China Economy Forum

[中国万岁-ProsperThroughCo-]

Why do so many get it so wrong in China?

By Andrew Hill
Published: March 7 2011 22:57 | Last updated: March 7 2011 22:57
My first reaction to Best Buy’s closure of its nine branded stores in China was: not again. Another retailer had leapt into the Chinese market – and fallen on its face.

Best Buy’s stores – familiar to North Americans and Europeans – are arranged by category of gadget and are big on service. But most Chinese are used to buying electrical goods more cheaply from makers’ agents, working in stores owned by established Chinese competitors such as Suning and Gome, or from smaller, local shops.

Home Depot, the US DIY group, recently closed stores in mainland China, having misread the local market. On Monday, Mattel shuttered its six-storey flagship Barbie store in Shanghai, in the face of waning enthusiasm for a doll ubiquitous in its established markets.

All plainly failed to meet Peter Drucker’s requirement for “true marketing”, which starts “with the customer, his demographics, his realities, his needs, his values. It does not ask, What do we want to sell? It asks, What does the customer want to buy? It does not say, This is what our product or service does. It says, These are the satisfactions the customer looks for, values and needs”.

Yet when Best Buy announced its Chinese move in 2005, it seemed to have struck the right note. Its “lab stores” would be managed by “local leaders” with “strong customer insights”. This would help “accelerate learning about the diverse consumers in China”. Vapid prose apart, Drucker himself could have drafted that press release.

It didn’t need much local insight to deduce that most Chinese customers wouldn’t buy warranties, need installation or pay more for goods available elsewhere for less. But success in its home market made Best Buy overconfident. Kal Patel, now the group’s Asia president and the man who recommended closure, says: “When you’re very, very successful, you can sometimes do things that feel like they go against rational logic. Very good people look at the numbers and then they say: ‘We could change the industry.’”

In fact, Best Buy was learning an increasing amount about the Chinese domestic market from its parallel ownership of Five Star, a chain of electrical retailers operating on the traditional model, where it acquired control in 2006. It was the US model that fell short. Mr Patel says: “Long term, I question whether you can be that revolutionary with the industrial structure [in China]: five years we’ve been there and the industrial model hasn’t changed.”

In spite of Best Buy’s setback, rivals are still convinced they know better. Within days of the retailer’s news, Media Markt heralded further expansion in China, on a model that sounds oddly similar to the one that let its US competitor down.

What lessons should those who follow in Best Buy’s footsteps learn?

●Use local knowledge and relevant prior experience. Non-Chinese brewers failed to push the local consumer up to premium beers, while SABMiller, drawing on its knowledge of another emerging market – South Africa – read the local conditions better.

●Start small. Mr Patel says that if Best Buy were launching a Chinese strategy now, it would try out “fast, quick, cheap” ideas. The total bill for restructuring in China, the closure of two more branded stores in Turkey and a revamp of the US supply chain came to $225m-$245m. Even if only part of that bill was attributable to the China experiment, that is a costly laboratory.

●Work on several fronts. Best Buy – which now owns all of Five Star – will expand its locally branded stores in China. But it will also incubate ideas via the internet, work with local partners and explore other options, such as stores within stores.

●Be different. The success of Apple stores in China, which provide the only reliable outlet for its products, contrasts with Best Buy’s experience.

●Stay humble. Non-Chinese groups still seem prone to arrogance about the applicability of their business models that would have embarrassed 16th-century Portuguese traders.

By contrast, Chinese groups investing abroad are using a different tone. Wang Zongnan, chairman of Bright Food, told the Financial Times he would keep Yoplait’s existing management if his bid for the French yoghurt maker succeeded, “because Bright has insufficient knowledge of international markets”. This could be rhetoric, or politics, or a mixture of both. But foreign investors that fail to recognise what they do not know will be condemned to an endless and costly round of trial and error. And error. And error.

