China News - Spring 2010

Return of Chinese scientists

Shi Yigong, a Princeton University molecular biologist, was awarded a $10 million research grant in 2008, but he surprised everyone a few months later when he announced he was leaving the US to become the dean of life sciences at Beijing's Tsinghua University. Mr Shi's surprise return is an indication of China's determination to catch up with technologically advanced nations.

China has steadily increased its spending on research and development in recent years and it now amounts to 1.5% of GDP. This is still less than the 2.7% which the US spends, but is far more than other developing nations spend. A 2008 study by the Georgia Institute of Technology predicts that within the next decade or two, China will pass the US in the ability to transform research and development into marketable products for the world.

More Chinese students than ever now study abroad; in 2008, 180,000 headed overseas to study. During the last decade, only one on four who had left China actually returned, but recently, China has begun a reverse pull and over the last three years, renowned scientists like Mr Shi have begun to trickle back. They are lured by patriotism and believe that the impact of their work will be substantially higher in China than in the US. He and others like him left the US with fewer regrets than some Americans might assume. Although he rose through the ranks of Princeton University, he believes many Asians reach a glass ceiling in the US and he also complains about what he believes is an American tendency to demonise China. At Tsinghua, Mr Shi is optimistic and has recruited about 18 postdoctoral fellows - almost all from the US. He does not pretend that science at Tsinghua is on the same level as Princeton at the moment, but he believes they will get there 'in a matter of years'. (From International Herald Tribune 7/1/10)

Chinese language teaching in US public schools

Nobody keeps an exact count, but a US government survey released last year suggests that maybe 1,600 US public and private schools offer Chinese-language courses, up from 300 or so a decade ago. Some schools are paying for Chinese teachers on their own, but hundreds are getting some help from Beijing. The Chinese government is sending teachers from China all over and is paying part of their salaries. The numbers of schools offering Chinese classes is growing exponentially. Only 1% of the 27,500 middle and high schools teaching foreign languages ran Chinese classes in 1997, but this had risen to 4% by 2008. Experts believe several factors are the reason for the surge in Chinese. Parents, students and educators recognize China's emergence as an important country and believe that fluency in Chinese can open opportunities. At the same time, there has been a decline in Japanese, French, German and Russian language classes. (From International Herald Tribune 22/1/10)

Macau seeks slower pace

Fernando Chui, the Oklahoma-educated son of one of Macau's wealthiest families was sworn in as head of Macau's government on Sunday. Mr Chui is 52 years old and was previously Macau's first secretary for social and cultural affairs since 1999, after first being appointed a member of the territory's legislature since 1992. The event was attended by Hu Jintao.

Macau's economy has bounced back from recession and mainland officials have eased visitor limits. For the first 10 months of the year, Macau's gambling revenue rose 2.3% to about $12.09 billion compared to a year earlier and in October, there was a record monthly revenue of $1.59 billion. Gambling accounts for about 75% of all government revenue in Macau, which several years ago surpassed the Las Vegas Strip as the world's largest gambling centre.

At the same time, Beijing's leaders, concerned about social instability and alarmed at the amount of mainland money that ends up on Macau's gambling tables, are urging local leaders to embrace slower and steadier growth. Francis Tam, Macau's top gambling official, said in October that the government would consider capping the number of gambling tables, raise the entry-age limit to casinos to 21 years from 18 and look for other ways of growth than casinos. As Macau appears to rein in, Singapore is to open two major resort-casinos in 2010 and Taiwan is looking to opening its own casinos. (From The Wall Street Journal 21/12/09)

From the British Press

Year of the Tiger celebrations in Manchester

More than 60,000 people flocked into Central Manchester on Sunday 14 February to celebrate Chinese New Year. The 175 metre dragon emerged from the Town Hall and weaved its way along Princess Street to Chinatown. There were food and jewellery stalls and a stage show in the both the 'Chinese' car park and Albert Square featuring folk dancing, Shaolin Monks (smashing steel bars on their head), acrobats and other performances. A huge display of fireworks ended the organised events, but parties continued well into the night. The organisers expected 16,000 but got a crowd well in excess of that number. About 18,000 Chinese live in the Greater Manchester areas and this year's celebrations were the biggest ever. (From the Manchester Evening News 15/2/10)

Canada courts China to join controversial projects

Canada, faced with growing political pressure over oil extraction from its highly polluting tar sands, has begun to court China and other Asian countries to help. This comes as American firms are turning away because of the heavy carbon footprint and damage to the landscape. According to Greenpeace, tar sands causes up to five times more greenhouse gas emissions than conventional oil. The Canadian Government recently approved a C$1.9 billion (£1.5 billion) investment by Chinese state owned PetroChina, which gave it a majority shareholding in two projects.

