Sales of electric cars in China have increased by 240% in the first half of 2015, which bodes well for Beijing’s target to have 5 million electric cars on its roads by 2020.
There were 19.7 million cars sold in China last year - easily the largest car market in the world, and nearly half of all electric cars made in the world were made in China. Last week, Nevs, the China focused consortium which bought Saab and decided to go all electric, announced its first big order for 250,000 electric cars for a Chinese leasing company. It will be based on the Saab 9-3 saloon and to get some idea of scale, at the end of last year, there were only 650,000 electric cars in the entire world. Despite all the talk, electric cars represent only 0.1% of the 1.2 billion cars in the world.
The Chinese government has mandated the lowering of the average fuel consumption to 5 litres per 100 kilometres from 6.9 litres per 100 kilometres. This is forcing foreign manufacturers such as VW and Ford to pour resources into electric technology. Over the next five years, at least $15 billion will be pumped into China’s electric car industry, which is attracting top talent. Padmasree Warrior, one of Silicon Valley’s most prominent executives, recently left California. She will join NextEV, a new Chinese electric vehicle manufacturer.
President Xi Jinping has designated electric car making as a strategic priority to build national champions to take on the likes of Toyota and General Motors. The impetus for electric cars is increasing nowhere more than the polluted cities of eastern China. In addition, electric vehicles will reduce China’s need to import oil from the Middle East - a big drag on China’s slowing economy. (From The Times 21/12/15)
Worldwide greenhouse gas emissions will fall in 2015, researchers have said, in what would be the first time they have reduced while the economy has increased substantially. A decline in coal consumption by China, which is responsible for a quarter of emissions, is resulting in an overall projected decrease of 0.6%. China’s emissions are expected to have decreased by 3.9% in 2015, after a decade of rising by nearly 6.7% a year. The figures, published in the journal ‘Nature Climate Change’ will provide some reassurance to the negotiators from 195 countries in the second week of climate change talks in Paris. India is a key player in the talks; reports say that Indian emissions could have risen by 6.7% this year. India emits the same amount of greenhouse gases China did 25 years ago and if history repeats itself, then global emissions could rise again. (From The Guardian 8/12/15)
China is a leader in industrial robots which are making up for a shrinking labour force. The country is spending on research into all manner of android life since its government backed the industry and related innovation to help spur the slowing economy and upgrade manufacturing.
Turing Robot’s Jeff Yu believes companion robots could replace kids’ toys and educational products. Mr Yu launched a whole range of robots including characters from Chinese cartoons. He says there will be a whole range of robots in Chinese homes and within the next two years the world will see Chinese robots. The name Turing is after the British pioneering computer scientist, Alan Turing.
The Xiao You model made by Beijing Canny Unisrobo Technology (Canbot) can read bedtime stories to children and can respond to their voices. Sales of more than 300,000 units are expected this year. There is even a model which can monitor a person’s health whilst other family members are out working. (The Times 11/1/16)
Mr Jin Liqun, the president of the new Asian Infrastructure Investment Bank, visited the City of London last week and addressed 120 investment professionals from companies such as M & G, Jupiter, Standard Life, Fidelity, Hermes and the Capital Group. The fund managers present loved his repartee and jokes, but were also impressed by the substance of the speech in which he explained in detail why the AIIB is not in competition with the World Bank. He said that the two banks complement each other and that the AIIB will encourage clean and green investments to counter White House objections. There are 57 founder members of the bank with a further 30 on the waiting list.
China is the largest shareholder followed by India and Russia. China has 26.6% of the votes and because two thirds of member countries represent three quarters of the votes, China has a veto. However, as more countries join, China will lose this.
The unit of currency of the bank will be the dollar and the official language will be English. Mr Jin commented that if China was set on supplanting the US dollar, the AIIB would use the yuan. In contrast to the World Bank, which is said to have bloated salaries and cumbersome bureaucracy and keeps offices in 100 countries, the AIIB will keep staffing levels relatively low. It will send out staff overseas on a project-by-project basis, recalling them on completion. Experts will be recruited on a temporary basis.
