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Editorial

Editor-in-Chief Makhdoom Babar Editor Jamshed Ullah News Editor Arshad Chaudhry Research & Analysis Uzma Zafar Raja Pervaiz Hussain Suzie Worng Waqas Wiki Designing & Layout Asmat Ullah Khan Awais Shehzad Technical Support Sultan Haroon Iqbal Bukhari Co-ordination Sobia Noreen Internet Edition John Nelson Rehmat Chughtai

Contact Head office:

CASH Mass Media, 1102-1103 11th Floor, Longhang No 555, Nathan Road, Mongkok, Kowloon, Hong Kong

Islamabad Office: Mail House, Shakeel Chambers 01 Khayban-e-Soharwardy, Islamabad Email: editor@ccedigest.com newseditor@ccedigest.com webeditor@ccedigest.com ads@ccedigest.com

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RCSC needs to be encouraged

espite the fact that the Red Cross Society of China (RCSC) has put in a lot of efforts during the relief operations in the recent earthquake in China, rumors have continued to sully the image of the RCSC, hampering its ability to fulfill its mission. It remains a fact that as the 7.0-magnitude earthquake shook Ya'an City, Sichuan Province, the RCSC moved quickly to launch disaster relief work and initiate a push for public donations. It also put out collection boxes on streets throughout China. However, passersby largely ignored the RCSC’s collection boxes and Instead, many opted to open their wallets to private charity groups, showing what little faith the public has in the RCSC. The Civil society strongly applauded the transparency and orderly handling of donations of the One Foundation, a private charity group initiated by kung fu film star Jet Li and promoted online by celebrities. In an eye opening incident, the RCSC received over 140,000 Yuan (22,661 U.S. dollars) in donations, while the One Foundation took in over 10 million Yuan the same day. In addition to its past problems, a fresh round of rampant rumors isn't helping the RCSC's cause. Rumors recently circulated online claimed the organization demanded that the Red Cross in Taiwan pay a hefty "admission fee" before volunteers from the island could offer assistance. Public supervision is certainly needed for charity organizations. However, deliberately denigrating the RCSC will hamper its disaster relief work and impede the development of the country's charity sector. As the largest organization of its kind in China, the RCSC, which boasts over 98,000 sub-organizations and more than 26 million members in China, plays a major role in providing humanitarian assistance throughout the country. Despite its scale and the role it plays, public hostility toward the RCSC and other government-sponsored charities solidified after a series of scandals pointed to embezzlement and corruption among the organizations' employees. As an dispensable part of China's social assistance system, charity work should be strengthened. Whether government-sponsored or not, charity organizations provide humanitarian aid for vulnerable groups in need. Promoting the development of private charity groups does not mean weakening or even denying the roles that official groups like the RCSC play. Rumors slandering the RCSC and complaints about the group's official background are, in fact, nothing but a kind of bias. We believe that RCSC needs to be encouraged as such charity organization with outstanding profile and amazing network are very vital for China to extend relief and rescue operations during natural calamities.

Editor


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in this issue May 06, 12, 2013 04

Cover Story

In-car screens found to be dangerous

SHANGHAI-Safety hazards posed by Shanghai taxis' in-vehicle advertising screens have sparked concerns in other cities, as experts called for a nationwide check of the devices.

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Supervise, don't smear Red Cross Despite its recent quake-relief efforts, rumors have continued to sully the image of the Red Cross Society of China (RCSC), hampering its ability to fulfill its mission.

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.


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in this issue 09

Hong Kong stocks end 0.15% higher

S.Korea's industrial output reduces on external uncertainties SEOUL -- South Korea's industrial output reduced last month as external uncertainties such as slow growth in major economies weighed on the export-driven economy, a government report shows.

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Yum's profits hurt by bird flu scare

China Telecom ends slide in profit SHANGHAI-Net profit rose 10 per cent year on year in the first quarter at China Telecom, the world's biggest fixed-line network operator, to 4.7 billion Yuan (HK$5.9 billion).


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Society

In-car screens found to be dangerous SHANGHAI-Safety hazards posed by Shanghai taxis' in-vehicle advertising screens have sparked concerns in other cities, as experts called for a nationwide check of the devices. The Shanghai Municipal Transport and Port Authority has said it had found dangers in monitors built into the back of the front passenger seat's headrest, following deaths or injuries allegedly caused by the screen, which is around 20 cm long and 15 cm wide. At its request, iTaxi Media, a small player in the city's on-board advertising screen market, has removed all of its products from the more than 2,000 cabs owned by the Blue Union Taxi Co for failing the national safety standard, the authority said. Although Touchmedia, the biggest player in the market, met the standard, it has been ordered to improve its products and install cushioned surfaces around the screens it has in 22,000 taxis by May 20. The transport authority ordered the city's taxi operators to stop installing new advertising screens or renewing contracts with advertising platform providers. The screens' providers were required to add safety tips, such as calling on passengers to wear seatbelts, before broadcasting

