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Editorial

Editor

According to the reports, China's import will total $10trillion in the next five years, about three times ofGermany's gross domestic product (GDP).

In recent years, China's share in global trade has beenexpanding. In 2012, China registered a total goods tradevalue of 3.87 trillion dollars, overtaking the United States toclaim the top ranking in this regard.

However, it is also believed that on the wrangling bat-tle field for the right to set down international trade rules inthe 21st century, China faces huge challenges, and eventhe risk of being marginalized. The major pressure comesfrom the United States.

With the unsolved deadlock in the Doha Round anda weak World Trade Organization (WTO), the US, as theworld's largest economy, is establishing a US-dominatednew 21st-century global trade pattern, backed by two pil-lars - the Trans-Pacific Partnership (TPP) and the Transat-lantic Trade and Investment Partnership (TTIP).

TTIP will bind together two large economies - the USand the European Union, with their combined GDP andtrade value accounting for half and one-third of the globaltotal respectively.

Using their dominant positions in international trade,the US and EU further push the formulation of new rules forglobal trade to cope with the rise of new economies, in-cluding China, while TPP is aimed at subjecting the stabilityof Asia-Pacific region to the new order, with security drag-ging trade against the backdrop of US "Return to Asia"strategy.

The CED believes that under such circumstances,China has to weigh between two options: to stay awayfrom this US initiative and set up its own version or wait tosee the progress in TPP negotiations and find an opportunemoment to extend its olive branches? We also believe thatfor China's foreign trade, a smooth transition to qualitygrowth from the past quantity-featured glory holds key toits future boom and even for the sustainability of the overallChinese economy.

In the months to come, major world economies willhave to continue their battle against slow growth amiddebt problems and the trend will remain that powers co-operate with and compete against each other at thesame time.

We believe that China holds a very pivotal role in thefuture global trade, keeping in view the prevailing andemerging trends in the global economy.


19, 26 May 2013

Cover Story

China remembersWenchuan

A photo of Mao Zedong relaxing in a wickerchair against a scenic backdrop of LushanMountain has fetched 340,000 Yuan ($55,300) atauction, 10 times the pre-sale estimate.

China marked the fifth anniversary Sunday of the8.0-magnitude Wenchuan earthquake inSichuan Province by mourning for some 70,000victims and holding a post-quake relief drill, rightafter a 7.0-magnitude quake struck...

04

Mao’s portrait grabs$55,300 at Beijingauction

06

A sheep implanted with anew type of artificial heart

developed by Chinesescientists using cutting-

edge aerospace technol-ogy has lived for 62 daysthus far, the heart's devel-opers have announced.

in this issueMagazine_Layout 1 5/21/2013 8:04 PM

in this issueFund for SW China

Nokia SiemensNetworks opens

global delivery hubin China

China's Internetgiants in acquisition

spree

Nokia Siemens Networks have inaugu-

rated a Global Delivery Center (GDC)

hub in Zhengzhou, province of Henan

C h i n a ' s I n t e r n e t g i a n t s h a v e

g o n e o n a n e w a c q u i s i t i o n s p r e e

i n r e c e n t m o n t h s a s t h e y r a m p u p

e f f o r t s t o d i v e r s i f y b u s i n e s s e s

a m i d t h e i n d u s t r y ' s c o n s t a n t l y

c h a n g i n g d y n a m i c s .

Chinese airlines toget first 787 Dreamlinersthis month

09 12


CED Monitoring

BEICHUAN-China marked the fifthanniversary Sunday of the 8.0-magnitude Wenchuan earth-quake in Sichuan Province bymourning for some 70,000 victimsand holding a post-quake reliefdrill, right after a 7.0-magnitudequake struck another part of theprovince on April 20.

Mourning for the victims of thetwo earthquakes was seen across SinaWeibo, while public drills on post-quake relief work and disaster reduc-tion took place nationwide on Sundayto mark the anniversary.

Disaster reduction pamphletswere distributed, the location ofpublic shelters was publicized andinformation boards containing first-aid tips and emergency responseadvice were put up across thecountry.

The country's ability to launchrelief efforts has been tested fol-lowing the Lushan earthquakeand the reaction this time waswidely applauded.

The provincial governmentlaunched a contingency plan 10

minutes after the quake, while thefirst team of rescuers set off for thequake-hit area within 30 minutes,the Xinhua News Agency re-ported.

Unlike the Wenchuan quakewhen people across the countrywere strongly encouraged to ar-rive at the quake-hit area andoffer help, media advocated sen-sible volunteerism and avoid clog-ging up roads and delayingrescue teams.

Gao Jianguo, a researcher atthe Institute of Geology of ChinaEarthquake Administration, toldthe Global Times that the habit ofconstructing safe buildings by fol-lowing stringent codes has beenstrengthened.

"But problems are still there,"Gao said. "Even though the codeshave been set up, chances arethat during construction they arenot well followed."

Figures released Saturday bythe Sichuan Provincial Bureau ofStatistics show that the economicgrowth of 39 hardest-hit countiesin the Wenchuan earthquake in-creased at an annual average of

15 percent from 2009 to 2012, ex-ceeding Sichuan's averagegrowth by 0.7 percentage points.

Outside this good news, re-construction in the affected areashas been frustrating due tocharges of corruption. An audit re-port assessing the reconstructionwork in affected zones by the Na-tional Audit Office in 2012 showedthat 1.4 billion Yuan ($228 million)of the funds had been embezzledor illegally transferred.

Zhu Lijia, a public manage-ment professor at the ChineseAcademy of Governance, toldthe Global Times that lessonsshould be learned by first stan-dardizing all procedures duringthe reconstruction, including de-sign and hiring contractors, as thework in zones following the Lushanearthquake has just kicked off.

"The whole process should bemade public and more transpar-ent, since it involves charity funds,"he said. "Authorities should acceptsupervision by people from the af-fected areas, answer inquiriesfrom the media and publicize fig-ures in a timely manner."

04

Society

China remembersWenchuan


05

Pupils mourn for victims who died in a massive earthquake five years ago in the old county seat of

Beichuan, southwest China's Sichuan Province, May 12, 2013. A memorial event was held in Be-

ichuan on Sunday to mark the fifth anniversary of the deadly earthquake which havocked Sichuan

on May 12, 2008. (Xinhua)


Society

06

Mao’s portraitgrabs $55,300at BeijingauctionCED Monitoring

BEIJING-A photo of Mao Zedongrelaxing in a wicker chair againsta scenic backdrop of LushanMountain has fetched 340,000Yuan ($55,300) at auction, 10 timesthe pre-sale estimate.

The photo, titled "ChairmanMao, the Brightest Sun in the Heartof World's People" was taken in1961 by "Li Jin", a pen name usedby his wife Jiang Qing for photosshe took during the "cultural revo-lution" (1966-76).

There was a sudden rise intension when the photo enteredthe salesroom at Huachen Auc-tions in Beijing on Friday, with anestimate between 30,000 and50,000 Yuan. Bidding started at22,000 Yuan, the price of 100,000Yuan was soon passed, and then awhite-hot race between two tele-phone bidders ensued.

