|Country||Spending||World share %|
Source: IISS (via The Economist 7/4/12)
Military assets (2010), China/US
|Defence budget 2010-2011, $bn||89.8||793.3|
|% share of GDP||1.3||4.9|
|Active personnel (millions)||2.4||1.6|
|Intercontinental ballistic missiles||66||450|
|Nuclear powered submarines with ballistic missiles||3||14|
Source IISS via The Economist 7/4/12
This issue of The Economist contains a special lengthy article on China's military and a forecast showing, Chinese military expenditure increasing steadily and overtaking that of the US about the year 2040. The Chinese navy is said to see itself as the guardian of China's ever expanding economic interests i.e. preserving the country's access to energy and raw material supplies and also safeguarding the soaring number of Chinese citizens who work abroad - currently about five million, but expected to rise to 10 million by 2020.
The world's $ billionaires
|Country||Number of billionaires|
There are believed to be 1226 US-dollar billionaires in the world, an all-time record. The average billionaire is worth $3.7 billion with a total wealth of $4.6 trillion.
Source: Forbes magazine via Money Week 16/3/12
This eco-city is at Tianjin, near Beijing, and is an experimental development funded by the Chinese and Singapore governments. The deputy director of construction, Wang Meng, says that it is a practical development where, if people take the bus and sort out their rubbish for recycling, they will be making their contribution. He adds that of the 100 or so eco-cities in the world, many are 'green follies' because they have bothersome environmental rules and people don't want to live in them. However, the main contribution of the residents of Tianjin Eco-city is in fact their being guinea pigs as planners experiment around them. For example, General Motors is using the city to work out if driverless cars can function in a normal traffic system.
They will road-test the next generation of driverless cars to assess them in a real-life situation with unpredictable drivers and pedestrians. Other projects on trial include a low-energy lighting system from Philips and rubbish bins from the Swedish company Envac, which empty themselves. They function by litter being sucked into an underground network but rely on people not putting the wrong sort of rubbish into the bins. The project is expected to run for about a decade and will have cost 250 billion yuan (£25 billion). The eco-city is to be situated on a former industrial wasteland half the size of Manhattan and will eventually house 350,000 people; so far sixty families have moved in. The project is so important that eight out of the nine politburo standing committee have already visited the place. Mr Wang says that the idea is to create something that can be adapted to other cities in China. He adds that they want to develop cheap technology that can be industrialised, produced and sold on elsewhere. He believes that people's views that being green is expensive must be changed. (From The Telegraph 19/3/12)
IHG will today unveil a key part of its plan to conquer China - a hotel specifically designed by its China-based team for the Chinese. Surprisingly it is believed to be the first international hotel chain to have come up with the idea. The hotels will have a late-night noodle bar, a traditional Chinese garden in the lobby and a team of hosts to greet VIP guests. The Chinese name of the hotel will be 'Huayi' suggesting a place where the Chinese elite gather and will target the high-end of the market but will expand out into second and third tier Chinese cities. The IHG chief executive, Richard Solomons, said that it is a local brand, created by local employees and that the idea is holistically Chinese. There will a tea house instead of a bar, because the Chinese prefer to drink tea. Hotels are often treated in China as a venue for private business and so IHG will lay on a series of 'multifunction suites' where a deal can be thrashed out before the participants go on to have a banquet and there may even be karaoke. Government officials are believed to spend £60 billion on food and entertaining and this is a key market, Mr Solomons said.