Prime Minister Stephen Harper said that there would definitely be more Chinese investment in the resource and energy sectors. PetroChina has taken a 60% stake in two tar sands projects due to start in the MacKay River and Dover areas next year. The plan is to produce up to 35,000 barrels a day by 2014 and eventually up to 500,000 barrels a day. China made its first investment in tar sands in 2005 when China National Offshore Oil Corporation put C$150 million for a 17% stake in a start-up firm. Sinopec increased its share in the Northern Lights oil project to 50% last year. Yet another state owned Chinese oil company, China National Petroleum, has also bought tar sands leases which have not yet been developed. Japanese, Korean and Indian companies are all showing an interest in tar sands oil. (From The Guardian 15/2/10)

Beijing's power of veto.

Russia is showing signs of disenchantment with its long time ally, Iran, and the focus is now on China - the Security Council member most opposed to sanctions. Beijing has adhered to a policy of non-interference in the affairs of other countries and China trades with Iran for its oil. For all the recent events with the US (Taiwan, the Dalai Lama), China does not seek international confrontation. Since 1971, China has only used its veto twice. In the same period, the US has used its veto 76 times. China has never voted against economic sanctions although it has frequently abstained - even over Darfur. (From The Times 10/2/10)

Rise in military budget is lowest in years

China announced its smallest increase in military spending in more than two decades. The planned increase is 7.5% and will be used to enhance China's ability to 'meet various threats,' said Li Zhaoxing, spokesman for the National People's Congress (China's parliament). The defence budget of 532.11 billion yuan (£51.7 billion) is low in relation to the size of the territory of China and its population. It is a mere 1.4% of GDP compared to 4% in the US and more than 2.0% in Britain, France and Russia. Ni Lexiong, a defence analyst at Shanghai University said that the reason was partially the global financial crisis, but also because China does not want to be seen as an aggressive military power. Large increases cause foreign concern. (From The Guardian 5/3/10).

On the same topic in The Times on the same day, Li Zhaoxing is reported to have said that this decision reflected a desire to spend more on social welfare programmes, which have lagged in recent years and the gap between rich and poor has grown. Wen Jiabao, Chinese prime minister is expected to announce a shift in funding to sectors such as health and education. The Times also reports that China spends 4.3% of the world's military budget, compared to the US which accounts for 45.7% of all military spending in the world by spending $607 billion. However analysts state that China does not include costs such as military research in its defence budget.

China's new supercomputer

China now has the world's fifth most powerful computer. It can do 563 trillion calculations per second; the world's most powerful can do 1700 trillion calculations. It is expected that the new Chinese computer will be used in oil exploration and aircraft design. (BBC Focus Magazine January 2010)

New business opportunities in China's regions

Research at the University of Leeds Centre for International Business and its partners, which included the China-Britain Business Council, shows that China's regional cities (away from Beijing/Shanghai/Pearl River Delta cities), offer a cheaper business environment, expertise in particular industries, good local support and rapid growth accompanied by increasingly affluent populations. There are nearly 300 Chinese cities with a population of over one million (c.f. five in Britain) and using official Chinese statistics, the research team has produced a shortlist of 35 cities which also benchmarks their attractiveness against that of Shanghai. The result is an index that ranks these cities plus Shanghai according to their business attractiveness, both overall and in sectors which are especially important for Britain.

Interviews and data obtained from British firms in China have yielded insights into why firms would find these cities so suitable for their needs. Especially attractive areas include 12 cities around the Bohai Sea in north-east China and seven cities around Shanghai. They have good infrastructure and provide ready access to international markets through the ports of Dalian, in the north-east, and Ningbo, near Shanghai. Specialised services and critical mass, for example in manufacturing, are also available. (From 'Britain in 2010' published by Economic and Research Council)

China to lead world research by 2020

China will be producing more scientific research than any other country within a decade according to Thomson Reuters for the Financial Times. Vast state investment in schools, universities and research has driven 'awe-inspiring' academic growth. Academic discoveries are rapidly tapped for commercial potential and Chinese scientists are especially strong on chemistry and materials engineering - both of which are considered central to China's industrial development and economic future. The number of peer-reviewed research papers has increased 64-fold over the last 30 years. This is far faster than other 'emerging nations' such as Russia, India and Brazil. China is way ahead of the pack! (From The Daily Telegraph 26/1/10)

