China plans to invest billions of pounds in British infrastructure including the £50 billion in the HS2 rail project, it was revealed today at the start of Cameron's visit. This marks a triumph for the prime minister who wants to increase the UK's economic, trade and diplomatic ties with China. He supports a free-trade agreement between the EU and China which could help British companies win a greater share of business worth £1.8 billion. However some countries are concerned that it would mean more cheap Chinese goods flooding the market.
A number of initiatives were discussed such as that involving digital and media industries that could be worth £2 billion to British companies and the establishment of a jointly funded £200 million UK-China Research and Innovation Partnership. Also discussed was an accord to boost cooperation on cross-border crime and health. Mr Cameron declared that no country in the world is more open to Chinese investment than the UK, that there are no investment hold-backs for Chinese companies wanting to do business here and also no limitations on visas for Chinese students wanting to study here. (From The Telegraph 3/12/13)
Forty years ago China was one of the poorest countries in the world with a per capita GDP just one fortieth of the US. Since then the growth has been one of the fastest in the world with an average growth per capita of 8% every year and is now just one fifth that of the US. It is the second largest economy in the world at $11 trillion (£6.6 trillion) compared to the UK at $2.3 trillion. China creates an economy the size of Greece every 11 weeks and its corporate giants Huawei and Lenovo are slowly eating into European markets. The consumption focused middle classes of Shanghai and Chengdu are hungry for Western products and know-how. It is against this backdrop that Cameron's visit should be viewed.
China has all the aces with free trade agreements with members of the Association of South-east Asian nations and also with Pakistan, New Zealand, Iceland and Switzerland. Against this the EU is languishing on the starting blocks and more concerned with rows over solar panels, wine and even bras, than with doing more business. We know free-trade agreements work. After the EU deal with South Korea, exports jumped by 24% to nearly £5.8 billion. As China enters the consumption cycle, high value creative industries, advisory services and technology are becoming more important. Opening up the Chinese market, as the new Chinese leaders have signalled they want to do, will only increase liberal trends in the country. Mr Cameron is right to pursue a policy of engagement. (From The Telegraph 3/12/13)
Lloyd Blankfein, the head of Goldman Sachs and Nick Clegg, the Deputy Prime Minister agree that the West should not be afraid of Chinese investment. Both are at the World Trade Forum and say that the UK, Europe and the US should not fear Chinese money. Mr Clegg welcomed the Chinese 10% stake in Heathrow airport and stated that Chinese investment was still quite low, even though Chinese investment in the UK over the past 18 months was equal to the previous 30 years. Asked if the UK was surrendering its sovereignty to China, he partially dodged the question and said these things should be held in balance. He said that there is no future in protectionism but there is also no future in not being open about where your values may conflict. Mr Blankfein said that the 21st century could belong to China but the US should have nothing to fear; if China continues to grow, he gets more optimistic for the US. When asked about food security in connection with the Chinese group Shuanghui's $5 billion (£3 billion) acquisition of US pork producer Smithfield last year, he said the Chinese are good owners, their money is good and their investment brings jobs. (From The Daily Telegraph 24/1/14)
The British Government's goal of making London a hub for Chinese investment has received a boost. PwC, the accountancy firm, signed an agreement with ABP, the Chinese real estate developer, to smooth the path for Asian companies to relocate to the capital. ABP is already working on a £1 billion plan to transform London's Royal Albert Docks into a European headquarters for hundreds of Chinese firms. The tie-up will create a 'one stop shop' for services for Chinese businesses that want to relocate to the Docklands development. The agreement will see APB providing business premises, recruitment facilities and logistics, whilst PwC will offer tax, accountancy and legal support in a 'corporate landing service' to be called, 'First Stop London'.
