Chinese Currency Falls to Lowest Level in Nearly a Year

The value of China’s currency, the renminbi, continued to slide against the United States dollar on Friday, rattling investors by falling to its lowest level in nearly a year.

With a drop of 0.3 percent, the renminbi hit 6.145 to the dollar in Friday trading, helping reverse a long running trend of gradual, incremental appreciation against the dollar and other major currencies during the last eight years. The intraday drop of almost 1 percent Friday was the biggest in years.

Analysts believe China’s central bank is intervening in the currency markets, intentionally engineering a slide in the value of the Chinese currency to punish speculators and prevent huge capital flows, or so-called hot money, from entering the country.

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China’s NPC: Here’s what to watch for

With concerns over the stability of China’s financial system at the fore, all eyes will be on the meeting of the country’s parliament, the National People’s Congress, next week for insight into the government’s assessment of the economy and agenda for the coming year.

Beginning March 5, around 3,000 delegates will convene in the Great Hall of the People for a session that is expected to last around nine days.

The NPC is the highest organ of state power that meets yearly to approve policies, laws, the budget and significant personnel changes.

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China swipes back at U.S. in annual rights report

China on Friday accused the United States of widespread human rights abuses, including cyber-surveillance and child labor, in Beijing’s annual rebuttal of Washington’s criticism of its rights record.

Human rights have long been a source of tension between the world’s two largest economies, especially since 1989, when the U.S. imposed sanctions on China after a bloody crackdown on pro-democracy demonstrators around Beijing’s Tiananmen Square.

In an annual survey of human rights around the world released on Thursday, the United States noted some positive reforms in China, but said Beijing continued to tighten curbs on freedom and activists and step up repression in Tibet and Xinjiang.

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China Home Prices Continue Slowdown

China’s housing market continued to show a modest slowdown in February as new data show that price growth was capped by discounts in some cities while the Lunar New Year holiday had an impact on sales overall.

Average new-home prices issued by data provider China Real Estate Index System on Friday showed prices grew 10.79% in February from a year earlier, compared with January’s 11.1%, which also slowed from December’s 11.5%.

The survey tracks new-home sales in 100 Chinese cities. The average price in February rose 0.54% compared with January, the survey said. That is down from 0.63% in January over December, which was the slowest on-month gain in more than a year.

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China’s Growth Puzzle

Once again, all eyes are on emerging markets. Long the darlings of the global growth sweepstakes, they are being battered in early 2014. Perceptions of resilience have given way to fears of vulnerability.

Stephen S. Roach

The US Federal Reserve’s tapering of its unprecedented liquidity injections has been an obvious and important trigger. Emerging economies that are overly dependent on global capital flows – particularly India, Indonesia, Brazil, South Africa, and Turkey – are finding it tougher to finance economic growth. But handwringing over China looms equally large. Long-standing concerns about the Chinese economy’s dreaded “hard landing” have intensified.

In the throes of crisis, generalization is the norm; in the end, however, it pays to differentiate. Unlike the deficit-prone emerging economies that are now in trouble – whose imbalances are strikingly reminiscent of those in the Asian economies that were hit by the late-1990’s financial crisis – China runs a current-account surplus. As a result, there is no risk of portfolio outflows resulting from the Fed’s tapering of its monthly asset purchases. And, of course, China’s outsize backstop of $3.8 trillion in foreign-exchange reserves provides ample insurance in the event of intensified financial contagion.

Yes, China’s economy is now slowing; but the significance of this is not well understood. The downturn has nothing to do with problems in other emerging economies; in fact, it is a welcome development. It is neither desirable nor feasible for China to return to the trajectory of 10% annual growth that it achieved in the three decades after 1980.

Yet a superficial fixation on China’s headline GDP growth persists, so that a 25% deceleration, to a 7-8% annual rate, is perceived as somehow heralding the end of the modern world’s greatest development story. This knee-jerk reaction presumes that China’s current slowdown is but a prelude to more growth disappointments to come – a presumption that reflects widespread and longstanding fears of a broad array of disaster scenarios, ranging from social unrest and environmental catastrophes to housing bubbles and shadow-banking blow-ups.

While these concerns should not be dismissed out of hand, none of them is the source of the current slowdown. Instead, lower growth rates are the natural result of the long-awaited rebalancing of the Chinese economy.

In other words, what we are witnessing is the effect of a major shift from hyper-growth led by exports and investment (thanks to a vibrant manufacturing sector) to a model that is much more reliant on the slower but steadier growth dynamic of consumer spending and services. Indeed, in 2013, the Chinese services sector became the economy’s largest, surpassing the combined share of the manufacturing and construction sectors.

The problem, as I argue in my new book, Unbalanced: The Codependency of America and China, is not with China, but with the world – and the United States, in particular – which is not prepared for the slower growth that China’s successful rebalancing implies.

The codependency construct is rooted in the psychopathology of human relationships whereby two partners, whether out of need or convenience, draw unhealthy support from each other. Ultimately, codependency leads to a loss of identity, serious frictions, and often a nasty breakup – unless one or both of the partners becomes more self-reliant and strikes out on his or her own.

The economic analogue of codependency applies especially well to the US and China. China’s export-led growth miracle would not have started in the 1980’s without the American consumer. And China relied heavily on the US dollar to anchor its undervalued currency, allowing it to boost its export competitiveness.

The US, for its part, relied on cheap goods made in China to stretch hard-pressed consumers’ purchasing power. It also became dependent on China’s savings surplus to finance its own savings shortfall (the world’s largest), and took advantage of China’s voracious demand for US Treasury securities to help fund massive budget deficits and subsidize low domestic interest rates.

In the end, however, this codependency was a marriage of convenience, not of love. Frictions between the two partners have developed over a wide range of issues, including trade, the renminbi’s exchange rate, regional security, intellectual property, and cyber attacks, among others. And, just as a psychologist would predict, one of the partners, China, has decided to go its own way.

China’s rebalancing will enable it to absorb its surplus savings, which will be put to work building a social safety net and boosting Chinese households’ wherewithal. As a result, China will no longer be inclined to lend its capital to the US.

For a growth-starved US economy, the transformation of its codependent partner could well be a fork in the road. One path is quite risky: If America remains stuck in its under-saving ways but finds itself without Chinese goods and capital, it will suffer higher inflation, rising interest rates, and a weaker dollar. The other path holds great opportunity: America can adopt a new growth strategy – moving away from excess consumption toward a model based on saving and investing in people, infrastructure, and capacity. In doing so, the US could draw support from exports, especially to a rebalanced China – currently its third-largest and fastest-growing major export market.

Compared with other emerging economies, China is cut from a different cloth. China emerged from the late-1990’s Asian financial crisis as the region’s most resilient economy, and I suspect the same will be true this time. Differentiation matters – for China, Asia, and the rest of the global economy.

Stephen S. Roach, a faculty member at Yale University and former Chairman of Morgan Stanley Asia, is the author of Unbalanced: The Codependency of America and China.

Copyright: Project Syndicate, 2014.

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China Intervenes to Lower Yuan

China’s central bank engineered the recent decline in the country’s currency as part of its efforts to prepare the tightly tethered yuan for wider trading, according to people familiar with the central bank’s thinking.

By guiding the yuan weaker, Beijing intends to thwart short-term speculators betting on a continued rise and to introduce greater two-way volatility into its trading, these people say.

The move is the clearest sign yet that Chinese leaders are pressing ahead on financial reforms, which include a more-freely-traded currency, amid hopes the yuan could one day rival the U.S. dollar as the de facto global currency.

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Departing U.S. Envoy to China Praises Growing Economic Ties

Gary F. Locke, the departing United States ambassador to China, praised the growing economic ties between the two nations in a final news conference on Thursday but said China needed to make progress in establishing the rule of law and government transparency, and in respecting freedom of expression and human rights.

In the wide-ranging talk that touched on an array of diplomatic issues, including points of conflict, Mr. Locke also urged China and Japan to “lower the temperature” on their territorial disputes and spoke of how the United States and China could work together on using cleaner technology to alleviate the dire air pollution in China.

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China says decision on new air defence zone depends on threat

China said on Thursday any decision to set up new air defence identification zones would depend on the level of threat it faced in the air, following speculation it wants one for the disputed South China Sea.

China alarmed Japan, South Korea and the United States last year when it announced an air defence identification zone for the East China Sea, covering a group of uninhabited islands at the centre of a bitter ownership spat between China and Japan.

Concern has grown since in Washington and Asian capitals that Beijing plans one for the South China Sea, where China is engaged in territorial disputes with Vietnam, the Philippines, Malaysia, Taiwan and Brunei.