 

[Brotherhood]

Reconstruction in quake-hit Sichuan nearly finishes in two years: official - People's Daily Online March 09, 2011

Reconstruction in southwest China's Sichuan Province, which had been hit by a devastating earthquake nearly three years ago, has "basically" finished, Vice Governor Huang Xiaoxiang said Tuesday.

Post-disaster reconstruction had been planned to take three years, but 92.3 percent of the national restoration and reconstruction projects had been completed by the end of 2010, Huang said.

On May 12, 2008, a magnitude-8 earthquake struck Wenchuan in Sichuan Province, leaving more than 80,000 people dead or missing.

"The quake-hit area will pose a fresh outlook three years after the earthquake," the official said.

 

[Brotherhood]

China to invest 1.3 trillion yuan in affordable housing - People's Daily Online March 09, 2011

To fulfill the goal set by the Chinese government of building 10 million units of affordable housing for low-income groups, at least 1.3 trillion yuan of investment must be put in place. The question is: who will pay for that?

Qi Ji, deputy minister of Housing and Urban-Rural Development, is confident that the financing will not be a problem because various resources, especially those from the non-governmental channels, can be exploited.

At a press conference during the ongoing annual session of the National People's Congress in Beijing, the minister explained how that could be achieved.

The proposed 10 million units include residences to be sold to low-income groups with caps on sizes and prices, renovated slums and housing rent to low-income groups.

According to the plan submitted by local governments, nearly 2 million units will be built to be sold to low-income groups. About 500 billion yuan of investment is needed for that. A bulk of that will come from the free land allocation by local government, and the construction will be funded through market operation.

About 4 million units of slums will be revamped. Enterprises and individual owners of those slums will pay about 340 billion yuan of the 500 billion yuan needed for the project.

That means that more than 800 billion yuan will be accessed from off the balance sheet of public funding. The remaining 500 billion yuan plus will have to be provided by the central and local governments.

The central government has announced a 100 billion yuan commitment to affordable housing this year. Local public budget will contribute to the project. There are also several other ways for local governments to raise the funds.

Qi stressed that the compulsory bottom line of 10 percent investment of land transfer yields in affordable housing has to be strictly observed, and a ratio higher than 10 percent will be required where necessary. Some places have already raised that to 20 percent.

"That's a huge sum of money," Qi said. The revenue from transactions of state-owned land is worth 2.9 trillion yuan in 2010, more than doubled that of 2009.

Other sources include the public housing provident fund and bank credit. The policy of government subsidies of bank credits for affordable housing is currently being formulated, Qi said.

And it seems that a public-private partnership model will be adopted to develop the market of housing rental to low-income groups, he said. Through all those efforts, the 1.3 trillion yuan, he believes, will be guaranteed.

By Li Jia, People’s Daily Online

 

[Brotherhood]

SAFE vows to deepen reform on China's capital account forex management - People's Daily Online March 09, 2011

China's foreign exchange regulator said Tuesday it would continue to reform its management of foreign exchange in capital account and facilitate steps towards a convertible renminbi (RMB) under capital account this year.

In a short statement on its website, the State Administration of Foreign Exchange (SAFE), China's foreign exchange regulator, said it would simplify the management of external debt financing and further develop yuan-denominated transactions on the capital account.

Monitoring and analysis of cross-border capital flows in 2011 will also be strengthened this year, with more off-site inspections and reviews of transactions, according to the statement.

SAFE also pledged to crack down on illegal "hot money" inflows as investors bet on the appreciation of the yuan, or China's currency.

Source: Xinhua

 

[Brotherhood]

Australia, China step up cooperation in air transport - People's Daily Online March 10, 2011

The growing ties between Australia and China were reflected in a new memorandum of understanding that will double the number of available flights between the two countries.

The new agreement, providing a massive boost in airline seat numbers signed by China and Australia, represents a 50 percent rise in available seats on direct flights between the two countries from the current 14,500 per week to 22,500 per week by 2012.

Local media quoted on Wednesday Federal Transport Minister Anthony Albanese as saying that the airlines of both nations would now be able to offer up to 18,500 seats on flights between Australia's major airports and China's each week.