The first Hualuxe hotel is due to open next year and IHG said it had signed 20 deals with investors to build more hotels. There could be 100 Hualuxe properties across China over the next two decades and the brand could eventually find its way overseas as more Chinese travel abroad. China currently accounts for 10% of IHG's profits but the group plans to have as many hotels in China as it does in the US by 2025 - when the two economies will be roughly the same size. (From The Telegraph 19/3/12)
In the Times Higher Educational magazine's ratings of world universities, only two in the top ten were British, Cambridge at number three and Oxford at number six. Harvard led the ratings with Massachusetts Institute of Technology second, Stanford fourth and California, Berkeley fifth. Chinese universities were amongst the fasters climbers: Tsinghua University rising from 35* last year to 30* this year, Peking rose from 43rd to 38th this year. Hong Kong went from 42nd last year to 39th. The full list of 100 top universities is at www.thetimes.co.uk/ediication (From The Times 15/3/12)
China's Premier began his tenth and final year with a warning. His speech contained a thinly veiled attack on Party conservatives which gave a glimpse of disagreements at the top level. He said, 'Without successful political structural reform ...new problems that have arisen in Chinese society will not be fundamentally resolved and such historical tragedies as the Cultural Revolution may happen again.' His tone was intended to suggest that he had spent the past decade as a frustrated reformer, blocked at every turn. He said, 'Due to my incompetence, institutional and other restraints, there are many shortcomings in my work.' He also said, 'The Arab demands for democracy must be respected. It is a force that cannot be held back.' Within hours, the phrase was circulated on China's equivalent of Twitter.
His speech also included a swipe at Bo Xilai, once a political star whose maverick management of Chongqing incited nostalgia for the Mao era. Mr Bo's fortunes have crumpled (see directly below), since Wang Lijun, his closest ally in a purge of organised crime, attempted a defection to a US consulate last month. Mr Wen said, 'The present Chongqing Municipal Party Committee and the municipal government must learn from the Wang Lijun incident.' A political scientist at Beijing Renmin University commented that this was a clear indication of Mr Wen's distaste for Mr Bo and his evocation of the Cultural Revolution. In addition, when Mr Wen mentioned the Cultural Revolution, he was in fact referring to Chongqing and he was showing his opposition to that model. (From The Times (15/3/12)
The Chinese authorities are expected to release a confession to involvement in the murder of Neil Heywood, the British businessman, by Gu Kailai. The official version will aim to resolve conflicting and lurid accounts of how Heywood met his end. Heywood's death in a hotel room in Chongqing last November has led to the fall of Bo Xilai, a rising star in the party, and to the arrest of Gu and a family aide on suspicion of murder.
The wealth of Bo's extended family has been put at several hundred million pounds and some reports claim his wife was using Heywood to move cash abroad. Tales of her expensive lifestyle and that of the couple's son, party- loving son Guagua, a former Oxford University student, have been followed by millions of Chinese who are also enthralled by unsubstantiated reports that she and Heywood were having an affair. There are also details of how Bo was dismissed from his posts in the 25-member politburo and the 350-member central committee. (From The Sunday Times 29/4/12)
A young Chinese woman who built a vast industrial empire from scratch but was sentenced to death for fraud has been reprieved after a public campaign. Wu Ying, 31 who was convicted of swindling investors out of £38 million generated a wave of sympathy in a country that executes 4,000 people every year. Critics of her sentence took to the internet and attracted support from leading members of the business community. Her death sentence was commuted by the Zhejiang Peoples' High Court following action by the provincial Supreme Court. She was given a two-year reprieve on her execution, which effectively means many years in prison, but avoiding the death penalty. An internet user said on Sina Weibo (the Chinese equivalent of Twitter) that the change in the sentence was not about forgiveness, but a public outcry for justice and fairness. It has been said that the result could herald reform in China's banking system, which is often reluctant to lend to privately owned companies, causing thousands of entrepreneurs, like Wu, to raise finance illegally. Wu opened a beauty parlour at the age of 15 before going on to build a conglomerate and a personal fortune of £380 million making her at the time, the sixth richest woman in China. She is the daughter of peasants but was arrested in 2007, and found guilty of raising finance outside of the banking system and of swindling investors to whom, she had promised extravagant returns. (From The Times 23/5/12)