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China’s Xi Presides Over Internet Security Committee

Chinese Communist Party chief Xi Jinping presided over the first meeting of a new high-level committee to address Internet security in the country, according to a broadcast on China’s state-run television.

The group, which the broadcast said was set up to address the growing number of cyberattacks and other Internet security issues facing China following revelations by Edward Snowden of the U.S. last year, will work to turn China into a “global Internet power” and promote socialist values.

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China paper slams West’s “Cold War mentality” over Ukraine

China’s top newspaper criticized the West on Thursday for remaining locked in a “Cold War mentality” against Russia in the contest for influence over Ukraine, calling for the shackles of such outmoded thinking to be cast off to deal with the crisis.

The commentary published in the People’s Daily, the flagship newspaper of the ruling Communist Party, was the strongest reaction yet in Beijing to the rift between the West and Russia that has been growing since the ouster of Moscow’s ally Viktor Yanukovich as president following weeks of protests.

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The New Model of Major Power Relations in the Asia-Pacific

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No shift in China’s property loan polices

All four major Chinese banks told Xinhua on Wednesday no changes had been made to their property loan policies, helping calm the somewhat panicking property and stock markets.

The stock market was slightly unnerved earlier this week after the Industrial Bank reportedly decided to suspend some loans to fend off property bubble risks.

Chinese shares plunged on Monday and Tuesday over fears of a property bubble burst stemming from rumors that Chinese banks had suspended property loans to reduce financial risks.

As real estate companies bounced back on Wednesday, the benchmark Shanghai Composite Index rose 0.35 percent, or 7.03 points, to finish at 2,041.25. The Shenzhen Component Index gained 0.21 percent, or 15.67 points, to close at 7,319.61.

On Wednesday, a number of Chinese banks confirmed to Xinhua that they had not changed their property loan policies.

A chief of the Bank of Communications’ public relations department, who refused to give his name, said the bank’s headquarters had issued no directives telling its branches to suspend property loans.

China’s top four banks, the Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China (ABC) and China Construction Bank, all confirmed to Xinhua that there had been no change in their property loan policies.

China’s banking sector had not tightened credit policy towards real estate companies, said a research paper by the China International Capital Corporation this week.

It is merely a single business department of an individual bank, which is the Industrial Bank, that had restricted some financing products for the real estate sector, it added.

However, a senior employee in ABC’s public relations department said although the bank had not suspended property loans, they noticed the risks in the real restate market, and would adopt differentiated policies in accordance with changes in the market.

The newly-found uncertainty came amid signs of a gradually cooling property sector, as official data on Monday showed home prices dropped last month in more Chinese cities.

Of 70 major Chinese cities, 62 saw monthly rises in new home prices, while prices in six cities declined in January. New home prices fell in only two cities in December.

The average monthly increase for new homes slowed slightly to 0.49 percent last month from 0.51 percent in December, with the average in the four first-tier cities — Beijing, Shanghai, Guangzhou and Shenzhen — slowing 0.1 percentage points from December, the data showed.

Prices of existing homes also cooled, declining in 13 cities, as opposed to only five in December.

However, bank executives and economists played down the risks. “Property loans are relatively good loans as housing is reliable collateral,” an executive of a big Chinese bank said.

“In addition, the banks are in control of interest rates so property loans can produce high returns, especially concerning property in big cities where risks are controllable,” he added.

Lian Ping, chief economist of the Bank of Communications, said systemic risks are not likely even though the property market suffers problems, because the proportion of property loans in the banks’ total loans is not high.

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Chinese yuan continues to weaken against USD

The Chinese currency, the Renminbi or the yuan, weakened 32 basis points to 6.1224 against the U.S. dollar on Thursday, according to the China Foreign Exchange Trading System.

The RMB has depreciated against the U.S. dollar in seven out of the past eight trading days since Feb. 18. The exception was Feb. 25, when the yuan strengthened 5 basis points.

In total, the yuan has fallen 171 points during the past eight trading days. China’s domestic foreign exchange spot change rate hit a seven-month low on Tuesday, according to China’s forex watchdog.

In China’s foreign exchange spot market, the yuan is allowed to rise or fall by one percent from the central parity rate each trading day.

The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices before the opening of the market each business day.

China’s forex watchdog, in response to continuous yuan depreciation and market speculations over its cause, said on Wednesday that the latest round of yuan volatility this past week is normal.

Recent movements of the Renminbi resulted from the market correcting previous yuan trade strategies, said the State Administration of Foreign Exchange (SAFE) in a statement.

Two-way fluctuations of the yuan are normal because of reforms in the yuan forex rate formation mechanism and a larger role played by the market, SAFE said.

The two-way fluctuations will help boost international income balances, improve the external economic environment and guard against financial risks, it said.

Despite recent depreciation, Lu Ting, chief China economist with Bank of America Merrill Lynch, said his institution continued to expect some yuan appreciation in 2014 with a year-end target of 6.00 yuan against one U.S. dollar.

There is no basis for sustained yuan depreciation, as China’s trade surplus is expected to rise to 280 billion U.S. dollars in 2014 from 265 U.S. dollars in 2013, he said in a research note.

Moreover, China will still be perceived as relatively safe compared with other emerging markets, owing to its large holdings of foreign exchange reserves and robust economic growth, Lu said.

Chinese policymakers and scholars, however, have reached the consensus that the current USD to RMB exchange rate is close to equilibrium level, and that further one-way appreciation of the yuan against the U.S. dollar should be avoided, according to Lu.

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Chinese companies are flocking to US for IPOS

About 15 to 20 companies from China are expected to go public in the United States this year amid restored investor confidence in the nation’s companies, a senior executive of the stock exchange in New York said on Wednesday.

The new listings from China will mainly be in the health, high-technology and retail sectors.

“China has become the third-largest country by the number of companies listed on NYSE Euronext, following the United States and Canada,” said David Ethridge, senior vice-president and head of capital markets at NYSE Euronext Inc, which operates equity exchanges around the world.

As of Nov 30, 2013, there were 74 Chinese companies listed on the New York Stock Exchange and nine on a smaller subsidiary exchange established specifically for small-capitalization companies. These companies’ total market capitalization stood at $1.04 trillion on that date.

Ethridge said that China will remain in the top three because of Chinese companies’ desire to list on the exchange as well as renewed investor confidence in such listings.

Starting in late 2010, the shares of US-listed Chinese companies were targeted by short-sellers. The situation became so serious in the fourth quarter of 2011 that 58 Chinese companies faced the prospect of being delisted in the US.

Their share prices recovered slightly in the first half of 2013. In the second half, conditions improved greatly, with the prices of 50 percent of those companies up more than 50 percent year-on-year. Discount online seller Vipshop Holdings Ltd even saw its price increase 369 percent last year.

Higher share prices led to renewed confidence among investors. At the same time, Chinese companies became more positive about conducting IPOs in the US.

Six Chinese companies listed there last year, raising $720 million, compared with just two IPOs in 2012.

That reflected a major decline from 2010, when 34 Chinese companies went public in the US.

Global investors are now paying closer attention to the quality of Chinese companies and conducting intensive due diligence. That’s in marked contrast to 2010, when almost all Chinese companies were popular, according to a report by the NYSE.

The US market is particularly attractive for Chinese Internet companies, and their performances in the capital markets there have been “pretty good”, said Ethridge.

The six US-listed companies last year were all in the Internet sector.

As of the end of 2013, the individual market capitalization of more than half of the Chinese Internet companies listed in US exceeded $1 billion.

Chinese companies planning IPOs in the US have become more cautious in choosing banks, accounting firms and law firms for their IPOs, said the report.

The micro-blogging site Weibo is reportedly heading for a market listing in New York with a valuation of as much as $8 billion.

Nasdaq-listed Sina Corp, which owns 71 percent of Weibo, is looking to raise more than $500 million through the deal, which is expected to take place in the second quarter

Jumei.com, an e-commerce company that sells cosmetics, is planning a US IPO and will seek to raise about $500 million.

Another e-commerce site, JD.com, recently filed documents indicating plans to raise $1.5 billion in a New York offering.

By Cai Xiao (China Daily)

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Lung cancer cases linked to air quality

Potential health impact of smog could be much greater than SARS, expert says

A type of lung cancer reported to be increasing in Beijing has been linked to worsening air quality, with an expert warning that the potential health impact could be much greater than the SARS epidemic in 2003.

“The proportion of lung adenocarcinoma cases is increasing,” said Wang Ning, deputy director of the Beijing Office for Cancer Prevention and Control, adding that there has been a drop in the proportion of squamous cell lung cancer cases in the capital.

