China News - Summer 2017

Africa’s first electric railway

The first electric railway in Africa was launched connecting Djibouti and Addis Ababa in Ethiopia. The Prime Minister of Ethiopia, Hailemariam Desalegn said it was an historic moment and the pride of our nation and people. Amongst those present at the launch were African leaders, tribal singers and a number of European diplomats. The railway is 466 miles long, took six years to build and cost $4 billion. It was built by Chinese engineers and was funded mainly by Chinese banks. The Chinese rail industry is at present involved in several other international projects: supplying carriages for the subways of Chicago and Boston, $5 billion on Indonesian railways, a link from China to Laos and a freight train link from Beijing to London. (From The New York Times, via the internet 7/2/17)

From the British press

First Silk Road train from Britain

Yesterday, a goods train left the DP World London Gateway rail terminal in Stanford-le-Hope, Essex on its way to Yiwu in eastern China. It will go via the Channel tunnel, Duisburg (Germany), Poland, Belarus, Russia and Kazakhstan, following the ancient Silk Road into China. The cargo in 30 containers consists of whisky, baby products and vitamins.

This is the first service in this direction from Britain to China and is three months after a train on the reverse direction from China arrived in Britain. The train will arrive at Yiwu on 27 April.

Rail transport is quicker than by sea and cheaper than air freight. This service is part of China’s One Belt One Road programme of reviving the old Silk Road routes from China to the West which were in existence more than 2,000 years ago. Xubin Feng, chairman of Yiwu Timex Industrial Investment Co, which organised the service said, ‘We have great faith in the UK as an export nation. (From The Times 11/4/17)

New investment in renewable energy

CountryNew investment 2016 $bn% change on year before
China78-32
US48-10
Britain25-1
Japan17-56
Germany13-14
India10nil
Brazil8-4
Australia451
Belgium3179
France 35
NB. These figures are estimates from a bar diagram in The Economist.

New investment in renewable energy globally fell by 23% last year to $241.6 billion. This is partly as a result of an investment slowdown in China and Japan after a huge increase in wind and solar capacity was financed in 2015.

Source: Frankfurt School UNEP Collaborating Centre, Bloomberg New Energy Finance (From The Economist 15/4/17).

The figures show China’s lead in renewable energy investment by a long margin in both 2016 and 2015

Defence spending $ per person 2015

United States1854
Singapore1705
Australia982
South Korea720
Taiwan417
Japan323
China156
Vietnam50
India40
Philippines38
Indonesia30
Source; SIPRI (From The Economist 22/4/17)
From these figures, it can be seen that China’s spending per person is tiny compared to many other countries.

Chinese observatory in Patagonia

China’s 200-hectare Deep Space station in Quintuco region of Neuquen province, southern Argentina, is nearing completion. It comprises two large ‘super-antennae’, the biggest 35 metres in diameter, and a power plant generating enough electricity to supply a small town. The flat landscape and absence of interference makes the spot ideal for space observation.

There are complaints however about the leasing of land to China for 50 years and that the site could be used for military purposes. It is allegedly run by China’s military. However, the Chinese authorities say that the antennae can only be moved slowly and are therefore not suited to military uses. China values this site, as it on the other side of the world from China and will be invaluable for its space programme. This includes unmanned missions to the moon and Mars, but China hope to put a man on the moon by 2025. The European Space Agency also has a station in Argentina in Mendoza province. (From The Times 11/4/17)

China/UK relations (Karen Bradley, Secretary of State for culture, media and sport)

The Fourth People to People dialogue is to take place in Shanghai, chaired by Jeremy Hunt for the UK and Vice-premier Liu Yandong for China. They will use culture, health, science and education to create an environment where Chinese investors, students and tourists are more likely to choose the UK. There will be a partnership between Visit Britain (Britain’s tourism body) and the leading Chinese travel website, Alitrip, which will create a virtual British marketplace on Alitip’s digital platform.