The deal includes an offer of additional capacity within Australia to China's carriers if they include stopovers in regional destinations including Cairns, Darwin and Broome.

In a boon for local Australian carriers now serving China is that the agreement would allow them to fly beyond China to four additional destinations of their own choice, adding much needed scope to the current networks.

Albanese said more than 1.7 million people traveled between Australia and China last year, an increase of over 20 percent on the previous year.

Chinese tourism is worth 3.1 billion U.S dollars to the Australian economy and the number of Chinese sightseers heading to Australia is expected to double by 2020.

In a statement released late Tuesday, the Australian government lauded the agreement and its importance to cross-border ties.

"Significantly, our new MOU with China contains a shared commitment to negotiating an 'open skies' agreement, an outcome that would remove most -- if not all -- of the limitations on Australian and Chinese airlines operating between and beyond our two countries."

The agreement is a victory for the Australian travel industry, most particularly the regionally isolated air-carriers, looking for a further toe-hold into Europe and North America.

As new traffic treaties take effect between Australia and the EU and UK, and most of them are due for renewal sooner rather than later, this raises the possibility of Qantas choosing to offer flights between Shanghai and London, Paris, Amsterdam, or Frankfurt, which is something of considerable strategic importance as the Chinese market and Australia's connections to it continue to grow.

China's key position and rapid assumption of global leadership of the air travel market is changing the balance of air-traffic flow with the Asia-Pacific now recognized as the future growth market.

Chris Emerson, Senior Vice-President Product Strategy and Market Forecast for Airbus, expected Asia-Pacific airlines to take delivery of around 8,560 new aircraft over the next 20 years.

"Valued at 1.2 trillion U.S. dollars, the requirement represents 33 percent of new aircraft deliveries worldwide over the forecast period, with the region overtaking North America and Europe as the largest air transport market," he said.

 

[Brotherhood]

Country ramps up healthcare spending - People's Daily Online March 10, 2011

Minister of Health Chen Zhu answers a question during a news conference at Media Center in Beijing on Wednesday. [Photo/China Daily]

With the nation's medical insurance systems now covering 1.27 billion people out of the country's 1.34 billion inhabitants, key officials vowed on Wednesday to iron out wrinkles encountered by those seeking medical help.

Under ongoing medical reforms that largely started in 2009, the government has established a basic medical insurance system for non-working urban residents and a new rural cooperative medical care system. The systems benefit 432 million urban dwellers and 835 million rural residents who were not covered by medical insurance in the past.

And, as part of its drive to improve healthcare, the government now plans to spend 1.13 trillion yuan ($173 billion) on healthcare between 2009 and the end of this year.

The amount surpasses the previous plan to spend 850 billion yuan on healthcare during that time frame, Wang Jun, vice-minister of finance, said at a press conference held on the sidelines of the annual parliamentary session.

Sun Zhigang, director of the State Council Office of Medical Reform, said the extra spending will have a dramatic effect.

"With these efforts, China will soon deliver universal healthcare to all citizens and I am confident that the reforms will include solutions to hardships encountered by people seeking medical care," Sun said.

Vice-Minister of Health Huang Jiefu, however, cautioned that the government is not yet in a position to cover 100 percent of people's medical bills.

"The possibility of the government subsidizing the bulk of medical bills is quite slim considering the current situation," he said.

In 2010, China's total healthcare expenditure, according to the Ministry of Health, was about 2 trillion yuan on the mainland, which translated to about 1,400 yuan per capita.

Given that government subsidies amount to 120 yuan per person, he said people covered by insurance policies are still going to have to cover the lion's share of their medical bills.

He explained that the public should be properly informed about what the authorities currently can and cannot do.

"In the coming years, we'll further expand the coverage (of health insurance) to the entire population of 1.34 billion people and increase the reimbursement rate from the policies," said Minister of Health Chen Zhu.

But he conceded that efficiency will need to be boosted first and there will have to be enhanced supervision of money used because the government-supported fund remains quite limited compared to the public's demand for medical services.

