China Economy Forum

[grey boy 2]

Largest Lingnan Immigrant Settlement begins to be built in Shaanxi - People's Daily Online July 15, 2011

Fu Min, a woman of the Qiang ethnic minority, watches the introduction of the immigrant settlement with her colleague. (Xinhua/Li Dehua)

Construction began on Ningqiang Erdaohe Settlement, the largest Lingnan Immigrant Settlement in Shaanxi, on July 14.

According to the Shannan Relocation and Resettlement Plan, investments in the project total 110 billion yuan, and 2.4 million people will be resettled from 2011 to 2020. The size will exceed the Three Gorges migrants.

Villagers from Erdaohe Village build an embankment for the immigrant settlement in Hanzhong, Shaanxi. (Xinhua/Li Dehua)

The settlement can accommodate more than 8,000 residents and will be completed before the end of October 2011. The main functions of the settlement are to support the poor and provide shelter for people who live in areas prone to geologic hazards.

By People's Daily Online

 

[grey boy 2]

China's economy slows to restore endurance - People's Daily Online July 15, 2011

China's GDP grew nearly 10 percent in the first half of the year compared to the same period of last year. Meanwhile, its Consumer Price Index grew more than 5 percent from a year earlier, according to statistics released by the National Bureau of Statistics on July 13.

Industry insiders believe that China's economic growth slowed slightly because certain macro-regulation policies took effect. Currently, the country's economy is shifting from fast growth driven by stimulus policies to self-driven, healthy development.

Fast economic growth due to stimulus policies

The NBS estimated that China's GDP reached more than 20.4 trillion yuan in the first half of 2011, up nearly 10 percent from a year earlier at comparable prices. Specifically speaking, the growth was 9.7 percent in the first quarter and 9.5 percent in the second quarter.

Sheng Laiyun, director of the Department of Comprehensive Statistics and spokesman for the NBS, said that despite declines in certain economic indicators for the first half of the year, the overall economic performance of China was good. The Chinese economy is shifting from fast growth driven by policy to self-driven, healthy development.

Guo Tianyong, a professor at the School of Finance under the Central University of Finance and Economics, said in an interview that after the global financial crisis, China had no choice but to introduce a stimulus plan to support economic recovery. It should be noted that stimulating the economy is not in line with the direction of China's economic reform, he said.

The stimulus plan used too much money, making it difficult for the government to curb inflation, Guo said. In order to reduce inflation and accelerate economic restructuring, China should phase out economic stimulus policies, encourage enterprises to conduct innovation to increase the effective supply of products and follow the self-propelled economic development pattern, he said.

China's economy cannot always run at an accelerated speed

The NBS statistics showed that China's retail sales of consumer goods witnessed steady growth in the first half of the year, but the growth in the sales of products related to the automotive and real estate industries slowed. Vehicle sales rose 15 percent in the past six months, a growth rate of 22.1 percentage points lower than that of the same period last year. The growth in the sales of furniture was 30 percent, 8.5 percentage points lower than last year. The growth in the sales of household appliances as well as audio and video equipment was nearly 22 percent, 7.3 percentage points lower than last year.

"Some major economic indices declined in the second quarter of 2011. It was mainly caused by the active readjustments and controls and also a normal reaction after the stimulus policies were withdrawn from the market," Sheng said.

Sheng said that after the subsidy policy for automobile sales was cancelled and the automobile-purchasing limitation policy was launched in some cities, the growth rate of the sales volume of the automobiles above the limitation has decreased by more than 20 percent in 2011 compared to the same period of 2010. The readjustments and controls on real estate have also affected the sales of related products, and the sales volumes of furniture, construction materials, decoration materials and others have all had an obvious decline compared to the same period of 2010.

"It is the normal reaction after the stimulus policies were withdrawn. It is similar to a long-distance runner. A long-distance runner could not always run at his top speed and sometimes must slow down to gather strength for the rest of course."

Lian Ping, Chief Economist of the Communication Bank of China, said, "China's economic growth rate decreased smoothly from 9.7 percent in the first quarter to 9.5 percent in the second quarter of 2011. The macroscopic readjustments and controls have shown their preliminary effects."

But Lian also said that the 9.6 percent GDP growth rate of the first half of 2011 is a little higher than the market expectation. Factors, such as electricity shortages, a weakening purchasing managers’ index and asset price adjustments, had led to market concerns about the second quarter's data, but the 9.5 percent GDP growth rate of the second quarter indicates that the economic slow-down is quite smooth.

Guo also beliEndogenous growth power remains strong

"Judging from the current and future situation, China's economic growth remains relatively strong, and the risk of rapid decline in economic growth is relatively small," Sheng said, when answering questions of reporters.

Sheng said that first, in regard to investments, as 2011 is the beginning of the 12th Five-Year Plan, the investment enthusiasm in various areas is relatively high. The local investment growth rate stood at more than 28 percent, which is a relatively high figure. The growth rate of private investments stood at nearly 34 percent in the first half of 2011, which is significantly higher than the average growth rate of national fixed assets, indicating that the market investment growth is relatively fast.

Furthermore, the income of urban and rural residents continued to increase in the first half of 2011, which will also increase the consumption strength of residents. Meanwhile, the social security and consumption environment continues to improve, which will also promote consumption.