Chinese outward-bound tourism is the most valuable in the world, worth £231 billion. Every 22 Chinese tourists who come here create one new job. They stay longer than other international tourists, 15 nights on average compared to eight nights for others. They also travel more widely across Britain than others too, spending about half their time in London. Visit Britain calculates that the Chinese spend £2,174 each, three times as much as other tourists. Last year there was a record 270,000 visits from China, leading to an expenditure of £586 million. Visit Britain hope this will reach £1 billion by 2020. Following tourism there will be discussions and announcements on fashion, museums, healthcare, sport, the theatre, opera, music, Madame Tussauds and the Premier League. The Premier League is one of Britain’s most successful exports; 174 million Chinese say they follow Premier League football. (From The Sunday Times 4/12/16)

China’s first jetliner takes off

The first large Chinese-made passenger jetliner took off on its maiden flight yesterday. This maiden test flight is a symbolic milestone in China’s goal to break into the Western-dominated passenger dominated aircraft market. The Chinese built C919 is seen as a rival to the single-aisle A320 jets made by Airbus and the Boeing 737. The Chinese plane was originally due to fly in 2014 before being delivered to buyers in 2016, but there have been manufacturing issues. (From I (Independent) 6/5/17)

World Infrastructure leaders

Busiest airports for freight/mail (m tonnes in 2005)

Hong Kong4.4
Memphis4.3
Shanghai3.3
Incheon2.7
Anchorage2.6
Dubai2.4
Louisville2.3
Frankfurt2.1
Tokyo2.1
Taipei2.0
Busiest container ports (TEU, m in 2015)
Shanghai38
Singapore31
Shenzhen25
Ningbo-Zhoushan21
Hong Kong20
Busan19
Guangzhou18
Qingdao17
Dubai16
Tianjin14
*TEU = 20-foot standard container or equivalent
All data estimated from bar charts
Sources; Airports Council International; Marine Department of Hong Kong From The Economist 8/4/17

Beijing’s caring zebra crossing campaign

At 100 crossroads in Beijing, volunteers will perform an ‘a wait light dance’ to stop pedestrians and cyclists from jumping the red lights. Beijing’s ‘spiritual civilisation construction committee’ has hired elderly dancers, line-dancing grandmothers, to wage war on jaywalking. ‘Road etiquette’ campaigns also hope to persuade drivers to give way to pedestrians and children have volunteered to stand in the street to force traffic to stop. The ‘spiritual civilisation construction committee’ asks cyclists and pedestrians to smile and give ‘thumbs up’ gestures to thank drivers who do give consideration to other road users. The committee say drivers should ‘strive to be civilised and polite.’ Other cities in China have opted for technology; in Wuhan, jaywalkers have their faces displayed on a nearby big screen, while Shenzhen is using facial recognition technology to allow police to identify and punish jaywalkers in a ‘social credit’ system. (From The Times 24/4/17)

Ivanka Trump’s children entertain Chinese President

Beijing’s state press highlighted the ‘aura of cordiality’ and ‘heart-warming’ moments of Xi Jinping’s visit to Trump’s Mar-a-Lago resort in Florida. This included a recital of Chinese folk songs by the US President’s grandchildren, Arabella and Joseph specially for the Chinese President and his wife Peng Liyuan. There was a photograph of the event in the Sunday Times of 9 April 2017.

Senior official pleads guilty to corruption

The former head of China’s statistics bureau has pleaded guilty to accepting the equivalent of £17 in bribes, a court said yesterday. Wang Baoan was also accused of ‘exchanging power for sex’. He accepted the bribes between 1994 and 2016 whilst boss of the statistics bureau and other senior government positions, the court in Zhangjiakou heard.

Wang was deputy finance minister from 2012 to April 2015, when he became head of the National Bureau of Statistics. In addition to accepting bribes, he frequently stayed at expensive hotels and engaged in ‘superstitious activities’. (From I (Independent) 12/5/17)

China gets a thirst for Scotch whisky

One of Scotland’s oldest whisky producers is banking on a rising Chinese appetite for Scotch whisky after it signed a distribution deal with China’s biggest food company. Loch Lomond Group, whose brands include Littlemill and Glen Scotia said that the partnership with the state-backed agriculture and food and beverage giant Cofco would pave the way for its whiskies to be sold across China. Whisky sales in China have increased 12-fold in the last decade. Bottles have become popular as gifts.

