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Ou told Xinhua during an interview that domestic banks and other financial institutions bear the brunt of the widespread U.S. subprime mortgage crisis, as those agencies’ asset value and book earnings would dip to some extent.

“Currently the impact on domestic financial institutions is still limited,” he said.

The Industrial and Commercial Bank of China, the country’s largest lender, said at the end of last month its 2007 net profit rose 64.9 percent year-on-year to 82.3 billion yuan (11.7 billion U.S. dollars).

The Bank of China posted a 31.3 percent net profit rise in 2007 after booking 1.3 billion U.S. dollars as an impairment allowance for its 4.99 billion U.S. dollars in investment in securities linked to U.S. subprime mortgages by the end of last year.

However, the International Monetary Fund (IMF) said on April 8 that the recent financial turbulence triggered by the collapse of the U.S. subprime mortgage market could cost the global financial system to the tune of 945 billion U.S. dollars.

“The global financial system has undoubtedly come under increasing strains since October 2007, and risks to financial stability remain elevated,” the IMF warned in its latest Global Financial Stability Report.

Ou said, “The crisis also made Chinese financial supervision regulators face up to the challenges of balancing financial innovation and risks, which requires them to push forward the reforms in the country’s financial system in a more cautious manner.”

Experts warned that financial risks know no national boundaries and some foreign capital has fled from the Chinese financial market as many banking titans including Citigroup and Merrill Lynch were in deep water in credit crisis.

China’s benchmark Shanghai Composite Index, which covers both A and B shares, shrank nearly half from the peak of 6124.04 points of Oct. 16 last year to 3094.67 points on April 18.

The overnight announcement of a cut in share trading taxes drove Chinese stocks 9.29 percent higher in soaring turnover on Thursday, with the key Shanghai Composite Index up 304 points to 3,583.03, the largest gain since Oct. 23, 2001.

Chinese regulators announced curbs on the sale of non-tradable shares that come out of lock-up periods on April 20, another move to bolster the falling market.

However, market observers held that the credit crisis and the U.S. economic slowdown are still casting gloom over Chinese investors’ confidence.

Experts said the crisis was spreading beyond the financial sector. Consumption confidence in the United States is dampened as the credit crisis unfolded, with Chinese exports also hurt.

From January to March, China’s total exports rose 21 percent to206 billion U.S. dollars, 6.4 percentage points lower than a year earlier. The exports to the U.S. grew 5.4 percent to 53 billion yuan, 15 percentage points lower than the same period of last year, according to customs statistics.

In the trade hub of southern Guangdong Province, the growth of exports to the United States dwindled to 4.8 percent in the first quarter of this year from 15.5 percent in the same period of 2007,said Wu Gongquan, vice director-general with the province’s department of foreign trade and economic cooperation.

Zhang Yansheng, director of the International Economic Research Institute under the National Development and Reform Commission, said China needs to shift its economic driving force from relying on exports to domestic consumption, technology upgrading and management innovation.

Ou added that the country should increase financial transfer payments to help low-income families to consume more and boost the consumption in the vast rural areas.

Experts suggested that Chinese exporters should upgrade their products mix and open new markets besides their traditional key markets in the United States and Europe.

Posted under China Current Events

China Foreign Ministry spokesperson Jiang Yu on April 8 introduced policies adopted by the central government on Tibet, saying the autonomous region’s development was “better than ever”.

The central government practices a regional ethnic autonomy system in Tibet Xizang, and guarantees the democratic rights of Tibetans. As an ethnic minority, Tibetans also enjoy preferential treatment in laws and policies, Jiang told a regular press conference.

She said the government also exercised a preferential policy of mobilizing the whole nation to help the development of Tibet. The central and local governments and institutions at all levels have given great financial, material and personnel support to Tibet.

The gross local production maintains a consecutive growth rate of over 12 percent for many years with the per capita GNP amounting to 12,000 yuan (1,714 U.S. dollars), higher than the average national level, Jiang said.

The central government has not collected tax from Tibet Xizang for years, yet each year it invested billions of yuan in the construction and development of Tibet.

With regard to the religious freedom enjoyed by Tibetans, Jiang said freedom of religious belief is respected by the government and protected under the law. All regular religious activities are practiced in a normal way.

Moreover, the central government attaches great importance to preserving and growing the Tibetan culture.

