The best China News & Insight from the web in one place.

Sinosolutions

Resources

China Logistics Development Report

China Logistics Development Report

Not even the worst economic crisis in 80 years could halt the growth of China’s logistics industry. The world’s rising economic superpower still put up growth numbers that aroused the envy of the rest of the world. Beijing continued to invest enormous sums of money into massive infrastructure projects, building new airports, railway lines, expressways, and intermodal centres. China’s full-speed march into modernity appeared far less affected by the dire news emanating from other corners of the world than many of the more developed regions.

Logistics, the industry that greases the wheels of the great Chinese economy, continued to grow at a rapid pace. Yet to argue that the 2008-9 was a uniformly positive year for the industry would ignore several troubling signs. Port throughput growth fell nearly everywhere in China over the period; and no place suffered a steeper growth decline than the Pearl River Delta, China’s most developed economic region.

 

Furthermore,  upon closer inspection China’s logistics industry still has significant structural problems that may undermine future development. Logistics still comprise over 18 percent of GDP, a figure more than double that in developed economies. The industry suffers from under-agglomeration, and many registered logistics companies operating in China lack professional standards and operational efficiency.

 

Despite tremendous government effort to spread China’s newfound prosperity to less-developed regions, the gap between China’s coastal area and its interior remains large - and growing. The country’s varied economic regions remain less integrated with each other than with various parts of the outside world. Bureaucratic hassles—such as fines levied upon inter-provincial trade—have prevented the massive Chinese economy from operating as a cohesive unit hindering the emergence of national brands able to compete on a global stage.

 

Aware that suboptimal logistics performance threatens to obstruct overall economic development, Beijing has expended enormous effort in rectifying these problems. Investment in transport infrastructure received a jolt by a CNY 586bn stimulus package, and the Chinese government confidently claims that a nationwide high-speed rail network will be in place by 2020. New airports, expressways, and container terminals will also affect the logistics landscape in coming years.

 

In addition, reforms such as the Fuel Tax Law have indicated a growing willingness for Beijing to consider green solutions in its logistics industry policy. The coming years are likely to witness an increased emphasis on environmentally-sound practices, a move that could lead to greater industry consolidation as smaller firms struggle to compete in a rapidly changing landscape.

 

Few observers expect the global economic slowdown to have reversed itself fully by the end of 2010, and correcting structural flaws in the logistics industry will require time, even by the standards of the Chinese government. The industry showed impressive resiliency in the wake of natural disaster in 2008, overcoming both the unseasonably cold weather in the winter and the tragic Sichuan earthquake in May.

 

Betting against its ability to overcome an economic slowdown would similarly be unwise – even though the World Bank now forecasts that a recovery independent of stimulus spending is likely to require a broad structural change in the composition of GDP growth drivers.

 

China’s Economic Geography

 

The Chinese economy is better understood not as a single unit but rather a decentralised collection of several regional economies that interact with one another less than one might expect. This arrangement— which differs from other large countries such as the United States—results from China’s transition from a command to a market economy.

 

Such fragmentation has resulted in the apparent lack of major, globally recognized companies emerging from  China,  particularly  given  the  size  of  its  economy.  Larger  Chinese  firms  have  enormous  difficulty managing their parent-subsidiary networks; companies under the same corporate umbrella often fail to cooperate and even work at cross-purposes.

 

Growth of Inter-Asian Trade

 

Within Asia, the PRC is the largest driver of regional exports, but its final demand accounts for only 6.4 percent of total Asian trade, which was only half the contribution from Japan and slightly below a quarter of the US. The results show that the G3 economies are still the main ultimate export destinations for finished goods leaving Asia, when taking into account the share of intermediate goods trade that is for assembly and production within the region, but that is eventually shipped out of the region.

 

Based on these data, CIO estimates that of the total volume of finished goods leaving Asian countries as exports, around 20 percent is destined for Asian markets with around 60 percent absorbed by G3 countries and the remainder headed for the rest of the world (ROW).

 

Air Freight

 

While most carriers, as well as shippers, appear confident that 2010 will represent a general stabilisation of overall demand—a return to 2008 volumes—most believe that this demand is likely to take the shape of mini-troughs and mini-peaks, due to the continued unpredictability of demand. This said however, given last year’s last minute scramble for capacity, it is unlikely that shippers will be prepared to run inventories as low as last year. In general, while most predict that 2010 will prove to be a much more positive year for the air freight market in China, it seems unlikely that carriers will be keen to reintroduce capacity back into the market straight away. Instead preferring a much more gradual approach as demand develops helping to hold up freight rates and limit liability in what remain uncertain times.

 

Future growth will however be dependent on several factors:

????nbsp;   Macro-economy stabilized.

????nbsp;   Foreign trade began to resume growth.

????nbsp;   International transshipment centers of air express giants will play a great role.

????nbsp;   Uncertainties caused by the economic crisis and legacy policies do remain.

 

China’s investment in airport infrastructure development will be enormous. According to a plan formulated in 2008, the country intends to spend more on airport infrastructure development over the next five years than the entirety of its airport investment program since the start of the reform era, a figure likely to approach USD 20bn by 2013.

 

Road Haulage

 

Some estimates indicating that up to 30-40 percent of China’s road haulage firms experiencing sever losses with many forced to withdraw from the market altogether. Given the high levels of fragmentation and lack of standardization and national registration in the sector it is extremely difficult to accurately gauge the real level of loss or indeed the number of companies forced to withdraw from the sector over the period. It is however possible to say that the vast bulk were only marginally profitable and were – especially given Beijing’s commitment to consolidate the sector – living on borrowed time. Perhaps the most significant trend—besides the global economic meltdown—facing road transport in China is the passage of a new fuel tax law, implemented on 1 January 2009.

 

Express Delivery and E-Commerce

 

Postal business achieved a total income of CNY 109.5bn in 2009, up 14 percent. In particular, the express delivery sector grew by 17.3 percent in terms of revenue and reached CNY 47.9bn; total volume increased by 22.8 percent to CNY 1.86bn pieces.