Adenocarcinoma of the lung is a common histological form of lung cancer that contains certain distinct malignant tissue, while the other type is a form of non-small-cell lung cancer.

Medical experts believe that smoking is more likely to cause squamous cell lung cancer, while exposure to air pollution, such as exhaust gases and secondhand smoking, is more likely to cause adenocarcinoma of the lung, Wang said.

Zhong Nanshan, an academic at the Chinese Academy of Engineering and director of the Guangzhou Institute of Respiratory Diseases, said that without timely intervention, pollution could have a potential health impact much greater than that of the SARS epidemic.

Zhong also said that severe pollution could result in low birth weight and premature births.

He said there has been an increasing number of studies on the relationship between air quality and health, and he referred to one linking exposure to air pollution and traffic fumes to low birth weight.

This study found that for every 10-microgram increase in PM2.5 per cubic meter, the incidences of premature birth increased by 3 to 5 percent, while average birth weights were lowered by 8.9 grams.

PM2.5 particles are air pollutants with a diameter of 2.5 micrometers or less, small enough to invade the smallest airways.

Some public health experts have forecast that in five to seven years, China will see a substantial increase in diseases including lung cancer and cardiovascular conditions, Zhong said.

Wang’s findings on cancer resulted from a study she led that was published in the Chinese Journal of Preventive Medicine in March 2011. Wang and her co-workers examined cases of lung cancer diagnosed at Beijing hospitals from 1998 to 2007.

“Of the city’s lung cancer cases that were histologically diagnosed, the proportion of squamous cell lung cancer decreased yearly from 30.41 percent in 1998 to 24.16 percent. Meanwhile, the proportion of lung adenocarcinoma increased from 42.83 percent to 46.80 percent,” the study found.

The International Agency for Research on Cancer, under the World Health Organization, has also linked lung cancer to air pollution.

In October 2013, the IARC said that outdoor air pollution was a leading environmental cause of cancer.

“After thoroughly reviewing the latest available scientific literature, the world’s leading experts, convened by the IARC, said there is sufficient evidence that exposure to outdoor air pollution causes lung cancer,” the agency said.

Beijing hospitals have reported a rise in patients seeking treatment for respiratory problems since smog descended on the capital seven days ago.

Zhao Hongmei, a respiratory medicine doctor at Beijing Bo’ai Hospital, said her department has been overwhelmed by patients.

“Usually, a doctor in my department sees 40 to 50 patients every morning. Now, the number has risen to 70,” she said. “We have been working at full capacity since Spring Festival.”

She said the number of patients in their 30s and 40s has increased markedly since the smog arrived.

“Most showed symptoms such as coughing and discomfort in the throat, but X-rays showed their lungs were not infected.”

Zhou Jipu, a doctor in the respiratory department at Beijing Hospital of Traditional Chinese Medicine, said he has seen an increase in elderly patients with underlying diseases in his department since Spring Festival, and smog has worsened their conditions.

By WANG QINGYUN and SHAN JUAN ( China Daily )

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China Currency Set for International Role, Says ECB Board Member

China’s renminbi could become a leading international currency, even rivaling the U.S. dollar, if the country opens up its markets and liberalizes its foreign-exchange rules, a European Central Bank Executive Board member said Wednesday.

Speaking at a forum dedicated to the role of the Chinese currency in Luxembourg, Yves Mersch said that the Chinese currency remains in the early stages of its internationalization, but said the process is “rapidly moving forward.”

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Many in China Can Now Have a Second Child, but Say No

After three decades of a Chinese policy that limits most families to one child, many families say they will not take advantage of a major change allowing a second child because of the rising cost of child-rearing.

“With two kids you have less money to give them the best,” said Mao Xiaodan, 27, a Beijing lawyer seven weeks into her first pregnancy who has dismissed the prospect of a second child. She said she was concerned about stratospheric housing prices and the high cost of schooling. “My husband’s co-worker has twins,” she said, “and just paying for elementary school has nearly bankrupted him.”

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China plans national days on Nanjing Massacre, anti-Japanese war victory

China’s top legislature is considering designating two new national days, one to mark victory in the anti-Japanese war and the other to commemorate victims in the Nanjing Massacre, it announced on Tuesday.

September 3 is expected to be the victory day and December 13 the memorial day for massacre victims, according to two draft decisions submitted for review at the bi-monthly session of the Standing Committee of the National People’s Congress which runs from Tuesday through Thursday.

“It is extremely necessary to set the days through legislative procedures,” said Li Shishi, director of the Legislative Affairs Commission of the NPC Standing Committee, while reporting to the legislative body.

Lawmakers, political advisors and people from all walks of life have repeatedly proposed setting the two dates as national days and institutionalizing national ceremonies of commemoration, Li said.

VICTORY DAY

He said that the planned designation of the victory day reflects the will of the Chinese people and reminds us of the need to remember history, cherish peace and create a better future.

The war of resistance against Japanese aggression was the first in modern history in which China won complete victory over foreign aggressors and an important part of the World Anti-Fascist War, according to Li.

China’s victory over Japanese aggression was a crucial point in turning China from weakness to revival and an important foundation to achieve national independence, liberation for the people and the founding of the People’s Republic of China, he said.

The draft decision to set the day was made to better commemorate heroic martyrs in the war and all the people who contributed to victory, as well as to recall the arduous resistance against Japanese militarists’ aggression, according to Li.

The draft decision was also aimed at expressing China’s stance of safeguarding national sovereignty, territorial solidarity and world peace, while carrying forward national spirit with its core of patriotism and inspiring the drive to realize the Chinese dream of national rejuvenation, the official said.

MEMORIAL DAY

The day must be held as an occasion for remembering the Nanjing Massacre victims and holding public memorial services and other activities on the national level, Li said.

Japanese troops started the massacre in Nanjing on Dec. 13, 1937, killing more than 300,000 people in the following 40-odd days.

As a flagrant violation of international laws, the atrocity was tried by the International Military Tribunal for the Far East and the Nanjing War Crimes Tribunal, which have already rendered a verdict based on irrefutable evidence.

The draft decision was made to mourn victims of the massacre and all those killed during the Japanese aggression against China, exposing the war crimes of Japanese invaders, Li said.

The occasion is expected to serve as a reminder of calamities the war caused for Chinese people and the world, and as an expression of the Chinese people’s stance of combating aggression and safeguarding human dignity and world peace.

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China petition reform vows rule of law

China unveiled a set of reforms to its petition system on Tuesday, vowing rule of law in handling petition cases and expanding petition channels online to better redress public grievances.

According to a set of guidelines released by the general offices of the Communist Party of China Central Committee and the State Council, authorities will stick to lawful means to dissolve conflicts and disputes.

Any malpractice that constrains the public from legal petitioning will be rectified and prohibited.

Guaranteeing and improving people’s wellbeing will become the “groundwork” to prevent and defuse disputes, under the guidelines.

Petitioning, also known as letters and calls, is the administrative system for hearing public complaints and grievances. People who are not satisfied with government decisions can request reexamination.

Many complaints are filed each year in China, in which petitioners generally see injustice in land acquisition, social security, education, healthcare or environmental protection.

They can supposedly take their grievances to a higher level if they fail to get satisfactory feedback from local petition offices, but local officials often prevent them from raising such cases with their superiors.

The latest reforms feature an expansion of channels for the public to file petitions, including through hotlines, videos and online formats.

Petition cases will be diverted to courts if they involve lawsuits, and government policy and decision-making will become more transparent and enlist more public participation, said the guidelines.

Officials are told to perform their duties according to law and improve their work styles to cement ties with the people.

The guidelines asked officials to accept petitions from the public in a face-to-face manner at intervals ranging from one day in six months for provincial-level officials and one day every week for township ones.

Inspection authorities are urged to better supervise officials’ handling of petitions, with a focus on issues that are common subjects of public complaints or that have not been resolved long after being acknowledged.

Those found to have showed indifference or hampered people’s interests in petition handling, refusing or delaying petitions, will be seriously punished, according to the guidelines.

They also vowed to improve assessment of governments regarding the handling of petitions, by placing more stock in the effectiveness of settlements rather than the number of petitions handled.

Local authorities were also told to improve their capabilities to resolve problems reported by the people and to prevent conflicts to safeguard social justice and harmony.

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LinkedIn targets ‘lead elites’

While most foreign Internet giants stumbled in the Chinese market, the United States-based professional social networking company LinkedIn Corp is moving to become more localized in China.

