witnesses tell of a city in shock

Transcription

Monday 3 March 2014
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The scene at the main railway station in Shanghai yesterday as two armed police officers stand guard in the station square. Security
has been tightened at all railway stations and airports in the city following Saturday’s attack in Kunming. President Xi Jinping has
urged all-out efforts to investigate the terrorist atrocity in the southwestern city and punish those responsible. — Xu Xiaolin
WITNESSES TELL
OF A CITY IN SHOCK
• China promises severe
punishment after terrorist
atrocity in Kunming
• Victims describe attackers
clad in black wielding
knives and machetes
TOP NEWS/A3-4
CHINA promised tough punishment for
knife-wielding attackers who killed at least
29 people in an unprecedented train station
rampage in Kunming by separatists from
the Xinjiang Uygur Autonomous Region, as
witnesses described a city in shock.
Victims spoke of more than 10 black-clad
attackers slashing indiscriminately with
large knives and machetes as people queued
to buy tickets at the main railway station
in the southwestern city on Saturday night.
The attack lasted about half an hour.
More than 130 people were wounded in
the attack in the capital city of Yunnan
Province, prompting shock and outrage
nationwide. Buses and taxis were used to
ferry people to hospital.
Police shot dead four of the assailants,
captured one and are continuing to search
for the other terrorists.
China Central Television said that at least
two of the attackers were women — one was
killed while the other was captured and
later taken to hospital for treatment.
A shop worker told reporters some of the
victims took refuge in her store.
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Monday 3 March 2014 Shanghai Daily
Lu: ‘You know what I mean’
Yang Jian
A SPOKESMAN for China’s
top political advisory body
sidestepped a question about
the country’s former security
chief yesterday, telling reporters: “You know what I mean.”
At a press conference ahead
of annual political meetings
in Beijing, a reporter with the
South China Morning Post asked
about online reports concerning Zhou Yongkang, the former
head of the Party’s Commission
for Political and Legal Affairs
and also a former member of
the Standing Committee of the
Political Bureau of the Party’s
Central Committee.
Zhou retired in 2012 but
Reuters reported he had been
put under virtual house arrest
while the Party investigated allegations of corruption.
He was last seen at an alumni celebration at the China
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demonstrate to the whole
Party and the whole society
that when we see that anyone
violates law and Party discipline they will be investigated
and dealt with severely, and no
matter who they are or what
their position is, we mean it.”
Lu added: “This is all I can
say. You know what I mean.”
Lu’s comment was greeted
with laughter from those in
the room.
The phrase "You know what I
mean” has since become a popular buzzword among China’s
Internet community.
Xinhua news agency later
published a short commentary
online, saying the government
will crack down on anyone
violating the law and Party
discipline and ended the piece
with “You know what I mean.”
The Chinese People’s Political
Consultative Conference opens
its annual session today.
2014 NPC/CPPCC
October 1. The Party has yet to
make a formal announcement
on his fate, and there has been
widespread speculation about
what has happened to him.
“Actually, I also merely got
some information from handful of media like you, but I will
try to answer your question
in this way,” spokesman Lu
Xinhua said, adding that the
government had investigated
corruption cases involving
many Party officials, including
31 high ranking officials.
“We a re doi ng th is to
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Published by Shanghai
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come into force. “The city’s air protection standard has been quite strict but we want it even
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TOP NEWS A3
Shanghai Daily Monday 3 March 2014
Kunming in shock after deadly terror attack
FROM A1
“Many were crying and some looked
like they had been cut. We were terrified. Everyone in Kunming is still in
shock,” she said.
Police shot dead at least four attackers, arrested one and were hunting
for more.
In a commentary, Xinhua news
agency called the terrorist attack
“China’s 9/11” and a “severe crime
against humanity.”
China's security chief Meng Jianzhu, who rushed to Kunming to
oversee operations, promised “all-out
efforts” to “severely punish terrorists
according to the law.”
He “urged forcible measures to
crack down on violent terrorism
activities.”
The Kunming city government said
the attack was orchestrated by separatists from the northwest region of
Xinjiang.
Attacks are almost unheard of in
Yunnan, more than 1,600 kilometers
from Xinjiang and a popular tourist
destination.
The attack comes months after
three terrorists of the same Xinjiang
family crashed their car into crowds
of tourists in Tian’anmen Square in
Beijing, killing two people. The attackers then set the vehicle on fire, killing
themselves, according to police.
Many Internet users expressed outrage yesterday.
“Targeting ordinary people in a terrorist attack is disgraceful,” was one
comment on Sina Weibo.
Li Chengpeng, a social commentator who has more than 7 million
followers on Weibo, said: “No matter
who did this, for what purpose, and
no matter which race, to target innocent people at a train station is an evil
choice. Their hearts will be punished
and they will go to hell.”
Xinhua said in its commentary that
the attack had shrouded the whole
nation in terror.
“Mothers, sons and daughters were
slaughtered by strangers,” it said.
“Nothing justifies such a carnage
against innocent civilians. A nationwide outrage has been stirred.”
(Shanghai Daily)
Xi urges all-out efforts to
catch those responsible
President Xi Jinping has urged
all-out efforts to investigate the
Kunming terrorist attack and punish those responsible.
Xi also stressed the careful
rescue and treatment of injured
civilians and proper handling of
the dead.
The president, who is also head
of China's national security commission, asked law enforcement
agencies to crack down on violent
terrorist activities, safeguard
social stability and guarantee the
safety of lives and property.
Premier Li Keqiang urged severe punishment for the attackers
and said public security departments should strengthen prevention and control measures to
guarantee safety in public places.
(Xinhua)
“
All-out efforts should be made to treat the injured people,
severely punish terrorists according to the law ...
Senior security official Meng Jianzhu visits an injured passenger at the No. 1 People’s Hospital in Kunming after he arrived in
the southwestern city early yesterday morning. Meng urged timely treatment for the injured and assistance for the families of
the people who were killed in the terrorist attack at Kunming Railway Station on Saturday night. — Xinhua
Official pledges harsh punishment for terrorists
SENIOR security official Meng Jianzhu
has pledged harsh punishment for terrorists in accordance with the law to
ensure social stability.
Meng, head of the Commission for
Political and Legal Affairs of the Party’s
Central Committee, arrived in Kunming
early yesterday morning to oversee anti-terrorism work following the deadly
train station attack on Saturday night.
People injured in the attack are being
treated at 11 hospitals in Kunming and
the National Health and Family Planning
Commission has sent a team of doctors
to direct rescue operations in the city.
Meng said the terrorists were devoid
of conscience and had brutally attacked
unarmed civilians, exposing their contempt for humanity and society and
should be harshly punished in accordance with the law.
“All-out efforts should be made to
treat the injured people, severely punish terrorists according to the law,
and prevent the occurrence of similar
cases, to ensure the safety of people's
lives and property and social stability,”
Meng said.
He ordered the use of all resources and
means to thoroughly investigate the case
and urged forcible measures to crack
down on violent terrorism activities.
Meng called for patrols to be stepped
up at public places where crowds might
be expected and a harsh crackdown on
violent crimes to heighten the public’s
sense of security.
Meng visited the station square and
also met with some of the injured and
the families of those killed.
He expressed his sympathy and condolences and urged timely treatment
for the injured and assistance for the
families of the deceased.
Guo Shengkun, minister of public
security, also arrived in Kunming yesterday to guide work.
(Xinhua)
Shanghai steps up security at rail stations, airports
Ma Yue and Yang Jian
SHANGHAI’S railway police have raised
security to its highest level following
Saturday’s terror attack at Kunming
Railway Station.
Armed police were on patrol at all the
city’s railway stations yesterday and
police were carrying out spot checks on
passengers.
Security checks at entrances were
stepped up to prevent anyone getting
through with dangerous items, especially knives.
The railway police also tightened realname checks on major routes and there
will be more officers on board trains
from Shanghai to Beijing this week
when the capital will be hosting the
annual sessions of the national political advisory body, the Chinese People’s
Political Consultative Congress, and China’s parliament, the National People’s
Congress.
Shanghai has also ordered stricter
anti-terrorist checks in public places
where large crowds would be expected
to gather.
The city’s airports also tightened security yesterday.
Passengers are being asked to open
carry-on luggage for inspections more
frequently, a security official at Hongqiao International Airport said.
“An anti-explosive inspection has been
added to passengers entering the terminal buildings,” according to a notice at
the airport’s Terminal 2.
Passengers are also being asked to take
out portable mobile phone battery chargers and other electronic devices from
their bags during security checks.
More police and police dogs have been
deployed at both the Hongqiao and Pudong airports.
Airports at Beijing and Kunming in
southeast Yunnan Province have also
tightened security checks.
A4 TOP NEWS
Normal operations resume at terror scene
Heavy police presence
eases public concern
ORDER has been restored at Kunming Railway Station after Saturday’s
deadly terrorist attack, officials said
yesterday.
Train arrivals were back to normal
yesterday after three trains with 3,000
passengers bound for Kunming, the
capital of Yunnan Province, had been
disrupted by Saturday’s attack.
Meanwhile, 60,000 passengers
were expected to leave the station
yesterday.
Part of a major road in front of the
station remains under traffic control
and a waiting area on a square east of
the station has been cordoned off.
However, with a heavy police presence, normal operations resumed
at the station and passengers could
walk into and out of the building with
no new restrictions.
Security screening of passengers
and luggage is being carried out and
staff are maintaining order in more
crowded areas, officials said.
In a ticket hall, people were seen
queuing to buy train tickets. Some
chatted with each other while others
were playing cards.
“I was a little frightened when I
learned about the terrorist attack in
the morning,” Liu Yujiao, a college
student who was leaving for the city
of Qujing in Yunnan.
“But with the heavy security presence I’m no longer worried.”
Meanwhile, the city’s education
authorities said that all local middle
and primary schools would be having classes as normal today, but
extra security would be provided at
campuses.
School officials will be on duty
before and after class, while police
officers will patrol campuses and the
surrounding areas.
(Xinhua)
Above: Mourners light candles at the scene
of the terror attack at the main train station in
Kunming last night. Knife-wielding assailants
left at least 29 people dead and more than
130 wounded in what was described as an
unprecedented terrorist attack at a Chinese
railway station. Victims described attackers
dressed in black bursting into the station in
the southwestern province of Yunnan and
slashing indiscriminately as people queued to
buy tickets.
Left: Police officers stand guard outside
the railway station in Kunming yesterday.
Security at the city’s Changshui International
Airport was also stepped up as staff carried
out tighter checks on all travelers and their
luggage. — AFP
‘At first I thought it was just someone fighting, but then I saw blood’
MORE than 10 terrorists attacked people
in the square and ticket hall of Kunming
Railway Station at 9:20pm on Saturday,
killing at least 29 civilians and injuring
more than 130 others.
A Xinhua news agency reporter at the
scene said the injured people had been
rushed to more than 10 local hospitals
for treatment.
A doctor with the Kunming No. 1 People’s Hospital said that medical workers
were busy treating the injured.
Reporters at the hospital told of seeing a dozen bodies and said that by
midnight Saturday night more than 60
victims had been sent to the hospital.
Liu Chen, a 19-year-old student from
Wuhan City in central China’s Hubei
Province, had been traveling in Yunnan
and was with a friend at the station to
get tickets for the tourist city of Lijiang
when the attack started.
“At first I thought it was just someone fighting, but then I saw blood and
heard people scream, and I just ran,”
Liu said.
At the No. 1 People’s Hospital, Chen
Guizhen, a 50-year-old woman, said her
husband Xiong Wenguang, 59, was killed
in the railway station attack.
“
I saw a person come
straight at me with
a long knife and
I ran away with
everyone...”
Yang Haifei
A resident of Kunming who was
attacked and sustained injuries
to his chest and back
“Why are the terrorists so cruel?” she
cried, holding her husband's bloodstained ID card in hands shaking with
emotion.
The couple, both farmers from the
Chuxiong Yi Autonomous Prefecture,
had just bought tickets to the eastern
province of Zhejiang where they were
due to start new jobs.
“I found his ID card on his body. I can’t
believe he has just left me,” she said in
tears.
Yang Haifei, a Kunming resident, said
he was attacked and sustained injuries
to his chest and back.
Yang said he was buying a ticket when
he saw a group of people rush into the
station, most of them dressed in black,
and start attacking others.
“I saw a person come straight at me
with a long knife and I ran away with everyone,” he said, adding that people who
were slower were seriously injured.
“They just fell on the ground,” he
said.
At the guard pavilion in front of the
station, three victims were crying. One
of them, Yang Ziqing, told Xinhua they
were waiting in the station square for
a 10:50pm train to Shanghai, but had
to run when a knife-wielding man suddenly came at them.
“My two friends’ husbands have been
rushed to hospital, but I can’t find my
husband, and his phone went unanswered,” Yang sobbed.
Pictures posted on Weibo show police
officers patrolling the station. Gruesome
images also show bodies covered in
blood and doctors helping to transport
the injured to hospital.
Weibo user “HuangY3xin-Dione,” who
was dining in a restaurant near the
railway station, said she was “scared to
death” when she saw a group of men in
black carrying long knives and chasing
people.
The security management bureau
under the Ministry of Public Security
called the attack a “severe violent crime”
at its official Weibo account.
“No matter what motives the murderers hold, the killing of innocent people is
against kindness and justice. The police
will crack down the crimes in accordance
with the law and without any tolerance.
May the dead rest in peace,” it read.
Zhang Yumin, 59, a retired cashier
from Beijing, was due to fly to Kunming yesterday with her husband for a
sightseeing tour. She said she was not
going to change her schedule despite
the attack.
Kunming Railway Station, situated in
the downtown area of the capital city
of Yunnan, is one of the largest railway
stations in southwest China. It was put
into operation in 1958.