 

Beijing’s new Postal Law has made waves in the express delivery industry. More dire predictions estimate that up to 80 percent of private express delivery enterprises will be unable to compete and fold from the industry. In the long term though the express delivery market in China promises only to expand, buoyed by the phenomenal growth of the nascent e-commerce industry.

 

In 2009, as part of an industry wide trend the two largest state-owned express companies - China Post EMS and China Post Logistics Company - completed integration and hence formed a new company, China Postal & Express Logistics.

 

The number of Chinese netizens reached 383m in Q4 2009, including over 109m online buyers. The e-trading turnover of SMEs amounted to almost CNY 2 trillion, accounting for 1.5 percent of the nation’s GDP. China E- Commerce shopping market is estimated to grow by over 50 percent in 2010, which means a total delivery volume of about 1bn or so.

 

Looking ahead to the future, the MOT has highlighted tier-3 and tier-4 cities in the eastern region and tier-2 and tier-3 cities in the central and western regions as becoming new growth areas for the industry in coming years.

 

Port Sector

 

As 2009 drew to a close, China had 413 ports with a total of 31,050 productive berths—of which 1,416 berths were over 10,000 tons. Coastal ports registered 5,119 productive berths—1,157 over 10,000 tons— while inland ports had 25,931 productive berths, 259 over the 10,000-ton level.

 

Of berths over 10,000 tons, 665 were between 10,000 and 30,000 tons, 252 between 30,000 and 50,000 tons, 366 between 50,000 and 100,000 tons and 142 berths in excess of 100,000 tons.

 

The global slowdown had an immediate impact on China international container trade sector with ports in numerous regions reporting disappointing figures for the Chinese New Year period.

 

In general, the south of the country was hit hardest, with port further north faring much better. At least part of the reason for this is that ports further north depend less on the lower value exports that tend to be the mainstay of certainly Guangdongs economy. Tianjin, for example, was boosted by the fact that much of its exports originate in the Binhai Free-Trade Zone, which tend to produce higher-tech products and the fact that its portfolio of shipping routes is less dependant on China-Eurpoe or US routes.

 

Bulk

 

Despite the overall slowing of growth in 2009, three new ports joined the 100m ton club. The new ports to reach  the mark  were  Jiangyin in Jiangsu Province,  Xiamen  in Fujian Province,  Zhanjiang in Guangdong Province and Huzhou in Zhejiang Province. Jiangyin and Huzhou are both river ports.

 

Over the course of 2009, coal imports increased by almost 211 percent to 125.83m tons. Over the same period, China’s coal exports fell 50.7 percent year-on-year to 22.4m tons, with production up 12.7 percent to 2.96 bn tons; making China a net importer of coal on an annualised basis (China’s net coal import reached103.43 m tons in 2009).

 

Iron ore imports grew rapidly in 2009. Chinese imports of iron ore showed robust growth in 2009, increasing 42 percent to 628m tonnes. Crude steel production within the country also increased, from 500m tonnes in2008 to 568m in 2009.

 

However, uneven distribution iron ore terminals are unevenly distributed a cause of steel company distribution patterns in China and network inefficiency. According to adjustments in the steel plant distribution pattern, China will build 12 super-large iron ore vessels with a capacity of 400,000 tonnes, in turn triggering new changes in the ore terminal distribution pattern.

 

Growing importance of logistics industry

 

As part of the overall stimulus strategy announced in 2008 intending to help mediate the effects of the global slowdown, the State Council acknowledged the critical role logistics will play in the overarching strategy to maintain GDP growth levels at the 8 percent target deemed necessary to absorb an emergent labour force and facilitate the structural changes deemed necessary to fully reform the economy.

 

Indeed, whilst 8 percent has in fact been maintained for the bulk of this year thus far, it has been achieved through a substantial shift in the composition of GDP growth drivers as pertinently noted by the World Bank China Economy Update Q3 2009. The noted shift seems to indicate that expansionary policies enacted by Beijing have in fact taken up much of the slack drawn into the system by a reduction in export demand. The Bank further concedes that, as expansionary measures subside to make way for natural growth the resulting composition of  GDP  drivers  will  be  structurally  different  from the  pre-crash economy  in that  domestic demand will likely mitigate to some extent the longer term reductions in spending power by the three main global consumer blocks – namely Japan, the US and the EU25.

 

Within this overall framework of structural change the State Council acknowledged the importance of the logistics sector both as an engine of growth to facilitate an effective response to the financial crisis as well as the need to streamline performance to enhance competitiveness to help the industry adapt to these longer term structural shifts in global consumption; to help Chinese logistics providers compete in an increasingly fierce global market environment; and create new jobs supporting the growth of domestic consumption.

 

Labour Law.

Labour Law.

A very comprehensive break-down of the various points on the New Chinese labour Law of 2008. For the PDF please click here

Investments between China & BRICS countr...

Investments between China & BRICS countries on the up.

BRICS, grouping Brazil, Russia, India, China and South Africa, represented a gathering of important emerging economies which were playing an increasingly big role in world economy during last decade.Close economic ties among BRICS countries, especially after the New Delhi Summit, will most likely result in further cross-border merger and acquisition (M&A) deals driven by Chinese companies in other four economies.



"Chinese investment enthusiasm into the BRICS has remained strong as economic growth in these, and other emerging markets, has remained relatively intact despite global uncertainty,” said Lawrence Chia, co-chairman of Deloitte China’s global Chinese services group.



The aggregate GDP of the BRIC countries (before South Africa joined in late 2010) has almost quadrupled since 2001, from around $3 trillion to between $11-12 trillion in 2010.

 

The fourth BRICS Summit was held in New Delhi on March 28-29, under the theme of BRICS countries’ commitment to the partnership of stability, security and prosperity, where leaders of the five countries vowed to strengthen cooperation and boost inter-trade among the BRICS economies.



Deloitte forecast that emerging economies will grow by five percent in 2012, compared to a figure of 1.2 percent for developed countries.
 