The development is part of a multi-pronged strategy by the Government to welcome Chinese investment. Visa rules are being relaxed for Chinese businessmen. The 35-acre dock site is tipped to be worth £6 billion to the UK economy and likely to generate £23 million in business rates. (From The Daily Telegraph 5/1/14)
Beijing announced that it was compiling a list of pharmaceutical and medical services companies found guilty or being investigated for bribery. A list of offenders will be published online in March. They will be banned from selling in the region in which the offence took place for two years. If any offender appears twice within five years, it will be banned nationwide for two years. (From The Times 28/12/13)
Britain must be very cautious about accepting Chinese investment in HS2 because of concerns about rail safety and corruption. Lord Adonis, the former transport secretary, also revealed that in 2009 Chinese officials had expressed interest but he declined to make any agreement. (From The Daily Telegraph 4/12/13)
Construction sites and school playgrounds fell silent under a toxic blanket of smog yesterday. The PM2.5 reading of 25 micrograms was 602.5. The World Health Organisation regards a reading of 25 as the maximum healthy level. By comparison, the worst level for Beijing earlier this year was 898. In an unprecedented action for the Shanghai government, residents were asked not to use their cars, while local government vowed to cut the use of official vehicles by 30%. In addition people were asked to use less electricity. Many people headed out of the city on trains saying they would not return until the danger had passed. Hundreds of airline flights were cancelled or diverted from Shanghai's two airports as visibility dropped to 600 metres. The crisis is always worst in winter, when people are heating their homes and natural weather patterns cause the wind to drop. As a coastal city, Shanghai is generally spared the smog that descends for weeks at a time on Beijing, Harbin and other northern cities. (From The Times 7/12/13)
America risks sliding into a tragic cycle of constant confrontation with China if it gets diverted by issues such as the disputed air defence zone in the East China Sea, Henry Kissinger has warned. He said that they should forge an unprecedented partnership based on cooperation over issues such as climate change to reduce the chances of a dangerous military rivalry. The relationship between the two countries is crucial for determining what kind of world order emerges. (From The Times 6/12/13)
Cabinet minister Ken Clarke is leading a 50-strong delegation from 38 British firms, universities and training hospitals to China in a bid to win some lucrative contracts. Chinese health spending has soared from 1% of GDP in 2002 to 5.15% and is expected to increase further to reach $1 trillion by the year 2020. The British government has identified healthcare in China a 'high value opportunity' and wants to be China's 'premier partner' in this area. Healthcare UK, the government agency which promotes this sector abroad, has already helped British companies win £306 million worth of contracts, including £233 million in China. (From i from The Independent 13/1/14)
The top ten spenders (in US $billion) are as follows:-
The International Institute for Strategic Studies (IISS) in London comments that there is a growing shift from the West to the East. China recently became one of only three countries in the world (together with the US and Russia) to conduct test flights of a new hypersonic missile delivery vehicle capable of delivering nuclear warheads at record-breaking speeds. Also, Beijing seems to be engaged in developing test-beds to match existing Western defence technologies but it is possible that in the future, China might display new and innovative defence technologies (See below, Chinese hypersonic jet).
The IISS predict that China's spending will match that of the US by the mid to late 2013s. Beijing has said that it wants to have the same military capability - a measure not the same as military spending - as that of the US by 20150. (From The Times 6/2/14)
China has tested a 'hypersonic' aircraft that is so fast it could render the defence systems of other nations obsolete. The Pentagon confirmed yesterday that the flight took place on 9 January. It caused immediate fears in Washington that Beijing would triumph in the race to build ultra-high-speed weaponry. The US tested a hypersonic craft in 2010 and India and Russia have projects under development. The Chinese development code-named Wu-14 by the US military is part of a project to deliver nuclear warheads from aircraft travelling at speeds in excess of Mach 10 (7,612 mph.). Western military sources said that China's apparent progress had come very much sooner than expected. Hypersonic technology would theoretically give missiles the ability to hit a target before warning mechanisms and anti-missile systems could react. The Wu-14 is believed to have drawn on the contributions of more than 100 universities and research laboratories in China. The Pentagon stopped short of confirming the speed but US politicians have commented that after US defence cuts, the Chinese, in some cases such as this, appear to be ahead. ? (From The Times 16/1/14)
Jack Ma, who10 years ago founded Alibaba, which is now the world's most successful commerce company, is stepping down at the age of 48, to devote his attention to problems such as China's financial position and the environment. Alibaba's sales make up 2% of China's GDP and exceed eBay and Amazon combined. Alibaba is expected to sell its shares soon and show its value at over $100 billion. Ma has said that he would hand over 'netizens' who criticise the government and will comply with the authorities, but he has turned down offers of joint ventures with the state. He believes in creating value for his shareholders and creating jobs and that the internet is making China more transparent and open. He has been named the Financial Times' (FT) 'Person of the Year' by which it says that he epitomises the new entrepreneurial China where a poor person can become huge through perseverance. The FT believes middle China is now focussing on issues other than GDP growth. (From The Financial Times 13/12/13)
The Organisation for Economic Cooperation and Development has compared standards achieved in core subjects by more than half a million 15- year-olds in 65 countries. The UK ranked 26th in maths, 23rd in reading and 21st in science when tests were sat in 2012. Researchers said that there had been no change in performance in Britain compared to the last time the tests were taken in 2009 and 2006. In relative terms, the UK performed worse than in 2006 and it is the first time it has been outside the top 20 in all three subjects. In all, Shanghai students scored an average of 613 points in maths, 570 in reading and 580 in science. Their British counterparts scored 494, 499 and 514 respectively.