In 2011, 8 million more Chinese will be covered by urban basic health insurance, added Hu Xiaoyi, vice-minister of the Ministry of Human Resources and Social Security, who was also speaking at the press conference.

That expansion will bring the total number of urban residents with health insurance to 440 million, which is 90 percent of urban residents. The number covered in 2010 was 432 million, according to a document released during the press conference.

Meanwhile, the government-supported fund will be increased to 200 yuan per person this year, according to the government work report delivered by Premier Wen Jiabao on March 5.

Regarding the rural cooperative health insurance system that was launched in 2003, Chen said the reimbursement cap for farmers will be raised from 30,000 yuan to 50,000 yuan this year, which is almost 10 times farmers' annual average net income per capita.

In addition, China will expand the pilot project that provides extra financial assistance to people suffering from severe diseases nationwide.

The current pilot project covers children with congenital heart disease and leukemia.

"We are now considering expanding the package to cover other diseases, such as breast cancer, cervical cancer and uremia," he said.

Source: China Daily

 

[Solomon2]

Trade deficit rises to $7.3 billion in February
14:36, March 10, 2011

Chinas General Administration of Customs reported that the country posted a $7.3 billion trade deficit in February, as exports growth fell far behind imports in the month.

Impacted by the domestic buying spree as Chinese families took a seven-day Spring Festival holidays, imports gained 19.4 percent year-on-year to reach $104 billion, while exports rose a paltry 2.4 percent at $96.74 billion.

Trade deficit in February hit $7.3 billion, the highest in more than three years, data say. In January, China achieved a trade surplus of $6.45 billion.

According to the administration, the biggest items the country imported in the first two months this year include iron ores, soy beans, meats and luxury cars.

Analysts have cautioned against reading too much into Februarys figures, saying that China was likely to return to a trade surplus soon, and the deficit will be short-lived.

However, some analysts believe that China's rising production cost, resulting from rising labor wages and raw material prices, domestic inflationary pressure and a gradually strengthening Renminbi currency, have more or less affected on its export competitiveness.

Commerce Minister Chen Deming said on Monday in Beijing that China will register a smaller trade surplus in 2011, as the government is trying to balance its imports and exports.

 

[Solomon2]

Top leadership stresses economic restructuring
March 09, 2011

Chinese President Hu Jintao, who is also General Secretary of the Central Committee of the Communist Party of China (CPC) and Chairman of the Central Military Commission, talks with deputies to the Fourth Session of the 11th National People's Congress (NPC) from north China's Inner Mongolia Autonomous Region, in Beijing, capital of China, March 8, 2011. Hu Jintao joined in the discussion of the delegation on Tuesday. (Xinhua/Lan Hongguang)

Chinese President Hu Jintao on Tuesday called for greater determination and efforts to achieve substantial progress in transforming the country's mode of economic development.

Hu made the remarks in a panel discussion with a delegation from Inner Mongolia Autonomous Region to the National People's Congress (NPC), China's top legislature, which is convening its annual session in Beijing.

New achievements must be made in the stable development of agriculture and animal husbandry, continuous growth of farmers' income, and comprehensive progress in agricultural and pastoral areas, he said.

The president called for appropriate relations between natural resources development and environmental protection.

He said greater prominence must be given to enhancing social management so as to facilitate the people's well-being, ethnic unity and progress, and social harmony and stability.

The president also extended Women's Day greetings to women legislators and political advisors as well as women of all ethnic groups across the country.

Wu Bangguo, chairman of the NPC Standing Committee, joined a panel discussion with NPC deputies from Hebei Province. He called for meticulous efforts to implement the scientific outlook on development and accelerate the transformation of economic growth mode.

Attending a panel discussion with NPC deputies from northeastern Jilin Province, Premier Wen Jiabao said the province is a major grain producing region and efforts must be made to ensure stable production capacity.

He urged local authorities to earnestly strengthen ecological conservation and environmental protection in a bid to achieve sustainable development.