As a co-writer of the report, namely “Lateral trades – Breathing fire into the BRICS”, China believed that cross-border investments between China and the other four BRICS countries will pick up over 2012 and beyond, as “comparatively more attractive growth fundamentals in the BRICS help encourage Chinese businesses to invest in those jurisdictions, as opposed to developed markets”.



The report also mentioned that “the desire to escape intense competitive pressures at home” is another reason that leads to Chinese companies’ increasing interest in acquiring in the BRICS.Statistics showed energy and resources sector accounted for 95 percent of the total deal value and 29 percent of the total deal volume in 2011.



Chinese consumer businesses, looking to expand into fast- growing overseas economies, became another power in the past acquisition activities.



Data showed that outbound consumer business and transportation investments into the four economies from 2009-2011 accounted for 4.5 percent of overall outbound M&A activity by value, while over the 2005-2008 period, this proportion just stood at 1.2 percent.
 

 

Corruption Perception Index 2011

Corruption Perception Index 2011

The Corruption Perceptions Index ranks countries/territories based on how corrupt their public sector is perceived to be. A country/territory’s score indicates the perceived level of public sector corruption on a scale of 0 - 10, where 0 means that a country is perceived as highly corrupt and 10 means that a country is perceived as very clean. A country's rank indicates its position relative to the other countries/territories included in the index.

Source: Transparency International, http://cpi.transparency.org

 

Going West and Climbing Higher?

Going West and Climbing Higher?

Some recent evidence suggests that a profound transformation of the industrial landscape in China is under way. First of all, migration of mass manufacturing activities from traditional export centers in Southern and Eastern coastal cities to the inland is accelerating. The world’s largest PC makers and their contract manufacturers are establishing new factories in the Southwest: Hewlett-Packard (No.1 PC vendor by shipments), Acer (No. 2) and AsusTek (No. 6) have chosen Chongqing, while Dell (No. 2) and Lenovo (No. 4) have chosen Chengdu of Sichuan Province. When these new plants run at their full capacity, industrial analysts expect that Chongqing and Chengdu will become the world’s largest manufacturing base for notebook and tablet computers, respectively. China’s populous Chongqing and Sichuan Province, once characterized as poor and rural and the country’s major sources of migrant workers, are going to be transformed into immense industrial hubs.

The drivers of this large-scale industrial migration are a sharp rise in labor and land costs as well as labor shortages in established manufacturing centers in Eastern and Southern China. In addition, the new manufacturing locations are well-serviced by infrastructure after a decade of government investment under the campaign of “Developing the West”. This migration of mass manufacturing presents a new challenge of growth for the developed coastal cities. While shifting manufacturing to the inland, multinationals are also transferring more managerial and R&D functions to China, with some cities being better positioned than others to attract this high-end employment. Regional headquarters of multinationals in Shanghai rose to 305 in 2010, up from 224 in 2008, according to the Shanghai statistics bureau (Financial Times, May 25). Intel has just sent an executive vice-president to Beijing as chairman of its China operations, a clear sign of the expansion of higher-end activities in the country.

 

Other cities may not be so lucky. According to recent Chinese reports, eighty percent of the Shanzhai cell phone manufacturers in the Shenzhen area have gone bankrupt since the beginning of the financial crisis. Although started as local-made lookalikes of foreign brands as the Chinese characters suggested, some scholars of industry have characterized the Shanzhai cell phone makers as a “Chinese way of innovation”. Based on turnkey solutions for combined chip, platform and third-party apps (provided by Taiwanese company MTK), clusters of small cell phone suppliers had been very successful in making cheap phones with gaudy features and shiny looks that pleased low-income Chinese and foreign consumers. Some 200 million unbranded Shanzhai cell phones were sold in 2010, and a large portion went abroad. Yet the faster than expected conversion to 3G-capable smart phones has destroyed the Shanzhai business model; at this stage at least, it is difficult for chip suppliers to commoditize the sophisticated smart phone platforms. The small Shanzhai manufacturers that used to implement incremental innovations on less advanced technologies in the 2G era now have neither the capability nor the financial resources to develop 3G smart phones.

 

Whos up for a game of sponsorship?

Whos up for a game of sponsorship?

Who’s up for a game of sponsorship?

If you’ve spent the last week focused on continuing machinations behind the closed doors of Zhongnanhai - where if we believe the rumours to be true, the Party has been pulling itself apart at the seams in order to piece itself back together again - you might have missed the biggest news of the month. That was of course, Huawei’s decision to sponsor the Canberra Raiders Rugby League Team.

The decision to hand over a cool US$1.8 million to see their logo adorning the shirts of a fairly unknown team -certainly to anyone outside of Australia  - may have confused you at first. On closer inspection, however, it becomes clear that the move has everything to do with the Australian government’s decision to turn Huawei’s bid to work on the rollout of a national broadband network. Rather than having a hissy fit and storming back to the firm’s mega campus in Shenzhen, they chose instead to sponsor the Raiders.

The reason is simple. Huawei hopes to ingratiate itself with the locals and throw off its image as an instrument of the PLA, something it has repeatedly failed to do despite a string of attempts in the past and which continues to hamper its expansion into developed markets.

Disregarding Huawei Australia CEO’s outlandish claim that “with Huawei’s 140,000 staff, it’s safe to say that the Raiders have just gained 140,000 new fans around the world”, it does look like a canny piece of PR. It’s sending the right message: you turned us down but we’re not going anywhere; in fact we’re so mad about Australia we’re going to sponsor your rather mid rate rugby league team. This week a team, next week the entire League perhaps?

Foreign companies sponsoring sports teams is nothing new of course. As economic power has shifted West to East, we’ve seen a correlated increase in the number of Western teams sponsored by Eastern firms. Just look at the English premiership. The Japanese were at it in the 1980s – JVC sponsored Arsenal, Sharp sponsored Manchester Utd, and er…Crown Paints sponsored Liverpool (woops).  The Koreans, in the shape of Samsung adorn the Chelsea shirt, while Arab nations are now well represented via Emirates’ sponsorship of Arsenal and Etihad’s of Manchester City.

