The best China News from the web in one place.

Collating the best China News from the web in one place and bringing you some of our own. China Brain is a community site for China Business Professionals, Academics, Entrepreneurs and Watchers.


A diversified policy towards Africa.

A diversified policy towards Africa.

China’s policy towards Africa over the last year has shown several new trends that illustrate Beijing’s evolving priorities and strategies in the continent that will have significant implications for African Nations.

Peace & Security in Africa.


In an unusual shift in policy, China has assertively enhanced its direct involvement in Africa’s security affairs. Two months into Xi Jing ping`s reign, Beijing unprecedentedly dispatched 170 PLA combat troops to the United Nations peacekeeping mission in Mali. This was in contrast to China`s policy of only contributing non combat troops to UN missions. It remains to be seen whether this move changes the PLA`s operating principle of “no combat troops on foreign soil”. China’s choice in dispatching combat troops for the first time in recent history does suggest rising interests, enhanced commitment and a direct role in maintaining peace and security of Africa.

In a further unprecedented and surprising move, China under Xi engaged in open intervention in the South Sudan conflict through direct mediation. In 2013, China’s envoy for African affairs, Ambassador Zhong Jianhua, paid no less than 10 visits to Africa to coordinate positions and mediate in the South Sudan issue. Again, in January 2014, in a rare display of overt political intervention, Chinese Foreign Minister Wang Yi publicly called for an immediate end of hostilities in South Sudan. At Ethiopia’s invitation, Wang Yi traveled to Addis Ababa to meet with rebel and government delegations. He openly urged “immediate cessation of hostilities and violence,” and publicly called for the international powers to back the Ethiopian-led mediation efforts. Given China’s considerable oil stake in South Sudan (China imported nearly 14 million barrels of oil from South Sudan in the initial 10 months of 2013), many believe that China is gradually abandoning its long-term “non-interference” principle to protect its overseas economic interests.

Under Xi Jinping, China has continued its naval missions in the Gulf of Aden whilst enhancing its security cooperation with Djibouti on such matters as local logistical supplies and emergency assistance. China has dispatched a total of 16 ships to the region and escorted over 5,300 ships.



China’s increasing direct involvement in the peace and security affairs of Africa is also reflected in its rising financial and military contribution to the main regional organization—the African Union (AU)—to help boost its security role in the continent. In 2013, China provided $1 million in assistance to the AU to support its mediation and coordination efforts in the Mali conflict. It has also provided military material assistance to African nations involved in the AU peacekeeping missions under the same framework.

China’s rising involvement in Africa’s security affairs is motivated by multiple considerations: primarily the instability and conflicts in Africa have increasingly become a direct challenge to China’s economic presence in Africa. China has reflected on its expensive lesson during the Libyan civil war in 2011, and is known attempting to take the initiative in preempting similar situations. Equally crucial is President Xi Jinping’s desire to build China’s leadership role and image on the international stage, peace and security issues in Africa being the perfect platform for such a goal.

New aspects of Chinese Economic Cooperation with Africa.

China has expanded its financing to Africa. In a little over a year, China has issued over $10 billion in loans to African nations, and promised a further $20 billion to be leant before 2015. The emphasis of these loans lies in China’s new priority of financing infrastructure, agricultural and manufacturing industries in Africa, a strategy that shifts away from its traditional investment in Africa’s extractive industries.


China is further strengthening its cooperation with African nations on developing their manufacturing industries. In the case of Ethiopia, the country is trying to become the center for manufacturing in Africa based on Chinese investment. This would serve to facilitate a shift in China’s own position in the world supply chain and transfer some of its manufacturing industries to Africa, which is eager for industrialization. Whilst this does not necessarily indicate an abandonment of the energy and natural resources Africa has to offer, it does suggest that China is trying to diversify its investment in Africa in pursuit of new investment models whilst defusing criticisms on China’s “exploitation” of African resources.


Diversifying the Chinese-African Political relationship.

In separate strategy to improve China’s image in Africa, Xi Jinping`s government is presently eagerly engaging the African media to propagate China’s virtues and beneficial investments in the continent. Under the “China-Africa People to People Friendship Action” plan, Chinese embassies across Africa are seeking collaborations with African NGO`s and have implemented dozens of projects. Although these projects are primarily implemented by NGO`s, they serve to diversify China’s aid model in Africa and promote exchanges and cooperation with society.

During his first year in office, Xi Jinping`s government has demonstrated a major new and diversified policy towards Africa and we wait to see the evolving relationship between the two.


Marketing Case studies: Middle Class Mum`s

Marketing Case studies: Middle Class Mum`s

With another 200 Million Chinese people expected to join the middle class by 2025, who will be making the purchasing decisions in these household and what will they be buying?


It`s the mothers. The highest percentage of a Chinese family’s disposable income is spent on their child after that it's the household. Mothers, by and large, decide how that money is spent and what brands they spend it on. This means that they control a very large portion of China consumer spending which is often much larger than their husband`s purchasing power. Any company attempting to sell consumer goods in China must understand this demographic and how they think. But what are the top priorities for mothers?



Health, Education, Household goods & Cars is what we believe mothers care about. Whilst middle class consumers have rising purchasing power and are increasingly willing to pay more for higher quality, brand names, and differentiated features, they are still price sensitive and recognizing who is doing the purchasing is essential to success in the marketplace. Brands need to connect emotionally and forge a strong brand position.