Agents acting on behalf of thebuyers spoke aloud to the auction-

eer as the bidding intensified,when normally bidding cards areraised.

"The result came as a sur-prise," said Li Xin, the manager ofHuachen's photography depart-ment.

"Photos taken by Jiang Qingrarely come onto the market, andthis one is sizable, measuring 45.5by 37 centimeters.

"The photo was highly sought-after, mainly because its photog-rapher was such a unique figure. Itclearly aroused huge interest.

"It also shows that 'red-classic'photos like this are becoming wellrecognized by the market. I sawmany new faces in the salesroom,"she said.

The auction house had offereda special "red classic" photogra-phy section to commemorate the120th birthday of Mao, puttingdozens of photos up for sale, in-cluding some by famous photog-raphers including Wu Yinxian, Hou

Bo and Qi Guanshan.Most of the photos showed the

late leader inspecting the country-side, meeting foreigners and at-tending Party conferences.

Mao was worshipped as asymbol of national power duringthe period between the foundingof New China in 1949 and the endof "cultural revolution" (1966-76).

He appeared center stage inmany artworks and photos, andmany of the images were taken bythe best photographers, using thevery latest technologies of thetime.

Friday's $55,300 photo byJiang was taken in black andwhite and later hand-colored, be-cause color film was not widelyused then.

It also highlighted Jiang's fa-voring of backlighting, a significantinfluence on Chinese photographyduring the period.

The past five years have wit-nessed a boom in demand for


07

photography, especially "red classic" photos that recorded New China's rise, development and reform."Our first photo auction in 2006 achieved sales of 3 million to 5 million yuan."Last year, two photo auctions exceeded 13 million yuan in sales, a 20 percent rise on the previous year,"

Li said.She added there is huge interest from Chinese collectors, both at home and from overseas, as soon as

old photos about China appear on the market.There has been growth too in bidding from public museums and libraries hoping to enrich their collec-

tions.


08

Finance

The fund will be used for the management of major geological disasters in Yunnan, including the moni-toring and assessment of disasters, relocation efforts and the construction of an emergency response system,according to the Ministry.

Starting from this year, the ministry will allocate 1 billion Yuan each year for eight consecutive years tofund the construction of a comprehensive system for managing geological disasters.


09

Fund for

SW China

The province has complicated geological conditions and is frequently hit by geological disasters, suchas earthquakes, landslides and mudslides.

In 2009, the central government set up a special fund for disaster prevention and management and hadsince granted a total of 745 million Yuan to Yunnan by the end of 2012.

The Ministry of Finance has saidthat it has allocated 1 billion Yuan

(about 161 million U.S.dollars) forgeological disaster management

in southwest China's YunnanProvince.

disaster management approved


10

Finance

Chinese airlinesto get first 787

Dreamliners thismonth


11


Finance

12

CED MonitoringBEIJING-Several Boeing 787

Dreamliners will arrive at Chi-nese airlines before June, asBoeing resumes deliveries ofthe jetliners, Boeing China'sPresident has said.

"The delivery of 787s is ontrack, and several Dream linerswill be delivered to China thisquarter," Marc Allen said.

The process of the Dream-liner's airworthiness certifica-tion in China is in its phase-outperiod now, he added.

China Southern Airlines CoLtd and Hainan Airlines Co Ltdwill be the first Chinese cus-tomers to get 787 Dreamliners,he said.

China Southern Airlinessaid that its first 787 Dreamlinerwill arrive by the end of Mayand the carrier will get eight ofits 10 orders this year,Yangcheng Evening News, aGuangzhou local newspaper,reported.

Boeing refused to commenton the report, but Allen said heis confident that the first batchof Dreamliners will be deliveredto China before June.

Four Chinese airlines or-dered 41 Dreamliners by theend of 2012, and 58 customersglobally are currently waitingfor more than 800 Dreamliners.

Boeing plans to improve itsproduction rate from the cur-rent seven a month to 10 by theend of2013.

Meanwhile, Boeing has de-livered a Dreamliner to All Nip-pon Airways Co Ltd, the firstdelivery since the aircraft'sproblems with its lithium-ionbatteries were resolved.

All 50 flying Dreamlinerswere grounded in January aftertwo incidents on Japanese jet-liners in which a battery over-heated. A Japan AirlinesDreamliner caught fire while

parked at Boston’s Logan Inter-national Airport on Jan 7. Abouta week later, an All Nippon Air-ways jetliner flying over Japanhad to make an emergencylanding after smoke was de-tected in an electrical system.

Two airlines are already fly-ing their Dreamliners again nowthat the US jetliner maker hasfixed the problem. Other air-lines using Dreamliners alreadyhave the aircraft scheduled tofly again, Allen said.

United Airlines Inc, whichuses six Dreamliners, plans tofly the aircraft again on Mon-day and will use the Dreamlineron its Shanghai-Los Angelesroute beginning on Aug 3.

"Our customers in theShanghai market have de-manded Boeing 787 Dreamlin-ers, which provide a morecomfortable flying experience,"said James Mueller, the UnitedAirlines' Atlantic and Pacificsales vice-president.

The Dreamliner, with asmall cabin but long range, ismore suitable for point-to-pointroutes, he said, as airlines arelooking for more business op-portunities in China's smallercities.

Meanwhile, Chinese air-lines also want to expand theirinternational market share withthe Dreamliner, which has amaximum range of 16,000 km.

Hainan Airlines, which or-dered 10 Dreamliners, plans touse the aircraft on its newChina-US route.

"The Dreamliner will beused in our Beijing-to-Chicagoroute, which will be launched inSeptember," said Wang Ying-ming, president of Hainan Air-lines Co Ltd.

Wang said the carrier alsoplans to use the new aircraft onits other two routes betweenBeijing and North America.

The airlines' demands oninternational expansion makeBoeing focus on selling the air-craft with250 to 350 seats inChina, including Boeing 787and 777 aircraft.

"We expect in the next 20years, there will be 700 aircraftsold in that category in China,"Allen said.

Airbus SAS, Boeing's mainrival, is working on its A350 XWBjetliners, which are meant tocompete with Dreamliner.

The European airplanebuilder also forecast that Chinawill have more than 1,000 air-craft with250 to 350 seats in thenext 20 years, said FabriceBregier, president and CEO ofAirbus.

The A350 XWB, which has630 confirmed orders world-wide, including 10 orders fromAir ChinaCo Ltd, will make itsfirst flight in June or July, headded.

Meanwhile, Chinese air-lines are not affected so far asmore countries have an-nounced to temporarily groundBoeing 787 Dreamliners for in-vestigations into battery-re-lated problems.

Boeing 787s purchased byChinese airlines have not yetbeen delivered and these or-ders willnot be affected, the USplane maker and two Chineseair companies media.

Four Chinese airlines haveordered a total of 41 Boeing787s, including 15 for Air China,the country’s flagship carrier,and all of them are awaitingdelivery, said an official incharge of press relations atBoeing (China) Co Ltd.

China Southern Airlines andHainan Airlines each booked10 Dreamliners, while the gov-ernment has not yet approvedthe six Dreamliners ordered byXiamen Airlines, the official


13

said, declining to be identified.A press official at Air China

said he has not been informedof any changes in the com-pany's Boeing 787 orders,which are expected to be de-livered in 2014.

