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EditorialRCSC needs to be

encouraged

Editor

Despite the fact that the Red Cross Society of China(RCSC) has put in a lot of efforts during the relief oper-ations in the recent earthquake in China, rumors have

continued to sully the image of the RCSC, hampering its abilityto fulfill its mission.

It remains a fact that as the 7.0-magnitude earthquakeshook Ya'an City, Sichuan Province, the RCSC moved quicklyto launch disaster relief work and initiate a push for public do-nations. It also put out collection boxes on streets throughoutChina. However, passersby largely ignored the RCSC’s collec-tion boxes and Instead, many opted to open their wallets toprivate charity groups, showing what little faith the public hasin the RCSC. The Civil society strongly applauded the trans-parency and orderly handling of donations of the One Foun-dation, a private charity group initiated by kung fu film star JetLi and promoted online by celebrities.

In an eye opening incident, the RCSC received over140,000 Yuan (22,661 U.S. dollars) in donations, while the OneFoundation took in over 10 million Yuan the same day.

In addition to its past problems, a fresh round of rampantrumors isn't helping the RCSC's cause. Rumors recently circu-lated online claimed the organization demanded that theRed Cross in Taiwan pay a hefty "admission fee" before volun-teers from the island could offer assistance.

Public supervision is certainly needed for charity organiza-tions. However, deliberately denigrating the RCSC will hamper itsdisaster relief work and impede the development of the country'scharity sector. As the largest organization of its kind in China, theRCSC, which boasts over 98,000 sub-organizations and more than26 million members in China, plays a major role in providing hu-manitarian assistance throughout the country. Despite its scaleand the role it plays, public hostility toward the RCSC and othergovernment-sponsored charities solidified after a series of scan-dals pointed to embezzlement and corruption among the organ-izations' employees.

As an dispensable part of China's social assistance sys-tem, charity work should be strengthened. Whether govern-ment-sponsored or not, charity organizations providehumanitarian aid for vulnerable groups in need.

Promoting the development of private charity groupsdoes not mean weakening or even denying the roles that of-ficial groups like the RCSC play. Rumors slandering the RCSCand complaints about the group's official background are, infact, nothing but a kind of bias.

We believe that RCSC needs to be encouraged as suchcharity organization with outstanding profile and amazing net-work are very vital for China to extend relief and rescue oper-ations during natural calamities.


May 06, 12, 2013

Cover Story

In-car screens found to be dangerous

Despite its recent quake-relief efforts, rumorshave continued to sully the image of the RedCross Society of China (RCSC), hampering itsability to fulfill its mission.

SHANGHAI-Safety hazards posed by Shanghaitaxis' in-vehicle advertising screens havesparked concerns in other cities, as expertscalled for a nationwide check of the devices.

04

Supervise, don't smearRed Cross

06

China saw outstanding real

estate loans accelerate as

of the end of March from

three months earlier while

industrial lending slowed,

official data showed

Wednesday.

in this issueMagazine_Layout 1 5/7/2013 8:26 PM

in this issueHong Kong

stocks end

0.15%

higher

S.Korea's industrialoutput reduces onexternaluncertaintiesSEOUL -- South Korea's industrial output re-duced last month as external uncertaintiessuch as slow growth in major economiesweighed on the export-driven economy, agovernment report shows.

China Telecomends slide in profitSHANGHAI-Net profit rose 10 per cent year onyear in the first quarter at China Telecom, theworld's biggest fixed-line network operator, to4.7 billion Yuan (HK$5.9 billion).

Yum'sprofitshurt bybird fluscare

09 12


SHANGHAI-Safety hazards posedby Shanghai taxis' in-vehicle ad-vertising screens have sparkedconcerns in other cities, as expertscalled for a nationwide check ofthe devices.The Shanghai Municipal Transportand Port Authority has said it hadfound dangers in monitors builtinto the back of the front passen-ger seat's headrest, followingdeaths or injuries allegedly causedby the screen, which is around 20cm long and 15 cm wide.At its request, iTaxi Media, a smallplayer in the city's on-board ad-vertising screen market, has re-moved all of its products from themore than 2,000 cabs owned bythe Blue Union Taxi Co for failingthe national safety standard, theauthority said.Although Touchmedia, thebiggest player in the market, metthe standard, it has been orderedto improve its products and installcushioned surfaces around thescreens it has in 22,000 taxis byMay 20.The transport authority orderedthe city's taxi operators to stop in-stalling new advertising screens orrenewing contracts with advertis-ing platform providers.The screens' providers were re-quired to add safety tips, such ascalling on passengers to wearseatbelts, before broadcasting

other content on the monitors.Transport authority official HuangXiaoyong said that the bodywould closely monitor the stepsTouchmedia takes to implementits order.Safety concerns about the screenscame into the spotlight following anumber of accidents. In the earlyhours of March 12, Lu Hang, 24,suffered from a fractured skullwhen her head bumped againstthe solid surface of an in-vehiclemonitor when her cab crashedinto a roadside barrier.In October, a passenger was killedin a traffic accident and the vic-tim's family claimed the death isrelated to the taxi's monitor. Inboth cases, the victims were notwearing seatbelts when the acci-dent took place.Taxi drivers in the city said back-seat passengers' heads can bumpagainst the monitor if they makean emergency stop.The screens also generate un-wanted noise and can distract thedriver, said cabby Chen Weiming."None of us like the advertisingscreens," he said.The transport authority's order hasfailed to quench the anger ofsome people and generated con-cern among residents in othercities over the safety of screens inthe cabs."Without a safety test, how could

these monitors be installed in thefirst place and who should beblamed?" said a blogger on SinaWeibo.The screens are also common incabs in other cities though theyare not as popular in Shanghai,where around two-thirds of its50,000 taxis have them.In Beijing, around 6,000 taxis, or 10percent of the city's total, havebeen fitted with monitors devel-oped by Touchmedia. In Xi'an,capital of Shaanxi province, 940 ofthe 987 vehicles owned by Tianzi,a major taxi operator in the city,have the screens.Zhu Xichan, a professor at Shang-hai-based Tongji University's Schoolof Automotive Studies, called forstricter supervision of modificationsto vehicles used for public trans-portation.Zhu, a vehicle safety expert, saidsafety tests are only carried out onnew vehicles before they leavethe factory and modifications byusers, such as installing thescreens, are not included in thetest catalogue."There's never an evaluation bythe transport authority or industrysupervisor on whether these mod-ifications are safe," he said.But he added that other safetyhazards, like passengers not wear-ing seatbelts, are much more seri-ous.