(Xinhua)
METRO A5
Revised law to
be even tougher
on air polluters
Yang Jian
PEOPLE and companies found
guilty of polluting the city’s
air will face stiff new penalties
under revised legislation set
to come into force this year,
lawmakers said yesterday.
“The city’s air protection
standard has been quite strict
but we want it even stricter to
deter violators,” Zhang Quan,
director of the Shanghai Environmental Protection Bureau
and a national legislator, told
Shanghai Daily.
Zhang made the statement
yesterday as 59 of the city’s
legislators arrived in Beijing
for the annual National People’s Congress, which starts on
Wednesday.
Lawmakers have had their
final discussions on the new
Shanghai Air Pollution Protection Law, which will be issued
within the year, he said.
“
The city’s air
protection
standard has
been quite strict
but we want it
even stricter to
deter violators
Zhang Quan
Shanghai Environmental
Protection Bureau Director
Under city law, violators will
face harsher punishments
than under national law, and
there will be no upper limits
on the penalties in some cases,
the official said.
Criminal charges will be applied if necessary, he said.
I n prepa ration for the
revised legislation, local government has developed a
new color-coded air pollution
alarm system.
The warnings will be indicated by the colors of blue,
yellow, orange and red, officials said.
On days with the worst air
quality, work at factories discharging pollutants will be
suspended, construction sites
will be told to cease operating,
and earth-moving vehicles will
be banned from the roads.
In all cases, the parties involved will be informed of the
suspension orders.
Separately, Jin Donghan, an
NPC deputy from Shanghai
and member of the Chinese
Academy of Engineering, said
the city government must
have stricter standards to
prevent air pollution by ships
and boats, an area which has
long been neglected.
Many channels cut through
populated areas, and in those
places, emissions from ships
have been a major contributor
to air pollution, Jin said.
Special “Emission Control
Areas” should be established
along key waterways to help
tackle the problem, he said.
Shanghai ranked 48th of 74
cities that adopted a new air
quality system last year. Its
PM2.5 density was twice the
national standard, according
to a Greenpeace survey.
• Are you sure I look cute?
Visitors to
home show
angered by
entry fee
Ke Jiayun
A baby is given a new haircut yesterday to celebrate Dragon
Head-Raising Day, which falls on the second day of the second
lunar month. It is a tradition for people, especially children, to
have a trim to celebrate the new year. — Zhang Suoqing
Woman who bit, stabbed
cop gets year in prison
Ke Jiayun
A WOMAN has been sentenced
to a year in prison for attacking a police officer who tried
to shut down her illegal waste
oil recycling business, Jiading
District prosecutor’s office said
yesterday.
The court heard the woman,
surnamed Cai, bit the officer
and cut him with a knife at her
workshop in Nanxiang Town,
Jiading District.
Last July, police received a
report that the workshop was
being used to process waste oil
from leftovers. When officers
visited the shop they found Cai
and her husband working over
a pot of boiling oil and ordered
them to stop. As one officer approached Cai, she bit him and
slashed at him with a knife.
Cai denied the attack, saying
the officer cut himself on the
knife when he lunged at her.
Producing oil from waste is
an offense in Shanghai, but the
court did not say if the couple
would face any charges.
VISITORS on the final day of
the inaugural Design Shanghai event were outraged
yesterday after being asked
to pay a 100 yuan (US$16.27)
entrance fee.
Entry to the home design event, which began on
Thursday at the Shanghai
Exhibition Center, was free
on all other days.
“We got here at 7am and
have been standing for two
hours, but no one told us we
would have to pay to get in,”
a visitor said.
At 9am the organizers appeared holding paper signs
saying there would be a
charge. The tickets went on
sale at 10:30am.
“Professional visitors who
registered for the exhibition online and those who
had VIP tickets can enter for
free, but everyone else has
to buy a ticket,” an official
announced to the crowd.
Another visitor said: “The
organizers said the event was
free to enter. But now they’ve
just changed their minds and
want to charge us.”
Lee Newton, one of the
event’s organizers, said the
company had stated on its
official website that weekend
visitors would have to pay to
get in, but that it did not apply
the charge on Saturday.
“Yesterday we tried to
allow as many people as possible to come in, but there
were just too many and it
became dangerous,” Newton told Shanghai Television
yesterday.
“But if you go to our website it says you have to pay
today,” he said.
Design Shanghai 2014 attracted more than 60,000
people, the organizers said.
EXPLORE MORE AT WWW.SHANGHAIDAILY.COM/METRO
City to get 6,000 green
car charging spots
Last buses from Metro
stations to leave later
Police database to help
find items lost in taxis
THE city government plans to
expand its network of charging
spots for new-energy vehicles to
6,000 by the end of next year.
The move will help to provide
a comprehensive service to
users of environment friendly
cars, the Shanghai Electric
Power Co said.
By the end of 2015, there is
likely to be 10,000 “green” cars
on the city’s streets, it said. The
city now has 24 power stations
and 2,020 charging spots, most
of which are near car dealerships, offices and residential
areas. The new network will increase coverage to parking lots
and park-and-ride areas.
SIX bus routes have extended
their operating hours to provide
a more integrated service with
the city’s Metro network.
On each of the routes, whose
terminals are close to Metro
stations, the time of the final
bus has been delayed by an
hour to about 11:30pm, 15 minutes after the Metro ends. The
routes are: No. 98 (Zhongshan
Road N. Station, Line 1), No. 518
(Jiangwan Town Station, Line 3),
No. 705 (Wenshui Road Station,
Line 1), No. 727 (Dachang Town
Station, Line 7), No. 962 (Shanghai Railway Station, Line 1) and
Baoshan No. 19 (Shanghai University Station, Line 7).
SHANGHAI Dazhong Taxi Co
said it has been working with
local authorities and will soon
publish full details of the hundreds of items left in its vehicles
by passengers on the police’s
service network.
The company said it has built
up a large collection of items left
in its cabs, including handbags,
guitars, umbrellas, and even ID
and social security cards.
The Shanghai Public Security
Bureau will post information
about the items in its “Lost and
Found” section, where people
will be able to search for the
things they have lost or misplaced, the bureau said.
The government’s target is
to have one charging spot for
every 10 square kilometers in
suburban areas, and one every
5km in downtown areas.
Shanghai International Auto
City in Jiading will be used as a
trial area for the new network.
A collection of electric vehicles
are parked close to a charging
point near the Oriental Pearl
TV Tower yesterday to help
publicize a new campaign
to promote the use of
environment friendly vehicles
in Shanghai. — Ding Ting
A6 NEWS FEATURE
Il l u s
trat
ion
by
Z
ho
uT
ao
/S
h
an
gh
ai
D
ai
ly
A government adviser presented a
3.8-meter scroll made up of 103
common permission cards needed
from birth to death. Lack of a
centralized registry exacerbates the
nation’s paper chase.
Chinese facing long march of the permits
Yao Minji
L
ily Jia, 32 years old, works for
a foreign tourism company in
Shanghai. The Liaoning native
holds a special talent residence
permit, the best of all such permits and
most difficult to obtain.
It took her two years to get everything
needed for the application. But if she
wants to get married or divorced, she
has to travel back to Benxi City, her
hometown in northeast China, to do so,
where she has had her hukou, or household registration officially issued.
Jia is also required to renew the permit every year though the paperwork
for that is not much easier than the first
time.
The number of permits, certificates
and documents that an average Chinese
citizen needs, and the tedious, painful
and long march leading to them, is
hardly Jia’s problem alone.
The scale of bureaucracy in China has
long been an issue, and it made a buzz
recently after a 3.8-meter-long scroll of
103 common cards — what an average
Chinese needs from birth to death —
was displayed. The number can reach
to more than 400 when including less
common ones.
“Chinese are either getting permits
or on the way to getting them,” said Cao
Zhiwei, a member of the Guangzhou
Committee of Chinese People’s Political
Consultative Conference (CPPCC), when
presenting the scroll at a meeting of the
government’s advisory body last week.
It was named “On the Long March to
Permits.”
Cao’s survey, based on Guangzhou,
shows one has to visit 18 departments
and 39 places and be charged over 28
times to get more than 100 stamps to finish the long march. The most frequently
used cards include the identity card and
hukou, household registration.
In addition to Cao’s survey, things can
get even harder for those not residing in
their hometown, where they have their
hukou registered.
It was reported that an older couple
from Xinjiang Autonomous Region who
had been married and living in Guangzhou for more than 40 years, was advised
by a local department to file for marriage
registration again in Guangzhou. They
needed to provide their marriage certificate in order to be the guarantor for
their child’s mortgage, but they couldn’t
find it anymore.
Due to a failure to bridge marriage
information between Xinjiang and
Guangdong, their options were either
to travel the long way back or to get a
local marriage registration.
“The scale of bureaucracy is somewhat
related to the country’s past of having
a planned economy, when an individual
was tied to a company/organization and
was required to get proof/permit from
the company/organization to get anything done,” said Yue Jinglun, associate
professor of Politics and Public Administration at Zhongshan University.
“Now, it is mainly due to the poor
level of the social credit system and
administrative management. In order
to prevent and fight counterfeiting and
to make it easy to manage, government
departments have continuously raised
the bar by asking for a lot of permits and
certificates,” Yue added.
Before a Chinese citizen is born, the
parents would have already filed for a
certificate to be entitled to maternity
care and service — otherwise the mother
could not be admitted to public hospitals. In addition to a birth certificate,
a vaccine card is also required within
days after birth; without it — a proof of
inoculation, the child will not be admitted to public schools.
A one-child certificate allows parents
to get cash rewards for following the
family planning policy — in Shanghai,
a one-time bonus of 5,000 yuan after
retirement for each parent.
If a person is single, a certificate
proving that is required from his/her
company when he/she wants to buy a
Shanghai collector Feng Jianzhong’s vast collection includes some of the
strangest certificates and permits. — Yao Minji
house.
When over 70 (in Shanghai), one needs
to get a senior citizen card, in addition to
the existing identity card that lists the
age, in order to get extra benefits such as
free bus rides at non-rush hours.
After a person dies, his relatives must
get a certificate proving the body was
cremated as required to proceed with
the funeral, and a rest-in-peace permit
so the ashes can be buried.
Cao suggested building a database for
citizen information to avoid repetitive
procedures and permits. Many netizens
complain about not having a system
like that in the United States, where one
social security card provides all the information needed in most cases.
“Well, it actually isn’t that bad in
Shanghai, or maybe I’m just too used
to it,” said Wang Fang, a retired middle
school teacher. “After all, I grew up in the
years when you needed a permit to leave
the city, and another one to get back.”
Local collector Feng Jianzhong has
picked some of the strangest and most
rare permits from his collection — a five
greatness honorary certificate (for good
soldiers), a permit for free train rides
as red guards and a permit exempting
a person from being sent to the country
for re-education during the “cultural
revolution” (1966-76), among others.
The “long march” doesn’t get much
easier for expatriates either, especially
for those freelancing, changing jobs, or
working for a small company.
American freelance photographer
Amanda, reluctant to give her full name
for fear of trouble at the immigration
office, is currently getting a new work
visa and employment permit. Without a
fixed, long-term employer, she has been
switching between a tourist visa and
a work permit in the past two years,
which sometimes requires her to leave
the country every few months in order
to apply for a new one.
“I understand that I need to follow the
regulations of the host country when
I visit,” she said. “But the papers and
the types of visas and permits are very
complicated. It also doesn’t feel great
knowing I must register every time I
change my address.”
NATION A7
Cargo ship
likely to go
into space
by 2016
CHINA is likely to launch
a cargo ship into space to
serve the Tiangong-2 laboratory by 2016, a leading space
scientist said yesterday.
The ship, named “Tianzhou” or “Heavenly Vessel”
in Chinese, will be delivered
by the new Long March-7
carrier rocket and dock
with Tiangong-2 automatically, Zhou Jianping, chief
designer of China’s manned
space program, said.
A cargo system that supplies goods and propellants
is a key technology China
must master to build its own
space station, he said.
Tiangong-1, China’s first
space lab and target orbiter,
was sent to orbit on September 29, 2011. The Tiangong-2
space lab is expected to be
launched in 2015.
“Manned spaceships are
expensive and have limited
capacity. But cargo ships
don’t have to return to Earth
and don’t carry people, which
makes them more economical,” Zhou said.
The Tianzhou cargo ship
can send supplies to the
space station, including propellants, living necessities
for astronauts and equipment for scientific research.
It can also send large-sized
facilities and equipment for
the construction of the space
station, he said.
Three cabin structures
are being designed for the
Tianzhou cargo ship, a fullyenclosed one, a semi-open
one and a wholly-open one,
he said.
The loading capacity of
the cargo ship will reach the
world-class level and will be
even better than some developed countries, he said.
(Xinhua)
• All cheer for Wood Horse Year
Tibetan friends in Lhasa greet each other yesterday on the first day of the Tibetan New Year, or Losar. This year the local people are
celebrating the Year of the Wood Horse and as usual everyone in Lhasa will have a week’s holiday. — Xinhua
Stray cats strut in Forbidden City
Pests or protectors,
the palace prowlers
are here to stay
WALKING on tiptoe, Ping’an
strolls through Beijing’s Forbidden City, his suspecting eyes
glowing in the dark of the palace that once housed emperors
and their concubines.
For years, the cat has roamed
the empty lanes of the former
royal palace after it has closed
its doors to visitors, in search
of his archenemy: mice.
Before being taken in by Shan
Jixiang, curator of the Forbidden City, also called the Palace
Museum, the animal lived a
much harder life and had to
forage for food in trash cans.
According to Ma Guoqing,
director of the san itation
department of the Palace Museum, about 200 cats, including
Ping’an, whose name translates
as “safety” in Chinese, have in
recent years found a home in
the Forbidden City.
“Some of them might even be
the descendants of royal pets,
but most are strays taken in by
the museum staff,” Ma said.
As a result, a policy originally
aimed at bringing down the
population growth of stray cats
in the Forbidden City has also
generated unexpected results
by scaring away rats from the
cultural relics.
