1. Reuters: U.S. senators urge nominee for Beijing ambassador to be tough on China
U.S.
lawmakers expressed concern about China's territorial ambitions at a confirmation hearing on Tuesday for the next American ambassador to China, and they urged him to take a tough line with Beijing. Senator Max Baucus, President Barack Obama's nominee for the ambassador's post, told a Senate
hearing he would do all he could to reduce tensions between China and its neighbors and said he would follow a "cautious" approach with Beijing. Baucus said he agreed with an assessment of Republican Senator John McCain that China was trying to reassert its historical position as the dominant power in Asia
.McCain said China's construction and acquisition of an aircraft carrier was "a statement of a desire to project power" that should worry the United States. He said tensions in the region had "implications that could lead to another 'Guns of August'" - a reference to the start of World War One in 1914.
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2. DealBook: Anxiety rising over relations between Japan and China
Even with all the optimism about the global economy here last week at the annual meeting of the World Economic Forum, there was a remarkable economic and political risk that appeared to have been largely overlooked: The long-simmering battle between China and Japan may be close to boiling over. One top executive went so far as to describe the nations’ relationship as a “stealth war.” The implications for the global economy — and some of the largest multinational companies — are profound. China and Japan represent the second- and third-largest economies in the world, after the United States, and they are among each other’s largest trade
partners. General Motors, Microsoft, Boeing, Nike, Coca-Cola and Procter & Gamble, among others, have huge businesses in both countries. “I probably spoke to no less than 40 U.S. C.E.O.’s here and I would say this issue came up
in more than half of those conversations,” said Ian Bremmer, the political scientist who founded the Eurasia Group, the political risk consulting firm. “This week at Davos, for me, the big takeaway was that China-Japan was much more problematic than we thought. The possibility that you get anti-Japanese sentiment in a big way and it causes real disruption on trades and hurting both economies is real.”
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3. WSJ - Andrew Browne: Shinzo Abe's history lesson haunts Davos
The star of this year's gathering of the global elite in Davos, Japan's Prime Minister Shinzo Abe, came with a rousing message about his country's economic recovery. "Japan is back," he declared in a keynote speech. And yet, he managed to create a bigger stir with apparently offhand remarks to reporters that compared tensions between Japan and China to rivalries between Britain and Germany on the eve of World War I. To be sure, Mr. Abe made clear that he doesn't see war coming. But he nonetheless set
off conversations about the prospects of armed conflict between the world's second and third largest economies among many of the senior-level bankers, business executives, politicians and others who turn up at Davos each year. Over private dinners and cocktail parties at the Alpine ski resort they turned to
handicapping the chances of war breaking out in a dispute between Japan and China over a set of uninhabited rocky islets in the East China Sea.
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4. DealBook: A top manager resigns from China’s foreign exchange agency
An American-trained fund manager who returned to China to help invest the world’s largest foreign exchange reserves has left his government position, the Chinese state-run news media reported on Tuesday
.The government did not explain why Zhu Changhong, a highly respected fund manager, was no longer the chief investment officer at the State Administration of Foreign Exchange in Beijing, the agency in charge of investing the nation’s $3.8 trillion in foreign exchange reserves. A spokesman
at the agency, known as SAFE, could not be reached on Tuesday afternoon for comment. Analysts said the departure was surprising because Mr. Zhu, who is in his early 40s, had been recruited to help the
Chinese government improve the management of its foreign exchange reserves, much of which are invested in United States Treasury bonds. In 2009, Mr. Zhu left his job as hedge fund manager at the Pacific Investment Management Company, the huge asset management company known as Pimco, and began work at SAFE in 2010.
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5. WSJ: China, Taiwan schedule formal talks
Top officials in charge of relations between China and Taiwan have set a date for talks next month, marking a minor breakthrough for the two governments since they split in a civil war six decades ago
.Political analysts said the talks between the heads of Taiwan's Mainland Affairs Council and China's Taiwan Affairs Office are an expected step for two economies that continue to grow closer. Though representatives from both governments have met before, the meeting slated for Feb. 11 would be the first time the two sides have held formal talks involving officials in charge of cross-strait relations. The venue for the meeting, China's eastern city of Nanjing, carries historical resonance. The city was the capital of the Nationalist government before it was ousted by Communist Party forces and retreated to Taiwan in 1949. Wang Yu-chi, head of Taiwan's Mainland Affairs Council, said the agenda would be modest and steer clear of discussions about Beijing's goal of reunification. The purpose of his meeting with Zhang Zhijun, head of China's Taiwan Affairs Office, is to "increase mutual understanding and interaction," Mr. Wang said at a news conference in Taipei on Tuesday. "We don't intend to talk about very political issues," Mr. Wang said. "If Zhang Zhijun is to come visit Taiwan, I would also hope that he doesn't mention peaceful reunification."
