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30/05/2013

China designates service industry new growth engine

Xinhua: “China will step up efforts to build up its service industry to make it a new engine to power sustainable growth, Premier Li Keqiang said on Wednesday.

CHINA-BEIJING-LI KEQIANG-GLOBAL SERVICES FORUM (CN)

Speaking at a summit during the second Beijing International Fair for Trade in Services, Li stressed the important role of the service industry in job creation and economic upgrading.

“Increasing service supplies and improving service qualities will help unleash huge potential in domestic demand, and thus offer firm support for stable economic growth and structural optimization,” he said.

The latest emphasis on service trade is part of China’s efforts to drive growth in the sector to build an upgraded version of the economy.

In 2012, the service industry accounted for 44.6 percent of gross domestic product (GDP), up 2.7 percentage points from a year earlier but still significantly below the share of 60 percent or more seen in many developed countries.

Li noted the key to spur growth in the area lies in reform and opening-up to remove institutional barriers.

“China will further open up the service industry, and pilot free trade experimental zones to tap development,” he said, adding that the government will seek balanced trade and encourage cross-border investments in the sector.

The premier stressed countries should abide by the win-win principles of rising against protectionism, removing trade barriers, and coordinating efforts to facilitate personnel flows, recognition of qualifications and a setting of standards.

Developed countries should lead the effort to open up their markets, while developing economies should be actively engaged in building the global trade mechanism and standards in the service industry, according to Li.

Under China’s 12th Five-Year Plan (2011-2015), the country aims to bring the sector’s proportion of GDP to 47 percent by 2015 and to make it a strategic focus for the country’s industrial restructuring and upgrading to ease reliance on traditional manufacturing.”

via China designates service industry new growth engine – Xinhua | English.news.cn.

See also: https://chindia-alert.org/2013/04/19/chinas-growth-the-making-of-an-economic-superpower-dr-linda-yueh/

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30/05/2013

In China, Big Data Is Becoming Big Business

Business Week: “With 1.3 billion people, a quickly expanding urban economy, and rising rates of Internet and smartphone penetration, China generates an immense amount of data annually. If streams of that data can be appropriately sifted, analyzed, and stored, companies seeking to understand China’s often-fickle consumers could have access to valuable real-time insights—and perhaps early warning to the next big consumer trends.

Shopping drives Beijing's Sanlitun area

At a presentation last week at Peking University’s Guanghua School of Management, China’s premier business school, associate professor of marketing Meng Su predicted: “China will soon become world’s most important data market.” He advised job seekers in China and elsewhere to consider training for a new career path as “data scientists,” which he described as “one of the most valuable jobs in the next 10 years.” Interpreting big data seems poised to become big business.

China’s government has signaled its intention to help domestic enterprises develop the infrastructure necessary to store and analyze “big data”—that is, data sets too large to be handled by traditional database-management tools and software. The current Five Year Plan, which aims to stimulate “higher-quality growth,” names seven strategic “emerging industries,” including next-generation information technology.

Meanwhile, leading Chinese firms, especially Internet companies, have already begun to incorporate big data into their strategies. Jack Ma, founder and then-chief executive officer of China’s e-tail giant Alibaba, declared last fall that the company should focus on three pillars of future business: e-commerce, finance (providing loans to small and medium enterprises in China), and data mining. In January, Alibaba underwent a restructuring that, among other changes, created a data-platform division with about 800 employees, as reported in the Chinese financial magazine, Caixin. The Alibaba Group has just begun to scratch the surface of analyzing the reams of user data generated through its business-to-business e-commerce site and its massive consumer-to-consumer platform, Taobao.com.

Professor Su warned, however, that the hype around big data in China may be a case of too much, too soon: “If everyone is talking about something, there is probably already a bubble,” at least of expectations, he said. “Most Chinese companies don’t own enough data, let alone know how to utilize, analyze, or monetize their data.” In other words, a select number of companies in China that do own large quantities of user-generated data—such as Alibaba and Baidu (BIDU)—hold the cards and may profitably sell that valuable information to other vendors.”

via In China, Big Data Is Becoming Big Business – Businessweek.

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30/05/2013

Smithfield Foods to be bought by Chinese firm Shuanghui International

Washington Post: “Smithfield Foods, whose signature hams helped make it the world’s largest pork producer, is being bought by a Chinese firm in a deal that marks China’s largest takeover of an American consumer brand.