Cats have long lived in the Forbidden City, which dates back
more than 600 years. They were
kept as royal pets, but now they
have outlived their masters.
Though there is no official
tally for the number of stray
cats in Beijing, a Capital Animal
Welfare Association report in
2010 said it was about 200,000.
A female can have three or four
litters a year and might add
100 cats to the stray population in its lifetime.
Stray cats have always been
a headache for city authorities,
who often receive complaints
from residents about bad smells
and nightly screeching.
For the conservators of the
Forbidden City, the surge in the
number of cats has also brought
the challenge of how to treat
them humanely while maintaining a clean environment.
Ma Guoqing said the museum
started to realize the seriousness of the problem in 2009,
when strays in large numbers
were seen skulking through the
yard and on the walls.
“The presence of cats could
pose a threat to visitors, and
their excrement is definitely an
eyesore,” Ma said.
A special program began in
2009 to take care of the cats. It
follows the trap-neuter-return
principle, a method of humanely trapping unaltered stray cats,
spaying or neutering them, and
returning them to the location
where they were collected, Gao
Haiying, who works for an animal protection group, said.
Chinese people don’t have
a tradition of neutering their
pets as they think it is better
for the animals, but that’s led
to an increase in the number of
abandoned pets, he said.
Ma said 181 cats in the Forbidden City have been neutered
in the past five years and their
number is now steady. He said
he even has a ledger in which
he records all “personal information” about the cats: names,
pregnancy status, neutering operation type and the amount of
money spent on the operation.
Money spent on the program
was not for naught, however.
The cats have played an important role in safeguarding
precious antiques, Ma said.
“They keep away the rats and
we’ve never found any damage
to relics caused by cat claws.”
(Xinhua)
Most on-the-run Chinese are top officials, execs
Yang Meiping
CORRUPT officials, fraudulent
financiers and embezzling executives accounted for the vast
majority of the public figures
who fled China with their illgotten gains from 1992-2012.
According to a report by
Beijing News, of the 54 people
named in 50 publicly reported
cases, 26 were government employees, of which just two were
low-level civil servants. Several
were government leaders, while
others held key positions in the
public security, transport and
energy sectors.
Among the provincial and
m i n iste r ia l-leve l off ic ia ls
named in the report were Lan
Fu, former deputy mayor of
Xiamen; Lu Wanli, former head
of the Transport Department
of Guizhou Province; and Yang
Wanzhong, ex-director of Shanghai Nuclear Power Office.
A total of 10 officials were
engaged in corruption cases
involving more than 1 billion
yuan (US$162.7 million), while
the sums involved in cases from
the financial sector and large
state-owned enterprises were
even larger, the report said.
In 2001, three former governors of Bank of China’s Kaiping
Branch in Guangdong Province
— Xu Chaofan, Yu Zhendong
and Xu Guojun — simultaneously fled to the United States
after embezzling a combined
US$482 million.
In 2003, Yang Xiuzhu, the former deputy mayor in charge of
urban construction in Zhejiang
Province’s Wenzhou, fled with
an alleged 253.2 billion yuan.
In total, financial institutions
accounted for 15 of the people
who fled, while 13 others worked
in state-owned enterprises, all
of them in executive-level positions, the report said.
Of all the runaways, the highest ranking was Gao Yan, a
former secretary of the Yunnan
Provincial Party Committee,
who fled while employed as
general manager of the State
E lect r ic Power Cor p. The
amount of money he embezzled
has never been revealed.
The report said that the US
was the most popular destination for the fleeing officials,
followed by Canada, Australia
and EU member countries.
Huang Feng, a law expert
from Beijing Normal University,
said that many officials chose
their destination countries not
just for the quality of life they
offer but because their governments did not have repatriation
agreements with China.
Beijing has taken great steps
to make it more difficult for
officials and executives to flee
China, including signing extradition treaties with 36 countries
and judicial assistance treaties
with the US, Canada and 47
other nations.
High court crackdown
Guangdong’s high court
said it has rejected 135 applications for prison terms
to be commuted in a bid
to crack down on judicial
corruption.
In each case the applications was convicted either
of dereliction of duty, undermining the financial order,
financial fraud or organizing
a mafia-style crime group.
The applications were also
made by people who had
served less than three years
of their sentence.
(Hu Xiaocen)
A8 BUSINESS
‘Internet of things’ set to make
daily life even more convenient
TECHNOLOGY
WE’RE in the beginning of a world in which
everything is connected to the Internet
and with one another, while powerful yet
relatively cheap computers analyze all
that data for ways to improve lives.
Toothbrushes tell your mirror to remind you to floss. Basketball jerseys
detect impending heart failure and call
the ambulance for you.
At least that’s the vision presented this
past week at the Mobile World Congress
wireless show in Barcelona, Spain. The
four-day conference highlighted what
the tech industry has loosely termed
“the Internet of things.”
Some of that wisdom is already available or promised by the end of the year.
Fitness devices from Sony and Samsung connect with your smartphones
to provide digital records of your daily
lives. French startup Cityzen Sciences
has embedded fabric with heart-rate
and other sensors to track your physical activities.
Internet-connected toothbrushes are
coming from Procter and Gamble’s
Oral-B business and from another French
startup, Kolibree. The mirror part is still
a prototype, but Oral-B’s smartphone
app does tell you to floss.
Carmakers are building in smarter
navigation and other hands-free services, while IBM and AT&T are jointly
equipping cities with sensors and computers for parking meters, traffic lights
and water systems to all communicate.
Internet-connected products represent
a growth opportunity for wireless carriers, as the smartphone business slows in
developed markets because most people
already have service.
With the technological foundations
here, the bigger challenge is getting
people, businesses and municipalities
to see the potential. Then there are security and privacy concerns — health
“
Information seems
harmless and trivial at
the moment, but can
be recorded forever
and can be combined
with other data. I don’t
think we’ve come to
terms with that yet.
insurance companies would love access
to your fitness data to set premiums.
At a more basic level, these systems
have to figure out a way to talk the same
language. You might buy your phone
from Apple, your TV from Sony and your
refrigerator from Samsung. It would
be awful to get left out because you
aren’t loyal to a single company. Plus,
the smartest engineers in computing
aren’t necessarily the best in clothing
and construction.
Expect companies to work together to
set standards, much the way academic and
military researchers created a common
language decades ago for disparate computer networks to communicate, forming
the Internet. Gadget makers are starting to
build APIs — interfaces for other systems
to pull and understand data.
Building everything is too much for a
single company, yet “they want all this
stuff to work together,” said Jim Zemlin,
executive director of the Linux Foundation, a backer of the Tizen project for
connecting watches, cars and more.
Samsung’s new fitness watches will use
Tizen, and tools have been built to talk
with Samsung’s Android phones.
Some customers might worry about
security, given recent breaches compromising credit and debit card numbers at
Target and other major retailers.
Determined hackers seem to constantly find loopholes. Imagine someone
spying on you remotely through security cameras in your home or tricking
your home security system into believing your car is approaching, so it opens
your garage door automatically.
AT&T emphasizes that it uses encryption and other safeguards for its
connected services, which include security monitoring and energy-efficiency
controls in homes. Glenn Lurie, AT&T’s
president of emerging enterprises and
partnerships, said the US wireless
carrier goes through extensive security certification and exceeds industry
recommendations.
Gilbert Reveillon, international managing director for Cityzen, said he’s
had interest from a UK car insurance
company and Chinese hospitals. Health
data can tell you whether you’re fit to
drive and can call paramedics in an
emergency.
Reveillon said any data sharing by
Cityzen will be in aggregate form, with
users’ identities removed. He said individual users could decide to share
more, but that would be up to them. He
said French regulators are quite strict
on that.
Jonathan Zittrain, a law professor at
Harvard University, said it’s difficult for
people to say no when presented with immediate benefits because any potential
problems are vague and years away.
“Information seems harmless and trivial at the moment, but can be recorded
forever and can be combined with other
data,” he said. “I don’t think we’ve come
to terms with that yet.”
(AP)
Berkshire’s Q4
earnings rise
10% to US$5b
INVESTMENT
WARREN Buffett’s company said on
Saturday that fourth-quarter earnings rose 10 percent to nearly US$5
billion as its insurance, rail and energy businesses generated major gains
in the improving economy.
Berkshire Hathaway’s insurance
companies, which include Geico and
General Reinsurance, reported a
US$394 million underwriting profit
for the final three months of 2013,
compared with a US$19 million loss
a year earlier. The Nebraska company
also benefited from the strong performance of its non-insurance companies
including BNSF railroad and electric
utility MidAmerican Energy.
Berkshire Hathaway Inc owns
roughly 80 subsidiaries, including
railroad, clothing, furniture and
jewelry firms. Its insurance and utility businesses typically account for
more than half of the company’s net
income. The company also has major
investments in such companies as
Coca-Cola Co, IBM and Wells Fargo &
Co, and last year bought NV Energy
and a major stake in H.J. Heinz.
Berkshire’s fourth-quarter report
and Buffett’s annual letter to shareholders released on Saturday show
the company doesn’t face any significant business issues in the coming
year, said author and investor Jeff
Matthews, who wrote “Warren Buffett’s Successor: Who It Is and Why
It Matters.”
“Life is good at Berkshire Hathaway,” Matthews said on Saturday.
Quarterly net income rose to
US$4.99 billion on revenue of
US$47.05 billion from US$4.55 billion on revenue of US$44.72 billion
in 2012. Operating earnings, which
exclude investments and derivatives,
grew to US$3.78 billion.
(AP)
EXPLORE MORE AT WWW.SHANGHAIDAILY.COM/BUSINESS/CALENDARLIST.ASPX
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China International Trade
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Date: Monday to Wednesday
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China Shanghai Textile,
Fabric & Accessories Expo
It’s one of the most important
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international buyers.
(March 3-5)
The 9th China International
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Date: Tuesday to Thursday (March
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China Wedding Expo
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WORLD A9
Ukrainian
soldiers (left)
and unidentified
gunmen (right)
guard the gate of
an infantry base
in Privolnoye,
Ukraine,
yesterday.
Hundreds of
unidentified
gunmen arrived
outside the base
in the Crimea
region. The
convoy includes
at least 13 troop
vehicles and four
armored vehicles
with mounted
machine guns.
The vehicles have
Russian license
plates.
— Darko Vojinovic
US warns
Russia over
G8 seat loss,
sanctions
US Secretary of State John
Kerry bluntly warned Russia
yesterday that it risked losing
its seat among the prestigious
Group of Eight nations, as
well as economic turmoil, if
it fails to pull its forces out
of Crimea.
Moscow could also face sanctions from its G8 allies and
see American businesses pull
out of the country if President
Vladimir Putin failed to deescalate tensions in Ukraine,
Kerry said, hitting the Sunday
talk shows to ratchet up pressure on Russia.
Kiev’s interim government
warned yesterday Ukraine
stood on the brink of disaster, and called up military
reservists after the Russian
parliament voted to allow
Putin to send in troops to its
western neighbor.
Putin “is not going have
a Sochi G8, he may not even
remain in the G8 if this continues. He may find himself
with asset freezes on Russian
business, American business
may pull back, there may be a
further tumble of the ruble,”
Kerry said.
“There is a huge price to
pay. The United States is united, Russia is isolated. That is
not a position of strength,” he
told NBC’s Meet the Press.
Britain and France have already pulled out of preparatory
meetings this week for the G8
summit to be held in June in
Sochi, and, along with the US
and Canada, have also threatened to boycott the summit.
“Russia chose this brazen act
of aggression and moved in its
forces on a completely trumped
up set of pretexts,” Kerry told
CBS’s “Face the Nation.”
“If Russia wants to be a G8
country, it needs to behave
like a G8 country.”
But Kerry steered clear of
warning of any US military action as pro-Moscow gunmen
controlled swaths of Ukraine’s
southern peninsula where the
Kremlin has based naval fleets
since the 18th century.
(AFP)
West and Russia set to confront
over Putin’s Ukrainian invasion
UKRAINE mobilized for war
yesterday after Russian President Vladimir Putin declared
he had the right to invade, creating the biggest confrontation
between Moscow and the West
since the Cold War.
“This is not a threat: this is
actually the declaration of war
to my country,” said Ukraine’s
Prime Minister Arseny Yatseniuk, head of a pro-Western
government that took power
when Russian ally Viktor Yanukovich fled last week.
Putin obtained permission
from his parliament on Saturday to use military force
to protect Russian citizens in
Ukraine, spurning Western
pleas not intervene.
Russian forces have already
bloodlessly seized Crimea, an
isolated Black Sea peninsula
where Moscow has a naval base.
Yesterday they surrounded several small Ukrainian military
outposts there and demanded
the Ukrainian troops disarm.
Some refused, although no
shots were fired.
Ukraine’s security council
ordered the general staff to immediately put all armed forces
on highest alert, the council’s
“
This is not a
threat: this is
actually the
declaration of war
to my country.
Arseny Yatseniuk
Ukraine’s Prime Minister
secretary Andriy Parubiy said.
The Defense Ministry was
ordered to conduct a call-up
of reserves — theoretically all
men up to 40 in a country with
universal male conscription,
though Ukraine would struggle
to find extra guns or uniforms
for huge numbers of them.
“If President Putin wants to
be the president who started the
war between two neighboring
and friendly countries, between
Ukraine and Russia, so he has
reached this target within a
few inches. We are on the brink
of disaster,” Yatseniuk said in
televised remarks in English,
appealing for Western support.
At K iev’s I ndependence
Square, where anti-Yanukovich
protesters had camped out for
months, thousands demonstrated against Russian military
action. Placards read: “Putin,
hands off Ukraine!”
Of potentially even greater
concern than Russia’s seizure of
the Crimea are eastern swathes
of the country, where most of
the ethnic Ukrainians speak
Russian as a native language.