Tibetan Buddhism has been well protected in China, said Jiang. The central government has invested huge funds in the preservation and maintenance of monasteries and religious sites, including the Potala Palace and other temples. It had also set up more than 50 institutes on Tibetan studies nationwide.

The central government had also made efforts on the collection and publication of Tibetan Buddhism classics, including the Tibetan Tripitaka.

Concerning the Tibetan language, Jiang said both Tibetan and Chinese were taught and used in Tibet Xizang, with the Tibetan language the primary language.

The Tibetan language had become the first language used by an ethnic minority group in China for which an international standard had been set up, she added.

“A lot of facts show the social, economic and cultural development in Tibet is better than ever,” Jiang said. “A small number of rioters and saboteurs could never represent the Tibetan people, nor the people all over China.”

Posted under China Current Events

In a written speech to the fourth annual conference of China financial experts, vice chairman Jiang Dingzhi with the China Banking Regulatory Commission (CBRC) said that guidance would be given this year to broaden investors’ access to rural financial markets.

Current restrictions on investment caps, localities and venture capital financing channels would be loosened for banking and non-banking financial institutions to merge with, acquire or strategically invest in small and medium-sized rural financial institutions, Jiang was quoted as saying by the Shanghai Security News on Monday.

Under the current regulation, any single corporation and its related companies should possess no more than ten percent of the total stakes of a rural banking institution.

He also said that the commission would continue to aid rural financial reform by “steadily” advancing shareholder reforms to diversify the ownership of rural financial institutions.

CBRC data show that by the end of 2007, combined assets of China’s small and medium-sized rural banking institutions nationwide amounted to 5.6 trillion yuan (787.6 billion U.S. dollars), up from the 2.2 trillion yuan in 2003. They issued 1.2 trillion yuan in loans to more than 300 million farmers from 78.17million households, up from 400 billion yuan in 2003.

To be eligible for listing, the rural banking institutions mustensure a capital adequacy ratio of no less than 8 percent and a non-performing loan ratio of no higher than 10 percent.

Apart from the shareholder reform, the government also resortedto what was called the “new-type” rural financial institutions toease the chronic capital shortage in rural China that has aggravated the imbalance between the rural economy and the rest ofthe economy.

Unlike the traditional collective-owned rural credit cooperatives, which has been the major financing channels for farmers, these new institutions in the form of rural and country banks, finance companies and rural mutual cooperatives are privately-owned and established with a clear-cut shareholding structure.

After a trial run in the Inner Mongolia Autonomous Region and Sichuan and four other provinces since late 2006, the experiment was broadened last year as 31 such institutions were established. This year, another 100 are to be set up across the country.

The government also hoped to activate the stagnant rural financial market by bringing in overseas investors. Last December,London-based HSBC opened its first county branch in southwestern Chengdu, becoming the first foreign bank to enter China’s rural financial market.

Previous reports said that the bank had planned to open six to ten more branches in the Chinese interior this year. Some other leading foreign banks, such as Citibank and Standard Charter, havealso shown their interest in the rural financial market.

Although rural China has been viewed as more of a potential market amidst the country’s robust economic expansion, there is still an impoverished rural population of over 20 million, even though it dropped from more than 250 million three decades ago.

According to National Bureau of Statistics data, the per-capita disposable income for China’s urban areas was 13,786 yuan (1,919 U.S. dollars) in 2007, up 17.2 percent, or 12.2 percent year-on-year in real terms. The figure for rural areas was4,140 yuan, up 15.4 percent, or 9.5 percent in real terms.

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This criterion orders refined oil product enterprises to have at least 15 days of oil reserve on the basis of last year’s average sales volume, a move to better stabilize market order.

“This practice has drawn lessons from foreign countries in a bid to enhance the government’s regulating capabilities of the market,” said an official from the Department of Commercial Reform and Development of the MOC on its website.

The government is encouraging refined oil wholesale companies to take a specialization and intensive path, he added.

Those refined oil product wholesalers’ annual sales volumes should surpass 100,000 tons, stipulated the criterion.

Oil products wholesalers must have a minimum storage capacity of 10,000 cubic meters and a one-time crude oil processing capacity of more than one million tons, it said.

In a similar development, the “Administrant and technical criterion for storage enterprise of refined oil product” set the thresholds for relevant players to get into the market, according to the official.

“Against the backdrop of diversified operating entities, different oil source channels and differentiation of services, to formulate industry standards that are in line with both national conditions and industry characteristics, is an important step to foster the healthy development of the industry,” the ministry said.