America's largest nuclear generator, Exelon has been approached by a consortium bankrolled by the Chinese government to rescue Britain's flagging reactor-building programme according to The Times. The German energy giants E.ON and RWE have pulled out, leaving the British government scouring the globe for new backers, and it may be forced to accept a bailout from the Chinese to revive the venture. However, it is not clear if ministers would be prepared to accept Chinese involvement because of possible Chinese operational control over the nuclear reactors. (From The Times 4/5/12)
Chinese parents seem to be buying houses for their offspring who are studying at British universities. The most popular areas are Bloomsbury, Clerkenwell and Holborn in London and in Oxford, Cambridge and Edinburgh. They tend to favour new properties - traditionally Chinese prefer not to live in a house in which people have died. In London, Savills estate agency show that buyers from China and Asia Pacific accounted for one in three prime new-build properties costing between £500,000 to £750,000. Chinese also seem to be buying for investment, as they see London as a safe place, but they generally eschew trophy homes in Mayfair or Belgravia. It is said that if they had a budget of £3 million, they would buy 10 properties in the £300,000 to £700,000 price range. Canary Wharf and Canada Water are popular areas. Some Chinese buyers have highly specific requirements: numbers have a particular significance. Chinese buyers have pulled out of deals when they realise the number four was in the address or on the fourth floor. Eight is considered a good number. Sometimes they are attracted by historical significance. A Chinese buyer bought a house in south London, where Vincent van Gogh had lived, for £565,000 at auction, without even seeing it. Despite all this, the head of research at Savills believes Chinese spending on property could be vastly increased if controls on how much money they can take out of the country were lifted and restrictions on property ownership overseas were removed. (From The Sunday Times 1/4/12)
When Charles Zhang sailed his 66ft Sunseeker yacht into Shanghai five years ago, it was the biggest privately owned yacht in China. Now it is believed he may be considering the purchase of a £100 million vessel - China's first gigayacht. Zhang is an internet pioneer who plans to scale Everest. A gigayacht is defined as being more than 200 feet long and having at least five decks. These were once the domain of Russian tycoons and Arab rulers, but Chinese entrepreneurs are poised to snap up many of the luxury vessels now under construction. A report being prepared by Italian government officials in advance of the China boat show in Shanghai in April emphasises that China is the most important luxury goods market. The UK became the biggest yacht exporter to China in 2010, overtaking Italy in the process. But economists say the pie is getting bigger every year. In 2010 there were only 1,500 yacht owners in China, excluding Hong Kong, but according to the Huran Wealth Report (an annual rich list for China), 50% of the big spenders it spoke to last year were interested in taking up sailing. The number of millionaires in China is expected to rise from 500,000 to 800,000 within three years. (From The Sunday Times 8/1/12)
Wen Jiabao fired a parting shot at conservatives in the ruling Communist Party warning that unless it undertook political reforms another Cultural Revolution could take place. He said that without successful political reform, it is impossible for us to fully institute economic structural reform and the gains we have made in this area may be lost. New problems that have cropped up in Chinese society will not be fundamentally resolved and such a historical tragedy as the Cultural Revolution may happen again. The mistake of the Cultural Revolution and the impact of feudalism are yet to be fully eliminated.
Mr Wen was delivering a speech at the National People's Congress, which meets once a year, and as Mr Wen will be stepping down, it was his farewell speech at the Congress. (From The Financial Times 20/3/12)
Baijiu, distilled from sorghum, a type of cereal, and often drunk shot for shot by host and guests at Chinese banquets, is a notoriously pungent and extremely powerful spirit. Diageo has won approval from Beijing to complete its acquisition of ShuJingFang, the vast baijiu producer, in which it bought a 39.7% stake last June. Diageo's chief executive, Paul Walsh, said, 'There are many baijiu brands in China and I hope that we have demonstrated our credentials with ShuiJingFang and we may have the opportunity to broaden our footprint.'
Asia and its emerging markets continue to produce strong growth in the drinks industry. At the forefront is Diageo's Johnnie Walker brand, considered to be 'the cradle of luxury.' The middle classes in China are becoming wealthier, but Johnnie Walker is just 'out of reach' - for the moment. Diageo hope to do what has been already been done with tequila. This drink has been transformed from a local drink in Mexico to bars across the world. Baijiu could travel the world and has already been introduced into Chinese restaurants around the world and there is opportunity to sell to the Chinese diaspora. Diageo have the global reach and clout to do this.
