19/03/2013

* China heads back to the ’90s in economic reform drive

Reuters: “China is poised to launch its most serious economic reform drive since the 1990s after a series of top appointments at the weekend put the architects of Zhu Rongji‘s clash with state owned enterprises in charge of key economic agencies.

China's Vice Premier Ma Kai attends the sixth plenary meeting of the National People's Congress (NPC) at the Great Hall of the People, in Beijing in this March 16, 2013 file photo. China is poised to launch its most serious economic reform drive since the 1990s after a series of top appointments at the weekend put the architects of Zhu Rongji's clash with state owned enterprises in charge of key economic agencies. Picture taken March 16, 2013. REUTERS-Jason Lee-Files

Vice Premier Ma Kai, Finance Minister Lou Jiwei and central bank governor Zhou Xiaochuan were all Zhu lieutenants at the State Commission for Restructuring the Economy, which drew up the blueprint to sever the army’s ties with business and make millions jobless as state-owned enterprises (SOEs) were reformed.

They headline a clutch of officials in Premier Li Keqiang’s new line-up, who are broadly considered pro-business economic reformers able to finish the work started by arch-reformer Zhu when he was premier in a way that meets the different economic conditions of today.

“China is about to bring on the structural reforms that will ultimately reduce the old SOEs to ashes,” Paul Markowski, President of New York-based MES Advisers and a long-time adviser to China’s financial authorities, told Reuters.

“This is changing the economic policy team in a way that would be akin to bringing back the Clinton economic team to run President Obama’s economic initiatives,” said Markowski, who met with senior officials – including those at the central bank and the powerful planning agency the National Development and Reform Commission (NDRC) – during China’s annual parliamentary meeting this month.

Zhu was credited with getting China into the World Trade Organisation in a move that required shutting thousands of inefficient businesses and ultimately set the nation’s exporters on course to become the world’s most prolific, driving the economy to No.2 spot behind the United States in the process.

The pace of reform hasn’t been matched since, allowing SOEs to expand their share of economic activity and retain their preferred borrower status at the nation’s banks, which critics say starves the private sector of capital and chokes innovation.

The need for an energetic push on economic reform is acute, not least because easier reforms have been done and China’s economy, now more than five times the size it was when Zhu left the stage, will respond in more muted fashion.”

via Analysis: China heads back to the ’90s in economic reform drive | Reuters.

18/03/2013

* Taiwan to aim missiles at China

News.com.au: “TAIWAN is set to produce 50 medium-range missiles next year that will target military bases in southeast China, a media report says.

Taiwan Missiles

The article on Monday came after former defence minister Michael Tsai revealed in a recently published book that the island successfully created medium-range guided missiles that could be used against rival China back in 2008.

The “Yun Feng” (Cloud Peak) missile has been developed by the state-run Chung-shan Institute of Science and Technology and each has a range of over 1,000 kilometres, said the Taipei-based China Times, citing unnamed military sources.

The missiles will be deployed in the mountains in central Taiwan from next year to aim at military targets, including airports and missile bases, along China’s southeastern coast, the report said.

Taiwan has been researching missiles of this type to counter threats from China after it fired missiles near the island in 1996, according to the report.

It added that the “Yun Feng” project was developed with the help of an unidentified European country.

The defence ministry declined to comment on Monday’s report but it has condemned Tsai’s revelations, saying they could endanger national security.

Taiwanese experts estimate China’s People’s Liberation Army currently has more than 1,600 missiles aimed at the island.

Tensions with China have eased since Ma Ying-jeou became Taiwan’s president in 2008 on a Beijing-friendly platform.

However, China still refuses to renounce the possible use of force against the island in its long-stated goal of re-taking Taiwan, which has ruled itself since the end of a civil war in 1949.

via Taiwan to aim missiles at China | News.com.au.

18/03/2013

* Indian startup aims for the moon – and $30 million

Reuters: “Rahul Narayan, who describes himself as a serial entrepreneur, is the founder of Team Indus. It is the only Indian team in a race to the moon by privately funded groups competing for the largest international incentive prize of all time – the Google Lunar X Prize.

Google is offering $30 million in prizes to the first privately funded teams to safely land a robot on the Moon, including a grand prize and other bonus prizes.

In a conversation with Reuters, Narayan talks about Team Indus’ prospects, timing, his struggle to be taken seriously by investors and why he would not be too disappointed if someone else wins.”

via Indian startup aims for the moon – and $30 million | India Insight.