Jia Qinglin, chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), which is also in annual session, joined a panel discussion with CPPCC National Committee members from the literary and art sectors.

He expected the CPPCC members to make great efforts to carry forward the fine traditions of the Chinese culture and strive for innovations in the cultural system.

Li Changchun, member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, attended a panel discussion with NPC deputies from eastern Shandong Province.

He said that improving the capacity for independent innovation is at the core of the nation's development strategy and the key for speeding up the transformation of economic development mode.

Li urged local authorities to deepen the reform of cultural system and strive to make cultural industry become a pillar sector of the national economy.

While discussing with NPC deputies from Shanxi Province, Vice Premier Li Keqiang urged officials to step up efforts to resolve the people's livelihood issues, and realize that household income and the economy grow at the same pace.

He said he hoped Shanxi can speed up the transformation and upgrading of its resources-based economy and improve the people's livelihood.

In his discussion with the NPC delegation from central China's Hubei Province, Zhou Yongkang, secretary of the CPC Central Commission for Political and Legal Affairs, said the province has made remarkable results in promoting social harmony and security.

He called on NPC deputies from Hubei to make the province a model in raising the quality of development, improving the people's livelihood, strengthening social management, and maintaining social harmony and stability.

 

[Brotherhood]

China's hybrid millet possible solution to Africa's food shortages - People's Daily Online March 11, 2011

A new variety of China-bred hybrid millet has yielded bumper harvests on trial plantation in some African countries, with its output at least doubling that of local millet varieties.

The millet variety, dubbed ZHM, is the result of 30 years of research led by Chinese scientist Zhao Zhihai, who is lauded the "father of hybrid millet" in China.

Millet is the staple food for many African countries, and experts said that if the Chinese variety of millet is popularized on the continent, it could provide a credible solution to food shortages that have long been haunting African countries.

On the sidelines of China's ongoing parliamentary session, Zhao told Xinhua that his team would travel to several agricultural countries in Africa to promote the hybrid millet.

Zhao, a deputy of the National People's Congress, China's top legislature, is a research fellow at an agricultural science institute located in Zhangjiakou city in north China's Hebei Province.

In 2007, his "Zhang Hybrid Millet" (ZHM) recorded an output of 810 kilograms per mu.

The next year, the UN Food and Agriculture Organization introduced a pilot plantation of the ZHM to ten African countries including Ethiopia, Cote d'Ivoire, Nigeria, Ghana, Benin, and Senegal.

"Millet is staple food in many African countries. The success of the ZHM's pilot plantation promises good prospects for its mass production in Africa," said Zhang Zhongjun, assistant to the FAO representative to China.

Zhao's team plans to set up companies in the countries with successful pilot plantations of the millet variety. Once established, the companies will provide seeds and assistance to local farmers.

"Instead of a quadrupled grain output, just a doubled output could help solve the issue of hunger in Africa," said Zhao.

The ZHM has been planted in 4 million mus (266,666 hectares) of farmland in eleven provinces in China, increasing the output by 100 million kilograms.

Liu Jianjun, a member of Zhao's research team have been to Ethiopia twice since 2009 to assist ten pilot planting programs there.

"We helped some local farmers to grow the hybrid millet and promised to buy their harvests. But they refused to sell after harvests as they said the new millet tastes much better than their traditional millet, called teff," Liu told Xinhua.

The output of teff normally stands at 100 kg per mu, but the Chinese hybrid millet can yield between 200 kg to 350 Kg, he said.

The Ethiopia government has given green light to the plantation of the Chinese variety of millet in the country, he said.

"But the problem is if we breed the millet seeds in China and send to Africa, the cost will go up," he said, noting that the problem concerning intellectual property rights could be resolved through the coordination of the Chines government and the FAO.

According to him, Ethiopia has 150 million mus of crop land with about 40 million mus for teff and other similar crops. If half of the 40 million mus are planted with the Chinese hybrid millet, the country would harvest additional 3 billion kilograms of grain.

Hybrid millet seeds are drought-resistant, water-economic and high yielding. The advantages have become even more prominent against the backdrop of global warming and worsening drought, Zhao said.

