1. WSJ: China to establish system for tracking real estate ownership
China plans to establish a national system for tracking real estate ownership and sales transactions, a key step in its effort to tame a property sector that threatens to price many Chinese out of the housing market. A nationwide real estate registration system could pave the way for levying a broad property tax in China for the first time. It could also help Beijing crack down on government officials and others who buy and own multiple properties despite restrictions on ownership. "This is a tough task," said Xu Deming, vice minister of land and resources, at a work meeting on Saturday, according to the ministry's website. China has to carry this out to safeguard the interests of the public and to ensure sustainable economic growth, Mr. Xu said. He didn't give details on whether such registrations would include the ownership of commercial property in addition to residential property. Such a system would make it easier for the authorities to detect and tax multiple property ownership. Currently there are many local registries and systems that aren't linked, making it difficult to determine who owns what. In November, the State Council, the country's cabinet, said that real estate registration processes that had been supervised by nine government departments would be combined into
single system overseen by the Ministry of Land and Resources.
WSJ
2. Reuters: China can avoid Japan-style property bubble: official
China's policy fine-tuning and ongoing urbanization can help it to avoid a Japan-style property bubble, a senior housing official said, amid fears a housing market crash could lead to a hard landing for the world's second-largest economy. Beijing has allowed local governments to take differentiated property tightening measures, rather than a one-size-fits-all bid to cool the market, Vice Housing Minister Qiu Baoxing said in remarks published in the Southern Metropolis Daily. He said Japan's property bubble burst in the 1980s, when the country's urbanization was
near an end and it could not generate fresh drivers to keep the market afloat. "China is some time away from reaching that point. If we understand the issue and adopt fine-tuning policies, things could be turned around," Qiu was quoted as saying.
Reuters
3. DealBook: 5 Chinese I.P.O.’s shelved after regulator stiffens rules
Five companies halted plans to sell shares on Monday after China’s securities regulator moved to tighten restrictions on new listings, the latest sign of challenges as the mainland seeks to reopen its stock markets to new offerings after a yearlong ban. The China Securities Regulatory Commission announced on Sunday that it would start investigations of companies that are marketing their initial public offerings to investors, monitoring
comments made by executives during such meetings to ensure they did not break the law by disclosing information not included in their public stock exchange filings. The commission also said it would monitor companies that sought to sell shares at higher valuations than the average for their industry and require them to make additional risk disclosures. Companies failing to comply would be barred from selling shares to the public, the regulator said. Five companies that had been among the first since late 2012 to receive approval to sell shares in mainland China said on Monday that they would suspend their I.P.O.
plans on the ChiNext market in Shenzhen, a secondary board mostly for start-up companies, and on another secondary board for small and midsize enterprises. The companies are the Beijing Forever Technology Company, the
Ciming Health Checkup Management Group Company, the Hebei Huijin Electromechanical Company, Netposa Technologies and the Nsfocus Information Technology Company.
DealBook
4. Economist: Urban renewal: New frontiers
The fate of China’s economic reforms will be determined locally. Our first article looks at a wealthy city near the coast; our second, at a poorer one inland.
Economist
5. Xinhua: Shanghai FTZ may emerge winner
After nine years of intractable negotiations, the failure to secure a free trade pact between China and Australia looks likely to become a big win for the three- month-old Shanghai Free Trade Zone, with major Australian bank Westpac the latest to urge Australian business back to China. Andrew Whitford, Westpac’s head of China, told local media last week that Australian companies seeking genuine access in China would enjoy enormous benefits from establishing a foothold in the Shanghai FTZ. “I see companies that are involved in agriculture or companies that are involved in hard commodities that set up in the free trade zone would have enormous opportunities,” Whitford told the Australian Financial Review on Thursday. The Shanghai FTZ opened in late September and 18 service-based industries such as financial,
shipping, business, professional, cultural and social are set to benefit from trials on
ground-breaking measures ranging from liberal interest rates, yuan convertibility and freer foreign investment criteria. However, it was the December announcement that foreign companies in the FTZ will be empowered to issue yuan-denominated bonds for repatriation that really ignited local interest. “As a foreign company setting up in the free trade zone, it is going to be a lot easier to be able to raise funds,’’ Whitford said. ‘‘Foreign companies will be able to issue RMB (yuan) bonds and repatriate the funds back offshore or put the funds onshore into China.
Xinhua
6. Caixin - Editorial: Leading the battle for reform
Let's hope the Communist Party group headed by Xi himself to embark on a holistic plan for change is ready for a long fight against interest groups.