Britain's poor showing overall is despite the fact that it spends more than the international average on primary and secondary education. The sum of £59,921 was spent by the UK on each child -bettered only by seven other nations. This amount is about twice as much as is spent in Shanghai, which suggests that China's performance could be even better if it invested as much. (From The Daily Telegraph 4/12/13)
Almost 100 years ago, Pandas were the target for Western big-game hunters - and they became even rarer. Now they are protected by Chinese conservation laws. It seems China is now the villain, being accused of encouraging poaching for elephant tusks, rhino horns and tiger bones by allegedly turning a blind eye to the trade in these animal parts. However, China in fact has probably the best record of any developing country for the protection of endangered animals. It has saved the panda, stabilised the population of Tibetan antelopes and black snub-nosed monkeys. The world's second largest importer of illegally traded animals is in fact the US.
China brought the panda back from the brink of extinction by protecting their habitat, imposing a national ban on logging and spending billions on encouraging farmers to plant trees. Almost a quarter of China's natural forests are now protected.
As China grows richer, its attitudes towards conservation and environmental protection are changing. This year has seen a dramatic success in reducing the trade in shark fins after a media campaign and government action. Unfortunately the economic boom has produced a class of wealthy Chinese who see ivory and rhino horn products as status symbols. Jackie Chan, the Chinese film star, has recorded a series of adverts for Chinese TV calling for people to stop buying ivory and to stop believing that rhino horn and tiger bones have any medicinal benefit. He has been reported as refusing sharks fin soup at a dinner he was invited to. To assist his campaign, he has recruited Chinese celebrities such as Yao Ming, the basketball star.
The Chinese government has arrested an ivory tycoon and last September, it started sending messages to every Chinese mobile phone user who landed in Kenya, warning them not to carry illegal, ivory, rhino horn or any other wildlife materials. (From The Daily Telegraph 14/2/14)
A conflict of principles and practice could be seen at the end of Mandela's life in his attitudes to countries like Cuba, Libya and China. He fought to place human rights at the centre of ANC political philosophy and as president he sought to define South Africa's national interest to include the happiness of others. However, when one Chinese human-rights activist asked him in 1991 to help Chinese dissidents, he replied that while the West had ignored him until his success was all but certain, China's leaders had supported him financially and morally from the beginning. He was not about to work against them; just as he would not condemn Fidel Castro or Muammar Qadafi, who had long supported the anti-apartheid cause. (From The Economist 14/12/13)
The Chinese Vice-president, Li Yuanchao was amongst international figures paying tribute to Mandela's life, along with President Obama, the President of Brazil and Raoul Castro of Cuba at his funeral.
China landed a robotic rover on the moon yesterday. It is called Yutu which means Jade Rabbit and was carried by a Chang'e 3 lander that made the first soft touchdown on the moon in 37 years. Only the US and Russia done this before. This lunar mission was launched on December 2 on a Chinese-developed Long March 3B rocket from Xichang in the south of China. It had entered the moon's orbit about 60 miles above the surface five days earlier. Just after 1 pm GMT yesterday, the craft landed on a flat lava plain called the Bay of Rainbows. Chinese TV broadcasted computer-generated images of the landing, because the vehicle had no contact with Earth during the final 12 minutes of descent. The rover then detached itself from the lander to begin a three-month scientific exploration gathering soil samples and looking for natural resources and rare elements such as titanium and uranium.