"I hope we can help African countries to beat hunger with technologies that some African countries lack," said Zhao. (one hectare equals 15 mus)

Source: Xinhua

 

[Brotherhood]

China should steer clear of US debt, expert warns - People's Daily Online March 11, 2011

The debt clock near Times Square in New York shows the US owes its creditors $13 trillion. A former adviser to the Chinese central bank has urged the largest foreign holder of US treasuries to stop buying the "risky" assets.[Photo / China Daily]


China, the largest US creditor, should stop buying US Treasuries because the "cost" of lending to a nation that may face a default on its debt is too high, said former Chinese central bank adviser Yu Yongding.

The US may reach its congressionally-mandated debt limit of $14.3 trillion in a few months, which could lead to a default, Yu said on Thursday. If the US were a euro-zone nation, a default or bailout would have happened long ago, said Yu, who is president of the China Society of World Economics and a former adviser to the People's Bank of China.

"China has kept on lending money to the US to keep its export machine going, and to prevent losses" on its holdings of Treasuries, said Yu. "Perhaps it is too late to do anything about the existing stock without causing a serious political and financial backlash. But at least China should stop continuing building up its holdings."

Experts including the current Chinese central bank adviser Li Daokui have urged diversification of the nation's foreign exchange reserves away from US debt after the country's holdings of Treasuries rose to a record $1.175 trillion in October. Pacific Investment Management Co dumped all Treasuries from its $237 billion Total Return Fund, the world's biggest bond fund, last month as the US projected record deficits.

China wants to diversify investments made with its $2.8 trillion of foreign exchange reserves to include equity in the world's largest companies and into non-traditional currencies including the Russian rouble, Indian rupee and Brazilian real, said Li, an academic member of the People's Bank of China's monetary policy board. Diversifying away from dollar assets too quickly may "disturb the market" and make China a "victim", Li said at a briefing in Beijing on Thursday.

Source: China Daily

 

[Brotherhood]

China's higher education students exceed 30 million - People's Daily Online March 11, 2011

China's higher education institutions of various forms had about 31 million students in 2010, an increase of 35 percent compared to 2005, according to the National Bureau of Statistics (NBS) on March. 10.

The NBS disclosed in its series report that in 2010, China's higher education institutions of various forms had about 31 million students, about 8 million more than in 2005 and about 1 million more than the planned scale, indicating an increase of 35 percent.

The enrolment of undergraduate students and students at the junior college level reached about 22 million, an increase of 43 percent compared to 2005. There were about 1.5 million postgraduate students and about 5.4 million adult undergraduates and college students, increasing by 57 percent and 23 percent respectively compared to the previous year.

In 2010, the gross enrolment rate in China's higher education reached 27 percent, an increase of nearly 6 percent compared to 2005. The figure is almost 2 percent higher than the planned goal.

The education level of teachers in full-time colleges and universities continued to rise while the scope of higher education is expanding. In 2010, the proportion of teachers in full-time colleges and universities holding graduate degrees stood at more than 57 percent, an increase of nearly 17 percent compared with 2005.

This figure in normal universities and colleges of undergraduate courses is nearly 68 percent, an increase of nearly 21 percent compared with 2005, and in higher vocational colleges, the proportion stood at more than 32 percent, an increase of more than 15 percent compared with 2005.

A total of 36 academicians of the Chinese Academy of Sciences and 33 academicians of the Chinese Academy of Engineering entered colleges and universities during the 11th Five-Year Plan period, accounting for more than 56 percent and nearly 41 percent of the total number of new teachers in colleges and universities, respectively. There were a total of 310 academicians of the Chinese Academy of Sciences and 278 academicians of the Chinese Academy of Engineering in Chinese colleges and universities in 2010, accounting for nearly 44 percent and more than 37 percent of the total number of teachers in Chinese colleges and universities, respectively.