Mr Walsh's visit to China is part of a five-week tour of Asia primarily aimed at understanding the potential for Scotch. Efforts to promote Diageo's most famous brand include the recent opening of Johnnie Walker House, a private club in Shanghai. This has been done for branding purposes in the hope that it will achieve what the Apple store did for personal electronics. (From The Times 22/3/12)
China's Bright Food, the grocery giant, is to buy a majority stake in Weetabix from Lion Capital, the buyout firm. This tie-up is the culmination of a long quest by Bright Food to buy British. It has previously tried, unsuccessfully, to acquire United Biscuits (who make Jaffa cakes and Hula Hoops). Bright Food says it wants to help Weetabix, which also makes Alpen and Ready Brek, to enter the Chinese market. However, it may not be easy because many Chinese eat congee, a traditional Chinese porridge-like dish).
The chairman of Bright Food, believes that as China develops, people will want to eat more healthy food and they know cereals are beneficial to health. His company is backed by the Shanghai government but at the moment has no plans to produce Weetabix in China and will retain the management team. (From The Sunday Times 6/5/12)
A very valuable haul of Chinese jade artefacts have been stolen from the Fitzwilliam Museum at Cambridge University. Eighteen items, including a 14th century Ming cup, were taken. They are considered of'great cultural significance' and were part of the permanent collection on display. This raid comes only two weeks after the theft of two jade artefacts worth £1.8 million from Durham University's collection. The happenings have prompted suggestions that Chinese artefacts are being stolen to order for collectors desperate to be part of the booming trade in Far Eastern antiquities. Auction houses have seen record prices paid for rare works of Chinese art in recent years as rich buyers in the Far East seek to add to thencollections. Amongst the items taken at Cambridge University were six pieces from the Ming Dynasty, including a 16th century carved buffalo, a carved horse from the 17th century and a green and brown carved jade elephant. Eight pieces from the Qing Dynasty and a rare table screen from the Qianlong period were also stolen.
Cambridgeshire police refuse to speculate on whether this robbery is linked to the Durham University thefts, but officers from both regions are believed to be liaising. Cambridgeshire police are committed to recovering the items and take the incident very seriously, but have commented that this type of crime is very rare. (From The Daily Telegraph 19/4/12)
Due to the magnitude of the euro-zone economic crisis, the main focus in recent months is whether China will come to the rescue by buying euro debt with its sizable foreign reserves. While China has pledged confidence in euro-zone recovery, it has refrained from making firm commitments to buy more euro bonds. It is not hard to see why. In the last few months, Standard & Poor's and Fitch have both downgraded the credit ratings of several countries including France, Spain and Italy. In addition, euro-zone leaders do not seem able to unite behind a common approach to tackle the crisis.
Despite being apprehensive, China is in fact stepping up its investments in Europe. China's state-owned shipping company, COSCO, now holds a 35-year lease on the Port of Pireas, the largest port in Greece. Chinese companies have acquired 8.7% of Thames Water and are buying 90% of Putzmeister, Germany's largest concrete pump manufacturer, Despite Premier Wen Jiabao's assurance that China does not intend to 'buy out' Europe and despite the non-recognition of market economy status and the arms embargo on China, many analysts believe that it will happen.
There are reservations on Chinese investment in debt-ridden Europe and there is negative media scrutiny - not applied to the US, which is the largest investor in Europe. One reason is that many Chinese firms are state owned or are sovereign wealth funds and there are concerns of a political agenda.
Despite being cash-rich, Chinese companies need to build up their brands, improve their technology and management expertise, and expand their reach into both old and new markets. The EU needs cash injection, the restoration of investor confidence and to access overseas markets. Thus the EU and China can help and complement each other. They should view the crisis in a longer-term context, foster partnerships and work together to create sustained momentum for economic growth. (From an article in Beijing Review 1/3/12 by Ms Loh Su Hsing of Chatham House, London)
The Chinese Ministry of Commerce is organising nearly 70 diverse promotional events in 2012 to promote domestic consumption. The China Textile Commerce Association is preparing for the Beijing Women's Shopping Festival in May. Other events include the China International Beer Festival in Dalian in July, the Ninth China International Gourmet and Travel Festival in Chegdu in September and the China Silk Fashion Festival in Beijing in July. The ministry has also announced plans for a 2012 'consumption promotion month' between 2 April and 4 May to coincide with the Tomb Sweeping Day and Labour Day holidays. Spurring domestic demand, especially consumption, is fundamental to drive China's steady and rapid economic growth, especially as overseas demand wanes and a high investment rate becomes unsustainable.