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other content on the monitors. Transport authority official Huang Xiaoyong said that the body would closely monitor the steps Touchmedia takes to implement its order. Safety concerns about the screens came into the spotlight following a number of accidents. In the early hours of March 12, Lu Hang, 24, suffered from a fractured skull when her head bumped against the solid surface of an in-vehicle monitor when her cab crashed into a roadside barrier. In October, a passenger was killed in a traffic accident and the victim's family claimed the death is related to the taxi's monitor. In both cases, the victims were not wearing seatbelts when the accident took place. Taxi drivers in the city said backseat passengers' heads can bump against the monitor if they make an emergency stop. The screens also generate unwanted noise and can distract the driver, said cabby Chen Weiming. "None of us like the advertising screens," he said. The transport authority's order has failed to quench the anger of some people and generated concern among residents in other cities over the safety of screens in the cabs. "Without a safety test, how could

these monitors be installed in the first place and who should be blamed?" said a blogger on Sina Weibo. The screens are also common in cabs in other cities though they are not as popular in Shanghai, where around two-thirds of its 50,000 taxis have them. In Beijing, around 6,000 taxis, or 10 percent of the city's total, have been fitted with monitors developed by Touchmedia. In Xi'an, capital of Shaanxi province, 940 of the 987 vehicles owned by Tianzi, a major taxi operator in the city, have the screens. Zhu Xichan, a professor at Shanghai-based Tongji University's School of Automotive Studies, called for stricter supervision of modifications to vehicles used for public transportation. Zhu, a vehicle safety expert, said safety tests are only carried out on new vehicles before they leave the factory and modifications by users, such as installing the screens, are not included in the test catalogue. "There's never an evaluation by the transport authority or industry supervisor on whether these modifications are safe," he said. But he added that other safety hazards, like passengers not wearing seatbelts, are much more serious.


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Society

Supervise, don't smear Red Cross BEIJING -- Despite its recent quake-relief efforts, rumors have continued to sully the image of the Red Cross Society of China (RCSC), hampering its ability to fulfill its mission. When a 7.0-magnitude earthquake shook Ya'an City, Sichuan Province, the RCSC moved quickly to launch disaster relief work and initiate a push for public donations. It also put out collection boxes on streets throughout China. However, passersby have largely ignored the collection boxes. Instead of donating quakerelief funds through the RCSC, many have opted to open their wallets to private charity groups, showing what little faith the public has in the RCSC. Meanwhile, the public has applauded the transparency and orderly handling of donations of the One Foundation, a private charity group initiated by kung fu film star Jet Li and promoted online by celebrities. On Saturday, the RCSC received over 140,000 Yuan (22,661 U.S. dollars) in donations, while the One Foundation took in over 10 million Yuan the same day. In addition to its past problems, a fresh round of rampant rumors isn't helping the RCSC's cause. Rumors recently circulated online claimed the organization demanded that the Red Cross in Taiwan pay a hefty "admission fee" 06

before volunteers from the island could offer assistance. Taiwan's Red Cross refuted the rumor on Monday, saying the report was "misleading" and "totally untrue." Public supervision is certainly needed for charity organizations. However, deliberately denigrating the RCSC will hamper its disaster relief work and impede the development of the country's charity sector. As the largest organization of its kind in China, the RCSC, which boasts over 98,000 sub-organizations and more than 26 million members in China, plays a major role in providing humanitarian assistance throughout the country. Despite its scale and the role it plays, public hostility toward the RCSC and other governmentsponsored charities solidified after a series of scandals pointed to embezzlement and corruption among the organizations' employees. One major such scandal occurred in 2011 and dealt a major blow to the RCSC's reputation. "Guo Meimei," a purported staffer of an organization supposedly affiliated to the RCSC, used social media to flaunt her extravagant lifestyle and luxury goods. After posting photos of herself carrying expensive handbags and posing on a white Maserati, netizens erupted in anger, speculating that she may have embezzled

money from the RCSC to fund her lavish lifestyle. A third-party investigation said neither "Guo Meimei" nor her apparent wealth had anything to do with the RCSC. But it also pointed out that grave flaws existed in the management of the China Business System Red Cross Society, one of the RCSC's fund-raising groups. The RCSC announced Wednesday that it will renew the investigation into the "Guo Meimei incident" in May. The renewed probe will be carried out by an independent third party, without the participation of any RCSC staff -- a move the organization hopes can reestablish its credibility among the public. As an dispensable part of China's social assistance system, charity work should be strengthened. Whether government-sponsored or not, charity organizations provide humanitarian aid for vulnerable groups in need. Promoting the development of private charity groups does not mean weakening or even denying the roles that official groups like the RCSC play. Rumors slandering the RCSC and complaints about the group's official background are, in fact, nothing but a kind of bias. Still, the RCSC's public image problems are not stopping the organization from playing an active


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and helpful role in quake relief. The group has donated quake relief funds and materials worth about 66.16 million Yuan and deployed 25 rescue teams with 113 vehicles

to quake-hit areas. To rehabilitate its image, there is no doubt that the RCSC needs to implement a stricter supervision system and boost transparency,

but neither fabricating rumors nor gloating at the organization's plight qualify as behavior that constitutes public or press supervision.(XINHUA) 07