The Asia-Pacific region now accounts for almost two thirds of global spirits consumption. China is one of the fastest growing markets and drinks multinationals such as Diageo are targeting the country. Loch Lomond, which was founded in 1814 and is based in West Dunbartonshire believes, Chinese drinkers prize the authenticity of Scotch whisky. Cofco has more than 1,000 sub-distributors as well as its own network of stores. It has plans to be the biggest spirits importer in China. (From The Daily Telegraph 2/5/17)

Royal tomb unearthed in Shanxi province

A royal tomb, believed to be that of General Zhao Xin and his wife Princess Nee Liu, who were buried on 18 March 564, has been unearthed near Taiyuan, northern China. The burial took place during the brief but tumultuous Norther Qi Dynasty (550-577). They were interred in the same coffin and were accompanied in the afterlife by 105 clay warriors, servants and camels. The tomb was actually excavated in 2012-13 but the discoveries were only reported widely in early 2017. (From BBC World Histories, Issue 3, April/May 2017)

Chinese group HNA in Deutsche Bank

The Chinese acquisitive conglomerate, HNA, has recently become the largest shareholder in Deutsche Bank, with an almost 10% holding. Reports in February stated an initial stake of only 3%. HNA is one of the Fortune Global 500 companies in the world and is a part owner of Hainan Airways. (From The Economist 6/5/17)

American Airlines buys into China Southern Airlines

American Airlines, the world’s largest carrier is to buy a $200 million stake in China Southern Airlines, China’s carrier. The deal should mean greater co-operation on routes. The deal is for mutual benefit: American Airlines is keen to strengthen its presence in the Chinese markets and Southern Airlines wants to expand abroad. (From The Economist 1/4/17)

Chelsea’s Costa ‘agrees move to China’

Diego Costa is set to leave Chelsea this summer and move to the Chinese Super League in a £76 million deal, according to reports in Spain. The Chinese club Tianjin Quanjian are ready to make him the best paid player in the Chinese league at around £25 million a year. Costa was seen with Jorge Mendes, the agent, and others believed to be Tianjin representatives in London last week. The fee would beat the £71 million that Shanghai Shenhua paid Boca Juniors for Carlos Tevez earlier this year. (From The Times 5/5/17)

China at Vatican conference

China’s participation in a conference on organ trafficking at the Vatican raised a few eyebrows. The Chinese representative heads China’s organ-transplant programme and his attendance was a sign of warming relations between the Vatican and China. (From The Economist 11/2/17

Philippines may share sea boundary with China

President Duterte of the Philippines has said that he was open to sharing resources with China in the South China Sea. He said that his nation could not develop the natural resources on its own; it does not have the capital. The Philippines could not even afford an oil rig and would consider sharing. (From I (Independent) 24/3/17)

From the Chinese Press

Job creation in China

In January and February of this year, China created 1.88 million new jobs, which was 160,000 more than the same period last year. The employment situation was generally stable, being about 5% in 31 major Chinese cities during the same two months.

During 2016, 13.14 million new jobs were created and the registered urban unemployment rate was 4.02% at the end of the year. (From Beijing Review 20/4/17)

Plastic eating fungus may solve pollution problem

Researchers at the Chinese Academy of Sciences (CAS) have identified a novel fungus capable of degrading polyurethane plastics. The research was published on the website of the international journal, ‘Environmental Pollution’. The fungus was isolated by a team led by Xu Jianchu at the Kunming Institute of Botany under CAS. The fungus can break the chemical bonds of the polymer through the activity of its enzymes.

The efficiency of degradation was influenced by pH, temperature and type of polymer. Current research is to ascertain optimum conditions for the rapid growth of the fungus, necessary to make it a viable process to tackle the pollution problem. (From China Today May 2017)

Chinese researchers create soft robotic arm for medical use

A team of postgraduates from Beihang University in Beijing have created a soft robotic arm, inspired by an octopus. The prototype, developed with a foreign firm, was exhibited on 30 March 2017. Soft robots are made from materials such as silicone, plastic, fabric, rubber and compliant mechanical parts such as springs.