The $4.7 billion purchase by Shuanghui International touches several sensitive fronts at once — the quick rise of Chinese investment in the United States, China’s troubled record on the environment and the acquisition of Smithfield’s animal gene technology by a country considered to be America’s chief global competitor.

Consumer spending was stronger than first thought, but businesses restocked more slowly and state and local government spending cuts were deeper.

What’s more, the deal puts a major company from a Chinese industry with a history of food-safety problems in charge of a U.S. firm with past environmental problems of its own.

Separately, U.S. government and business officials often complain that China uses strict control of its market of 1.6 billion people to force American companies that want to do business there to surrender intellectual property.

The deal may become a test of U.S. attitudes toward China as it moves through likely reviews by the Justice Department and the Committee on Foreign Investment in the United States.

With no obvious national security concerns stemming from the production of ham, bacon and sausage, Smithfield chief executive C. Larry Pope said he expects approval. He emphasized that the deal wasn’t about bringing Chinese pork products or management standards to the United States but about sending U.S. products and expertise the other way. The deal will leave intact Smithfield’s management, workforce and 70-year presence in Virginia, he said.”

via Smithfield Foods to be bought by Chinese firm Shuanghui International – The Washington Post.

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30/05/2013

Royal Albert Dock set to become London’s third business district under £1bn deal

London 24: “London Mayor Boris Johnson has unveiled details of a £1bn deal to transform London’s historic docklands into the capital’s next business district forging links with China.

View of Royal Albert Docks

The state-of-the-art business district at Royal Albert Dock will act as a platform for financial, high-tech and knowledge driven industries, and will be largest development of its kind in the UK.

It is set to become the third financial district in the capital after the City and Canary Wharf, creating tens of thousands of jobs.

Owned by the Greater London Authority the 35-acre site will be transformed by commercial developer ABP Chinese (Holding) into a gateway for Asian and Chinese business seeking to establish headquarters in Europe, along with other businesses wanting to set up in the capital.

The deal is believed to be worth £6bn to the UK economy, generating £23m in business rates annually and acting as a catalyst for further development in the area.

Mr Johnson said: “For centuries the waterways of east London were the throbbing arteries of UK trade and commerce. This deal symbolises the revival of that great era, continuing the re-invention of this once maligned part of the capital into a 21st century centre of trade and investment.”

The deal is expected to deliver around 20,000 full-time jobs and boost local employment in Newham by 30 per cent.

Mayor of Newham, Sir Robin Wales, said: “The Royal Docks Enterprise Zone offers an unrivalled investment opportunity and this deal further strengthens Newham’s growing reputation as an ideal destination for international business.”

The deal represents one of the first direct investment by a Chinese developer in London’s property market.

Chairman of ABP, Mr Xu, said: “My vision is to develop a world class international business district which will initially target Asian businesses to help them secure a destination in London, which in China is seen as the gateway to both the United Kingdom and the wider European economy. Our plans aim to strengthen trade between east and west, provide new local jobs and deliver benefits for the wider London and UK economy.”

The area will become home to over 3.2 million square feet of high quality work, retail and leisure space, including 2.5 million square feet of prime office space along London’s waterways.”

via Royal Albert Dock set to become London’s third business district under £1bn deal – Politics – London24.

See also: https://chindia-alert.org/2012/02/13/pattern-of-chinese-overseas-investments/

Posted in China alert, Economics, Foreign acquisition | 1 Comment »

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29/05/2013

China to issue new plan for air pollution control

China Daily: “China to issue new plan for air pollution control

A national plan for air pollution control could be outlined as early as this week, said 21cbh.com, a professional financial news website Tuesday.

The outline will target the reduction of air pollution on a national scale by establishing clear standards of air quality in different regions.

Coal plants, motor vehicles and dust that produce fine particulate matter will be the focus of strict control in the outline initiated by the Ministry of Environmental Protection, according to multiple sources who told the news website.

The overall plan has undergone multiple revisions and will be submitted to the State Council, China’s cabinet, for review by the end of this month, the Shanghai Securities News quoted Yang Tiesheng, deputy director of the energy saving department under the Ministry of Industry and Information Technology, as saying on May 22.