After the global economic recession in 2008, China unveiled a series of subsidies and tax rebates to encourage domestic consumption of household appliances and cars to replace older ones with new models. Although that programme ended in 2011, the subsidy programme for rural appliance purchases will continue. There will also be new policies to boost consumption, especially to promote the green economy, low-carbon emissions, energy conservation and environmental protection. Logistics cost increases over the past two years have been blamed for price increases in consumer goods and in response, the State Council has decided to clear up arbitrary charges in logistics and to generally improve the climate for consumers.
The primary task for China to expand its domestic demand is to cultivate private investment and consumption. In the past the country has relied on government investment and consumption. (From Beijing Review 29/3/12)
By 2015, China's total retail sales of consumer goods are expected to reach 32 trillion yuan ($5.08 trillion) with an average annual growth rate of 15%. By the same date, total added value of hospitality (lodging/catering) will reach 8.6 trillion yuan ($1.37 trillion) again with an average growth of 15%. On-line retail sales are expected to grow annually at more than 30% to reach 2 trillion yuan ($317.46 billion). The Chinese Ministry of Commerce is the source of this information. (From Beijing Review 29/3/12)
Cyber-attacks launched from overseas bases surged in 2011, rising to 8.9 million computers affected from 5 million in the year before, according to a network security report. Japan was the main source of attacks responsible for 22.8%, closely followed by the US (20.4%) and South Korea (7.1%). The report was released on 19 March by China's National Computer Network Emergency Response Technical Team and Coordination Centre. They found that 11,851 Internet protocol addresses based overseas took control of 10,593 Chinese websites last year. They destroyed servers, distorted website content and stole personal data from Chinese Web users. They altered the content of 1,116 Chinese websites, including 404 run by government agencies. (From Beijing Review 29/3/12)
China's cabinet, the State Council passed a fiveyear plan on 21 March for improving drinking water in rural areas. China will strive to solve drinking water safety problems for 298 million rural residents during 2011-2015. A total of 114,000 rural schools and nearly 80% of the rural population will have access to safe drinking water through centralised water supply facilities. Already in the period 2006 to 2011, 105 billion yuan ($17 billion) was spent to provide 210 million rural inhabitants with safe drinking water across China. Local governments were urged to improve protection of water sources and also strengthen the prevention and treatment of water pollution. (From Beijing Review 29/3/12)
The fifth session of the 11th People's Congress of Anhui Province elected Li Bin as Governor. She is at present the only female provincial governor in China. She was born in 1954 and holds a PhD in economics. Her previous positions include vicepresident of the Jilin Provincial Academy of Social Sciences, deputy governor of Jilin Province, deputy director and Party secretary of the National Population and Family Planning Commission and deputy governor, acting governor and deputy Party secretary of Anhui Province. (From China Today, April 2012)
The State Council, China's cabinet, issued a document on 10 April stating that China has pledged to maintain the country's low birth rate so as to limit the population to 1.39 billion by 2015. This means that the population growth rate will be kept below 0.72% per annum. The document stated that China's working population will peak between 2011 and 2015. At the same time the aging population will grow at an unprecedented rate. The urban population will remain greater than the rural population. (From Beijing Review 19/4/12)
US Ambassador Gary Locke recently announced in Beijing a pilot scheme to ease visa applications for Chinese visitors to the US. By 2016, the number of visitors to China from the US is expected to grow 135% on 2010 figures. Chinese visitors currently spend more than $6,000 per head per trip. The US embassy and consulates in China handled more than one million visa applications in 2011 - an increase of over 34% on 2010. The overall objective is to spur economic growth and create jobs in the US. (From China Today April 2012)
China established The China Renewable Energy Centre (CNREC) on 23 February to promote sustainable growth in China. The missions will be to conduct research on renewable energy, formulate development strategies and carry out cooperative programmes with the international community. A key area is electricity generation from renewable sources. (From China Today April 2012)