Britain was the first major Western country to join and this was significant in influencing others to follow suite. Britain is the tenth largest shareholder and Sir Danny Alexander, formerly chief secretary to the UK treasury, will be one of five Beijing-based vice-presidents. A fund manager specialising in Chinese investment said that Osborne’s decision to join the AIIB was a masterstroke, exactly the correct thing to do because of the growing trade with China and the City’s desire to be the main offshore centre for renminbi-based trading. It has done wonders for Sino-British relations. (From The Times 1/2/16)
Chinese investors are ready to pour record amounts into the UK property sector after the summer lull, which made them cautious. By the Chinese New Year, next Monday, £740 million will have been invested into London real estate this year. For the past decade, China has been the largest foreign owner of British property from skyscrapers to airports. Last year, in the final three months, £900 million was invested in London commercial real estate after a downturn due to the Shanghai stock market turmoil. CBRE, the international real estate company, believes Chinese investment could surpass the £3 billion of 2015. Richard Zhang, the head of CBRE’s China business team in London, said that the controlled slowing in the Chinese economy, the attractiveness of sterling and prime large lot size assets means London is still seen as a safe haven for capital.
Landmark buildings such as Aldgate Tower, 88 Wood Street and 17 Columbus Courtyard and a further £540 million worth of deals are expected and the volumes are expected to exceed the total recorded last year. Advanced Business Park, another Chinese developer is transforming part of the Royal Albert Dock, near London City Airport, as business space. (From The Times 1/2/16)
China National Chemical Corporation or ChemChina, the state-owned group chaired by Ren Jianxin, said yesterday that it had reached agreement with the Swiss seeds group, Syngenta, to buy it for $34 billion. As Beijing has encouraged its state-owned and private companies to expand overseas, Mr Ren has been one of China’s most ambitious and successful operators. He has already taken over Pirelli, the Italian tyre maker, Mercuria, the Swiss energy trader and Krauss Maffei, the German machinery maker.
If the Syngenta shareholders agree, the deal will go through, but there may be a counter bid by Monsanto of the US. In addition, the US authorities may intervene because a lot of Syngenta’s business is in the US. However, the Syngenta management see the prospect of expansion into emerging markets, especially China. (From The Times 4/2/16)
The Telegraph also reported this deal, which has been recommended by the Syngenta board and makes some observations and analyses. The Telegraph says that this is not just another case of China buying abroad and also moving up the value chain by buying technical knowhow, it is also a move to ensure that China can feed itself. Chinese people are eating more meat but China only has a finite area of land. It is therefore essential that each unit area produces more. Syngenta is an agricultural business that makes pesticides and genetically modified seeds. In a related move, Sirius Minerals is planning to build a mine in North Yorkshire to extract the world’s largest and richest deposit of polyhalite, a kind of potash and a nutrient-rich ingredient for fertiliser. Most of the upfront commitments for its production have come from Chinese buyers. (From The Telegraph 4/2/16)
Middle-class British being priced out of boarding schools by rich Chinese
A leading headmaster has stated that boarding schools are risking their future by relying too much on Chinese pupils whose wealthy parents are prepared to pay huge fees. The headmaster of Westminster School, Patrick Derham has said that middle-class British families had been almost priced out of fee-paying schools whose fees have risen faster than professional salaries and inflation. Average fees for boarding schools were £30,369 last year. The fees had risen faster than inflation every year since 1990. Pupil numbers have been static for 15 years at 70,642, but the proportion of the number of pupils from overseas has risen to 27,211 or 38.5%. Of the boarding pupils from non-British families overseas, almost 21% were from China and 17.6% from Hong Kong, with a further 10.3% from Russia. Individual schools do not publish figures on international pupils because the issue is considered sensitive.