According to sources, by 2010, China selected and supported a total of more than 1,800 members of the "Chang Jiang Scholars Program," which includes distinguished professors and chair professors worldwide. The country cultivated and supported 391 high-level innovation teams and 5,643 new-century excellent talents as well as more than 100,000 young teachers.

By People's Daily Online

 

[Solomon2]

Diversifying away from dollar assets too quickly may "disturb the market" and make China a "victim", Li said at a briefing in Beijing on Thursday.

Yep. If China's leaders had not been so eager to wield excess political power at the IMF/World Bank by remaining in the "developing" bloc rather than moving up to China's rightful place as a wealthy country China wouldn't be having such problems and the U.S. economy wouldn't be so distorted by excessive Chinese imports.

With no place to put the money domestic capital investment has run up against the full-employment limit. My analogy to China today is S. Korea of the late 70s, an authoritarian regime which, once the excess labor pool created by industrialization had been mopped up and the CB spending money to hold down the exchange rate (one could buy a Korean supertanker for under $4 million!) unavoidably sent prices of domestic goods skyrocketing. Attempts to hold labor costs down resulted in mass riots. Increased fuel costs made matters worse as profits crashed and unemployment suddenly loomed. China is thus right on the edge of experiencing its first capitalist bust in memory.

 

[truthseeker2010]

Australia not 'economic colony' of China: PM

Prime Minister Julia Gillard has rejected suggestions Australia is an "economic colony" of China, adding the nation keeps a "weathered eye" on national interest concerns during approaches from Chinese entities.

In a wide-ranging interview with CNBC, Ms Gillard also defended her decision to introduce a carbon tax after vowing not to do so before the election, saying she was making the best of the minority government.

"We are in a minority government and we need to work with others to get legislation through, and in order to act we've agreed to have a scheme that is fixed price for a period – effectively like a tax – and then going to a full cap-and-trade scheme," Ms Gillard said in the United States.

"So yes, that's different than what I said before the election. If I had every choice in the world we would be there going to a full cap-and-trade scheme, but I've seized the opportunities of this parliament to make sure we get carbon pricing done."

Ms Gillard declined to say whether the United States or China was Australia's most important economic partner, describing the US-Australian alliance as "rock solid" but saying Australian believed in "constructively" engaging with China.

"We are frank when we need to be, but we want to see China take its proper place in the rules-based order in the world," Ms Gillard said.

Responding to an observation that Australia's top 10 industries are all commodities, Ms Gillard noted the nation's services economy, agriculture, manufacturing and tourism sectors, and said while the resources boom is a "good thing," the government is seeking to ensure it balances economic growth.

Asked whether Australia would be open to a Chinese company acquiring a key Australian company, such as Rio Tinto Ltd or BHP Billiton Ltd, Ms Gillard replied that the Foreign Investment Review Board looks at major investments with a national interest criteria.

"But we're also an open trading economy and we accept the disciplines that come with that. We do want to see money move. We want to see investment move," she said.

Ms Gillard also reiterated her intention to proceed with the Minerals Resources Rent Tax without changes, and played down the prospect of a housing crash in Australia.

Australia not 'economic colony' of China: PM | News | Business Spectator

 

[Brotherhood]

asahi.com¡ÊÄ«Æü¿·Ê¹¼Ò¡Ë¡§China to build 60 nuclear reactors over next decade - English

BEIJING--China plans to build six nuclear power plants a year over the next decade, increasing its nuclear power capacity to more than 70 gigawatts by 2020, according to a top official of a nuclear power company.

Liu Wei, vice president of China Nuclear Power Engineering Corp., which comes under China's nuclear authority, the China National Nuclear Corp., said in an interview with The Asahi Shimbun that China should have about 70 reactors online by 2020, more than now operating in Japan. Japan has 54 reactors.

Currently, China has 13 reactors with a total output capacity of 11 gigawatts. Twenty-five new nuclear power plants are already under construction, nearly half of all new facilities being built worldwide.

Recently the United States approved the export of nuclear facilities to China, and Westinghouse Electric Co., owned by Toshiba Corp., is building one of the new reactors.