04

Society

In-car screens found to bedangerous


05


Society

06

Supervise, don't smear Red CrossBEIJING -- Despite its recentquake-relief efforts, rumors havecontinued to sully the image of theRed Cross Society of China (RCSC),hampering its ability to fulfill its mis-sion.

When a 7.0-magnitude earth-quake shook Ya'an City, SichuanProvince, the RCSC moved quicklyto launch disaster relief work andinitiate a push for public donations.

It also put out collection boxeson streets throughout China.

However, passersby havelargely ignored the collectionboxes. Instead of donating quake-relief funds through the RCSC,many have opted to open theirwallets to private charity groups,showing what little faith the publichas in the RCSC.

Meanwhile, the public has ap-plauded the transparency and or-derly handling of donations of theOne Foundation, a private charitygroup initiated by kung fu film starJet Li and promoted online bycelebrities.

On Saturday, the RCSC re-ceived over 140,000 Yuan (22,661U.S. dollars) in donations, while theOne Foundation took in over 10million Yuan the same day.

In addition to its past prob-lems, a fresh round of rampant ru-mors isn't helping the RCSC'scause. Rumors recently circulatedonline claimed the organizationdemanded that the Red Cross inTaiwan pay a hefty "admission fee"

before volunteers from the islandcould offer assistance.

Taiwan's Red Cross refuted therumor on Monday, saying the re-port was "misleading" and "totallyuntrue."

Public supervision is certainlyneeded for charity organizations.However, deliberately denigratingthe RCSC will hamper its disasterrelief work and impede the devel-opment of the country's charitysector.

As the largest organization ofits kind in China, the RCSC, whichboasts over 98,000 sub-organiza-tions and more than 26 millionmembers in China, plays a majorrole in providing humanitarian as-sistance throughout the country.

Despite its scale and the role itplays, public hostility toward theRCSC and other government-sponsored charities solidified aftera series of scandals pointed to em-bezzlement and corruption amongthe organizations' employees.

One major such scandal oc-curred in 2011 and dealt a majorblow to the RCSC's reputation."Guo Meimei," a purported stafferof an organization supposedly af-filiated to the RCSC, used socialmedia to flaunt her extravagantlifestyle and luxury goods.

After posting photos of herselfcarrying expensive handbags andposing on a white Maserati, neti-zens erupted in anger, speculatingthat she may have embezzled

money from the RCSC to fund herlavish lifestyle.

A third-party investigation saidneither "Guo Meimei" nor her ap-parent wealth had anything to dowith the RCSC. But it also pointedout that grave flaws existed in themanagement of the China Busi-ness System Red Cross Society,one of the RCSC's fund-raisinggroups.

The RCSC announcedWednesday that it will renew theinvestigation into the "Guo Meimeiincident" in May. The renewedprobe will be carried out by an in-dependent third party, without theparticipation of any RCSC staff -- amove the organization hopes canreestablish its credibility amongthe public.

As an dispensable part ofChina's social assistance system,charity work should be strength-ened. Whether government-spon-sored or not, charity organizationsprovide humanitarian aid for vul-nerable groups in need.

Promoting the development ofprivate charity groups does notmean weakening or even denyingthe roles that official groups likethe RCSC play. Rumors slanderingthe RCSC and complaints aboutthe group's official backgroundare, in fact, nothing but a kind ofbias.

Still, the RCSC's public imageproblems are not stopping the or-ganization from playing an active


07

and helpful role in quake relief. Thegroup has donated quake relieffunds and materials worth about66.16 million Yuan and deployed25 rescue teams with 113 vehicles

to quake-hit areas.To rehabilitate its image, there

is no doubt that the RCSC needs toimplement a stricter supervisionsystem and boost transparency,

but neither fabricating rumors norgloating at the organization's plightqualify as behavior that constitutespublic or press supervision.(XIN-HUA)


08

Finance

Hong Kong stocks


09

end 0.15% higher


10

Finance

HONG KONG-- Hong Kongstocks closed up 33. 06 points, or 0.15percent, at 22,580.77. The benchmarkHang Seng Index traded between22,647.59 and 22,488.65. Turnover to-taled 42.86 billion HK dollars (5.52 bil-lion U.S. dollars).

The Hang Seng China EnterprisesIndex fell 48.50 points, or 0. 45 per-cent, to close at 10,785.58.

Two sub-indices gained, with theUtility adding the most by 0. 44 per-cent, followed by the Finance, up0.43 percent. The Commerce and In-dustry and the Properties lost 0.13percent and 0.33 percent, respec-tively.

Banking giant HSBC, which ac-counts for the largest weighting of theHang Seng Index, went up 0.78 per-cent to 84.05 HK dollars, while its localunit Hang Seng Bank closed 0.16 per-cent higher at 128.90 HK dollars.

China Mobile, China's dominantmobile carrier, ended up 0.06 per-cent at 84.15 HK dollars, while an-other Chinese telecom giant ChinaUnicom, slid 0.36 percent to 11.04 HKdollars.

Local bourse operator HKEXdipped 0.54 percent to 129.30 HK dol-lars.

As for local property developers,Sun Hung Kai, HK's largest propertydeveloper by market value, edgeddown 1.14 percent to close at 112.60HK dollars; Cheung Kong properties,owned by billionaire Li Ka-shing, de-creased 0.51 percent to close at116.50 HK dollars.