The softness is necessary for effectiveness and safety with humans. The robotic soft arm was inspired by the tentacles of an octopus and can bend and swirl easily and suction cups allow it to adhere tightly to objects of different shapes and sizes. It is expected that with five to ten years more development, the robotic arm will be used in minimal-invasive surgery and athletic rehabilitation. (From China Today May 2017)

Innovative companies on the rise in China

There are now 4,200 maker spaces and 2,000 gazelle companies in China, according Zhang Zhihong, chief of the Torch High Technology Industry Development Centre at the Ministry of Science and Industry. A maker space is a collaborative work area where innovators can come together. A gazelle company is one which maintains consistent growth of at least 20% over more than five years.

Zhang gives credit to the national policy of encouraging mass entrepreneurship and innovation. Most of the maker spaces are situated in national new technology and i-tech zones. A 2016 survey of 4,298 maker spaces showed that they provide services to more than 120,000 companies. There are 2,084 gazelle companies in China’s national new technology and hi-tech zones which is more than Silicon Valley in the US. (From China Today May 2017)

China and Norway normalise relations

China and Norway have restored full diplomatic relations and have signed a wide range of cooperation documents. The Chinese Premier Li Keqiang held talks with the Norwegian Prime Minister, Ema Solberg, in Beijing on April 7 2017. Norway hopes to resume bilateral free trade agreements as early as possible and would like to expand cooperation in areas such as agriculture, fishery, environmental protection, finance and investment. (From China Today May 2017)

China builds Jakarta-Bandung high-speed railway

A consortium of Chinese and Indonesian firms signed an agreement to construct a 142 km long railway, the first of its kind in the whole of Southeast Asia. It will cut travelling time between the two cities from three hours to 40 minutes by reaching a top speed of 350 km per hour. (From China Today May 2017)

Chinese Burials in England

Five graves of Chinese sailors buried in a Newcastle cemetery are being renovated. The sailors were in Newcastle to take delivery of two warships to China, the cruisers Chaoyong and Yangwei, which had been built in Newcastle for the Chinese navy. Two sailors died of unknown illnesses before the ship left Tyneside in August 1881. Six years later a further crew of Chinese sailors travelled to Newcastle to collect two more ships, the cruisers, Zhiyuan and Jingyuan. During this visit three more Chinese sailors died and were buried in the same cemetery.

The Chinese government of that time bought the plots of land for the graves in 1881 and 1887. After about 130 years the grave stones are being restored. Amongst those involved in the work are the Northern Britain Chinese Entrepreneurs Association, the China Foundation for Cultural Heritage and Alan Macfarlane, professor emeritus of King’s College, Cambridge. (From China Watch in the Daily Telegraph 21/2/17)

Investment in Belt and Road countries increases

China has invested more than $50 billion in countries along the Belt and Road since the initiative was proposed in 2013. Progress is rapid and the Belt and Road (OBOR) initiative has won support from over 100 countries and organisations. Nearly 50 cooperation agreements have been signed along the route and over 70 other agreements made with international organisations. Some large cooperation projects have been implemented, such as the Belgrade-Budapest railway, the China-Laos railway and construction of ports and other infrastructure. Although the OBOR initiative came from China, it belongs to the world and all countries will share the benefits. From China Today April 2017)

Shift from low-end manufacturing to more value-added production

In 2015, China announced it would move its manufacturing sector up the value chain and promote development in 10 key sectors such as medical devices and robotics. This was termed the ‘Made in China 2025’ plan. On 28 March, the Chinese authorities promised ‘multi-pronged financial support’ for the manufacturing sector as the government looks to shift China from low-end manufacturing to more value-added production under this plan.

In a guideline jointly released by several regulators, including the central bank and the Ministry of Industry and Information Technology pledged their support for the Made in China 2015 plan. More financial support should be given to technology and to manufacturing sector upgrades. China will allow banks and institutions to play differential roles in serving the manufacturing sectors. In addition, agencies will be set up to offer more professional services to industry. The government is pursuing advanced technology and growth through innovation. (From Beijing Review 13/4/17)

Increase in Chinese pensions

The state pension in China has been increased by 5.5% from 2016 levels to 2,400 yuan per month ($348.5). It will benefit 106 million retired people. The consumer price index was 2.0%. Last year the increase in the pension was 6.5%. This is the thirteenth year in a row in which pensions have been increased; between 2005 and 2015, pensions went up by at least 10% annually. (From Xinhua via the internet 14/4/17).

