12/06/2009 Source: Xinhua

China suffered 101 trade remedy investigations launched by 19 countries and regions by November 3 this year, according to the Ministry of Commerce (MOC).

These investigations, targeting Chinese products, involved more than $11.68 billion, said Wang Chao, the MOC assistant minister, at a seminar recently held in Beijing.

“The world financial crisis has led to a sharp rise of trade protectionist atmosphere worldwide. China now is in the center area of world trade friction,” he said.

According to Wang, trade protectionism against Chinese products is expanding from goods trade to other fields, such as currency exchange rate, service trade, intellectual property rights, and investment.

He suggested that China improve its trade remedy system, enhance ability to deal with trade friction to safeguard industry safety in coping with challenges in the “post-crisis” period.

Under the World Trade Organization rules, members may appeal to trade remedy measures, including levying anti-dumping, anti-subsidies taxes, when encountering unfair trade practices. But this has been frequently used as a tool to carry out trade protectionism by some countries amid world economic downturn.

12/01/2009 Source: www.chinaview.cn

After four years in office, Canadian Prime Minister Stephen Harper will visit Beijing this week — a trip many influential Canadians believe is long overdue.
To gauge Canadians’ views of the Prime Minister’s trip to China, Xinhua recently interviewed leading Canadian academics, former politicians and other opinion shapers.

A SIGNIFICANT TRIP

All the interviewees agree that this is a very significant trip, for both China and Canada, given China’s stature on the world stage continues to grow.

“I think it is extremely important that China and Canada reenergize their relationship,” David Emerson, Canada’s former International Trade Minister, told Xinhua during a phone interview. He called the visit “an important milestone.”

Former Foreign Affairs and International Trade Minister Pierre S. Pettigrew said the delay in making the visit was a bad start but the prime minister was correcting his mistakes.

“It took the prime minister a long time, almost four years in office before visiting China,” he said.
However, Barbara McDougall, Canada’s former Secretary of State for External Affairs in the early 1990s, said the timing of the Prime Minister’s visit was good. “I think it will be a comfortable and productive meeting,” McDougall said.

Peter Harder, President of the Canada-China Business Council, said it was an interesting moment for Harper’s visit, given he was the chairman of the upcoming G8 and co-chairman of the G20 summits. Harder said the most important “deliverable” of this visit was that it took place.

“Traditionally, China and Canada have had very good relations, and this goes back a long time,” said Gregory Chin, who served in Canada’s embassy in Beijing from 2004 to 2006. This is an opportune moment for Prime Minister Harper and Chinese leaders to strengthen their personal relationship.

Jean Michel Laurin, Vice-President for Global Business Policy at Canadian Manufacturers & Exporters, said he expected the PM’s visit to help “Canadian companies and Chinese companies do more business.”

TRADE, CLIMATE CHANGE, ENERGY

The observers said trade, climate change, and energy cooperation were likely to be among the major areas of discussion.

Nevertheless, given the world economic turmoil since late last year, the state of the global economy would also be on the agenda of both leaders.

“China has been leading Asia into economic recovery, and is becoming a more important partner to both the United States and Canada. The economy will certainly be the (most) important topic (during the visit),” said Pettigrew.

Further fuelling these discussions of the economy is the fact that next summer, as Peter Harder noted, Canada will host two key international summits, the G8 and G20. China is an influential member of the G20.

Dr. Alan Alexandroff at the University of Toronto said it would be important for Prime Minister Harper to ask for President Hu’s views about what ought to be on the agenda at the G20, so Canadians could learn more about China’s priorities and interests.

THIS IS NOT A ONE-OFF VISIT

One question that always hovers over trips such as Harper’s is what evidence will observers weigh in order to judge whether the visit was successful?

“No doubt, the Chinese leaders and the Canadian government will do everything they can to make this meeting successful,” said Harder of the Canada China Business Council. “I hope they would commit to the idea that this is not a one-off visit but the first in a series of visits. The two leaders can instruct their ministers and government staff to enhance the Canada-China investment relationship.” This could be a theme for further interactions and talks at future meetings.