Although China's export growth rate dropped by a relatively wide margin, the 20 percent export growth rate is still not a low figure because the base number of 2010 was relatively high and China's trade surplus reached 44.9 billion yuan in the first half of 2011. Therefore, China's exports continue to increase steadily. As China is in the acceleration phase of industrialization and urbanization, the power and growth space of the troika are still relatively large. In addition, structural adjustments and the transformation of development patterns in various places, including the acceleration of the pace of industrial upgrading, will also continue to give new vitality and driving force to the economic growth.

"Economic structural adjustments will bring greater space to allow China's economy to get on a healthier development track. The Chinese government should implement certain preferential policies to cultivate strategic emerging industries in order to stimulate business innovation. Some state-owned monopoly-type fields should also be further opened to private capital," Guo said.

Lian predicts that China's economy will further slightly decline in the second half of 2011. "In the second half of 2011, China's investment will not obviously slow down because the affordable housing construction will be further accelerated, and the level of consumption will slightly increase. In the first half of 2011, the rigid demand of the automotive industry and real estate was restricted by the macroscopic readjustment and control, which will be released if housing and car prices show slight decline in the second half of 2011," Lian said.

He also predicts that China's GDP growth will reach nearly 10 percent in 2011.

By Ye Xiaonan from People's Daily Overseas Edition, translated by People's Daily Online.eves that the monetary policies, under the dense macroeconomic readjustments and controls, took restraining the inflation as its foothold in the first half of 2011. From the data, it could be seen that the economy has fallen back a little bit. It will alleviate the concerns about a possible hard landing and stagflation of China's economy. It is expected that, in the second half of 2011, China will continue its steady monetary polices, price-control mechanisms will have more room to play their role, and interest rates will also be raised once or twice.

 

[grey boy 2]

Shanghai ranked sixth on financial center list - People's Daily Online July 15, 2011

According to the Xinhua-Dow Jones International Financial Centers Development Index, which ranks financial centers worldwide, Shanghai moved up two places from last year to No 6. (China Daily Photo)

A recently released financial index ranks Shanghai as the world's No 6 financial center, two positions behind Hong Kong.

Experts said mature market regulations and more diversified investment channels are necessary to boost the city's competitiveness.

It is the second year that the Xinhua-Dow Jones International Financial Centers Development Index (IFCD Index) has been published, and Shanghai moved up two spots from last year, surpassing Paris and Frankfurt. Beijing was ranked 14th and Shenzhen was 21st.

The traditional financial centers of New York, London and Tokyo remained in the top three positions in this year's list.

Michael Petronella, president of the Chicago Mercantile Exchange (CME) Group Index Services LLC, said he believed the results clearly reflect China's growing economic prominence on the world stage.

In 2010, China overtook Japan as the world's second-largest economy. Goldman Sachs predicted that at its current rate of growth, China will dethrone the United States as the world's largest economy by 2027, and PricewaterhouseCoopers (PwC) said it could happen as early as 2020, Petronella said.

"The capital market, particularly the stock market in Shanghai, will become the largest in the world soon," said Jiao Ran, director of the economic information editorial department of Xinhua News Agency.

"The ranking mirrors the status quo of the world's major financial centers, particularly as the top three positions are still held by the traditional financial centers," said Liu Shengjun, deputy director of the Lujiazui International Finance Research Center, which is affiliated with the China Europe International Business School.

"I agree with most of the index except for Tokyo's position," Lu Hongjun, president of Shanghai Institute of International Finance, told China Daily. "Owing to Japan's current economic status, its internationalization, and the recent earthquake and nuclear emergency, Tokyo is much less prominent in the global financial market," said Lu.

Lu said Shanghai's rise is in line with the city's achievements over the past year.

Qi Xiaozhai, director of the Shanghai Commercial Economic Research Center, said that the city's efforts to build a global financial center and shipping hub have been recognized by the world.

However, he warned that the city is still a long way from challenging the dominance of the traditional financial hubs. "Shanghai should improve many sectors such as trade, industry, service, and education," he said.

"In addition, market supervision and transparency still lags far behind some Western markets," said Liu of the Lujiazui International Finance Research Center.

The list comprises 45 international financial centers. The top 10 are New York, London, Tokyo, Hong Kong, Singapore, Shanghai, Paris, Frankfurt, Sydney and Amsterdam.

On the basis of 66 indicators and 2,073 questionnaires, the IFCD Index chose 45 famous financial cities as samples, and set up a comprehensive evaluation system. The objective indicator system rates international financial centers by five aspects - the financial market, growth and development, industrial support, service and the general environment.

Source:China Daily

 

[grey boy 2]

Lhasa completes first wastewater treatment plant - People's Daily Online July 15, 2011

Construction of the first wastewater treatment plant in Lhasa, capital of southwest China's Tibetan Autonomous Region, was completed Thursday, according to local authorities.

The plant, located at the junction of the Lhasa and Doilung rivers, is designed to treat 50,000 tonnes of wastewater every day, said Gesang Puncog, director of the city's housing and urban-rural development bureau.

The project cost 122 million yuan (about 18.9 million U.S. dollars), and was funded by the Chinese central government, Gesang Puncog said.

"We didn't have many examples to learn from in terms of building a wastewater treatment plant at such high altitude, with so low air pressures, low temperatures and scarcity of oxygen, such as Lhasa," he said.

After five years' planning, the construction of the plant started last April, he said, adding that in the past, the wastewater in Lhasa was discharged into rivers without being treated.