Those areas saw v iolent
protests on Saturday, with proMoscow protesters hoisting
flags at government buildings
and calling for Russia to defend
them. Kiev said the protests
were made by Russia, accusing
Moscow of sending hundreds of
its citizens across the border to
stage them.
Putin’s declaration that he has
the right to invade his neighbor
— for which he quickly received
the unanimous approval of his
senate — brought the prospect
of war to a country of 46 million people on the ramparts of
central Europe.
Ukraine has appealed for help
to NATO, and directly to Britain
and the United States, as co-signatories with Moscow to a 1994
accord guaranteeing Ukraine’s
security after the breakup of
the Soviet Union.
NATO Secretary General Anders Fogh Rasmussen accused
Russia of threatening peace and
security in Europe before NATO
ambassadors met in Brussels to
discuss their next steps.
The US has proposed sending
monitors to Ukraine under the
United Nations or Organization
for Security and Cooperation in
Europe, bodies where Moscow
would have a veto.
In Crimea, Ukraine’s tiny
contingent made no attempt to
oppose the Russians, who bore
no insignia on their uniforms
but drove vehicles with Russian
plates and seized government
buildings, airports and other
locations in the past three days.
Kiev said its troops were encircled at least three places.
Igor Mamchev, a Ukrainian
navy colonel at a small base
near the regional capital Simferopol, told Ukraine’s Channel
5 television Russian troops had
arrived at his checkpoint and
ordered him to surrender.
(Reuters)
Frenchman latest foreigner to die in Benghazi
GUNMEN killed a French national in Libya’s eastern city of
Benghazi yesterday, a security
official said, the latest slaying
of a foreigner in the restive
area.
Separately, gunmen in Benghazi also shot and wounded
an Eg y ptian who had been
working in a grocery, while a
Libyan police officer survived
an assassination attempt, a
security source said.
The Frenchman worked for
a company upgrading a large
hospital in Benghazi, which has
been rocked by car bombs and
assassinations amid Islamist
militant activity, the official
said.
“He was killed with three
shots,” the official said.
The French foreign ministry
had no immediate comment.
The killing comes a week
a fter pol ice fou nd seven
Egyptian Christians shot dead
execution-style on a beach outside Benghazi, home to several
oil firms.
No one has claimed responsibility for the killing of the
Egyptians but residents said
gunmen had looked for Christians in their neighborhood,
suggesting radical Islamists
might be behind it.
Most countries have closed
their consulates in Benghazi
and some foreign airlines have
stopped flying there since the
US ambassador and three other
Americans were killed in an
Islamist militant onslaught in
September 2012.
An American schoolteacher
was also killed by gunmen in
December while he exercised
in the city.
Th ree yea rs a fte r t he
revolution that ousted Muammar Gaddafi, Libya’s weak
government and army are
struggling to control brigades
of former rebels and Islamist
militias in a country awash with
weapons.
Western diplomats worry the
violence in Benghazi will spill
over to the capital, Tripoli.
In January, a British man and
a New Zealand woman were
shot execution-style on a beach
100 kilometers west of Tripoli.
(Reuters)
A10 WORLD
Islamic extremists kill 90 in Nigeria violence
TWIN car bombs at a bustling
city marketplace blasted buildings to rubble and tore apart
bodies the same night an attack
on a farming village razed every
thatched-roof hut.
At least 90 people have been
killed, officials and survivors
reported yesterday, as Nigeria’s
Islamic extremists step up attacks and criticism mounts of
the failure of the military and
government to suppress the
4-year-old Islamic uprising in
the northeast.
In Maiduguri, capital of Borno
state and birthplace of the Boko
Haram terrorist network, the
attackers chose a densely populated area with narrow alleyways
that maximized the blasts and a
Saturday night when the market
was open late.
The victims include children
dancing at a wedding celebration and people watching a
soccer match at a cinema, survivors said.
Fifty-one bodies were retrieved by yesterday morning
but many more are believed
buried in rubble, said a Red
Cross official who insisted on
anonymity because he was not
authorized to speak to the press.
Some were burned beyond recognition in fires caused by the
explosions.
In a village 60 kilometers
away, suspected extremists
also struck Saturday night, killing 39 people, according to cab
driver Mansur Buba.
He said he returned home
yesterday to find victims being
buried in Mainok village, which
has been attacked many times
in the past year. A State Security
Service agent said no huts were
left standing there. He spoke on
condition of anonymity because
he is not authorized to speak to
reporters.
In Maiduguri, the headquarters of the army and air force
offensive against Boko Haram,
the first bomb came from a pickup truck loaded with firewood,
said Hassan Ali, the leader of an
anti-terror vigilante group.
More people were killed in the
second blast, which was timed
to catch people who rushed to
help those wounded in the first
explosion, survivors said.
Survivors said they captured
a man who drove the second
car to the scene, jumped out,
grabbed a tricycle taxi and tried
to make off. He was badly beaten and taken to nearby Umaru
Shehu General Hospital, where
a security guard said all the
wounded brought in had died.
Most survivors insisted on anonymity for fear of reprisals.
Some bodies were blown
apart, said trader Mallam Sumaila. An Associated Press
reporter saw a charred corpse
at Umaru Shehu hospital, where
wailing families were collecting
bodies for immediate burial, in
the Muslim tradition.
(AP)
Thailand’s first poll
re-runs peaceful
A team charges during the start to the Iditarod dog sled race in Anchorage. — Reuters
Alaska’s famed Iditarod race begins
DOZENS of mushers and their
sled-dog teams on Saturday
joined in the ceremonial start
to Alaska’s famed Iditarod Trail
Sled Dog race that will take
contestants through nearly
1,600 kilometers of wilderness
this week.
Fans lined the streets of
downtown Anchorage with
cameras, banners and signs
and outstretched hands hoping for a passing high five from
the competitors.
The 18-km jaunt through
the state’s largest city set the
stage for yesterday’s start of a
race that marks a 1925 rescue
mission that carried diphtheria serum to Nome by sled-dog
relay. A total of 69 mushers,
some from as far away as Jamaica and New Zealand, were
expected to take part.
“Saturday is an opportunity
to interact with mushers, watch
dog teams excited to leave the
starting line, travel 11 miles
of the city streets and call it
a day,” said race Executive Director Stan Hooley. “There is
much more of an opportunity
to touch and feel the race, and
celebrate this great race.”
Timed racing was set to start
yesterday when the mushers
reached Willow, a small community about 80km north of
Anchorage. The competition
will eventually see them glide
into Nome, a city on the coast
of the Bering Sea.
They will hit 21 checkpoints
with distances between stops
ranging from 29 to 137km before reaching the finish line
in Nome.
(Reuters)
THAILAND’S first poll re-runs
passed peacefully yesterday
following a widely disrupted
general election, as pro-government “Red Shirts” stepped
up rallies in support of Prime
Minister Yingluck Shinawatra’s
battered administration.
The February 2 election failed
to ease a four-month political
crisis when protesters seeking
to topple Yingluck’s government caused the closure of
around 10 percent of polling
stations, many in opposition
strongholds.
The Election Commission said
results cannot be announced
until polls have been held in
all constituencies, setting a
late-April deadline for their
completion.
Yingluck can only remain
prime minister in a caretaker
role until then with limited
power over policy, further eroding her authority as she handles
ongoing street protests and a series of legal challenges against
her administration.
E le c t i o n c o m m i s s i o n e r
Somchai Srisutthiyakorn said
around 120,000 people were
registered to vote yesterday
across more than 100 constituencies in five provinces.
He said the re-runs, the first
attempted since February 2,
had been held “peacefully ...
without any problems.”
But only a trickle of voters
were seen at several polling
stations in Phetchaburi, an opposition heartland around 160
kilometers south of Bangkok,
according to an AFP reporter.
“I was disappointed that I had
the right to vote on February 2
but couldn’t,” Sangwan Yuusuk,
57, said at a polling station.
Under election law, 95 percent
of the 500 seats in the lower
house of parliament must be
filled to enable the appointment
of a new government.
On its website the Election
Commission said senators will
be elected on March 30.
The main opposition Democrat party, which boycotted the
general election, last month
lost a legal attempt to nullify
the poll.
In addition to the protests,
Yingluck faces a series of legal
complaints against her government, including charges of
negligence over a troubled rice
subsidy scheme which could
see her removed from office.
Pro-government Red Shirts
have ramped up their rallies
and rhetoric in support of Yingluck and her billionaire brother
Thaksin, a former prime minister who lives in exile to avoid jail
for a corruption conviction.
(AFP)
Will, Jaden Smith get Razzies for ‘After Earth’ roles
WILL and Jaden Smith have
something they can bond over.
They were awarded Razzies for
their acting in “After Earth.”
Jaden was selected as worst
actor for his starring role in the
sci-fi flop about a father and son
stranded on an untamed earth,
while the elder Smith was chosen as worst supporting actor
at Saturday’s Golden Raspberry
Awards, which mock Hollywood’s
awards season on the eve of the
Oscars. They were also chosen
as the worst screen combo by
online Razzies voters.
Razzies organizer John Wilson noted the pair was “stranded
on Planet Nepotism.”
“After Earth,” which was directed by M. Night Shyamalan,
tied with “Movie 43” for the
most prizes with three awards.
The raunchy comedy anthology
featuring Halle Berry, Richard
Gere, Kate Winslet and Naomi
Watts earned Razzies for worst
picture, screenplay and director. Apparently, it took a village
to craft something so loathed.
Will Smith (left)
and Jaden Smith
in a scene from
“After Earth”
— Sony
The Razzies noted that “Movie
43” is credited with 13 directors
and 19 screenwriters.
Tyler Perry also didn’t receive any good tidings from the
Razzies. Perry, as feisty alterego Madea, was picked as worst
actress for “A Madea Christmas,”
while Kim Kardashian was selected worst supporting actress
in “Tyler Perry’s Temptation.”
Despite being the year’s biggest box-office bomb, “The Lone
Ranger” lassoed just one prize:
worst remake, rip-off or sequel.
Adam Sandler went home
empty handed at this year’s
Razzies. His “Grown-Ups 2”
originally led the hate-fest
with eight nominations, including worst picture and actor for
Sandler, but the comedy sequel
wasn’t awarded a single trophy.
Sandler made Razzie history in
2011 by winning both the worst
actor and actress prizes for his
brother-sister cross-dressing
comedy “Jack & Jill.”
(AP)
OPINION A11
“
The new rules on petitioning prioritize improvements in
people’s well-being to help prevent and ease social unrest. In
this way, it is hoped, there will be less need for petitioning.
Ni Tao
[email protected]
WOODPECKER AT WORK
Suit over smog may
help clear up citizen rights
Ni Tao
A
resident of Shijiazhuang,
capital of Hebei Province,
recently made headlines
by ta k i ng t he loca l
environmental watchdog to court.
While the past few years have
w itnessed an increase in the
number of cases that pit citizens
against government agencies, it’s
the first time a citizen has sued
environmental authorities for not
doing enough to tackle the smog.
The activist, named Li Guixin,
filed a lawsuit with a district
People’s Court in Shijiazhuang on
February 20.
He also demanded 10,000 yuan
(US$1,666) in compensation, but
added that this was intended to
“galvanize the local environmental
bureau to fulfill its mission of
clean ing up the polluted air
according to law.”
This is cause for celebration.
F i n a l ly t he r e i s a c it i ze n
representative who acted out of a
civic sense of shared environmental
responsibility on behalf of the
wider public, who are often wary of
any onerous remedy that curtails
their “rights,” such as the right to
drive cars.
But if common sense is any
g u ide, we shou ld n’t be too
sanguine about the prospect of this
milestone lawsuit, because even if
it is accepted and dealt with, the
case will predictably drag on, and
the final ruling may take months
to materialize, at which point the
smog would have worsened to an
extent defying easy solutions.
Rude awakening
Any sensible person can see that
Li’s move is essentially a symbolic
act. As Xinhua noted, the suit is a
kind of “awakening” of civil rights
as well as a “rude awakening” to
lackadaisical law enforcement,
prodding them to take forceful
measures to ensure the air is
breathable.
Confronted with the same health
risks, we hope the best for Li’s
legal campaign, but hope should
be pinned equally on the easy
availability of means for citizens
to air their grievances.
Unfortunately, the chan nels
through which popular woes can be
openly publicized are sometimes
ver y l i m ited, if not blocked
altogether. When “orderly” means
are exhausted, people habitually
turn to the dramatic, messy and
risky option of petitioning.
The plight of petitioners in China is
not news. We have frequently heard
about cases in which disgruntled
groups, frustrated in their dealings
with local governments, hop on a
train bound for Beijing, hoping
that the supposedly enlightened
big shots in Beijing will address
their plight. The journey is often
fraught with tensions.
Fearful that petitioners will make
local bosses look bad in the eyes of
their superiors, governments often
send in “stability-keeping” squads
to intercept these troublemakers,
and in some egregious cases of
illegal incarceration, have even
confined them to re-education
camps or mental hospitals.
‘Catch me if you can’
This type of “catch me if you can”
saga is unfolding on a daily basis.
The reason many petitioners get
around local authority and take
their cases directly to Beijing is
that they tend to have more trust
in disinterested Beijing officials to
handle their cases fairly, whereas at
home they are likely to be ignored,
snubbed and mistreated.
Neve r t he less, too muc h
petitioning traffic in the Chinese
capital is compelling the national
government to discourage this
practice.
Recently, the General Office of
the Communist Party of China
and the General Office of the State
Council, China’s cabinet, jointly
issued a set of directives regarding
the handling of petitioners.
One directive stipulating that
the two agencies will no longer
take petitions that skip proper
procedures — meaning traveling
directly to Beijing to seek redress—
stirred a controversy.
Some obser vers a rg ue that
Beijing’s refusal to take petitions
will leave petitioners at the mercy
of venal cadres back home, paving
the way for more corruption and
injustice. After all, a few petitioners’
grievances would never have been
redressed if they did not attract
the attention of people at the very
top. That’s exactly why this kind of
petitioning odyssey is popular.