As for mainland-based financialstocks, China Construction Bank, thecountry's second largest bank whichaccounts for the third largest weight-ing of the Hang Seng Index, rose 1.1percent at 6.45 HK dollars. ICBC, theworld's largest bank by market value,added 0.19 percent to 5.42 HK dol-lars. Bank of China went up 0.28 per-cent to 3.59 HK dollars.

As for energy stocks, China's toprefiner Sinopec lost 0.82 percent to8.40 HK dollars. PetroChina, the coun-try's largest oil and gas producer,ended down 0.51 percent at 9.83 HKdollars. (1 U. S. dollar equals 7.76 HKdollars) (XINHUA)


Finance

12


13

Yum's profitshurt by

bird flu scareCED Monitoring

SHANGHAI-Yum Brands Inc, the biggestforeign fast-food operator in China, said

publicity over tainted chicken and the out-break of bird flu hurt first-quarter earnings

and sales in the country, leading to a 26 per-cent drop in first-quarter profit for the com-

pany that operates KFC and Pizza Hut. Yum, which draws half its revenue from

China, reported that operating profit in thecountry plunged 41 percent during the quar-

ter ended March 23. Chairman and CEO David Novak vowed to

"stay the course" and proceed with a plan todevelop at least 700 new restaurants in

China this year.


Finance

14

S.Korea's industri reduces on extern


15

ial output nal uncertainties

SEOUL -- South Korea's indus-trial output reduced last monthas external uncertainties suchas slow growth in majoreconomies weighed on the ex-port-driven economy, a gov-ernment report shows.

Production in all industries,including manufacturing, serv-ice, construction and publicadministration sectors, fell 2.1percent in March from a monthearlier after rising 1.1 percent inthe prior month, according toStatistics Korea. From a yearbefore, the output declined 0.9percent after reducing 2 per-cent in the previous month.

W e a k e r - t h a n - e x p e c t e dgrowth in the global top twoeconomies worsened thegrowth momentum of the SouthKorean economy. The U.S.economy grew at an annualrate of 2.5 percent in the firstquarter, missing the marketconsensus of 3 percent. TheChinese economy expanded7.7 percent in the first quarterfrom a year earlier, lower thanan average market expecta-tion of 8.1 percent.

Reflecting uncertaintiessuch as the economic slow-down in Europe and the auto-matic spending cut in the U.S.,the International MonetaryFund (IMF) cut its 2013 globalgrowth outlook to 3.3 percentearlier this month from 3.5 per-cent estimated three monthsago.

The Ministry of Strategy and

Finance said in a report that theprolonged weak yen trendwould put downward pressureon exports, which account formore than half of the South Ko-rean economy.

The South Korean won rose14.4 percent against theJapanese yen in the first quar-ter, the highest appreciationsince the 14.5 percent gain inthe second quarter of 2009.Market watchers expected theweak yen trend to begin influ-encing negatively the SouthKorean economy from the sec-ond quarter of this year.

The ministry earmarked17.3 trillion won (15 billion U.S.dollars) in supplementarybudget in 2013 to boost thesluggish economy. It slashed its2013 growth outlook for SouthKorea to 2.3 percent from anearlier estimate of 3 percent.

The South Korean economygrew 0.9 percent in the firstquarter from three months ear-lier, staying under the 1 percentgrowth for eight straight quar-ters. Exports edged up 0.2 per-cent on-year in March, andimports retreated 2 percent,confirming that domestic de-mand was weakening.

Output in the manufactur-ing and mining industries fell2.6 percent in March from amonth earlier, keeping theirdownward trend for threestraight months.

Production in the auto in-dustry was sluggish after the

nation' s top two carmakersHyundai and Kia failed toagree on extra work on week-end with their labor unions,while those in the chemicaland shipbuilding industriesstayed weak amid the falteringbusiness conditions.

Local manufacturers oper-ated at an average capacity of75.7 percent in March, down1.9 percentage points from amonth earlier. Inventories andshipments in the manufacturingsector fell 0.4 percent and 1.8percent each.

Retail sales increased 1.4percent on-month in March onthe back of demand for autofuel, but production in the serv-ice industry declined 1 percentlast month after rising 1.8 per-cent in the prior month.

Facility investment sank 6.6percent in March from a monthago as companies delayed in-vestment amid lingering uncer-tainties. Investment in theconstruction sector fell 3 per-cent as the government de-layed expenditure related tosocial overhead capital (SOC)amid the reorganization of min-istries.

The cyclical component ofthe composite leading indica-tor, which reflects outlook forindustrial conditions, fell 0.2point in March from a monthearlier. The coincident index ofeconomic indicators declined0.4 point last month.(XINHUA)


IT

16

China Mobile plansto launch 4Gnetwork by August


17

alone are closer: China Mo-bile: 115 million, China Uni-com: 88 million, and ChinaTelecom: 78 million.

This time around, the LTE-TD standard is a global one— China Telecom and Clear-wire are just two of the manyGlobal TD-LTE Initiative mem-bers — and that will makethings a great deal easierwhen it comes to gainingsupport from device makersand, most importantly, land-ing new users.

Rumors have long sug-gested that Apple will sup-port the LTE-TD network and,if the US firm does launch anew iPhone model at theend of the year, it will be in-teresting to see if China Mo-bile can keep to thisspeculated August 2013launch, as that could see itintroduce China’s first 4GiPhone before the end of2013.

Irrespective of the exactlaunch date and possiblenew iPhone, the message isclear, China Mobile is keento hit the ground running with4G.

Late last year, China saidit would license LTE networksthis year, but China Mobile ishoping to steal a march onits China Unicom and ChinaTelecom — its two rivals —which are enjoying successwith 3G.

China Mobile’s TD-SCDMA 3G network hasproved difficult for the oper-ator since it requires devicesthat run on it to include in-built support for the uniquenetwork, something thatApple — for one — has notdone.

That has left China Mo-bile as the only Chinese op-erator without a deal withApple, and that’s one factorthat has helped Unicom inparticular, which wasApple’s sole operator part-ner in China for some time,grow its 3G user base at amore rapid rate than ChinaMobile.