China to launch electric car at Detroit Motor Show

BYD, the Chinese carmaker (part-owned by Warren Buffet) is unveiling plans to bring its e6 vehicle to America, at the most important motor show in the world. Paul Lin, BYD's marketing manager, says that they plan to build an extensive after-sales network to reassure potential American buyers. The e6 is a 'crossover' car with five seats and will sell for less than $50,000, which is at the top end of the 'cross-over' mid-sized range. Lin believes that this year's US government's generous tax credits worth up to $7,500 for electric cars make it the right time to launch. The e6 is larger than most pure electric cars, has a range of 200 miles on a single charge and a top speed of 87 mph. It takes 15 to 20 minutes to charge the car to 50% capacity at a high-voltage quick-charge station or overnight using domestic electricity charging. BYD also plans to introduce its F3DM and F6DM hybrid cars to the US this year. (From The Times 11/1/10)

Hummer comes to end of road

The deal between General Motors and China's Sichuan Tengzhong for $150 million (£97 million) will not go through because the Beijing authorities believe that the gas-guzzling Hummer was not compatible with China's environmentally friendly policy. The deal, which was announced in June last year, fell foul of many regulatory approvals and a report that it did not even gain approval from local regulators in Sichuan province. As a result, Hummer will wind down in an orderly way with the loss of 3,000 jobs in the US. (From The Telegraph 25/2/10)

Chinese artist Qi Bashi reaches third place in sales league of 2009

Figures out next month from the art market data organisation Art Price will show that Pablo Picasso and Andy Warhol raked in more than $220 million (£143 million) between then in 2009, heading the rankings as they do every year. But this year the appearance of Qi Bashi immediately below them, with more than $70 million in sales, gives an indication of change in the international market - and China's economic boom. Qi (1863-1957) owes his place on the list with his work being described as original, striking and instantly recognisable. He is a household name in China and is best know for his reflective late pictures of mice, birds and especially shrimps.

In 2009, the traditional art markets of New York and London had their worst year, but during the same period, the Chinese market surged. This is due to local new money as the number of Chinese dollar billionaires reached 130 last year. The Chinese art market is now the third most important in the world after London and New York. (From The Times 25/2/10)

Chairman Mao's little red cookbook

Official guidelines have been issued to restaurants across China giving instructions on how to cook Mao's favourite pork meal. The dish is widely regarded as the 'brain food' that provided Mao with the wits to defeat his enemies and the Hunan local government has sought to standardise the cooking, although the true dish can only be made with the meat of rare pigs from Ningxiang County. The dish is hong shao rou (red braised pork) - cubes of braised belly pork with caramelised sugar and Shaoxing rice wine. Restaurants which do not follow the correct procedures will not be allowed to call themselves as 'authentically' Hunanese. Three other dishes have also been codified in the official recipe book. (The recipes are detailed in the 'Revolutionary Chinese Cookbook' by Fuchsia Dunlop, who in fact is a former member of SACU and a former editor of SACU's magazine). (From The Daily Telegraph 30/1/10)

Volvo sold to Geely of China

Ford has said that it hopes to complete the sale by the second quarter of next year in a deal that would mark one of the biggest moves to date of a Chinese car company into Europe. Geely is China's largest independent carmaker and is said to be keen to gain a foothold in Western vehicle development and manufacturing. Geely is believed to have offered just under $2 billion (£1.25 billion) for Volvo - far less than the $6.45 billion that Ford paid in 1999. Ford said that the sale, which is subject to financing and government approvals, would 'ensure Volvo has the resources, including the capital investment, needed to further strengthen the business and build the global franchise'.

Li Shufu, chairman of Zhejiang Geely Holding Group, said Geely is committed to complete the transaction in the best interests of all parties and that Volvo - which has 100,000 employees worldwide - would be uniquely positioned to exploit the fast growing Chinese market. (The Times 24/12/09)

People 'satisfied with their country's national conditions' 2009

Country % people 'satisfied' (approx-read off chart) Points change from 2008
China 87 +1
India 43 +2
Germany 43 +9
Indonesia 40 +10
United States 37 +13
Brazil 28 -3
France 27 -2
Russia 27 -27
Japan 25 +2
Britain 21 -9

Source: Pew Global Attitudes Project (From The Economist 2/1/10)