The directives have a new focus
on strict separation of lawsuit
from petition. Petitions that touch
on legal issues are to be settled
in court, not primarily through
petitioning offices.
In general, this is a laudable
development that strengthens
the rule of law, as petitioning is
supposed to be a last resort when
one has no legal recourse.
Besides, the new arrangement will
greatly ease the burden on those in
charge of registering petitioners’
complaints. The message seems to
be: Let the law run its course and
everything will be fine.
That sounds good, but in practice
the directive has several caveats.
If the local judiciary is in cahoots
with the very people that crush and
oppress petitioners, what’s the
point of asking for its help?
Indeed, many turned to petitioning out of desperation, after they
tried and failed to get justice from
the court.
The new rules on petitioning
prioritize improvements in people’s
well-being to help prevent and ease
social unrest.
In this way, it is hoped, there will
be less need for petitioning.
Despite thei r wel l-mea n i ng
nature, the rules leave a question
unanswered: How do they plan
to address the root cause of the
huge petitioning traffic to Beijing.
Why would it be necessary to trek
thousands of miles to Beijing if
problems could be solved locally?
At the end of the day, the most
effective way to stem the flow of
petitioners flocking to Beijing
would be to order local bosses
to treat them better, and sternly
punish transgressions like locking
up petitioners and slighting them
with endless subterfuges.
If Li’s pro bono lawsuit can
drive official initiatives to tackle
pollution, it will send positive
signals to the public, especially
to potential petitioners who are
fed up with being stonewalled by
environmental watchdogs.
Shanghai Daily welcomes the
ideas of others. Please send
your idea to
[email protected]
Li Xinran
[email protected]
Reprimand centers
show some officials
ignore rule of law
A TEAM of lawyers has urged Henan provincial
authorities to provide an explanation over the reprimand education centers where innocent petitioners
were confined and maltreated without any legal
cause.
Henan has ordered the closure of all such centers
in the province after the family of a detainee made
it public on Weibo. Zhang Fengmei, 70, had been
held for five days at the center in Nanyang City after
seeking to file a petition in Beijing, according to a
Beijing News report on February 13. The report did
not give details of the petition.
Zhang said that while in detention she was watched
by up to 10 people, including police officers. She
wasn’t even allowed to go to the toilet, but was made
to use a bucket in the corner of the room.
No rules in China’s legal system allow the practice,
but it was carried out in many places in Henan.
Henan’s public security department, department
of justice and bureau of calls and visits (petitioning) jointly issued a rule on September 26, 2009 to
cope with petitioners who go to Beijing to file their
complaints. The document says “for those who go
to Beijing to file abnormal petitions shall be taken
to a designated place to accept reprimand, warning
and persuasion for at least 24 hours.”
According to pictures taken from the outside, the
full name for facilities of the kind is “reprimand
education center for abnormal petitions.”
Who is more abnormal?
In an open letter to Henan’s provincial government, the lawyers asked for an official interpretation
of what an “abnormal petition” is.
Who, indeed, is behaving abnormally?
The petitioners are usually quite reasonable.
An earlier media report said many villagers in
Henan‘s Puyang City had their land illegally seized
by Lieutenant General Gu Junshan’s family for real
estate development. They went to Beijing to petition
for justice but were dispersed by security staff led
by Gu‘s wife — a senior police officer stationed in
Beijing to intercept them and other petitioners.
Any innocent person’s freedom and other fundamental rights are protected by the Constitution
and legally guaranteed. Any officers involved in the
illegal practice of “reprimanding petitioners” shall
be liable for violating the Constitution and laws.
China has abolished its “re-education through
labor” system, which allowed police to sentence
petty criminals, drug addicts and some petitioners
to up to four years’ confinement in labor camps
without going through the courts.
However, the so-called reprimand centers in
Henan alert us that camps under different names
might grow rampantly since the ground is still
fertile. Without a legal basis, they might be operated more secretly in the future, which could be
more harmful to our society.
A12 HANGZHOU SPECIAL
WEST LAKE EXPO / CULTURE / TOURISM / ECONOMICS
Efforts to aid public
• Preparing West Lake for spring
THE Hangzhou govern ment announced new health, transportation
and other initiatives to bring substantial benefits to local residents.
It said the city will buy 1,000 hybrid
taxies this year. Half of them will be
put into service by the end of June and
the rest will join the fleet by the end
of the year. The Hangzhou Transport
Bureau is responsible for the task.
The city will shut down or relocate
20 polluting factories that are in the vicinity of protected water sources this
year. Ten will be closed or relocated
by August.
The city will add 6,000 beds in oldage nursing homes, with 1,200 added
before April, 3,000 before July and the
rest before the year’s end.
The Hangzhou Bureau of Culture,
Radio, TV, Film, Press and Publication
will establish 10 self-service minilibraries before November with five
put in use before June.
The city will also make sure that
90 percent of school sports grounds
are open to the public this year and
will inform the public via media before
October.
The city government also will evaluate the result of its initiatives, the
officials said.
Traffic-easing plan
HANGZHOU traffic authorities announced several measures, which
started on Saturday, to ease traffic
congestion around West Lake during
the peak travel season in the spring.
The measures include converting
the roads south and north of the lake
into one-way traffic on weekends and
implementing the odd-even license
plate system to reduce cars around
the lake before June 1.
The one-way traffic rule will be
enforced on roads south and north
of West Lake from 8:30am to 5pm on
weekends. Odd-even traffic restrictions will be implemented on private
cars entering the West Lake scenic
area between 8:30am and 5pm, based
on the last digit of their license plates.
Call (0571) 8506-6910 or 8798-5571 (in
Chinese) for more information.
The West Lake scenic area spans
from Beishan Road in the north to
Hupao Road and Fenghuangshan Road
in the south, and from Yuhuangshan
Workers clean up the withered lotus stalks in West Lake. The dried tops of the lotus, typical of the winter scenery of the lake,
are removed to allow for lotuses to sprout again in the upcoming spring. — Xinhua
Road in the east to Meiling Road in
the west. Motorists are advised to park
their cars at the Huanglong Stadium,
Zhejiang Provincial Hall of the People,
and Zijingang Interchange Center.
Parking will be free and buses will
ferry them to the West Lake area.
Buses, coaches and taxies will not be
affected by the new measures.
Second-child permit
SINCE January 17, when China’s onechild policy was eased, 1,745 couples
in Hangzhou have applied for a second-child permit, the city’s population
and family planning officials said.
Among them, 572 couples have received the permits and the rest are
still waiting for consideration.
Zhejiang is the first province in
China to allow couples to have a second child if either parent is the only
child. Hangzhou, the provincial capital, has about 125,000 couples who
are eligible for having a second child
and two-thirds of them plan to have
a second child, the officials said after
doing a survey.
China’s one-child policy was enacted in 1979 and was incorporated
in the Population and Family Planning
Law in 2002.
Station names given
NAMES of Metro Line 2 stations along
a newly built extension line were revealed at the annual meeting of the
city’s political advisers. The northwest
terminal was named Xinliang Road
Station, instead of Liangzhu Station as
previously suggested.
The second phase of Metro Line 2
runs from Fengtan Road Station to
Xinliang Road Station, through Wenhua Road, Sanbacun, Yuying Road,
Sandun, Dongjia Road, Gouzhuang,
and Xinyue Road stations, according to
Zhang Jinrong, deputy chief engineer
of Hangzhou Metro Corporation.
The extension line is scheduled to
go into operation in 2018.
The first phase of Metro Line 2,
which will run from Caoyang Station
to Fengtan Road Station, while sharing Fengqi Road Station with Metro
Line 1 and also Qianjiang Road Station with Metro Line 4, is anticipated
to go into service in October.
WHAT’S ON A13
http://www.iDEALShanghai.com/whats-on
Stage
PICK OF THE DAY
Mister M
Multimedia Piano Show
To mark the 50th anniversary
of the establishment of the
diplomatic relation between
China and France, French rock
singer, songwriter and guitar
player Matthieu Chedid, better
known by his stage name M, is
back to Shanghai on his China
tour, this time collaborating
with Chinese musicians ChaCha and AM444.
Date: March 7, 8:30pm
Tickets: 250 yuan (presale),
350 yuan (at door)
Tel: 962-388
Venue: Shanghai Qianshuiwan
Culture Center
Address: 1/F, 179 Yichang Rd
A multimedia piano concert
named “Nodame Cantabile” that
once astonished audiences with
its innovative presentation in
2009 will return to Shanghai. The
concert will be staged at Shanghai
Culture Square tonight by young
Chinese pianist Song Siheng.
Date: Today, 7:15pm
Tickets: 80 yuan
Tel: 6217-2426, 6217-3055
Venue: Shanghai Culture Square
Address: 597 Fuxing Rd
ް႗ୟ6:8ࡽ
Swiss Flutist
Geneva-born flutist Emmanuel
Pahud is world-famous for his
interpretation of Baroque and
Classical flute works. Pahud was
tutored and mentored by flutists
Francois Binet, Carlos Bruneel and
Aurele Nicolet. Classically trained
at the Conservatoire de Paris, he
plays in diverse music genres,
whether baroque, jazz, contemporary, classical, orchestral, or
chamber music.
Tickets: 80-680 yuan
Tel: 962-388
Venue: Concert Hall of Shanghai
Oriental Art Center
Address: 425 Dingxiang Rd,
Pudong
೶۫ۡၑୟ536ࡽ
Piano Recital
Polish American pianist Anna Kijanowska will present local music
lovers a piano recital. The pianist
has established herself as a multifaceted musician. Her concert
performances represent the stunning diversity of today’s globalized
classical music scene.
Tickets: 80 yuan
Tel: 5415-8976
Venue: Shanghai City Theater
Address: 4889 Dushi Rd
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HK Orchestra
The Hong Kong Philharmonic
Orchestra begins a tour in the
Chinese mainland next week
under the baton of its music
director Jaap Van Zweden. The
all-Beethoven program includes
“Egmont Overture,” Violin Concerto in D major” and “Symphony
No. 5.” The tour will stop in Beijing,
Shanghai, Xiamen and Guangzhou. Dutch violinist Simone
Lamsma will join the tour.
Venue: Shanghai Oriental Art
Center
Pudong
೶۫ۡၑୟ536ࡽ
Percussion Duo
Joint Venture Percussion Duo will
present a marimba concert featuring a broad selection of compositions of the African percussion
GO
ᅓ‫ׅ‬ୟ28:ࡽ2୍
instrument that’s dubbed “the
pearl of percussion instruments.”
The audience can look forward
to Bartok’s seven pieces from
“Mikrokosmos,” Ravel’s “Le Tombeau de Couperin” (“The Tomb of
Couperin”) and Egberto Gismonti’s
“Infancia.”
Date: March 28, 7:30 pm
Venue: Shanghai Oriental Art
Center
Pudong
four parts — namely “Ocean Paradise,” “Forest Fun,” “Prairie Hero”
and “Urban Home.” Traditional
beast training is replaced with
interactive performances.
Date: Saturdays and Sundays,
2pm
Tel: 962-388
Venue: Shanghai Circus World
Address: 2266 Gonghexin Rd
ࠌࢅႎୟ3377ࡽ
Horse Sculpture
Music from Budapest
Exhibition
The Arkansas Jazz Orchestra
from the United States will stage a
Jazz performance. Beautiful and
romantic scores of “Sweet Home
Chicago,” “Wood Choppers Ball”
and “Little Brown Jug,” as well as
popular Chinese songs “Sweet”
and “Rose Rose I Love You” are
featured in the repertoire.
Tel: 5415-8976
Venue: Shanghai City Theater
Address: 4889 Dushi Rd
‫ۼ‬๨ୟ599:ࡽ
‘Happy Circus’
The circus show is focused on a
“green” theme with 31 programs in
The solo exhibition of horse
sculptures of South Korean artist
Kim Seon Gu echoes the coming
Chinese Year of the Horse. Kim is
exhibiting nearly 30 of his bronze
sculptures, ranging in height from
20 centimeters to 2.5 meters.
Most of his works feature a rider in
different poses on a running horse.
Date: Through March 15,
10am-5:30pm
Tel: 5213-5366
Venue: Levant Art Gallery
Address: 1/F, 107 Huqiu Rd
ࢸ൮ୟ218ࡽ2୍
ට௷‫ڢٷ‬411ࡽ
Jazz Show
Art lovers are treated to an exhibition of the artworks by young
Chinese artists. The avant-garde
paintings, sculptures and art
installations are winning pieces of
the annual Creative M50 awards.
10:30am-6:30pm
Tel: 6299-6610
Venue: M Art Center
Address: 1/F, Bldg 2, 50 Moganshan Rd
ఎ߅෷ୟ61ࡽ3ࡽ୍2୍
೶۫ۡၑୟ536ࡽ
Under the baton of veteran
conductor Iván Fischer, Budapest
Festival Orchestra will present
a concert of classical music.
Program includes Borodin’s
“Polovtsian Dances,” Glazunov’s
“Violin Concerto” and Beethoven’s
“Symphony No. 7.”
Tickets: 180-1,280 yuan
Tel: 962-388
Venue: Lyric Theater of Shanghai
Grand Theater
Address: 300 People’s Ave
Creative Artworks
Paintings of Sundry Media
Contemporary Ink-Wash
An exhibition featuring the paintings created by Hou Wei and his
six students is underway at Xuhui
Art Museum through March 11.
For the viewers, it is difficult to
differentiate Hou’s paintings via
materials, as he is swift to use
sundry media together including oil, water-color and acrylic.
According to the artist, it is more
reasonable to categorize his paintings by contents and spirit. Hou’s
subjects vary from landscape, tiny
abandoned objects to female.
9am-4pm
Venue: Xuhui Art Museum
Address: 1413 Huaihai Rd M.