China Mobile’s total userbase of 726 million is farahead of China Unicom (251million subscribers) andChina Telecom (168 million),but the numbers for 3G users

CED Monitoring

SHANGHAI-China Mobile,the world’s largest mobileoperator, is said to be aimingto launch its LTE network —which would be the first 4Gservice in China — for publicusage by August of this year,according to media reports.

An ‘informed’ sourcetold Chinese website CWWthat China Mobile is hopingto receive approval for theLTE-TD network by May 17,which would enable it tolaunch for consumers from asearly as August.

The operator has previ-ously said that it will begin re-leasing 4G-compliantdevices during the third-quarter of 2013, and, inpreparation for the launch, ithas already deployed morethan 200,000 LTE-TD base sta-tions across 150 different lo-cations in the country.

The operator is said to beready to open the tender forits LTE-TD equipment — in-cluding MiFi routes, smart-phones, etc — from nextmonth.


18

IT

China Telecom endsslide in profit

the proceeds were pocketmoney for a telecommunicationsgiant like China Telecom andwould not have an impact on itsbusiness.

Xiang said the improvementin China Telecom's profit was aresult of a variety of reasons andthe iPhone was not the main fac-tor in the first quarter's growth.

"Besides the iPhone, ChinaTelecom offers a big variety ofmobile phones to consumersfrom the low end to the high end.It did very well in luring new mo-bile service users, and the growthin the number of subscribers is ro-

terday.The Beijing-based firm an-

nounced it would sell to its par-ent, China TelecommunicationsCorp, the 80 per cent stake itholds in E-surfing Media, a newcompany that offers video serv-ices for subscribers. The initial pay-ment for the E-surfing shares was1.2 billion Yuan.

On completion, China Tele-com said it expected to realise again of 670 million Yuan, whichwould be used as general work-ing capital.

Xiang Ligang, an independ-ent industry commentator, said

CED MonitoringSHANGHAI-Net profit rose 10 percent year on year in the first quar-ter at China Telecom, the world'sbiggest fixed-line network opera-tor, to 4.7 billion Yuan (HK$5.9 bil-lion).

It was the first increase inearnings since the country's third-biggest mobile-telephone opera-tor in terms of users startedoffering Apple's iPhone in Marchlast year.

Revenue grew 14.6 per centto 77.8 billion Yuan, the companysaid in a filing with the stock ex-change after trading closed yes-


19

China Telecom said selling,general and administrative ex-penses increased 28.7 per cent to18.3 billion Yuan from 14.2 billionYuan as a result of "appropriateincrease in marketing initiativesfor the profitable scale develop-ment of mobile services".

Subsidies for mobile deviceswould have made up much ofthat increase.

Shares of China Telecomclosed unchanged at HK$3.91yesterday, while the Hang SengIndex rose 0.65 per cent.

has solid execution and has beenhighly successful in monetising 3Gopportunities."

The company said last year,when it started sales of theiPhone, that the device wouldenhance its long-term sustain-able growth but with "short-termpressure" on profitability.

The company said a net 7.41million new mobile subscriberswere added in the first quarter fora total of 168.03 million, of which78.07 million were 3G subscribers.That compared with China Uni-com's 250.7 million mobile usersand China Mobile's 726.3 million.

bust," Xiang said.China Telecom had re-

ported a decline in profit in eachof the quarters since March lastyear, amid an intense drive togain valuable high-end usersfrom rivals China Mobile andChina Unicom.

Analyst Eva Yip, at Sun HungKai Financial, said China Telecomhad begun to benefit from the in-crease in users of the 3G mobileservice and rising data consump-tion.

"We expect the mobile busi-ness to grow further," Yip wrote ina research note. "China Telecom


20

Industry

China’s smal on new retail


21

l stores rely l revolution


22

Industry

An operator of a smallstore introduces newly ar-rived goods through SinaWeibo to netizens in 2012. It isa thing-to-thing exchangestore, which is on Tongmingroad, in Hongkou district,Shanghai.

CED MonitoringSHANGHAI-For the past

eight months, 31-year-old HeChang has been promotinghis products on what is ar-guably China's most powerfulretail marketing tool, andthey have been selling likehotcakes.

His Chinese pancakes, orjianbing guozi, a famousproduct enjoyed by millionsof people for centuries, havebecome a hot topic on SinaWeibo, China's most popularsocial network, which nowboasts over 500 million users.

While the Twitter-like so-cial network, which kickedoff in August 2009, is yet tomake a profit — its latest fi-nancial report showed an in-come of $66 million dollars in2012 against expenditures of$150 million — thousands ofshrewd entrepreneurs suchas He have managed to es-tablish money-making busi-nesses on the back of theplatform, by grabbing the at-tention of more than a thirdof the nation's population.

"So far, we have 300,000verified corporate users," ex-plained Hu Weixi, who worksin Weibo's business manage-ment department, which wasset up a year ago.

Although there is no dis-

tinction as to whether its ver-ified-business "blue V" usersare start ups or multination-als, Hu says the number ofsmall operators like He couldbe "substantial".

Last December, Weibo'sHu and his team launchedan online campaign called"those small and beautifulstores on Weibo", so moreusers could know aboutthese "tiny but unique storesthat were submerged in thesea of millions-of-followers-owning big Vs".

"We have received morethan 2,000 applications, farmore in number and richer indiversity than we expected,"said Hu.

A total of 118 corporateusers have been selectedand listed, free of charge, onan electronic-magazine-likepage, approximately 30stores a month, which fea-tures banner ads on thepage of every user, with linksto every one of the otherstores.

The stores vary fromsneaker makers to organicfarms, cafes, bridal gownmakers, music venues andclothing.

"The service has at-tracted more than 2 millionclicks, and followers of somestores have been increasingseveral times over as a re-sult," said Hu. "I wouldn't sayit's the most successful cam-paign, but definitely one ofthe most."