According to Gesang Puncog, the plant will be expanded in the future. By 2020, the daily wastewater treatment capacity of the plant will reach 180,000 tonnes, he said.

A staff member checks the sewage treatment process at the first sewage treatment plant in Lhasa, capital of southwest China's Tibet Autonomous Region, July 14, 2011. (Xinhua/Wen Tao)

 

[grey boy 2]

China announces new rare earth export quotas - People's Daily Online July 15, 2011

The Ministry of Commerce (MOC) on Thursday announced the second batch of rare earth export quotas for this year, totaling 15,738 tonnes.

The Secret Ingredients of Everything
From smart phones to hybrid vehicles to cordless power drills, devices we all desire are made with a pinch of rare earths—exotic elements that right now come mostly from China.

The quotas almost doubled the corresponding second batch of rare earth export caps last year, which stood at 7,976 tonnes.

Twenty-six rare earth producers will share the quotas, according to a table posted on the MOC website.

Baotou Iron and Steel (Group) Co., Ltd. (Baogang Group), a mining giant based in north China's Inner Mongolia Autonomous Region, got the largest export quota of rare earth, or 3,220 tonnes, followed by China Minmetals Corp. (China Minmetals) with a quota of 1,327 tonnes.

The MOC set the first batch of rare earth export quotas for this year at 14,446 tonnes.

China's rare earth sales currently account for more than 90 percent of the global total. However, decades of excessive exploitation have resulted in its reserves falling to about one-third of the world's total from about 85 percent in the 1990s.

Meanwhile, the country has suffered serious environmental damage due to rare earth mining.

To control the environmental damages, the Chinese government has announced various policies, including suspending the issuance of new licenses for rare earth prospecting and mining, imposing production caps and export quotas and announcing tougher environmental standards.

The measures, however, have sparked complaints from major rare earth consumers such as the United States and Japan.

WTO Article 20 allows its members to impose export restrictions for reasons such as conservation of exhaustible natural resources if such a restriction is made effective in conjunction with restrictions on domestic production or consumption.

Source:Xinhua

 

[grey boy 2]

China, EU to seek bilateral investment treaty - People's Daily Online July 15, 2011

Chinese Commerce Minister Chen Deming (L) shakes hands with EU Trade Commissioner Karel De Gucht at a press conference after the 25th meeting of joint economic and trade commission between China and European Union in Beijing, capital of China, July 14, 2011. (Xinhua/Xing Guangli)

China and the European Union (EU) have agreed to negotiate a bilateral investment treaty, said China's Minister of Commerce Chen Deming on Thursday.

He made the remarks during a joint briefing in Beijing with the visiting EU Trade Commissioner Karel De Gucht.

The minister said the two sides discussed a wide range of issues including investment, trade and intellectual property rights (IPR).

The EU expressed concern over China's compulsory certification regulations, export credits and exports of raw materials. China stated its views on high tech trade and registration of traditional herbal medicine. China also expressed grave concern over the EU's recent trade remedy measures particularly anti-subsidy duties, said Chen.

The EU is China's largest trading partner. China is the EU's fastest-rising export destination. Last year, bilateral trade reached 480 billion U.S. dollars. In the first half of this year, bilateral trade grew 21.3 percent from a year ago with EU exports to China increasing 13percentage points faster than China's exports to the EU.

The EU Trade Commissioner said a more open EU-China market will benefit both sides. He welcomed China's moves in promoting technological innovation and looked forward to further cooperation particularly regarding raw materials, IPR and government procurement.

Chinese Commerce Minister Chen Deming speaks at a press conference after the 25th meeting of joint economic and trade commission between China and European Union in Beijing, capital of China, July 14, 2011. (Xinhua/Xing Guangli)

 

[Martian2]

China races to the bottom of the ocean - Telegraph

"China races to the bottom of the ocean
By Malcolm Moore, Shanghai
6:00PM BST 15 Jul 2011

China has launched a major new mission to explore the deep seas, building the only manned submersible in the world capable of navigating the ocean floor at 7,000m (23,000ft) below sea level.

Jiaolong submarine

Over the weekend, the 26ft-long Jiaolong submersible, named after a shape-shifting water dragon from Chinese mythology, will attempt to dive to 5,000m (16,404ft) in the Pacific Ocean to the south east of Hawaii.

If it succeeds, the titanium-hulled vessel will attempt to become the world's current deepest-diving submersible by dropping to 7,000m below sea level.

The craft's three crew members, Tang Jialing, Fu Wentao and Ye Cong, have trained for years for the dive, even taking a series of dives in Alvin, the American deep sea submersible, in 2005.

The only expedition which has ever gone deeper was the dive of the Trieste bathyscaphe in 1960, a 7ft-wide sphere with 5-inch thick steel walls that dropped to the bottom of Challenger Deep, the lowest point of the Pacific's Mariana trench. The Trieste was unable however to navigate on the bottom.

The Trieste, which resembled an underwater hot-air balloon, took Jacques Piccard, the son of its inventor, and Don Walsh, a US naval officer, to 10,916m (35,814ft) below the surface, despite one of its outer window panes cracking under pressure. The men reported back that they had spotted soles and flounders flapping in the ooze at the bottom.

The Jiaolong would "take the international community by surprise", according to Li Haiqing, a spokesman for China's State Oceanic Administration. All the details about its 47-day mission, however, have been classified as state secrets.

