China News - Spring 2012

From the British Press

Ranking of international banks by market capitalisation (31 October 2011)

RankNameCountryBillions euros
2China Construction BankChina134.2
4Wells FargoUS98.9
5Agricultural Bank of China China98.1
6JP MorganUS97.2
7Bank of ChinaChina88.0
9Commonwealth Bank of Australia Australia59.0
10Itau UnibancoBrazil58.9

Source: Bloomberg (via Santander Shareholder Report, Jan-Sept 2011)

IPO planned for People's Daily

The online division of the People's Daily, the official mouthpiece of the Communist Party, won approval on Friday to go ahead with an initial public offering of stock. This decision by China's top securities regulator paves the way for the People's Daily online to raise up to $85 million by selling stock on the Shanghai Stock Exchange, most likely this year.

This will be the first time a state-run media Web site has files to go public and is expected to be followed by other state-run media properties, including Xinhua, the official news agency. China is trying to upgrade state-run media outlets and cultural properties, partly by forcing them to be more market-orientated and thus less dependent on subsidies.

They are also trying to compete with Internet search engines and social networking Web sites such as Sina, Sohu and Baidu. Although, they are official Party news outlets, analysts say they have come a long way from when they were simply state mouthpieces. In addition, they hope to compete with global giants like CNN, News Corporation, Bloomberg and Al Jazeera. (From The New York Times 14/1/12 via the Internet)

Chinese studies in the UK

Although an increasing number of people are studying Chinese at master's level, are there enough courses to cope with the demand? Michel Hockx, president of the British Association for Chinese Studies (BAGS) and professor of Chinese at the School of Oriental and African Studies (SOAS) believes we don't have enough and furthermore, every self-respecting university should have a Chinese programme which should include postgraduate programmes.

China has 20% of the world's population and is the second largest economy in the world - and could be the largest by 2020, so Chinese studies are important. The current major centres of UK Chinese studies are SOAS and the universities of Nottingham, Westminster, Oxford, Cambridge, Leeds, Sheffield, Manchester and Edinburgh. Some 300 undergraduates start Chinese studies every year and the larger MA courses attract up to 30 students annually.

In the US, the top centres are Harvard, Stanford, Berkeley, Chicago and Columbia. One of the fastest growing centres in the UK is Nottingham University and is in fact one of the largest in Europe. It is home to the China Policy Institute, the UK's only think tank dedicated to the analysis of Chinese government policy and also home to the Nottingham Confucius Institute which promotes the teaching of Chinese language and culture. Nottingham has five master's programmes: an MA in contemporary Chinese studies; an MSc in the business and economy of contemporary China; an MSC in banking and financial markets in contemporary China; an MSC in Corporate Finance and an MSc in management in contemporary China and emerging markets.

Nottingham also offers an MA in Chinese/English translation and interpreting, in conjunction with the University's School of Cultures, Language and Area Studies and the Centre for English Language Education. Some 125 master's students are enrolled in these programmes and the department has 400 undergraduates and 16 PhD students. By 2015 there may be 800 students, 150 in master's studies. Throughout Nottingham University, about 900 students are studying Mandarin - believed to be the largest body of students in the UK learning Mandarin. Nottingham has a campus in Ningbo, China, and in Malaysia. There are plans to open another campus in Shanghai. (From The Times 25/1/12)

China's Vice-President leaders' visits

Xi Jinping, the man expected to be China's next president, began a visit to the US and Europe yesterday. He is likely to take over from Hu Jintao in October at the 18th Communist Party Congress in October as general secretary of the party. In the US, he is expected to meet Barack Obama and will also visit Mucatine, Iowa in the US Corn Belt, to have tea with old friends. He first visited the area 27 years ago as a junior cadre. The Chinese Vice-President, Cui Tiankai said that the visit was an 'important high-level interaction' that he hoped would develop relations with the US. Ultimately the development of bilateral ties is determined by the relationship between the two peoples, he added.