The rover has solar panels to power transmission back to earth and carries more sophisticated equipment than its predecessors. It can travel at 660 feet per second, has six wheels, weighs 260lb, has at least four cameras and can dig up soil samples to a depth of 100 feet. Ground penetrating radar will gather measurements of the lunar soil and dust. The name Jade Rabbit (Yutu) was chosen by an online poll in which 3.4 million people voted. It comes from a Chinese folktale about the pet rabbit of the moon goddess Chang'e. (From The Sunday Times 15/12/13)
N.B. On 13 February 2014, The Times reported that 'Jade Rabbit dies on dark side of the moon'. The first sign that something was wrong came on January 25, a t the start of Yutu's second 14-day long lunar night. The craft needed to hibernate to survive temperatures of -180 degrees C, keeping its instruments warm by retracting its mast and using a radioactive source for heat. There appeared to have been a mechanical fault, possibly due to a failure to fold back one of its solar panels. When day returned, the rover could not be contacted to direct its solar panels towards the sun. There was nothing more the engineers could do.
The Chinese government yesterday formalised its decision to amend laws banning families from having more than one child. The Standing Committee of the National People's Congress (NPC) passed a resolution to allow couples, where one of the parents is him or herself an only child, to have two children. The law introduced in 1979 has led to selective abortions and even infanticide because Chinese families traditionally prefer to have male children. Authorities say the one-child policy has prevented some 400 million births.
The changes are a direct response to anxieties regarding the rapidly decreasing working population in China. People over the age of 65 are likely to make up a quarter of the population by 2030, up from one in seven now. The state predicts that the working population will decrease by eight million people each year from 2023 onwards. It is estimated that the new law will create up to two million more births each year. NPC officials say that China still has a large population and many economic and social problems are rooted in this. It is hoped that the easing of the one-child per family policy will be the stimulus to economic growth and exports. (From The Independent on Sunday 29/12/13)
The Chinese National People's Congress approved the abolition of this system, in place since 1957, which allows police to sentence petty criminals for up to four years in a labour camp without trial. (From The Independent on Sunday 29/12/13)
Last year China overtook Japan to become the second-largest film maker in the world, after the US. Some believe it will be the biggest in five years' time. Most Chinese movies lose money: only about a quarter make it into theatres and piracy means there is no legitimate DVD market. However, many other films in the world, including Hollywood, are also unprofitable and only 7% of British films make a profit. However, films have become central to consumer consumption in China and Wang Jianlin, China's richest man has said he will build the world's largest studio complex in Qingdao, costing an estimated $8.2 billion.
Hollywood is trying to enter, but only 34 big-budget films and a handful of independent foreign ones are allowed into China each year. In addition, foreign producers are usually allowed to keep less than 25% of box-office revenues. Despite this, foreigners are desperate to get into China and sometimes films are specially adapted for the Chinese market. Hollywood studios are helping to finance or co-produce Chinese films. Some Chinese films lack technical sophistication and even big-budget Chinese films can look amateurish.
In the US, power lies with the studios, but in China the state controls which films are made and has a hand in every aspect of the film industry. Hollywood has always been the world's dream-maker, but the Chinese government wants China to make its own films. The government wants to increase the state's cultural soft power. It wants foster the Chinese film industry in the domestic area and also globally. At home the objective is to make films that inculcate Chinese values and culture, but it wants people to see them voluntarily. At one time people were forced to watch propaganda films.