Xiamen Airlines, which also

expect deliveries in 2014, hasnot seen its orders affected bythe incidents so far, the com-pany's press official told Xin-hua.

Hainan Airlines "alwaysconsiders it a top priority to en-sure operation safety" and will

follow the US authorities' safetyappraisal on the Boeing 787s,according to emailed com-ments sent by the company. Itdid not specify whether orderswill be adjusted.


IT

14

Nokia SiemensNetworks opens

global delivery hub in China


15

CED Monitoring

SHANGHAI-Nokia Siemens Net-works have inaugurated aGlobal Delivery Center (GDC)hub in Zhengzhou, province ofHenan. The new facility will pro-vide tools, processes andskilled resources to remotelymanage mobile broadbandnetworks for operators in Chinaand around the world. Poolingtogether existing competencesand assets, it will also deliverfull life-cycle services for TD-LTE*, reinforcing Nokia SiemensNetworks leadership and con-tribution to a thriving TD-LTEecosystem.

The new GDC hub is an ad-dition to Nokia Siemens Net-works’ pioneering globalservice delivery model, de-signed to help operators bringservices to market faster andimprove the speed, quality andefficiency in network opera-tions. It will complement thestrengths of the company’sworld class global delivery cen-ters in India and Portugal, andsix other global delivery hubsoperating across the globe.

With enhanced capabili-ties, Nokia Siemens NetworksGDC hub will provide an in-creasing range of services, in-cluding technical consulting,network design, planning andoptimization, systems integra-tion, maintenance and man-aged services. It will also serveas a center of competence forTD-LTE. China is the ideal loca-tion for the new facility, asNokia Siemens Networks canuse the existing TD-LTE insightand experience to continuedriving innovations and com-mercial deployments acrossthe globe.

“We are very excited tolaunch our new global deliveryhub in China. This representsyet another step in ensuring

that customers in China andworldwide benefit by leverag-ing global level of competenceand best practices, especiallyfor TD-LTE, without any lan-guage or location barrier” saysJoseluis Garcia, head of globalservice delivery at NokiaSiemens Networks.

Through the company’splanned centralized, consoli-dated, global service deliverymodel, the GDC hub will de-

liver economies of scale anddrive network efficiencythrough remote service deliv-ery, using standardized and au-tomated IT tools and processes.It is expected to help operatorsachieve industrialized effi-ciency across all phases of thenetwork life-cycle, from de-ployment through operation,maintenance, upgrade, opti-mization and increasingly serv-ice management.


IT

16

China's Internetgiants inacquisitionspree

B E I J I N G - C h i n a ' s I n -t e r n e t g i a n t s h a v e g o n eo n a n e w a c q u i s i t i o ns p r e e i n r e c e n t m o n t h s a st h e y r a m p u p e f f o r t s t od i v e r s i f y b u s i n e s s e s a m i dt h e i n d u s t r y ' s c o n s t a n t l yc h a n g i n g d y n a m i c s .

A l i b a b a , C h i n a ' sl e a d i n g e - c o m m e r c ef i r m , a n n o u n c e d l a s tw e e k t h a t i t w i l l p a y $ 2 9 4m i l l i o n f o r a 2 8 - p e r c e n ts t a k e i n d i g i t a l m a p p i n gc o m p a n y A u t o N a v i H o l d -i n g s L t d .

B E I J I N G - T h e m o v e ,f o l l o w i n g A l i b a b a ' s p r e v i -o u s d e a l t o t a k e a n 1 8 -p e r c e n t s h a r e i n S i n aC o r p ' s m i c r o b l o g g i n gs e r v i c e W e i b o , i s t h eg i a n t ' s l a t e s t a t t e m p t t om a p o u t a s t r a t e g y i n t h ek e y m o b i l e I n t e r n e t m a r -k e t , i n w h i c h m a j o r c o m -p a n i e s h a v e b e e n v y i n gf o r p r e s e n c e .

L i Z h i , a n a n a l y s tw i t h I n t e r n e t s e r v i c ep r o v i d e r A n a l y s y s ,n o t e d t h a t r a t h e r t h a nd e v e l o p i n g n e w p r o d -

u c t s o n t h e i r o w n , t h eI n t e r n e t g i a n t s h a v ep r e f e r r e d t o m a k e u pf o r t h e i r w e a k a r e a st h r o u g h m e r g e r s a n da c q u i s i t i o n s ( M & A ) t oc o n s o l i d a t e t h e i r p o s i -t i o n s .

E a r l i e r t h i s m o n t h ,C h i n a ' s o n l i n e s e a r c hl e a d e r B a i d u I n c . a n -n o u n c e d i t s p l a n t o b u yt h e o n l i n e v i d e o b u s i n e s so f P P S , t o r i v a l i n d u s t r yl e a d e r Y o u k u T u d o u ,w h i c h w a s c r e a t e d l a s ty e a r t h r o u g h t h e m e r g e ro f t h e c o u n t r y ' s t w om a j o r v i d e o g i a n t s ,Y o u k u a n d T u d o u .

T h e p u r c h a s e i sB a i d u ' s l a t e s t s t e p t o d i -v e r s i f y b e y o n d i t s c o r es e a r c h s e c t o r .

T h e s t r i n g o f M & Ad e a l s h a s h i g h l i g h t e d t h eh e a t e d c o m p e t i t i o na m o n g I n t e r n e t g i a n t s t os e c u r e d o m i n a n c e o f t h em o b i l e I n t e r n e t m a r k e t a sa n i n c r e a s i n g n u m b e r o fC h i n e s e a r e g o i n g o n l i n et h r o u g h m o b i l e d e v i c e s .

C u r r e n t l y , T e n c e n t ,

w h i c h h a s s o f a r a t -t r a c t e d 3 0 0 m i l l i o n u s e r st o i t s p o p u l a r v o i c e m e s -s a g i n g p l a t f o r m W e c h a t ,i s w i d e l y r e g a r d e d a sh a v i n g s e c u r e d a d o m i -n a n t s e a t i n t h e m o b i l eI n t e r n e t m a r k e t .

B u t M a H u a t e n g , T e n -c e n t ' s c h a i r m a n a n dC E O , t o o k a c a u t i o u sv i e w a b o u t t h e c o m -p a n y ' s p o s i t i o n .

" N o m a t t e r h o w w e l l -p l a c e d w e a r e n o w i n t h em o b i l e m a r k e t , a s l i g h to v e r s i g h t m a y c a u s e as h i p w r e c k , " h e s a i d a t a nI n t e r n e t c o n f e r e n c e e a r -l i e r t h i s m o n t h .

A c c o r d i n g t o d a t af r o m t h e C h i n a I n t e r n e tN e t w o r k s I n f o r m a t i o nC e n t e r , C h i n a h a d 4 2 0m i l l i o n m o b i l e I n t e r n e tu s e r s a s o f t h e e n d o f2 0 1 2 .