In the case of pancake-seller He Chang,whose busi-ness is called Huangtaiji,

selling products at 9.5 yuan($1.53) a packet, the powerof Weibo is more than just aclick or the odd extra fol-lower.

Last August, the Harbinnative opened his first eateryin the central business districtof Beijing, with 13 seats, sell-ing his hometown specialties— fried dough stickswrapped in an omelet withspicy or sweet sauces — to-gether with other Chinesetraditional breakfast itemssuch as soya milk and jelliedbean curd.

He registered the outlet'sbusiness account on Weiboat the same time, and hismarketing creativity so farhas been impressive.

As well as responding toonline orders, or postingmouth-watering pictures ofmeals at midnight, the ac-count has been catching at-tention because of thepictures he has been postingshowing himself deliveringpancakes in his Mercedes orwith his beautiful wife.

He claims that every oneof the 70,000 comments lefton the account so far havebeen sent a response.

"I am trying to sell Chi-nese traditional food in afast-food chain way like Mc-Donald's or Starbucks, in thesocial network era," said He,though he says it's impossibleto calculate how many of hiscustomers have been at-tracted to his place becauseof Weibo.

In an interview with Chi-nese business magazine En-


23


24

Industry

trepreneur early in April, Hedisclosed that annual salesat his outlet are likely toreach 5 million yuan, and heestimates the business is nowworth 40 million yuan.

He refuses to confirm thefigures to China Daily, but hedid suggest he had paid off

his first round of financing.Meanwhile, 29-year-old

Shanghai office worker TuJing says she has been "kindof falling in love" with onlineshopping, or at least collect-ing shopping information onitems, on Weibo.

Her favorite online shop-

ping destination used to beTaobao.

"There is something verybasic, almost human, aboutinteraction with an onlinestore, and with other cus-tomers online," she said.

"It's just like being back inyour childhood, when you


25

could sometimes get a freelollipop from the boss of thelocal store in your neighbor-hood.

"It's great when you hearabout complaints aboutsomething from anotherstore, even though they arestrangers in real life.

"That's something younever get from the big-boxstores," said Tu.

She adds that she lovesthe experience of telling herfavorite cookie bakery onWeibo, how low-fat shewants her biscuits to be, andnext time she buys cookiesfrom the store, without aword, the boss offers exactlythe low-fat kind she wants.

This idea of a shoppingcommunity coincides withwhat Jack Ma, the founderof Alibaba Group andTaoboa, now China's largestshopping platform, is be-lieved to want for his sites —a growing population ofsmall-businesses users.

Having earned 1 trillionyuan in turnover in 2012 andattracting big names likeNike, Canon and Sumsung toits two sites — the customer-to-customer Taobao.comand business-to-customerTmall — Ma has said he be-lieves "the future of e-com-merce lies in small business".

"Small is beautiful," hetold a forum in September,claiming small businesses arenot only the roots of his e-commerce empire, but alsothe future drivers of theglobal economy over thenext two decades.

The 49-year-old billion-aire said he was inspired tosupport small businesses dur-ing a trip to Japan a fewyears ago, where he saw atiny rice cake store with asign saying "founded 147years ago".

Intrigued, Ma gave hispatronage to the store, runby an elderly lady, and saidhe started to "find the charmand beauty" that big busi-nesses often lack today.

The first step in his sup-port was to introduce the"double million" project,which aims to help 1 millionsmall stores achieve annualsales of 1 million Yuan.

Three months after Ma'sspeech, during the "double12" one-day online sales ex-travaganza on Taobao —named after the date it fellon, Dec 12, which featuredthousands of stores offeringspecial bargains and salesoffers — 80 percent of its 6billion Yuan turnover camefrom its "small and beautiful"stores, an "unprecedented"performance, said officials.

Jiang Peng, the presi-dent of Taobao, attributedthe massive share of the busi-ness to the level of servicethese small stores can offer,which customers cannot findelsewhere.

Jiang said he believedthe stores don't need to, andhardly ever do, grow very bigbecause of the size of themarket they are catering to.

That is certainly not He'splan for his pancake busi-ness.

A Manchurian, whonamed his eatery after hisroyal ancestors who startedthe last feudalistic dynasty,the Qing Dynasty (1644-1911), He says he wants tocreate a "new era just as myforefathers did, but mine isabout pancakes."

He dreams his jianbingwill be talked about in for-eign countries without thesuffix "the Chinese pancake".

He plans to open five tosix Huangtaiji's in Beijing, andlater expand to cities likeShanghai, Shenzhen or evenNew York and London.

What's more, He hopesthat within five to sevenyears, he can also be self-suf-ficient in all the materialsused to make his pancakes,already claimed to be "all-green" with no chemical oradditives.

"There is something very basic, al-most human, about interaction withan online store, and with other cus-

tomers online.


26

Industry

Exciting Autoexhibitionheld in Fuzhou


27

CED MonitoringFUZHOU-The 21st

Fuzhou InternationalAutomobile Exhibition

took place at theCross-Straits Interna-

tional Conference andExhibition Center, inthe capital of Fujian

province.The event covered a

100,000-square-meterspace and includes ananimation festival forauto fans and a cos-play (Costume Play)competition, in addi-tion to a vast array ofthe usual automobiles

on display.

There wereat least 100brands and300 modelson show, in-

cludingAudis, BMWs,

Mercedes,Bentleys,

Lamborghinis,and Rolls-Royces.


Automobile

28


29


30

Automobile


31

The event covered a 100,000-square-meter space and in-

cludes an animation festival forauto fans and a cosplay (Cos-

tume Play) competition, in addi-tion to a vast array of the usual

automobiles on display.


32

CED Monitoring

CHENGDU-By producing morethan 410,000 vehicles last year,Chengdu's auto industry grew30 percent, more than fourtimes the national average forpassenger vehicles.

The capital city of Sichuanprovince is now the nation'sthird-largest automobile mar-ket and the biggest in the west-ern region.

About two million vehiclesare now on the road in the city.