China underachieves in the film industry. It has only won the Palme d'Or at Cannes once, which was 20 years ago for Chen Kaige's 'Farewell My Concubine'. This film was banned in China at the time. China does not have a sex/violence ratings system, like most countries of the world: the film industry has to negotiate with censors. In April China's Film Director's Guild honoured film director Feng Xiaogang, but in his acceptance speech, he complained about the 'torment' of censorship. Some critics believe the censors are starting to loosen up. Popular online video 'microfilms' appear not to be subject to the same censorship, but possibly this is due to oversight. The government uses subsidies as well as censorship to get the kind of films that it wants. (From The Economist 21/12/13)
The number of internet users (netizens) in China hit 604 million at the end of September, with mobile phones being the favourite means of accessing the internet. About 464 million people, 77% of netizens, regularly accessed the internet with their phones. Official statistics show that all China's cities and 99% of its townships have been connected to the internet, which has provided a new means of interaction between the public and the government. (From Beijing Review 12/12/13)
The Director General of the UN Food and Agricultural Organisation (FAO), Jose Graziano da Silva, has delivered a speech to commemorate the 40th anniversary of cooperation between China and the FAO. The FAO has provided technical support to China in the past and a new five-year cooperation plan is being discussed. According to FAO statistics, 173 million people worldwide have been lifted out of poverty since 1990; notably, two thirds of this total, 114 million people, were in China. (From Beijing Review 12/12/13)
A national emergency broadcast centre opened in China on 3 December to speed up the construction of a nationwide radio network for transmitting rescue and relief information in disaster-hit regions. It will build a radio link between central authorities and community-level offices. It is hoped this will lead to coping better with disasters. The plan was inspired by the 7.0 magnitude earthquake that hit Lushan in Sichuan province on 29 April this year. (From Beijing Review 12/12/13)
China is on track to meet its 7.5% growth target for the whole year (2013); growth in the first three quarters averaged 7.7%. The consumer price index rose 2.6% in the first 11 months of the year, which was below the full year target of 3.5%. Unemployment for the first three quarters was 4.04% - a drop for the first time for three years and well below the target of 4.6%. China created 10.66 million new jobs for urban residents from January to December, which is already in excess of the target of 9 million jobs for the whole year. Total grain output reached 601.94 million tons in 2013, up 2.1% year on year, marking an increase for 10 consecutive years. China's Central Economic Work Conference held in Beijing from 10 to 13 December stated that making progress while ensuring stability will be the keynote in 2014 and that China will continue to follow a proactive fiscal policy and prudent monetary policy next year. (From Beijing Review 26/12/13)
The price of homes in large Chinese cities continue to rise during November 2013. All but one of the 70 major cities monitored reported year-on-year increases in November. Twenty-six cities reported an annual increase of 10% or more, with only prices in Wenzhou in Zhejiang province not rising. Shanghai's increase of 21.9% was the highest, followed by Beijing's 21.1% and Guangzhou's 20.9%. New home prices rose month on month in 66 of the 70 cities monitored compared to 65 in October. (From Beijing Review 26/12/13)
China will set up three to five fully private banks on a trial basis this year in an attempt to further open up the banking sector to domestic and foreign capital. Private capital will be introduced to restructure current banking institutions or set up new ones which bear their own risks. Strict procedures and standards will be set for the pilot banks with demanding set-up criteria, limited licences, enhanced supervision and a risk-handling system.
The China Banking Regulatory Commission will try to relax the threshold for foreign capital to enter China's banking system and also ease operation requirements for the yuan. Further steps will be taken to to support banking reform in the Shanghai free trade zone and the financial reform pilot zone. (From Beijing Review 16/1/14)
The Political Bureau of the CPC Central Committee decided on 30 December 2013 to set up a team to comprehensively deepen China's reforms. Xi Jinping will lead the team to oversee the overall planning, coordination, implementation and supervision of reforms. The team will take responsibility for the study and formulation of fundamental rules, policies and blueprints for major reforms of economic, political, cultural, social and environmental systems as well as the system of party building. This panel will help the central leadership balance all significant national reforms involving multiple governmental departments that will have a long-term impact. (From China Today February 2014)
The State Council announced on 8 January 2014 that it will increase the pensions of 74 million retired state enterprise workers by 10%. The Council also urged government departments to reform their endowment insurance and pension systems. Disadvantaged groups will be given financial aid to improve their standard of living. The Central Government has allocated more than 98 billion yuan ($16 billion) to help disadvantaged groups and has asked local authorities to make sure the money gets to the needy in a timely manner. The government also encouraged non-profit organisations to take part in the relief effort. (From Beijing Review 16/1/14)