The large numbers of overseas pupils is a key feature because they pay the fees and are necessary for the survival of some schools. However there are risks in relying on them. One solution could be bursaries paying full fees for disadvantaged children via charities such as the SpringBoard Bursary Foundation and Arnold Foundation, which Mr Derham founded while he was at Rugby. (From The Times 1/2/16)
Retail tourism experts Global Blue have noted that travel bookings for the Chinese New Year indicate strong demand for UK experiences. More visitors could boost sales for sectors such as retail and leisure. Despite the devaluation of the yuan and stock market turmoil last month, the Chinese still love to go abroad. The market research firm GfK said 109 million Chinese travelled abroad in 2015 - nine million up on 2014. It forecasts further growth helped by a new two-year visa for Chinese visitors to the UK.
Spending by Chinese tourists in the UK slowed to just 1% year on year in 2015, but China remains the top international tax-free spending nation for the UK. To improve sales, Gordon Clark, Global Blue’s UK and Ireland managing director said British brands should focus on campaigns executed in China that talk about their brand heritage and store locations. For the Year of the Monkey, Vivienne Westwood has launched a special necklace and Alexander McQueen and Amanda have unveiled scarves. (From i, Independent 1/2/16)
In addition to the usual Dragon Parade of the 175 foot- long Dragon, there will be many other special displays and events in Manchester city centre. The fa?ade of St Ann’s Church will be a screen for spectacular light projections which will include Year of the Monkey artwork created by Manchester artist Stanley Chow. In New Cathedral Street, Asian food stalls will be offering Asian and Oriental dishes. Also in St Ann’s Square will be Chinese music played by local Chinese musicians and a giant Chinese golden dragon will be on display.
Events connected with the Year of the Monkey are also planned for the Arndale Shopping Centre, Manchester Art Gallery, the Centre for Chinese Contemporary Art and at other locations in the city centre. The House of Fraser departmental store (Kendall’s) will be hosting staff from Hainan Airlines which will begin a direct Manchester to Beijing, from this June. SACU’s friend, China Pearl, will be performing classical Chinese dance in the store at various times. (From The Manchester Evening News 5/2/16)
China’s richest man, Wang Jianlin, who heads the Wanda Group, has snapped up Hollywood’s Legendary Entertainment for about £2.4 billion. The studio is behind such films as Batman and The Hangover. This is part of plans to expand overseas. Wanda already bought the American cinema chain, AMC, in 2012 and is developing a £5.5 billion studio complex in eastern China. Mr Wang, who was last year named China’s richest man said that Wanda will help Legendary increase its market opportunities in the fast-growing China market. (From Metro 13/1/16)
Driverless cars were one of the major exhibits, but there was also huge interest in drones, with more than 100 new models on display. Two Chinese-made items were of special interest: the Ehang 184 and the DJI Phantom.
The Ehang 184 resembles a miniature helicopter and is claimed to be the first drone to be able to carry a person. The DJI Phantom features a high quality 4K camera which uses Wi-Fi to stream video footage up to three-quarters of a mile away. (From The Daily Telegraph 8/1/16)
There are now more dollar billionaires in Beijing than New York according to Huran, a Shanghai-based firm that tracks global wealth. A total of 100 billionaires live in the Chinese capital, 95 in New York, 66 in Moscow, 64 in Hong Kong and 50 in Shanghai.
Despite the stock market irregularities, 32 new billionaires appeared in China last year, compared to just four in New York. Rupert Hoogewerf, the founder of Huran said that it is no flash in the pan, as super-wealth creators have been growing a lot in China for the last few years. However, he did not expect Beijing to overtake Hong Kong, as it has done, for both billionaires and dollar millionaires.
Including Hong Kong, China also overtook the US in the total number of billionaires, 568 against 535. The two countries together account for about a half the world’s 2,188 billionaires, based on assessments made on 15 January. The Chinese billionaires had a combined wealth of $1.4 trillion, comparable to the GDP of Australia. However, none could be rated into the top ten, which is still led by Bill Gates. Most of the others in the top ten are Americans. China’s richest man, Wang Jianlin is rated at No 21. He has plans to open a £3 billion leisure park-cum-shopping centre in Britain. (From The Times 24/2/16)
Before Wikipedia, the largest depository of knowledge was the Yongle Encyclopaedia of 1408, which contained 22,937 manuscript rolls. (The name of the work is likely to be after the Yongle Emperor, who was reigning at that time during the Ming Dynasty). (From The Telegraph 15/1/16)
The new international airport currently under construction will eventually be able to handle 100 million passengers annually. It is in the Daxing District in south Beijing and by 2015, it will have four runways and be able to handle 72 million passengers and two million tons of cargo and mail. Eventually it will have seven runways. (From Beijing Review 3/12/15)
The average retirement age in China, at 55, is the youngest in the world, according to Yin Weimin, minister of Human Resources and Social Security. The central government is at present considering a steady rise in the retirement age. This is important for a country that is becoming old before getting rich.