LinkedIn, the world’s largest online professional network with 277 million members globally, launched a Chinese-language website on Tuesday to offer more localized services.

Its new website will be called Ling Ying (lead elites).

Derek Shen, LinkedIn’s China president, wrote in a blog post that LinkedIn has created a joint venture with Sequoia China and China Broadband Capital to connect more than 140 million Chinese professionals.

LinkedIn owns 93 percent of the China joint venture, while the other two partners put in $5 million in cash for a 7 percent stake, according to a filing earlier this month with the US Securities and Exchange Commission.

California-based LinkedIn announced recently it had about 50 million members in the Asia-Pacific region. China ranked as the third-largest market for LinkedIn in the region with 4 million members, behind India (about 24 million) and Australia (5 million). LinkedIn has had operations in China with an English-language site for more than a decade.

“LinkedIn is still at an initial stage of its development in China.We hope to localize and improve our products and services for Chinese professionals,” Shen said.

“The chance for LinkedIn to ‘win’ in China is greater than 50 percent, because we have a local team, as well as support from the international platform,” Shen added.

China has long been a market where foreign Internet giants rarely achieved successes. LinkedIn’s social media peers such as Facebook Inc and Twitter Inc were blocked after they balked at government censorship rules.

Facebook hasn’t built up operations in China beyond hiring contractors to help advertisers reach people outside the country, Bloomberg News quoted Debbie Frost, Facebook’s spokeswoman, as saying.

Google ceased search tools in the Chinese mainland and redirects users to pages in Hong Kong.

“LinkedIn cannot avoid the same tricky political questions that were encountered by other foreign giants. The issue matters a lot because it determines whether LinkedIn can have legitimate status in China,” said Xie Wen, a Chinese IT expert and former president of Yahoo China.

Jeff Weiner, chief executive officer of LinkedIn, confirmed on Tuesday that the company will adhere to China’s censorship rules to maintain normal operations in the country.

To learn from previous global players’ failures, Xie also pointed out that LinkedIn has to localize thoroughly. “LinkedIn cannot just copy the US model. If foreign high-level management does not know China issues, then just let the Chinese team handle the problems,” he said.

In addition, LinkedIn should have enough patience and be willing to keep investing, because it takes time to grow a business, Xie said.

Dong Xu, a Beijing-based analyst, voiced pessimism about LinkedIn’s future development in China. “First, Chinese users usually hesitate to pay websites for services, while LinkedIn collects good money from its members overseas,” Dong said.

Meanwhile, China does not have a well-developed professional networking environment, she said.

“Chinese people do not separate their social networking activities into some for entertainment and some for professional development. Most of their professional social networking demands are still met offline,” Dong said.

There are several existing competitors in China’s professional networking market. Jamie Huckabay, chief executive officer of the Shanghai-based ushi.com, a networking system focusing on white-collar professionals, said that the market will benefit from LinkedIn’s move in China.

“There are great opportunities in the market as more people find it important to network professionally and more companies use such network systems as agencies to locate the right talent.

“With more players in the market, such as LinkedIn, we actually have more partners to move the industry in the right direction,” Huckabay said.

By Shen Jingting and Meng Jing ( China Daily)

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China says worried by Japan arms exports ban revision

China expressed concern on Tuesday about Japan’s drafting of new guidelines that would reverse a decades-old ban on weapons exports, saying it was a worrying part of Japan’s swing to the right.

A source with knowledge of the matter told Reuters on Sunday that Japan had drafted the new guidelines. The changes would likely further strain Japan’s ties with China and South Korea.

Japan has been reviewing the self-imposed export ban under Prime Minister Shinzo Abe’s new security strategy, aimed at bolstering the self-reliance of the military.

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Easy Currency Bet Gets Harder as the Chinese Yuan Tumbles

A sharp and sudden slide in China’s yuan is forcing investors to rethink one of the most reliable trades in financial markets over the past four years: betting on gains in the Chinese currency.

Since China resumed efforts to move the yuan higher in 2010, traders have piled into bets that profited as the currency has staged a seemingly relentless advance. But after hitting a record against the dollar in mid-January, the currency has dropped over 1%, reaching a six-month low on Tuesday.

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Philippines Summons China Envoy Over Water Cannons in Shoal

The Philippines summoned China’s envoy in Manila to protest the use of water cannons on Jan. 27 to drive Filipino fishing boats from a disputed shoal in the South China Sea, calling it an act of harassment.

“We call on China to respect our sovereignty and the rights of our fishermen in that area,” Philippine Foreign Affairs spokesman Raul Hernandez said in a televised briefing in Manila today. The Philippines “strongly protests the acts of harassment and the manner by which these were committed.”

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Compliance becomes hotter issue for U.S. firms in China: report

U.S. companies in China placed greater focus on compliance last year after several high profile probes into corruption and high pricing, but rising costs and a skills shortage remained their main concerns, the American Chamber of Commerce in Shanghai said in its annual report.

The handover of power to a new generation of Chinese leaders last year raised uncertainty among U.S. companies over the political environment, but they were less worried than earlier about the risk of a slowing Chinese economy, according to the report released on Tuesday.

China is the world’s second largest economy and posted 7.7 percent GDP growth in 2013, slow by Chinese standards but far quicker than stagnant growth in Europe and the United States.

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China leader’s stroll in Beijing alley sparks buzz

Chinese President Xi Jinping braved Beijing’s choking smog Tuesday, making an unannounced visit to a trendy alley and sitting with residents in his latest public relations effort to be seen as a man of the people.

Xi wore a black jacket and pants and was followed by a posse of similarly plainly suited Beijing city officials for his short stroll through part of a traditional alleyway popular with tourists and fashionable youth.

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China targets judicial corruption in commutation

Chinese authorities have vowed to crack down on judicial corruption in commutations of sentences and probation following a number of cases of convicts bribing their way out of jail.

“Terms and procedures on commutation, parole and serving a sentence outside jail for medical reasons should be stringent within the framework of the law,” said an instructive document released on Monday by the Commission for Political and Legal Affairs of the Communist Party of China Central Committee.

In one high-profile case, Zhang Hai, former board chairman of Jianlibao Group Co. Ltd., a Chinese beverage giant, used illegal means to have his sentence cut by five years in a second court trial and had his jail term further reduced by more than four years while he was serving the sentence.

In a Monday statement, the Supreme People’s Procuratorate (SPP) revealed that Zhang’s lighter sentence was achieved through stealing crucial information revealed by other suspects to serve as his own contributions to police investigations.

He also persuaded outside connections and bribed prison and justice officials to fabricate documents on his good behavior to claim two commutations.

While confirming the valid role of remission in rehabilitating convicts and helping them return to society, the commission noted “some problems” in this area that “severely trample the sanctity of law and harm the credibility of law enforcement,” citing criminals who use money and power to dodge punishment.

According to the commission, illegally making decisions to commute a sentence or grant release on probation will be severely punished.

The document focuses on regulating commutation, parole and serving a sentence outside jail for medical reasons for three kinds of crimes, namely taking advantage of one’s position, disrupting financial order and financial fraud, and organizing mafia-style groups.

In order to warrant remission, criminals convicted of these three crimes should be proactive in disgorging ill-gotten gains, assisting in recovering illicit money and goods overseas or paying compensation, it said.

Those who try to reduce their sentences or secure probation using personal influence or other improper means will be refused remission even if they are repentant, according to the document.

Criminals convicted of the three crimes should be prevented from applying for commutation for a period, while those sentenced to life in jail should not be eligible for remission until they have served three years, it said.

Once the life-termer is granted commutation, they should be refused further remission within two years and each abatement of sentences should not be over one year, it added.

According to the document, convicts with diseases are not allowed to serve their sentences outside jail if they do not cooperate with medical treatment arranged by penalty enforcement organs or they are likely to present a danger to society outside jail.

The commission called for procedures on commutation, parole and serving a sentence outside jail to be made public in order to prevent judicial corruption.

Under the current law, requests for a convict’s remission should be proposed by jails, detention houses or other penalty enforcement organs, and then submitted to the courts, with procuratorates supervising the whole procedure.

Submissions of commutation, probation and serving a sentence outside jail should be made public and subsequent verdicts by the courts must be published on their official websites, the document noted.

Hearings are needed when it comes to remission for convicted officials above county level involved in job-related crimes, and criminals convicted of death sentences with a reprieve or life sentence for disrupting financial order or financial fraud, it said.

Publicizing submissions and verdicts in warranting remission will effectively curb judicial corruption concerning commutation and probation, said Zhou Guangquan, law professor of Tsinghua University.