More transport investment

China will spend at least 2.6 trillion yuan ($376.81 billion) on transport infrastructure projects this year. During the 13 Five-year Plan (2016-20) the spending will be 15 trillion yuan ($2.17 trillion). The spending on railways will be 3.5 trillion ($508.3 billion), on roads, 7.8 trillion ($1.13 trillion) and on waterways 500 billion ($72.61 billion).

Following the completion of these projects China will have extended its railway network by 30,000 km, more than a third will be high-speed and there will be an additional 320,000 km of roads. China will also build 50 new civilian airports. In green transportation, there are expected to be 200,000 new energy buses by 2020, up from more than 160,000 at the end of 2016. (From Beijing Review 9/3/17)

Tourism boom

China’s tourism industry raked in 39 billion yuan ($5.74 billion) during the three-day Qingming Festival holiday. The revenue was driven by 93 million domestic tourist trips according to the National Tourism Administration.

The Qingming Festival, also known as Tomb-Sweeping Day, is an important occasion for Chinese people to honour their ancestors. Others spent the holiday on leisure travel, with most trips being short-haul travel by road. However, about 35 million passenger rail journeys were taken, mainly heading for the Beijing-Tianjin-Hebei area and for the Yangtze River Delta region. Tourism is important for China’s shift towards a more service-driven economy and it is a useful indicator of the strength of consumer spending. (From Beijing Review 13/4/17)

Private investment encouraged

Guidelines have been announced to encourage private investment in a wide range of sectors, including care of the elderly, education, culture and sports. Restrictions on private investment will be eased and procedures for private businesses will be streamlined. Financing channels for public service projects should be broadened to include the bond market, collateral financing and industrial investment funds that operate under market mechanisms. Private investors will find favourable policies in land use and improved taxation and market supervision. (From Beijing Review 30/3/17

Chinese universities rank high

The London-based Times Higher Education (THE) magazine, has ranked Peking University and Tsinghua University as the second and third best universities in Asia in the 2017 listing. The National University of Singapore was ranked the best. In total, the Chinese mainland has 54 institutions in the top 300 universities in Asia. Six Chinese institutions are in the top 20; Hong Kong has five. Editor of THE rankings, Phil Baty, has said than Asia is becoming a dynamic, diverse and competitive higher education region and that China is a key part of this development. (From Beijing Review 30/3/17)

Intellectual property issues

A total of 87,000 cases related to infringement of intellectual property rights (IPR) were handled during the 12th Five-year Plan (2011-15) according to the State Intellectual Property Office. The office also announced that 322,000 cases of other business infringements, including confidentiality, counterfeiting and trademark rights, were also dealt with. Shen Changyu, head of the office, said that the establishment of IPR protection centres will be accelerated this year. (From Beijing Review 30/3/17)

Largest 5G Tests established

China has established the world’s largest 5G test field in the race to standardise mobile communications technology. (5G is the 5th generation mobile communication network). Chinese industrial giants, Huawei Technologies and ZTE Corp, are participating in test programmes at the outdoor test site in the Huairou District of Beijing. Years of investment have put China in pole position to formulate the industry standard and reap the benefits of a network that provides much faster connectivity with lower energy consumption. China aims to commercialise 5G mobile networks as early as 2020. From driverless cars to the industrial internet and smart cities, 5G is expected to support significantly faster mobile broadband speeds and increasingly extensive mobile data usage as well as to enable the full potential of the ‘Internet of Things’ (The infrastructure of the information society of all smart devices). (From China Today April 2017)

More nuclear power plants in China

The deputy director of China’s National Atomic Energy Agency, Wang Yiren, has said that China will build more nuclear power plants, whilst at the same time guaranteeing the safety of nuclear power development. Although nuclear power is seen as critical to China’s future development, it currently accounts for about 3% of China’s total power production. The global average is about 11%. Apart from nuclear plants, China plans more one-stop nuclear fuel bases that can increase the efficiency of existing sites. The installed capacity of its nuclear power plants (including ones under construction) will reach 88 million kW by 2020.