We can only speculate about what kind of leadership Mr Xi's will be and nobody knows if he will be a reforming force or not. It is likely that he will try to soften China's image abroad whilst staying firm on domestic issues such as Tibet, Taiwan and Xinjiang. He is seen as a canny political operator and is more outgoing than Mr Hu. According to WikiLeaks Cables in 2010, Mr Xi is a fan of US war films. In China, his wife the folk singer is more famous than he. He is thought to have a personal fondness for the US and he has a daughter at Harvard University.

He is said to be more outspoken than Mr Hu and during a visit to Mexico in 2009, Mr Xi rounded on China's critics, 'There are some foreigners out there with full bellies, with nothing better to do than to point their fingers at us. Firstly, China does not export revolution. Secondly, it does not export famine and poverty. Thirdly, it doesn't cause you any trouble. What more do you want? (From The Independent 14/2/12)

Huawei buys laboratory in Ipswich

Huawei has paid $10 million to take over the Centre for Integrated Photonics, which specialises in the transmission of data over fibre-optic cables. This acquisition in Ipswich will become Huawei's British research base and will work alongside its six other such facilities in Europe. About sixty scientists and experts will transfer to the Chinese business.

The Ipswich laboratory was originally founded in the 1970s as a high-tech research division of BT and called the Fibre Optics Group. BT sold the business to Dow Corning in 2000. It was later, in 2003, acquired by the East of England Development Agency to save it from closure. Shenzhen based Huawei plans to double its workforce in Britain to 1,000 people and will establish its European design centre in London. Huawei won a large part of the contract to upgrade BT's network to fibre ahead of Marconi. This is the second big investment by China in the UK this week: China Investment Corporation bought a 9% stake in Thames Water. (From The Times 25/1/12)

China's first auto plant in EU

China has opened up its first car plant in the European Union because labour costs and taxes are cheap. Great Wall this week became the first Chinese carmaker to open an assembly plant in Bulgaria. This is regarded as the start of a new trade onslaught that will see China increasingly trying to gain access to the European market. The plant is on the outskirts of the village of Bahovitsa and will be operated jointly by Great Wall and Bulgaria's Litex Motors. It will build 50,000 units a year of the Voleex CIO and the Steed pick-up truck. The workforce will increase from 120 to 2,000 over the coming years. (From The Times 23/2/12)

China invests in Afghanistan

China's state-owned National Petroleum Corporation (CNPC) will sign a deal with Afghanistan's Ministry of Mines today which will allow the Chinese firm to work oil blocks in the north-eastern provinces of Pul and Faryab. This deal will give China access to the Amu Darya River Basin, which is said to contain reserves of about 87 million barrels of oil. This is the first big contract for oil exploration and extraction in Afghanistan. China is already the biggest single investor in the country. It has already signed a £2.2 billion copper mining deal to develop the Aynak copper mine in Logar province. (From The Independent 28/12/11)

UK universities climate centre in Shanghai

The Tyndall Centre for climate change is a partnership of eight UK universities which brings together scientists, engineers, social scientists and economists to develop sustainable responses to climate change. The partnership was founded in 2000 and this summer the Centre celebrated its launch in Shanghai, where its Chinese hub was opened in July at Fudan University, one of China's 'big three'. Fudan Tyndall is funded by a 15-year commitment by the Chinese central government and the Shanghai City government.

The Shanghai partnership brings new expertise to Tyndall in human demography, air pollution and human health, urban design, ecology and biodiversity. The inclusion of Fudan University also offers an invaluable opportunity to pool Chinese and UK university expertise to tackle the problem of greenhouse gases and advancing climate-resilient development. David Cameron highlighted the importance of the Fudan-Tyndall relationship when he visited China last November.The Fudan-Tyndall Centre's research priorities will focus on moving to a low carbon economy, adapting people and places to the impacts of climate change and securing supplies of food and water. (From Manchester University Alumni magazine, Winter 2011)

Poor Chinese pupils top exam ratings

Statistics relating to the percentage of 'free-meal' pupils who gain five A* to C grades, including English and Maths show Chinese pupils at the top of the list with 73.5%, Indian at 57%, Bangladeshi at 56.2%, Black African at 47.2%, Pakistani at 42.9%, Mixed heritage at 39.5%, Black Caribbean at 37.8%, Irish at 33.6% and at the bottom, White British at 28.8%. Figures also reveal that children who speak English as a second language make more progress in the three Rs throughout their secondary education than British pupils. (From The Daily Telegraph 10/2/12)