Porn sites closed down

China arrested almost 5,400 people involved in online pornography and shut down 9,000 illicit websites in 2009. The Ministry of Public Security believes that purification of the internet is essential for the county's stability. (From The Times 2/1/10)

From the Chinese press

Goodwill ambassador

The first Chinese ambassador against hunger appointed by the UN World Food Programme (WFP), Li Ning, performed his duties in Bangladesh on 4-8 December 2009. China donated $2 million to Bangladesh in 2008 and 2009 through the WFP. China began to receive food assistance in 1979: Guangxi Zhuang Autonomous Region was the beneficiary. However, China became a food donor by 2005 and by the end of 2008, China had donated $33 million to WFP throughout the world. Li Ning was a sports icon in China. He is aged 46 and won three gold medals in gymnastics at the Los Angeles Olympic Games in 1984 and was chosen to light the flame at the Beijing Olympics on 8 August 2008. (From Beijing Review 24/12/09)

Macao celebrates 10th anniversary

On 20 December 2009, Macao celebrated the 10th Anniversary of its return to the motherland. In 1999, the Macao Special Administrative Region was established (Macao SAR). During these 10 years Macao has experienced a rapid and constant economic boom. From 1999 to 2008, the GDP has averaged an increase of 13.30% every year and the average monthly income of its citizens virtually doubled from MOP4,500 ($563.85 to MOP8,000 ($1,002.40). In addition, high speed economic development and a continuous inflow of foreign investment reduced the unemployment rate from 6.3% in 1999 to 3.0% in 2008. Macao has retained its status as a free port with low taxes and its infrastructure has been greatly improved.

Macao's Basic Law, with 'one country two systems' as its guideline, has constitutional status in the SAR and has allowed it to retain its social system and lifestyle unchanged. The political system led by the administration and checked by an independent judiciary has been successful. The economic, social and cultural development prospects for the future are vast. (From Beijing Review 17/12/09)

High ranking official for trial

Wen Qiang, the highest ranking official to be prosecuted in the massive crackdown on organised crime in Chongqing, stood trial from 2 to 7 February. Prosecutors said that Wen, a former Director of the Chongqing Municipal Bureau of Justice, took bribes totalling more than 16 million yuan ($2.4 million) either personally or through his wife from 1996 to 2009. Wen had served as a senior police officer in Chongqing for 16 years and is alleged to have protected criminal gangs and helped businessmen obtain ill-gotten gains. He is also charged with rape and in addition could not account for more than 10 million yuan ($1.5 million) worth of personal assets. (From Beijing Review 18/2/10)

Beijing moves to tighten rules on home requisitions

The State Council has released a draft regulation on home requisitions and redevelopment compensation for wider consultation in a landmark move to address growing public discontent over forced evictions. If passed after the consultation period, which will last until 12 February, the new regulation will replace the controversial housing demolition regulation which was introduced in 2001 and which has been widely criticised for encouraging the excessive use of forced evictions.

The draft regulation says regional government should only demolish housing if it is in the public interest and developers would not be allowed to use excessive means such as cutting off electricity or water supplies. Only county level governments and above can give the go-ahead and only if at least 90% of the homeowners agree. Developers must obtain two thirds of the yes vote from prospective evictees before any compensation package can go to local governments above the county level for approval. Academics believe it is a shift in official attitudes and a significant break from earlier legislation. Also it was more in line with China's constitution and the 2007 property law which favours private rights over development and limit what local governments can do in housing development. Due to flaws in previous legislation, regional governments have often colluded with developers to press ahead with evictions in order to ratchet up regional growth rates.

Pressure has been mounting over several violent and even deadly confrontations in the past few months between home owners and developers backed by local governments. In Chengdu, a woman set herself on fire after her 7 million yuan garment factory was demolished and she was only paid 2.17 million yuan in compensation. The district government claimed it was illegal. (From South China Morning Post 30/1/10)

Chocolate wonderland?

About 80,000 kilograms of Belgian chocolate has been hand-sculpted into a Willy Wonka world with Chinese characteristics. There are chocolate terracotta warriors, a life-sized chunk of the Great Wall, Buddha figurines, a laptop and a life-sized BMW. But when the park closes, all will be thrown away, not a piece will be eaten! Chocolate manufacturers are trying to turn Chinese into chocoholics and the theme park draw attention to chocolate. At present the average Chinese person eats just 90 grams of chocolate a year, compared 5 kg in the US and 10 kg in Switzerland.