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6. LAT: China looks to halt New Year's fireworks to curb air pollution
Fireworks are as integral to Chinese New Year as pine trees are to Christmas. But with smog blanketing many Chinese cities these days, environmental activists, meteorologists and government officials are urging people to start the new year off without a bang. Tradition holds that noisy
pops and colorful flares ward off evil spirits and bring good luck for the new year. But the pyrotechnics also release
particulates including sulfur dioxide and other toxins. In Beijing two years ago on Chinese New Year’s Eve, levels of tiny
particulates known as PM2.5 surged to 1,486 per cubic meter, state-run media reported -- more than 40 times the standard considered safe in the U.S. China’s official seven-day holiday, welcoming the Year of the Horse, begins Friday. Starting Thursday, the China Meteorological Assn.
will issue a daily four-alert fireworks index tied to smog levels; when the index
hits the highest, or red, level, the public will be advised not to light any fireworks, the official Xinhua News Agency said. Several cities have curtailed the number of days that residents are allowed to use fireworks. Chu Xumin, of the environmental group Green Zhejiang in eastern China, noted that the city of Hangzhou has issued a regulation permitting fireworks on only three days during the holiday, down from an 18-day period in 2013. The city also canceled its autumn fireworks festival.
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7. SCMP: China no longer world’s No 1 place to invest, Obama says in sweeping speech
US President Barack Obama extolled his country’s economic gains in recent years, boldly declaring that America had usurped China as the world’s top investment destination and that this year would be a “breakthrough year” for America. He kicked off his State of the Union address on Tuesday with a list of his administration’s economic achievements, which he said bolstered the superpower’s footing. “Here are the results of your efforts: The lowest unemployment rate in over five years. A rebounding housing market. A manufacturing sector that’s adding jobs for the first time since the 1990s. More oil produced at home than we buy from the rest of the world – the first time that’s happened in nearly twenty years. Our deficits – cut by more than half,” he said. “And for the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is," he said. “That’s why I believe this can be a breakthrough year for America. After five years of grit and determined effort, the United States is better-positioned for the 21st century than any other nation on earth,” Obama said.
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8. SD: Industrial profits slow as China moves to restructure economy
Profit growth
at China’s industrial companies continued to moderate in December, another reflection of the economic slowdown as the country tries to accelerate reforms. Industrial profit expanded 6 percent from a year earlier to 942.5 billion yuan (US$155
.7 billion) last month, down from the 9.7 percent rate in November, the National Bureau of Statistics said yesterday. China’s manufacturers reported a combined profit of 6.28 trillion yuan in 2013, up 12.2 percent on an annual basis. He Ping, a bureau researcher, said the recent moderations were out of a high comparative base a year earlier, along with weak demand at home and abroad and falling prices of some products. But China’s manufacturing sector delivered a good performance last year as a whole, with its profit growth rate picking up from 2012’s 5.3 percent, He said.
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9. SD: Half of regions cut investment growth goal
Half of China’s 28 provinces and municipalities which have released their economic goals for this year cut the growth target for investment from a year earlier while just three raised the goal. Six provinces maintained the target and the remaining five, including Shanghai, did not mention it in their government work report, according to the Economic Observer under Xinhua news agency. Jiang Chao, a Haitong Securities Co analyst, said China’s economic restructuring, its aim to rely less on investment and a slower economy amid reforms were reasons for the cuts. Shanghai’s fixed-asset investment grew 7.5 percent last year from a year ago. The city’s fixed-asset investment was helped by an 18.4 percent surge in capital going into property development. Guangdong and Yunnan provinces as well as Tianjin were the three areas which raised the target, while the
others including Jilin, Guizhou and Gansu provinces cut the target by as much as 5 percentage points.
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10. Reuters: Qualcomm faces prospect of record antitrust fines in China
Qualcomm Inc, the world's biggest cellphone chip maker,
may be hit with a record fine exceeding $1 billion in a Chinese antitrust probe, raising the specter of harsh penalties for foreign firms facing an increasingly aggressive regulator. China's National Development and Reform Commission (NDRC) initiated an investigation into Qualcomm last year and is currently holding talks with the U.S.
company, which this month said it was still in the dark about the basis of the scrutiny. The probe and the potential fine - the amount of which could hinge on negotiations - come as the NDRC zooms in on information technology providers, especially companies that license patent technology for mobile devices and networks. Industry experts say the NDRC, the government's main economic planning body, is trying to lower domestic costs as China rolls out its faster 4G mobile networks this year. "It is, in some ways, a game of chicken," said Yee Wah Chin, a New York-based antitrust expert at law firm Ingram, Yuzek, Gainen, Carroll and Bertolotti.