But up until now, we haven’t seen too many examples (at least not to China Brain’s knowledge) of Chinese companies sponsoring Western teams. In the same way Chinese demand has raised prices for assets in the past, should we expect to see a similar effect occurring in sports sponsorship?  We wouldn’t be surprised to see representatives of the many teams who are struggling financially in these times of austerity heading over to China. Much in the same way business junkets continue to arrive on a daily basis attempting to flog all and sundry to the Chinese, who’s to say that they won’t succeed where others have failed? It’s just a shame for Glasgow Rangers that Scotland’s oil has run out otherwise we would be fairly confident of seeing PetroChina’s or CNOOC’s name on the shirt and an easy way out of their insolvency crisis.

Huawei has made a bold first foray into foreign sports and it is once again blazing the trail for Chinese firms overseas. Its first task it to test whether the Raiders will really live up to the company’s vision which according to its web site is ‘To enrich life through communication’. Anyone who’s shared more than a few drinks with a representative of an Australian Rugby League team will affirm that their communication style can certainly be colourful. Enriching might be stretching it a bit though. Good on yer’ Huawei.

Modern Art in China, a time line

Modern Art in China, a time line

In February 1989, at the “China/Avant-Garde show” at the National Gallery of Art—the first Chinese government-sponsored exhibition of experimental art—the female artist Xiao Lu whipped out a pellet gun and fired two shots into a mirrored sculpture made from two telephone booths , which she created with another artist, Tang Song. Police officers swarmed into the museum. The international media covered the story as an act of rebellion. Xiao was embraced by the Chinese intelligencia as a hero and became the most famous female Chinese artist ever. Some even said the incident was an inspiration for the Tiananmen Square demonstration a couple months later.

Later Xiao said that the motivation for her action was not political or aesthetic but emotional. She was expressing anxiety over her relationship ship with Tang which was on the decline, and firing at a reflection of herself. Many found this revelation trivialized what was perceived as a great revolutionary act.

 

In the mid 1990s, the art scene was still largely underground and most artists were poor, often living in squalid conditions. Modern artists were accused of being sources of “spiritual pollution” and worried about being arrested if they talked to foreign reporters. With money in short supply, censors watching them and no galleries to market their works, they mounted one-night shows that doubled as rent parties in their small apartments.

 

On his only visit to China in 1982, Andy Warhol wrote: “I went to the Great Wall. You know, you read about it for years. And actually, it was really great. It was really, really, really great.”Warhol painted Mao because Life magazine called him the most famous man in the world.

 

 An exhibition featuring Chinese artists at the Saatchi Gallery in London called “The Revolution Continues” drew lots of attention in late 2008. On the Chinese modern art scene today John Howkins wrote in The Australian, “One of the most vibrant scenes is contemporary art. New movements multiply with bewildering speed, as cities, artists and international dealers promote their favorites... the Stars Group, Scar Art, the Red Brigade, Nativist Realism, Cynical Realism, Rational Painting, the Stream of Life, the New Generation...and Political Pop through to Youth Cruelty and Visual Comics. This rapid turnover is caused partly by Chinese people's instinct to operate in groups and partly by their mania for labels. [Source: John Howkins, The Australian July 28, 2008]

 

Chinese Art Schools and Artists

 


 

Work by Wang Guangyi Artists have traditionally been required to belong to the China Artists Association. Until fairly recently there were very few art galleries in China.

 

The Central Academy of Fine Arts in Beijing is China’s top art school. Less than 10 percent of those who apply are accepted. Among the famous contemporary artist that have studied there are Liu Wei, Fang Lijun and Zhang Huan, Faculty members include the artists Liu Xiaodong, whose works have sold for as much as $8.2 million, Sui Jianguo, regarded as China’s best sculptor; and Xu Bing, the winner of a MacArthur Foundation genius award. Many of the school’s professors have become millionaires from selling works by their students.

 

In the Maoist era the Central Academy of Fine Arts occupied a small area near Tiananmen Square, It had only 300 students and professors who mostly taught Social Realism and prepared students to work for the state. In 1989 its students created the “Goddess of Democracy” statue that was a focal point of the Tiananmen Square protests. Today the school occupies a new 33-acre campus and has 4,000 students, a 160,000 square-foot museum, spacious classrooms and studios and the latest video editing equipment. Students tend to be less idealistic than they were in the past and more commercial minded.

 

Works by students who have not even graduated from the Central Academy of Fine Arts in Beijing are being featured at major galleries and being sold for thousands of dollars. Collectors often show up at the university to search for rising talent. Some artists sign their works with their e-mail addresses and cell phone numbers.

 

Faculty members at the Central Academy of Fine Arts have told the New York Times that today’s students are less interested in politics and more interested in their personal struggle. One artist, whose works feature subjects that look himself dressed in women’s clothes, performing violet sexual acts, told the Times his art tells “my own story, my mentality. The whole process of art is like a process to cure myself.”

 

Traditionally students have been taught to paint by painting the same figurative works over and over in a training method that emphasized discipline. At the Central Academy of Fine Arts these training methods have given way to a freer teaching styles that encourage students to look deep in themselves of inspiration,

 

Other noteworthy schools include the China Academy of Art in Hangzhou (formally known as the Hangzhou Academy) and the Sichuan Fine Arts Institute. The latter has a reputation for producing innovative painters. In 2007 it received more than 64,000 applications for 1,600 openings.

 

Chinese Modern Art in the 1980s

 


 

Work by Xu Bing In 1982, a couple years after the Cultural Revolution ended, there were only 100 or so graduating art majors in the whole country. Today there are around 260,000. The revolutionary Stars Group was formed in the late 1970s.

 

 The relatively free-wheeling 1980s is regarded by some as a sort of golden age of Chinese modern art. Many critics argue that more innovative works emerged during that period than during the painting boom that followed when artists became more commercially aware and made “a fortune manufacturing machines to read credit cards.”

 

The 1980s is regarded as key period in Chinese modern art. Artists from the influential 1985 New Wave include Wang Guangyi, Xu Bing, Geng Jianyi and Hunag Yongping. Some of their works are clearly copies of Picasso, Munch and the Dada artists but others are original and offer insight in what Communist China was like as it was emerging from the Cultural Revolution.