Health. The expansion of the middle class is not just stimulating investment in private hospitals but also in dental services, cosmetic specialties, rehabilitation services and elderly care. Spending that would previously have been seen as a luxury items is becoming a standard cost of living for the middle class. Patients usually want to go to clinics attached to the highest-reputation hospitals and private health insurance is now a necessity for many families to facilitate this.


Education. In a country as populated as China it`s all about differentiating yourself for the other thousands of equally qualified people and with the one child policy still in force the child is the center of the family. Academic achievement reflects successful parenting and tiger mothers often only allow their children to engage in activities that would help further their academic ambitions: Exam preparation classes, Foreign language lessons, Arts and music classes, role play centers for social education and physical exercises. No expense is too great to further the potential of the families child.


Household goods. Buying habits are changing in a subtle shift away from a focus on ‘Value for money” to quality and value added goods that have a track record for good safety. As urbanization accelerates, consumer spending is becoming more like that of the West’s middle class. Urban Chinese are shopping to meet emotional needs, driving a skyrocketing demand for middle-class goods, food, and entertainment.


Cars.  Nothing says you have made it better than a car. Demand simply keeps on rising for both domestic and foreign brands with China becoming BMW`s biggest market in 2013.  Increasingly it is women who now make the final decision about which car to purchase and forefront in their minds is Quality & Safety.




As marketers focus on China’s middle class they will also have to prepare to serve an even more affluent upper tier of that demographic which, in many cases, will be located outside of China’s first-tier cities. According to consulting firm McKinsey, China will soon undergo a shift from its current “mass middle class” to a new category of upper-middle-class Chinese consumers. Calling this cohort the “new mainstream,” the firm identifies them as consumers with household incomes between ¥106,000 and ¥229,000 ($16,000-$34,000). Perhaps even more striking, their numbers will swell from just 14 percent of urban households today to 54 percent by 2022, according to McKinsey’s estimates. It is not uncommon for women to keep the family bank accounts in their own names and give their husbands a weekly allowance hence it will be the mothers of this new mainstream that will be holding the purse strings and the demographic that must be catered to. Chinese women are emerging as one of the most confident bodies of consumers in the world. And they have the money to keep on spending.


Pictorial: China pre-1900.

Pictorial: China pre-1900.

A selection of incredible photographs from China Pre-1900 showing both the ordinary lives of Chinese people as well as the Empress Dowager Cixi and Foreign troops sent to quell the Boxer Rebellion. The imgaes are taken form the collections of: Albert Khan (1860-1940), John Thompson (1837-1921) and Jonathon Goforth (1859-1936) & China Magazine.

Books: The New Emperors: Power and the Princelings in China.

Books: The New Emperors: Power and the Princelings in China.

By Kerry Brown for China Brain.


`The New Emperors’ looks at the nature of power in modern China, and in particular at the key location where most of this power is now placed – the Standing Committee of the Politburo, which, since 2012, has had a mere seven people sitting on it. It is on this body that the key strategic decisions about China’s economic and political direction are made. The members of this group are superficially very similar. They are all men, all ethnically Han, and all in their fifties or sixties, They are lifelong members of the Communist Party, and own total allegiance to it. They have served almost all their professional careers in entities either under its control or at its centre. But looking a little more closely at the biographies of these seven individuals shows that under the surface there is great diversity, and that the current Communist Party of China is not a monolithic entity, but more akin to a dynamic organism, adapting, reshaping, changing and evolving. The sole shared quality is their allegiance to the Party’s continuing hold on power, and its centrality in modern Chinese political life.  This could be called their common cause, as the Party’s faithful servants and guardians.



In this book, my approach has been to map out a new concept of what power is in modern China, and how people exercise it. I argue that the key issue is not about factions, with their neat delineations and boundaries and misleading rationality, but more networks, loose, liquid and constantly shifting and changing. The concept of network, outlined in works like that of the great Chinese sociologist Fei Xiaotong, serves to capture the dynamism of political debts, allegiances and negotiations in China. The transition from the leadership of Hu Jintao and Wen Jiabao to Xi Jinping and Li Keqiang illustrates this. This was a succession process without overt public campaigning. The sole figure who did seem to be pushing for his promotion onto the Standing Committee, Bo Xilai, failed spectacularly in achieving his aim, and is now in jail for claimed corruption crimes. All the other figures had to promote their cause in a subterranean, calculating way, building up support and capital amongst business, provincial, family, party, ministerial, intellectual and military circles. Those that secured the widest support had the best chance of succession. The final casting vote in the process was the benediction given at the very end by retired former elite leaders, such as Jiang Zemin and Zhu Rongji.


The outcome of the process over 2011 and into 2012 was a Standing Committee where membership was largely based on specific constituencies and skills that successful figures brought to a leadership that is faced with some of the toughest issues of continuing reform faced in the country over the last four decades. Of the seven, six had served at the highest level in Provincial government, in charge of major economies, some of them working in two or more large provinces as Party bosses. The exception, Liu Yunshan, figures in the leadership as ideological leader, a former journalist for the Xinhua news agency in Inner Mongolia whose route to the top had largely been through the state propaganda and information management apparatus. His membership shows how critical this area is for the new leaders. The rest had all had provincial and central ministerial records to lay down as evidence of their abilities.