W i t h t h e m a r k e t p o -t e n t i a l y e t t o b e t a p p e d ,t h e I n t e r n e t g i a n t s ' M & Aa c t i v i t y w i l l l i k e l y t o g oo n f o r a w h i l e , a c c o r d i n gt o L i . ( X I N H U A )


17


18

Industry

Shanghai toestablish freetrade zone


19

reform".As Shanghai Disneyland is set

to open in 2015 and a high-endduty-free center opens aroundthe same time in WaigaoqiaoFree Trade Zone, Wan concludedthat the free trade zone is "in linewith the local government's callfor a transformation of economicdevelopment, which will focusmore on boosting domestic con-sumption".

"The free trade zone will alsohelp Chinese companies goingoverseas by helping increase ex-ports," he said.

"The new free trade zoneshould not simply replicate anyother already existing exampleseither in form or in function," headded.

Much concern has been ex-pressed that the establishment ofthe Shanghai free trade zone willpose a threat to Hong Kong.

But Wan said Shanghai willnot challenge Hong Kong's statusas a major global free port, as thelatter promises and providesmore open policies.

Hong Kong Trade Devel-opment Council has beenclosely monitoring the devel-opment of the free trade zoneplan. But Jacky Chung, thecouncil's regional director foreastern and central China,said it is probably not yet timeto predict the impact of theplan.

Zheng Weimin, a researcherwith the Chinese Academy of So-cial Sciences, said that Shanghaiand Hong Kong play differentroles in the Chinese economyand their functions are comple-mentary.

Hong Kong's advantages liein its sound legal system and mar-ket openness. Their relationship ismore cooperative than compet-itive.

"It is a new national strategythat everything should be se-cured before the plan really getsstarted," said Wan Zengwei, di-rector of the Pudong Academyof Reform and Development inShanghai.

The free trade zone plan isone of Shanghai municipal gov-ernment's major tasks for 2013,according to a government workreport delivered by Yang Xiong,acting mayor of Shanghai, at thefirst session of the 14th municipalpeople's congress.

Benefiting from the newsabout the free trade zone, pricesof related stocks rallied while theShanghai Composite Indexdropped 1.11 percent on Tues-day.

Shanghai Pudong Road &Bridge Construction Co Ltd wasup 4.59 percent, while Pudong-based real estate developerGolden Bridge rose 4.22 percent.

Zhang Qi, a senior analyst atHaitong Securities Co Ltd inShanghai, said the performanceof stocks related to the free tradezone has remained good sinceSpring Festival despite an ongo-ing decline in the Shanghai Com-posite Index.

"The plan is in accordancewith the city's goal of buildingit into a regional shipping,commercial and trading hub.It will also help promote thecity's transit, export and off-shore trade," he said.

Wan from the Pudong Acad-emy of Reform and Developmentin Shanghai said the rapid imple-mentation of the free trade zoneplan is closely related to the cur-rent economic situation as Pre-mier Li Keqiang reiterated at aneconomic conference in Marchin Shanghai "we should use open-ing up to boost domestic de-mand and provide a push for

CED Monitoring

SHANGHAI-Despite rapid devel-opment in the past few years,many die-hard traditionalists inShanghai still believe in the oldadage that a bed in Puxi is pre-ferred to a house in Pudong.

But this "wilderness" has nowbecome the focus of the city's fu-ture.

And this isn't just related toDisneyland, which, when it iscompleted in 2015, will be part ofPudong New Area's attractive-ness.

The major driving force is a10-year plan for Pudong, or theeastern part of Shanghai, that isgrander and bolder than any-thing that has ever been con-ceived even by overly ambitiousShanghai officials.

The plan encompasses anarea of 28 square kilometers, in-cluding Waigaoqiao Free TradeZone, Yangshan Free Trade PortArea and Pudong Airport Com-prehensive Free Trade Zone.

The area is almost the samesize as Macao, and its trade vol-ume topped $100 billion last year,the highest on the mainland.

In this area, a new economicorder will be established with itsown set of rules for commerceand finance. Indeed, the Shang-hai free trade zone, as it is tem-porarily called, is set to haveeven more of an impact thanother such entities in Shenzhen orTianjin.

The project, mapped out atthe beginning of this year andapproved this week, is the first ofits kind in China. Ready for sub-mission to the State Council laterthis month for the official seal ofapproval, the project is expectedto start operation in phases in thesecond half of this year at theearliest.


20

Industry

Figures show continued struggle

for steel industry


21

CED Monitoring

SHANGHAI-China's steel in-

dustry continued to suffer

from weak demand and thin

profits during the first quarter,

and the situation could con-

tinue for the rest of the year

as prices keep falling.

The latest data from the

China Iron and Steel Associa-

tion show that the profit mar-

gin across the domestic steel

industry dropped to 0.9 per-

cent, delivering collective in-

dustry profits of 2.5 billion

Yuan ($406 million) for the

quarter.

Xue Heping, an expert

with the association, said the

profit level was too small for

an industry with total assets

worth 4.3 trillion Yuan.

Thirty of the country's 86

large and medium-scale steel

companies reported losses in

the first quarter, five fewer

than the same period last

year, the association's figures

showed.

The loss-making compa-

nies reported a total loss of

6.1 billion Yuan during the pe-

riod, against losses of 9.4 bil-

lion Yuan at the same stage

in 2012.

Although the number of

steel companies in the red is

less than during the same pe-

riod last year, Xue said that it

did not mean the industry

was likely to improve in

months to come.

"Although the industry

performed better than in the

same period last year, it is still

questionable whether they

can even maintain these low

profit levels."

During the quarter, the in-

ventories of the 86 large and

medium-scale steel compa-

nies reached 583.1 billion

Yuan, 10.2 billion Yuan higher

than the same period last

year, which puts increased

pressure on their sales and

marketing operations to clear

the growing stockpiles.

"There is still a lot of future

uncertainty for steel compa-

nies," said Xue, as the industry

enters what he called a high-

risk period, saddled with high

levels of debt.

According to the associa-

tion, the total debts of 86

major steel companies had

reached 2.98 trillion Yuan by

the end of March, 188.9 bil-

lion Yuan more than at the

same period last year.

The debt-to-asset ratio of

the industry has reached

about 70 percent, a difficult

situation for the industry.

"Meanwhile, manage-

ment, financial and market-

ing costs have also risen as

the market continues to

worsen," said Xue.

He predicted losses are

likely to continue in April and

May as the price of steel

keeps on falling to its lowest

level in five years, with some

major producers having to

adjust their product prices to

maintain or boost market

share.

On Monday, Wuhan Iron

and Steel Group, one of the

country's major steel produc-

ers, cut the price of its hot-

rolled steel by 180 Yuan a ton

and cold-rolled steel by 100

Yuan a ton.

In major steel trading

cities, the current price of

hot-rolled steel is 3,600 Yuan

per ton.

"The steel price adjust-

ments being made by major

producers reflect an ongoing

weak market," said Lu Huay-

ing, a steel industry analyst

with price monitoring service

Lange Steel Information Re-

search Center.

Over the past year,

China's major steel compa-

nies - which account for 80

percent of the country's total

output – 阿 have recorded

overall profits of 1.58 billion

Yuan, a 98.22 percent year-

on-year drop, according to

the association.