However, the first task is to find a chocolate which satisfies the Chinese taste bud. Experts believe it is a delicate balance, not too sweet and not too bitter. On the other hand, others believe that this is not the case; foreign brands of chocolate are prohibitively expensive for many people. Some believe that mainland produced chocolate is not gaining popularity because it is not good enough. Another view is that Chinese people's traditional concept of balance and moderation in diet runs deep and Chinese do not eat too much of one thing. It has been suggested that it is simply a matter of time. Chocolate has been eaten in the West for hundreds of years, but only for a couple of decades in China. (From South China Morning Post 4/2/10)

Drought in Guangxi

The southern Chinese sugar-producing region of Guanxi is suffering from a prolonged drought that has left almost a quarter of a million people without enough drinking water. Mountainous areas in western and northwestern Guangxi, which shares a border with Vietnam, have not had enough rainfall since last August and at least 240,000 people and 110,000 head of cattle do not have sufficient drinking water.

Local government trucks have been sending water trucks to those villages that suffer shortages. In addition, local officials have been organising local residents to dig wells and divert water from elsewhere to the drought-hit areas. (From South China Morning Post, via Reuters and Xinhua, 31/1/10)

New Secretary General for Shanghai Cooperation Organisation (SCO)

Last month Muratbek Imanaliev became the third Secretary General of the SCO, the regional group of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. He pledged an emphasis on regional security, strengthening of economic cooperation and enhancement of the SCO's international influence. Specific objectives include a resolution to address the hostilities and danger that proliferate in Afghanistan, developing cooperation with the UN and other international organisations and enhancing energy cooperation within the SCO. The SCO is also considering the membership applications of Iran and Pakistan. (From Beijing Review 18/2/10)

The Incinerator dispute

A major dispute arose last September in Panyu District of Guangzhou, Guangdong province, when residents found out that a solid waste incinerator power plant was going to be built in their neighbourhood. Finally the Panyu District Government said that they might hold a 'district-wide referendum' to solve the problem. (From Beijing Revue 24/12/09)

China's top universities to rival Ivy League

The president of Yale University says China's top universities will rival the elite ones in the US and Britain in 25 years times after Prime Minister Wen Jiabao pledged to make China's universities 'world class'. In a Guardian interview in London, Dr Richard Levin said that Beijing spends 1.5% of its GDP on higher education every year and the gap may narrow in a generation's time but he does not regard this as a threat. Prime Minister Wen told a conference in Beijing last month that a lack of independent thinking and freedom of speech, rather than a shortage of money, had impeded universities. He said that only independent thinking makes good universities and that the current stereotyped development method does not work. He also believed that universities should be given decision-making power in administration and curriculum.

Professor Shi Yigong, dean of the School of Life Sciences at Tsinghua University condemned depriving students of free thinking. He said it made colleges tedious. Dr Zhu Qingshi, the president of South University of Science and Technology in Shenzhen and a member of the Chinese Academy of Sciences, said mainland universities have a long way to go, because a world-class university is not about hardware or grades, but about whether it has accelerated the world's general advancement. It has to cultivate the public and its graduates have to be well recognised by society.

However, there are other factors to consider. In Hebei province nearly one third of the higher education institutions have been hit by corruption scandals, according to state media. More than 26 principals or directors from 19 educational establishments in the province have been arrested for taking bribes in the last 10 years. (From South China Morning Post 4/2/10)

Government education spending to reach 4% of GDP by 2012

The last six years have seen a big rise in government spending on education with the Vice Finance minister planning that investment in education reach 4% of GDP by 2012. The structure of expenditure and the methods by which funds are collected and managed are also due for reform.

Since 2004, China has realised free compulsory education in urban and rural areas and set up subsidy systems for poor families. Vocational education has developed fast and higher education is being taken up by ordinary people. The same period has seen a significant increase in government education spending. Ding Xuedong, the Vice Finance Minister said that from 2004 to 2008, spending increased from 400 billion yuan to 970 billion yuan i.e. from 14.9% to 16.3%. The percentage is now higher than the world average - education is the top priority in government spending. Ding is confident that fiscal spending in education will reach 4.0% of GDP in 2012. However the proportion of education spending also relies on how much fiscal spending accounts for total GDP. In 2009 fiscal spending accounted for 20% of GDP, percentage points lower than the world's average, which put a curb on educational spending. (From CCTV-9 2/3/10)

Sino File is compiled by Walter Fung with some input for From the Chinese Press by Teresa Ray.

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