In the `New Emperors’ I look at the previous statements, actions and records of the leadership before they were promoted in 2012. In Xi Jinping, we see the member of an elite Party family whose father remains immensely respected and admired, and whose networks were of great assistance to his son in coming through Fujian, Zhejiang and then Shanghai before being brought to the Centre in 2007. Xi Jinping has been called the `peasant emperor’ in China, someone who knew hardship as a youth but who is now seen as a member of the new aristocracy.  Li Keqiang is also linked to former elites through his wife, but has a stronger intellectual background, studying law in Beijing in the 1980s and then completing a Ph D in economy in the early 1990s. Li’s stewardship of Liaoning and Henan provinces shows someone who was able to manage crises, but about whom there are questions over his skills as an implementer.


For Zhang Gaoli, the story is simply about an official from the state oil industry who was able to deliver staggering high levels of GDP growth in the provinces he was put in charge of through skillful recruitment of business networks. Zhang Dejiang, a North Korean trained economist, showed different tactics in Zhejiang, and then Guangdong province, using high levels of physical coercion to deal with acrimonious disputes, speaking out strongly against the private sector, but showing total pragmatism when put in charge of provinces with huge private entrepreneurialism, never letting ideology standing in the way of economic success. Wang Qishan is the maverick of the current leadership, someone who came from a mixed professional background, studying history and then working at a think tank in Beijing and only joining the Party when he was already in his thirties. But Wang’s skills as an economist and a diplomat are already proven, and his current task of heading the anti corruption agency shows that he is regarded as someone who gets things done, no matter what enemies he makes.


Finally, there is Yu Zhengsheng, a man from one of the most elite family backgrounds, and with the longest and richest provincial experience, but someone who has also suffered greatly, with his sister reportedly killing herself in the Cultural Revolution. Yu is regarded as the `older brother’ on the leadership, someone very close to the family of former paramount leader Deng Xiaoping.


Beyond their biographies however, there is the key question of what precisely they believe their mission is, and what sort of world they are trying to create in China. In the final chapter, I look in detail at the words of the three who have said most about their beliefs in the last decade – Xi, Li and Liu. With these figures,  I map out from their own worlds a vision of the world and their role in it. For Xi, this is clearly restoring the moral mandate of the party after too many years of allowing it to be sullied by greed and larceny; for Li, the core issue is unleashing more spaces for growth within China and becoming less economically dependent on the world outside; and for Liu, it is conveying the core message of party ideology and belief to a sometimes unreceptive and disbelieving membership.  For all of them and their colleagues, the great mission is a simple one: to steer China towards becoming a strong, rich and powerful country in the 21st century, and one that has its rightful status restored in the world.



Kerry Brown is Professor of Politics and Director of the China Studies Centre at the University of Sydney, and Associate Fellow of Chatham House, London. `The New Emperors: Power and the Princelings in China’ was published by I B Tauris in June and available from Amazon here.


Can China sustainably manage its domestic tourism sector?

Can China sustainably manage its domestic tourism sector?

By Roy Graff for China Brain.


China has been the world's largest domestic tourism market since 2009, when it registered an astonishing 3.3 billion individual trips. Last year domestic tourists spent ¥2.6 trillion ($417 billion) according to the China Tourism Academy. Whilst foreign countries have been actively encouraging Chinese tourists, who tend to spend a relatively high sum of money during their time abroad, the largest market potential remains within the country. Furthermore, domestic tourism is expected to grow by 10-20% annually in the near future.


A good indication of expected growth in the sector can be seen by corporate expansion plans. French hotel giant Accor announced that about a third of its planned 100 new hotels in China are to be opened close to domestic tourist destinations as opposed to cities. Furthermore, Walt Disney & Co. will open a Disney resort near Shanghai in 2015 or 2016. But what does this burgeoning love of travel mean for the environment and is it being sustainably planned? Besides impacting cultural and natural heritage treasures directly, tourism strains water and waste management, consumes vast amounts of energy, and creates vast amounts of pollution. Will China be able to relieve these pressures and make its tourism industry more sustainable?


If you were a farmer living on the planes of Western China and dark clouds gathered over the mountains, you would know that a flood may be about to hit your land. Water is a resource you need but too much of it would wash away your newly planted seedlings and possibly your property as well. The same risk of ‘too much of a good thing’ can be applied to the domestic tourism sector in China.


The villagers in Dujiangyan, Sichuan province, have developed a sophisticated irrigation system to protect their fields from sudden water surges and ensure that all farmers have equal access to water during dry spells. This so impressed modern archaeologists and sociologists that it has been recognized as a UNESCO World Heritage Site.


Jiuzhaigou, another UNESCO World Heritage Site in Sichuan, despite its remoteness, attracts tens of thousands of tourists every day. The area is indeed very beautiful and will see its popularity increasing. However, it also contains a fragile ecosystem, in which wildlife has nearly dissappeared, due to the increasing human activity. Although visitor numbers are restricted by UNESCO, during the peak-season, the amount of tourists often exceeds the limit.


All across China, domestic tourism has been booming (so has outbound tourism) and its pattern is changing from people travelling only in tour groups to more independent self organised travel, to ever more diverse regions of China. When you consider that statistic of 3.3 billion trips each year, what environmental impact can we expect as tourism continues to expand?


