revised law states that managers responsible for “serious” and “extremely serious” accidents will be banned from serving as principals in enterprises in the same industry.

The regulation on work safety issued by the State Council in 2007 defines “serious accidents” as those causing 10 to 30 deaths, 50 to 100 serious injuries, or direct economic losses of between 50 and 100 million yuan.

via China imposes harsher punishment to ensure workplace safety – Xinhua | English.news.cn.

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01/09/2014

State-owned enterprises: Fixing China Inc | The Economist

JIN JIANG is one of the world’s biggest hotel groups, managing five-star properties across China, a budget motel chain and a travel agency. It is also a state-owned enterprise (SOE), controlled by the Shanghai government. It has seen better days. The company’s best hotels played host to hundreds of foreign leaders in the past century, including Richard Nixon in 1972, when America and China began their historic rapprochement. But in recent years visiting dignitaries have opted for newer hotels over Jin Jiang’s musty rooms and tired furnishings.

When people think of Chinese state companies, they often have its giant banks or oil companies in mind. But most of the 155,000 enterprises still owned by the central and local governments are more akin to Jin Jiang: they are businesses that have little to do with the country’s economic or political priorities, and they have had a run of bad years, losing ground to private-sector rivals. That may be about to change. China is in the midst of the biggest attempt in more than a decade to fix the country’s brand of state capitalism, attempting to breathe new life into Jin Jiang and dozens, if not hundreds or even thousands, more like it.

There are two main problems with China’s SOEs today. First, they have failed to comply with the government’s order to focus on what are deemed to be “strategic sectors” such as aviation, power and telecommunications. These are industries that the Communist Party believes it must dominate in order to maintain control of an increasingly complex economy. But fewer than half of state companies occupy these commanding heights. Some 80,000 are instead in the economic lowlands: they run hotels, build property developments, manage restaurants and operate shopping malls. The temptations to branch out have been too great: relative to their private-sector peers, they have benefited from cheaper financing from state-owned banks, favouritism from local governments in land sales and a lighter touch from regulators.

Second, despite these advantages, SOEs have given progressively less bang for their buck. Faced with mounting losses in the 1990s, China undertook a first round of drastic reforms of its state-owned companies. There were mass closures of the weakest firms, tens of millions of lay-offs and stockmarket listings for many of the biggest which made them run a little more like private companies. That initially paid dividends. SOEs’ return on assets, a gauge of their productivity, rose from barely higher than zero in 1998 to nearly 7% a decade later, just shy of the private-sector average. But over the past five years, their fortunes have ebbed. Profitability of state companies has fallen, even as private firms have grown in strength. SOE returns are now about half those of their non-state peers. For an economy that, inevitably, is slowing as it matures, inefficient state companies are a dangerous extra drag. Jian Chang of Barclays says that putting SOEs right is “the most critical reform area for China in the coming decade”.

Until recently, however, few analysts thought that China had the desire or the ability to get back into the muck of SOE reform. Companies under the central government, such as PetroChina, the country’s biggest oil producer, were believed to be strong enough to resist the changes that would erode their privileges. At the provincial and municipal levels, local officials were thought bound to government-owned companies by ties of power, patronage and money. China was not expected to sit entirely still: gradual deregulation of interest rates and energy pricing was placing indirect pressure on state companies to operate more efficiently. But a direct, frontal assault on them of the kind waged by Zhu Rongji, then prime minister, in the 1990s seemed out of the question. Even when the party unveiled a much-ballyhooed reform plan last November and vowed to target SOEs, there were doubts about how far Xi Jinping, China’s president, could go. People close to the State-owned Assets Supervision and Administration Commission (SASAC), the agency that oversees China’s biggest SOEs, say that it was still dragging its feet at the start of this year.

But a flurry of announcements in the past few months shows that reforms are getting on track. There is no one-size-fits-all approach. Sinopec, Asia’s biggest refiner, is close to selling a $16 billion stake in its retail unit, a potentially lucrative opening for private investors. CITIC Group, China’s biggest conglomerate, is poised to become a publicly traded company by injecting its assets into a subsidiary on the Hong Kong stock exchange, for $37 billion. After its initial reluctance, SASAC announced reforms at six companies. They are to experiment with larger private stakes and greater independence for directors.

via State-owned enterprises: Fixing China Inc | The Economist.

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01/09/2014

India Outpacing China’s Oil Demand – India Real Time – WSJ

India’s oil demand has grown faster than China’s so far this year, highlighting slowing energy demand in the world’s most populous country and fueling expectations that India may pick up the slack over the medium-to-long term. The pace of India’s demand also reflects optimism about India’s economic growth under Prime Minister Narendra Modi.

In absolute terms China is Asia’s largest oil consumer, having burned 10.76 million barrels a day of oil and accounting for 12.1% of global oil consumption in 2013, according to BP PLC. The second-largest oil consumer in Asia is Japan, though its oil consumption has been declining as its economy has matured.

India ranks third at 3.7 million barrels a day and accounted for about 4.2% of global oil consumption in 2013.