Up to 23 of its major mem-

ber companies reported an-

nual losses last year, 15 more

than the previous year, total-

ing 28.9 billion Yuan, around

seven times higher than in

2011.


22

Automobile

Ferrari plansrapid push inChina sales


23

SHANGHAI-Ferrari SpA, th

e iconic Italian sports car

producer, unveiled a fiv

e-year business strategy on

Wednesday in which it hopes to increase its

turnover

from China and the United States, as income from

Europe remains sluggish.


24

Automobile

A Ferrari 458 Spider is loaded onto a truck

after it was purchased by a young Chinese in

Shenzhen, Guangdong province. Ferrari

plans to add three new mainland dealerships

this year.


25

"The Greater China

market plus the Far

East region will con-

tribute 2 percent

more turnover to Fer-

rari in the next five

years, while the US

will generate 10 per-

cent more," said Luca

di Montezemolo, its

chairman.

He added that by

2017, China and the

US will both contribute

30 percent of

turnover, from the cur-

rent 28 percent for

China and 20 percent

for the US.

Meanwhile, turnover

from Europe and the

Middle East will de-

cline from the current

52 percent to 40 per-

cent.

The company saw a 5

percent fall in sales in

its home market, Italy,

last year.

"So we cannot ignore

the robust economic

potential in China,

which will help drive

Ferrari's business in

the future," said Mon-

tezemolo.


26


27

In 2012, Ferrari sold 7,318 sports cars world-wide, a 4.5 percent increase from 2011. It sold

784 cars in its Greater China market, a 4 per-cent rise, reinforcing the market as its second

largest after the US."I'm satisfied with our market performance in

China. In the coming years we will put more ef-fort into China, the world's largest vehicle mar-

ket, including training customers into makingthe Prancing Horse more favored by growing

new rich," said Montezemolo.Ferrari has 27 dealerships in the Greater

China region, he said, and the company plansto have 30 dealers by the end of 2013, with

three being added on the mainland.However, Montezemolo said the company's

sales this year are likely to be similar to those in2012, both globally and in China, where the

premium-car market has slowed along with theoverall car market.

Moreover, Montezemolo said that Ferrari willinvest 250 million Euros ($329 million) in emis-

sion reduction technology over the next fiveyears, half of the company's budget on re-

search and development.The move is in line with Chinese govern-

ment's requirement on energy conservation andemission reduction for the automobile industry.

Matthias Mueller, chairman of German lux-ury vehicle and sports carmaker Porsche AG,

also said recently that its sales are likely to beflat this year, after rising 28 percent year-on-

year in 2012.Andrew Thomson, head of automotive, Asia

Pacific & China, at KPMG, said: "The new gov-ernment's commitment to addressing corruption

and increasing transparency in respect of, forexample, government agency and SOE spend-ing, may lead to some challenges for the ultra-

premium vehicle segment in China this year."The feedback we are receiving from clients

and the market are telling us that ostentatiousdisplays of wealth will become less prevalent."

"People may be less likely to want to drawattention to themselves by buying ultra-pre-

mium vehicles, and the relevant automakersmay need to adjust their development plans

accordingly."


28

planning survey done

Sansha’s city

Construction


29

SANSHA -- To advancethe construction of China'snewest city, an official dele-gation completed a field sur-vey of the islands and waterswithin the jurisdiction of San-sha City, according to theprovincial authorities ofHainan.

It was the first compre-hensive survey organized bythe Hainan provincial author-ities since the official estab-lishment of Sansha City inJuly.

From May 6 to 14, a dele-gation of relevant officials atboth the provincial and citylevels traveled 2,270 nautical

miles on board the Yuzheng-310, a fishery administrationpatrol vessel.

They surveyed theZengmu Reef, as well as theYongshu, Meiji and Zhubireefs.

The delegation held dis-cussions with local garrisonand fishery enterprises andextended their regards to theenterprises and local fisher-men.

Sources with the Hainanprovincial government saidthe survey was conducted inpreparation for the formula-tion of Sansha's regional de-velopment plans.

To facilitate local re-source development and en-vironmental protectionefforts, the survey focused onthe marine resources and en-vironment of Sansha.

The delegation con-ducted in-depth discussionsover these issues in severalworkshops during the survey-ing process, they said.

With its government of-fice based on Yongxing Is-land in the South China Sea,Sansha City administers threeisland groups -- Xisha, Zhong-sha and Nansha -- and theirsurrounding waters.(XINHUA)


30

Construction

CED MonitoringBEIJING-Security concernswill likely delay the first ship-ments of gas and oil from theMyanmar coast to Chinathrough a new pipeline run-ning across territory con-trolled by ethnic militiagroups, a Myanmar energyofficial said.

Construction of the 793-km pipeline will be com-pleted by the end of May,according to Li Zilin, vicechairman of South East AsiaGas Pipeline Company, aconglomerate of Chinese andMyanmar companies.

"Technically the gaspipeline is ready, but I'm notjust sure when the situationalong its route will allow it tooperate," said a senior En-ergy Ministry official who

asked not to be named be-cause he was not authorizedto speak to the media.

The official said opera-tions were likely to be de-layed due to recent clashesbetween government forcesand ethnic militia fighters inShan state, as well as "fiercefighting" with the Kachin In-dependence Army in Kachin,a northern state that bordersChina.

The pipeline will be aconduit for gas from the Shwefields off the coast ofRakhine, a western state bor-dering Bangladesh, to China'sYunnan province.

It will also transport oilfrom the Middle East andAfrica overland across Myan-mar, allowing China to avoidusing the Straits of Malacca

between Malaysia and In-donesia, one of the world'sbusiest shipping lanes.

The project has alsosparked protests in MandayIsland where the pipeline be-gins and residents say landhas been confiscated tomake way for a deep seaport.

"We are waiting to havetransparent talks about ourgrievances with the authorityand the Chinese companies,"Tun Kyi, chairman of MadayIsland Development Associa-tion, told Reuters.

About 400 villages onManday Island staged aprotest last week. Demandsincluded adequate compen-sation for land seizures, im-proved roads and creation ofjobs.

China-Myanmarpipeline

start-up delaylikely


31


Real Estate

32

CED MonitoringBEIJING-China's grade A

office rent is under pressure thisyear because of its alreadyhigh base, weakening demandand rising supply in some cities,industry analysts said.

Beijing grade A office rentsedged downward for the firsttime in three years, as demandslowed. The decline follows

rises for more than three years,according to a report by JonesLang LaSalle (JLL).

Rents in the overall marketedged down 2 percent quarter-on-quarter in the first quarter to337 Yuan ($54) per squaremeter per month, the first de-cline since the third quarter of2009, the report showed.

The downtick was more

pronounced in the central busi-ness district (down 3.7 percentquarter-on-quarter), where re-sistance to high rents was moreacute, although mild rentalgrowth remained in place insubmarkets where upcominglease expiries are less of a con-cern.

"While business interest inBeijing remains strong, some

Grade A officerents under

pressure


33

tenants are reviewing their of-fice space requirements giventhe huge rental growth wit-nessed in recent years," saidEric Hirsch, head of markets atJLL in Beijing.