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Finance

Hong Kong stocks

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end 0.15% higher

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Finance

HONG KONG-- Hong Kong stocks closed up 33. 06 points, or 0.15 percent, at 22,580.77. The benchmark Hang Seng Index traded between 22,647.59 and 22,488.65. Turnover totaled 42.86 billion HK dollars (5.52 billion U.S. dollars). The Hang Seng China Enterprises Index fell 48.50 points, or 0. 45 percent, to close at 10,785.58. Two sub-indices gained, with the Utility adding the most by 0. 44 percent, followed by the Finance, up 0.43 percent. The Commerce and Industry and the Properties lost 0.13 percent and 0.33 percent, respectively. Banking giant HSBC, which accounts for the largest weighting of the Hang Seng Index, went up 0.78 percent to 84.05 HK dollars, while its local unit Hang Seng Bank closed 0.16 percent higher at 128.90 HK dollars. China Mobile, China's dominant mobile carrier, ended up 0.06 percent at 84.15 HK dollars, while another Chinese telecom giant China Unicom, slid 0.36 percent to 11.04 HK dollars. Local bourse operator HKEX dipped 0.54 percent to 129.30 HK dollars. As for local property developers, Sun Hung Kai, HK's largest property developer by market value, edged down 1.14 percent to close at 112.60 HK dollars; Cheung Kong properties, owned by billionaire Li Ka-shing, decreased 0.51 percent to close at 116.50 HK dollars. As for mainland-based financial stocks, China Construction Bank, the country's second largest bank which accounts for the third largest weighting of the Hang Seng Index, rose 1.1 percent at 6.45 HK dollars. ICBC, the world's largest bank by market value, added 0.19 percent to 5.42 HK dollars. Bank of China went up 0.28 percent to 3.59 HK dollars. As for energy stocks, China's top refiner Sinopec lost 0.82 percent to 8.40 HK dollars. PetroChina, the country's largest oil and gas producer, ended down 0.51 percent at 9.83 HK dollars. (1 U. S. dollar equals 7.76 HK dollars) (XINHUA) 10


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Finance

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Yum's profits hurt by bird flu scare CED Monitoring SHANGHAI-Yum Brands Inc, the biggest foreign fast-food operator in China, said publicity over tainted chicken and the outbreak of bird flu hurt first-quarter earnings and sales in the country, leading to a 26 percent drop in first-quarter profit for the company that operates KFC and Pizza Hut. Yum, which draws half its revenue from China, reported that operating profit in the country plunged 41 percent during the quarter ended March 23. Chairman and CEO David Novak vowed to "stay the course" and proceed with a plan to develop at least 700 new restaurants in China this year. 13


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Finance

S.Korea's industri reduces on extern

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ial output nal uncertainties SEOUL -- South Korea's industrial output reduced last month as external uncertainties such as slow growth in major economies weighed on the export-driven economy, a government report shows. Production in all industries, including manufacturing, service, construction and public administration sectors, fell 2.1 percent in March from a month earlier after rising 1.1 percent in the prior month, according to Statistics Korea. From a year before, the output declined 0.9 percent after reducing 2 percent in the previous month. Weaker-than-expected growth in the global top two economies worsened the growth momentum of the South Korean economy. The U.S. economy grew at an annual rate of 2.5 percent in the first quarter, missing the market consensus of 3 percent. The Chinese economy expanded 7.7 percent in the first quarter from a year earlier, lower than an average market expectation of 8.1 percent. Reflecting uncertainties such as the economic slowdown in Europe and the automatic spending cut in the U.S., the International Monetary Fund (IMF) cut its 2013 global growth outlook to 3.3 percent earlier this month from 3.5 percent estimated three months ago. The Ministry of Strategy and

Finance said in a report that the prolonged weak yen trend would put downward pressure on exports, which account for more than half of the South Korean economy. The South Korean won rose 14.4 percent against the Japanese yen in the first quarter, the highest appreciation since the 14.5 percent gain in the second quarter of 2009. Market watchers expected the weak yen trend to begin influencing negatively the South Korean economy from the second quarter of this year. The ministry earmarked 17.3 trillion won (15 billion U.S. dollars) in supplementary budget in 2013 to boost the sluggish economy. It slashed its 2013 growth outlook for South Korea to 2.3 percent from an earlier estimate of 3 percent. The South Korean economy grew 0.9 percent in the first quarter from three months earlier, staying under the 1 percent growth for eight straight quarters. Exports edged up 0.2 percent on-year in March, and imports retreated 2 percent, confirming that domestic demand was weakening. Output in the manufacturing and mining industries fell 2.6 percent in March from a month earlier, keeping their downward trend for three straight months. Production in the auto industry was sluggish after the

nation' s top two carmakers Hyundai and Kia failed to agree on extra work on weekend with their labor unions, while those in the chemical and shipbuilding industries stayed weak amid the faltering business conditions. Local manufacturers operated at an average capacity of 75.7 percent in March, down 1.9 percentage points from a month earlier. Inventories and shipments in the manufacturing sector fell 0.4 percent and 1.8 percent each. Retail sales increased 1.4 percent on-month in March on the back of demand for auto fuel, but production in the service industry declined 1 percent last month after rising 1.8 percent in the prior month. Facility investment sank 6.6 percent in March from a month ago as companies delayed investment amid lingering uncertainties. Investment in the construction sector fell 3 percent as the government delayed expenditure related to social overhead capital (SOC) amid the reorganization of ministries. The cyclical component of the composite leading indicator, which reflects outlook for industrial conditions, fell 0.2 point in March from a month earlier. The coincident index of economic indicators declined 0.4 point last month.(XINHUA) 15


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IT

China Mobile plans to launch 4G network by August

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CED Monitoring SHANGHAI-China Mobile, the world’s largest mobile operator, is said to be aiming to launch its LTE network — which would be the first 4G service in China — for public usage by August of this year, according to media reports. An ‘informed’ source told Chinese website CWW that China Mobile is hoping to receive approval for the LTE-TD network by May 17, which would enable it to launch for consumers from as early as August. The operator has previously said that it will begin releasing 4G-compliant devices during the thirdquarter of 2013, and, in preparation for the launch, it has already deployed more than 200,000 LTE-TD base stations across 150 different locations in the country. The operator is said to be ready to open the tender for its LTE-TD equipment — including MiFi routes, smartphones, etc — from next month.