It is China's diverse and until recently, isolated scenic areas and natural wonders that are the areas leading the trend for growth. One example is Guizhou, a minority-dominated and underdeveloped province in South West China, where income from tourism rose by 30%, to ¥186 billion ($29.8 billion) in 2012.



Chinese netizens often use a phrase 人山人海 (renshan renhai) “a sea of people” to describe the scene around attractions during national holidays. Beaches and mountains strewn with litter after national holidays are becoming a usual vision and unchecked building development in environmentally sensitive areas continues without EIA (environmental impact assessment) or government long term planning and supervision. Water and energy resources are often not adequately managed to ensure local communities are protected while tourists enjoy hot water, air conditioning and imported food. This isn’t exclusively a Chinese problem but the scale of tourism in China outstrips any other place on earth.




Sustainability is an oft-used and abused term that has to all intents and purposes lost its effect of changing people’s behaviour or encouraging actual government action. Peggy Liu, Chairperson of JUCCCE has said that the language of sustainability no longer serves its purpose and we must reassess how we define what is good for people and the planet, starting with simple human ambitions for quality of life and dignity. Even those that benefit in the short term from over development in tourism spots have children and relatives who may wish to enjoy these resources in future generations. This means understanding and addressing issues such as carrying capacity, resource allocation and people flow. We should ensure that local communities across China share in the rewards of tourism growth through employment, nature and tourism education and training. When people who live locally care about the resources that others pay to see, they will do a much better job of protecting these same resources.


In China, usually it is the local governments that are in charge of the majority of tourist attractions, therefore there is little transparency in management, and the only criterions used to evaluate performance is the number of sold tickets and profit, hence there is little space for environment protection and sustainability. By rewarding management in a transparent fashion and education, it can be ensured that people in charge of national parks are committed to responsibly operating them by encouraging a transparent administration, adding new benchmarks for performance and ensuring that they commit to long-term sustainable management.


Taking a national park as an example, what this means in practice is an accounting system that considers not only direct management costs but also puts value on waste cleanup, effect on surrounding areas, support of local communities through training and employment schemes, increasing the well being of people in the local community and revitalizing the eco-system through re-introduction of native animals and plants. Setting goals for all these things and rewarding management financially for them will offset their reduced income from leasing adjacent land to development and earning additional revenue from concessions and private business operating inside the park.


China has an opportunity to become a model of good, long-term planning and sustainable management of its scenic spots. There are companies already taking the initiative in planning and developing new tourist resorts and attractions, thanks to the leadership of visionaries that understand China is facing an environmental catastrophe if business continues as usual.



However, due to the top-down nature of planning and development in China, a lot of responsibilities lies with the central and local governments, which must pay a lot of attention to the problem, enforce environmental regulations and incentivize private business and park administrations not only encourage economic development, but also bolster a long–term, viable approach that protects both the nature and human heritage for future generations.



Roy Graff is Managing Director of ChinaContact, a boutique market entry specialist for China’s tourism, luxury retail and hospitality sectors.


As a keen supporter of sustainable development and environmental protection he provides pro-bono time to causes he is passionate about. Currently Roy serves as Project Director – Eco and Heritage Tourism at JUCCCE. He has held several volunteer positions including Vice President of communications at PACE (Professional Association for China’s Environment) in China and council member of Tourism Concern in the UK. Roy cooperates with UNESCO, IUCN and other bodies to promote a sustainable and ethical tourism industry in China.


Thought Leadership more...

Report on the Diversification of China’s Education Industry 2014.

Report on the Diversification of China’s Education Industry 2014.

Date: 2014-06-16

Since the beginning of 2014, two hot issues have emerged in China’s private education sector. First, in March this year, Premier Li Keqiang pointed out that “vocational education reforms should keep current with social progress”, emphasizing that “efforts should be made to develop vocational education and professionals that are suited to market needs, to create a merit-based but not diploma-oriented social atmosphere.” This statement opens up a new pathway for vocational education, serving as a beacon for the development of private and vocational schools in China. Second, an investment spree in the on-line education sector beginning the second half of 2013, has continued to make headlines in mainstream media. Internet behemoths are making inroads into this new business area, leading to turbocharged growth of the online education market. But a look at the private education market clearly shows that online education represents only a small proportion. In fact, the market is now growing at a slower pace, in its transition from “enclosure movement” to “intensive cultivation”. In this stage, How China’s private education groups diversify becomes especially vital.



Caged Tiger: The Transformation of the Asian Financial System.

Caged Tiger: The Transformation of the Asian Financial System.

Date: 2014-05-27

There will be no Asian Century without an Asian financial transformation.

The ‘Asian Century’ is upon us. Asia’s economy already accounts for a quarter of global economic output, up from 17% two decades ago. ANZ expects Asia’s share to rise to 35% in 2030 and to be over half the world economy by 2050. The United States (US) and Europe, which currently account for around half the world’s economic output, could see their share fall to less than a quarter by mid-century. This is a tectonic shift in the global economic landscape.


Yet with the exception of Japan and the newly industrialised economies, Asia’s rapid industrialisation of the past two decades has not been matched by an extensive development of its financial system. Many Asian countries have relatively closed and highly regulated financial systems, with a dominant bank sector and heavily managed exchange rates.