 

In 1988, an exhibition of relatively modest nude oil paintings in Beijing was singled out by Communist officials as a display of Western decadence and closed down. A protest over the closure grew into larger protests that led to the crack down at Tiananmen Square.

 

The “China Avant-Garde” show in 1989 at the National Gallery if Art in Beijing was a defining moment in the Chinese modern art scene. It was the first contemporary art exhibition permitted in an official forum. It lasted for only a few hours. It was shut down after a performance artist entered the show with a gun and shot two bullets through her work—a pair of mannequins in phone boxes.

 

One famous work from the 1980s is A Book form the Sky by Xu Bing. Attracting a lot of attention when it was shown at the National Art Museum , it consists of a bunch of books and wall scrolls that appear to replicate ancient literary text but up are comprised of intelligible characters. The work was interpreted by many to be criticism of Communist propaganda.

 

Chinese Modern Art in the 90s

 


 

work by Zhang Xiaogang In the early 1990s the art scene in Beijing was centered around an artist colony called Dong Un (East Village) behind the city’s Third Ring Road. There was a very lively underground scene there. Shows were held in basements in out-of-the-way areas to avoid police detection. If an exhibit stayed open a week that was considered a long time. Artists sometimes moved four or five times a year. After one controversial exhibition in 2001 police raided the colony and arrested some of the artists and razed the village and built a public park in its place.

 

“Apartment art’ described the movement and experimental and avant guard artists who showed their art in private or alternative spaces because had no other place to show their art. The artist Wang Gongxin told the China Daily, ‘The government didn’t allow our works to be shown in public galleries,, so young artists of the time were looking for a private space to transform into a contemporary space.”

 

"Cynical Realism" is the name of the movement that sprung up after Tiananmen Square. Typical of this period was an oil painting by Fang Lijun showing a bald man with his back to the viewer, facing towards clonelike men in grey Mao suits; and sculpture by Wang Keping called “Fist,” consisting a wooden bust of a man with a giant hand wrapped around his mouth.

 

Modern Chinese art got its first major dose of international attention when Princess Diana showed up at the 1995 Venice Biennial, which featured several Chinese artists. Collector and fashion designer David Tang, the one who got the princess to come, later told Vanity Fair magazine, “I got the most famous person in the world to come and give us a lift, If this doesn’t succeed, nothing will.”

 

Chinese Modern Art in the 2000s

 


 

Factory 798 Artists working in the late 1990s and early 2000s explored the social dislocation and isolation associated with the economic reforms or did various takes on Mao or Chinese iconography.

 

The Beijing International Art Biennial was an enormous exhibition at the Millennium Monument Art Museum and the National Art Museum in Beijing. Dubbed “the largest international art gathering ever held in China,” its featured many non-Chinese artist. Shanghai also has a biennial. Large exhibitions of works by modern Chinese artists have also been held at galleries in London, New York and other places.

 

Even with this high profile exposure artists complain they get little institutional support and don’t have enough places to exhibit their works. Some have taken up living together in warehouses and pulling their resources so they can pay their bills and work. Some have been harassed by police. One group of performance artist cooked up a dish made with potatoes and jewelry and placed then in condoms that were buried in the earth. For their trouble police arrested them and put three them in jail for two months.

 

Chinese Modern Art Scene in the 2000s

 


 

work by Zeng Fanzhi On the art scene in China, Arne Glimcher, owner of a prestigious New York gallery, told Vanity Fair, “It’s a little bit like Germany after the Second World War. With the culture being annihilated, it was fresh to start again. Or like America in the 1950s when we really didn’t have an indigenous style, so we were fresh to start from scratch.”

 

On the art scene in Shanghai, one American architect and collector told Vanity Fair,“There’s a kind of energy. In the art districts, ladies in Bentleys pull up dressed to the nines, and slog through mud to get to a gallery where they’re seeing a new artist’s work, while some deranged person is quivering off to the side. There’s a visual bombardment to the place.”

 

On the art scene in Beijing one collector told Vanity Fair, “”If you got to other art centers of the world—London, New York, Los Angeles—you may hear about a new gallery opening here and there. In Beijing, you hear about entire neighborhoods opening up overnight. The construction happens so quickly, and the number of galleries and the amount of art that’s proliferating is just astounding.”

 

Li Xianting is regarded are leading force in the Beijing modern art scene. He was the editor of an official art magazine before he was canned for supporting controversial art. Gaudy Art is China’s version of Pop Art.

 

Arguably the most happening place for artists in China is Factory 798 in Beijing. See Factory 798, Beijing

 

 The Ullens Center for Contemporary Art (UCCA), opened by a Swiss collector in 2008 has become the center of art life in Beijing. The Pace Gallery has moved aggressively into China, opening a huge space here two years ago and signing up some of the biggest names in Chinese contemporary art, like Hai Bo, Li Songsong, Zhang Xiaogang and Zhang Huan,

 

2008 Jeffrey Hays

 

China key economic indicators for 1980...

China key economic indicators for 1980, 1990, 2000, 2011 and 2016.

Economic indicators for China 1980-2016.

SOURCE: IMF, WORLD BANK

 