China's State Council announced on 18 April that China will accelerate development on energysaving and new-energy vehicles to ease pressure on resources and on the environment. Prioritising purely electricity-driven vehicles will be the major strategic route for China to transform the auto industry. At present the focus is on pure electric cars and plug-in hybrid electric vehicles. China's total output of pure electric and plug-in hybrid vehicles is expected to be 500,000 by the year 2015 and 5 million by 2020. China's auto industry will try to lower average fuel consumption of cars produced in 2015 to 0.069 litre/km and those produced in 2020 to 0.05 litre/km. (From Beijing Review 26/4/12)
Beijing is likely to introduce new vehicle emission permits that could be as strict as those in Europe, in response to concerns over the city's air pollution. A draft standard has been released which specifies strict limits for a variety of vehicle emissions, including carbon monoxide, hydrocarbons, nitric oxide and particulate matter. If adopted, the 'Beijing V emission standard' could help to reduce the emission of nitric oxide and other pollutants including particulate matter of 2.5 micrometre diameter, known as PM2.5. (From Beijing Review 22/3/12)
China aims to increase its forest coverage to more than 23% by extending the forest area to 223 million hectares by the end of 2020. The State Forestry Administration announced to Xinhua that during the period 2011 to 2020, the public will be mobilised to plant 26 billion trees. At the end of 2008, China's forests covered 20.36% of its land area or 195 million hectares. From Beijing Review 22/3/12)
New York University Shanghai (NYU Shanghai), the first joint China/US university, will enrol its first undergraduates in 2013, said the preparatory council of NYU Shanghai on 5 April. The application requirement will be based on the performance of students in China's national college entrance examination and also a NYU-style screening process. Of the first 300 undergraduates, it is expected that 51% will come from the Chinese mainland and the rest will be international students. The university campus is under construction in the Lujiazui Financial and Trade Zone in Pudong New Area. (From Beijing Review 19/4/12)
There are over 300 registered users of Tianhe-lA, China's fastest computer, according to the National Supercomputing Centre in Tianjin. A press release on 20 March revealed that customers came from the United States, Canada, Singapore and Sweden. The complex tasks include services for mine surveying, bioinformatics, large-data animation design, nuclear fusion energy research and marine environmental engineering. Tianhe-lA has a processing speed of 2.57 quadrillion operations per second and was ranked the fastest in the world in November 2010, but was surpassed by the Japanese developed K Computer in June 2011.Tianhe-lA was developed at a cost of $72.3 million. (From Beijing Review 29/3/12)
Free surgery for more than 6,000 children with congenital heart disease is offered this year in a medical programme launched in Lhasa on 6 April. The aid programme is aimed at treating patients aged up to the age of 18, said Phubu Drolma, the director of Tibet Regional Health Department. The Tibetan plateau region with an average altitude of over 4,000 metres has a much higher reported incidence of congenital heart disease than other parts of China. The rates are 1.11% amongst new born babies in Tibet, compared to 0.8% elsewhere in China. Free heart surgery has cured more than 2,900 Tibetan children since 2008. (From Beijing Review 19/4/12)
The government- backed People's Daily plans to raise 527 million yuan ($83.7 million) in its initial public offering (IPO) in Shanghai. People.com.cn will sell 69.1 million shares of which 19.97% will be reserved for offline subscription for institutional investors. The proceeds will be used to upgrade technology, deliver news on mobile platforms and strengthen its editorial team. (From Beijing Revie\v 19/4/12)
More than 700 foreign language training institutions have been set up in Beijing to encourage people to learn another language, according to the Organising Committee of Beijing Speaks Foreign Languages Program. In addition, the government has developed lectures popularising foreign languages and introducing foreign cultures to encourage language learning. Some 100 public lectures on foreign languages and cultures given by famous professors will be offered during 2012. (From Beijing Review 12/4/12)
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