Another sign of China's growing scientific ambition, the Jiaolong was conceived as part of the 863 programme, a well-funded national high-technology plan that also helped to build China's Shenzhou spacecraft.

While the Jiaolong's current mission is purely scientific, the Chinese government is hoping its new ability to explore the deep will put it in prime position to explore and extract vast deposits of metals, including gold, copper and zinc, that lie in the sea bed.

China has already signed a deal with the International Seabed Authority (ISA) to map an area of 30,000 sq miles of the Pacific, according to Jin Jiancai, secretary general of the China Ocean Mineral Resources Research and Development department.

"With permits from the ISA, China will be able to explore minerals and other resources for commercial purposes in this area once the technology matures," Mr Jin said. The ISA regulates mining in international waters and is currently considering applications to hunt for minerals from China and Russia as well as Nauru and Tonga, which are sponsoring private mining companies.

Wang Pinxian, the head of the State Laboratory of Marine Geology at Tongji university, said China's limited natural resources, and its thirst for everything from oil to copper to coal, had led it to start considering ocean mining. "One project, a gas exploration mission in the South China Sea has already been decided," he said.

The Jiaolong has already dived to more than 3,600m in the South China Sea last year, where it planted a small Chinese flag in the sea bed with a robotic arm, despite territorial disputes between China and other South East Asian countries over who has sovereignty over the waters."

A Chinese submersible -- a small submarine that relies on a support vessel -- places the national flag on the seafloor in the South China Sea on June 29, 2010. According to the New York Times, this mission signaled Beijing's intention to take regional lead in exploring remote and inaccessible parts of the ocean floor, which are rich in oil, minerals and other resources.

The submersible -- named Jiaolong, after a mythical sea dragon -- has successfully reached 3,759 meters beneath sea level during a manned test. It is designed to dive to a depth of 7,000 meters. (Photo credit: ChinaFotoPress/Getty Images. Caption credit: Foreign Policy editorial researcher Philip Walker.)

 

[Dance]

Iran and China ink agreements totaling $4 billion​

TEHRAN: Iran and China on Saturday signed a series of agreements worth $4 billion (2.8 billion euros) for infrastructure projects as part of a broader bid to boost trade volume between the two nations, Iranian state media reported.

The bilateral agreements span cooperation in water, mining, energy and industrial sectors.

As part of a $500 million (354 million euros) deal, China agreed to provide Iran with 60 energy recovery incinerators, which are to be installed within a year in major cities and in Iran’s northern tourism hub along the Caspian sea.

China also pledged to boosts its imports of Iranian mineral products, state TV reported.

Iran’s Vice President Mohammad Javad Mohammadi-Zadeh told the television that China was Iran’s leading economic partner, with last year’s trade volume reaching $30 billion (21 billion euros).

The agreements were signed during a visit by He Guoqiang, a senior executive of the Chinese Communist Party, who heads a delegation visiting Iran.

He was received by Iranian President Mahmoud Ahmadinejad.

“The main objective is to quickly bring our economic and trade exchanges to $100 billion,” Ahmadinejad said during Saturday’s meeting, according to his website.

“China, with a strategic vision, wants to strengthen its cooperation with Iran, because it is in the interest of both nations as well as regional countries,” He Guoqiang was quoted as saying by the website.

China’s ambassador to Tehran told IRNA recently that bilateral trade would reach $40 billion (28 billion euros) this year.

China and Iran have become major economic partners in recent years, partly thanks to the withdrawal of Western companies in line with sanctions against the Islamic republic over its contentious nuclear drive.

Beijing, which now buys about 20 per cent of Iranian crude, opposes the policy of the United States and its European allies seeking to strengthen UN sanctions against Iran, which they believe is seeking nuclear weapons.

Tehran denies this, saying its nuclear programme is purely for peaceful objectives.


Iran and China ink agreements totaling $4 billion | Business | DAWN.COM

 

[grey boy 2]

China hails WTO ruling against EU duties on Chinese steel fasteners - People's Daily Online July 17, 2011

The Ministry of Commerce (MOC) on Saturday welcomed the World Trade Organization ruling that the European Union (EU) is illegally taxing Chinese steel fasteners.

It is of great significance and will help Chinese enterprises enjoy better competitive conditions in the international market including the EU, said an unidentified official of the MOC Treaty and Law Department in a statement on its website.

"This is not only a victory for Chinese industry but for the WTO rules as well," the official said.

The ruling has reinforced the confidence of WTO members in the WTO rules and the multilateral trading system, the official said.

The ruling from the WTO's appellate body on Friday said the EU isn't complying with international commerce rules by imposing anti-dumping duties on the fasteners from China.

The WTO ruled the EU's single duty requirements and practices are discriminatory and violated WTO rules.

It said the EU isn't calculating them fairly as it takes China as a single exporter, instead of treating the companies individually.

For a long time, the EU has been requiring Chinese exporters to prove they meet with the "single duty" requirements in responding to anti-dumping cases.

The EU imposed anti-dumping duties of 26.5 to 85 percent on fasteners from China for five years in January 2009.

China is the world's biggest producer of screws, nuts, bolts and washers, while the EU is its major market.

The WTO set up an expert panel on Oct. 23, 2009 after China initiated the WTO case on July 31, 2009, saying anti-dumping measures taken by the EU against the import of Chinese steel fasteners violated WTO trade rules.