Litigating effectively: When in China, do as the Chinese do?

Litigating effectively: When in China, do as the Chinese do?

Date: 2014-04-02

Whenever a Western company loses a business dispute, it usually accepts the ruling of the court and pays up (assuming appeal is no longer possible). Chinese businessmen tend to hold a different view: it ain’t over until it’s over.


When entering into a transaction with a Chinese counterpart, enforcement of the agreement should already be taken into account during negotiations. A (foreign) bank guarantee or escrow is of course a good solution, but this is often a non-starter for the Chinese side.

The Evolution of the 2nd & 3rd Tier Cities in China.

The Evolution of the 2nd & 3rd Tier Cities in China.

Date: 2014-01-06

There are 35 regional cities in China which account for approximately 16 percent of China’s population and 36 percent of China’s Gross Domestic Product (GDP). The majority of regional cities are located on the east coast, particularly in the economically advanced regions of the Bohai Rim, the Yangtze River Delta and the Pearl River Delta, and a number of inter-connected ‘city clusters’. The remaining cities are more widely distributed through the country. Each one of these 35 featured cities offers foreign companies particular opportunities, as well as challenges, in a wide range of sectors. These regional cities are considered as the 2nd and 3rd tier cities of China. In general they have a population of more than 5 million people, have a provincial GDP of at least RMB 250 million and the key characteristics are rapid economic growth, lower input costs, large and developing consumer and industrial markets, strong local government support and policy momentum for regional economic development.

Finding faster growth. I eat therefore I am.

Finding faster growth. I eat therefore I am.

Date: 2013-12-16

As millions of Chinese emerge from poverty they use newly disposable incomes to define themselves through food. If they are to take advantage, brands must first understand why.


23 million members of the Chinese population will have money to spend on indulging themselves for the first time this year. By 2020, it’s likely that over 160 million more will be able to do the same.
New research from TNS proves that the vast majority of these newly disposable incomes will be spent on eating and drinking, enjoying new types and new quantities of food and beverages. For brands and manufacturers in these categories, no greater opportunity exists on earth


Repatriation Strategies – How can a SME get their profits out of China?

Repatriation Strategies – How can a SME get their profits out of China?

Date: 2013-12-09

In today’s environment, with China as an increasing consumer market, many companies have a respectable part of the total value chain in China. Quite often this results in having money “trapped’ in China. Through the appropriate business model, foreign investors can create solutions and structures to remit cash back to the shareholder or any other related company.


Profit repatriation is a delicate subject under China’s foreign direct investment regime. Various regulatory, formality and tax factors surrounding the issue make it worthwhile for investors to define carefully their repatriation strategies, so as to entail tax and profit outcome that they should be legally entitled to. These strategies may not necessarily be complex or costly, while their effects could be substantial.

Value-Added Tax (VAT) Reform in China

Value-Added Tax (VAT) Reform in China

Date: 2013-11-20

For many years, China has operated a dual system of indirect taxes, with VAT applicable to the domestic purchase and sale of goods as well as the importation of goods, typically at a rate of 17%. By contrast, most services have been subject to Business Tax (BT) at rates of either 3% or 5%. These reforms are taking place because BT is an inefficient turnover tax. It effectively taxes each stage of a supply chain, irrespective of the profit or “value-added” by each business in that supply chain. By contrast, VAT is a tax collected by businesses, but effectively borne by the end consumer.


Taxpayers should actively communicate with customers and suppliers and re-evaluate their business models, including but not limited to pricing, invoice issuance, previous arrangements for the purpose of avoiding repeated BT tax levy etc., to effectively reduce their VAT liabilities and optimize the cost savings benefits. Most importantly companies should meet with their direct tax officers to discuss the tax liabilities imposed upon them for various “services” in order to have a full understanding of the new VAT principles.


Intellectual Property Rights (IPR) - Best Practices in China.

Intellectual Property Rights (IPR) - Best Practices in China.

Date: 2013-09-03

"If you can make it, they can fake it!” – A common phrase used in China. Intellectual property (IP) protection is one of the major concerns that western companies have while deciding whether to collaborate with Chinese companies or even enter the China market. The IP protection history in China is very short. For centuries, the Chinese people had not had any sense of protecting their own inventions or respecting the inventions of others. Not until 1984, when the Chinese government established its first patent law. The Chinese government has realized that creating a positive IP protection environment is not only important to protect the rights of foreign companies collaborating with their Chinese partners, but also critical to foster a creative environment for technology advancement of Chinese companies.


There are numerous internal and business policies that companies can undertake to reduce the exposure of IP misuse in the first place, including internal IP control; non-disclosure of trade secrets and know-how; careful selection and monitoring of business partners in China, including distributors and licensees; or avoidance of business partners. Although this may make market penetration more difficult, it will protect a company’s vital assets from being exploited. It is advisable for companies to seek advice on IP issues before entering the market.


Analysis of the competition strategy for MVNOs

Analysis of the competition strategy for MVNOs

Date: 2013-08-23

In May 2013, the Ministry of Industry and Information Technology issued the Notice for the Launch of the MVNO (Mobile Virtual Network Operator) Pilot Program in China, allowing private enterprises to enter into the MVNO business. In a short period of time, we will start seeing MVNOs operating in China's telecom market.  Which types of enterprises have advantages in the MVNO area? When different types of enterprises enter the MNVO market, should they adopt different strategies? What are the potential opportunities and threats in the MVNO market?