“If I were planning this trip, I wouldn’t have high expectations in terms of particular accomplishments. I would have expectations about rebalancing bilateral relationships in a positive way, so that the two countries can work together on global issues,” said McDougall, who used to hold a variety of ministerial level positions in Canadian government.

Emerson said the meeting sent a signal that Canada and China were continuing to build on their friendship and partnership that had existed between the two countries for many years. He said: “Ties cooled down in recent years. And it’s time to get back down to building up friendship again.”

In April, Canada’s Minister of International Trade, Stockwell Day, announced that Canada would open new trade offices this year in Nanjing, Qingdao, Shenyang and Wuhan.
China-Canada economic ties have evolved from small, simple-item commodity trade into an all-dimensional cooperation covering trade in commodity and services, capital flows and personnel exchanges.

According to Chinese statistics, two-way trade increased more than 100 times from 150 million U.S. dollars in the early days of China-Canada diplomatic relations to 15.5 billion dollars in 2004.

12/01/2009 Source: China Law & Practice

As 2009 nears its end, China’s merger-control regulator shows no sign of slowing down, issuing two important regulations covering the reporting of concentrations. But it appears to have taken
a step backwards by completely removing a crucial definition from one of the regulations.

The anti-monopoly bureau of the Ministry of Commerce (Mofcom) issued the Measures for the Review of Concentrations of Business Operators (?????????) and Measures for the Reporting of Concentrations of Business Operators (?????????) on November 27 2009. Both take effect on January 1 2010.

Lawyers who had hoped the finalised measures would add more detail are instead finding themselves disappointed and facing increased uncertainty: an important Article defining what constitutes “acquisition of control” over an undertaking has been entirely removed from the second set of measures.

“The definition is critical, because a transaction other than a straightforward merger is only notifiable if it constitutes such an acquisition of control,” said JSM senior associate Gerry O’Brien.

The previous draft of the Measures for the Reporting of Concentrations of Business Operators defined acquisition of control as occurring in situations such as: where 50% or more of the voting shares or assets of an entity were acquired; or where a party obtained rights to appoint directors or key executives of a target, among others. The uncertainty created by the removal of the definition means companies may need to consult with Mofcom before going ahead with many deals, even those that concern only minority share acquisitions.

The finalised Measures for the Reporting of Concentrations of Business Operators are also missing guidance on joint ventures (including if and when joint ventures constitute concentrations under the AML).

“Without formal rules limiting the kind of transactions covered by merger review, Mofcom may be tempted to argue that acquisitions of minority shareholdings and limited control rights, as well as the creation of joint ventures of a more limited nature, have to be notified where the thresholds are met,” Linklaters’ antitrust team wrote in a recent client alert.

The move also gives Mofcom more discretion to investigate transactions in which it is particularly interested.

11/24/2009 Source: Xinhua

An official of China’s State Administration of Radio, Film and Television said in Xiamen Tuesday that it would enforce the eradication of unlicensed websites offering online videos.

Tian Jin, deputy director of the administration, said at a forum on online media that the move would secure the healthy development of the Internet for the country’s 200 million or more online video service users.

Tian said online video programs had become a new platform for information transmission in recent years, and he praised the positive roles of major media websites, such as xinhua.net and cctv.com.

But some videos circulating on the Internet contained obscene or violent content, he said.

He did not say when exactly the crackdown would start.

Wang Chen, director of the Information Office of the State Council, said at the same forum that China would step up regulation of online media as Internet safety issues were increasingly “prominent.”

“Undesirable” content had “severely undermined” the physical and psychological health of minors, Wang said.

Wang urged online media to tighten self-discipline and raise their sense of responsibility to build a healthy, civilized and orderly online environment.

The Chinese government has launched repeated campaigns to crackdown on websites and publications with obscene content.

China has up to 360 million Internet users nationwide and nearly 200 million mobile phone users obtain Internet services from their phones.

11/24/2009 Source: Xinhua

China’s banking regulator on Monday asked the country’s commercial banks to better manage risks and avoid year-end volatility in lending.

Commercial banks should ensure that lending increase was kept in a stable and sustainable pace, the China Banking Regulatory Commission (CBRC) said.

Financial institutions with low capital adequacy ratio and no practical remedy plans would face restrictions in various sectors such as overseas investment, branch increase and business expansion, it said.