Chinese ink-wash paintings have
featured stereotypical subjects for
centuries. Yet some artists are not
content reproducing the flowers,
trees and mountains found in most
ink-wash paintings. They have
started venturing into new territory.
The exhibition “A Fragment in the
Course of Time — Landscape
of Chinese Ink Art in the 1980s”
features a group of Chinese artists
who have chosen their own paths
to create something different.
Date: Through April 10, 10am6pm, close on Monday
Admission: 30 yuan
Venue: Shanghai Himalayas
Museum
Address: 3/F, 869 Yinghua Rd
࡛࣊ዐୟ2524ࡽ
ᆉࢾୟ97:ࡽ4୍
8am Talk to Lei
8:30am Travel Front
9am Culture Matters
10am High Drama
11:45am A Fistful of Kung Fu
12pm Pop Big Shot
12:10pm City Beat
12:45pm You Are the Chef
1pm The Funniest Home Video
1:30pm Real Fun
2:30pm High Docu
3:30pm ICS Show
4:30pm Fun Club
5pm On the Red Carpet
5:30pm Docu View
6pm The Funniest Home Video
6:30pm You Are the Chef
6:45pm Pop Big Shot
7pm Real Fun
8pm Docu View
8:30pm Talk to Lei
9pm Shanghai Live
9:45pm A Fistful of Kung Fu
10pm High Drama
9:30am, 3:30pm Nature and Science
9:55am, 3:55pm Civilization
11am, 2pm, 6pm, 9pm Biz China
11:30am, 6:30pm Around China
8pm Asia Today
1pm, 7:30pm, 12:30am Dialogue
8am, 7pm Worldwide Watch
8:30am, 2:30pm, 8:30pm Culture
Express
9:15am, 3:15pm Learning Chinese
1:30pm, 9:30pm Rediscovering
China
9:50am Hugo
12pm True Detective S106: Haunted
Houses
1pm Argo
3pm Paranorman
4:30pm The Pirates! Band of Misfits
6pm Mirror Mirror
7:50pm Spider-Man 2
10pm Django Unchained
9:30am Hush
11:15am The Postman
2:15pm Hard Target
4pm King Creole
6:25pm Switchback
8:20pm Payback
10pm Gone (2012)
Starring: Amanda Seyfried, Sunjata
Powers and Jennifer Carpenter
Jill Parrish comes home from a night
shift to discover her sister Molly
has been abducted. Jill, who had
escaped from a kidnapper a year before, is convinced that the same serial
killer has come back for her sister.
Afraid that Molly will be dead by sundown, Jill embarks on a heart-pounding chase to find the killer, expose his
secrets and save her sister.
A14 COMICS/GAMES
GARFIELD
HOROSCOPES
change your life or your direction. A
move or the way you live will improve
if you embrace change. Expanded
interests equal greater possibilities.
Happy Birthday: Seize the moment.
Don’t let any opportunity that comes
your way slip past you. Pick up the
pace and go after your dreams with
passion, discipline and the mindset
of a winner who will not stop until
victory has been achieved. Reevaluate your personal position and
consider your options. A serious
attitude regarding love will enhance
your personal life. Your numbers are
5, 11, 18, 20, 27, 36, 48.
PISCES (Feb 19-Mar 20)
Don’t let confusion set in. Help others
without making a cash donation.
Greater focus should be put on ways
to develop your creative dreams. Join
groups that share similar interests.
Love is on the rise, but you must
avoid secret affairs.
POOCH CAFÉ
ARIES (Mar 21-Apr 19)
Don’t jump into something without
doing your due diligence. The
decision you make based on your
findings will keep you from making a
costly mistake. Getting angry will be
a waste of valuable time. Take care
of business and don’t share personal
secrets.
STONE SOUP
TAURUS (Apr 20-May 20)
Concentrate on learning and
gathering experience and
opportunities will surface. Don’t be
too quick to share with someone
who is likely to use the information
against you in a competitive
situation. Personal and professional
partnerships are highlighted.
GEMINI (May 21-June 20)
A change of heart will lead you in
a much better direction. Offering
assistance to someone inspired to
take the same path will enable you to
accomplish much more as a team.
Get any agreement in writing to avoid
problems.
NON SEQUITUR
CANCER (June 21-July 22)
Do something creative that captures
your imagination. Too much idle
time will lead to boredom and
expenditures that you cannot afford.
Check your moodiness before
you blame someone else for your
dissatisfaction. Make peace, not war.
LEO (July 23-Aug 22)
You are heading upward and must
not let anything or anyone stand
in your way. Make calls that can
CROSSWORD
ACROSS
1
Word before
“a prayer” or
“a clue”
6 Tug-of-war
need
10 — up
(energizes)
VIRGO (Aug 23-Sep 22)
Keep a tight lid on the way you feel,
especially with regard to contracts,
settlements and money matters.
Listen to what’s being said. Collect
information that is pertinent to a
decision or response you will be
expected to make.
LIBRA (Sep 23-Oct 22)
Test the waters. Make your choices
clear, and you will tempt someone
you least expect to see things your
way. Offer positive alternatives and
use your intellect and ability to find
solutions. Lead the way, and you will
attract allies.
SCORPIO (Oct 23-Nov 21)
Make whatever job you do speak for
your integrity, work ethic and ability to
take whatever you are given and turn
it into a masterpiece. Once you put
your project behind you, plan a little
downtime with friends or family.
SAGITTARIUS (Nov 22-Dec 21)
Take a step in the right direction.
Make a couple of personal
improvements and you will raise
your self-esteem and invite others to
compliment you on your progress.
Social events should be attended
and appear to be encouraging
romantically.
CAPRICORN (Dec 22-Jan 19)
Don’t expect everyone to agree with
you. Be prepared to take the bad
with the good. Have your answers
and suggestions ready. Don’t make
changes that will upset your personal
or emotional situation. Walk away
from negative influences.
AQUARIUS (Jan 20-Feb 18)
Take the role of the person in your
group who gets things done. Wheel
and deal and make plans that
are geared toward moneymaking
endeavors. Do your best to advance
by making positive changes to the
way you earn your living.
©2014 UNIVERSAL PRESS
SYNDICATE
SUDOKU
14 Inappropriate
looker
15 “Urn”
homonym
16 What gives
irises their
color
17 Go from C’s to
B’s, eg
20 Arm
decoration
21 Absolute
power
22 NASA’s
domain
25 Flower that
blooms in the
fall
26 Dashing style
30 Ewe’s offspring
32 Stuffed Italian
morsels
35 Awkward state
41 Proceed, say
43 Ruby’s victim
44 Lip woe
45 “Buzz off!”
47 One enjoying
the sights
48 “Ristorante”
course
53 Little bird of
prey
56 Balticrepublic
58 Rasta’s music
63 Revealing
too much
beforehand
66 Sea eagle
67 Ta-ta in Turin
68 Morning wakerupper
69 “This — on
me!”
70 Weigh by lifting
71 Dined at home
4
DOWN
33
1
2
3
34
Ball thrower?
Ottoman official
Place for a
quarter
5
6
7
8
9
10
11
12
13
18
19
23
24
26
27
28
29
31
36
Politico
Gingrich
Groups of three
Exerciser’s unit
Rower’s
necessity
President —
(acting head)
Green feeling?
Some big cats
Big to-do
Ziti alternative
Attendant of
Bacchus
Bucket go-with
Important
historic period
Reached
ground
Dependable
money-maker
“Cogito, —
sum”
Vientiane locale
Confess openly
One of a
noted nautical
threesome
Elaborate inlaid
work
Parent of 53Across
Oft-flipped
items?
Rod and Todd’s
animated dad
37 In — (existing)
38 Nautical
greeting
39 Not gracious,
as a loser
40 Nightstand
water vessel
42 Hammer or
hacksaw, eg
46 Submarine
sandwich
48 Basil-based
sauce
49 Ghostlike
50 Shop-’til-youdrop site
51 Population
Puzzle answer
centers
52 What goes
in nose to
make noise?
54 Prior, to poets
55 Roadster
maker
57 Move stealthily
59 Mountain pass
in India
60 Way in or out
61 “Nay!” sayer
62 First garden
64 Nincompoop
65 “Wayne’s
World” zinger
Fill the grid with the numbers 1 to 9 so
that each row, column and 3x3 block
contains the numbers 1-9.
SPORTS A15
Sharks to stick with
domestic coaches
Ma Yue
YAO Ming has told the Shanghai Sharks to get him the CBA
trophy. The club’s general manager Zhang Mingji said Yao had
made it clear he would only be
satisfied when the Sharks bring
home the CBA title.
Yao, who took over the club
five years ago, is exploring better development options for the
club, whose best performance
since he took over was finishing
fourth in the 2009-10 season.
Though the Sharks advanced
to the CBA playoffs, their primary goal this season, they
could have surpassed that with
a better team management.
“ In the future, the
club will only hire
domestic coaches
to take charge of
the team. ”
“We did regret hiring Australian Rob Beveridge as head
coach in the middle of the
season, which proved to be unsuitable. In the future, the club
will only hire domestic coaches
to take charge of the team,”
Zhang said.
The Shanghai outfit struggled
with issues off the court with
frequent changes of coaches.
Veteran head coach Wang Qun
resigned citing family issues
after just five rounds. The club
then turned to young coach and
former player Wang Yong, who
is only 27 years old.
They signed Beveridge in December to assist Wang. However,
the former Australian national
youth team head coach also left
the team before the end of the
regular season.
“Some coaches have a high
profile and tactical ability,
while others are simply good
at communicating with players
and inspiring them to perform
to their potential. We favor the
latter,” Zhang said.
The Sharks finished eighth in
the 18-team Chinese Basketball
Association regular season.
They were trounced 0-3 by
Guangdong Southern Tigers in
the first round playoffs.
“Currently, Wang Qun is still
the team’s head coach,” Zhang
said. But the team might need a
backup coach as well as Wang’s
wife was reported to be sick and
needs constant care.
“Foreign coaches are not familiar with the operation of
the Chinese league, and sometimes don’t communicate well
with local players. We did not
put enough emphasis on the
stability of the coaching staff.
We really doubt whether foreign
coaches can bring stability to
the team.”
Zhang said there was always
debate on whether the team
should play foreign and experienced players more often or
give the younger players more
time on court. “We still favor a
long-term development method,
but we must be realists as well
under the current system,” he
said.
He also stressed that player
management will be improved
next season. He said one player
smoked everyday that affected
his form.
The team will meet in April
for training when it will put
more emphasis on technique,
including shooting skills. “We
hope to create a more aggressive playing style during the
summer training,” he said.
LeBron James (right) of
the Miami Heat handles
the ball during a game
against the Orlando
Magic in Miami on
Saturday. — AFP
Blazers complete a rare
season sweep of Nuggets
BASKETBALL
PORTLAND completed a season sweep of Denver for the first time in 15 years by beating the
Nuggets 102-96 on Saturday to move within
three games of the NBA Western Conference
lead.
In the Eastern Conference, Indiana maintained
its two-game lead over Miami by struggling
past lowly Boston, the Los Angeles Clippers
widened their lead in the Pacific Division by
crushing New Orleans, and Houston held on to
beat Detroit.
Portland’s Robin Lopez scored 18 points and
LaMarcus Aldridge returned from an injury
to add 16 for the Trail Blazers, who won their
fifth straight. Denver, by contrast, has lost five
straight.
Indiana had difficulty in dispatching Boston,
winning 102-97, with Paul George scoring 10 of
the Pacers’ last 12 points.
George led the Pacers with 25 points and
Evan Turner added 17 as Indiana won its fourth
straight game. Jeff Green had 27 points for the
Celtics, who have lost six of seven.
The Clippers had the luxury of resting Chris
Paul and Blake Griffin in the fourth quarter and
still cruising to a 108-76 win over New Orleans.
Paul had 21 points and eight assists, while Griffin added 20 points.
Houston opened a big early lead and hung on
to beat Detroit 118-110, with Terrence Jones leading the way with 22 points and 10 rebounds.
Jones finished 10 of 15 from the floor as
Houston shot 50 percent for the game, including
61 percent in the first half. Houston scored 41
points in the first quarter. James Harden added
20 points and 12 assists.
Miami won its seventh-straight game, beating
lowly Orlando 112-98, with LeBron James scoring 20 points, having switched to a clear face
mask to protect his broken nose.
Memphis used a big second half to overwhelm
Cleveland, winning 110-96, with Zach Randolph
having 23 points and 14 rebounds. Minnesota
beat Sacramento 108-97, with Kevin Martin scoring 26 points to help the Timberwolves reach
a .500 record.
Washington beat Philadelphia 122-103, with
Trevor Ariza making eight 3-pointers and scoring a career-high 40 points. Brooklyn’s Marcus
Thornton scored 12 of his 25 points in the
fourth quarter to guide the Nets to a 107-98
win over Milwaukee.
(AP)
EXPLORE MORE AT WWW.SHANGHAIDAILY.COM/SPORTS
GOLF
ALPINE SKIING
TENNIS
ATHLETICS
Creamer ends drought
in stunning style
Jansrud wins World
Cup super-G at home
Federer snares record
sixth Dubai crown
Pearson clocks fastest
time in 60m hurdles
PAULA Creamer thanked the
“man of my dreams” for her
return to winning ways as she
ended the longest drought of
her career in thrilling fashion
in Singapore yesterday.
Creamer sank a 75-foot eagle
putt on the second playoff hole
to win the US$1.4 million HSBC
Women’s Champions, her ninth
victory but the first since the
2010 US Women’s Open. Boosted
by her pilot fiance Derek Heath,
a new swing thought and extra
practice, she eked out a fabulous playoff win over Spain’s
Azahara Munoz.
“It has everything to do with
it,” said Creamer, when asked
what role her relationship had
KJETIL Jansrud of Norway continued his fine run of form by
winning the men’s alpine skiing
World Cup super-G race in Kvitfjell, Norway, yesterday.