China now has 210 million people aged above 60 years, representing 15.5% of its population. This figure will rise to 19.3% by 2020 and 38.6% by 2050. The existing retirement age dates back to the early 1950s when life expectancy was less than 50. Now, on average, Chinese people live well into their 70s and the policy is clearly obsolete. (From China Today December 2015)
From 2018 the retirement age should gradually change by one year for women once every three years and one year every six years for men. The two sexes will then reach the same retirement age by 2045. This is in a report released by the Chinese Academy of Social Sciences on 3 December. This statement has triggered widespread discussions. The current retirement age, 50 or 55 for women and 60 for men, was set in the early 1950s, when life expectancy in China was less than 50 years. The life expectancy has now reached 75 years. Gradually increasing the retirement age can provide more manpower for economic growth and also fill any possible pension gap and thus ensure a stable pension system. (From Beijing Review 17/12/15)
The Times Higher Education supplement on 2 December 2015 published a list of the world’s best universities in emerging economies for 2016. Chinese universities took 39 of the top 200 and five in the top ten. The top two were Peking University and Tsinghua University. The emerging economies included the BRICS countries of Brazil, Russia, India, China and South Africa. The recognition is based on 13 performance indicators used each year by the Times Higher Education World University Rankings, which are specially calibrated to reflect the development priorities of universities in emerging economies. (From Beijing Review 10/12/15)
The Boston Consulting Group’s annual global survey listed three Chinese companies in the top 50. Tencent, the Chinese online media company, ranked number 12 and Huawei and Lenovo were listed at number 45 and 50 respectively. The top three were Apple, Google and Tesla Motors. A decade ago, there were no Chinese companies on the list. (From Beijing Review 10/12/15)
The executive board of the International Monetary Fund on 30 November 2015 has approved the inclusion of China’s currency (RMB) in its Special Drawing Rights (SDR) basket as an international reserve currency. From the 1 October 2016, the RMB will be the fifth currency in the IMF basket; it will have a 10.92% weighting. The other currencies are the US dollar with 41.73% weighting, the Euro with 30.93%, the Japanese yen with 8.33% and the British pound with 8.09%. The IMF board representing the fund’s 188 member countries said that the RMB met all existing criteria. Christine Lagarde, managing director of the IMF, said that the board’s decision was an important milestone in the integration of the Chinese economy into the global financial system. She also said that it is recognition of the progress made by China over the past years in reforming its monetary and financial systems. (From China Today January 2016)
China has fulfilled the targets for reducing major pollutants outlined in its 12th Five-Year Plan (2011-15), six months ahead of schedule. The Chinese Minister of Environmental Protection, Chen Jining, announced this on 29 November 2015, but made the point that a substantial improvement of the environment will only be possible if pollution is reduced further by 30 to 50%. He also reported that water quality had improved significantly, acid rain had been reduced and 250,000 tonnes of ozone-depleting substances had been phased out. The latter figure is more than half of the amount phased out by all developing countries. (From Beijing Review 10/12/15)
China’s largest tidal power generator unit, with a capacity of 3.4 megawatts, was ready to be installed near Zhoushan, Zhejiang province. The generator unit owns independent intellectual property rights with 46 core technological patents. The unit is expected to be operational in June 2016. (From Beijing Review 21/1/16)
China offered 750 million yuan ($116 million) worth of humanitarian aid to West African countries Sierra Leone, Liberia and Guinea and sent 1,000 medical personnel to the areas affected by the disease. The first group of Ebola patients cured by the Chinese medical team in Sierra Leone left hospital in April 2015. Chinese Foreign Minister Wang Yi visited the three countries in August 2015 and was the first foreign minister from outside the region to go to the epidemic area. (From Beijing Review 7/1/16)