To curb abuse of power in warranting remission, law enforcement officers will have sign-off and be held responsible for each procedure they handle, said the document, adding regular supervision and inspection will be conducted nationwide.

Judicial officers will be sacked if they are found illegally commuting a sentence or granting release on probation, through means such as fabricating information, forging materials or taking bribes from convict.

“Trading power for money or dereliction of duty will be severely punished,” the commission said.

Apart from judicial officers, people who provide fake medical certificates to help criminals escape penalties will be held accountable, it added.

According to the SPP, 24 people are being or have been investigated for suspected involvement in Zhang’s manipulations. They include 11 in the judiciary and prison service, three working in detention centers, one court official, two lawyers and seven others.

Among them, three working in the prison, court and detention services have already been sentenced to five to six years in jail, with Zhang’s secretary, Kang Jie, receiving 11 months.

Meanwhile, the two reduced sentence decisions have been revoked and the second court ruling is also being reconsidered by Guangdong’s higher court.

Related departments are now trying to arrest and extradite Zhang and Huang Lu, Zhang’s girlfriend who is alleged to have bribed officials for a reduction in his sentence. Their whereabouts were not revealed by the SPP.

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Real estate price growth loses steam

Growth in home prices continued to slow in January, adding to signs of a cooling property sector, official data showed on Monday.

The trend emerged after local governments took measures to rein in escalating prices and banks tightened lending to property developers.

Month-on-month average growth in new home prices fell to 0.49 percent in January from 0.51 percent in December, the National Bureau of Statistics said.

Of the 70 cities tracked by the bureau, 62 saw home prices rise in January from December, compared with 65 cities in December.

Prices in six cities fell in January compared with the previous month, with prices in two cities remaining unchanged.

Growth in new property prices slowed in January in four major cities — Beijing, Shanghai, Guangzhou and Shenzhen — the bureau said.

New home prices in Beijing rose by 18.8 percent compared with the same period last year, the slowest year-on-year growth since August.

In Shanghai, prices increased by 20.9 percent year-on-year, the slowest since September.

Property prices rose by 18.9 percent in Guangzhou and by 18.2 percent in Shenzhen from a year earlier, the slowest since July.

Liu Jianwei, a senior analyst at the bureau, said two factors contributed to the slowdown in price growth.

First, a slew of provincial capitals have tightened property policies and increased supplies of affordable housing since November, helping to stabilize market expectations.

Second, a tightened credit supply has reduced property turnover, denting prices.

Shen Jian-guang, an economist in Hong Kong at Mizuho Securities Asia, said: “We see firm determination by the Chinese government to curb the property market.

“Measures on the financial market are having an impact on the property market. We should see a turning point this year when home prices in China’s first-tier cities stop rising.”

Data from private research institutions show that property turnover fell further in February.

Weekly data from China Index Academy, a research body with the nation’s biggest real estate website, SouFun Holdings, show that 39 out of the 42 cities it monitored from Feb 10 to 16 saw a fall in transactions compared with a year ago.

Transactions in Beijing dropped by 91.8 percent, while those in Shenzhen fell by 89 percent.

A report by property brokerage Centaline China said, “Although the Spring Festival period is traditionally the off-season for the property market, this year was particularly quiet.”

The report compared turnover data in 54 cities it monitored during the Spring Festival period (15 days before and after Lunar New Year) for the past three years. While data for Spring Festival in 2012 were the worst, this year’s were the second-lowest. In first-tier cities, turnover fell by nearly 40 percent.

In Hangzhou, capital of Zhejiang province, prices at a property project were cut by 2,000 yuan ($328) per square meter, while in Changzhou, Jiangsu province, prices were reduced at a project by 5,000 yuan per square meter, Chinese media reported.

The tightening of national monetary supply also took its toll on mortgage policies.

A number of major banks canceled their 15 percent discount on first-home mortgages, while some smaller banks even raised their mortgage rates to 130 percent of the benchmark rate.

The development saw Chinese developers’ share prices fall on Monday. Real estate stocks tumbled, leading to a 1.75 percent decline in the Shanghai Composite Index, its steepest loss in a month and a half.

Yang Hongxu, vice-president of the E-house China R&D Institute in Shanghai, said turnover and price rises will moderate this year, but he remains upbeat about China’s property market. “The price gain will narrow, but it will still be a gain. Prices in major cities will not drop,” he said.

By Zheng Yangpeng

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Smog to loom large over two sessions

Environmental issues, especially the nation’s problems with smog, will be a major focus at the upcoming plenary sessions of the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference, according to officials who are busy preparing legislative proposals for the annual meetings.

“I am working on economic and technical proposals that will implement the clean burning of coal, which will help solve our smog problem,” said Cao Xianghong, a petrochemical expert at the Chinese Academy of Engineering.

The proposal by Cao, a member of the National Committee of the CPPCC, will suggest that the task of burning coal fall more heavily on large enterprises instead of individual households in order for the government to better manage emissions.

Yao Tandong, who last year recited a poem to President Xi Jinping during the two sessions to poke fun at the heavy smog, said his proposals will likely be about pollution. Yao is the director of the Chinese Academy of Sciences’ Institute of Tibetan Plateau Research and a member of the National Committee of the CPPCC.

Chai Fahe, vice-president of the Chinese Research Academy of Environmental Sciences, said airborne pollution will be a hot issue at the two sessions for years to come. Chai added that several legislators have inquired into the latest draft of the nation’s Atmospheric Pollution Prevention Act that will be submitted to the NPC at the two sessions.

“The revision of the act will be a major discussion point at this year’s two sessions,” he said.

“The legislators’ proposals will mainly focus on three aspects: to accelerate the revision process; to clarify the responsibilities of local governments and polluters, which includes strengthening penalties; and to enhance the management on mobile pollution sources.”

Chai said many legislators will likely bring up the public’s heightened expectations of cleaner air as China releases its Airborne Pollution Prevention and Control Action Plan (2013-17) on the national level and as local governments create anti-pollution action plans.

Leading up to the two sessions, combating smog was a top priority at many provincial legislative sessions in January and February.

Last month, Beijing passed an airborne pollution prevention law that sets a pollution reduction target. The regulation provides a general framework for action that will be augmented by detailed directives to be published soon. It will take effect on March 1.

With many legislators focusing on battling smog, others said they will focus on other environmental issues, such as water pollution and ecological security.

“I’ve already known enough deputies who are preparing to bring up smog in their proposals,” said Gao Jixi, director of the ecology institute of the Chinese Research Academy of Environmental Sciences.

He said he is working on a proposal about how to manage nature reserves to build an ecological network.

Gao, who is also a member of the CPPCC, said he may also raise another proposal that tackles environmental problems during the process of urbanization.

Thick smog has enveloped northern China for the past five days, affecting more than one million square kilometers of the country.

By Wu Wencong (China Daily)

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Lou vs. Lew: U.S. and China Trade Barbs Amid Fed Taper Worries

A day after U.S. Treasury Secretary Jacob J. Lew criticized China for dragging its feet on economic reform, a senior Chinese official has struck back.

“Take the U.S., for example: Its recovery is being helped by monetary policy and not much by structural adjustment,” Lou Jiwei, the 63-year-old finance minister told Bloomberg News on Feb. 22 at a G-20 ministerial meeting in Sydney. “They have always been saying that China should boost its consumption ratio and the U.S. should boost its investment ratio, but that structural change is not happening in the United States.”

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China Accused of Firing Water Cannons at Filipino Fishermen

A top Philippines military official accused China on Monday of firing water cannons at Filipino fishermen near a disputed shoal in the South China Sea.

“The Chinese Coast Guard tried to drive away Filipino fishing vessels to the extent of using water cannon” near Scarborough Shoal on Jan. 27, Gen. Emmanuel Bautista, chief of staff of the Philippine Armed Forces, told foreign reporters at a forum in Manila, according to Agence France-Presse. He did not say if any injuries resulted from the incident.

Chinese maritime law enforcement vessels have maintained a presence at the shoal, which is claimed by both the Philippines and China, since a tense, monthslong standoff between the two countries in 2012.

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China sacks vice police chief with connections to Zhou Yongkang

China formally sacked former vice minister of public security Li Dongsheng, state media announced on Monday, only a day after news that China’s premier had unveiled more measures to tackle corruption.

Li Dongsheng had been suspended for suspected serious discipline violations last December, a brief statement issued by Xinhua said, giving no further details.

The term “serious discipline violations” normally refers to corruption, and the news comes as speculation intensifies about the country’s former domestic security tsar Zhou Yongkang.