18/03/2013

* China replaces Britain in world’s top five arms exporters

reuters: “China has become the world’s fifth-largest arms exporter, a respected Sweden-based think-tank said on Monday, its highest ranking since the Cold War, with Pakistan the main recipient.

A visitor to the China Aviation Museum, located on the outskirts of Beijing, takes a photograph of a row of old anti-aircraft guns on display in this August 17, 2010 file photo. REUTERS-David Gray-Files

China’s volume of weapons exports between 2008 and 2012 rose 162 percent compared with the previous five-year period, with its share of the global arms trade rising from 2 percent to 5 percent, the Stockholm International Peace Research Institute (SIPRI) said.

China replaces Britain in the top five arms-dealing countries between 2008 and 2012, a group dominated by the United States and Russia, which accounted for 30 percent and 26 percent of weapons exports, SIPRI said.”

via China replaces Britain in world’s top five arms exporters: report | Reuters.

17/03/2013

* China’s Glamorous First Lady Peng Liyuan Saving the Communist Party With Song

The Daily Beast: “A U.S. president married to a Hollywood celebrity would spark a full-blown media frenzy in America. But China, for one, is not fazed. In 2007, when now president Xi Jinping was named to the Politburo Standing Committee of the Chinese Communist Party (CCP), his wife, Peng Liyuan—a glamorous and wildly popular singer—quietly disappeared from public view.

China's New First Lady Peng Liyuan

Peng, 50, is known for singing soaring patriotic songs in praise of the Communist Party, often while clad in glittering floor-length ball gowns and occasionally in Chinese ethnic minority costume (think Barbra Streisand in Native American garb). She was born in Shandong province, enrolled at Shandong University of Art and Design at age 14, and joined the People’s Liberation Army in 1980, at 18. In 1986 she married Xi Jinping. Her daughter, Xi Mingze, was born in 1992 and stays invisible too (she studies at Harvard under an assumed name).

Peng’s star began to ascend in 1983, when she performed in state broadcaster China Central Television’s inaugural new year’s gala, today the most viewed TV program in the world. (Celine Dion performed at this year’s). Peng sang in the gala almost every year until 2007.

I was working in Beijing for a Chinese government-overseen magazine in 2007. We tried to run a profile describing Xi as “the son of a veteran revolutionary and the husband of Peng Liyuan, a famous singer,” but our censor asked us to delete that line. When we resisted, she forwarded us an email in bold red font from her superior at the Ministry of Commerce, stressing that we weren’t allowed to write about the personal lives of government officials, “especially family background or marital life.” To commit this “rudimentary political error,” he wrote, was to “touch a high-voltage line.”

Chinese government officials have many reasons to avoid revealing their personal sides. Many analysts say the CCP’s power relies on a façade of unity, and that means disappearing into a monolithic, faceless abstraction. Xi’s predecessor Hu Jintao was known for his blandness, but a video unearthed late last year of a smiling, animated Hu in 1984 suggests that his evolution toward inscrutability was purposeful.

It’s also posited that Chinese culture encourages conformity; there is an oft-quoted Chinese expression, “The bird that sticks out its neck gets shot.” Moreover, the idea of a high-profile first wife conjures the ghost of Jiang Qing, Mao’s wife who was also a performer and is widely considered responsible for China’s horrific Cultural Revolution. And, as exposés on the family wealth of Wen Jiabao and Xi have revealed, digging into the personal lives of China’s political elite tends to unearth skeletons.

In the face of this kind of competition, a little stardust from China’s new First Lady might be the Party’s best weapon.

Fast-forward to now: the Financial Times just reported that Peng will not only accompany Xi to the BRICS summit in Durban, South Africa, this month, but will speak there. “She can help China build soft power,” said a source in the piece. Peng also became a Goodwill Ambassador for tuberculosis and HIV/AIDS—a controversial subject in China—for the World Health Organization last year and won a splashy $160,000 China Arts Award in December.

Is Xi Jinping –and the Party at large—embracing American-style politicking? It’s widely opined that Bo Xilai, the charismatic Chongqing Party secretary purged last year, was brought down for being too threateningly populist. Yet, Xi Jinping seems to be styling himself in Bo’s mold. He’s made highly publicized visits around China the last few weeks, intended to echo Deng Xiaoping’s 1992 “southern tour” that jump-started China’s economy, and inspired enthusiastic tea-leaf readings that he’ll be a reformer. Though Bo was kicked down, perhaps the party has learned from his talents.