The WTO ruled on Dec. 3 last year that the EU anti-dumping duties are discriminatory and violate global commerce rules.

The EU appealed on March 25 this year. China appealed further on March 30 on the remaining problems that did not win support from the expert panel.

 

[grey boy 2]

RMB internationalization well underway - People's Daily Online July 18, 2011

2011 marks the 10th anniversary of China’s accession to the WTO and the second anniversary of the official launch of cross-border RMB trade settlement. The country has made rapid progress in opening up in the past 10 years, and foreign trade has become the largest driving force behind its economic growth. Based on strong worldwide demand for Chinese products, the internationalization of the RMB is well underway.

Solid foundation laid for RMB internationalization

"This is a historic breakthrough. When you look back at the cross-border RMB trade settlement some time later, you will find that this moment is destined to be recorded in history," economist Xie Guozhong said in July 2009 when the People's Bank of China, the country's central bank, announced a trial run of cross-border RMB trade settlement.

Cross-border Renminbi trade settlement has witnessed explosive growth in just two years and has expanded to 144 countries and regions, laying a solid foundation for the RMB internationalization.

Li Bo, director of the Monetary Policy Department under the People's Bank of China, said that China has made considerable progress in the internationalization of the RMB in the past two years. First, total cross-border RMB transactions hit 500 billion yuan in 2010, accounting for about 2 percent of China's total export and import volume. Such transactions reached 530 billion yuan in the first four months of this year alone, more than the total for all of 2010.

Second, a pilot RMB cross-border investment and financing program has been launched, with the scale reaching 19 billion yuan. Third, foreign companies make direct investments in China using the RMB. Furthermore, China has signed currency swap deals with a number of its trading partners, introduced the RMB backflow policy and fostered the development of the RMB business in Hong Kong. So far, China has signed currency swap deals with South Korea, Hong Kong Special Administrative Region, Malaysia, Belarus, Indonesia, Argentina, Iceland and Singapore involving a total of 803.5 billion yuan or more than 120 billion U.S. dollars.

Hong Kong as the Laboratory for Shanghai

The Chinese government is promoting the international use of RMBs in the offshore market of Hong Kong as a laboratory to test how the RMB is received internationally and what this implies for local markets. The use of Hong Kong is significant because it gives China the opportunity to internationalise its currency gradually, by feeling the stones under its feet, without compromising the stability of its own mainland markets. Contrary to common understanding, Hong Kong can make the RMB international without the necessary step of making it first fully convertible. In this regard, Hong Kong can become to China what the London offshore Eurodollar market was to the US dollar in the 1960s. During that period the US had certain capital controls, but this did not stop the greenback from increasing its share in international business transactions. While the Chinese firewalls are in place, the Chinese government wants to use the extra time that it has until 2020 to develop Shanghai’s financial centre in order to cope in the future with the full convertibility of the RMB. In this regard, the experience gained from the circuit created through Hong Kong is of great value (see Figure 4).

Figure 4. The RMB’s circular loop through Hong Kong (taken from Lamba, 2010)

In general, the Hong Kong experience will quicken the pace of opening up China’s mainland capital market and capital account convertibility. Following this logic, in August 2010 the PBoC has opened for the first time the interbank bond market in mainland China to a limited number of foreign investors, in another pilot programme of great significance.


Risk control

Preventing huge imports, exports of speculative capital

While the cross-border flow of the RMB is strengthening, Chairman of the China Banking Regulatory Commission Liu Mingkang said that China should prevent the possible negative impacts caused by huge imports and exports of speculative capital. Some countries have adopted the Unremunerated Reserve Requirement and some have started to collect income taxes of foreign investments or financial transaction taxes. These methods or measures are all very good for China to use for reference.

An official from China's central bank said that in order for the RMB to "go global," the steady growth of China's economy and comprehensive national strength must be the foundation, and while China maintains steady policies and improves its macro-economic management capacity, it must prevent radical changes to its economy.

The official emphasizes that the internationalization of the RMB must be greatly supported by reforms of domestic economic systems. "For example, the reform of the RMB Capital Account Liberalization must be promoted in an orderly fashion. If capital and demand are restrained in all aspects, the development will be certainly slow. Under the current conditions, the choice between RMB and foreign currencies should not be decided by administrative policies but should be decided by economic entities according to their will and interests."

Steadily achieving RMB internationalization in three steps

The remarks made by China's National Council for Social Security Funds Chairman Dai Xianglong during the "Second Global Think Tank Summit" hosted by the China Center for International Economic Exchanges have attracted widespread attention. He said, "China's GDP and foreign exchange reserves account for 10 percent and one third of the world's total respectively, and China is the world's largest financial creditor country, so that China's RMB will naturally become an international currency. This will benefit not only China but also the improvement in the global monetary system."

He said that the internationalization of the RMB could be divided into three steps. The first step is to make the RMB an international trade settlement currency based on the convertibility of RMB on the current accounts. The second step is to turn the RMB into an investment currency by allowing certified investors at home and abroad to jointly promote the two-way flows of the RMB. The third step is to achieve the internationalization of the RMB and turn the RMB into an international reserve currency.