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11. Reuters: Wal-Mart to upgrade China vendor compliance after state TV criticism
U.S.
retailer Wal-Mart Stores Inc said on Wednesday it will upgrade its vendor compliance process in China, requiring more documentation and making use of a computer-based system to help suppliers manage associated paperwork. The announcement came after state-owned China Central Television (CCTV) criticized the world's No. 1 retailer for circumventing its quality control process and fast-tracking some products with higher profit margins. Wal-Mart will "ensure the correct documents and other required items are in place before the products are sold in our stores," the retailer said in a statement. Documentation includes labels that accurately reflect
ingredients, government test reports, China Compulsory Certificates, sample products or photographs, copies of manufacturing permits, details substantiating health claims and claims such as "organic" and "world-famous", official
barcodes and papers on intellectual property.
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12. WSJ: In China, the Coolpad is hotter than Apple's iPhone
Apple Inc.
and Samsung Electronics Co.
are the dominant
smartphone brands in the U.S.
and in many other parts of the world. But in China, the world's biggest
smartphone market, there isn't a clear winner yet. Virtually unheard of outside China, several homegrown brands are gaining ground and seeking to challenge the technology giants'
duopoly. Working in their favor: advanced hardware at lower prices, strong relationship with Chinese carriers, as well as creative ways to build a fan base through social media and online forums. Hundreds of millions of Chinese mobile users still haven't replaced their basic phones, making the country a critical battleground for global
smartphone brands at a time when growth is slowing in the U.S.
and other mature markets. Research firm Canalys estimates that
smartphone shipments in China totaled 354 million units last year—compared with 139 million units in the U.S. Canalys expects Chinese shipments to increase to 422 million units this year.
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13. Forbes: NY's Silverstein Properties bets $2.2 billion on China free trade zone
US real estate developer Silverstein Properties just bet $2.21 billion that a new China free trade zone will help the socialist country build a world class financial services hub. Silverstein is the first foreign investor to buy into the Qianhai Economic Zone in the southern Chinese city of Shenzhen where China is preparing to test out a freer flow of the yuan in and out of the country, as well as greater convertibility of foreign exchange. Within two days of a Wednesday announcement by China’s government granting permission for the free trade zone in the southern Chinese province of Guangdong, the New York-based developer
successfully bid RMB 13.4 billion ($2.21 billion) for an undeveloped site in Qianhai. Shenzhen is the second-largest city in Guangdong, and its position across the border from Hong Kong, has long made it a favorite for manufacturers. Now the prospect of the new free trade zone, and its potentially greater freedoms, including market-driven bank deposit rates, and derivatives trading, has piqued the interest of speculators.
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14. NPR: A Chinese company brings hope to former GM workers in Ohio
For years, industrial cities across the U.S.
have watched factories pack up and leave, taking their operations to Mexico or China. But here's something relatively new: increasing numbers of Chinese companies are bringing manufacturing to the United States. Just south of Dayton, Ohio, a Chinese auto-glass maker now plans to open up shop in what used to be a large General Motors truck plant. The announcement is a big deal for this former factory town. Death knell, nail in the coffin, final blow. These phrases are often used to describe
GM's decision to close the Moraine Assembly plant in 2008. Former GM employee Kate Geiger describes what followed: "Buildings closed down. Parking lots growing up with weeds. For sale signs. You know there's a McDonald's that been closed for 20 years and they've never done anything with it." Geiger works as a graphic designer now—and here in her office you can actually see the corner of the mostly empty GM plant through the window. But, at a recent news conference, Ohio Gov. John Kasich introduced Fuyao Auto Glass, China's biggest windshield maker, which announced it will purchase about 1.4 million square feet of the former GM facility. "We're now beginning to see some
really good news
for the Dayton area," Kasich said.
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15. FT - Matin Wolf: The challenges of a post-crisis world
Nations must nurture recovery and promote reform. Co-operation and communication should be the order of the day.
FT Back to Top
16. BBC: Battle to secure train tickets home for Chinese New Year
Jia Wubin is currently enjoying quality time with his son, 19, and father, 70. For this to happen, he travelled 17 hours on the train before he finally made it to his home in Shanxi province. This is the third year the 43-year-old construction worker made the long journey home from Beijing ahead of the Chinese New Year at the end of January. For many people in China, travelling home for the Chinese New Year is a bittersweet experience. It is estimated that there will be 3.6 billion trips made by Chinese migrants during this year's Chinese New Year holiday period. Some media call it "the world's largest human migration".
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