Late last year, China said it would license LTE networks this year, but China Mobile is hoping to steal a march on its China Unicom and China Telecom — its two rivals — which are enjoying success with 3G. China Mobile’s TDSCDMA 3G network has proved difficult for the operator since it requires devices that run on it to include inbuilt support for the unique network, something that Apple — for one — has not done. That has left China Mobile as the only Chinese operator without a deal with Apple, and that’s one factor that has helped Unicom in particular, which was Apple’s sole operator partner in China for some time, grow its 3G user base at a more rapid rate than China Mobile. China Mobile’s total user base of 726 million is far ahead of China Unicom (251 million subscribers) and China Telecom (168 million), but the numbers for 3G users

alone are closer: China Mobile: 115 million, China Unicom: 88 million, and China Telecom: 78 million. This time around, the LTETD standard is a global one — China Telecom and Clearwire are just two of the many Global TD-LTE Initiative members — and that will make things a great deal easier when it comes to gaining support from device makers and, most importantly, landing new users. Rumors have long suggested that Apple will support the LTE-TD network and, if the US firm does launch a new iPhone model at the end of the year, it will be interesting to see if China Mobile can keep to this speculated August 2013 launch, as that could see it introduce China’s first 4G iPhone before the end of 2013. Irrespective of the exact launch date and possible new iPhone, the message is clear, China Mobile is keen to hit the ground running with 4G. 17


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IT

China Telecom ends slide in profit

CED Monitoring SHANGHAI-Net profit rose 10 per cent year on year in the first quarter at China Telecom, the world's biggest fixed-line network operator, to 4.7 billion Yuan (HK$5.9 billion). It was the first increase in earnings since the country's thirdbiggest mobile-telephone operator in terms of users started offering Apple's iPhone in March last year. Revenue grew 14.6 per cent to 77.8 billion Yuan, the company said in a filing with the stock exchange after trading closed yes18

terday. The Beijing-based firm announced it would sell to its parent, China Telecommunications Corp, the 80 per cent stake it holds in E-surfing Media, a new company that offers video services for subscribers. The initial payment for the E-surfing shares was 1.2 billion Yuan. On completion, China Telecom said it expected to realise a gain of 670 million Yuan, which would be used as general working capital. Xiang Ligang, an independent industry commentator, said

the proceeds were pocket money for a telecommunications giant like China Telecom and would not have an impact on its business. Xiang said the improvement in China Telecom's profit was a result of a variety of reasons and the iPhone was not the main factor in the first quarter's growth. "Besides the iPhone, China Telecom offers a big variety of mobile phones to consumers from the low end to the high end. It did very well in luring new mobile service users, and the growth in the number of subscribers is ro-


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bust," Xiang said. China Telecom had reported a decline in profit in each of the quarters since March last year, amid an intense drive to gain valuable high-end users from rivals China Mobile and China Unicom. Analyst Eva Yip, at Sun Hung Kai Financial, said China Telecom had begun to benefit from the increase in users of the 3G mobile service and rising data consumption. "We expect the mobile business to grow further," Yip wrote in a research note. "China Telecom

has solid execution and has been highly successful in monetising 3G opportunities." The company said last year, when it started sales of the iPhone, that the device would enhance its long-term sustainable growth but with "short-term pressure" on profitability. The company said a net 7.41 million new mobile subscribers were added in the first quarter for a total of 168.03 million, of which 78.07 million were 3G subscribers. That compared with China Unicom's 250.7 million mobile users and China Mobile's 726.3 million.

China Telecom said selling, general and administrative expenses increased 28.7 per cent to 18.3 billion Yuan from 14.2 billion Yuan as a result of "appropriate increase in marketing initiatives for the profitable scale development of mobile services". Subsidies for mobile devices would have made up much of that increase. Shares of China Telecom closed unchanged at HK$3.91 yesterday, while the Hang Seng Index rose 0.65 per cent.

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Industry

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China’s smal on new retail


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l stores rely l revolution

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Industry

An operator of a small store introduces newly arrived goods through Sina Weibo to netizens in 2012. It is a thing-to-thing exchange store, which is on Tongming road, in Hongkou district, Shanghai. CED Monitoring SHANGHAI-For the past eight months, 31-year-old He Chang has been promoting his products on what is arguably China's most powerful retail marketing tool, and they have been selling like hotcakes. His Chinese pancakes, or jianbing guozi, a famous product enjoyed by millions of people for centuries, have become a hot topic on Sina Weibo, China's most popular social network, which now boasts over 500 million users. While the Twitter-like social network, which kicked off in August 2009, is yet to make a profit — its latest financial report showed an income of $66 million dollars in 2012 against expenditures of $150 million — thousands of shrewd entrepreneurs such as He have managed to establish money-making businesses on the back of the platform, by grabbing the attention of more than a third of the nation's population. "So far, we have 300,000 verified corporate users," explained Hu Weixi, who works in Weibo's business management department, which was set up a year ago. Although there is no dis-