"Many landlords are recog-nizing this and are being moreprudent as a result. We expectleasing demand will remainthin and the chances of seeingfurther rental compression inthe next one to two quartersare high," Hirsch added.

According to internationalreal estate advisory companySavills, although the city-widevacancy rate is expected tolevel out at 3 percent by theend of 2013, the lowest level inthe past 15 years, rents couldfall by roughly 2 to 3 percent,as tenants continue to relocateto non-prime locations or areforced to squeeze their officespace in prime locations be-cause of deteriorating afford-ability, making it hard forlandlords to apply rental incre-ments.

Grade A office rents in Bei-jing reached 318.8 Yuan per sqm per month by the end of thefist quarter, with quarter-on-quarter growth constrained tojust 0.4 percent, as landlordsoffered more incentives to at-tract tenants in the face ofslowing demand, the reportfrom Savills showed.

Overall rents in Shanghai'sgrade A office market re-mained flat at 8.9 Yuan per sqm per day this quarter. AndPudong's grade A office rentsexceeded Puxi rents for the firsttime since the third quarter of2010, according to JLL.

Rents continued to growsteadily in Pudong this quarter,rising by 1.3 percent quarter-on-quarter. Meanwhile, in Puxi,rents declined slightly by 0.3percent as the majority of land-lords held rents flat in spite ofweak demand and new supplywhich reached the market thisquarter, the report showed.

Seasonality combined withslowly improving sentiment

about the broader Chineseeconomy contributed to an in-crease in the number of new in-quiries in the office marketfollowing the Chinese New Yearholiday.

Multinational companies inPuxi appear to be more opti-mistic about the market, al-though at present leasingvolume remains persistentlylow as it takes time for inquiriesto become deals. Retailers andpharmaceutical tenants remainthe two sectors that have main-tained the strongest level of de-mand.

In Pudong, financial serv-ices remained active, althoughavailable expansion space inthe core central business dis-trict was limited. As a result,some tenants have looked tonon-core areas to satisfy spacerequirements.

Pan Shiyi, chairman ofproperty developer SOHOChina, said there is no bubblein the commercial propertymarket in Beijing and Shanghai


34

Real Estate

yet. However, there are risingrisks in second-tier cities withhigh vacancy rates, such asChongqing and Xi'an.

He added more effortsshould be made to improve theinternal quality of grade A of-fice buildings, such as strength-

ening internal air treatment,given the air pollution.

According to research bycommercial real estate serv-ices firm CBRE, construction of40.8 million square meters of of-fice space will be completed inthe next four years across

China's 14 major cities, fuelingworries about oversupply insome second-tier cities.

Between 2013 and 2016,the total stock of quality officespace in the 14 major cities willincrease 80 percent, or 40.8million sq m, the CBRE report


35

showed. Although future supplymight be less than expectedbecause the projects usuallysuffer delays during the con-struction stage, a number ofsecond-tier cities, such as Tian-jin, Shenyang and Chongqing,are likely to see supply signifi-

cantly outpace demand, saidChen Zhongwei, head of re-search at CBRE China.

A number of second-tiercities will experience peak of-fice completion and delivery ofprojects in the next few quar-ters, a development expected

to continue to push up vacancyrates. As a result, rent perform-ance will be under pressureand some projects may pushback their delivery dates.


36

Real Estate

TAIWAN-INvESTED FIRM

LARGESTTAXPAYER IN

PINGTANCED Monitoring

BEIJING-To date, a Taiwan-in-vested real estate developerhas handed in the most taxes inthe Pingtan ComprehensivePilot Zone, Fujian, this year, ac-cording to taxation authorities,Pingtan Times has reported.

Haixia Ruyi City Construc-tion & Development Co haspaid 52.84 million Yuan ($8.6million) in taxes in the first fourmonths, accounting for 10.47percent of the total amount inPingtan, making it the largesttaxpayer, said the local taxa-tion bureau.

The company has sold1,314 units of commercialhouses in its real estate projectnear the Jinjing Bay area. Totaltaxes of 77.18 million Yuanhave been paid from salesamounting to 1.09 billion Yuan.

As of April 8, a total of 101Taiwan-invested enterprises

have settled in Pingtan, the firstpilot zone opening up to Tai-wan on the Chinese mainland.The aggregate investment bythe 101 enterprises amounts to$318 million, a 27.5-fold in-crease from four years ago.

The flourishing investmentenvironment can be attributedto preferential policies by theState Administration for Industryand Commerce, which includesimplified registration proce-dures, protection of enterpriserights and a better mechanismfor industrial and commercialmanagement.

Construction of high-endboarding houses, which are ex-pected to accommodate 5,000employees at an industrial parkin the Pingtan ComprehensivePilot Zone, Fujian, broke groundon Tuesday, May 9.

The housing project, XieliJingxiu City, is part of an invest-ment by Xieli Technology In-

dustrial Park launched by XieliGroup Ltd, a comprehensiveenterprise that operates in ar-chitectural ceramics, artware,microelectronics and real es-tate.

With an investment of 5.7billion yuan ($926 million), theindustrial park will focus onelectronic circuit packaging,research and production of 6-inch and 8-inch wafers.

The boarding houses will beable to accommodate morethan 200 mid-level executivesof Xieli (Pingtan) TechnologyLtd Co this year. After its com-pletion in 2014, they will houseroughly 5,000 employees in thepark.

"The groundbreaking of the(boarding houses) project sym-bolizes the acceleration of ouroverall plan. It will make ouremployees more comfortableworking and living here," said LiMingfu, general manager of


37

Xieli Group.The improvement of infra-

structure will help lure more tal-ent, according to Li.

"The construction of high-

end boarding houses createsbetter conditions for talent re-cruitment. With more preferen-tial policies from the Pingtanadministrative committee to

support development of high-tech industries, it will play abigger role in the growth of thepark and all of Pingtan," headded.


Agriculture

38

CED Monitoring

SHANGHAI-Bamboo may tech-nically be a member of thegrass family, but its potential isnot so lowly. Growers in Chinaare using it to create buildingmaterials and fabrics, revitalizeforests, and rejuvenate ruraleconomies, Erik Nilsson reportsin Anji county, Zhejiang.

Bamboo's alchemic abilityto be manufactured into nearlyanything - from car speakers tocalculators, and buildings tobeer - is conjuring a gold minein China. The country producesabout 80 percent of the world'sfastest-growing plant, hailed bymany as "the next super-mate-rial" and the "timber of the 21stcentury". There are more than1,500 uses for the "great grass".The World Bamboo Organiza-tion estimates the industry gen-erates about $10 billion a year,which could double by 2018.Bamboo's magic is enhancedby its organic production, rapidharvest cycles and ability togrow on mountainsides.

"Chinese culture is bambooculture," says Xuan Taotao, anexpert with Tianhuangpingtown's agricultural departmentin Zhejiang province's AnjiCounty.

"Bamboo can make farm-

ers rich and our environmenthealthy, so we must preservebamboo forests and industries."

Anji creates 20 percent ofChina's bamboo products,generating about 12.5 billionYuan ($2.03 billion) annually,though it contains fewer than 2percent of the country's bam-boo forests. The county is cov-ered by about 66,667 hectaresof bamboo, about 57,333hectares of which is mosobamboo, Xuan says.