Revenue from Chengdu'sauto industry hit 71.6 billionYuan ($11.6 billion) last year,

an increase of 51.6 percentover 2011, said Zheng Xueyu,director of the auto industry of-fice for the Chengdu Economyand Information Committee.

"The target for the city's autoindustry in 2013 is to produce600,000 units with carmakers gen-erating revenues of 105 billionYuan," Zheng said in a recent inter-view with local media.

It would be a dramatic in-crease from 2011 when 150,000vehicles and revenues of 55 bil-lion Yuan were produced.

"The added value from theindustry was 29.6 billion Yuanlast year, an increase of 42 per-

cent at a time when the na-tional auto market had slowergrowth," Zheng said.

The industry's prosperity isfueling a boom in Chengdu'soverall manufacturing sector,helping stimulate the iron andsteel, machinery, electronics,glass, petrochemicals and re-lated service industries. "Every1 percent the auto industrygrow boosts upstream anddownstream industries by 17percent," Zheng said.

Chengdu has always beena major market in westernChina, but it almost entirelylacked an auto industry.

Auto industry revs up Chengdu


33

Yu Jian, director of the autoindustry department at theChengdu Economic Develop-ment Zone, said that the cityproduced only 800 agriculturalvehicles a year in 2003.

The CEDZ, some 13.6 kilo-meters east of the city is nowthe core of Chengdu's auto in-dustry.

Chen Xiaoming, deputy offi-cer of the auto industry depart-ment at the CEDZ, said growth inChengdu meets the central gov-ernment's "go west" strategy,bringing more investment and jobopportunities to the city.

"Chengdu has competitive

edges in its talent and businessenvironment, which the localgovernment put in lot of effortto improve further," he toldChina Daily.

In 2004, the provincial andmunicipal governments set thetone for developing Chengdu'sauto industry.

When the local governmentset up a promotion commissionfor the automotive industry in2008, the only significant pro-duction was 40,000 units of theVolkswagen Jetta.

In 2011, Volvo Group an-nounced it would build its firstChina plant in Chengdu.

In 2012, parts supplierRobert Bosch GmbH laid thefoundation for its second chas-sis plant in the country.

Early last year, FAW-Volk-swagen's 540,000-unit Chengdufacility was completed, helpingbring auto production capacityin the city to 1 million annually,two years before the originaltarget date.

Chengdu is now an impor-tant production base for FAW-Volkswagen, FAW Toyota,Volvo and Geely. It has 275 re-lated enterprises, 19 of themmaking finished autos, Zhengsaid.

Auto industry revs up Chengdu


34

Construction

ural resources and land-scapes in the process of con-struction and used moderntechnologies to restore envi-ronments that had been pre-viously damaged.

The restoration includesthe famous tourism resort of

the Laoshan Mountains.Known for its high-quality

granite, the place used to behome to many quarries, andthe economy of many localvillages was highly dependenton the stone business. Butyears of over-exploitation has

resulted in heavy damage tothe environment.

So, the government hastaken measures to "repair themountains in a natural way".

"We have taken too muchfrom nature, and now it istime to pay back," said Li

Coastal city greens up its act for horticulture event


35

CED Monitoring

QINGDAO-The ideals ofecology will be seen inevery single tree, roadand building, said Li Qun,Party chief of Qingdao,the host city of the 2014International HorticulturalExpo.

Six years after host-ing the Olympic and Par-alympic sailing events,the city will once againbe the focus of theworld's attention as thefirst Chinese coastal cityto host an internationalhorticultural expo.

The event will be apeople-oriented gala in-tegrating ecologicalconcepts and world-class standards, said Li.

"The expo will be apresentation of harmonybetween human and na-ture," he said. "Garden-ing technologies andapproaches will be show-cased as much as possi-ble to allow the visitors tointeract with nature andget inspiration from it."

Under the theme"From the earth, for theEarth", the expo will beheld in a venue coveringan area of more than240 hectares, besidewhich is a 55-hectarebusiness and service dis-trict known as the ExpoVillage.

The venues are pro-jected to be completeby October, and trial op-erations will begin at thattime.

Expo planners aretaking special care topreserve the city's natu-ral beauty, cultural her-itage and biodiversity,according to the localgovernment.

The organizers saidthat they have paid at-tention to preserving nat-

Fengli, secretary-general ofthe expo's executive commit-tee.

A special concrete mixedwith seeds is paved on theslopes to guarantee thestrength of the surface of themountains while the grass and

bushes grow."We are repairing the en-

vironment in a natural way,"said Li. "We have actuallydone much to make it looklike we have done nothing atall."

Coastal city greens up its act for horticulture event


36

Construction

REFLECTINGBUILDING WHILE

CED Monitoring

SHANGHAI-Any river that runsthrough a great city alwaysseems to add vitality and re-move the coldness of modernhigh-rises made of steel, con-crete, and glass, and providesome choices for the peoplewho plan the city. Two exam-ples that spring to mind are theThames and the Seine.

The south bank of theThames contains one of Eu-rope's largest cultural districts,where British theaters attractartists and audiences from allover the world, giving Londonmore creativity and rhythm.

The left bank of the Seine,at its peak, was enchantingand attracted the world's topartists, philosophers, novelists,and poets to come and debateand construct avant-garde the-ories, making Paris a mecca ofart and thought at the time.

In a similar vein, in the East,there's Shanghai, whose ambi-tion is to become a culturedcosmopolis and a center of fi-nance, the economy, tradeand shipping as well. So it'sworking on a public artisticspace on the bund along theHuangpu River.

One of this year's mosthighlighted programs in thearea is West Bund 2013: A Bien-nale of Architecture and Con-temporary Art, which the city isoffering the public as an out-


37

REFLECTINGBUILDING WHILE

door space to bring more cul-tural vitality

It's not that Shanghai is ex-actly lacking in art space. It isreported to have more than 300art museums and galleries, al-though that's down from morethan 800 at its peak. Two exam-ples, 50 Moganshan Road andthe Hongfang Art and CultureCommunity, have been land-marks of Shanghai's creativityand culture for some time. And,it has the already 17-year-oldShanghai Biennale.