The CBRC called for enhanced inspections in financial system to detect problems after surging loan extends between the fourth quarter last year and the second quarter this year.

In October, new yuan-denominated loans in October were down 51 percent from September, according to statistics from the People’s Bank of China, the central bank.

China’s yuan-denominated loans in the first 10 months this year totaled 8.92 trillion yuan (1.31 trillion U.S. dollars), far exceeding the government’s target of 5 trillion yuan for this entire year.

The CBRC denied media reports which claimed that the banking regulator would impose lending controls on commercial banks and require big lenders to increase the capital adequacy ratio to 13 percent, compared with the current 11 percent on average.

“There is no such requirements from the CBRC,” it said in a statement on its website.

11/20/2009 Source: China Daily

China Mobile, the country’s largest wireless carrier, is coming under pressure to shut off access to pornography through its cell phone network.

The move comes as online sites accessible only through mobile phones are becoming a popular new method for distributing porn, since the technology makes it harder for government to track and shut them down.

In the process however, wireless carriers are making extra money off the fees they charge the companies.

“The pornographic websites along with the carriers form an industry chain producing giant profits, escaping government’s regulations on the Internet,” said Li Qiang, a postgraduate student from the Chinese Academy of Sciences.

Li, a China Mobile user, became aware of the pornography in mobile phones in March this year when he clicked an ad link in a text message that led him to a site containing pornography.

Wireless carriers are the major beneficiaries of pornographic sites, Xinhua reported, citing officials from the Ministry of Public Security.

Carriers charge subscribers for wireless access to the Internet. They also take a cut of the fees for extra items such as pictures and video clips.

Attention has recently been focused on carriers like China Mobile, who are benefiting from the illegal businesses.

Media coverage of the pornographic websites has prompted China Mobile to block access to these sites and scrap contracts with the companies exposed by media reports, a company official said yesterday.

“I can’t be more worried wondering what my child will see when he logs online with his mobile phone,” said Zhou Yan, a citizen in Beijing.

There are nearly 650 million cell phone users in China, offering distributors of porn a huge and profitable market.

“Profits are the biggest incentive for cell phone websites to carry porn,” said Shi Xiansheng, assistant to the secretary-general of the Internet Society of China.

It costs only 1 yuan (14 cents) to register a domain name and 251 yuan annually to rent a storage space of three gigabytes in a server, according to the industry group.

But proceeds from running a website with pornographic content can amount to as much as a thousand times the costs of running it.

11/20/2009 Source: Xinhua

Low interest rates, especially the deposit rate, would discourage financial institutions from providing adequate financing to the real economy, Zhou Xiaochuan, governor of the People’s Bank of China (PBOC) said Friday.

He told the 2009 Business Week CEO Forum in Beijing that low interest rates would reduce pressure on financial institutions, removing incentives to actively provide financial services to the real economy.

“China has set the interest rate at about 2 percent to press Chinese financial institutions to lend money to real economy for gains and reduce cash stockpiles,” he said.

Zhou was referring to the low-interest policies of some countries and regions to fight the lingering economic downturn, said Tan Yaling, an expert with the China Institute for Financial Derivatives at Peking University.

U.S. Federal Reserve chairman Ben S. Bernanke said last week that U.S. interest rates had remained very low for an extended period and would likely stay that way for some time.

He reaffirmed the Federal Reserve’s stance of keeping rates low for an “extended period” to sustain economic growth.

The Federal Reserve has kept its benchmark rate near zero since last December to spur an economic rebound and combat the worst financial crisis since the 1930s.

The central banks of Europe and Japan also said that they would keep their key interest rates at 1 percent and 0.1 percent, respectively.

China’s monetary policy should be in line with its long-term economic strategy and focus on the domestic development, said Tan.

The one-year benchmark deposit rate stands at 2.25 percent among Chinese banks. The rate has been unchanged since December last year when China’s central bank cut loan and deposit rates by 0.27 percentage points.

In efforts to stimulate the economy following the global financial crisis, the central bank cut the interest rates five times in four months from September to December last year.

U.S. Ambassador to China Jon Huntsman and Nobel Economics Prizelaureate Robert A. Mundell attended the forum.