Caixin
7. Caixin: What the central gov't thinks of shadow banking
The cabinet gave regulators and others its thoughts on the opaque sector, then essentially left the matter in their hands.
Caixin
8. SD: Shanghai among top 50 cities with China’s worst air
Shanghai ranks 48th among the 74 Chinese cities that adopted a new national air quality monitoring system last year, with the city’s annual PM2.5 density nearly double the national standard, according to a survey released yesterday. Beijing came 13th in the list of cities with the worst air
.Shanghai’s annual average PM2.5 density was 60.7 micrograms per square meter last year, compared to the national standard of 35, environmental organization Greenpeace reported. PM2.5 refers to airborne particles smaller than 2.5 micrometers in diameter that are the cause of urban smog and hazardous to health. Greenpeace said that, in December, Shanghai’s PM2.5 density peaked at 421 micrograms per square meter, five times the daily standard of 75. The Greenpeace report was based on data from China’s Environmental Protection Ministry website as well as environmental protection bureaus in the 74 cities.
SD
9. SD: Service firms pay 67% of tax revenue
The service industry paid nearly two-thirds of Shanghai’s tax revenue last year and financial firms took the lead as they made up 40 percent of the 100 top service taxpayers, underlining the city’s goal to be a global financial center. The Bank of Communications Ltd was the top service taxpayer with 16.2 billion yuan, followed by Shanghai Pudong Development Bank with 10.4 billion yuan, and Shanghai GM Sales Co Ltd with 8.4 billion yuan.
SD
10. SCMP: Another Communist Party princeling apologises for Cultural Revolution atrocities
Following a rare apology issued last year by Chen Xiaolu, the son of one of the Communist Party's founding generals, for his wrongdoings during the Cultural Revolution, the daughter of another Communist Party elder has also stepped up to express remorse for her connection to the death of her middle school principal 48 years ago. Song Binbin, 64, joined a group of her former classmates on Sunday to
apologise to their teachers for their part in the political upheaval that ravaged China between 1966 and 1976, The Beijing News said on Monday. Song’s father, Song Renqiong (1909-2005), was one of the Communist Party’s founding generals and a member of the "Eight Immortals", the most powerful elders in the Party's top echelon in the 1980s and 1990s. The younger Song, who was studying at a high school attached to Beijing Normal University at the time, became a symbolic figure in the frantic and often violent Red Guard movement after a meeting with Mao Zedong on top of the Tiananmen Rostrum
in August 1966, where Mao encouraged
Red Guards from around the nation to resort to violence in their "continued revolution". A photo published on The Beijing News on Monday shows Song and some of her former fellow classmates bowing in front of a statue of Bian Zhongyun, the party secretary and vice principal of the school at the time who was persecuted and brutally beaten to death by students two weeks before Song's historic meeting with Mao. She was among the
first of educators to be killed during the Cultural Revolution.
SCMP
11. Bloomberg: Honeywell probed by U.S. over Chinese F-35 fighter parts
Honeywell International Inc. (HON) is cooperating with a government probe into parts it provided for F-35 fighters that were made in China. The equipment is “a common electrical sensor found on a circuit card that is widely available in commercial applications around the world,” Scott Sayres, a Honeywell spokesman said in an e-mail today. “Honeywell did produce this component in China for a short period of time, and proactively and voluntarily decided to move production to a U.S.
facility in 2012 after consulting with the Department of Defense and our partners. We believe we have followed all applicable U.S.
laws and regulations relating to the manufacturing of defense-related components in China,” he said.
Bloomberg
12. WSJ: KFC's crisis in China tests ingenuity of man who built brand
Sam Su, vice chairman of Yum Brands, working to win back confidence in Asia.
WSJ
13. WSJ: China's Cofco bids for Dutch grain trader stake
Cofco has adopted a strategy of buying relatively small assets overseas.
WSJ
14. BBC: Sinopharm executives face corruption probe
China's largest drug distributor Sinopharm has said two of its former senior executives are being investigated over alleged corruption. A former vice president was detained by police last week, while a former general manager is also being probed.
Sinopharm is the most high-profile domestic company to feature in China's crackdown on misconduct in its pharmaceutical sector so far. Shares of Sinopharm fell by more than 2% in Hong Kong trading on Monday. In a statement to the Hong Kong stock exchange on Sunday, Sinopharm said its former vice president, Shi Jinming, had resigned last month for "personal reasons".
