Date: June 18, 2008
Source: China Daily News

China is expected to overtake the US as the world’s leading recipient of corporate investment in the next five years, reveals a study of future global capital flows.

According to the study, China will become the most influential country in IT and telecom, industrial products and mining.

KPMG International has come to these conclusions by surveying over 300 of the largest multinational companies in 15 countries, plus representatives of private equity and sovereign wealth funds.

“Our survey shows corporate investors are already planning their responses to a shift in global economic power, after a period when the US has had a disproportionately high share of global investments. The majority of the people surveyed saw the next five years to return to more normal patterns of investment,” said Sue Bonney, head of tax for KPMG’s Europe, Middle East and Africa region.

Some 51 corporate investors surveyed are considering investing in China this year, while the number increases to 72 in 2013 and 2014, compared with about 69 considering investing in the US in 2013 and 2014. Though still drawing a very high proportion of global investments, the US is still placed behind China.

The US is also expected to be dislodged from its dominant position in mining, industrial products and IT-telecom sectors, with China taking the first place in each of these. The survey showed a trend of investments moving away from the US, Japan, Singapore and the UAE, and a big increase in investment flows into Brazil, Russia, India and China (the BRIC nations).

“The BRIC economies are viable alternative places to invest, primarily taking away funds from the US economy. A roughly equal balance of economic power is being established between the Americas, Europe and Asia-Pacific, which would indeed herald the beginning of an entirely new global economic game,” Sue said.

Earlier in March, PricewaterhouseCoopers LLP said China could overtake the US by 2025 to be the world’s largest economy and is anticipated to grow to about 130 percent the size of the US by 2050.

In the report titled “The World in 2050: Beyond the BRICs”, PwC said it is still upbeat about China, India, Brazil, Mexico, Russia, Indonesia and Turkey.

Date: June 17, 2008
Source: China Daily News

Beijing Capital International Airport is building double fences around the complex and installing high-tech devices to thwart terrorists during the Olympic Games.

The fences will add up to 34.8 km, roughly the length of Beijing‘s Second Ring Road, and will prevent terrorists from breaking onto the runways, taxying area and control towers, the Civil Aviation Administration of China (CAAC) said on its website yesterday.

Covert police booths will be built along the fences to look for trespassers, and steel barriers will be put on manholes that lead to sewers running under the flying area, it said.

All windows facing the flying area, except those in the terminal buildings and maintenance garages, will be covered with steel window guards.

The entire project is expected to be completed by the end of this month.

The airport is introducing high-tech devices, too, to monitor the flying area, the website said, without giving much details. One of the devices, however, can identify vehicles passing through the airport and scan their undercarriage to prevent unwanted entries.

These “digital, intelligent devices” will make the capital airport “one of the world leaders in high-tech security measures”, it said.

Earlier, Zhang Zhi, deputy director of the airport police department, said his force will be equipped with advanced bomb detecting, moving and disposal devices, X-ray machines and anti-riot robots, and will set up checkpoints on highways leading to the airport to check suspicious people and vehicles.

Railway safety

In a related development, the Ministry of Railways said yesterday that officials must make providing safe and sound transport during the Games their top priority.

Railway transport must be “absolutely safe”, the ministry said in a statement on its website, urging officials to learn from the recent train accident in East China.

A high-speed train from Beijing to the coastal city of Qingdao derailed and crashed into another train in Shandong Province on April 29, killing 71 passengers and injuring 416.

The ministry said passenger flow to six Olympic host cities of Beijing, Shanghai, Tianjin, Shenyang, Qinhuangdao and Qingdao, especially on the Beijing-Tianjin and Beijing-Shanghai routes, would rise sharply during the Games.

Date: June 13, 2008
Source: China Daily News

BEIJING — China‘s auditing authority said Thursday it had so far found three cases of the illegal use of quake relief funds involving nearly 300,000 yuan (US$43,478).

The findings were published on the website of the National Audit Office (NAO) as the first document about audit results involving the huge relief funds for regions hit by the massive earthquake in southwestern China exactly a month ago.

The NAO said malpractice was found in a local office of the All-China Federation of Industry and Commerce (ACFIC) and a branch of the Industrial and Commercial Bank of China in Mianyang, one of the worst-hit areas.

The local non-governmental industry and commerce association in Anyang, Henan Province, was found to have used 271,100 yuan from donations without authorization to buy relief goods.

About 41,500 yuan was spent on apparel purchased from the younger brother of an ACFIC official and fake invoices were presented along with the goods. Auditors discovered cast-offs among a batch of clothes dispatched by the official to Guangyuan, Sichuan Province.

The NAO said the local government of Anyang had started investigating the issue so that relevant people could held responsible.

The Fucheng ICBC sub-branch in Mianyang was found to have bought 56 pairs of Nike sneakers, worth 28,500 yuan, for its employees with relief funds. Invoices stated they had bought umbrellas and raincoats.

The branch had returned the misappropriated funds, the NAO said.