 
Main indicators
1980
1990
2000
2011
2016

SOURCE: IMF, WORLD BANK

Real GDP growth (annual %) 7.8 3.8 8.4    
Gross domestic product, current prices (US$, billions) 202.46 390.28 1198.48 6988.47 11779.98
Gross domestic product per capita, current prices (US$) 205.12 341.35 945.6 5183.86 8522.86
Industry, value added (% of GDP) 47.10 42.83 45.76 46.75  
Gross domestic product based on purchasing-power-parity (PPP) share of world total (%) 2.19 3.88 7.14 14.35 18.04
Total investment, (% of GDP) 52.41 36.14 35.12 48.65 46.23
Gross national savings, (% of GDP) 48.84 39.22 36.83 53.81 53.47
Inflation, average consumer prices 50.86 100 200.49 261.38 303.9
Inflation, average consumer prices (% change) 5.99 3.1 0.4 5.5 3
Volume of imports of goods and services (% change) 17.38 -16.88 24.8 16.52 14.78
Volume of exports of goods and services (% change) 23.03 12.84 25.22 15.56 14.97
Value of oil imports (US$, billions) 0.66 5.21 18.9 226.75 230.33
Value of oil exports (US$, billions) 3.55 3.68 4.63 27.48 26.29
Population, millions 987.05 1143.33 1267.43 1348.12 1382.16
General government revenue (% of GDP)   19.02 13.78 20.87 22.71
General government total expenditure (% of GDP)   20.98 17.05 22.44 22.56
General government gross debt , (% of GDP)   6.95 16.44 26.88 10.93
Current account balance (US$, billions) 0.29 12 20.52 360.54 852.22
Unemployment rate (as % of total labour force) 4.9 2.5 3.1 4 4
Gross domestic product based on purchasing-power-parity (PPP) valuation of country GDP (Current international dollar, billions) 247.89 910.93 3015.43 11316.22 18667.27

 

 

 

Pritzker Architecture Prize Awarded...

Pritzker Architecture Prize Awarded to Chinese for First Time

Chinese architect Wang Shu wins “architecture world’s highest honour”

 

Combining the use of old materials to celebrate the past with contemporary forms, Chinese architect Wang Shu won the 2012 Pritzker Architecture Prize on the 27th. Wang Shu is not only the first Chinese citizen to be awarded this honour, he is also the fourth youngest winner. Previously, Chinese-American I.M. Pei had also won this award in 1983.

According to reports, Thomas J. Pritzker, the head of the Hyatt Foundation which organises the prize, announced the winner Wang Shu on the 27th. He said, “The selection of Mr. Wang, 48, is an acknowledgment of “the role that China will play in the development of architectural ideals.”

 

Pritzker pointed out: “The question of the proper relation of present to past is particularly timely, for the recent process of urbanization in China invites debate as to whether architecture should be anchored in tradition or should look only toward the future. As with any great architecture, Wang Shu’s work is able to transcend that debate, producing an architecture that is timeless, deeply rooted in its context and yet universal.” [...]

 

Wang Shu was born in Xinjiang in 1963. He graduated in 1985 from Nanjing College of Engineering majoring in Architecture and gained a doctorate in Architecture in 2000 from Tongji University. He is currently the head of Architectural Arts School at the China Academy of Art, and is known as “The most cultured architect in China”.

 

A troubled history, but a bright future

A troubled history, but a bright future

We live in extraordinary times. The fifth year approaches of financial crisis in the developed countries. Significant parts of the world are unstable. But despite these challenges, there is much to celebrate in the relationship between China and the UK.

Britain, of course, is focused on two major events this year, the Olympics and Her Majesty’s Diamond Jubilee. But this is also the 40th anniversary of full diplomatic relations between our two countries. I believe history will judge the current strength of the Sino-UK partnership as being of pivotal importance in global affairs.

 

China and Britain have much in common. On the global stage, we share heavy responsibilities. We are two of the five permanent members of the United Nations Security Council, and our countries play a crucial role in seeking resolution to the financial crisis in forums such as the G20. There are many further tasks of mutual interest, from resolving poverty alleviation to tackling climate change.

 

We have a shared history of groundbreaking contributions that have benefited all humanity. China’s inventions include paper, printing and the compass. Britain was the cradle of the industrial revolution that profoundly reshaped the world. Both countries have very deep cultures that have contributed much to the world in the arts, literature and philosophy.

 

During the past 300 years, Sino-UK links have gone through a number of positive and negative cycles. Official ties between the two countries started with Macartney’s mission to China in September 1792, though historians have described this as “a dialogue between the deaf and the blind”. During the first Opium War in 1840, Britain forced open the door of China with gunboats. Relations between China and the UK and the rest of the West have since been defined by inequality, with China at a disadvantageous position.

 

There were some bright intervals. Seventy years ago, Chinese and British people stood shoulder to shoulder against the invasion of China by Japan. Then, those ties went into a deep freeze following the foundation of the People’s Republic of China in 1949. On March 13, 1972, China-UK relations were raised from charge d’affaires to ambassadorial level. Forty years on, in 2012, our countries are closer than ever before.

 

There have been some crucial milestones during the past four decades that have led to this point. The restoration of China’s position as one of the five permanent members of the UN Security Council was a key first move. Other notable steps were the British commitment to the one China policy on the issue of Taiwan and Tibet; the successful resolution of the Hong Kong question; the establishment of a comprehensive strategic partnership; high-level dialogue mechanisms, such as the annual summit of premiers: plus, economic, financial and strategic dialogue.

 

These strong political links have been matched by an extraordinary economic transformation. Sino-UK bilateral trade reached $58.7 billion in 2011, more than 200 times that in 1972, and the premiers of our countries have committed to raising the sum to $100 billion by 2015. Two-way investment has surged from zero to nearly $20 billion – in particular, Chinese investment in the UK is growing fast.

 

The collaboration between our countries is constantly widening and deepening.

 

Co-operation is advancing in the areas of energy efficiency, environmental protection, branding and financial services, and there are joint efforts involving infrastructure development, small businesses and research.

 

People-to-people and cultural exchanges are on the rise – there are now 47 pairs of sister provinces and cities – and there is a choice of more than 10 direct flights between our countries every day. More than 120,000 Chinese students study in the UK, compared with just 100 back in 1972. A total of 19 Confucius Institutes and 60 Confucius Classrooms have been opened in Britain. No other European country can compete in this regard. China will also participate in the 2012 London Book Fair as the “market focus” country, which will involve more than 300 related activities.

 

Of course, China and the UK differ in history, culture, social systems and values, so one should not be surprised when differences arise. In a mature relationship, some important principles need to be followed – we should respect each other, treat each other as equals and seek common ground while accepting the differences.

 

Over the past two years, since I came to London, I have visited many places in Britain and I have been deeply impressed by the enthusiasm for the growing links between our two countries. There is great mutual benefit to be had if we work to take the relationship to new highs over the next 40 years.