Welsh holiday village for Chinese tourists

A £50 million holiday village is planned for a former country estate near Llandeilo, Carmarthenshire. It will include 80 holiday homes and a 92-bed hotel. Signs in the holiday park will be in Mandarin and English and the 70 locally recruited staff will be expected to be familiar with Chinese customs. Nearly 110,000 Chinese tourists visited London last year and the Anglo-Chinese consortium behind the development believes it can attract 20,000 of them into Wales. Tommy Li of Maxhard Ltd, the developer, said that although many Chinese had heard of England and Scotland, few knew anything about Wales. The holiday park on the Pantglas Estate is being marketed as 'just three hours from London'. Pantglas will be Britain's first purpose-built holiday park for Chinese tourists, who are coming in record numbers and last year spent £184 million - an increase of 40% on five years ago. (From The Times 29/1/12)

Chinese amongst largest sovereign wealth funds

Wealth fund$bn assetsCountryFounded
Abu Dhabi Investment Authority627UAE-Abu Dhabi1976
SAFE Investment Co568China1997
Government Pension Fund Global560Norway1990
SAMA Foreign Holdings473Saudi Arabian/a
China Investment Corporation410China2007
Kuwait Investment296Kuwait1953
Hong Kong Monetary Investment293China (HK)1993
Gov of Singapore Investment Corp248Singapore1981
Temasek Holdings157Singapore1974
Nat Social Security Fund135China2000
Nat Welfare Fund114Russia2008
Qatar Investment Authority85Qatar2005
Australian Future Fund73Australia2004
Libyan Investment Authority70Libya2006
From The Times 2/2/12

New Confucius Institute at Lancaster University

Lancaster University's Confucius Institute, launched on 20th December 2011, will be a hub for Chinese studies and will run courses in Mandarin and Chinese culture to benefit school and university students and also Lancashire businesses. It has been set up as a joint venture with the South China University of Technology (SCUT) in Guangzhou and is overseen by the Office of Chinese Language Council International. Guests at the official opening included the President of SCUT, Professor Wang Yingjun. She said that the institute will serve as a bridge between the UK and China and will be of great significance in the exchange of education and culture between China and the UK.

She added that the British higher education system is an important model for China and she hopes the two countries can learn from each other, inspire each other and have a mutually beneficial relationship. The deputy vice chancellor of Lancaster University and Professor Wang were joined by Dr Huang Qihai who will be the director of the institute. The celebrations included a traditional Chinese lion dance performed by Accrington-based Northern Dragons. (From The Westmorland Gazette, 5/1/12)

Taiwan elections

The elections took place without any mishap - as has been the case in previous years. The result was as officials in both the US and mainland China preferred - a victory for Mr Ma and the ruling Kuomintang. Mr Ma won nearly 52% of the vote and held the legislature. The opposition, the Democratic Progressive Party (DPP) led by Ms Tsai Ying-wen, came second with nearly 46% of the vote. She resigned the chair of the DPP after her defeat, but she deserves credit for turning around the fortunes of a party thrown into disarray by Mr Ma's victory in 2008 and the shock of the former DPP leader, Mr Chen, being convicted and gaoled for gross corruption. Mr Ma's share of the vote fell from 58% four years ago and this suggests that he will have to be more cautious in his dealings with China. (From The Economist 21/1/12)

Fewer flights to China from UK

At present there are 621 flights to Shanghai from Heathrow compared to 1,100 from Frankfurt and 1,132 from Paris. To Guangzhou, there are 311 flights from Amsterdam, 211 from Frankfurt and 290 from Paris. There are none from Heathrow. (From The Sunday Times 23/12/11)

Two thirds of directors in Brazil, China, India, South Korea and Mexico said they were more inclined to do business with Britain's European rivals because they offered more direct flights. This information is from a study commissioned by the British Chamber of Commerce and Heathrow.