Mr Wang stated that a Fukushima-style nuclear accident would not happen in China because this 2011 incident in Japan was due to a combination of natural disasters and improper crisis responses. He claimed that the third-generation nuclear technology currently adopted by China has far better safety performance and would restrict the impact of any accident on site. (From China Report 1/3/17)

China’s new ocean depth record

According to the Chinese Academy of Sciences (CAS), the Chinese underwater glider, ‘Haiyi’ (Chinese for sea wings), reached a depth of 6,329 metres in the Mariana Trench, thus breaking the previous record depth of 6,000 metres held by the US. The craft was developed by the Shenyang Institute of Automation under CAS and is used for monitoring the deep-sea environment over vast areas. The craft dived 12 times and travelled over 130 kilometres during an 87-hour mission and collected high-resolution data for scientific research.(From China Today April 2017)

Weibo fined for disseminating pornography

The social media platform, Weibo.com, has been fined for disseminating pornography, as part of a nationwide crackdown. In February, the National Office Against Pornography and Illegal Publications launched a new round of its national campaign against the sale, production and distribution of illegal publications and online erotic content items that could affect juveniles. Investigators found that Weibo had started providing audio-visual programmes in February 2015 without first obtaining a licence.

The national office has asked all online service providers to treat this as a lesson and shut down accounts which have illegal contents such as pornography. (From Beijing Review 27/4/17)

Putting population back on track

The year 2016 has a special significance for China’s demographics, as the new policy of allowing all couples to have two children became effective from 1 January of that year. As a result, 17.86 million births were recorded in 2016 and the total fertility rate exceeded 1.7, the highest in a decade. China’s family planning policy has completed the change from ‘quantity control’ to ‘structural adjustment’.

A whole series of challenges needs to be addressed including a shrinking workforce (by 2 to 3 million per year from 2012), a shrinking customer market and the burden of an ageing population. The Chinese National Population Development Plan (2016-30) is considering a series of measures, including removing the restraints on childbirth. Meanwhile, efforts will be made to strengthen reserves of human resources for further technological and social innovation. Social security systems will be improved to guarantee their living conditions.

During the 13th Five-Year Plan (2016-20), 17 to 20 million births are expected every year. This is in line with the Chinese National Health and Family Planning Commission. It is expected that the fertility rate and the number of births will increase steadily even though the number of women of child-bearing age will continue to drop. (From Beijing Review 9/3/17)

New ruling in home schooling

A new ruling from the Ministry of Education has reaffirmed China’s long standing restrictions on home schooling. These is no way for parents to refuse to send their children to school for the nine years of compulsory education, unless they have special permission for health reasons. This nine years could be more in some regions, depending on the level of development. (From China Report 1/3/17)

China’s second-hand car industry

The China Automobile Dealers Association reports that the sales volume of second-hand vehicles reached 10.39 million in 2016. This is up from 251,700 in the year 2000. It is predicted that by 2020, the figure will reach 29.2 million. There is great potential for improvement in China’s underdeveloped second-hand car market when it is compared with the mature second-hand car market overseas. Buyers have concerns about transparency, vehicle condition, price fraud and a lengthy process of owner transfer. However, in recent years, e-commerce companies have emerged and are trying to find solutions for these problems in an, at present, chaotic market. (From China Report 1/3.17)

Chinese company FIFA sponsor

Chinese electronics giant Hisense announced on 6th April that it will be an official sponsor of the 2018 FIFA World Cup. It is the first Chinese consumer electronics brand to sponsor the tournament and will be involved with a range of marketing and advertising activities for the 2017 Confederations Cup and the 2018 World Cup. It will reach 200 countries and regions and should enhance the company’s international profile.

Hisense will be able to display its logo at the FIFA events on advertising boards in stadiums and on screen credits. It will offer technical expertise and products throughout the 2018 World Cup games and also engage in joint research and development initiatives with FIFA to improve display technology. (From Beijing Review 20/4/17)


SinoFile is compiled by Walter Fung.

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