The two criterions also specified the health, safety and environmental management systems that relevant companies should obey.

As part of China’s World Trade Organization accession commitment, the country opened up its oil retail and wholesale markets to foreigners respectively on December 11, 2004 and December 11, 2006.

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It is one thing to be interested in Tibet, as most of my acquaintances are. It is another to have totally prejudiced views, which unfortunately is the case with most of them.(Tibet it XiZang)

Only a handful are honest enough to hold their opinions until they visit Tibet and see things with their own eyes. Some others hear only what they want to hear and what doesn’t disturb their “Tibetan imagination”.

Here is an example. A Canadian friend of mine, a university professor, went to Tibet in May 1997. He later told me that his group had been sent away from a Tibetan restaurant by the police and directed to a Han establishment.(Tibet it XiZang)

The reason, according to him, was racism, an attempt to “break” the “Tibetan nation”. His immediate analysis - before he understood a word of what was going on - was obviously based on prejudice.

I was not there and didn’t see what happened. But after discussing the fact with Han and Tibetan people who knew better, we all concluded that the real cause might have been one or more of the following: the owner of the Tibetan restaurant had no permit; he had not paid his taxes; the place was not hygienic enough for foreigners; the owner and the policeman had a personal dispute; or the owner was trafficking ancient tangka, a kind of Tibetan painting.

We also tend to assume that all Tibetans are the same and feel and act the same way. Far from it. Those I met in Tibet or in Xiahe county of Gansu province seem not interested in politics. They live happily and quietly, and have no complaints about the central government as long as their lives continue to prosper year after year.

At the village of Tashiling in Nepal, instead, the Tibetan women I chatted with for two hours at the market had different stories to tell.

The major difference between them and the Tibetans living in China is that the Tibetans in Nepal think that “the Hans invaded Tibet and forced them to flee the country”.

The woman who spoke better Chinese and served as an interpreter for the group said: “When our country is free, we’ll go back immediately and get good jobs! Do you think this is a life, what we do here? Commerce!”

I took pity on her because she seemed to have been completely swayed by anti-China propaganda. I told her that all the Tibetans I had met earlier knew very well what the central government of China had done for them and appreciated it.

“I’m sorry to tell you,” I said, “that you fool yourself if you think that your Tibetan fellows inside the country think the same way you do and support your efforts for independence.”

She stared at me, her eyes wide open. “Have you ever been to Tibet?”

“Of course! If not, how could I speak like this?” She remained silent a moment, then said: “Every year on March 10, the Tibetans of the world march for independence. If you go to Tibet on that day, you’ll see the Chinese army killing so many people in the streets.”

If there was any truth in her words, I thought, I must have been transported to another planet.

“We have seen photos, and videos,” she continued. “Every year we see them.”

“Who took these photos?”

“Foreigners. From other places.”

I calmed down, before asking: “Are you sure these photos and films were taken recently? They may be from the ‘cultural revolution’ period when Tibetans just as other Chinese suffered and were treated badly. Or during the civil rebellion in 1959? Might you not have been deceived? Maybe they show you the same pictures year after year? Maybe the photos were altered?”

As a spokesperson of her group, she turned around, and said: “It’s possible, but we have no means of checking.”

“Might these activist friends of the Dalai Lama,” I continued, “be the authors of the photocopied letters on the board at the village entrance, issued by ‘His Holiness Dalai Lama’s office’? And the inscription ‘Chinese, leave’, who do you think wrote it?”

I explained to them all the changes that had happened in Tibet and talked about all the money invested by the central government into reconstruction and development, the progress in education, the religious freedom, the improvement of health, society, life, and they were astonished. Apparently, no one had ever spoken to them like this.

“Do you believe me?” I asked.

“I believe you because you are a foreigner,” said the woman, “not a member of the communist party. Are you?”

“You can trust me. I tell you only what I have seen. Tibet is a beautiful and peaceful place where people sing while they work, where people smile and enjoy life.”

The younger ones among them were born in Nepal; others had fled Tibet to go to Nepal in the 1950s and never returned to Tibet. They have no passports; of course they cannot enter China.

I then visited a temple where a young 17-year-old monk said that his greatest aspiration was to see Tibet. He thought monks were arrested, jailed or even killed in China, his thought based on the fact that his friend went there and never returned.