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tinction as to whether its verified-business "blue V" users are start ups or multinationals, Hu says the number of small operators like He could be "substantial". Last December, Weibo's Hu and his team launched an online campaign called "those small and beautiful stores on Weibo", so more users could know about these "tiny but unique stores that were submerged in the sea of millions-of-followersowning big Vs". "We have received more than 2,000 applications, far more in number and richer in diversity than we expected," said Hu. A total of 118 corporate users have been selected and listed, free of charge, on an electronic-magazine-like page, approximately 30 stores a month, which features banner ads on the page of every user, with links to every one of the other stores. The stores vary from sneaker makers to organic farms, cafes, bridal gown makers, music venues and clothing. "The service has attracted more than 2 million clicks, and followers of some stores have been increasing several times over as a result," said Hu. "I wouldn't say it's the most successful campaign, but definitely one of the most." In the case of pancakeseller He Chang,whose business is called Huangtaiji,

selling products at 9.5 yuan ($1.53) a packet, the power of Weibo is more than just a click or the odd extra follower. Last August, the Harbin native opened his first eatery in the central business district of Beijing, with 13 seats, selling his hometown specialties — fried dough sticks wrapped in an omelet with spicy or sweet sauces — together with other Chinese traditional breakfast items such as soya milk and jellied bean curd. He registered the outlet's business account on Weibo at the same time, and his marketing creativity so far has been impressive. As well as responding to online orders, or posting mouth-watering pictures of meals at midnight, the account has been catching attention because of the pictures he has been posting showing himself delivering pancakes in his Mercedes or with his beautiful wife. He claims that every one of the 70,000 comments left on the account so far have been sent a response. "I am trying to sell Chinese traditional food in a fast-food chain way like McDonald's or Starbucks, in the social network era," said He, though he says it's impossible to calculate how many of his customers have been attracted to his place because of Weibo. In an interview with Chinese business magazine En-


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Industry

trepreneur early in April, He disclosed that annual sales at his outlet are likely to reach 5 million yuan, and he estimates the business is now worth 40 million yuan. He refuses to confirm the figures to China Daily, but he did suggest he had paid off

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his first round of financing. Meanwhile, 29-year-old Shanghai office worker Tu Jing says she has been "kind of falling in love" with online shopping, or at least collecting shopping information on items, on Weibo. Her favorite online shop-

ping destination used to be Taobao. "There is something very basic, almost human, about interaction with an online store, and with other customers online," she said. "It's just like being back in your childhood, when you


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"There is something very basic, almost human, about interaction with an online store, and with other customers online. could sometimes get a free lollipop from the boss of the local store in your neighborhood. "It's great when you hear about complaints about something from another store, even though they are strangers in real life. "That's something you never get from the big-box stores," said Tu. She adds that she loves the experience of telling her favorite cookie bakery on Weibo, how low-fat she wants her biscuits to be, and next time she buys cookies from the store, without a word, the boss offers exactly the low-fat kind she wants. This idea of a shopping community coincides with what Jack Ma, the founder of Alibaba Group and Taoboa, now China's largest shopping platform, is believed to want for his sites — a growing population of small-businesses users. Having earned 1 trillion yuan in turnover in 2012 and attracting big names like Nike, Canon and Sumsung to its two sites — the customerto-customer Taobao.com and business-to-customer Tmall — Ma has said he believes "the future of e-commerce lies in small business".

"Small is beautiful," he told a forum in September, claiming small businesses are not only the roots of his ecommerce empire, but also the future drivers of the global economy over the next two decades. The 49-year-old billionaire said he was inspired to support small businesses during a trip to Japan a few years ago, where he saw a tiny rice cake store with a sign saying "founded 147 years ago". Intrigued, Ma gave his patronage to the store, run by an elderly lady, and said he started to "find the charm and beauty" that big businesses often lack today. The first step in his support was to introduce the "double million" project, which aims to help 1 million small stores achieve annual sales of 1 million Yuan. Three months after Ma's speech, during the "double 12" one-day online sales extravaganza on Taobao — named after the date it fell on, Dec 12, which featured thousands of stores offering special bargains and sales offers — 80 percent of its 6 billion Yuan turnover came from its "small and beautiful" stores, an "unprecedented" performance, said officials.

Jiang Peng, the president of Taobao, attributed the massive share of the business to the level of service these small stores can offer, which customers cannot find elsewhere. Jiang said he believed the stores don't need to, and hardly ever do, grow very big because of the size of the market they are catering to. That is certainly not He's plan for his pancake business. A Manchurian, who named his eatery after his royal ancestors who started the last feudalistic dynasty, the Qing Dynasty (16441911), He says he wants to create a "new era just as my forefathers did, but mine is about pancakes." He dreams his jianbing will be talked about in foreign countries without the suffix "the Chinese pancake". He plans to open five to six Huangtaiji's in Beijing, and later expand to cities like Shanghai, Shenzhen or even New York and London. What's more, He hopes that within five to seven years, he can also be self-sufficient in all the materials used to make his pancakes, already claimed to be "allgreen" with no chemical or additives.

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Industry

Exciting Auto

exhibition

held in Fuzhou

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There were at least 100 brands and 300 models on show, including Audis, BMWs, Mercedes, Bentleys, Lamborghinis, and RollsRoyces.