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China Must Reduce ‘Unbearable’ Smog, Government Adviser Says

Air pollution in China, the world’s biggest carbon emitter, has reached intolerable levels and the country should aggressively cut its reliance on coal, according to the government’s climate-change adviser.

“China’s pollution is at an unbearable stage,” Li Junfeng, director general of the National Center for Climate Change Strategy and International Cooperation, said at a conference in Beijing yesterday. “It’s like a smoker who needs to quit smoking at once otherwise he will risk getting lung cancer.”

Chinese authorities have pledged to shut polluting factories and limit the number of cars in response to growing public concern that dirty air and water are damaging people’s health. China, which now uses coal for about 65 percent of its energy, should cut that ratio by two percentage points a year, according to Li.

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China’s giant pandas arrive at new home in Belgian zoo

A pair of giant pandas from southwest China’s Sichuan Province arrived at their new home in Belgium’s Pairi Daiza zoo, some 60 km southwest of downtown Brussels, at around 15:00 local time (1400GMT) on Sunday.

About 2,500 people, many of them excited children waving national flags of China and Belgium as well as panda-decorated flags or wearing costume of Panda greeted the pandas along the road to the zoo.

Visitors today can only observe the pandas through a closed-circuit television system in the reception.

Officials said they want the pandas fully adapted to their new home before making public debut in April. The zoo authorities set the daily maximum visitors at 18,000 by then.

The pandas, Xing Hui, the male and Hao Hao, the female, are both 4 years old and are on lease from a breeding center in southwest China’s Sichuan Province.

The lease term is 15 years, according to officials with the China Conservation and Research Center for Giant Pandas, the world’s largest research base for the species.

“It’s a good thing for Belgium,”Nicole Duflot, a grandmother coming to the zoo with her husband and her grandson told Xinhua, “though today we can’t see the Panda but it’s a great thing for us to come here.”

The Pandas will be living in a panda hall of 5,300 square meters within the zoo.

“I hope Xing Hui and Hao Hao will enhance friendship between Belgium and China.” Liao Liqiang, the Chinese ambassador to Belgium, said during an interview with Xinhua.

“I hope the panda research cooperation programme will bear fruit soon, and Xing Hui and Hao Hao can soon give birth to a baby panda, I hope the Belgium people continue to pay close attention to them and pandas protection.” Li Qingwen, Deputy Secretary-general of China Wildlife Conservation Association said when addressing to the visitors coming to the zoo.

Li said, giant panda is China’s national treasure, pandas now enjoy better situation in the wild after all theses years of protection efforts.

“There are 2 captive-bred pandas released to the wild successfully, one of which has already live in the wild for one and a half year and the monitoring shows that it is in good condition.” He told Xinhua.

“Panda is the flag species to promote the animal and plant diversity, I hope we can encourage wild life protection through the cooperation programme.”Jia Jiansheng, deputy director of Department of Wildlife Conservation and Nature Reserve Management, State Forestry Administration of China, told Xinhua.

“In a bid to make the pair feel at home, the zoo spent altogether 10 million euros (13.7 million U.S. dollars) for the construction, 8 million euros of which spent on Chinese Temple and the Panda enclosure and 2 million euros for the improving the condition of the rest of the zoo,”Eric Domb,President of Pairi Daiza Zoo, said in the news conference.

The zoo authority said, the pandas sleep a lot in the trip, and they are in very good condition than expected.

They also said that the zoo will first try feeding the pandas 40 different varieties of bamboo, supplied from France and the Netherlands. Then depending on which varieties Hao hao and Xing Hui most like, Pairi Daiza have allocated 4 hectares of land to grow bamboo plantations for the duo.

In 1987, two giant pandas visited Belgium but only stayed a few months. Built on ruins of a medieval monastery, Pairi Daiza Zoo was praised as one of the best zoo in Europe, and has the largest Chinese garden in it. Some of the rare Chinese animal such as the Red Crowned Crane and the red panda has been settle down there.

Giant pandas are one of the world’s most endangered species. About 1,600 live in the wild, mostly in the mountains of Sichuan, while more than 300 live in captivity.

Known as China’s “national gem,” more than 40 pandas are on lease, and their offspring now live in 18 zoos in 13 countries. The lease term is usually 10 years.

Xing Hui and Hao Hao are the first two giant pandas China has sent overseas for a lease term of 15 years.

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CPC shows resolve to solve problems

President Xi Jinping’s latest speech showed Chinese leaders’ emphasis on improving the system and ability in governing the country.

At a workshop on deepening reform, held in the Party School of the Communist Party of China (CPC) Central Committee on Feb. 17, Xi told ministers and provincial governors that the CPC needs to provide a more stable and more effective system for development.

Xi said an important mission is to make the socialist system with Chinese characteristics more mature, comprehensive, stable and useful for the cause of the Party and state, as well as for people’s wellbeing, social harmony and stability.

While expressing confidence in the current system as a whole, which Xi believes represents the results of gradual development based on history, culture and economy, he admitted it needs improving.

Liu Jingbei, a professor with the China Executive Leadership Academy at Pudong, Shanghai, said the reform plan put forward by the CPC is a good roadmap, what needs to be done next is its execution.

In his speech at the workshop, Xi stressed improving Party officials’ governing capabilities in promoting the country’s governing system.

A more effective governing system will only happen when integrity, capability and skills of officials are improved and the efficiency of Party organs, government departments, public institutions, enterprises and civil organizations are raised, Xi said.

Zheng Changzhong, an associate professor with Fudan University’s School of International Relations and Public Affairs, said the country needs to tackle obstacles from vested interest groups in its reform after it has made the right plans.

“The advantages of socialism with Chinese characteristics would be effectively showcased if the country could succeed in both areas,” said Zheng.

China has seen enforcement of strict discipline over Party and government officials since the election of the new CPC leadership in November 2012 in efforts to promote clean governance.

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Gaokao gets accepted by overseas universities

International horizons have opened up for students sitting the national college entrance exam as an increasing number of overseas universities accept the exam’s scores, according to educational analysts.

Millions of Chinese students sit the exam, also known as gaokao, every year but only a select few enter the top domestic universities.

“The situation has changed as more foreign universities accept that Chinese students with high gaokao scores are qualified to sit in world-class classrooms,” said Zhang Feng, marketing manager for Australia and New Zealand projects at EIC Group, an overseas study consultancy.

Up to 60 percent of colleges and universities in Australia now accept gaokao results after the University of Sydney led the way in 2012, he said.

Students need to submit their gaokao scores, and if these are accepted, they have to satisfy English language proficiency requirements before enrolling.

For instance, the University of New South Wales launched its gaokao policy this year, with its entry requirements based on the percentage average of all attempted subjects in the exam.

Students from provinces with a maximum gaokao mark of 750, are required to achieve scores ranging from 600 to 660 (a range of 80 percent to 88 percent), to gain entry into the university’s undergraduate programs.

The degree programs span the humanities, commerce and economics, actuarial studies, architecture, fine arts, media, engineering and science.

Li Baoli, Europe projects manager for EIC Group, said universities in France, Germany, Italy and Spain are also accepting gaokao students.

“The required scores for gaokao in many European universities are much lower than at top domestic universities,” she said.

In a move to woo Chinese students, colleges and universities in those non-English-speaking nations have established degree programs in English, she said.

Analysts believe that accepting China’s gaokao scores reflects intense competition for the crucial student yuan and closer cooperation between those universities and their Chinese counterparts.

“In France, scores for subjects in the gaokao exam, such as math, chemistry and physics, are used to judge the academic level of a Chinese student,” Li said.

Alessandro Mariani, international affairs manager for China and Southeast Asia at the Paris Institute of Political Science, stressed the need for high grades.

“We are familiar with the education system of every country, for example the Chinese system, so we want our students to have high gaokao grades.”

The institute, one of the most prestigious in France, has more than 450 Chinese students, making up 10 percent of its international students.

Gao Zhihang, a senior high school student from the Inner Mongolia autonomous region, said greater international acceptance of gaokao grades offers students a host of opportunities.

Gao, 17, planned to apply to the Universite Paris-Sud with his gaokao scores this year.

“For me, it is too early to make a decision on whether to aim for a college career in China or abroad since there is no extra entrance exam in applying to overseas universities. All I need to do now is to be fully prepared for the upcoming gaokao,” he said.

Xiong Bingqi, vice-president of 21st Century Education Research Institute, said the upcoming education reform that removes the English test from gaokao will not impact on language skills for domestic students applying for overseas universities.

“Besides having to pass language tests for enrollment, such as the IELTS, Chinese students should also improve language skills for their future life overseas. Therefore, they will still devote themselves to studying foreign languages,” he said.