A recent report from Frontier Economics found Heathrow offered 658 flights a year to Beijing compared to 1,032 from Frankfurt and 964 from Paris, Charles de Gaulle. It also found that of 370,000 transit passengers flying to Beijing via European hub airports, only 27,000 of them fly via Heathrow. (From The Daily Telegraph 26/1/12)

New African Union HQ

African Union leaders have inaugurated a new $200 million headquarters building in Addis Ababa, the capital of Ethiopia. It was paid for by China and is a symbol of China's rapidly changing role in the region as it increasingly turns to Africa for natural resources. (From The Independent 30/1/12)

Did opium bankroll the British Empire?

Opium substantially kept the British Empire afloat, according to an article by Julia Lovell (Birkbeck, University of London) in BBC History. The drug, derived from the poppy was grown in India and sold for silver, which was used to buy tea and from which the government extracted custom duties. The duties paid for a large part of the Royal Navy and so opium helped keep the British Empire afloat. Colonial administrations in Asia were also extensively funded by the management of opium growing monopolies.

As late as the 1850s, opium revenues accounted for more than 20% of British government revenues in India. This was a significant part of the imperial economy. The sale of opium from British India to China increased by a factor often: 4,000 chests per year in 1800 to almost 40,000 by 1939. Wars were fought over opium in 1839-42 and 1856-60. The 1860 Beijing Treaty forced the legalisation of the drug in China. (From BBC History February 2012)

Geely amongst the first in Britain?

The first mass-produced and amazingly cheap Chinese car has been given the clearance for launch in Britain next year. Geely, the Chinese car giant, which owns Volvo and controls the London taximaker, Manganese Bronze, is to launch a medium sized saloon and estate car aimed at 'austerity Britain'. It is designed to undercut the equivalent Skoda model by about 25%. The Geely Emgrand has just received a safety rating by the Euro NCAP agency and will arrive in the UK by the end of next year. Geely's UK marketing manager said that Geely will be doing what the Japanese did with Datsun-Nissan and, more recently, what the Koreans Hyundai and Kia did, i.e. enter at the low-cost, value-for-money end of the market. The Geely Emgrand EC7 will be between the Ford Focus and Mondeo in size and will cost about £10,000 - about £3,000 cheaper than the highly successful Skoda Octavia. The Octavia' sales are up by over 20% within the last two years in a falling UK new car market.

Geely say that their car represents good value for money for people who are not prepared to pay for a brand, badge or logo - and with the Euro NCAP safety rating there is nothing to be afraid of with an unfamiliar manufacturer. Analysts believe that this car will be the start of a much larger trend: all the big Chinese manufacturers have been linking up with the Western auto giants. They also believe that in time, the Chinese will develop the technology to bring their products up to Western standards and begin to export aggressively to the West. (From The Times 28/12/11)

Top stores attract China's big spenders

A promotional tour of Beijing and Shanghai led by the VisitBritain tourism organisation has just ended. It included representatives from London's West-end, the luxury goods emporium in Bicester, Oxfordshire, Harrods and Selfridges and even Gretna Green retail park. China accounted for just under 110,000 visits to Britain last year, a 23% annual increase. However, the overall spend by Chinese nationals rose even faster, by 57% and this trend appears to be accelerating, with VisitBritain recording a near-doubling of the spend per Chinese tourist during 2011. Although the average Chinese has about a fifth of the average yearly income of a Briton, there are believed to be 960,000 people in China worth at least £1 million. Chinese-speaking sales staff are common in some places, Harrods alone has 70 such persons, who are trained in Chinese customs as well being well-informed about the goods they are selling. Many shops now accept the Chinese bank card, Union Pay, first introduced in to the UK only 18 months ago. Selfridges, the pioneer in accepting it, has 75 UnionPay machines, whilst Harrods has 100. (From The Guardian 28/12/11)

Sinopec buys stakes in overseas energy companies

In the past six years, Sinopec, the Chinese state controlled oil company, has spent more on acquisitions than anyone else. The oil industry is trying to work out Sinopec's intentions as it and other Chinese state controlled oil companies step up their campaign to secure natural resources overseas. Yesterday, Sinopec bought a stake in the US group Devon Energy's shale fields for $2.2 billion. This deal, the eleventh since the summer, brings its total spending to $10.4 billion and $48 billion since 2005.