So what's the point of pour-ing more money and resourcesinto yet another space? Or,more important: Even if thegovernment wants to createanother open art space, will theartists and public necessarilyaccept the good intention andenjoy themselves on the water-front?

One answer comes fromMohsen Mostafavi, the dean ofHarvard University's GraduateSchool of Design, who shareshis observation on how to cre-ate positive interaction be-tween the public and projectsby saying simply, "The best wayto attract citizens to public artspace is to let them get in-volved in the process of plan-ning and construction."

However, the West Bunddid not make its blueprint pub-lic or seek the public's opinion,unlike, say, Hong Kong's WestKowloon Cultural District. But it


Construction

38

does try to get their attentionwith various programs, for ex-ample, last year, when the gov-ernment held the first WestBund Music Festival, or thisyear, when the event will con-tinue to attract people.

The West Bund 2013 exhibi-tion comes on Oct 19, along-side the Huangpu River under agigantic gray dome, on the6,000 square meters of a de-funct cement plant. The 58-daybiennale marks the beginningof a new life for the former in-dustrial site and possibly manyothers as well.

The old cement plant willbe converted into what iscalled a "cloud theater" - anew theater style that com-bines different artistic forms,such as film, music, architec-ture and literature.

There are 12 prominent ar-chitects from around the worldwho will use the inside and out-side of the giant cement plantto experiment on 12 architec-tural forms. The theme of theirwork is intended to reflectShanghai's history of urbaniza-tion and construction, and tointerpret the present and imag-ine the future.

The biennale is expectedto create China's biggest out-door art gallery or, perhapseven the world's, for the 21stcentury. It will have art pro-grams and public educationactivities such as lectures, dia-logues, performances andworkshops, all open to the pub-lic.

Gao Shiming, the head ofthe China Academy of Art'sSchool of Intermedia Art andart curator of the biennale, ex-plains, "That's why the WestBund Biennale is different frommany others. It's not a two-month fixed exhibition. It has aseries of successive cultureevents and will penetrate intothe life of Shanghai's people."

In addition to being a partof the exhibition, the 12 works

of architecture will play otherroles, such as that of a restau-rant or art gallery, or, in thewords of Li Xiangning, a profes-sor at Tongji University's Col-lege of Architecture and UrbanPlanning and a curator of thebiennale, "We hope that ordi-nary citizens will take part inthe games along with the ar-chitects and artists."

The curators will take somecues from the Venice Biennaleand make touring the areamore convenient, by providingbikes and electronic cars. And,according to the grand plan,there will be an archive and re-search center for avant-gardeart added after the biennale, toattract artists, including those inexperimental architecture,sound art, film art and avant-garde theater.

The museums under con-struction include the West BundMuseum of Art, Long Museum,and Yudeyao Museum of Art,and the blueprint calls forChina's largest art gallery com-plex to pop up here some timein the future.

Last year, DreamWorksSKG, the Hollywood studio be-hind hits like Kung Fu Pandaand Shrek, chose to build theirShanghai studio in this area,which inspired the governmentto come up with plans for a dig-ital film and electronic gamesmanufacturing site. It will alsohold eight theaters, whichshould help Shanghai in devel-oping its large center for exhi-bitions and performances.

China is paying closer at-tention to the world of art, de-sign and architecture, and itcertainly does not lack bien-nales. But this one is supposedto be different from all the oth-ers, including the Shanghai Bi-ennale, according to ZhangYonghe, former dean of MIT'sArchitecture School and chiefcurator of the project. One wayis that, unlike many exhibitions,it is not restricted to a gallery or

two but blends in with the city. "We imagine that people

who visit the exhibition can ei-ther come here for it alone, orjust come across it whenthey're taking a walk with theirchildren," Zhang explains. Asecond difference, he goes onto explain, is in the theme - Re-flecta and Fabrica - two Latinwords that could describeShanghai's history over the pastthree decades.

"A retrospective look atShanghai's developmental his-tory reveals the rise of China,"Zhang adds, "over the past 30years, its construction work, de-velopment, and urbanizationhave been speeding up.

"We use the Latin word'fabrica', which means tomake, to express the deepermeaning of the historicalprocess, not only in the past butalso at present and in the fu-ture. But, despite the continuingdevelopment, we also need toreflect on and review the pastto construct a historical attitudetoward the development -that's the 'reflecta'."

Another difference is thefact that this biennale will cre-ate a dialogue between archi-tecture and other art forms,such as film and sound art. Whyis that needed? Because, asZhang says, for many people,architecture is the art of space,but it is also an art of time,which is always changing in il-lumination by day or night. Andthe other art forms will bringmore change to architecture inthe dialogue.

"In this way, the old indus-trial plants will get new vitalitythrough a re-design and we'llfind that new beauty," Zhangconcludes.

Over the next six months,before the biennale com-mences, those 12 architects, in-cluding Zhang Yonghe; theItalian Vito Acconci, one of thefounders of performance art;and the Danish company


39

Schmidt Hammer Lassen Archi-tects will be visiting the water-front to get to work on theirexperiments.

Afterward, artists from other

fields can create their ownwork based on their under-standing of the buildings andthe surroundings to form a dia-logue between architecture

and other artistic forms. In any case, unlike so

many biennales, the art activi-ties here will roll on even afterthe 58-day event closes.


40

Real est

No let up inskyrocketing ofhome prices


41

CED MonitoringBEIJING-Housing prices face

significant upward pressure in 2013due to the possible effect of thecurrent policies and the authoritiesmay tax owners of multiple prop-erties to guard against further pricehikes, a top think tank said.

"The tendency of housingprices this year depends on policyselection (by the authorities)," saidLi Enping, a property market re-searcher with the Chinese Acad-emy of Social Sciences, who isalso an author of the academy'sannual report on the country's realestate sector, which was releasedon Thursday.

Li said that if local govern-ments decide to strictly implementthe tax on secondhand homesales, the prices will inevitably rise

because the extra tax will betransferred to buyers, as it is stillvery much a seller's market.