The third case noted by the NAO involved people stealing money in the name of quake relief funds by sending text messages to cell phone users asking them to remit donations into specific banking accounts.

The NAO said it had brought in the public security departments to do the investigations and some bank accounts had been frozen by the police.

The national auditor said it would publish auditing results regularly every month following Thursday’s move, which was meant to make results open to public scrutiny as soon as they made some progress.

The government disaster relief fund had reached 23.61 billion yuan as of Thursday at noon, while domestic and foreign donations totaled 44.85 billion yuan in cash and goods.

The State Council had asked the audit offices to track both government departments and non-governmental organizations as to their handling of government funds and donations and publicize the results regularly.

Date: June 12, 2008
Source: China Daily News

BEIJING — China‘s currency, the yuan, Thursday ended a short-lived downward adjustment to break the 6.91 mark, setting a new high against the US dollar since the country depegged its currency from the greenback in July 2005.

On Thursday, the central parity rate of the yuan, or Renminbi (RMB), was set at 6.9015 yuan against the dollar, according to the China Foreign Exchange Trading System. The reference rate was up 194 basis points from the previous trading day level.

The yuan has risen more than 5.5 percent against the US dollar so far this year, in comparison with the 6.9-percent gain last year, and has broken its own record high value 43 times.

Analysts attribute the increase to rising oil prices on the global market after the United States announced a reduction in its crude oil storage, dampening the upward trend of the US dollar and making non-dollar currencies to rebound.

Despite economic slowdown on weaker exports, Chinese authorities would continue to allow gradual appreciation of the yuan against the dollar to  tame inflation, Chu Jianfang, a senior analyst with CITIC Securities said.

According to Customs data released on Wednesday, China‘s monthly trade surplus dropped to 20.2 billion US dollars in May, down 10 percent from the same month last year.

The export growth rate was 0.6 percentage points lower than May last year, whereas the import growth rate was 20.9 percentage points higher.

On Thursday, the RMB lost 200 basis points against the European currency to 10.7225 yuan for one euro and 66 basis points against Japan‘s currency to 6.4485 yuan for 100 Japanese yen.

Source: China Business Review
Date: June 11, 2008

The World Bank has announced that China is now the world’s second largest economy, only surpassed by Japan in purchasing power. The Chinese economy grew 10.6 percent during the first quarter of 2008, slightly more than the first three months of 2007. Experts blame the severe winter storms and the troubled American economy for the slowdown. China’s imports rose more than 28% during the first quarter with a corresponding 11% decrease in the trade surplus. The value of exports grew more than 21% and the domestic gross.

Date: June 10, 2008
Source: China Daily News

When Chongqing-based magazine New Travel Weekly featured the May 12 earthquake, it maintained its popular themes of glamour and sex.

Scantily clad models draped themselves over the rubble, bloodied bandages as accessories to their bikinis, tight t-shirts and mini-shorts, under the headline “Reborn from the Ruins”.

The public reaction to this display of questionable taste and insensitivity was immediate.

The outcry at the newsstands quickly reached the city government, which suspended the magazine for “rectification”, and the magazine president and chief editor lost their jobs for “unethical reporting”.

It was an extreme case of poor journalistic judgment, but New Travel Weekly was among the few media whose insensitive reporting during their coverage of the quake raised concerns.

The Chinese media has reacted to the disaster with unprecedented openness and determination to bring the full extent of the catastrophe to the public.

“The earthquake has been a test for reporters,” Yu Guoming, deputy dean of the School of Journalism at Renmin University, said.

“The quake has proved reporters are responsible, compassionate and they put their own safety aside to bring reports to their audiences.”

However, Yu said “just as a test shows one’s weakness, the earthquake also revealed weak journalistic ethics, the inexperience and naivety of some reporters when faced with an event of such magnitude.”

Jiang Min, a policewoman in the city of Pengzhou near the epicenter of Wenchuan, who lost 10 relatives, including her 2-year-old daughter and her parents, at first became a symbol of fortitude in the face of overwhelming tragedy – then later became the face of media exploitation.

Despite her loss, Jiang Min continued relief work with other police and soldiers.

But in one television report, the reporter pressed her to answer the question, “Why are you still here?” A drawn-looking Jiang was pounded with further questions, such as, “Do you think of your own parents and daughter when you see the rescued old people and the kids?”

“I was furious when I saw the report on TV,” Ma Jianan, who works at an advertising company in Beijing, said.

“The reporter was so insensitive to Jiang’s feelings and had little professional ethics.”

Later, Jiang was interviewed several more times by television programs.

Television and radio stations, newspapers and magazines sent hundreds of reporters to Sichuan within hours of the earthquake. They filed stories from the front lines of the rescue and relief effort in Sichuan. Television stations broadcast live news programs of rescue work and newspaper and magazines published special copies reporting on the quake.

But audiences have also been critical of journalists who did not measure up to their expectations, like the CCTV reporter who filed a report on the third day after the quake from a hotel room in Chengdu, rather than from Dujiangyan.