1. NYT: China to reward localities for improving air quality
Chinese officials announced on Thursday that they were offering a total of 10 billion
renminbi, or $1.65 billion, this year to cities and regions that make “significant progress” in air pollution control, according to a report by Xinhua, the state-run news agency. The announcement came from the State Council, China’s cabinet, after it held a meeting on Wednesday to discuss, among other issues, the country’s immense air pollution problem. “Control of PM2.5 and PM10 should be a key task,” the State Council said in a statement, referring to two kinds of particulate matter that are deemed harmful to human health. The meeting was presided over by Li Keqiang, a member of the Communist Party’s ruling Politburo Standing Committee and China’s prime minister.
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2. FT: China offers financial incentives to clean up pollution
China is to create a fund to help tackle air pollution in heavily affected cities, with Rmb10bn ($1.6bn) allocated to help industry comply with new environmental standards. The move comes as a comparison of the ecology of 40 major international cities by researchers at the Shanghai Academy of Social Sciences ranked Beijing second to last. “The pollution index nears extreme levels, and is near a level that is no longer livable for human beings,” the report concluded, according to state media on Thursday
.The central government funding is a recognition that addressing air pollution – a flashpoint for discontent among relatively prosperous
urbanites – requires addressing provincial cities’ reliance on heavy industry for jobs and economic growth. In 2013, China revealed a plan to cut air pollution in the smoggy North China plain, Shanghai and Guangdong in the south, while encouraging the development of coal-based industry in the arid and impoverished west.
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3. WSJ: China's rebound invites scrutiny of data
Suspicions renewed
of 'Chinese companies 'over-invoicing' outbound goods.
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4. WSJ - Editorial: China's wonky trade data
The surge in China's January exports by 10.6% year-on-year gave the markets a welcome surprise Wednesday, since analysts had predicted almost zero growth. The implication is that the animal spirits of global commerce are healthier than previously thought. We hope that's right, but there are reasons not to read too much into this data. The first and most obvious caution is that China's January and February statistics are especially unreliable due to the Chinese New Year holiday. This year it fell on Jan. 31, so some factories were idled in both months. Government statisticians seasonally adjust the numbers, but since they seem to do it differently every year this only adds more uncertainty. The safest course is to wait for the February numbers and average the two months. The two big spikes in the short-term interbank lending rate last year in June and December were also the result of technocrats at the PBOC trying to rein in bank lending. But whenever these measures start to bite, somebody in Beijing gives the order to reopen the lending faucets. Chinese investors know that making money depends on getting in front of government policy, so they are acutely aware of which way the wind is blowing at any time. As the debate continues behind the vermilion walls of Zhongnanhai, the leadership compound in Beijing, those investors move money in and out of the country. As a result, the real economy gets whipsawed and so do the investment banking analysts who are paid to predict China's trade data.
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5. Bloomberg: China said to target 7.5% export growth in 2014
The Chinese government is targeting export growth of about 7.5 percent in 2014, three people with direct knowledge of the matter said, setting sights lower than last year’s pace. The goal, based on the U.S.
dollar value of sales, has been distributed to economy-related ministries and local governments to serve as an internal guideline for planning, said the people, who asked not to be named as they aren’t authorized to speak to the media. Overseas shipments rose 7.9 percent in 2013, according to official data, as the government targeted 8 percent growth in exports and imports combined. The target may reflect Ministry of Commerce concerns last month that trade growth won’t be faster than in 2013 amid an unstable global recovery. The strength of exports will help determine the pace of expansion in the world’s second biggest economy that analysts see slowing to a 24-year low of 7.4 percent this year. “As the European and U.S.
economies show signs of warming up, uncertainties remain for China’s export outlook, such as the recent turmoil in emerging markets,” said Liu Xuezhi, a Shanghai-based analyst with Bank of Communications Co., China’s fifth-largest lender.
A COSCO Pacific Ltd.
container ship enters the Port of Long Beach in Long Beach, California, U.S.