By Jin Zhu in Beijing and Li Xiang in Paris (China Daily)

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Tesla faces bumpy ride in China

Like Steve Jobs, the founder of Tesla Motors Elon Musk is called a genius and is highly skilled in hype.

With its high-profile debut, the Tesla seems to harbor ambitions to refuel China’s struggling new energy vehicle market. The company has engineered publicity stunts and stimulated stocks on the country’s sluggish A share market.

China, with its abundant local policy hurdles, is proving a hard nut to crack for the US upstart.

As part of Tesla’s marketing strategy, the model S, the carmaker’s pride and joy, was priced at 734,000 yuan ($121,300), half the price of an equivalent imported gasoline sedan, but still too high to intrigue China’s price-savvy buyers. The model S is nearly three times the price of China’s own electric sedan, which will certainly put a damper on Tesla’s sales.

Besides, Chinese consumers appeared to be uninterested in expensive environmentally friendly cars, Jia Xinguang, a seasoned auto analysts said.

Jia noted that buyers were more inclined toward gasoline vehicles that provide a better driving experience at the same or lower price.

The disinterest was directly reflected in sluggish sales of pure electric and hybrid vehicles last year, accounting for less than 0.1 percent of the market and contrasting sharply with total vehicle transactions.

In 2013, 22 million new cars rolled onto Chinese roads, China’s fifth straight year as the world’s biggest auto market. Tesla is out of step with China’s automobile boom, despite the expected explosion in new energy cars, top-down government aid, stronger environmental awareness and a threatened energy crisis.

The company’s marketing strategy might work in the US, but is misfiring in the Chinese market.

Unlike Tesla, China’s leading carmakers have put electric coaches, taxis and inexpensive private sedans as their main new-energy products, the government’s priority in the new energy era.

“Actually, no automakers in China consider electric sedans for individual customers a major development strategy, not to mention luxury cars for high-end buyers,” said Zhong Shi, another auto industry analyst.

Chinese government has supported the new energy vehicles with subsidies to carmakers and making it easy for buyers to register them. This has mainly benefited the electrification of public transportation like taxis and buses. Promotion is easier in those government-led fields.

By the end of 2015, China plans around 300,000 new energy vehicles in 40 cities, over ten times last year’s sales. Analysts expect the increase to mainly be in electric buses and taxis, not luxury sedans.

In response, Tesla is reportedly thinking about opening plants in China and launching models at a range of different prices, to win both the hearts of Chinese car buyers and the preferential policies of the Chinese government. In that case, Tesla will feel the pressure of fierce competition and local protectionism, inevitable during the localizing process.

Tesla’s leaders still have faith in their Chinese future and expect it to contribute greatly to their global revenue.

Tesla’s 2013 revenue increased nearly five times to $2 billion on a GAAP basis, with an overall loss of $74 million, way better than expected.

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Premier Li’s anti-graft speech published

The full text of a speech made by Premier Li Keqiang at a key anti-graft meeting earlier this month was published on Sunday, reiterating a systematic and reinforced anti-corruption campaign in 2014.

Li was speaking at a meeting of the State Council, or China’s cabinet, on promoting clean-handed government and mapping out this year’s anti-graft plans.

Calling for rigid accounting for government financial records, Li stressed that all government income and spending records must be included in the budget management, according to the full text of the speech.

He encouraged auditors to be brave in thoroughly probing violations.

Li also urged for reinforced supervision over the power, noting that the key to corruption restraint if to control the power and money spending of officials.

At the meeting, the premier vowed complete transparency in government affairs regarding “three public consumptions” on official vehicles, trips and receptions.

He also pledged maximum effort to loosening administrative approvals for investment.

He urged more publicity for food and drug safety, affordable housing and medical charges.

Officials were also told by Li to take the lead in clean government building by implementing the spirit of President Xi Jinping’s anti-graft speech to the third plenary session of the Party’s Central Commission for Discipline Inspection in January.

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U.S. Army General Meets China Officials Amid Regional Tensions

General Raymond Odierno, the U.S. Army chief of staff, held talks with his military counterparts in Beijing amid growing regional tensions involving China.

Odierno met with Wang Ning, deputy chief of the general staff of the People’s Liberation Army, at the defense ministry, U.S. Embassy spokesman Nolan Barkhouse said. He was also scheduled to meet Fan Changlong, vice chairman of the Central Military Commission, one of China’s highest-ranking military officials.

The visit reflects attempts to build trust between the two armed forces as China increasingly asserts itself in Asia, including patrolling waters where the U.S. has traditionally guaranteed security. In November, China set up an air defense identification zone covering East China Sea islands disputed with Japan, demanding civil and military aircraft present flight plans to enter the space. The U.S has refused to recognize the zone and continues flights in the area.

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Government to publicize administrative approval items

China’s central departments have been ordered to make public catalogues of their administrative approval items, in a bid to make government power more transparent.

According to a circular issued by the State Council on Thursday, all central government departments should publish their remaining administrative approval items on their official websites in the coming days, so they can be viewed by the public.

The move came amid the country’s drive to slash red tape.

The central government has cut or delegated to lower governments nearly 400 administrative approval items since the new leadership took office last March.

But how many items remain in central authorities is unknown.

The State Council, or China’s cabinet, said it will combine the catalogues into a collective publication and take stock of the total items kept for central departments after heavy slashing.

Central government departments will not be allowed to intervene the approval of items not included in the catalogues they publicized, according to the circular.

Moreover, the circular warned them not to exercise extra-catalogue administrative approvals, nor reinstate exempted items under disguise.

Some central departments had already taken action before the order. Logging on the website of the Ministry of Education, a Xinhua reporter found a catalogue listing all its 24 remaining approval items in the middle of its homepage.

Administrative approvals are an important demonstration of government rights. Fewer approvals by central government will give more power to local governments and freedom to enterprises, which is believed to contribute to the economy.

The move is aimed to let government power be exercised under the sun, said Dong Keyong, dean of the public administration and policy school of the Renmin University.

It will help “put power into the cage of regulations,” Dong said, quoting words that President Xi Jinping used in a vow to fight corruption.

He said that the approval items had long been a secret to the public and some departments even played games as they often add items under various excuses while the central government strives to exempt them.

In Thursday’s circular, government departments are also required to solicit public opinions on further reductions of such approvals and give priority to fields in which the removal of administrative approvals may have had a good impact.

Regarding one Ministry of Education’s approval item on the appraisal and selection of professors in higher learning institutions, a professor with a Beijing-based university, who refused to be named, had a word to say.

The appraisal of academic title is part of the university’s independent rights and should be decided by universities, the professor said, adding that the appraisal criterion also varies in different universities.

He held that the the ministry should collect public views on whether or not the item will be kept.

With the deepening of China’s administrative approval reform, local governments are also expected to publicize their approval item lists.

Premier Li Keqiang noted in a meeting earlier this week that China will establish a system to make all local governments’ power regarding administrative approvals transparent.

East China’s Zhejiang Province has announced that it will promote a “government power menu” system this year. Central province Anhui also asked local departments to “draw a diagram displaying the operation of power” in a pilot reform program.

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China Focus: China probes more senior officials

The Communist Party of China (CPC) has picked up its fight against corruption after the Lunar New Year by announcing probes of another two vice-ministerial-level officials.

On Tuesday evening and Wednesday morning, the Central Commission for Discipline and Inspection (CCDI), the CPC’s anti-graft body, publicized on its website that Ji Wenlin, vice governor of south China’s Hainan Province, and Zhu Zuoli, senior political advisor of northwestern Shaanxi Province, were under investigation for “serious violations of discipline and laws.”

The two officials were removed from their posts on Thursday.

The bombshells pick up from the CPC’s tough measures against corruption at the end of last year, when barely a week passed without news of high-level officials being probed. In December alone, investigations were opened into five ministerial and provincial-level officials.

Li Chongxi, chairman of southwest China’s Sichuan Provincial Committee of the Chinese People’s Political Consultative Conference, was last among a series of “tigers” being investigated last year. He was removed from his post for suspected violations of discipline and laws.

Ji and Zhu put the number of high-level officials being probed at 20 since the 18th CPC National Congress witnessed a power transition among the CPC Central Committee.

“It’s some sort of extension of last year’s anti-graft efforts,” said Dai Yanjun, a professor with the Party School of the CPC Central Committee. The fact that more than a month passed without any senior officials being brought down did not mean a suspension of the campaign, Dai added.

The lull may simply have been because authorities chose to hold off from announcing the news until after the Lunar New Year holiday, according to the professor.