 

Liu Xiaoming is China’s ambassador to the United Kingdom

 

China: The Case for Change On the Road...

China: The Case for Change On the Road to 2030

China should complete its transition to a market economy -- through enterprise, land, labor, and financial sector reforms -- strengthen its private sector, open its markets to greater competition and innovation, and ensure equality of opportunity to help achieve its goal of a new structure for economic growth.

 

 

These are some of the key findings of a joint research report by a team from the World Bank and the Development Research Center of China’s State Council, which lays out the case for a new development strategy for China to rebalance the role of government and market, private sector and society, to reach the goal of a high income country by 2030.

 

The report, “China 2030: Building a Modern, Harmonious, and Creative High-Income Society”, recommends steps to deal with the risks facing China over the next 20 years, including the risk of a hard landing in the short term, as well as challenges posed by an ageing and shrinking workforce, rising inequality, environmental stresses, and external imbalances.

 

“China’s leaders have recognized that the country’s growth model, which has been so successful for the past 30 years, will need to be changed to accommodate new challenges,” said World Bank Group President Robert B. Zoellick.

 

“The case for reform is compelling because China has now reached a turning point in its development path. Managing the transition from a middle income to a high-income country will prove challenging; add to this a global environment that will likely remain uncertain and volatile for the foreseeable future and the need for change assumes even greater importance.”

 

China has an opportunity to avoid the middle-income trap, promote inclusive growth, without further intruding on the environment, and continue its progress towards becoming a responsible stakeholder in the international economy,” he said.

 

The report lays out six strategic directions for China’s future: completing the transition to a market economy; accelerating the pace of open innovation; going “green” to transform environmental stresses into green growth as a driver for development; expanding opportunities and services such as health, education and access to jobs for all people; modernizing and strengthening its domestic fiscal system; and seeking mutually beneficial relations with the world by connecting China’s structural reforms to the changing international economy.

 

“Central to the report’s findings is the need for China to modernize its domestic financial base and move to a public financial system-- at all levels of government -- that’s transparent and accountable, overseen by fewer but stronger institutions, to help fund a changing economic, environmental, and social agenda,” Zoellick said.

 

“The reform agenda, with a stronger and more flexible financial sector, the promotion of innovation, and green growth as drivers of development, can lead to opportunities for creating new jobs and additional productivity within China as well as new opportunities for foreign firms.”

 

There is growing recognition, supported by the findings of the research report, that China’s growth will decline gradually in the years leading to 2030 as China reaches the limits of growth brought about by current technologies in its current economic structure. The report advocates Chinese policymakers should shift from a focus entirely on the quantity of growth to include the quality of growth as well.

 

The report makes the case for the government to redefine its role -- to focus more on systems, rules and laws -- to boost efficient production, promote competition, and reduce risks. It recommends redefining the roles of state-owned enterprises and breaking up monopolies in certain industries, diversifying ownership, lowering entry barriers to private firms, and easing access to finance for small and medium enterprises.

 

Reforms should include commercializing the banking system, gradually removing interest rate controls, deepening the capital market and further developing independent and strong regulatory bodies to support the eventual integration of China’s financial sector within the global financial system. Financial reforms in the next two decades should be decisive, comprehensive and well coordinated, following a properly sequenced roadmap. A priority is to liberalize interest rates according to market principles.

 

On land reform, priority should be accorded to protect farmers’ rights over agricultural land, expanding land registration and rental rights. To assist with labor reforms, changes in the residency permit system – the hukou – are a priority. While progress on hukou reforms will depend on fiscal reforms that balance revenue raising and spending authorities across different levels of government, it should begin and be completed by 2030.

 

To accelerate the pace of innovation, the report advocates greater efforts to build countrywide research networks, steps to improve the quality of tertiary education and links with global networks, supported by a stronger rule of law and intellectual property rights enforcement. It says such an open innovation system would be a prerequisite to benefit fully from global innovation links.

 

For China to advance the “going green” development agenda, it will need to look at long term market incentives to encourage enterprises and households to go green. This should include more public investments, and the better design and enforcement of regulations to complement market incentives, such as taxes, fees, tradable permits and quotas, and eco-labeling. China can establish itself as a global green technology leader by implementing stringent and effective policies to reduce greenhouse gas emissions. Stringent emissions reduction policies, such as carbon trading or carbon taxes, could spur innovation in green technologies.

 

To reverse rising inequality, the report says China will need to focus on a social protection system appropriate for China in 2030, with a special emphasis on the poor. It lays out the case for “flexicurity”. This can include reforms in pension and unemployment systems so workers have reasonable support in their old age or when jobless. This can ensure comprehensive coverage of pension insurance, especially for rural people and migrant workers in cities. The report also warns that extending the current level of urban services and social protection to rural residents and migrants -- well over half the population -- will pose a significant fiscal burden and should be implemented prudently.

 

To fund China’s priorities in the decades ahead, and to deal with external shocks, the report calls for further fiscal system reforms. These should include improving the efficiency of raising revenue and changing fiscal relations between different levels of government as well as strengthening the efficiency of public spending. There is untapped potential for revenues through higher taxes on energy consumption, taking dividends from state-owned enterprises, and levying taxes on personal incomes, motor vehicles, and property.

 

The report proposes a sequencing of reforms, as well as quick wins and actions to address short term risks. Support for reforms will be stronger if the plans are based on full participation throughout all levels of society. The biggest risk is that vested interests will try to thwart reforms.

 

As a key stakeholder on the global economy, China can consider how its structural reforms relate to rebalancing changes globally. China should support free trade and back a multilateral agreement on investment. China’s long-term interests lie in global free trade and a stable and efficient international financial and monetary system, relying on multilateral frameworks to help shape the global governance agenda.

 

China’s growing weight in world trade, the size of its economy and its role as the world’s largest creditor will make the internationalization of China’s renminbi inevitable. Acceptance of the RMB as a major global reserve currency will depend on the pace and success of financial sector reforms and opening of its external capital accounts.