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6. Reuters: Kerry to take harder U.S. line on Asia maritime disputes to China
The United States fired a shot across China's bow a week ago by taking a tougher stance on maritime disputes in East Asia, a message Secretary of State John Kerry will amplify in Beijing this week. The high tensions in Asia over Beijing's territorial claims in the East China and South China Seas will be near the top of Kerry's agenda when he meets senior Chinese officials on Friday. He will also discuss North Korea and climate change. Kerry's top aide for East Asian and Pacific affairs, Assistant Secretary of State Danny Russel, drew a
harder U.S.
line last week on a series of maritime disputes between China and its neighbors. "It (Russel's testimony) certainly indicates a sharper tack in terms of the concerns we have and the steps we want China to take" on maritime disputes, said a senior State Department official. "Secretary Kerry will continue to press the Chinese to refrain from provocative actions and rhetoric and caution against the provocative nature of some of China's actions."
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7. WSJ: Obama visit to Philippines may jump-start base talks
U.S. President Barack Obama's arrival in the Philippines this April should lend fresh impetus to faltering talks over the deployment of U.S.
military forces to Subic Bay, a strategic location overlooking the disputed South China Sea. The bilateral discussions began last August, but are understood to have stalled over the status of new "temporary" facilities, which would house visiting U.S.
forces without contravening a Philippine constitutional ban on permanent foreign military bases in the country. The latest, fifth round of talks on a proposed "framework agreement" on bilateral security ended on Jan. 31 without resolution, the U.S. Embassy in Manila said. Manila will be the president's fourth and final stop on his coming regional tour, the White House confirmed on Feb. 12, after Japan, South Korea and Malaysia.
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8. CNN: Big boots to fill: The new U.S. ambassador to China
Washington is sending a veteran politician, not a career diplomat, as its new ambassador to China. Six-term Democratic Party Senator Max Baucus, 72, will soon take up his diplomatic post in Beijing, replacing Gary Locke, who is stepping down to rejoin his family in Seattle. Given his relative lack of China experience, some, in both the U.S.
and in China are wondering if Baucus is a good choice. He has made eight trips to China and has met with
to Chinese leaders, but he is not considered a China hand. His strong suit is his extensive experience when it comes to trade issues. In his new role, he is expected to press China to play by internationally accepted rules regarding currency, intellectual property, labor and human rights and free trade. His past trade successes involving China have also been noted. "In the 1990s, he played a pivotal role in China's accession to the World Trade Organization and normalizing trade ties between our countries," said Xie Tao, a professor at Beijing University of Languages and Culture. "To appoint a free trade supporter and a veteran senator can be viewed as a positive move from the US administration to encourage more trade."
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9. SD: China will spend billions to reward cleaner companies
China is to set up a 10 billion yuan (US$1
.65 billion) fund to fight air pollution, offering rewards for companies that clean up their operations, as a more affluent urban population turns against a growth-at-all-costs economic model that has poisoned much of the air, water and soil. Authorities have issued countless orders and policies to try to clean up the country, invested in various projects to fight pollution, and empowered courts to mete out the death penalty in serious cases. But enforcement of
rules has been patchy at local level, where authorities often rely on the taxes paid by polluting industries. At a State Council meeting yesterday, Premier Li Keqiang said the central government would set up the fund to “use rewards to replace subsidies to fight air pollution in key areas.”
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10. SD: Shanghai to improve tax policies for FTZ
Shanghai fiscal and tax authorities are to study tax policies for overseas investment and offshore businesses to bring a boost to the city’s free trade zone, officials said yesterday. Song Yijia, head of the Shanghai Finance Bureau, said the bureau’s prime task this year is to promote the FTZ by improving tax policies and opening up auditing services for foreign investment. “We will learn from international practices and actively cooperate with state departments to further study and improve tax policies related to Shanghai’s pilot free trade zone, such as foreign equity investment and offshore businesses,” Song said at the city’s annual fiscal and tax conference.