Anti-graft work has been strengthened comprehensively since the congress, and it has been endorsed by the public. It has been impossible to overlook last year’s introduction of a number of key rules and regulations, including measures to curb extravagance during festivals, a five-year (2013-2017) plan on building a system to punish and prevent corruption, and the declaration that the efforts will target “tigers” as well as “flies,” meaning both high-ranking and grassroots officials.

Dai said the continuation of anti-graft work has also been reflected in further investigation of graft cases. People can see from public information that there seem to be links between the officials condemned last year and those being brought into the spotlight now.

For example, public records show that Ji has held a post in the CPC Sichuan Provincial Committee once chaired by Li Chongxi.

“Undoubtedly, more corrupt officials will be exposed as long as the anti-graft efforts investigate these networks,” said Dai.

Prof. Xie Chuntao with the Party School of the CPC Central Committee agreed that Ji and Zhu’s downfall is not “a reboot of the CPC’s anti-graft measures.”

It is very likely that the authorities pinned down their wrongdoing before the holiday, said Xie, adding that the CPC’s anti-graft plans were laid out at the third plenary session of the CCDI in January.

According to a communique issued after the session, the Party will carry on its anti-graft battle this year through reforming the supervision system and toughening punishment.

It will also sharpen the efficiency of CCDI inspections of provincial governments, state-owned enterprises and public institutions to discover malpractice and harmful work styles.

China’s anti-graft momentum has been strong since the 18th CPC National Congress, and it will keep on like this, said Xie.

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Beijing approves ‘two children’ policy

The Standing Committee of Beijing People’s Congress has passed a revision of the city’s regulations to officially allow couples in which either spouse is an only child to have a second child.

Before this, only couples in which both spouses were only children were allowed to have a second child in the city.

Wang Delin, vice-chairman of the legislative affairs committee under the congress, said the city’s infrastructure, such as hospitals, kindergartens and primary schools, should be improved to meet a possible increase in demand after the change of policy takes place, and women workers should be guaranteed maternal leave if having a second child.

He also suggested that the city’s authorities should conduct studies on whether to increase subsidies or other favorable policies for people such as senior couples who have only one child and couples who have lost their only child.

By Wang Qingyun (chinadaily.com.cn)

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Zero tolerance to judicial corruption: top procurator

China’s procurator-general Cao Jianming on Thursday pledged to fight against corruption within the procuratorial system.

There must be zero tolerance to judicial corruption and any procurators violating disciplines must be punished, said Cao, procurator-general of the Supreme People’s Procuratorate, while attending a meeting on anti-graft work within the procuratorial system.

Supervision should be strengthened to ensure procuratorial power is performed according to the law and regulations, Cao said.

In January, he called on procuratorial organs to provide specific measures for the implementation of a five-year (2013-2017) plan on building a system to punish and prevent corruption, issued by the Communist Party of China Central Committee in December.

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Can Tencent crack US market after Facebook-Whatsapp deal?

Facebook Inc will pay $19 billion in cash and stock for WhatsApp, a popular smartphone messaging service.

The lofty price tag shows the world’s largest social network’s determination to boost its mobile messaging service, a demographic where Facebook’s influence has begun to wane.

As the company gains an advantage in tapping into a new and relatively large group of youngsters actively messaging each other, WeChat, the mobile messaging application from China’s Internet giant Tencent, which is also aiming to woo the same demographic in the US market, faces a stronger rival now.

WeChat first went global in 2012. It has since made a splash in many emerging markets, including Southeast Asia and Latin America. However, capturing the US market can be difficult, according to Cao Junbo, chief analyst of iResearch Consulting Group.

“All the most popular mobile messaging apps in the world have their own territories. WeChat dominates Chinese mainland market while apps like Line and Kakaotalk have their faithful users in Japan, Korea and other Southeast Asian countries. Whatsapp is the most-commonly used messaging app in the US and Europe”.

“It will be hard for any of these services to tap into other markets because users from different cultures have different habits and preferences when it comes to mobile messaging”, said Cao. “The apps that dominate Asian market provides social platform, games and other services while Whatsapp only provides messaging service”.

Kelly Turketo, an Australian who has been living in Beijing for almost a year, said she prefers WeChat over Whatsapp. “I guess Whatsapp and WeChat are similar except WeChat has awesome animations. My Aussie girlfriend just downloaded it and she loves the animations. Now she’s always sending them to me.”

George Dufournier, an event planner who works with mostly teens in Miami and currently lives in Beijing, said he likes WeChat. “It’s a great combination of social networks and instant messages”, “I use Facebook mostly back in the US because it’s easier to create events and pages so people can confirm if they are coming to an event or not. People in the US use Whatsapp when they have friends overseas. I didn’t use it often back home because my mobile-phone plan offered me unlimited texts facility.”

“I can definitely see WeChat’s potential in the US market, but it might take time for it to gain popularity”, he said.

Lu Gang, the founder of Technode.com, the official partner of TechCrunch in China, said he hopes to see WeChat expand its presence in global market but expresses concerns.

“It has a great potential if it pushes harder. However, out of the 100 million overseas users it has, we don’t know how many are living in China. It will be even more difficult for WeChat to compete with Whatsapp now since Facebook is backing it”, Lu said.

According to Wired, Facebook admitted on a recent earnings call that teenagers are spending less time on its service, and a tool like WhatsApp is a way to attract the much sought-after demography.

The service now spans 450 million monthly users, and about 70 percent of them are active on any given day, Facebook said.

By Cai Muyuan ( chinadaily.com.cn)

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China Factory Data Show Slowdown Risk as Xi Limits Credit

A Chinese manufacturing slowdown fueled speculation that President Xi Jinping’s officials will switch focus in coming months from taming credit growth and financial risks to supporting economic expansion.

A factory gauge for February fell to a seven-month low, HSBC Holdings Plc and Markit Economics said yesterday. Barclays Plc said yesterday that the central bank had turned “more supportive” as the overnight loan rate sank to the lowest level in 10 months.

Investors are focused on financial stresses in the world’s second-biggest economy after the near-default last month of a high-yield trust product and as economists forecast the nation’s slowest expansion in 24 years. While the government has cooled credit growth, a record 2.58 trillion yuan ($425 billion) of new financing in January highlighted the challenges that remain.

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Chinese Naval Patrol Prompts Conflicting Regional Response

A three-week patrol by a Chinese naval flotilla in Southeast Asian waters has drawn conflicting responses from regional governments, exposing confusion over how to react to China’s rising maritime power.

Torn between offending a key trading partner and standing up for their countries’ sovereignty, some regional officials have denied that Chinese ships sailed close to their territory at all, despite Chinese government statements and state media reports to the contrary.

Two Chinese destroyers and one amphibious landing craft, which may have traveled with a submarine escort, according to security analysts, left southern China on Jan. 20. Chinese state media provided detailed coverage of the patrol, which pressed farther south than other Chinese naval missions have done in the past.

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Trefor Moss and Rob Taylor, Wall Street Journal via CHINA US Focus http://ift.tt/1d5T2xu

China preps military for ‘short, sharp war’ with Japan, US Navy analyst says

China is practicing for a “short, sharp war” with Japan.

That is the assessment of a top U.S. Navy intelligence analyst, who told colleagues that China’s People’s Liberation Army (PLA) is currently conducting training exercises in a practice scenario in which the military takes the Senkaku Islands, near Taiwan.

“We witnessed the massive amphibious and cross-military region enterprise,” Capt. James Fannell, deputy chief of staff intelligence and information operations for the U.S. Pacific Fleet (PACFLEET) said at the West 2014 conference on Feb. 13 in San Diego.

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China Yuan Falls to More Than 2-Month Low on PBOC Guidance

China’s yuan fell to a more-than-two-month low against the U.S. dollar Thursday after the central bank guided the local currency weaker for the third session in a row, fueling yuan depreciation.

On the over-the-counter market, the dollar was at CNY6.0834 around 0830 GMT, after hitting CNY6.0851–its highest level since early December and much higher than Wednesday’s close of CNY6.0764. The dollar traded in a range of CNY6.0807 to CNY6.0851.

The People’s Bank of China set the dollar/yuan central parity rate at 6.1146, above Wednesday’s 6.1103. The increase in the central parity came after the U.S. Federal Reserve meeting minutes showed support for the current pace of cutbacks to its bond-buying program. However, the parity has been strengthening recently even when the dollar was volatile on weak economic indicators.

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Wynne Wang, Wall Street Journal via CHINA US Focus http://ift.tt/1jgZdnl