Meanwhile, Li added, regard-ing surging secondhand homeprices, new properties will also lifttheir pricing objectives.

In the latest effort to cool theproperty market, local govern-ments were urged to implement a20 percent personal income taxon capital gains from propertysales, if a homeowner sells theproperty within five years of its pur-chase and the property is not theonly one owned by the seller.

The authorities in major hous-ing markets such as Beijing,Shanghai and Guangdong said inlate March that they would imple-ment the policy, which led to asharp decline in secondhand

home sales in those markets.Although Li said that other

local authorities are only expectedto carry out the personal incometax policy on a "selective" basis,he pointed out that the countrymay tax the possession of multipleproperties in the second half, ifcurrent policies continue to pushup housing prices and worsen themarket environment.

"The mismatch between sup-ply and demand has been grow-ing for years," Li said.

He added that the taxes onmultiple properties might boostsupply and keep overall housingprices at a stable level or evenlead to a slight decline.

The tax has been tested inShanghai and Chongqing sincethe beginning of 2011, but mostly


Real estate

42

for buyers of second homes orowners of high-end property.

This week, the State Adminis-tration of Taxation denied that thepilot program will be extended toother cities, such as Hangzhou,adding that there is "currently notimetable for a national expansion".

But, according to Li, the prop-erty tax pilot program may be ac-celerated in major cities, and levieswill not only be on new homes butalso on existing units at all levels.

Meanwhile, he suggested thatthe current land transfer mecha-nism, which charges a one-off feeto use the land for 70 years, couldbe changed to rents paid annually.

The move "could ease financ-ing pressure for developers andprovide long-term fiscal revenuefor local governments", he said.

Zhang Hanya, a re-searcher at the Inst i tute of In-vestment of the Nat ionalDevelopment and ReformCommission, said the govern-ment has been focusing oncurbing speculat ive demand,whi le a more urgent issue isto add more supply.

"The government should re-duce its administrative meas-ures in the housing market andlet the market play its role,"Zhang said.

This view was echoed by ZhaoSong, director of the land price di-vision of the China Land Surveyingand Planning Institute, who said thatthe marginal effect of administra-tive measures has been declining,and many, such as purchase re-strictions, have proven to havebrought a negative impact.

Wang Juelin, former deputy di-rector of the Policy Research Cen-ter of the Ministry of Housing andUrban-Rural Development, said themarket is under the spotlight thisyear mainly because of the over-heated market in first-tier cities.

"However, the property mar-kets in central and western regionsremain stable, and some even re-ported price declines. Such re-gional differences should be takeninto consideration when formulat-ing new policies," he said.


43


Real estate

44

Property loans accelerate,industrial lending goes slow


45

Property loans accelerate,industrial lending goes slow

BEIJING -- China saw outstandingreal estate loans accelerate as of

the end of March from three monthsearlier while industrial lendingslowed, official data showed

Wednesday.By the end of last month, financialinstitutions in China had lent 12.98

trillion Yuan (2.08 trillion U.S. dollars)to the property sector, up 16.4

percent year on year, according tostatistics from the People's Bank of

China (PBOC), the country's centralbank.

The growth was 3.6 percentagepoints faster than that recorded at

the end of last year, the PBOC said.Of the total, outstanding loans forproperty development quickenedfor the 10th consecutive month to

reach 1.04 trillion Yuan as of the endof March, with a year-on-year

increase of 21.4 percent.Meanwhile, financial institutions

extended 6.46 trillion Yuan ofmedium- and long-term loans to the

industrial sector as of the end ofMarch, up 3.2 percent year on year.

The increase was 0.6 percentagepoint less than three months earlier,

dragged down by slower loans tothe heavy industry, the PBOC said.Industrial output grew 9.5 percentyear on year in the first quarter of

2013, down from 11.6 percentrecorded last year, official data

showed.Investment in property developmentgained 20.2 percent year on year inthe first quarter, faster than the 16.2

percent growth in 2012.Altogether, outstanding loans by

financial institutions in the countrytotaled 65.76 trillion Yuan as of

March end, up 14.9 percent year onyear, but the growth was 0.8

percentage points slower from ayear earlier, according to the PBOC.


46

Construction

WELLINGTON -- Chinaand New Zealand willexpand their sharing ofagriculture expertise andknowledge under a newbilateral agreementsigned here.New Zealand Minister forPrimary Industries NathanGuy and visiting ChineseMinister of Agriculture HanChangfu signed theStrategic Plan onPromoting AgriculturalCooperation inWellington."This is an importantagreement which willencourage cooperation

and the sharing ofknowledge to benefitboth countries, " Guy saidin a statement.The plan set out areas inwhich both countriescould learn from eachother, such as animalwelfare and science,increasing productivity,and building skills andknowledge."This document will furtherbuild on the strongrelationship that our twocountries share,particularly in theagricultural sector," said

Guy.Since the signing of thebilateral free tradeagreement in 2008, NewZealand exports to Chinahad almost tripled, from 2billion NZ dollars (1.69billion U.S. dollars) a yearto 6.9 billion NZ dollars in2012."Two-way trade betweenChina and New Zealandhas reached almost 15billion NZ dollars. Our aimis to double bilateraltrade to 20 billion NZdollars by 2015 and we'reon track to achieve that

New Zealand,China agree toshare agricultureknowledge


47


Construction

48

goal, " said Guy."The strategic plan willopen wider thechannels forcooperation, includingbetween our industryorganizations andcompanies," headded."There are already anumber of businessventures betweenChina and NewZealand in the primarysectors, with (dairygiant) Fonterra lookingto expand its milkingoperations in China."China was also keento learn from NewZealand given itsstrong reputation forfood safety andquality food products,according to Guy.The agreement wouldrun until 2017 andcould be updated atany time.Han's visit to NewZealand was believedto be the first by aChinese Minister ofAgriculture for over 30years, and Guy wouldreciprocate later thisyear.


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