The 28-year-old Oly mpic
champion in the discipline
made it two wins in three days
following his joint first finish
with Austria’s Georg Streitberger in a downhill on Friday.
Jansrud took the super-G honors
ahead of Switzerland’s Patrick
Kueng and downhill Olympic
champion Matthias Mayer of
Austria, who collected his second podium finish in two days
having entered it without ever
finishing in the top three in
World Cup racing.
ROGER Federer won a record
sixth Dubai Championships
— and 78th career title — by
beating Tomas Berdych 3-6, 6-4,
6-3 in the final on Saturday.
Federer, who maintains a
home in Dubai, delighted a
packed stadium for back-toback wins over Novak Djokovic
in the semifinals and Berdych.
“Things definitely went my way
out here tonight,” Federer said.
“I’ve had a lot of tough matches
in the last year and a half so it
was nice to get a lucky break
again.” Federer’s win, his sixth
here in the last 12 years, extends his record of winning at
least one title a year to 14 consecutive years.
OLYMPIC champion Sally Pearson of Australia clocked the
fastest 60m hurdles indoor
time of the season on Saturday,
just a week out from the world
championships.
Pearson timed 7.79sec in the
heats at the Berlin meet before
winning the final in 7.80sec for a
perfect confidence boost ahead
of the world indoor championships at Sopot in Poland next
week. Cuba’s 2008 Olympic 110m
hurdles gold medalist Dayron
Robles claimed the men’s 60m
hurdles in 7.53sec. More than
10,000 spectators were buoyed
by seeing Germans David Storl
and Malte Mohr claim victories in the shot and pole vault
respectively.
Paula Creamer reacts after
winning the final round of the
HSBC Women’s Champions.
played in the victory. “I am in
such a good place, I am blessed
with what I have, I’m blessed
with what I’ve been given. It’s
a lot of hard work, there’s a lot
of up and downs but Derek just
makes me so happy, he makes
me want to be better.”
SPORTS
A16
Wenger:
Stoke loss
major blow
ARSENE Wenger conceded Arsenal’s
stuttering Premier League title bid
had suffered a “major setback” after
it lost ground at the top with a shock
0-1 defeat at Stoke.
Jon Walters’ second-half penalty
handed Stoke a famous win at the Britannia Stadium on Saturday and left
the Gunners four points behind Premier League leader Chelsea in third
place. Liverpool beat Southampton
3-0 to move into second place.
Andre Schurrle scored a hat-trick in
Chelsea’s 3-1 win at Fulham.
“It is not slightly worrying, it is a big
worry for us to lose a game like that.
It’s a massive setback,” Wenger said.
“In a game like that, we didn’t produce the performance we wanted. To
win a title when you are expected to
perform you have to perform. It’s as
simple as that.”
Although it was Mark Hughes, as
opposed to predecessor Tony Pulis in
the Potters’ home dugout, the game
retained the same feisty edge so
memorable from these teams’ recent
meetings. Glenn Whelan and Charlie
Adam both escaped without sanction from referee Mike Jones despite
controversial challenges on Olivier
Giroud, frustrating the striker.
“I have nothing to say about that. I
am long enough in the game to make
my own judgement,” Wenger said.
“It would be a shame if people
highlight that as it wasn’t that type
of game,” Potters boss Hughes said.
However, the Arsenal manager
was unimpressed by Jones’ decision
to point to the spot after adjudging
Laurent Koscielny handled inside the
penalty area as Walters attempted to
lift the ball over him.
“We conceded a goal that was a nice
gift from the referee but that can happen,” Wenger added.
“He was one yard away. How could
he take his hand away in time? There
was no intention at all.”
Wenger’s side could have few complaints with the outcome, however.
“We had a good defensive performance and overall we are unlucky to
lose this game but offensively we did
not create enough,” Wenger said. “Our
offensive game was poor considering
our standards.”
(AFP)
Manchester City substitute Jesus Navas celebrates after scoring the third goal against Sunderland during their English
League Cup final at Wembley Stadium in London yesterday. City fought back to win the match 3-1. — Reuters
Magical City rallies to take Cup
SOCCER
TWO moments of magic in the space
of two second-half minutes helped
Manchester City to a 3-1 victory over
Sunderland in the English League Cup
final at Wembley yesterday.
Manuel Pellegrini’s favorites were trailing to Fabio Borini’s 10th minute strike
for Sunderland and a shock looked on
the cards until Yaya Toure and Samir
Nasri intervened. Jesus Navas completed
the turnaround late on.
Toure curled in City’s equalizer after
55 minutes before Nasri thumped home
the winner to snatch the season’s first
silverware for Pellegrini’s title-chasing
side. It was City’s first League Cup title
since 1976.
“We needed to win today, it was very
important. And we deserved it the way
we played in the second half,” Toure told
Sky Sports.
“Today we showed we are a great team.
I think it was my best goal.”
Sunderland spent the opening five
minutes entrenched inside their own
half as City, which scored 19 goals en
route to the final, moved the ball around
with ease on the lush turf.
But minutes later the ball was in the
back of the City net.
There seemed no imminent danger
as Borini closed down Vincent Kompany but City’s skipper was guilty of
over-complication and Borini robbed
him of the ball before bursting into the
penalty area and thumping a shot with
the outside of his right boot past Costel
Pantilimon.
City dominated possession for the rest
of the half without ever carving open a
Sunderland rearguard bolstered by former Manchester United stalwarts Wes
Brown and John O’Shea.
Aguero denied
Phil Bardsley, who scored in Sunderland’s semifinal penalty shootout win
over United, reacted superbly to deny
Sergio Aguero a certain goal but keeper
Vito Mannone was not required to make
any outstanding saves.
Sunderland was always dangerous on
the counter-attack and could have doubled its lead when Borini ran through on
goal from a suspiciously offside position
but Kompany recovered to nick the ball
away as the Italian cocked his leg to
shoot.
A city onslaught was expected at the
start of the second half but again, Sunderland continued to impress.
Ki Sung-yueng, part of the Swansea
City side to lift the trophy last season, let
fly from 30 meters, forcing Pantilimon to
tip his dipping strike over the crossbar.
Then the wheels fell off Sunderland’s
bandwagon.
One nonchalant swing of Toure’s right
leg sent a curling 25 meter shot beyond
the fingertips of Mannone after 55 minutes and two minutes later Nasri turned
the final on its axis with an unstoppable
shot from the edge of the penalty area
after Aleksandar Kolarov’s cross was
half cleared.
It was cruel on Sunderland which until
then had been worth its lead but a further demonstration of the formidable
firepower available to Pellegrini. Substitute Navas made absolutely sure there
was no way back for Sunderland with
City’s third on the stroke of full time.
(Reuters)
Bayern on a roll in Bundesliga
ARJEN Robben scored a hat-trick as
Bayern Munich routed Schalke 5-1 on
Saturday to extend its Bundesliga lead
to 20 points, a record after 23 games.
David Alaba opened the scoring with
a deflected freekick in the third minute, Robben chipped in his first in the
15th, Mario Mandzukic’s header made
it 3-0 in the 24th, and Robben claimed
his second in the 28th, with a fine finish inside the far post.
It was utter dominance from Bayern in the first half, with more than
three-quarters ball possession, 409
completed passes to Schalke’s 65, and
a successful pass rate of 91 percent.
Bayern stretched its league record
unbeaten run to 48 games after its 15th
win in a row — also a league record.
Earlier, Borussia Dortmund took advantage of Bayer Leverkusen’s freefall
by beating Nuremberg 3-0 at home to
move to second.
Leverkusen lost 0-1 at home to Mainz
for its fifth consecutive defeat.
(AP)
Monday
3 March
2014
B
FINANCE
PASCAL
LAMY:
Driving reform
is ‘no easy feat’
Ye Zhen
“
I
t’s like trying driving a car
when some people are slamming on the brakes and
others are pushing on the
accelerator,” Pascal Lamy, former
head of the World Trade Organization, said of China’s reform
experiment in creating a pilot free
trade zone in Shanghai.
Lamy, who was director-general
of the WTO between 2005 and
2013, said he expects the “car” to
experience a pretty bumpy ride.
“As happens all over the world,
when reforms of this kind are
undertaken, there will be resistance, either from sectors that
reject foreign competition or from
administrations for bureaucratic
reasons,” said Lamy, who sat down
with Shanghai Daily after he
delivered a keynote speech to an
academic seminar organized by
the School of Economics and Management of Tongji University.
“Driving such a car will be no
easy feat and will require careful
political management,” said Lamy.
Even so, the French political
advisor, businessman and former
European Union commissioner
for trade said he remains optimistic about the prospect for the
new zone, coming as it does
when a dramatically changing
international economy is pushing
China to develop new competitive
advantages.
“My own judgment, based on
past experience, is that this new
stage in economic reform will
work, will happen and will benefit
China and the rest of the world,”
Lamy said.
CONTINUES ON B3
YUAN: Alarm bells mute on recent weakness
CURRENCY/B2
B2 CURRENCY
Blip in the yuan signals its strength in the future
No cause for alarm, free-market exchange rates fluctuate. Recent weakness in the yuan is
viewed as a natural step in the evolution toward becoming a world reserve currency.
Feng Jianmin
T
he Year of the Horse started
with the exchange rate of
the Chinese yuan galloping
downhill.
The once seemingly unstoppable
appreciation of the yuan began going
into reverse on February 18, touching a
ten-month low of 6.1808 per US dollar
last Friday.
The yuan has lost more than 2 percent against the dollar since January
14, when the yuan hit a 20-year-high of
6.0406.
This reversal goes beyond matters
of mere high finance. The declining exchange rate has affected many
ordinary consumers, much to their
surprise.
An office worker surnamed Chen
went for a holiday abroad before the
Chinese New Year and spent some
dollars while overseas. She waited too
long to pay off her credit card bills.
“As usual, I waited for the deadline
because later has always been cheaper,” said Chen. “I could have saved
about 100 yuan (US$16.31) for every
thousand dollars I spent if I had acted
sooner.”
But Chen is among many who believe
the yuan will rise again.
“Everything needs a rest,” Chen said.
1.4%
The yuan has lost about 1.4 percent
against the US dollar since January
14, when it hit a 20-year high.
bolder reform steps, such as moving
from daily to weekly or even monthly
settings of the reference rate and widening the band in which the currency
is allowed to trade against the dollar.
China currently allows the yuan to
trade between 1 percent on either side
of central bank’s daily reference rate.
Zhu with JPMorgan said he expects the
band to double in the next two or three
months, when the official rate and
trading rate converge and when capital
flow is balanced.
Resuming appreciation
Under control
Financial authorities and economists
are interpreting the yuan’s new trend
as a sign that everything is under
control.
The State Administration of Foreign
Exchange called it a “normal” reaction amid recent cash withdrawals
from emerging markets and said the
possibility for large and continuous
outflows of foreign capital is “relatively small.”
The foreign-exchange watchdog said
two-way volatility in the yuan is likely
to increase as the Chinese market
gains strength.
Economists attributed the depreciation to economic data pointing to
slower industrial activity, to concerns
about financial stability amid quick
expansion of trusts and to withdrawal
of foreign capital from emerging
markets after the US Federal Reserve
started paring back its monetary
stimulus.
The message Chinese officials want
to send is that the depreciation of
the yuan is orchestrated and under
control.
“We believe the recent yuan depreciation is supported by a shift in policy
stance,” said Zhu Haibin, JPMorgan’s
chief China economist. “In particular,
the central bank would like to revert
to a two-way volatility regime and to
mitigate the near-term pressure of
capital inflows.”
The yuan was one of the best
performing currencies in 2013, appreciating by 3 percent against the US
dollar — about 7 percent in terms of
the real effective exchange rate, or a
weighted average exchange rate with
major trading partners, according to
the investment bank.
The fast appreciation of the yuan in
Photo by Huang Yihuan/Shanghai Daily
real effective terms placed heavy pressure on exporters and changed market
sentiment from 2012, when the yuan
barely moved against the US dollar.
Because of fast appreciation and
relatively high interest rates, banks
in China purchased 2.78 trillion yuan
of foreign exchange in 2013, nearly 6
times more than in 2012.
Over the same period, China’s foreign-exchange reserves added another
US$500 billion to US$3.82 trillion.
Last November, the People’s Bank
of China said that there is “no longer
any benefit” from increasing the forex
reserves.
Financial risk
Continuous currency inflows could
damp the central bank’s efforts to
contain credit expansion and rebalance the economy. Excessive US dollar
assets are seen as adding to financial risk, and a strong yuan hurts
exporters.
By allowing a relatively sharp
depreciation, the central bank may be
testing new ground in its long-term
aim to turn the yuan into an international reserve currency.
“The central bank never really wants
too much yuan appreciation,” said Yao
Wei, an economist with Societe Generale. “What matters is how it manages
the currency.”
Yao said that to make a real difference, the central bank should take
“
The central
bank never
really wants
too much yuan
appreciation ...
What matters is
how it manages
the currency.
Yao Wei
Economist
Societe Generale
Most financial institutions are still
predicting that the yuan will resume a
stable appreciation this year.
The central bank signaled further
currency reforms in four documents it
issued in the past two weeks related to
the newly formed Shanghai free trade
zone.
They outlined operational details,
including cross-border yuan lending
and fully liberated interest rates for
foreign currencies.
Foreign interests are watching
closely.
European Central Bank executive
board member Yves Mersch said last
week that the currency may eventually become the lead reserve currency,
rivaling the greenback, if China is
efficient in reforming the economy and
especially the financial sector.
A poll of 200 institutional investors
conducted by State Street, the world’s
second-largest custodian bank, and
the Economist Intelligence Unit found
that 53 percent of respondents said
the yuan may become a major reserve
currency.