China's oil resources are scant and China lacks the technology to tap into its potentially huge gas reserves in coal seams and shale rock. Buying a stake in Devon Energy allows Sinopec to acquire the expertise to develop China's own shale deposits. China National Offshore Oil Company's bid to buy the US oil company Unocal was blocked in 2005 by US politicians and so to avoid political censure in the US, Chinese companies need to form joint ventures as Sinopec has done with Devon Energy. However, joint ventures also give Western companies access to China's potentially huge market - when it opens up. Shell in particular has made efforts to form joint ventures with Chinese companies with this in mind. (From The Times 6/1/12)

The biggest brand name you've never heard of

Chow Tai Fook has 1,500 retail outlets in China, Hong Kong and Taiwan. The family company is the biggest jewellery retailer in the world and forty days ago listed 10% of its stock on the local market, raising about $2 billion. The revenues of Chow Tai Fook are 50% bigger than those of Tiffany, the next largest jeweller in the world. Possibly the most disturbing element for foreign observers is that it is the biggest brand name they have never heard, because its fame and prospects are entirely a Chinese affair. The company's plans are all in China's second, third and fourth-tier cities. (From The Times 23/1/12)

Chinese wealth fund buys into Thames Water

The Chinese state-owned China Investment Corporation (CIC) bought an 8.7% holding in Britain's biggest water company, Thames Water, which supplies millions of homes in London. The deal will see about £20 million a year flow from the UK to China through dividend payments. UK Government sources said that this is a breakthrough that will open up a 'two-way street' in trade between the two countries and a step in developing strong strategic relationships for the benefit of both countries. Mr George Osborne hailed the deal as a vote of confidence in Britain as a place to invest and do business. This event follows the announcement that the City of London is set to become the trading home of the Chinese currency in the West. (From The Times 21/1/12)

From the Chinese press

Scientific papers

China (mainland) published 121,500 academic papers on science and technology in major international journals in 2010, accounting for 8.6% of the world's total. The statistics are based on a survey of papers indexed by renowned international databases such as the Science Citation Index and the Engineering Index. The number of Chinese theses published in the world's 173 highest-rated publications - including Science and Nature - reached 5,203 last year. These figures indicate that China is second only to the US in terms of the number of scientific papers published. (From Beijing Review 15/12/11)

China's credit rating (Dagong)

Dagong Global Credit Rating Co Ltd., China's domestic rating agency will maintain the local and foreign currency sovereign credit rating of China at AA+ and AAA with a stable outlook. The agency believes that the fundamentals of the Chinese economy have not changed despite domestic inflation and the debt crises in Europe and the US. The deficits of the government at all levels are narrowing and the Chinese Central Government has strong debt-payment capabilities in the local currency. China's foreign debt payment payment capabilities are also strong given China's huge foreign exchange reserves and net assets abroad. In addition both the Central Government and the private sector have very low levels of foreign debt. (From Beijing Review 15/12/11)

Ping Pong Diplomacy commemoration

Chinese Vice President Xi Jinping and former US President Jimmy Carter watched a 'friendship match' of table tennis in Beijing on 8 December 2011. This was to commemorate the 40th anniversary of Ping Pong Diplomacy, which led to the normalisation of diplomatic relations between China and the US in 1971. (From Beijing Review 15/12/11)

Job creation in China

China's State Council (or cabinet) issued a plan on 8 February to create 45 million new jobs in the cities by 2015. An objective will be to keep the urban unemployment rate at no more than 5%. At the same time China plans to create 40 million new jobs in the countryside in a five-year period.

From 2006 to 2010, 57.71 million new jobs were created in urban areas and 45 million people from the countryside were able to find new jobs, according to official data. At the end of 2011, the urban unemployment rate stood at 4.1%, which was the same as a year before.

China's government also pledged to maintain an average 13% growth annually in national minimum wage in the period up to 2015 (2011 to 2015). The minimum wage standard rose by an average of 12.5% year on year during the period 2006 to 2010. (From Beijing Review 16/2/12).