The north-south line of Addis Ababa’s light rail system was opened on 20 September 2015. It was constructed by the China Railway Group is operated by the Chinese Shenzhen Metro Group and cost more than $475 million. The project is China’s first light rail project in Africa and is a construction landmark after the African Union HQ building in the city. (From Beijing Review 7/1/15)
China aims to lift over 10 million people out of poverty this year. The director of China’s State Council Leading Group Office of Poverty Alleviation and Development announced that its work in 2016 will integrate central and local efforts to tackle poverty more effectively. Since 2010, China has lifted about 100 million rural people out of poverty, leaving 60 million more to be helped by the end of 2020, when everyone should be free of poverty. (From Beijing Review 7/1/16)
According to a report by the Chinese Academy of Social Sciences (CASS), an average middle-class resident in Beijing earns 256,016 yuan ($39,478). In Shanghai, the figure is 219,770 yuan (£33,889) and in Guangzhou, 170,037 yuan ($26,220). These three cities are amongst China’s most developed; the figures for all three combined is about 200,000 yuan ($30,800). According to the report, 55% of Beijing’s residents are middle-class, in Shanghai it is 51% and in Guangzhou 42.5%. (From Beijing Review 7/1/16)
The Asian Infrastructure Investment Bank (AIIB), a complement to the existing international financial system, was formally established in Beijing on 25 December 2015 and is expected to begin its operations this year. The inaugural meetings of its directors and executive council are scheduled to run from 16th to the 18th January 2016. The bank, which now has 57 members, will have its headquarters in Beijing. The three largest shareholders are China, India and Russia, with voting rights of 26.06%, 7.5% and 5.92% respectively. China’s voting right and stake may become diluted after more members join the bank, which will always be open for new members. With an authorised capital of $100 billion, the AIIB will initially prioritise investment in energy, power generation, transportation, rural infrastructure, environmental protection and logistics. The first loans are expected to be in place by mid-2016. (From Beijing Review 7/1/16)
Major shareholders of the AIIB ($ billions) :
In 2015 trade between the US and China surpassed the trade between the US and Canada, making China the US’s biggest trading partner. More than 800,000 American jobs depended on goods and services sold to China during 2015. Meanwhile Chinese direct investment in the US in 2015 is expected to have exceeded the $10 billion benchmark for the third year since 2013, totalling nearly $60 billion since 2000.
By 2015 there were more than 2,000 Chinese firms based in the US with a total investment of nearly $60 billion. Chinese companies are benefiting from economic growth in the US. (From Beijing Review 28/1/16)
The Ministry of Public Security (MPS) announced on 12 January 2016 that requirements for foreign professionals entering and leaving Beijing will be eased. In addition, such foreigners who seek permanent residence in China will be provided with favourable terms.
The MPS will run a pilot programme in Beijing’s Zhongguancun Science Park. This will provide foreign professionals with conveniences such as special offices for permanent residence examination and approval. Terms will be more favourable for those with doctoral degrees to obtain a green card. The new regulations will also allow short-term internships for foreign students in Beijing and will allow them to run their own start-ups in Zhingguancun.
Talented foreigners in technology and senior management are encouraged to join companies in China’s creative industries and to apply for permanent residence. The new regulations will take effect from 1 March and are aimed to promote Beijing’s environment for innovation and start-ups. (From Beijing Review 21 January 2016)
A solar power station in Nuyang County, Henan province, was connected to the Chinese electricity grid at the end of 2015. It consists of 120,000 solar panels and is expected to generate 33.56 million kilowatt-hours of electricity per year. (From Beijing Review 28/1/16)
Liu Mingzhen is a professor at the University of Electronic Science and Technology of China at Chengdu. She is the youngest recipient of China’s scheme to sponsor its most promising scientists, called the Thousand Talents Programme. The award was also granted to Yang Shu, who like Liu was born in 1990. The two young scientists will be given their own scientific research facilities, a living allowance of 500,000 yuan ($76,700) and a research fund of 1 to 3 million yuan ($153,400 to 460,200) over the next three years.