Anji has been producingthe plant since its founding 60years ago.

It traded bamboo for ricewith Shanghai, where the tim-ber was used to build homes.

By the 1950s, the localtrees had been logged off, soonly bamboo was left.

When people started usingconcrete to build houses in the1980s, the government intro-duced processing plants tomake low-end products, suchas chopsticks and toothpicks,from bamboo. The industryevolved to include flooring andother higher-end goods andsupported 90 percent of localGDP. It's currently about 30 per-cent, since more locals migrateto other cities.

"The bamboo price is rising,because young people want to

work in urban areas rather thancut bamboo," Xuan explains.

"The industry could disap-pear here."

About 50 species producemore than 3,000 products inAnji. There are more than 3,000bamboo-processing factoriesin the county of 250,000 resi-dents.

"Nearly everyone is in-volved in bamboo," Xuan says.

"But because it requires vir-tually no care and is harvestedevery two or six years, thefarmers don't have to workhard."

Yuan Guochang works only10 days annually on his 1.33hectares of bamboo, whichbrings in 36,000 Yuan every twoyears.

"I hire other farmers to dothe cutting, and the buyerscome to me," Yuan says.

"It's easy money. I hope Ican get higher yields to earnmore money," Yuan says."Bamboo is the spirit of Anji andof China."

Anji Cheng Feng BambooProducts Co Ltd's founder HuGongnian demonstrates bam-boo's impact on poor farmers.

Hu never went to schoolbut became rich and success-ful from bamboo.

His company produced the

BAMBOO:CHINA’S POWER

PLANT


39


40

Agriculture

pillars for the German pavil-ion at the World Expo 2010 inShanghai.

Hu's career developmentmirrors that of Anji's bambooindustry.

"I've loved bamboosince I was a child," he says.

He apprenticed under abamboo carpenter at age 17and became a middlemanat 20. He started makingchopsticks and toothpicks in1995. Ten years later, hebegan producing flooringand shifted into furniture in2007.

Cheng Feng earns about20 million Yuan a year, em-ploys 70 workers and its fac-tories cover about 1.33hectares.

"Bamboo is harder andmore elastic than wood, butit is cheaper," he says.

"It has made Anji rich.The global market is growing.It benefits the farmers most.And my business is gettingbigger."

Anji was not only the firstplace in China to industrial-ize bamboo but also has de-veloped its most extensivetourism industry around thegrass.

Bamboo lures more than500,000 tourists to the area ayear, generating 500 millionYuan for the county. Theycome to hike the forests, eatbamboo in rural restaurantsand buy bamboo handi-crafts, Tianhuanping's deputymayor Ye Yan says.

Many visitors come tosee the filming sites of suchblockbusters as CrouchingTiger, Hidden Dragon, TheBanquet and The Matrimony.There's even a small museumdedicated to films shot inAnji's bamboo forests.

And the bamboo indus-try poses little risk to the en-

vironment that supports itsplantations, Xuan says.

Manufacturing productswith it requires few chemi-cals.

"Bamboo flooring doesn'tuse the toxic substancesother flooring does," ZhejiangBamboo Industry TechnologyCo Ltd general manager XuGuowen says.

Xu says the factory work-ers earn more per squaremeter - about $20 - than thefactory, which keeps about$5-10 of the $60 sale priceafter dealing with whole-salers and shipping costs.

Xu's enterprise's parentcompany Yoyu Bamboo ex-ports mostly to the UnitedStates and Europe.

"The flooring is cheaperthan wood, 100 percentstronger than oak and muchdenser," office managerTong Wangjing says.

The company also pro-duces traditional Chinesefurniture using red bambooand contemporary furniturefor offices, homes and hotels.It employs more than 1,000people in its five factories.

"Many people are sur-prised by what we make withbamboo, which would usu-ally be made of plastic,"Tong says.

Tong's career has alsoadvanced with Anji's bam-boo industry.

She earned 15,000 Yuana year at the company adecade ago, and now earnsmore than 100,000.

"I was a teacher but sawthe bamboo industry takingoff, so I switched jobs," shesays.

"Here, I can learn aboutbamboo and move forwardwith its development."

She says local peoplehave used bamboo since

before she was born."When I was a kid, farm-

ers made everything of bam-boo - chopsticks, pot covers,furniture, baskets, farm im-plements, toys, floors - youname it."

Xuan recalls that evenrich people had bambooroofs because it was a matterof life and death.

"We'd get flash floods,"he recalls.

"People would grab theirbamboo roofs and floataway, like they were rafts. Ifyour house had shingles,you'd drown."

Anji resident Chen Yun-chang was among the firstChinese to make bamboo-processing machines.

"Everything was done byhand before we industrial-ized in the early '90s," hesays.

He still builds machinesbut now for his own factory,which produces blinds, matsand rugs.

Xue Qiang Products,which he founded in 2000,exports to the US, Europe,Japan and South Korea,bringing in roughly $120,000a month.

"More people are buyingbamboo products as peopleare thinking greener," hesays.

The 400 workers in his10.67 hectares plant earn anaverage of 2,400 yuan amonth.

Manager Chen Yanfengsays this means he can stayin his hometown.

"We don't have to be-come migrant workers," saysthe 33-year-old, who hasworked at the plant for 14years. He earns about 10,000Yuan a month and has inno-vated upon several ma-chines.


41

His colleague, 28-year-old manager Guo Qin,agrees.

"Without the industry, I'dhave to work the fields likemy parents," says Guo, whoearns 10,000-20,000 Yuan amonth.

"I can study bamboomachinery here."

Anji is not only China'smain bamboo productionbase but also the largest pro-ducer of bamboo manufac-turing machines.

Anji Jitai Machinery CoLtd manager Liu Zhanmingsays his company grew 20percent annually from its2003 founding until 2008.

Its 38 workers producedozens of types of machinesin its 1.2-hectare factory.

Many are exported toAfrica, South America andSoutheast Asia.

"We are a small enter-prise, but we have a big im-pact on the world," he says."About 2.5 billion people livein bamboo forests, and themarket will grow. As it does,the machines will becomegreener."

Another up-and-comerin the bamboo sector is thetextile industry.

Tan Zhuzhuang is Anji'smain bamboo textile brand.

"Bamboo is almost assoft as silk," manager DuDongliang explains.

"It breathes better thanother materials and kills bac-teria. So, it's cooler in sum-mer and doesn't stink if yousweat. It's also three to sixtimes more absorbent thancotton."

That said, bamboo clothis about 20 percent more ex-pensive than cotton.

But it's a long commoditychain. It takes 17 steps and100 days to turn a bamboo

pole into yarn.Chen Yanfeng, the Xue Qiang Products manager improv-

ing on machines, believes Anji's and China's future bambooalchemy shines.

"I think our situation will only get better as processing tech-nology advances," he says.


Agriculture

42


43

CED Monitoring

Xi’an- A farmer who runs so-called "agritainment" restau-rants in the mountainous areaof Xi'an can earn 200,000 Yuan($31,408) a year, more than theaverage annual income ofurban residents, said KangLifeng, deputy director of theXi'an tourism administration.