Livelihood subsidies

The Tibet Autonomous Region (AR) has allocated more than 8 billion yuan ($1.3 billion) this year to improve the living conditions of farmers and herdsmen. The fund is 68.4% larger than last year and will be used for rural infrastructure construction and as agricultural subsidies, according to the region's Finance Department announcement on 4 February. Some of the money will be used to encourage farmers to modernise and industrialise their work and to develop Tibetan featured industries. Tibet AR has a population of 3 million, over 80% are farmers and herdsmen. Last year their net income surged 13.6% to 4,700 yuan. (From Beijing Review 16/2/12)

Legal aid

More and more Chinese citizens have sought free legal aid. About 946,000 people asked for free legal aid during 2011 - a year-on-year increase of 15.4%. China now has about 3,573 government sponsored legal aid centres with a total staff of 13,800. In addition, practising lawyers also take on legal cases. The central budget for legal aid increased from 100 million yuan ($15.88 million) in 2010, to $200 million ($31.76 million) in 2011. Part of this revenue was funded by national lottery ticket sales. (From Beijing Review 16/2/12)

Taiwan Investment Zones

A new state-level investment zone for businesses from Taiwan has been established in south-eastern Fujian Province, local authorities said on 31 January. It will focus on wind power equipment manufacturing, photo-electricity, intelligent transportation and high-end service industries. An existing Taiwanese investment zone in Fujian Province was expanded to 11.46 sq km from 1.8 sq km. This investment zone will become a major base for metallurgy, electricity, IT, and equipment manufacturing. (From Beijing Review 9/2/12)

Foreign Experts

Some 81,000 foreign experts were working in Shanghai at the end of 2011 - up by 30% compared to the 2005 figure. Shanghai has more foreign experts - overseas professionals recognised by a government certificate - than any other city in China. It is believed that one in every six foreign experts in China is in Shanghai. The foreign experts work mainly in the cultural, educational and research sectors. This category does not include other foreigners legally hired to work locally on work permits. At the end of 2010, some 210,000 foreign nationals were living in Shanghai, according to the latest population census. Over the past five years, 370,000 foreign expert employment contracts were established or renewed in China, according to official statistics. (From Beijing Review 9/2/12)

More Chinese students going abroad

A study by, the largest on-line education website in China, showed that 330,000 Chinese went abroad for further study in 2011, which is a 20% increase for the fourth consecutive year. The US was the destination for 57,000 or 47%. The increase over recent years is believed to be due to two factors: looser immigration policies of developed nations designed to attract international students and also the rising popularity of studying abroad among young Chinese. (From China Today February 2012)

Chinese moon map

On 6 February China published a complete set of lunar maps and lunar images which cover the entire surface of the moon. The images were captured by China's second lunar orbiter, Chang'e-2, and have a resolution of 7 metres. (From Beijing Review 6/2/12)

Energy from combustible ice

After 10-year's work, China has made breakthroughs in this area. Combustible ice is essentially frozen natural gas and an energy source still to be fully researched. It is estimated that the organic carbon the natural gas hydrate in the world is twice the amount contained in the combined reserves of coal, crude oil and natural gas. China officially launched detailed investigations into combustible ice in 2002 and recently explored 25 combustible ice ore bodies in the South China Sea. The reserves are believed to hold 19.4 billion cubic metres, the equivalent of 4.1 billion tons of oil. (From China Today January 2012)

London is world's No.1 financial centre

The Global Financial Centres Index, first published by the Z/Yen Group in 2007, currently lists London as the largest, with New York second, Hong Kong third, Singapore fourth, and Shanghai fifth. Other Chinese cities featuring on the list are Beijing 19th and Shenzhen 25th. (From China Today January2012)

China's Antarctic research

On 17 December 2011, China's 28th Antarctic expedition successfully laid a domestically developed Ocean Bottom Seismograph (OBS) in Prydz Bay, Antarctica. This is the first time China has installed such a device, which will provide valuable information on volcanic processes and obtain data on the structure of the earth's lower crust and upper mantle. In addition it will collect data on seismic activity and improve understanding of the formation and evolution of sedimentary basins. (From China Today February 2012)

SinoFile is compiled by Walter Fung.

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