Japanese companies are also exporting related facilities.

While China's nuclear drive is aimed at domestic demand, Liu did not rule out the possibility that Beijing could also export nuclear facilities and technology, which Tokyo eyes as a key economic growth area.

Excerpts from the interview follow:


Question: The schedule seems a little rushed.

Answer: Our initial plan was to achieve an output of 40 gigawatts by 2020, but we expect to achieve that goal five years ahead of time, or earlier.

While a final decision has yet to be made, we plan to set the target at more than 70 gigawatts.

The standard output capacity of a reactor is 1 gigawatt. By 2020 we hope to have more than 70 reactors operating, more than Japan has.

With an eye on reducing carbon dioxide emissions, China plans to boost its reliance on non-fossil fuel energy sources to 15 percent of total supply. Currently nuclear power generation accounts for about 1 percent of overall electricity supply, so there is plenty of room for growth in this field.

Q: The construction period seems short.

A: With two years of preparation we can construct the facilities so that they can be commercially operable within five years. Unlike in Japan, we do not encounter opposition from local communities.

With thermal power generation that uses coal still the main source of power in the country, nuclear energy tends to be seen as a clean form of energy.

A set of four generators costs about 50 billion yuan (about 600 billion yen or $7.25 billion) to build, meaning that local communities will benefit from new jobs and the tax income that is generated.

Q: Do you have plans to export reactors?

A: Currently, our priority lies with domestic needs, but we are thinking about it.

China has been building nuclear power plants for the last two decades and will continue to build a large number of facilities.

Compared with many industrialized countries which have largely stopped construction of new facilities, China is developing new technologies every year. Drawing on experience and cutting-edge technologies from other countries, China has designed, built and operated its own nuclear reactors at a lower cost than developed countries. There lies our strength.

Q: There are safety concerns among Japanese about such a large amount of construction being undertaken so rapidly.

A: We have a track record of safely operating nuclear facilities for 20 years now. We hope to reassure people about that. China, Japan and South Korea will form a region where more than 100 reactors are concentrated. There are many areas where we can cooperate to ensure the safe and peaceful use of nuclear energy.

Last year I had the opportunity to visit the Kashiwazaki Kariwa plant in Niigata Prefecture, and learn about nuclear facilities and earthquakes. It was good experience. .

 

[Brotherhood]

Official: China should export nuclear power - People's Daily Online March 11, 2011

Nuclear power is China's strategic emerging industry, and promoting nuclear power exports can facilitate the upgrading and transformation of China’s foreign trade structure, said Yang Qi, honorary president of the Nuclear Power Institute of China, during the Fourth Session of the Chinese People's Political Consultative Conference National Committee. Yang proposed that the nuclear power export should be elevated to a national strategy.

Yang said that currently the conditions of China's nuclear power exports are basically ripe. China accumulated rich experiences and capacity during the more than 20 years in research and development, engineering design, equipment manufacturing, engineering construction and operation and management of nuclear power.

China is now able to independently design and construct 300,000-kilowatt, 600,000-kilowatt and 1-million-kilowatt nuclear power units. China National Nuclear Corporation (CNNC), China Guangdong Nuclear Power Group and the State Nuclear Power Technology Corporation (SNPTC) are developing third-generation nuclear power technology. That is expected to lead to an indigenous brand for the international market.

Yang has proposed to elevate the promotion of nuclear power exports to a national strategy. The government should support the nuclear power exports strategy by diplomatic, economic cooperative and other means.

Domestic enterprises should participate in bidding on international projects by integrating project construction, equipment engineering, technical support and bank loans as well as carrying out the independent nuclear power brand demonstration projects.

He added that the rollout of the CP1000 pressurized water reactor technology at home could lay a foundation for its overseas expansion. Other support, he suggested, should focus on promoting the research and development of the third-generation nuclear technologies with independent intellectual property rights, expanding the international market, offering more favorable project loans and tax breaks and helping nuclear power exports enterprises to access various types of financing resources.

By Li Jia, People's Daily Online