The specific measures put forward by the plan include stipulating the declining rates of atmospheric pollutants such as PM2.5 (particles smaller than 2.5 microns in diameter), sulfur dioxide, nitrogen oxide in cities, the reduction of coal consumption throughout the country, as well as the promotion of using clean energy such as natural gas, while banning coal-fired power plants in cities and minimizing heavy-polluting vehicles.

The Yangtze River Delta region and the Pearl River Delta region will be the key areas of the new air pollution prevention campaign.

Roughly one million heavy-polluting vehicles, popularly known as “yellow label cars”, will be prohibited from driving on roads in Beijing, Tianjin municipality and Hebei province, which would reduce half of the PM2.5 by vehicle emissions alone, said one environmental expert as quoted by the news website.

The outline stipulates that air quality must “make substantial progress” in the upcoming five years rather than the next 20 years, a standard previously adhered to by big cities such as Beijing, according to a source from the National Development and Reform Commission, China’s economic planning body.

Grade II air quality stipulates the average concentration of PM2.5 over a 21 hour period should be between 35 to 75 milligrams per cubic meters, according to the latest standard made by the Ministry of Environmental Protection in 2012.”

via China to issue new plan for air pollution control |Politics |chinadaily.com.cn.

See also: https://chindia-alert.org/economic-factors/greening-of-china/

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29/05/2013

Settlers in Xinjiang: Circling the wagons

The Economist: “In a region plagued by ethnic strife, the growth of immigrant-dominated settlements is adding to the tension

MANY hours’ drive along what was once the southern Silk Road, through a featureless desert landscape punctuated by swirling dust-devils and occasional gnarled trees, a curious sight eventually confronts the traveller: row upon row of apartment blocks with vivid red roofs, as if a piece of Shanghai suburbia has been planted in the wilderness (see picture). Following the military-style nomenclature of immigrant settlements in China’s far west, it calls itself 38th Regiment. It is home to thousands of people, in a spot where just a few years ago there was nothing but sand.

The town is the latest addition to a vast network of such communities in the Xinjiang Uighur Autonomous Region, China’s biggest province by land area and also its most ethnically troubled. Neighbouring Tibet has long been roiled by ethnic tension, too, but rarely has it witnessed the kind of violence that has troubled Xinjiang: a low-level insurgency involving ethnic Uighurs whose Muslim faith and Central Asian culture and language set them apart from the Han Chinese who dominate places like 38th Regiment. On April 23rd, 21 people were killed near Kashgar during an encounter between police and alleged separatists. An explosion of inter-ethnic violence in 2009 in the regional capital, Urumqi, that left nearly 200 dead, by official reckoning, exacerbated the divide. The expansion of the settlement network is deepening it further.

To use its full name, the 38th Regiment of the 2nd Agricultural Division is part of the Xinjiang Production and Construction Corps. This state-run organisation, usually referred to as the bingtuan (Chinese for a military corps) controls an area twice the size of Taiwan, broken into numerous parts scattered around the province (see map). A few bits are city-sized. Most are more like towns or villages. Of their total population of more than 2.6m people, 86% are ethnically Han Chinese. In Xinjiang as a whole, in contrast, Han officially make up just over 40% of the 22m inhabitants. The rest are Uighurs and a few other ethnic groups.”

via Settlers in Xinjiang: Circling the wagons | The Economist.

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29/05/2013

When blue becomes the new white

FT: “My maid and her husband, a driver, have scrimped and saved and crammed themselves into a tiny flat in Shanghai for decades with one goal in mind: to give their only son a crack at the “Chinese dream”.

Newly graduated Chinese students gather for a convocation ceremony at the University of Science and Technology in Hefei in east China's Anhui province

Now those decades of deprivation have reached their climax as the cherished child of these hard-working people graduates from university and takes his first job: as a construction worker. And he counts himself lucky to have a job.

Small wonder that Xi Jinping, the Chinese leader, has recently been out gladhanding graduates who are facing one of the toughest job markets since the Communist party stopped giving them careers by fiat. For, like obesity and diabetes, a glut of unemployed graduates seems to be one of the unintended side-effects of economic development in China.