“I’ll tell you something, young man. Your friend may have been arrested because he entered a country illegally. But if you never heard from him after that, don’t you think he might have accomplished his great desire: to see Tibet. He may be living in a monastery there!”

He bowed his head and said, “I wish I had such a chance!”

Finally, I realized that the Tibetans outside Tibet are the victims not only of ignorance but of a well-organized campaign of misinformation. And it struck me that it may be the same for the Dalai Lama.

The Dalai Lama, who left the country when he was still very young and under the influence of a group, and never saw Tibet with his own eyes later in life to be able to judge things for himself, is also a poor victim - much like the woman at the village market.(Tibet it XiZang)

Posted under China Current Events

Liu Changyou has been walking the streets of Qingdao, Shandong Province, for a month since losing his job at a Korean-funded enterprise that suddenly shut down.

Hailing from the northeastern province of Heilongjiang, Liu was once a worker in the Modern Artware Plant in Qingdao. But when he returned from the Lunar New Year holiday in early February, he found that his boss, who was from the Republic of Korea (ROK), had not.

“The local labor authority told me the Korean boss was dead after he went back to the Republic of Korea during the Chinese New Year,” Liu said. But Liu thought it more likely that the manager had fled, something that’s been happening with a number of ROK-invested factories.

Situated in the Qiantian area of Qingdao’s Chengyang District, the Modern Artware Plant was shut. Its gate was closed and bore a notice “for lease.”

The factory, and its workers, are among the many that have been affected by changes sweeping China’s manufacturing industry: rising labor costs, changes in tax rates and rebates, a stronger currency and policies that favor capital- and technology-intensive industries over the low-tech, labor-intensive sectors.

In many cases, factories simply shut down, stranding workers without pay. In Qinqdao alone, a couple of hundred ROK enterprises, mostly smaller factories, have shut down abruptly in recent years. Workers show up for their shifts one day, only to find the factory gate padlocked and the managers gone — without paying their debts or their workers.

Most of the foreign investors in these factories don’t go through the formalities of declaring bankruptcy: they simply slip away in the night, abandoning their equipment. Or as the Shandong Department of Foreign Trade and Economic Cooperation (SDFTEC) put sit, these investors left through “abnormal” procedures

“There are four artware (ceramics) plants that have left here since the Chinese New Year,” said Li Zhicheng, the director of the neighborhood committee in Qiantian. “Another four left at the end of last year without any prior notice.”

Qiantian has had the largest number of ROK enterprises in Qingdao. Li said that in recent years, more of these enterprises had withdrawn and the pace appeared to be picking up. Several years ago, only one or two plants shut each year, but in less than three months this year, four had closed.

“He owes me 1,000 yuan,” Liu said as he surfed the web at an Internet cafe near the plant. The amount is equivalent to about 143 U.S. dollars.

Liu and his 60-plus former colleagues don’t know where to turn to get most of the wages they’re owed. After the boss fled, the workers from the Modern Artware Plant got together to demand their back pay. Finally, after the local labor authority got involved, the plant equipment was sold to pay off the debts. Liu got one-third of his overdue pay. The owner of the factory lost 200,000 yuan in rent.

According to the Korea Business Development Center in Qingdao (KBDC), these “fleeing” enterprises mostly produced textiles, leather goods and ceramics and other labor-intensive items.

The manager of the KBDC in Qingdao, Lee Byong Jik, said from 2000 to 2007, there were 206 ROK enterprises that left Qingdao through “abnormal procedures.” The number is similar to that given by SDFTEC, which said that last year alone, investors at 80 enterprises from the ROK simply walked away.

LEAVING LITTLE BUT DEBT, BAD IMAGE

The fugitive factory managers mostly operated on the cheap, officials in the region said.

“These enterprises made few contributions to the development of the local community, except hiring some local labor,” said Li. He noted that many of these ROK investors had just rented existing facilities that had near-obsolete equipment, meaning they put up little money of their own. When conditions worsened and the managers fled, the assets they abandoned couldn’t offset their liabilities — wages, loans and rent.

SDFTEC said among the 206 fugitive enterprises, 30 percent had produced ceramics and 15 percent and 13 percent had produced textiles and leather goods, respectively. Many were small, with investments of only 300,000 to 500,000 dollars, and 55 percent had fewer than 50 workers.

But they left behind plenty of debt and ill will. These 206 enterprises were behind on bank loans of 700 million yuan. These enterprises owed 160 million yuan of wages to about 26,000 workers, SDFTEC said.