CED Monitoring FUZHOU-The 21st Fuzhou International Automobile Exhibition took place at the Cross-Straits International Conference and Exhibition Center, in the capital of Fujian province. The event covered a 100,000-square-meter space and includes an animation festival for auto fans and a cosplay (Costume Play) competition, in addition to a vast array of the usual automobiles on display. 27


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Automobile

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Automobile

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The event covered a 100,000square-meter space and includes an animation festival for auto fans and a cosplay (Costume Play) competition, in addition to a vast array of the usual automobiles on display. 31


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Auto industry rev CED Monitoring CHENGDU-By producing more than 410,000 vehicles last year, Chengdu's auto industry grew 30 percent, more than four times the national average for passenger vehicles. The capital city of Sichuan province is now the nation's third-largest automobile market and the biggest in the western region. About two million vehicles are now on the road in the city. Revenue from Chengdu's auto industry hit 71.6 billion Yuan ($11.6 billion) last year, 32

an increase of 51.6 percent over 2011, said Zheng Xueyu, director of the auto industry office for the Chengdu Economy and Information Committee. "The target for the city's auto industry in 2013 is to produce 600,000 units with carmakers generating revenues of 105 billion Yuan," Zheng said in a recent interview with local media. It would be a dramatic increase from 2011 when 150,000 vehicles and revenues of 55 billion Yuan were produced. "The added value from the industry was 29.6 billion Yuan last year, an increase of 42 per-

cent at a time when the national auto market had slower growth," Zheng said. The industry's prosperity is fueling a boom in Chengdu's overall manufacturing sector, helping stimulate the iron and steel, machinery, electronics, glass, petrochemicals and related service industries. "Every 1 percent the auto industry grow boosts upstream and downstream industries by 17 percent," Zheng said. Chengdu has always been a major market in western China, but it almost entirely lacked an auto industry.


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revs up Chengdu Yu Jian, director of the auto industry department at the Chengdu Economic Development Zone, said that the city produced only 800 agricultural vehicles a year in 2003. The CEDZ, some 13.6 kilometers east of the city is now the core of Chengdu's auto industry. Chen Xiaoming, deputy ofďŹ cer of the auto industry department at the CEDZ, said growth in Chengdu meets the central government's "go west" strategy, bringing more investment and job opportunities to the city. "Chengdu has competitive

edges in its talent and business environment, which the local government put in lot of effort to improve further," he told China Daily. In 2004, the provincial and municipal governments set the tone for developing Chengdu's auto industry. When the local government set up a promotion commission for the automotive industry in 2008, the only significant production was 40,000 units of the Volkswagen Jetta. In 2011, Volvo Group announced it would build its first China plant in Chengdu.

In 2012, parts supplier Robert Bosch GmbH laid the foundation for its second chassis plant in the country. Early last year, FAW-Volkswagen's 540,000-unit Chengdu facility was completed, helping bring auto production capacity in the city to 1 million annually, two years before the original target date. Chengdu is now an important production base for FAWVolkswagen, FAW Toyota, Volvo and Geely. It has 275 related enterprises, 19 of them making finished autos, Zheng said. 33


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Construction

Coastal city greens up its act for

ural resources and landscapes in the process of construction and used modern technologies to restore environments that had been previously damaged. The restoration includes the famous tourism resort of 34

the Laoshan Mountains. Known for its high-quality granite, the place used to be home to many quarries, and the economy of many local villages was highly dependent on the stone business. But years of over-exploitation has

resulted in heavy damage to the environment. So, the government has taken measures to "repair the mountains in a natural way". "We have taken too much from nature, and now it is time to pay back," said Li


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for horticulture event

Fengli, secretary-general of the expo's executive committee. A special concrete mixed with seeds is paved on the slopes to guarantee the strength of the surface of the mountains while the grass and

bushes grow. "We are repairing the environment in a natural way," said Li. "We have actually done much to make it look like we have done nothing at all."

CED Monitoring QINGDAO-The ideals of ecology will be seen in every single tree, road and building, said Li Qun, Party chief of Qingdao, the host city of the 2014 International Horticultural Expo. Six years after hosting the Olympic and Paralympic sailing events, the city will once again be the focus of the world's attention as the first Chinese coastal city to host an international horticultural expo. The event will be a people-oriented gala integrating ecological concepts and worldclass standards, said Li. "The expo will be a presentation of harmony between human and nature," he said. "Gardening technologies and approaches will be showcased as much as possible to allow the visitors to interact with nature and get inspiration from it." Under the theme "From the earth, for the Earth", the expo will be held in a venue covering an area of more than 240 hectares, beside which is a 55-hectare business and service district known as the Expo Village. The venues are projected to be complete by October, and trial operations will begin at that time. Expo planners are taking special care to preserve the city's natural beauty, cultural heritage and biodiversity, according to the local government. The organizers said that they have paid attention to preserving nat-

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Construction

BUILDING CED Monitoring SHANGHAI-Any river that runs through a great city always seems to add vitality and remove the coldness of modern high-rises made of steel, concrete, and glass, and provide some choices for the people who plan the city. Two examples that spring to mind are the Thames and the Seine. The south bank of the Thames contains one of Europe's largest cultural districts, where British theaters attract artists and audiences from all over the world, giving London more creativity and rhythm. The left bank of the Seine, at its peak, was enchanting and attracted the world's top artists, philosophers, novelists, and poets to come and debate and construct avant-garde theories, making Paris a mecca of art and thought at the time. In a similar vein, in the East, there's Shanghai, whose ambition is to become a cultured cosmopolis and a center of finance, the economy, trade and shipping as well. So it's working on a public artistic space on the bund along the Huangpu River. One of this year's most highlighted programs in the area is West Bund 2013: A Biennale of Architecture and Contemporary Art, which the city is offering the public as an out36