India’s oil demand has shown steady growth through July at an average of 3%, or 101,000 barrels a day. China’s oil demand has declined at an average of 0.6%, or 62,000 barrel a day, in the same period, Barclays PLC analyst Miswin Mahesh said.

Indian oil demand growth has “organic, domestic, economic activity-linked factors still driving it,” he said. Mr. Mahesh expects the south Asian country’s oil demand to accelerate to 210,000 barrels a day next year, spurred by healthy construction activity, government-financed industrial projects and strong growth in car purchases.

China’s oil-demand growth, on the other hand, remains uncertain, with a large portion of its imports this year going into strategic stockpiling instead of consumption. Its oil demand fell into negative territory in July and its oil imports declined for the first time this year.

“This surprise drop in crude imports further supported our view that [China’s] full-year oil demand could be weaker than current market expectations,” Thomas C. Hilboldt, head of Asia Pacific oil research at HSBC Holdings PLC said last week.

The disparity of the demand drivers in India and China is also telling.

The bulk of oil demand in both countries is for diesel, the most widely consumed liquid fuel in Asia. China’s diesel consumption has shown a sharp decline because of its industrial slowdown, while India’s diesel demand rose sharply in the last few months because of power shortages and delayed monsoon rains.

Despite this, the extent to which Indian energy demand can compensate for China’s decline remains doubtful.

Markets are looking for the next emerging-market economy to take over as China moves into its post-industrial phase. Yet India has a fundamentally different economic structure and growth model, Janet Kong, head of market analysis at BP Singapore’s trading division pointed out last week.

“It’s very much a service-oriented economy…not relying on a lot of infrastructure investments or manufacturing,” she said.

The manufacturing sector in India has underperformed for many years, contributing to about 15% of gross domestic product and 12% of employment, compared with 25% or more of GDP in countries like China, Malaysia, Thailand and Vietnam, according to the Asian Development Bank’s 2014 report. Meanwhile, China is transitioning from an industrial economy dependent on exports to focus more on domestic consumption.

via India Outpacing China’s Oil Demand – India Real Time – WSJ.

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30/08/2014

Houses in Shanghai are not built, they’re printed[1]- Chinadaily.com.cn

A Chinese company recently built 10 full-sized houses using a giant printer.

Houses in Shanghai are not built, they're printed

The detached, one-story houses now standing in the Shanghai Hi-Tech Industrial Park, in the city’s Qingpu district, look like ordinary buildings. But they were “printed out” in less than a day with “contour crafting“, commonly known as 3-D printing technology.

‘Mirror’ perfect fit for shoppers  Four huge printers measuring 32 meters long, 10 meters wide and 6.6 meters tall were used to make the houses, which were built layer by layer.

“It’s not only cost-effective but also environmentally friendly,” said Ma Yihe, inventor of the printers, who is also president of the Shanghai Winsun decoration and design company.

“Unlike traditional construction, the new technology doesn’t produce any waste,” said Ma, who has been working in the 3-D printing construction industry for 12 years.

The materials used to make the houses are a mixture of quick-drying cement and recycled industrial waste, which help lower construction costs by up to 50 percent. For the moment, the company is keeping the recipe for the cement a secret.

Meanwhile, the houses can withstand just about any safety test, Ma said.

via Houses in Shanghai are not built, they’re printed[1]- Chinadaily.com.cn.

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26/08/2014

China’s Skyrocketing (Pet) Population – Businessweek

During a stint in the U.S. Army, Dennis Schenk worked alongside canine rescue units in the aftermath of a hurricane. He fell in love with dogs and decided he wanted to make them his career. He eventually got certified as a dog trainer by the International Association of Canine Professionals and the International Association of Animal Behavior Consultants and in 2009 moved to China. Now he’s flown around the country by clients who pay him 500 yuan ($81) an hour to train their dogs to come and sit, and to treat them—the pets, not owners—for anxiety and aggression.

"Building a Beautiful Home for Your Pooch" (left); "The Most Beautiful Tail"

Cat and dog lovers are a relatively new breed in China. Up until the 1980s, keeping pet dogs was illegal in Beijing, because pets were considered to be a bourgeois affectation. Restrictions were loosened in the 1990s and early 2000s. (A height limit on dogs is still in place.) By 2012 the city had more than 1 million registered pet dogs, now served by more than 300 pet hospitals, according to the Beijing Small Animal Veterinary Association. China has become the third-largest pet market in the world, after the U.S. and Brazil, according to Euromonitor International, and is home to 27 million dogs and 11 million cats.

Maoist rhetoric hasn’t disappeared entirely. In early August the Communist Party-run People’s Daily ran an editorial decrying pet ownership as a “crude and ludicrous imitation [of a] Western lifestyle”—and argued that uncollected sidewalk poop disrupts “social peace and harmony.” In some cities, unwanted puppies are dumped on the street and become strays. The local press has reported cases of auxiliary police officers beating strays to death.

via China’s Skyrocketing (Pet) Population – Businessweek.

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