Sound familiar? Many readers of the Financial Times will know what it is like to have an unemployed graduate in the family – or to have been one themselves. Maybe job shortages are just part of the human condition, one that now affects the Chinese like the rest of humanity. (When I graduated from university in 1980, media jobs were so thin on the ground that I ended up teaching at a university in Ghana that had no books, few lights and little running water – landing a job without a flushing toilet was presumably not part of my parents’ university plan for me.)

Mr Xi pointed out on his jobs-fair visit that – like all the other flaws of capitalism – the scourge of graduate unemployment these days is global. But it would be hard to find people who have suffered more to take their place among the ranks of the white-collar unemployed than the Chinese.

This week alone, millions of students across the country will be skipping sleep, baths and online war games to study, while millions of parents take up to a year off work to cook, clean and nag them round the clock. Millions will pass next week’s dreaded college entrance exam (or gaokao) – only to end up unemployed or wearing a hard hat.

Increasing numbers are wondering if it’s all worth it, and are coming up with alternatives that range from the tragic to the downright postmodern. A Chinese newspaper reported this month that a fed-up teenager in central China hired a hit man to kill his father and older sister because – he said – they put too much pressure on him to study. And after this year’s three-day May Day public holiday, a 15-year-old boy in eastern China jumped to his death because he did not finish his holiday homework. Another teen in the same town rose at 4am to finish homework but was found hanging from the staircase before he got to school.

The overwork doesn’t stop with gaokao: just this month Chinese newspapers reported that two twenty-somethings in southern China dropped dead after taking on too much overtime – and such stories are not uncommon. Xinhua, the state news agency, said this week that 40 college graduates were found sharing one 130-square-metre room in Beijing while looking for jobs – living like the construction workers that they may be lucky to become.

So more and more students are opting instead for that most un-Chinese of solutions: time off the treadmill – or what the rest of the world knows as a “gap year”. Li Shangcong, a top student at his high school and vice-president of the student union, decided to skip gaokao altogether and cycle to the Cannes Film Festival – via Siberia. He never made it to France, having been deported by Russian immigration for an expired visa.

When his parents spluttered about the need to make something of himself, he said what teenagers around the world have been known to say in such circumstances: that he is attending the university of life and they should get off his back. He is currently on another trip to Russia.

Shi Zheying at least had her father onside: she skipped the high school entrance exam to “travel 10,000 miles rather than read 10,000 books first” – with her dad. The phrase immediately became popular among China’s “netizens”. Her grandparents, themselves teachers, were force-tutoring her at night, refusing to accept examination results that placed her as low as 16th in her class. After she decided to quit school, she was placed fifth.

China is not the land of “turn on, tune in, drop out” quite yet. But it’s a far cry from a world where terminal overwork is the only option.”

via When blue becomes the new white – FT.com.

Posted in China alert, Economics, graduate, unemployment | 1 Comment »

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29/05/2013

China’s spurned mistresses can’t be relied on to bust graft

(Reuters) – “China must not rely on whistle-blowing mistresses to expose corrupt officials, China’s top newspaper said on Wednesday, after a string of such incidents has led to some people hailing the girlfriends as graft-busters.

Liu Tienan, then deputy chairman of China's National Development and Reform Commission (NDRC), attends a news conference in Beijing in this February 27, 2009 file photograph. REUTERS/Stringer/Files

President Xi Jinping has singled out corruption as a threat to the Communist Party’s survival, and the keeping of mistresses in lavish apartments, which breaks party rules, has come to represent to many people the excesses of power in China.

In a recent high-profile case, Liu Tienan, once the deputy chief of China’s top planning agency, was sacked after his mistress told a journalist that Liu had helped defraud banks of $200 million, state media reported.

But the People’s Daily, the ruling Communist Party’s official newspaper, questioned the woman’s motives and said China could not rely on such people to fight corruption.”

via China’s spurned mistresses can’t be relied on to bust graft: paper | Reuters.

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28/05/2013

* China Building Beachhead in Europe With $5 Billion Belarus City

Business Week: “China is building an entire city in the forests near the Belarusian capital Minsk to create a manufacturing springboard between the European Union and Russia.

China Building Beachhead in Europe With $5 Billion Belarus City

Belarusian President Aleksandr Lukashenko allotted an area 40 percent larger than Manhattan around Minsk’s international airport for the $5 billion development, which will include enough housing to accommodate 155,000 people, according to Chinese and Belarusian officials.