Liu has bachelor’s, master’s and doctorate degrees from Bristol, Cambridge and Oxford Universities in the UK. She has made a series of breakthroughs in perovskites, an emerging class of semiconductors which provide a low-cost alternative to silicon-based photovoltaic panels. She co-authored a paper in Nature in September 2013 when she was 23, making her the youngest Chinese scientist to be published in this international journal. (From Beijing Review 14/1/16)
Chinese policy-makers approved the nation’s first domestic violence law on 27 December 2015. The law defines domestic violence as physical or mental harm inflicted on someone by a family member and includes verbal abuse.
The definition of family member has been expanded to include ‘people who live together’. This includes guardians and their charges, those living in foster families and people in cohabiting relationships. At present however, cohabiting relationships are not recognised under Chinese law, which leaves room for judicial interpretation. According to the All-China Women’s Federation, almost 25% of Chinese women have experienced violence in their marriage, but it receives only 40,000 to 50,000 complaints from women each year. (From China Today February 2016)
During the 12th Five-Year Plan period, the impoverished population of China fell by 100 million from 166 million to 66 million by the end of 2015. This takes into consideration the new poverty line definition in China. (From China Today February 2016)
The first nuclear power plant in Western China began commercial operations on New Year’s Day. The first reactor can supply 24 million kilowatt-hours of electricity a day - enough for the needs of a medium-sized city. The second reactor is due to begin operating in the second half of 2016. The two reactors together will produce 15 billion kilowatt-hours of electricity each year and will save 4.8 million tons of coal and slash carbon dioxide emissions by 11.8 million tons each year. This is equivalent to planting 32,500 hectares of forest. Four more reactors are planned in this region of Guangxi Zhuang Autonomous Region. (From China Today February 2016)
The sixth Disney Resort in the world will officially open on 16 June this year in Shanghai. This was announced on 13 January by the Walt Disney Group and Shanghai Shendi Group. It will feature attractions not seen in the other five Disney resorts, such as one based on Marvel comics, Star Wars and some inspired by Chinese culture. (From Beijing Review 21/1/16)
China announced on 2 February that it would lower the minimum deposit required for home purchases in most cities to spur the real estate market. The People’s Bank of China (PBOC), China’s central bank, said that in cities where there were no home purchasing restrictions, down payments for first homes financed by loans from commercial banks, will stay at a minimum of 25%, ‘in principle,’ but they can go down as much as 5% points. The exact deposit requirement will depend on the local governments according to local conditions and with the guidance of the PBOC. In cities where existing home purchasing restrictions apply, these will remain in force. Beijing, Shanghai, Guangzhou, Shenzhen and Sanya (Hainan) are the five remaining cities with restrictions on home purchases. These were introduced in 2010 to rein in house prices. (From Beijing Review 18/2/16)
Four miners were rescued on 29 January after being trapped underground for 36 days in a gypsum mine accident in Pingyi County, Shandong Province. The rescue team drilled two access shafts, one a back-up, using a large-diameter drill head. This is the first time this technique has been applied in China and only the third time worldwide. (From Beijing Review 18/2/16)
China saw 289 million users join its 4G network in 2015, bringing the total to 386 million. Since the ‘Broadband China’ strategy was launched in 2013, by the State Council to get more people on line, the network has developed significantly. China plans to make 4G available across the whole country by 2018. At present China has 785 million mobile broadband users. (From Beijing Review 18/2/16)
An international maritime surveillance centre will be built for China’s home-grown Beidou Navigation Satellite System (BDS). This will be an alternative to the US-operated GPS system. The centre will be located in Tianjin and will monitor and assess the accuracy, operating situation and signal quality of the system. The Beidou project was formally launched in 1994, about 20 years after GPS. The first Beidou satellite was launched in 2000 and by 2012, a regional network had already taken shape and was providing services in positioning and navigation to China and other Asian countries. (From Beijing Review 3/12/15)
SinoFile is compiled by Walter Fung.
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