Li Daokui, an adviser to the Chinese central bank, recently said in an article, "The strategic objective of the internationalization of the RMB is to enhance the international status of the Chinese economy, improve the stability of the world economy and benefit the Chinese economy during the process. The internationalization of the RMB will perhaps become a grand trend for the world economy over the next decade as well as a major development trend for China over the second decade after its accession into the World Trade Organization."

By Tian Li, reporter with People's Daily Overseas Edition, translated by People's Daily Online

 

[grey boy 2]

China-ASEAN trade sees 25 percent bump in first half of 2011 - People's Daily Online July 18, 2011

In the first half of 2011, the aggregate bilateral trade volume between China and ASEN totaled 171.1 billion U.S. dollars, which was a year-on-year increase of 25.4 percent, according to statistics recently released by China Customs.

China's export volume totaled 80 billion U.S. dollars and imports totaled 91 billion U.S. dollars, with an increase of 24 percent and 26.6 percent, respectively, which means there was a 10.9 billion trade deficit.

Among ASEAN countries, bilateral trade between China and Indonesia increased by 41 percent while trade with Vietnam grew 40.9 percent. In contrast, trade between China and Philippines as well as China and Singapore saw relatively sluggish growth of 11.2 percent and 14.2 percent, respectively.

Compared with other ASEAN countries, the trade gap between China and Malaysia is the greatest, with a deficit of 17.2 billion U.S. dollars.

By People's Daily Online

 

[grey boy 2]

China's Internet users rise to 485 mln by June - People's Daily Online July 20, 2011

The number of people surfing the Internet in China rose to 485 million by the end of June this year, up 6.1 percent from the end of last year, the China Internet Network Information Center (CNNIC) announced Tuesday.

The increase of 27.7 million over the six-month period was smaller than the increase of 36 million during the same period last year, the CNNIC said in a report.

The growth of Internet users has been slowing since the beginning of 2010, and the easing trend is more evident currently, the report said.

The Internet penetration rate was 36.2 percent at the end of June, up 1.9 percentage points from the rate last year, it said.

About 65.5 percent of China's Internet users, or 318 million people, use mobile phones to surf the net, an increase of 14.94 million from the end of last year, it said.

Weibo, a twitter-like social networking website, has enjoyed "explosive growth" in its number of users, it said. The number of microblog users surged by 208.9 percent to reach 195 million by the end of June, it said.

The number of group-purchase users also rose 125 percent in the first six months of the year, it said. About 18.75 million used group-purchase websites at the end of last year.

Source: Xinhua

 

[grey boy 2]

Number of private cars in China exceeds 70 million - People's Daily Online July 20, 2011

Statistics from the Traffic Administration under the Ministry of Public Security show that the total quantity of automotive vehicles in China stood at 217 million by the end of June 2011, including nearly 72.1 million private cars.

The ownership rate of private cars continues to increase, and private cars have become increasingly popular as a mode of transportation. Experts believe China's rapid economic growth and rising incomes of residents lay a solid foundation for the popularization of cars. However, China should treat the growth of private cars with a more rational attitude.

11 cities have more than 1 million cars each

Currently, 11 cities have more than 1 million cars. In the first half of 2011, there were nearly 10.1 million new automotive vehicles nationwide, including 7.6 million new cars, higher than nearly 6.9 million new cars in the same period of 2010. Data shows that 11 cities ,such as Beijing, Shenzhen, Shanghai, Chengdu and Tianjin, have more than 1 million cars, and Beijing has more than 4.6 million cars.

Sedans, the most popular passenger cars, have seen rapid growth in sales. By the end of June 2011, the total quantity of passenger cars in China stood at nearly 67.9 million, including nearly 61.5 million sedans, accounting for nearly 91 percent of the total quantity of passenger cars.

In addition, the "Blue Book on Social Construction" issued by the China Academy of Social Sciences in 2011 points out that there are 60 private cars for ever 100 families in Beijings.

Small, medium-sized cities limit auto purchase

Zhou Qingjie, director of the Economic Research Center under the Beijing Technology and Business University, told reporters from People's Daily that the most important reason for the rapid growth of private cars is that the incomes of China's residents continue to strengthen along with their confidence in China's economic development. The number of common people who have realized the dream of having a private car is increasing. Meanwhile, the abundance of automobiles developed and produced by China's national automobile industry for common families have provided sufficient choices for private car consumer.

But Zhou also believes that the rapid growth of private cars is closely connected with the automobile industry stimulus policy launched by China after the international financial crisis.

Data show that China's automobile sales volume exceeded 13 million in 2009, and the volume of November of 2009 increased by more than 96 percent compared to the same month of 2008, a new historical record. The amazing development of China's automobile industry has made China the largest country in automobile production and sales in the world. And in 2010, China's automobile output and sales volume both exceeded 18 million and both set a new historical record.

However, due to the gradual withdrawal of stimulus policies, certain cities have taken measures to curb the purchase of new vehicles. Beijing took the lead in introducing a series of restrictions on the purchase and use of vehicles as well as increasing parking fees substantially, in order to limit the number of vehicles in the city. Guiyang, the capital of Guizhou province, recently imposed restrictions on car purchases, and it is highly possible that more second- and third-tier cities will follow its lead.

"It is worth nothing that although the purchase restrictions have curbed the growth of private vehicle ownership in Beijing and a few other large cities, the sales of vehicles have risen sharply in second-tier cities. Many residents in second-tier cities were worried about the possible introduction of car purchase restrictions, and thus decided to buy cars ahead of schedule. This has stimulated the growth of private car ownership in China in the short term. In addition to Beijing, many other cities in the country also have great market potential and are ready to witness amazing car sales growth," Zhou said.