REFLEC


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NG WHILE

ECTING

door space to bring more cultural vitality It's not that Shanghai is exactly lacking in art space. It is reported to have more than 300 art museums and galleries, although that's down from more than 800 at its peak. Two examples, 50 Moganshan Road and the Hongfang Art and Culture Community, have been landmarks of Shanghai's creativity and culture for some time. And, it has the already 17-year-old Shanghai Biennale. So what's the point of pouring more money and resources into yet another space? Or, more important: Even if the government wants to create another open art space, will the artists and public necessarily accept the good intention and enjoy themselves on the waterfront? One answer comes from Mohsen Mostafavi, the dean of Harvard University's Graduate School of Design, who shares his observation on how to create positive interaction between the public and projects by saying simply, "The best way to attract citizens to public art space is to let them get involved in the process of planning and construction." However, the West Bund did not make its blueprint public or seek the public's opinion, unlike, say, Hong Kong's West Kowloon Cultural District. But it 37


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Construction

does try to get their attention with various programs, for example, last year, when the government held the first West Bund Music Festival, or this year, when the event will continue to attract people. The West Bund 2013 exhibition comes on Oct 19, alongside the Huangpu River under a gigantic gray dome, on the 6,000 square meters of a defunct cement plant. The 58-day biennale marks the beginning of a new life for the former industrial site and possibly many others as well. The old cement plant will be converted into what is called a "cloud theater" - a new theater style that combines different artistic forms, such as film, music, architecture and literature. There are 12 prominent architects from around the world who will use the inside and outside of the giant cement plant to experiment on 12 architectural forms. The theme of their work is intended to reflect Shanghai's history of urbanization and construction, and to interpret the present and imagine the future. The biennale is expected to create China's biggest outdoor art gallery or, perhaps even the world's, for the 21st century. It will have art programs and public education activities such as lectures, dialogues, performances and workshops, all open to the public. Gao Shiming, the head of the China Academy of Art's School of Intermedia Art and art curator of the biennale, explains, "That's why the West Bund Biennale is different from many others. It's not a twomonth fixed exhibition. It has a series of successive culture events and will penetrate into the life of Shanghai's people." In addition to being a part of the exhibition, the 12 works 38

of architecture will play other roles, such as that of a restaurant or art gallery, or, in the words of Li Xiangning, a professor at Tongji University's College of Architecture and Urban Planning and a curator of the biennale, "We hope that ordinary citizens will take part in the games along with the architects and artists." The curators will take some cues from the Venice Biennale and make touring the area more convenient, by providing bikes and electronic cars. And, according to the grand plan, there will be an archive and research center for avant-garde art added after the biennale, to attract artists, including those in experimental architecture, sound art, film art and avantgarde theater. The museums under construction include the West Bund Museum of Art, Long Museum, and Yudeyao Museum of Art, and the blueprint calls for China's largest art gallery complex to pop up here some time in the future. Last year, DreamWorks SKG, the Hollywood studio behind hits like Kung Fu Panda and Shrek, chose to build their Shanghai studio in this area, which inspired the government to come up with plans for a digital film and electronic games manufacturing site. It will also hold eight theaters, which should help Shanghai in developing its large center for exhibitions and performances. China is paying closer attention to the world of art, design and architecture, and it certainly does not lack biennales. But this one is supposed to be different from all the others, including the Shanghai Biennale, according to Zhang Yonghe, former dean of MIT's Architecture School and chief curator of the project. One way is 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 either come here for it alone, or just come across it when they're taking a walk with their children," Zhang explains. A second difference, he goes on to explain, is in the theme - Reflecta and Fabrica - two Latin words that could describe Shanghai's history over the past three decades. "A retrospective look at Shanghai's developmental history reveals the rise of China," Zhang adds, "over the past 30 years, its construction work, development, and urbanization have been speeding up. "We use the Latin word 'fabrica', which means to make, to express the deeper meaning of the historical process, not only in the past but also at present and in the future. But, despite the continuing development, we also need to reflect on and review the past to construct a historical attitude toward the development that's the 'reflecta'." Another difference is the fact that this biennale will create a dialogue between architecture and other art forms, such as film and sound art. Why is that needed? Because, as Zhang says, for many people, architecture is the art of space, but it is also an art of time, which is always changing in illumination by day or night. And the other art forms will bring more change to architecture in the dialogue. "In this way, the old industrial plants will get new vitality through a re-design and we'll find that new beauty," Zhang concludes. Over the next six months, before the biennale commences, those 12 architects, including Zhang Yonghe; the Italian Vito Acconci, one of the founders of performance art; and the Danish company


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Schmidt Hammer Lassen Architects will be visiting the waterfront to get to work on their experiments. Afterward, artists from other

fields can create their own work based on their understanding of the buildings and the surroundings to form a dialogue between architecture

and other artistic forms. In any case, unlike so many biennales, the art activities here will roll on even after the 58-day event closes. 39