Is China’s Economy Crashing? The Imminent Middle Income Trap.

Is China’s Economy Crashing? The Imminent Middle Income Trap.

China’s economy might indeed crash. Then again, it might not. Bearishness on China has gone viral. Two years ago, talk was of China’s economy saving the world. Today observers have swung to the opposite extreme, one expressed elegantly by Paul Krugman as “the Chinese model is about to hit its Great Wall, and the only question now is just how bad the crash will be.”



The following essay was written for the Boao Review by Professor Danny Quah of the LSE where he carefully dissects current predictions that the Chinese economy will either dramatically crash or else become ensnared in the ‘middle income trap’, please click here to open the full PDF.




Located near the geographical center of China but culturally part of Western China, Xining is the Capital of Qinghai province and at the heart of the governments Go West policy. With a population of about 2.25 million inhabitants about half of whom live in the main four urban areas, it is a prefectural level, third tier city with a GDP per capita of ¥19,494 RMB (US$2,800) in 2008, placing it roughly in the middle of all Chinese cities. Its main industries are currently wool spinning and textiles, fur, high altitude animal husbandry, dairy products, salt extraction & processing, Traditional Tibetan medicines, and light processing industries.


Xining has a relatively high percentage of ethnic minorities, the majority being Hui with also a sizeable Tibetan population. It is home to significant religious sites for both Muslims and Buddhists. Xining has a cold, semi-arid climate due to its high altitude.



Major Economic Indicators (2012)



Land Area (km2)




   GDP (RMB billion)



GDP Composition


          Primary Industry (Agriculture)


          Secondary Industry (Industry & Construction)


          Tertiary Industry (Service)


    GDP Per Capita (RMB)


    Unemployment Rate


    Fixed Asset Investment (RMB billion)


    Total Import & Export (USD million)


          Export (USD million)


          Import (USD million)


    Sales of Social Consumer Goods (RMB billion)


Source: Xining Economic and Social Development Report 2012


Xining has seen substantial economic growth over the past few years with 15% growth in GDP in 2012 from a year earlier. It’s GDP makes up nearly half of the total province (45.2% in 2012). In the same year, Xining’s value added industrial output rose 19.5% and foreign trade 14.5% year on year.


It is at the center of the so called Silk Road Economic Belt being a hub for both logistics and investment for increased economic ties with Central Asia. Key to this development plan is the currently ongoing Industrial Transfer process where manufacturing in the eastern costal cities are being actively encouraged to re-locate to the area, with a special focus on renewables.




One of the largest development projects in recent years was the Xining Economic and Technological Development Zone, completed in 2010. XETDZ lies in the east of Xining and is the first of its kind at the national level on the Qinghai-Tibet plateau as part of the country’s attempt to further develop the western region. XETDZ focuses on export-oriented industrial projects. It has an area of 12.8 square kilometers with a GDP over 18 billion in 2010.


Ferrosilicon, machine tools, bearings and cotton yarn are major exports of Xining. Japan, South Korea and the U.S. are the most important trading partners of the city.


The province is rich in natural resources, and current has an economy based on mineral extraction, hydropower, and Highland agro-husbandry. Oil and natural gas from the Chaidamu Basin have also been important contributors to the economy. Underdeveloped infrastructure however has thus far prohibited it from fully capitalizing on these advantages. For the future however, the focus will be very much on “Inclusive and Sustainable’ development revolving around solar, wind, and low-carbon energy projects.


Major Companies:

Qinghai Salt Lake Industry Group is a leading producer and distributor of potassium fertilizers. Headquartered in Xining, it posted RMB 5.9 billion in revenues and RMB 1.5 billion in net profits for 2010.


West Mining Co is a private company headquartered in Xining. It is engaged in the mining, smelting and trade of zinc, lead, copper and aluminum. It is China’s second-largest producer of lead concentrate. It posted RMB 18.51 billion in revenues and RMB 989.43 million in net profits for 2010. West Mining Co listed its A shares on the Shanghai Stock Exchange in 2007.


Xining Special Steel (Group) Co., Ltd. is the largest special steel enterprise in Northwest China with annual output of 400,000 tons. It produces steel bars and reinforced bars and machinery. It posted RMB 7.05 billion in revenues and RMB 233.12 million in net profits for 2010.


Qinghai Jinrui Mineral Development Co., Ltd. is principally engaged in the research, development, production, processing and sale of strontium products and castings. It was listed on the Shanghai Stock Exchange in 1996 and has total assets worth over 1.3 billion as of 2012.


Xining New Energy Development Co., Ltd. is a high-tech and joint stocking enterprises and engages in solar energy power generation. It is the largest production base of household solar energy power generation system in China.


      Golmud 200 MW PV solar plant


Qinghai Supower Titanium Co., Ltd. is the only company in Qinghai which produces and processes titanium and titanium alloy. Located in XETDZ, the company employs about 200 people with an annual output of 8,000 tons of titanium. It was founded in 2008 and has a registered fund of RMB 240 million.