Lukashenko, who’s led his former Soviet state of 9.5 million for two decades, is turning to China to help revive a $60 billion economy that’s needed $6.5 billion of bailouts from the International Monetary Fund and Russia since 2009. The hub will put Chinese exporters within 170 miles of EU members Poland and Lithuania and give them tax-free entry into Russia and Kazakhstan, which share a customs union. It will also let them draw from a workforce that’s 99.6 percent literate and makes $560 a month on average, half the Polish wage.

“This is a unique project,” Gong Jianwei, China’s ambassador to Belarus, said on state television May 17, after the project won regulatory approval. “Nobody will be able to build anything like this industrial park anywhere else in Europe anymore. The infrastructure is so powerful.”

The “modern city on the Eurasian continent,” as it’s called in marketing documents, will be built around the M1 highway that links Moscow and Berlin via Belarus and Poland. A speed-rail network will tie the airport to the center of the city, which will be powered by a $10 billion nuclear plant, Belarus’s first, which Russia agreed to finance and build by 2018. The first stage of the park is scheduled to be completed by 2020, with the second stage taking another 10 years.”

via China Building Beachhead in Europe With $5 Billion Belarus City – Businessweek.

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27/05/2013

* As China’s middle class grows, so do its concerns

Taipei Times: “Beijing is facing increasing public pressure to deal with issues such as pollution, food safety and education driven by the 10 percent of its population who now count as middle class

W ith two cars, foreign holidays and a cook for their apartment, one Beijing family epitomizes the new middle class created by China’s decades of rapid economic growth — and its resulting worries.

Li Na, 42, is a caterer at the Beijing Zoo, and her husband, Chi Shubo, 48, works for a state-owned investment company. The couple have seen their fortunes transformed since Li arrived in Beijing 20 years ago from Shandong Province.

Then, she cycled for hours from a shared dormitory to visit her husband’s workplace. Now she commutes in a US-made car and the couple holiday with their 11-year-old daughter in Japan, South Korea and the US.

Tens of millions of other Chinese have made a similar transition. About 10 percent of China’s 1.35 billion people now count as middle class, according to the Organisation for Economic Co-operation and Development, a figure that is set to rise to 40 percent by 2020.

However, their concerns about air pollution, food safety and China’s education system show the challenges facing the country’s newly appointed leaders, who have promised a shift away from the model of growth at all costs.

Every year, Li and her husband set a goal to improve their lives.

“We always have a plan,” Li said. “For example, this year I might want a new camera and my husband will help make that come true.”

The family’s four-bedroom apartment in a Beijing suburb was the most important purchase of their lives.

“We struggled half our lives to buy it,” Li said over a breakfast of fried eggs and bacon.

In a picture of comfortable suburban living, their daughter, who goes by the name Nancy, sprawls on a vast sofa opposite a huge flat-screen Sony television, nuzzling the family’s fluffy brown dog.

Li says her top priority is Nancy’s education. It is not a school day, but Li’s iPhone alarm rings to signal that it is time for her daughter’s first lesson.

She steers her Chevrolet Epica sedan past forests of near-identical apartment blocks to the Haidian Youth Palace, a relic of Maoist-era China which now holds classes aimed at boosting children’s creativity.

At weekends, Nancy has lessons in traditional Chinese calligraphy and a badminton class “with a private coach,” Li said.

In the past year, the young girl swapped learning the piano for a new instrument, the ocarina, a pocket-sized flute.

Nancy has only three or four hours of free time a day on weekends, Li said, as she seeks to hold her position in China’s highly competitive education system.

A glut of graduates created by the expansion of China’s university system means that the graduate unemployment rate is higher than that of the general population, making winning a place at the very best colleges ever more crucial.

Getting into a top school is also not always about ability, Li said, with cash donations sometimes involved.

“Sometimes parents need to do extra work, give out red envelopes and even then, success can depend on your contacts,” she said.

This year has bought some more worrying lessons. When thick smog blanketed northern China, sending pollution levels soaring in the capital, Nancy learned about PM2.5, the name given to invisible pollutants which can damage children’s lungs.

She reached into the pocket of her mother’s car seat and pulled out a face mask.

“My mum made me wear this every day in January and February because the PM2.5 was very bad,” she said.”

via As China’s middle class grows, so do its concerns – Taipei Times.

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