 

For more information on this, please visit: www.worldbank.org/china

 

Tips for doing business in China

Tips for doing business in China

Research:

  • Firstly, consider what your company’s objectives are in China and carefully research your target market before developing a formal business plan. Discuss your strategy with a local representative who understands the market and economic conditions.
  • Consider the unique selling points of your product or service and whether there is actually a market for that product or service in China. If there is, you need to ensure you can be competitive in China and, more importantly, whether you have the time, resources and stamina to handle the demands of communications, frequent travel, product delivery and after-sales service.
  • All foreign investments need to be registered with the appropriate local and state authorities, which can be time-consuming and bureaucratic. Exporters will also need to deal with Chinese tax, accountancy and employment law, and China’s transport infrastructure and commercial legal system.
  • Understand the basic Chinese regulations which govern your industry or investment in China. Companies are often constrained in how flexible they can be due to the regulatory environment.
  • It is recommended that you have a website including product description, indicative FOB price, and unique selling points for your product or service.
  • It may be helpful to talk to other Australians with business experience in China, for example, Australia China Business Council members in Australia; China Australia Chamber of Commerce members in China and Austrade’s network of export advisers in both Australia and China.
  • The Internet can be an invaluable tool when it comes to researching country and market information before you even begin to formulate your strategy.

  

Market entry strategy:

  • When determining your market entry strategy, consider recent market trends and keep in mind your long-term and short-term requirements for infrastructure, labour and your customer base. Remember China is changing at a rapid pace and it is essential your research and market information is up-to-date.
  • Don’t automatically assume Beijing or Shanghai should be your target markets. Many other regions of China are substantial markets in themselves and competition can be less intense. It is therefore advisable to treat China as a global region in its own right and focus your initial market entry approach on a particular region or city.
  • It may be highly beneficial to employ an agent or distributor with marketing skills who has excellent knowledge of local market conditions and preferably speaks English. A good agent can greatly reduce set-up costs and time taken to enter the market. As well as having someone on the ground to look after your interests, you will have access to good local knowledge and contacts.
  • It may be highly beneficial to have your own well-briefed interpreter available to assist with discussions, formal presentations and explanation of technical issues.
  • Potential Chinese business partners are often more interested in the cost-effectiveness of the product rather than the product itself, so it’s important to be able to demonstrate how the product can save money.
  • Choose the right partners. In-market contacts are often more important than product and price.

 

Negotiations:

  • Always seek good quality independent legal, tax, and professional advice before signing anything that could have implications for your company. If you are setting up in China, it is important to get the business and tax structure right from the start.
  • Use a qualified legal firm with a presence in China to review all contracts. Failure to gain full information about a potential partner’s credit and professional background could lead to serious problems further down the road.
  • If you are concerned that your product is in danger of being copied, seek legal advice on how best to protect your intellectual property (IP).
  • Halve your expectations, and double your time and budget. Chinese business people prefer to establish a strong relationship before closing a deal.
  • Be prepared for tough negotiations and to deal with grey issues. Be firm, polite, and creative, but be prepared to say no.

 

Etiquette:

  • Building up good business relationships and trust is very important in China, so expect to spend a lot of time at meetings and banquets with your potential business partners.
  • Business meetings always start promptly, so it’s important to arrive early for the standard formal introductions. It is usual to be introduced to the most senior person at the meeting first, followed by the others in descending order of seniority.
  • A handshake is the standard way to greet men and women, whatever their age or seniority. Note that the Chinese respect their elders, so an extra show of courtesy in the presence of an older person will reflect well on you.
  • Business cards (ming pian) are essential in China, and it’s a good idea to have your card translated into Chinese on the reverse side. Present your card with both hands with the Chinese side face up. It’s a sign a respect to spend a few moments examining the business cards you receive rather than putting them away immediately.
  • When meeting potential business partners, it is helpful to know some Mandarin. Simple phrases such as ‘Ni hao’ (hello) ‘Zao shang hao (good morning) and Xia wu hao (good afternoon) can go a long way. Note that surnames are placed first, eg. Mr Yao Ming should therefore be addressed as ‘Mr Yao’.
  • A great deal of business in China is conducted over dinner, where very senior people may attend who were not at previous negotiations, but are key to the approval of a business deal. However, business dinners or lunches can also indicate a general warming of a relationship, and in this case, their role should not be over-stated.
  • Never begin eating or drinking until you host does. It is polite to try all dishes that are offered to you, but you can discreetly leave anything you don’t like at the edge of your plate. Don’t place your chopsticks pointing into the bowl – always place them horizontally on the hold provided.
  • Dinner speeches and frequent toasts are standard, with locally produced wines or ‘bai jiu’ spirit the usual drinks for toasts. It is customary for toasts to be made by both sides during the meal.
  • The Chinese generally like to give small and inexpensive gifts. It’s a good idea to bring small gifts with an Australian theme for your hosts and wrap them in colours such as red, yellow or gold, which are regarded as lucky in China. It is not customary for your hosts to open the gifts in front of you, unless you encourage them to do so.
  • Chinese negotiators are shrewd and know that foreigners will be reluctant to travel home from China empty-handed. They are willing to stretch out discussions, which can wear their foreign counterparts down. Be sure that your interpretations of any business deal are consistent with theirs and that everyone understands their duties and obligations.
  • Expect to encounter delays or frustration during your business dealings in China, but it’s important to remain patient and polite. The Chinese don’t like to ‘lose face’ so losing your temper or showing frustration will only set you back.
  • If you are beckoning to someone, motion towards you using your hand and palm pointed downwards – never palm up. Furthermore, don’t use your index finger or point when speaking.
  • Try to speak with your counterparts in short, simple, and jargon-free sentences.
  • Be aware that business in China slows down during the Chinese New Year – usually from late January to early February, and for periods such as National Day (1 October) and May Day (1 May). It’s best to avoid arranging meetings during these times.

 

Please login here

Create new account / Forgot password?

Create new account

And a little about you

Forgot your password?

Enter the e-mail address you used to create your account and we will send you instructions for resetting your password.

* Please check your email to get the temporary password we've just assigned you

Edit Password

To continue reading this article please register below as a site user. Thank you

Create new account

And a little about you

If you are already a member, please login here