Qinghai Huanghe Hydropower Development Co. Ltd. is a comprehensive energy enterprise focused on the development and construction of power stations as well as the production and sale of silicon products and solar power generating equipment. It was established in 1999 under China Power Investment Corporation and now has total assets worth over 57 billion RMB.



Xining is rich in mineral resources. Its reserves of potassium, magnesium, lithium, iodine, natural sulfur, silica and asbestos rank the first in China.



As a provincial capital, Xining is the center of education of the province. As of the end of 2012, the city had 9 colleges and universities with a total of 61,858 students. The major universities include Qinghai University, Qinghai Normal University, and Qinghai University for Nationalities.



Xining's main station is the first stop on the Qinghai-Tibet train line. This line, completed in 2006, is the world’s highest railway. As a result, Xining has considerable tourism from travelers passing through on their way to Tibet, especially as this is considered the best place to start the journey in order to acclimate to the altitude. Xining is also the connecting point for trains heading the opposite way on the Lanzhou-Qinghai Railway.


The main station has almost been completed for the high-speed rail link to Lanzhou and Urumqi, with construction due to finish in August.


Xining Airport (IATA: XNN) is located about 30km east of downtown Xining. It has 13 airlines operating out of it heading to more than 20 domestic destinations and Hong Kong.


There are long distance buses out of Xining to about ten surrounding cities ranging from 4-20 hours away. These buses run on China National Highway 214 out of Xining.


Within the city there is a low-cost bus system (flat-rate 1 RMB) that runs until about 9 p.m., sometimes ending earlier in the winter.



Xining is a popular tourist destination in the summer, especially as it is an important religious location with the Ta’er Monastery(one of six famous monasteries in the Gelugpa Sect of Tibetan Buddhism) and the Dongguan Mosque (one of the most famous mosques in the northwest region of China).


Tourism is also an important pillar in Xining. In 2012, it hosted 11.28 million tourists, with a tourist income of RMB 7.52 billion, up 33.9% year on year.


History and Culture

There are about 37 nationalities living in Xining, though only a few groups are numerically significant. According to the 2010 Census, Han Chinese make up 74.04 percent of the total population of Xining, while Hui (16.26 percent), Tibetan (5.51 percent) and Tu (2.6 percent) are the main minority groups in the city.


Xining has a history of over 2,100 years and was part of the Northern Silk Road. It was also significant as a western stronghold against foreign attacks in the Han, Sui, Tang, and Song dynasties.


Key Indicators on ASEAN-China Trade & Investment 2013

Key Indicators on ASEAN-China Trade & Investment 2013

The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration. At present, China is the largest trading partner of ASEAN while ASEAN is China's third largest trading partner. From 2002 to 2012, China-ASEAN bilateral trade climbed 23.6 percent annually to its current 400 billion U.S. dollars. Mutual investment added up to over 100 billion dollars by the end 2012. Currently member countries and China are working to upgrade and deepend the China-ASEAN Free Trade Area (CAFTA) that was established in 2010.



Key Indicators on ASEAN-China Relations (2013): Trade






ASEAN-China Trade

443.6 billion USD

(ASEAN Importing 244.1 billion USD /Exporting 199.5 billion USD)

China is ASEAN's largest trade partner, and ASEAN is China's 3rd largest trade partner.

Increased by 10.9% from 2012

 China's Trade with Malaysia

 106.07 billion USD

(Malaysia Importing 45.93 billion USD /Exporting 60.14 billion USD)

 1st among ASEAN Member States

Increased by 11.9% from 2012
 China's Trade with Singapore

75.91 billion USD

(Singapore Importing 45.86 billion USD /Exporting 30.05 billion USD) 


 Increased by 9.6% from 2012
China's Trade with Thailand

71.26 billion USD

 (Thailand Importing 32.74 billion USD /Exporting 38.52 billion USD)


Increased by 2.2% from 2012

 China's Trade with Indonesia

 68.35 billion USD

(Indonesia Importing 36.93 billion USD /Exporting 31.42 billion USD)


Increased by 3.2% from 2012 
 China's Trade with Vietnam

 65.48 billion USD

(Vietnam Importing 48.59 billion USD /Exporting 16.89 billion USD)


Increased by 29.8% from 2012
China's Trade with the Philippines

38.07 billion USD

(the Philippines Importing 19.84 billion USD /Exporting 18.23 billion USD)


Increased by 4.6% from 2012

Source: General Administration of Customs of China


Key Indicators on ASEAN-China Relations (2013): Investment


 ASEAN-China Investment Total: 14.09 billion USD


 ASEAN's Investment to China Total: 8.35 billion USD China's Investment to ASEAN Total: 5.74 billion USD 
Rank   Country  Investment    Rank  Country Investment
 1st among ASEAN Member States  Singapore  7.327 billion USD  1st among ASEAN Member States Singapore 2.4 billion USD
 2nd Thailand  480 million USD 2nd  Laos 800 million USD
 3rd  Malaysia  280 million USD  3rd  Indonesia  760 million USD

Source: Ministry of Commerce of China


Hanergy Solar Group

Hanergy Solar Group

Beijing based Hanergy is China`s largest, privately owned, producer of renewable energy. The group operates in the hydropower, wind power and the solar power fields, whilst it`s focus has now shifted towards the latter, the company has become the largest thin film solar panel producer in the world and has a presence in Europe, North America and Asia-Pacific. The company was recently featured in the MIT Technology Review’s “50 Smartest Companies of 2014” ranking, probably due to its almost 1000 patents, mostly related to photovoltaic innovation.