BBC
15. FT - Joe Zhang: Rising rates will help cure China’s credit addiction
In June and December last year, China’s
interbank interest rates jumped from their normal level of about 3
per cent to peak as high as 9 per cent a year. The
shockwaves did not stop there. Banks scrambled for deposits and pushed up interest rates on their wealth management products. Funding costs in the vast shadow banking sector also moved up, while stocks and bonds suffered falls. Observers at home and abroad expressed concern about bad debts and the fragility of the banking industry. Some even called it China’s “Minsky moment” – a term coined during the Russian debt crisis of 1998 to describe the turmoil that arises when
overstretched investors must finally repay their debts. Some fear that tighter credit markets could cause asset prices to collapse and precipitate a meltdown of the banking industry. But as someone who worked at China’s central bank in the 1980s, I am encouraged by the government’s willingness to tackle the country’s 35-year addiction to cheap credit. The rapid growth of bank loans after the early 1980s, coupled with lax credit standards, resulted in non-performing loans that accounted for 30-40
per cent of loan books by the late 1990s. To prevent a repeat of that episode, the central bank is now playing tough. It is to be hoped that the rules of the game will change over time. China needs higher interest rates to cool its property bubble, reduce wasteful investments and
minimise the extent to which ordinary savers
subsidise business. The government remains reluctant to undertake a full
liberalisation of the credit market. But even before it does, market forces are driving interest rates higher.
FT
16. Sinosphere: Q. & A.: Wu Wei reflects on reform, now and in the 1980s
Wu Wei is a former Chinese official who in the 1980s was heavily involved in developing the Communist Party chief Zhao Ziyang’s plans for
measured political reform. Mr. Wu also served as a secretary to Bao Tong, the senior aide to Mr. Zhao. Those reforms collapsed in 1989, when the party patriarch, Deng Xiaoping, turned against Mr. Zhao and ordered troops to suppress student protests based
in Tiananmen Square in Beijing. Mr. Wu was detained and investigated after the June 4, 1989,
crackdown, and later went into publishing and business. He has remained a close observer of Chinese politics, and last year his book “On Stage and Backstage: China’s Political Reform in the 1980s” was published in Hong Kong. In an interview, Mr. Wu, 61, discussed his experiences in the 1980s and what he sees as their lessons for understanding the current Chinese leadership’s drive for market reforms and social adjustment under President Xi Jinping.
Sinosphere
17. NYT - Jonathan Pollack Oped: Why does China coddle North Korea?
A month after the execution of Jang Song-thaek, widely viewed as North Korea’s second-most-powerful leader, China remains stymied in relations with its reclusive, defiant neighbor. This is not a new story. Though few in Beijing are prepared to admit it, China’s policies toward North Korea have long been a conspicuous failure. China’s official reactions to the North’s internal power struggle have, thus far, been limited largely to formulaic calls for internal stability. But Mr. Jang’s
ouster must be deeply disquieting to senior Chinese policy makers, who yet again find themselves on the outside looking in. By nearly all indications, leaders in Beijing were blindsided by the latest events. By contrast, South Korean intelligence disclosed Mr. Jang’s fall from power a full five days before its stunning climax at a Politburo meeting on Dec. 8.
NYT
18. FT: Ken Clarke visits China with health service trade in his sights
Ken Clarke, the veteran cabinet minister, begins a five-day trade visit to China on
Monday saying he wants to increase British sales in the fast-growing Chinese healthcare market and that efforts to date have been “hopeless”.
Mr Clarke
hopes to build on David Cameron’s visit to China last month to create a bridgehead for British healthcare firms, claiming they should be able to exploit the global reputation of the National Health Service.
The minister told the Financial Times that Britain had
world-beating healthcare
companies but said: “For the moment we’re left miles behind in this field by the Americans and Germans because their export efforts are better than ours.” Mr Clarke, the prime minister’s trade envoy, has made a priority of selling healthcare to China, India and Brazil, tapping into what he believes is a vast and expanding market in the big emerging economies. As with Mr Cameron’s trip to China last month, Mr Clarke is not planning to let British concerns about Beijing’s human rights record get in the way of his efforts to win business. “You can’t have all of your dealings with the Chinese dominated with campaigning and publicity about human rights,” he said, adding that Beijing knew very well that Britain disapproved of its “authoritarian state”. “The trip is focused on health and – if it were to come up in general conversation – I will of course discuss the evolving human rights situation in China. But I’m not expecting it to.”
FT