Excessive private cars can increase urban traffic pressure

The overly rapid growth of private car ownership has increased urban traffic pressure, making traffic congestion and parking difficulties two major problems in city management.

Zhou takes a conservative attitude toward the overly rapid rise in the number of private cars. "When the number of private cars in China reach or approach that in the United States, China will have huge oil demand, considerably increasing its reliance on import oil. Furthermore, the excessive number of autos in service will make China's existing urban infrastructure and management unbearable. Therefore, both the government and each resident should take a more rational attitude toward private car ownership," Zhou said.

Zhou suggested that if China's auto industry seeks to be really competitive in the market, they must break through technical bottlenecks, particularly some core techniques of auto components. They also must pay attention to brand building and enhance the added value of their products, he said. China should actively adjust the structure of its auto industry, improve the overall strength of the auto industry and accelerate the pace of "becoming a strong auto production country."

By Ye Xiaonan from People's Daily Overseas Edition, translated by People's Daily Online

 

[Ryan]

China Says Experimental Fast Nuclear Reactor Now Connected to Power Grid
By Bloomberg News - Jul 21, 2011 6:29 AM ET
The 65-megawatt fast-neutron reactor near Beijing connected to the grid at 40 percent capacity today, Xu Mi, chief engineer at the experimental fast reactor program of the China Institute of Atomic Energy, said by telephone. The reactor was built by the institute with help from the Russian government.

China continues to promote the development of nuclear power even after it stopped approving new plants pending safety reviews following the March 11 accident at Japan’s Fukushima Dai-Ichi plant, the worst atomic disaster since Chernobyl 25 years ago. France, the U.S. and U.K. are among countries developing the next generation of reactors based on fast-neutron technology that uses uranium fuel more efficiently.

“This is a pretty big breakthrough, as in the reactor is actually producing electricity,” Dave Dai, regional head of utilities research at Daiwa Securities Capital Markets, said by telephone from Hong Kong. “This basically means they can go ahead in terms of schedule for the real commercial ones.”

The experimental fast reactor took a decade to build and achieved criticality, or started controlled and sustainable generation, exactly a year ago, according to a report by the China Institute of Atomic Energy published on the website of China National Nuclear Corp., the nation’s biggest operator of atomic plants. China started fast-reactor research in the mid- 1960s, it said.
Fast Reactors

Fast reactors reduce radioactive waste compared with existing operational designs by using most of the fuel during the nuclear reaction, according to the World Nuclear Association.

The reactors utilize up to 70 percent of uranium feedstock compared with 1 percent for existing pressurized water reactors, such as the AP1000 design by Westinghouse Electric Co., according to the report published by China National Nuclear.

About 20 fast reactors have been operating around the world, some since the 1950s, the nuclear association said on its website. France and Russia run commercial plants based on the technology, it said.

“The next step for us is to increase the generating capacity of the reactor to 100 percent while connected to grid,” China Institute’ Xu said. “After that, we can use the technology to build our own commercial fast reactors.”
Fourth Generation

China plans to start construction of a 1-gigawatt fast reactor at Sanming city in 2018 using home-grown technology, Xu said. State-owned China National Nuclear will start building two 800-megawatt fourth-generation reactors using Russian designs in 2013 or 2014, he said. The reactors will also be at Sanming.

The nuclear industry has developed several generations of reactors starting with the first in 1950-1960s, according to the website of the World Nuclear Association. There are no such reactors outside the U.K. today. The second generation units are used in the U.S. and France, while early third-generation reactors have been operating in Japan since 1996, according to the nuclear association.

“Generation IV designs are still on the drawing board and will not be operational before 2020 at the earliest,” the group said.

China will build more fast reactors of greater than 600 megawatts in capacity starting 2015 and start commissioning them from 2030, Xu said on May 13.
Safety Review

China plans to conclude safety checks on all its nuclear plants by October, completing one stage of a nationwide review of its atomic power industry following the Fukushima crisis.

The country, planning to build more nuclear reactors than any other nation, said on March 16 it suspended approval of all new atomic projects until a safety review is carried out. China’s existing reactors use second-generation technology, the official Xinhua News Agency said on July 22.

China started its first commercial nuclear plant in 1994 and currently has the highest number of atomic facilities under construction, according to data from the World Nuclear Association.

The nation has 13 generators in commercial operation while 28 are being built, the Ministry of Environmental Protection said in June. China may have more than 100 atomic reactors by 2020, it said.

Japan’s 40-year-old Fukushima Dai-Ichi plant was crippled by an earthquake and tsunami on March 11, causing radiation leaks.

To contact the reporter on this story: Chua Baizhen in Beijing at bchua14@bloomberg.net

To contact the editors responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net; Amit Prakash at aprakash1@bloomberg.net.

China Connects First Fast Nuclear Reactor to Electricity Grid - Bloomberg


July 21, 2011, 8:38 PM HKT

China’s Nuclear Scientists Unveil Latest ‘Breakthrough’
China says its nuclear industry has made a fresh technological breakthrough, which, even if it doesn’t immediately solve the country’s energy needs, underscores Beijing’s determination to be a leading font of knowledge about the controversial power source.