Currently Hanergy’s installed capacity for hydropower exceeds 6 GW, whilst the same figure for wind power stands at 131 MW according to the company’s reports. The company also has the world’s largest, privately built, power station, Jin’anqiao. Its Wind power plants are in Jiangsu and Ningxia provinces.


However, today, the core business and focus of the company is the development and production of photovoltaic panels. Hanergy has made striking progress in becoming a global leader in the field, considering it only started the development of its photovoltaic arm 5 years ago. Local media in Guangdong, province where Hanergy launched its solar panel operations, coined new term – “Hanergy speed”. The company claims its annual capacity for producing PV panels is now over 3 GW, which would translate to 4 billions kWh of electricity annually. The group has signed construction agreements for solar power plants with a 4 GW total capacity in Inner Mongolia, Ningxia, Jiangsu, Hainan, Shandong, Hebei and other provinces, as well as in several European countries.


Hanergy focuses on thin film photovoltaic solar panels. Production line start-up costs are relatively high whilst efficiency is lower than traditional silicon panels, but the lower production costs and consistently improving transformation rate should increase thin film panels commercial attractiveness. Over supply in the solar industry forced numerous companies out of business, some of which were rescued by Hanergy Solar Group (HNS), in which Hanergy Group acquired a controlling stake in February this year.


Hanergy Group and Hanergy Solar Group have been aggressively expanding in both the domestic and international markets. It recently signed a partnership with IKEA, where it will furbish its retail stores with solar panels in the UK and China. Furthermore, by acquiring MiaSole and Global Solar Energy in the US and Solibro in Germany it has significantly strengthened its R&D capacity The latter has been working on improving conversion efficiency of Copper Indium Gallium and Selenium (CIGS) panels since the acquisition, with highest efficiency rate of patented panels being 15.5% conversion, while the latest lab tests are reaching 19.6% conversion: meaning about a fifth of sun’s radiation is being converted into electricity. Moreover, Hanergy has signed an agreement with Aston Martin Racing, and will explore possibilities of solar technology application in motorsports.



However, despite all positive news, Hanergy’s future plans seem to be both risky and reliant on Governmental patronage. The group’s investments into wind and solar farms are only 30% - 40% funded by the Hanergy itself, the rest of the capital usually coming from local governments. If Hanergy fulfills its expansion plans, it will have a solar panel production capacity of around 6.6 GW, while globally added capacity was just less than 40 GW last year, with a quarter of it coming from China. It believes that its markets success is dependent on it`s development and delivery to customers of its latest CIGS panels and considering Hanergy does not currently figure among the top sellers globally, all will indeed depend upon the volume of its CIGS panels shipped to end users.


China`s foreign aid budgets 2001-2013.

China`s foreign aid budgets 2001-2013.
This paper aims to estimate China’s net foreign aid from 2001 to 2013 as compared to net ODA figures which OECD DAC usually uses. First, a practical definition to capture China’s foreign aid activities as a proxy for China’s ODA was proposed. It consists of grants and interest-free loans (treated as grants), concessional loans as bilateral aid, and contributions to international development agencies as multilateral aid. Second, both net and gross disbursements of China’s foreign aid were estimated. The results showed that China’s net foreign aid has grown rapidly since 2004 and reached US$ 7.1 billion in 2013. The share of bilateral aid is much larger than that of multilateral aid. The difference between net and gross foreign aid is still small due to the fact that the repayment of concessional loans is still relatively limited.
Relevant points from the paper are:
  • Most Chinese aid is provided bilaterally. Only 15% is given as multilateral aid.
  • Concessional loans, provided by China Eximbank, now make up nearly half of the total aid.
  • There are more than 40 departments involved in some way.

The full paper is available here.

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Do you believe China housing prices may be set for a long period of stagnation?


Yes:20%No:40%Only in Tier 1 Cities:40%

Are you willing to change your lifestyle to reduce your environmental footprint?


Yes:57%No:8%Yes, but to the extent that comfort & convenience of my life is not sacrificed:36%

Do you believe Beijing would benefit from having the Central Government moved away to a purpose built centre outside the city limits?


Yes:63%No:20%Interesting Idea!:17%

Which city in China will enjoy the highest GDP growth in 2013?



If China were to reach the levels of Individual consumption of the West, do you believe the World could support that?



Which of the following Chinese Auto brands would you consider purchasing?


Geely:12%BYD:21%Great Wall:32%Cherry:1%None of these:34%

What do you see as being the most pressing Social issue China faces over the next decade?



Is China currently an investment opportunity or heading for crisis?



How many gold medals will China win in the Olympics?


45+:16%40-45:24%35-40:48%-35 :12%

Where will the Shanghai Composite be at the end of 2012?


more than 2,200:50%more than 2,500:21%more than 2,700:29%

How many Chinese companies will be in the Fortune 500 by 2015?


more than 50:57%more than 100:21%more than 150:21%

What do you think China's GDP growth will be in 2012?


less than 5%:20%less than 10%:60%more than 10%:20%

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