Pressure is on for the CCP to burnish its image. Overly outsize stars within—or married to—the party can be reined in, but society at large is developing a celebrity culture, and that’s a threat too. More and more, people look up to leaders from business, pop culture, and the Internet. Alibaba founder Jack Ma inspires Steve Jobs–like reverence in China. Real-estate tycoon Zhang Xin is affiliated with the World Economic Forum and the Council on Foreign Relations and is becoming a thought leader. And the rabid following behind Li Yang, founder of Crazy English, is downright cultlike.

These people have the power to influence the masses and could do so in dangerous ways. Kai-Fu Lee, former president of Google China, has microblogged veiled criticisms of the government on his Weibo account, which has over 32 million followers. Yang Lan, the “Oprah of China,” has griped about China’s media censorship (“There are frustrations”) to overseas publications like Marie Claire. And the most popular blogger in China is Han Han, known for his cynical attitude toward Chinese politics and society.

In the face of this kind of competition, a little stardust from China’s new first lady might be the party’s best weapon.”

via China’s Glamorous First Lady Peng Liyuan Saving the Communist Party With Song – The Daily Beast.

17/03/2013

* Chinese state-owned railway giant goes into biz

China Daily: “The China Railway Corporation, which will take over the commercial functions of the former Ministry of Railways (MOR), went into business on Sunday.

Chinese state-owned railway giant goes into biz

The company announced its arrival via Sina Weibo, the Chinese equivalent of Twitter, two days after receiving approval from the State Council, China’s cabinet.

The company will conduct business operations that were previously conducted by the now-defunct MOR, while the newly formed State Railways Administration will handle the MOR’s administrative responsibilities.

With registered capital of 1.04 trillion yuan ($165.73 billion), the China Railway Corporation will take over all of the MOR’s related assets, liabilities and personnel, as well as shoulder the responsibility of running trains for public welfare, according to a statement posted on the government website.

The wholly state-owned enterprise is administered by the central government and supervised by the Ministry of Transport, the statement said.

The move was made as part of the government’s efforts to restructure its cabinet, as well as eliminate a previous situation in which the MOR played roles as both market participant and regulator in the railway sector.

The company is expected to address the MOR’s high remaining debt and improve the country’s massive railway network.”

via Chinese state-owned railway giant goes into biz |Economy |chinadaily.com.cn.

16/03/2013

* Shell, Samsung in China pilot to ease currency controls

Reuters: “China has eased strict cross-border currency rules for 13 multi-national firms including Samsung and Shell in a scheme that further cranks open its tightly controlled capital account, financial sector sources told Reuters.

A Shell fuel leaves the Kingsbury fuel terminal, central England June 11, 2008. REUTERS/Darren Staples

The experiment, which has not been publicly announced by the government, gives firms freedom to shift funds worth up to 30 percent of their invested capital in China across its borders, bankers directly involved in the scheme said.

The move responds to growing demand from international firms operating in China for freedom to use soaring stores of yuan, also know as the renminbi, to boost the efficiency of their management of capital while keeping speculative pressure at bay.

“It’s a way of opening up the capital account which helps companies deal with the real flows of the economy,” Michael Vrontamitis, head of product management of transaction banking for East Asia at Standard Chartered in Hong Kong, told Reuters.

“Those are the real flows. These companies are not speculating on the currency,” said Vrontamitis, whose bank is handling transactions for Shell under the pilot program.

Six of the firms involved are foreign, eight company executives and bankers with knowledge of the matter said. They are Shell, Samsung, Intel Inc, Alcatel-Lucent, Schneider Electric and Caterpillar Inc.

The other seven companies are Chinese state-owned enterprises: Sinochem Corp, China Minmetals Resources, China Shipping Group, COFCO Group, Baosteel Iron & Steel, Shanghai Electric Group Co. and China Eastern Airlines.

Some of the names of participating companies and banks have been reported in the Chinese media, but the full list has not been disclosed. The currency regulator declined to comment.

via Shell, Samsung in China pilot to ease currency controls: sources | Reuters.

15/03/2013

15/03/2013

* China confirms Li Keqiang as premier

BBC: “China’s leaders have named Li Keqiang premier, placing him at the helm of the world’s second-largest economy.

Mr Li, who already holds the number two spot in the Communist Party, takes over from Wen Jiabao.

Mr Li was elected for a five-year term but, like his predecessor, would be expected to spend a decade in office.