Gu Ju,
head of Shanghai’s tax authorities, said the bureau will seek central government support in terms of tax policies to encourage such businesses to open in the zone. This initiative is part of the tax bureau’s mission to improve tax collection and incentive policies in the zone in order to facilitate cross-border trade and investment.
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11. CD: Sino-US accountancy is at crucial level with SEC probe
Analysts have urged China and the US to set up a framework to address cross-border accounting issues. It is a subject that has become increasingly significant on the bilateral diplomatic agenda after US regulators said they were set to punish the Chinese affiliates of the four largest accounting firms for blocking investigations of possible fraudulent accounting. James Lee, regional director of the Institute of Chartered Accountants in England and Wales for China, wrote in an article on Tuesday that it is in the long-term interests of both the US and China to do so, "especially as China is expected to provide
increasing capital funding for companies from the US and elsewhere once it develops its international financial center in Shanghai". The four largest accounting firms — Deloitte Touche Tohmatsu CPA Ltd, Ernst & Young Hua Ming LLP, KPMG Huazhen and PricewaterhouseCoopers Zhong Tian
CPAs Ltd — have until Wednesday to attempt to reverse a US Securities and Exchange Commission administrative judge's decision to bar them for six months from auditing Chinese companies listed in the US. PR officers with the firms said on Monday they could not confirm the date or the progress of the appeal, as there have been no updates on this matter.
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12. Reuters: Microsoft denies global censorship of China-related searches
Microsoft Corp denied on Wednesday it was omitting websites from its Bing search engine results for users outside China after a Chinese rights group said the U.S.
firm was censoring material the government deems politically sensitive. GreatFire.org, a China-based freedom of speech advocacy group, said in a statement on Tuesday that Bing was filtering out both English and Chinese language search results for terms such as "Dalai Lama", the exiled Tibetan spiritual leader whom Beijing brands as a violence-seeking separatist, charges he denies. Microsoft, responding to the rights group's allegations, said a system fault had removed some search results for users outside China. The company has in the past come under fire for censoring the Chinese version of internet phone and messaging software Skype. "Due to an error in our system, we triggered an incorrect results removal notification for some searches noted in the
report but the results
themselves are and were unaltered outside of China," Stefan Weitz, senior director for Bing, said in a statement emailed to Reuters on Wednesday. Weitz did not say if the error had been fixed and Microsoft officials in Beijing declined to elaborate.
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13. WSJ: China vehicle sales rose 6.4% in January
Included a 7% rise in passenger-vehicle sales, to 1.85 million.
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14. WSJ: Uber sets its sights on China
U
.S
.-based company will challenge dozens of other local
ride-fetching
smartphone apps.
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15. WSJ: Why China’s falling out of love with the Oreo
China’s love affair with the Oreo is crumbling.
Mondelez International Inc., the maker of Oreo cookies, Cadbury chocolates and Ritz crackers, announced Wednesday that its revenue was down in the fourth quarter and for the full year in part because China’s appetite for the crème-filled sandwich cookie
fell. Distributors had excess biscuit inventory, Mondelez reported. Oreo has been one of the country’s most popular cookie brands since it launched in China in 1996, with Mondelez holding the largest market share in China’s biscuit segment at 16%, according to market-research firm Euromonitor International. Cookie sales in China have more than tripled from 2003 to 50.4 billion yuan, or roughly $8.3 billion, last year. But industry watchers say China is one tough cookie, and Mondelez is facing bigger obstacles to
growth here. Consumers in the world’s most populous country are curious and willing to try out new things, but that means as more brands enter the market, there are more snacks to distract them from Oreos, said Ben Cavender, a senior analyst at consultancy China Market Research in Shanghai. Mr. Cavender said most companies are finding that Chinese consumers bore easily, so it’s key for food makers to innovate and introduce new brands. ”You have to keep the market constantly hooked,” he said, noting that changing the packaging often isn’t enough.
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