Agritainment refers to anyfarm-based tourism operationthat provides agriculture-themed entertainment, such asreal farming experiences andhomemade meals made fromfood grown on the farm. Cur-rently, there are altogethermore than 5,000 such restau-rants in Xi'an, Kang said. A vil-lage called Donghan, knownfor paintings by farmers, at-tracted some 30,000 foreign vis-itors, mainly US residents, lastyear. It hosts parties at which afarmer addresses visitors in Chi-nese and English. Foreign guestscan learn to draw folk-style pic-tures as well as make dumplingsand buns.

A better life for the farmersis made possible by local efforts

to tap into the area's richtourism resources, such as geo-graphic advantages of the Qin-ling Mountain range, whichforms a natural picturesquelandscape and folk culture. Yet,some farmers live in areas thatalso house historical relics andshould figure out other ways tomake life better. In order to ren-ovate the relics, some farmerswere resettled to other places,but some remained at their for-mer residences. In the past, liv-ing conditions in the historicalarea have not been that good,due to a lack of basic facilities,such as modern pipelines.

People used to live byfarming traditional agriculturalproducts, so incomes were lim-ited, said Hui Xilu, director of theXi'an urban planning bureau.However, the municipal plan-ning department discoveredthat the historic places aremore suitable for growing eco-nomic agricultural products, in-cluding peach trees. Theso-called "10,000-mu (666-hectare) peach farm" in anorthern suburb is a populartourist attraction. Locals are en-

couraged to get involved withthe leisure agriculture business.

Xi'an was selected as oneof the happiest cities in the na-tion in 2009. It stands out amongthe 10 cities that pay the mostattention to the livelihood of cit-izens, Xi'an Mayor Dong Junsaid. According to statistics pro-vided by the local develop-ment and reform commission, inthe past five years, the munici-pal government has investedmore than 70 percent of its totalexpenditures on boosting livingstandards. The fiscal budgetreached 107.88 billion Yuan.

In 2011, urban residents' in-come per capita was 25,981yuan and farmers' income percapita was 9,788 yuan, both ofwhich were more than double2006 levels. Growth rates werethe biggest among 15 sub-provincial capital cities. "So thatpeople can eat high-qualityfood, the city ensures that safebreakfasts, oils, buns, beanproducts and vegetables arefor sale in local communities,"Dong said. The city imple-mented measures to ease traf-fic jams and build more public

'AGRITAINMENT'BOOSTS XI'AN

FARMERS'INCOME


Agriculture

44

toilets, he noted. "Be-sides happiness, officialsthat were interviewed allagree that Xi'an's peo-ple are born with a pridein their native city sincethey were raised in sucha historic atmosphere,"the mayor stressed.

In the downtownarea, the city wall thatused to guard the impe-rial palace of the TangDynasty (AD 618-917)has been standing therefor more than 600 yearsand is still open to thepublic. Residents werefrequently told the taleof love between a Tangemperor and renownedbeauty Yang Guifei, hisbeloved imperial concu-bine. There is a kind ofhistoric responsibility thatcould not easily befound in other Chinesecities, Dong said. "Isometimes get a littletired of the city its noo-dles, the city wall andthe Shaanxi dialect. Butonce I leave the city fora new place and livethere for a certain pe-riod, I miss Xi'an its noo-dles, the city wall andthe folk culture that ap-pear in my dreams, untilI finally go home, wheremy pride is rooted," Kangsaid.

"We will stick to thenotion that 'develop-ment for the people'and insist on implement-ing more policies to ben-efit the livelihoods ofpeople to solve theirproblems," said themayor. "We will do morepractical things for peo-ple to make their livesbetter. We will help eachcitizen lead a more dig-nified and happier life,"Dong noted.


45


46

Science and technology

CED Monitoring

TIANJIN - A sheep implanted with anew type of artificial heart devel-oped by Chinese scientists usingcutting-edge aerospace technol-ogy has lived for 62 days thus far,the heart's developers have an-nounced.

The development of the heartwas jointly conducted by scientistsfrom the China Academy ofLaunch Vehicle Technology andTEDA International CardiovascularHospital in north China's Tianjin Mu-

nicipality.The sheep, nicknamed "Tian-

jiu," is in sound condition after re-ceiving the blood pump on March14, said Liu Xiaocheng, president ofthe hospital.

He said researchers usedmagnetic suspension and hydrody-namic bearings -- both examplesof aerospace technology -- to de-sign and produce an implantablethird-generation ventricular assistdevice (VAD), a mechanicalpump used to support heart func-tion and blood flow in people with

weakened hearts.The device is the first of its kind

to be fitted with a battery and con-troller. The sheep experiment is sim-ilar to a clinical implantation, thescientists said.

Once the device is marketed,it may end suffering for the 16 mil-lion people in China with failinghearts, as many patients are wait-ing for heart transplants.

China began research onVAD in the early 1980s. Clinical useof commercialized VADs had yetto take place until now.

RAM WITHARTIFICIAL HEART SETSSURvIvALRECORD


Science and technology

48

vIETNAM TO LAUNCH2ND REMOTE SENSING

SATELLITECED Monitoring

BEIJING-Vietnam plans tolaunch the second remotesensing satellite, VNREDSat-1B,into orbit by 2017, after suc-cessfully launching the first ofthis kind on May 7, online VNEx-press has reported.

The report quoted a noticereleased on Thursday by theEmbassy of Belgium in Vietnamas saying that Vietnam andBelgium had reached anagreement upon which Belgiancompanies under the auspicesof Spacebel will manufacturethe VNREDSat 1B, which willhelp monitor the natural re-sources, natural disasters, andimprove management of theterritory and main natural re-sources sources.

The VNREDSat-1B will beoriginated from a group of

PROBA (Project for On-BoardAutonomy) satellites of the Eu-ropean Space Agency (ESA).

It will cost a total of over 60million Euros (78.2 million U.S.dollars) from Belgium's officialdevelopment assistance (ODA)and the Vietnamese govern-ment's corresponding fund. Thesatellite has a weight of about130 kg.

Vietnam's first remote sens-ing satellite VNREDSat-1 waslaunched into orbit, togetherwith two other satellites -- a140kg Proba-V satellite of theEuropean Space Agency (ESA)to map vegetation cover, anda 1.3kg Estonian micro-satellite,ESTCube-1 to test an electricsolar sail -- by Arianespacefrom the Guiana Space Cen-ter, French Guiana at 9:06 a.m.on May 7 (Hanoi time).

According to the Vietnam

Academy of Science andTechnology, the satellite suc-cessfully sent its first photos ofVietnam to the ground receiv-ing station on May 9. Theground stations can connectwith the satellite from two tofour times per day through thesatellite signal receiving andtransmitting station located inHanoi-based Hoa Lac Hi-TechPark.

Vietnam becomes the fifthASEAN nation to own a remotesensing satellite after Thailand,Indonesia, Malaysia and Singa-pore.

In 2008 and 2012, thecountry launched twotelecommunication satellites,Vinasat-1 and Vinasat-2, bothof which are operating on ageostationary orbit at an alti-tude of about 35,800 km.


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