China and the Commonwealth of the Bahamas in Nassau, Bahamas, agreed on 19 December 2013 that citizens of both countries holding valid passports are exempt from visa requirements for up to 30 days. However, a visa is required for stays longer than 30 days and for people intending to study or to work. (From China Today February 2014)
Chinese archaeologists and experts announced on 7 January the discovery of a mathematical document dating back more than 2,200 years (Warring States period 475-221 BC). The document is a set of bamboo strips which records a method for the multiplication of any two whole numbers under 100 and certain fractions. This document is the earliest of its kind discovered so far and has filled in a historical gap for mathematical documents prior to the Qin Dynasty (221-206 BC). It is older and has more calculating functions than other multiplication tables so far discovered and was very advanced for the world at that time. In July 2008, Tsinghua University acquired a rare collection of 2,500 bamboo items belonging to the late Warring States period which had previously been smuggled out of China. (From Beijing Review 16/1/14)
US research company Gallup's research across 131 countries of the world show that 22% of the population live on less than $1.25 per day or less, the World Bank's definition of poverty. In China during 2007 there were 26% of the population living in poverty but by 2009, two years later, this had dropped to 14%. After a levelling off during the global depression, the downward trend continued with 13% living in poverty reducing to 7% by the year 2012. The World Bank recently set a new goal of reducing the worldwide rate of extreme poverty to no more than 3% by 2030. (From China Today February 2014)
China will soon begin large scale production of fresh water by desalination of sea ice, according to Beijing Normal University and Beijing Huahaieyuan Technology Co Ltd. Huahaideyuan is expected to be able to produce at least one billion cubic metres of fresh water annually by 2023. China's sea ice desalination programme started in 1996 and has received a total of 29.7 million yuan ($4.88 million) in funding from various government departments. (From Beijing Review 23/1/14)
A report by the State Oceanic Administration stated that by the end of 2012 China had built 95 facilities to desalinate seawater, with a daily capacity of 774,000 tons. The average cost per ton was 6 to 8 yuan. The largest plant can desalinate 200,000 tons every day. Desalination facilities are in nine coastal provinces including Tianjin, Hebei, Zhejiang, Lianing and Shandong. (From China Today February 2014)
Primary school enrolment rates in Tibet reached 99.59% in 2013. In this year 11 billion yuan ($1.82 billion) was invested in education which benefitted 600,200 students, according to Ma Shengchang director of education in the region. Tibet was the first place in China to provide 9-year compulsory education for free in 2007 and also since 2012, free 15-year education. There are plans to increase the annual budget further by 70.5 million yuan ($11.65 million) from September. In addition in the autumn, children from kindergarten to senior high level will each receive 2,900 yuan ($479) to cover annual expenses for food, accommodation and educational supplies while they attend boarding school. (From Beijing Review 23/1/14)
Xinjiang Uygur Autonomous Region is to rebuild itself as the transport, financial and logistics centre of the Silk Road Economic Belt in 2014. Nur Bekri, the regional governor, said that Xinjiang will continue opening up to Central Asia and Europe and grasp the opportunity to boost growth. The Silk Road Economic Belt agreement was signed by 24 cities from eight countries along the Silk Road in November 2013 to promote greater cooperation and development among the countries.
Xinjiang will promote the establishment of a free trade zone with countries along the route and strengthen cooperation on agriculture, energy, tourism and culture. At the same time Xinjiang will keep on opening up the domestic market and prepare for the transfer of industries from the eastern regions to the western regions. Chinese President Xi Jinping proposed the idea of the economic belt during his visit to central Asia in September last year. The area defined as the new Silk Road covers 18 Asian and European countries with a total area of 50 million square km and a total population of three billion people. (From Beijing Review 30/1/14)
There were 98.19 million overseas trips taken by Chinese tourists in 2013. This represents an increase of 18% over the year before. (From Beijing Review 30/1/14)
In mid-November, Guangzhou Evergrande FC won the 2013 Asian Football Confederation (AFC) Champions League title, the first Chinese team to do so in 23 years. Following a 2-2 draw with South Korea's FC Seoul in Seoul, the two teams drew again in Guangzhou 1-1 and the home team was declared the winner. The team's success has been credited to the Italian coach, Marcello Lippi, and a raft of foreign players. A bonus of more than 150 million yuan ($24,63 million) was awarded to the winning players. The match was watched by 50,000 spectators in Guangzhou's Tianhe Stadium and watched by millions more on TV. (From China Report 7/12/13)
SinoFile is compiled by Walter Fung.
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