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Real est

No let up in skyrocketing of home prices 40


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CED Monitoring BEIJING-Housing prices face signiďŹ cant upward pressure in 2013 due to the possible effect of the current policies and the authorities may tax owners of multiple properties to guard against further price hikes, a top think tank said. "The tendency of housing prices this year depends on policy selection (by the authorities)," said Li Enping, a property market researcher with the Chinese Academy of Social Sciences, who is also an author of the academy's annual report on the country's real estate sector, which was released on Thursday. Li said that if local governments decide to strictly implement the tax on secondhand home sales, the prices will inevitably rise

because the extra tax will be transferred to buyers, as it is still very much a seller's market. Meanwhile, Li added, regarding surging secondhand home prices, new properties will also lift their pricing objectives. In the latest effort to cool the property market, local governments were urged to implement a 20 percent personal income tax on capital gains from property sales, if a homeowner sells the property within ďŹ ve years of its purchase and the property is not the only one owned by the seller. The authorities in major housing markets such as Beijing, Shanghai and Guangdong said in late March that they would implement the policy, which led to a sharp decline in secondhand

home sales in those markets. Although Li said that other local authorities are only expected to carry out the personal income tax policy on a "selective" basis, he pointed out that the country may tax the possession of multiple properties in the second half, if current policies continue to push up housing prices and worsen the market environment. "The mismatch between supply and demand has been growing for years," Li said. He added that the taxes on multiple properties might boost supply and keep overall housing prices at a stable level or even lead to a slight decline. The tax has been tested in Shanghai and Chongqing since the beginning of 2011, but mostly 41


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Real estate

for buyers of second homes or owners of high-end property. This week, the State Administration of Taxation denied that the pilot program will be extended to other cities, such as Hangzhou, adding that there is "currently no timetable for a national expansion". But, according to Li, the property tax pilot program may be accelerated in major cities, and levies will not only be on new homes but also on existing units at all levels. Meanwhile, he suggested that the current land transfer mechanism, which charges a one-off fee to use the land for 70 years, could be changed to rents paid annually. The move "could ease ďŹ nancing pressure for developers and provide long-term ďŹ scal revenue for local governments", he said. Zhang Hanya, a researcher at the Institute of Investment of the National Development and Reform Commission, said the government has been focusing on c u rb in g sp e c u la tive d e ma n d , while a more urgent issue is to a d d mo re su p p ly . "The government should reduce its administrative measures in the housing market and let the market play its role," Zhang said. This view was echoed by Zhao Song, director of the land price division of the China Land Surveying and Planning Institute, who said that the marginal effect of administrative measures has been declining, and many, such as purchase restrictions, have proven to have brought a negative impact. Wang Juelin, former deputy director of the Policy Research Center of the Ministry of Housing and Urban-Rural Development, said the market is under the spotlight this year mainly because of the overheated market in ďŹ rst-tier cities. "However, the property markets in central and western regions remain stable, and some even reported price declines. Such regional differences should be taken into consideration when formulating new policies," he said. 42


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Real estate

Property loans acce industrial lending g 44


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ccelerate, g goes slow

BEIJING -- 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. By the end of last month, financial institutions 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 to statistics from the People's Bank of China (PBOC), the country's central bank. The growth was 3.6 percentage points faster than that recorded at the end of last year, the PBOC said. Of the total, outstanding loans for property development quickened for the 10th consecutive month to reach 1.04 trillion Yuan as of the end of March, with a year-on-year increase of 21.4 percent. Meanwhile, financial institutions extended 6.46 trillion Yuan of medium- and long-term loans to the industrial sector as of the end of March, up 3.2 percent year on year. The increase was 0.6 percentage point less than three months earlier, dragged down by slower loans to the heavy industry, the PBOC said. Industrial output grew 9.5 percent year on year in the first quarter of 2013, down from 11.6 percent recorded last year, official data showed. Investment in property development gained 20.2 percent year on year in the first quarter, faster than the 16.2 percent growth in 2012. Altogether, outstanding loans by financial institutions in the country totaled 65.76 trillion Yuan as of March end, up 14.9 percent year on year, but the growth was 0.8 percentage points slower from a year earlier, according to the PBOC. 45


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Construction

New Zealand, China agree to share agriculture knowledge WELLINGTON -- China and New Zealand will expand their sharing of agriculture expertise and knowledge under a new bilateral agreement signed here. New Zealand Minister for Primary Industries Nathan Guy and visiting Chinese Minister of Agriculture Han Changfu signed the Strategic Plan on Promoting Agricultural Cooperation in Wellington. "This is an important agreement which will encourage cooperation

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and the sharing of knowledge to benefit both countries, " Guy said in a statement. The plan set out areas in which both countries could learn from each other, such as animal welfare and science, increasing productivity, and building skills and knowledge. "This document will further build on the strong relationship that our two countries share, particularly in the agricultural sector," said

Guy. Since the signing of the bilateral free trade agreement in 2008, New Zealand exports to China had almost tripled, from 2 billion NZ dollars (1.69 billion U.S. dollars) a year to 6.9 billion NZ dollars in 2012. "Two-way trade between China and New Zealand has reached almost 15 billion NZ dollars. Our aim is to double bilateral trade to 20 billion NZ dollars by 2015 and we're on track to achieve that


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goal, " said Guy. "The strategic plan will open wider the channels for cooperation, including between our industry organizations and companies," he added. "There are already a number of business ventures between China and New Zealand in the primary sectors, with (dairy giant) Fonterra looking to expand its milking operations in China." China was also keen to learn from New Zealand given its strong reputation for food safety and quality food products, according to Guy. The agreement would run until 2017 and could be updated at any time. Han's visit to New Zealand was believed to be the first by a Chinese Minister of Agriculture for over 30 years, and Guy would reciprocate later this year.

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