The China Institute of Atomic Energy said Thursday that a small, experimental “fast breeder” reactor outside Beijing had been hooked to the grid to produce electricity. Essentially, the tiny 20 megawatt nuclear plant “863” is now helping satisfy China’s vast power needs.

To supporters of nuclear power, fast-breeding is alluring. The idea is that it produces more plutonium than the plant needs to run, providing fissionable material usable elsewhere in the nation’s nuclear program. For China, which is long on nuclear ambitions but short on uranium, it’s an especially desirable technology.

Yet the process hasn’t proved workable on a large scale elsewhere. Fast-breeder programs have been abandoned in a number of countries, including the U.S., and the plants that remain are small. To some critics, it is a nuclear version of the “perpetual motion machine,” a seemingly problem-solving theory that doesn’t work well outside the laboratory.

In a statement posted to its website (in Chinese) Thursday, China’s atomic institute said the advantages of fast-breeder reactors are that they save uranium and reduce nuclear waste. “The establishment of sustainable development of nuclear energy is important,” the statement said, noting that a number of industry dignitaries were on hand for the announcement.

China’s nuclear engineers, of course, are operating in the aftermath of the Fukushima disaster, a game-changing event that would seem likely to make the industry more risk averse. In days after Japan’s March 11 earthquake-tsunami-nuclear crisis, Beijing defiantly pledged to continue with its huge nuclear rollout but quickly reversed course and said it would proceed cautiously.

In fact, the grid hook-up to the experimental fast-breeder plant may underscore that caution, as Beijing spent a year testing the plant’s operations before linking it to the grid.

Among the practical challenges associated with fast-breeders: they are potentially riskier than more conventional light-water reactors, relying on cooling of the reactor core with a potentially dangerous loop of flammable sodium, rather than water. Plus, the fuel input is essentially weapons-grade uranium, which is difficult to handle compared with the chemically stable material that powers most nuclear plants, namely uranium dioxide.

The fast-breeder process also appears for China to be a degree more tricky to develop on a commercial scale than reprocessed fuel, another controversial technology the country says it is pursuing to address its uranium needs. Fast breeding is something new for China while the country’s military has long-term experience with reprocessing.

Mark Hibbs, a nuclear expert at the Carnegie Endowment for International Peace, says he visited China’s fast-breeder reactor in the weeks after the Fukushima disaster. He describes it as a tiny “research reactor,” and says he got the sense officials planned to proceed extremely cautiously in building an 800-megawatt plant as scientists once discussed.

Breakthroughs like fast breeder reactors might not result in commercially applicable programs any time soon, but in the age of Fukushima they may signal that China possesses world class nuclear power expertise. According to Mr. Hibbs, news of the efforts say, “Look, China is a high-technology nuclear country.”

– James T. Areddy. Follow him on Twitter @jamestareddy

China

 

[grey boy 2]

Chinese fast reactor starts supplying electricity 21 July 2011

Exactly one year after achieving first criticality, China's experimental fast neutron reactor has been connected to the electricity grid.

At 10.00am today, the head of China National Nuclear Corporation (CNNC), Sun Qin, declared to workers and officials gathered in the Chinese Experimental Fast Reactor's (CEFR's) control room that the unit had successfully achieved grid connection.

Inside the control room of the CEFR (Image: CNNC)

The sodium-cooled, pool-type fast reactor has been constructed with some Russian assistance at the China Institute of Atomic Energy (CIEA), near Beijing, which undertakes fundamental research on nuclear science and technology. The reactor has a thermal capacity of 65 MW and can produce 20 MW in electrical power. The CEFR was built by Russia's OKBM Afrikantov in collaboration with OKB Gidropress, NIKIET and Kurchatov Institute.

Xu Mi, chief engineer at the CEFR program at CIEA, told Bloomberg that the unit was connected to the grid at 40% capacity. "The next step for us is to increase the generating capacity of the reactor to 100% while connected to the grid," he said. "After that, we can use the technology to build our own commercial fast reactors."

Beyond the pilot plant, China once planned a 600 MWe commercial scale version by 2020 and a 1500 MWe version in 2030 but these ambitious ideas have been overtaken by the import of ready-developed Russian designs. In October 2009, an agreement was signed by CIAE and China Nuclear Energy Industry Corporation (CNEIC) with AtomStroyExport to start pre-project and design works for a commercial nuclear power plant with two BN-800 reactors with construction to start in August 2011, probably at a coastal site. The project is expected to lead to bilateral cooperation of fuel cycles for fast reactors, which promise to vastly extend the fuel value of uranium as well as reduce radioactive wastes.

In April 2010, a joint venture company was established for the construction of China's first commercial-scale fast neutron reactor, near the inland city of Sanming in Fujian province. The joint venture - Sanming Nuclear Power Co Ltd - was established by CNNC, Fujian Investment and Development Corp and the municipal government of Sanming city. CNNC holds a majority stake in the venture.

Unlike most of the reactors used today for nuclear power generation, fast neutron reactors make maximum use of uranium resources by generating a certain amount more fuel than they consume. They do this by using fast neutrons to 'burn up' uranium and plutonium mixed oxide (MOX) fuel, which can be surrounded by a uranium 'blanket' in which slightly more plutonium is created than is used. The MOX fuel uses the plutonium recovered when used fuel, including that from conventional light water reactors, is reprocessed.