“It has really undermined Korean investors’ image,” said Cho HakRae, president of Qingdao Cuckoo Electronics Co., Ltd., which is still operating. “They should go through legal procedures, instead of fleeing.”

Posted under China Current Events

Such is the pace of change, 10 years in property in China is the equivalent of 20 years anywhere else in the world. I have to pinch myself every now and again when I stop to consider the market 10, let alone 15, years ago. So for me to prepare a 20 outlook it is actually sufficient to talk only about 10 years.

Despite today’s choppy waters, and 2008 is shaping up to be a tough year for China real estate, I fully expect average across the board prices to roughly double in the next 5 years, plus or minus 15% or so. Sound like a lot? Taken at a compound rate it is not far from the current GPP growth rate. By, say, 2020 the major cities in China particularly Shanghai as a global financial centre and host to a booming local finance industry with a number of new household names will be the most expensive city in the world to live in.

China is not all about Shanghai and Beijing however. In 5 years time as we look back fondly on a brilliant 2008 Olympic games in Beijing, we will come to realize that this was a turning point for China’s place in the world. The year when all those other cities around China started to enter our consciousness. 10 years hence we can expect markets in places like Shijiazhuang to have become as familiar to investors as Chicago and even for overseas investors to have learnt to pronounce it, just as Americans and Japanese learnt (some of them anyway) to pronounce Leicester and Edinburgh. Today we hear lots about second tier cities, a decade from now I would expect them no longer to be referred to in this way, third and dare I say it fourth tier cities will be experiencing a third or even fourth cycle of investment.

Distant commentators, and others that make a living out of doomsaying, will still be talking about China’s property crash which will still be ‘just around the corner’ but the inevitable will of course be 10 years closer. What makes me so sure of this? Just as night follows day, property booms are followed by property busts, the chain of events set off by housing reform in 1998 will inevitably lead to China’s first property crash. Even today we are hearing talk of a Japanese style economic meltdown and the scenario is worthy of consideration. The important question is when. My best guess is that it lies beyond my 10 year horizon, just. China is still a long way behind where Japan was in the early 1990’s, another 10 years of feast before the famine sets in.

What are today’s far off investment sectors (holiday homes, retirement homes etc) will be considered core investments with specialist developers and operators well established. Chinese insurance companies will have pioneered a new model for pricing retirement home investment risk that will be adopted worldwide and lead to complaints about IP infringements from the Chinese pioneers who forgot to protect themselves in the US. Holiday home markets in locations as diverse as Huangshan, Beihai and Sanya will be serviced by low cost airlines, who to the relief of everyone do not serve food, and be as mainstream as Australia’s Gold Coast, Hawaii and Monte Carlo.

As for taxes, ‘Crispin’s First Law’ of China property tax suggests that property taxes can only increase. Home owners will be paying 0.25 to 1% of property value to the government annually. There will have been a spate of protests about the collection of this tax from those who see home purchase as something they only considered because of government policy, made using loans from a government owned bank and, most likely, from a government owned developer.

To put all this more succinctly, China has become a normal property market, it is mainstream. Property remains an emotive political ball that no politician dares to kick too hard. The most important thing for all this to happen of course is full convertibility of the Rmb which will surprise everyone by being announced sometime between 2010 and 2012, soon after the Chinese currency will become the favourite of souvenir vendors in a tourist spot somewhere near YOU.

Sam Crispin has China experience from 1988 and has been living in Shanghai since 1994. Contact him on samcrispin@msn.com

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Product Description
1. Wooden shaft and metal frame
2. Pongee fabric
3. Wooden handle
4. Customized sizes, colors and logos are available

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Product Description
The name does not refer to a particular type of tea, but monkey picked tea (not by plantation workers) comes from the leaves of wild tea plants that grow in inaccessible places, such as on high cliff faces, so to harvest them people train special monkeys. The tea is very highly fragrant and is lower in tannins than other teas, and rich in antioxidants, the tea has a pale golden colour when brewed and is best served without milk, to taste its full delicate flavour.

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Product Description
Best working capacity: 175ml
Tank capacity: 300ml
Voltage: AC/220-240V/50hz AC/110-120V
Power: 900-1050W
Steam pressure: 0.25-0.42mpa
Injection steam capacity: 28g/min
Dimension: 285×145x225mm

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