On Thursday, Xi Jinping was confirmed by legislators as the new president, completing the transition of power from Hu Jintao.

Li Keqiang’s widely-signalled elevation was confirmed by 3,000 legislators at the National People’s Congress, the annual parliament session, in Beijing. He received 2,940 votes to three, with six abstentions.

From humble beginnings, Li Keqiang has risen high in politics, but his career has not been without controversy. During the mid-1990s a scandal of stunning proportions devastated many rural communities in Henan. Thousands of farmers and their families contracted HIV after receiving contaminated blood transfusions. Most infections in the government-backed blood-selling scheme happened before Li Keqiang became the province’s party boss. But he was widely criticised for silencing those speaking out.

Many villagers still travel to Beijing every year to protest about the issue. One demonstrator told the BBC she hoped Li Keqiang would pay more attention, saying she had still not received any compensation. But others have seen a different side to the politician. One gay-rights activist told the BBC that Li Keqiang was very “easy-going” during a recent meeting. “He didn’t act at all like a government official,” said Kong Lingkun. “During the discussion he wanted everyone’s opinion and he encouraged us to speak freely.”

China’s new premier likes to project an image that he’s modern, sophisticated and ready to listen. But he has also shown he can be ruthless when the party’s reputation is at risk.

As premier, he will oversee a large portfolio of domestic affairs, managing economic challenges, environmental woes and China’s urbanisation drive.

The appointments seal the shift from one generation of leaders to the next. A raft of vice-premiers and state councillors will be named on Saturday, before the NPC closes on Sunday.

Mr Li, 57, who is seen as close to outgoing leader Hu Jintao, speaks fluent English and has a PhD in economics.

He has called for a more streamlined government, eliminating some ministries while boosting the size of others.

The son of a local official in Anhui province, he became China’s youngest provincial governor when he was tasked to run Henan.

But his time there was marked by a scandal involving the spread of HIV through contaminated blood.

Mr Li is expected to end the NPC with a press conference on Sunday, given by Wen Jiabao in the past.

via BBC News – China confirms Li Keqiang as premier.

15/03/2013

* Beans means bonanza as oil frackers turn demand for guar into gold rush | The Times

The Times: “Just as America’s booming shale gas industry has helped to wean the country off an unhealthy dependence on imported Middle Eastern oil, a new national addiction is emerging — to the Indian guar gum on which the industry depends.

A merchant paints numbers on sacks of guar as a laborer loads them onto a truck at a grain market in Jodhpur, India

Soaring demand for guar from US oil companies — whose apparently insatiable appetite stems from its use in making the drilling fluids used in the process of hydraulic fracturing or “fracking” for shale gas — triggered a 374 per cent surge in Indian exports between January 2011 and January 2012.

With 80 per cent of global production of guar — which means cow feed in Hindi — India has a near monopoly on the bean, a fact that has led to a bonanza for Indian farmers who witnessed a ninefold increase in prices during 2012. “The price increase has been just astronomical,” says Naveen Mathur, commodities analyst at Angel Broking in Mumbai.

For decades, apart from cow feed, powdered guar has been used as a thickener in toothpaste, pet food and ice cream, but global demand has mushroomed in recent years because oil companies such as Halliburton and Schlumberger have required huge quantities for use as a thickening agent in the fluid needed to squeeze shale gas out of rock formations deep underground.

Almost overnight, guar has become India’s biggest agricultural export, shipments of which were worth $4.9 billion between April and January 2012, roughly double the value of the country’s exports of basmati rice and cotton combined.

Like the Texan oil booms of the 19th century, the guar rush is having a similar effect on the desert state of Rajasthan, where most of it is grown and where some farmers have earned more in a single season than the previous ten put together.

Guar beans, which are milled and powdered to produce gum that is eight times more viscous than cornstarch, grows only in rare climatic conditions — arid areas watered by intermittent but heavy monsoon rains.

But the huge surge in prices and exports has prompted some to ask whether the boom can last.

As Indian farmers frantically plant new areas to meet demand, US oil scientists in Houston are desperately trying to come up with synthetic alternatives, such as carbon methyl cellulose, which could rival guar on both price as well as efficacy.

Others are trying to develop new strains of guar that can be grown in different climatic conditions.

So far, they have not managed to do so — and India’s guar boom looks set to continue.

via Beans means bonanza as oil frackers turn demand for guar into gold rush | The Times.

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