“We expect yuan depreciation to be
moderate and temporary,” JPMorgan’s
Zhu said. “The reluctance to see significant yuan depreciation is still deep
in the mind of Chinese policymakers,
as it may cause large capital outflows,
raise political objections from major
trading partners and also impede the
central bank’s efforts to promote the
international use of the yuan.”
He said that JPMorgan maintains its
expectation for 1 percent or 2 percent
appreciation of the yuan this year, supported by China’s 7.4 percent annual
economic growth, a stable current-account surplus at 2 percent and the low
likelihood of any full-blown financial
crisis.
Credit Agricole and Bank of America
Merrill Lynch continue to hold their
target of a rate of 6 yuan to the dollar
by the end of the year, while Australia
& New Zealand Bank said that the yuan
may end 2014 at 5.98.
COVER STORY B3
Containers are piled in the Yangshan Free Trade Port Area, which is part of the China (Shanghai) Pilot Free Trade Zone. — Zhang Suoqing
‘Work in progress’ may face pockets of resistance
FROM B1
Q: The establishment of the Shanghai
free trade zone is seen as a milestone
in China’s commitment to reform and
wider opening up to the world. But
there are different voices. The zone
generates both expectations and
skepticism. How do you view its role in
China’s economy?
A: I think it’s a work in progress. The
policy direction is very clear. It’s one
more way to open up trade, investment,
financial markets and the customs
system. Shanghai has always been at
the frontline of opening to trade and
investment. So the direction is clear, but
it takes time to get things going.
There is still some distance between
expectations and reality. This is to be
expected. It’s normal. This is a major
process of change. It takes time to
happen. You need a lot political energy.
There will be resistance, either from
sectors that resist foreign competition
or from administrations for bureaucratic reasons. So it will necessitate quite
a lot political push, as was done in the
past. But what matters is the strategy
and direction, the sense of where the
policy is going. Of course, this is to be
tested step-by-step. There are obviously
quite a number of operational implementations on the way.
Q: How do you view what’s being done
in the zone to date?
A: What has been done, for the
moment, affects finance, transport,
shipping, trade and legal work. These
are areas that China intends to push
beyond its commitments to the WTO. So
what China is really doing here is testing WTO-plus. There is an opening up
of the services market and also a huge
simplification in regulations. Of course,
there are also a few experiments in
financial services, with more freedom
for equity operations, for cross-border
currency flows and for yuan transactions. There are also tests in trade
facilitation, customs procedures and
customs clearance.
Although a positive step forward, I
believe that the negative list is still a
bit long-ish. I expect the list to shrink
with time. And the area where it still is
not very clear is in the sector of stateowned enterprises. Obviously, there is
an intention to clear the decks and have
a clearer division between the provision
of public services on the one side and
market-based production of services
or commodities on the other. This still
remains to be done. And in my view it
will be tough because shrinking the
SOE sector is always politically very
difficult.
Q: Many foreign investors are showing less enthusiasm than expected for
the free trade zone. Why do you think
that is?
A: So far, there has been more initiative from Chinese companies than from
foreign enterprises. It’s normal because
the Chinese are more familiar with the
system.
But it also shows there is still quite
a way to go in providing the necessary
certainty and confidence for the future.
In some areas, decisions that have been
taken are pretty clear, but when you
look at detailed regulations, they are
not. Until and unless the necessary
degree of certainty is available, I think
this imbalance will remain.
Q: How do you see China’s long-term
economy prospects?
A: I think the 10 percent growth rate
of the last decade is not sustainable in
the long term.
But we also have to understand that
7 percent growth today is much more
than 10 percent five years ago. It’s not
about percentage but about the volume
and the absolute number.
Although there are changes taking
place and although difficult issues
remain to be addressed in the financial
sector, in the environment, in regional
imbalance and in the social system, I
think the Chinese economy will remain
rationally manageable. But I expect the
growth rate will be less as the economy
grows bigger in size.
The way to sustain growth momentum, as in the past, will be based on
domestic reforms and in increased
competition.
Of course, this is a process that is not
painless. It necessitates political energy
not only from within China but also
from elsewhere abroad. In my view, the
key for the future lies in the quality of
the social system, including the environment, which we all know is a serious
problem here.
Q: What do you think will be the implications for WTO of trade talks such as
the Tans-Pacific Partnership and the
Trans-Atlantic Trade and Investment
Partnership?
A: Until they are concluded, nobody
knows what the impact of these trade
negotiations will be. If you look at the
past, bilateral, regional and multilateral
negotiations have gone hand-in-hand. In
recent decades, there has been convergence and synergy between bilateral
and multilateral market opening. So far,
so good.
It will depend on what’s in the final
agreements, which still seem to be very
elusive. The TPP talks have been going
on for five years. It’s a long and complex
process. And the TTIP is only at the
beginning of negotiations. So let’s see
what exists if and when these negotiations conclude. We are not there yet. It’s
too soon to make a judgment.
“
There will be
resistance,
either from
sectors that
resist foreign
competition
or from
administrations
for bureaucratic
reasons ... But
what matters is
the strategy and
direction, the
sense of where
the policy is
going.
B4-5 FINANCE
WINNER NO.4:
CHINA PACIFIC INSURANCE
WINNER NO.1: JIADING JISHIYU MICRO-CREDIT CO
Helping small businesses thrive
JIADING Jishiyu Micro-Credit Co
won third prize from the Shanghai government for devising a
system to become the personal
accountant for sole proprietors
taking out loans.
“Most of our customers run
businesses of their own,” company Chairman Song Mei told
Shanghai Daily. “They may be
owners of tea shops, fishmongers
or butchers. They like to keep
money in their drawers, not cash
registers. The bank notes normally were greasy and crumpled.
Our onsite inspectors now count
the money and create records for
them.”
The company was founded in
March last year by a group of
alumni from the China Europe
International Business School,
one of the leading MBA schools in
Shanghai.
“We tuned ourselves to our
customers,” Song said. “Not many
people want to do that for small
borrowers. It’s very time-consuming and risky, especially when you
don’t have the right information.”
Song and her university associates operate what is known as
“grassroots finance.” Small loans
from commercial banks typically
start at 20 million yuan (US$3.3
million). Jishiyu clients last year
borrowed, on average, 15,000
yuan.
“We are serving the real grassroots here,” she said. “We get to
know our customers personally.
Sometimes they are late with payments because they have an awful
lot of things to do running a solo
business. So our system has automatic text messages reminding
borrowers of payment dates three
days in advance. That has cut the
incidence of late payments.”
The Shanghai financial innovation award cited Jishiyu for its
efforts in assisting cash-strapped
small businesses and in advancing information management
systems.
Song said the tolerance for
bad loans among small credit
companies is around 10 percent.
However, Jishiyu has slashed that
ratio to under 3 percent.
“We take that 3 percent as our
operational cost, not risk,” she
said. “Anything beyond that level
is considered risk to us.”
The biggest challenge Song and
her peers is the lack of access to
the credit rating system run by
the People’s Bank of China, which
provides financial institutions
with personal credit history.
The system was opened to all
commercial banks in 2005 but
has yet to be extended to firms
doing small business or personal
loans.
Song said the central bank
began a trial project last year,
which reviewed the business
records of 10 selected small loan
companies, including hers. She is
hoping that is a sign that access
to credit histories will soon be
expanded, cutting down the time
it now takes to process a loan
application.
Nonetheless, Jishiyu has been
successful.
It plans to double its capital to
200 million yuan this year and
has secured a 50 million yuan
loan from the Shanghai Branch of
China Development Bank.
Thinking smarter
yields rewards
15k
Jishiyu clients last year borrowed, on average, 15,000
yuan. In comparison, small
loans from commercial
lenders typically start at 20
million yuan.
Hu Xiaocen
Shanghai equates innovation with progress
in its campaign to build itself into an
international financial center. So every
year, the city bestows awards honoring
innovation to financial institutions it deems
demonstrate the spirit of reform and
transformation.
3%
Jishiyu’s tolerance for bad
loans is under 3 percent.
The awards showcase firms that are
committed to improving the financial
environment and enhancing the competitive
edge of the burgeoning financial hub.
Shanghai Daily sat down with executives
from some of the most recent winners to
explore how their strategies benefit their
firms and the city.
‘Everyone pays’ in an eye-blink
who don’t have Internet access,
such as the elderly and people live
in remote regions. The platform
handled 13 million transactions
a month last year, totaling more
than 30 billion yuan (US$4.9
billion).
Zhu Guang, senior manager of
product innovation department
at UMS, told Shanghai Daily that
the company is working on other
innovative products and is hoping
to win more innovation prizes in
the future.
UMS recently partnered with
China CITIC Bank to provide
unsecured loans to its 2.7 million
merchant customers. Loan underwriting is based on a merchant’s
daily point-of-sale transactions.
Loan approvals are done in the
blink of an eye. The merchant
normally receives the money on
the same day the loan application
is filed. A loan of up to 500,000
yuan is available.
UMS said it has extended 2.3
billion yuan to over 3,600 merchant in the past three months
— growth it describes as “swift.”
CHINA Pacific Insurance Group took
top honors in the financial innovation
awards, cited as a pioneer in providing
coverage for damage resulting from
physical defects in buildings.
The Shanghai-based insurer is the
city’s second-biggest property insurer
and the third-biggest life insurer on
China’s mainland.
Shao Jian, vice general manager at
the firm’s Shanghai branch, said China
Pacific was the first to offer what is
called “inherent defects” insurance in
the mainland. The new policy is still
in a trial run and available only in
Shanghai.
The policy protects owners from
property damage caused by defective
design, materials or workmanship.
It also reduces the risk for developers who carry legal responsibility for
buildings up to 10 years after their
completion.
Shao said she and her colleagues
were motivated by several high-profile
incidents in Shanghai.
In 2010, fire destroyed a 28-story
apartment building in downtown Jingan District, killing at least 58 people
and injuring over 70. The cause of the
fire was traced to unlicensed welders
whose sparking ignited scaffolding
erected for repair work.
Six months earlier, a new 13story apartment building in suburban
Minhang District collapsed because
of shoddy construction. No one was
injured because the building hadn’t
been opened yet to residents.
Third-party supervisor
WINNER NO.2: CHINA UNIONPAY MERCHANT SERVICES
SHANGHAI-BASED China UnionPay Merchant Services (UMS), the
biggest operator of its kind for
bank card transactions in the
country, won an innovation prize
for its one-stop platform that
makes bill payments easier for
consumers.
UMS is a subsidiary of UnionPay, Chinese mainland’s only
interbank network operator.
The platform — called Quan
Min Fu, which means “everyone
pays” — allows consumers to pay
utility bills, credit card debts,
mobile phone top-ups and online
purchases with no extra charge.
There are similar service
providers in the market, such as
Alibaba Group’s Alipay platform.
However UMS has extended the
system’s access point beyond
computers and cellphones to
offline channels. It has more
than one million terminals
across the country, including
point-of-sale machines, automatic
teller machines and Quan Min Fu
self-service machines. It offers
the one-stop service to consumers
Insurer pares
risk of defects
in buildings
2.3b
UMS said that it has extended 2.3 billion yuan to
more than 3,600 merchant
in the past three months.
WINNER NO.3: STANDARD CHARTERED BANK
Pioneering expanded use of the yuan globally
CHINA views foreign banks as important players in transforming the
yuan into an international currency.
The Shanghai government honored
Standard Chartered for its efforts
in boosting use of the yuan among
multinational companies.
The British lender was the only
foreign bank so honored. It received
second prize last year for launching
a cross-border lending structure for
the yuan to encourage more companies to use the Chinese currency in
trade settlement.
“We know that liquidity is the
lifeblood of every business,” said
Loh Long Hsiang, general manager
of the bank’s Shanghai branch.
“So we have designed flexible
repayment schedules for yuandenominated cross-border loans,
giving our clients greater flexibility
in capital deployment from a global
perspective,” Loh said.
Loh said the bank plans more new
products along the same line, such
as multi-currency notional pooling
and regional yuan pooling facilities.
Notional pooling is a treasury
management tool used by multinationals to concentrate virtual cash
balances from subsidiaries to reflect
an aggregate account balance but
avoid physical inter-company money
transfers and loans.
A number of foreign banks on
China’s mainland started to provide
cross-border lending in yuan after
the People’s Bank of China last year
expanded pilot projects for crossborder yuan transactions in trade
and investment.
Standard Chartered was the first
foreign bank on the mainland to
assist a multinational company in
cross-border yuan lending. In late
2012, it obtained a loan quota of 3.3
billion yuan (US$541 million) from
the central bank for an American
company, allowing the client’s headquarters in China to lend surplus
yuan to overseas branches.
Since then, Standard Chartered
China has supported 19 companies
in yuan cross-border lending totaling 39 billion yuan.
The service was extended after the
central bank announced in late February that cross-border cash pooling
in yuan would no longer be limited
by quotas or administrative approvals. It was a bid to help businesses in
the Shanghai pilot free trade zone to
improve their capital management.
Following the latest relaxation of
the rules, Standard Chartered set
up a yuan-denominated, two-way
sweeping transaction for Baoxin
Auto Group, the biggest BMW dealer
on China’s mainland, to assist the
Hong Kong-listed company’s crossborder fund transfers and trade
settlement.
Other foreign banks have also
embraced the new measures and
launched similar sweeping services
for clients.
HSBC China said it has launched
a centralized yuan cross-border
transaction management solution
for Saint-Gobain’s subsidiary in the
Shanghai free trade zone. SaintGobain is a Paris-based designer and
manufacturer of building materials.
Citi China announced the launch
of a yuan cross-border pool for the
European pharmaceutical giant
Roche in the pilot zone.
19
Since late 2012, Standard
Chartered Bank has supported 19 companies in yuan
cross-border lending totaling
39 billion yuan.
“Under our policy, the insurer
becomes a third-party supervisor
that manages the risks along with the
developer during the entire construction process,” Shao said.
That gives the insurer the right to
advise the builder to halt the construction process if inspections reveal
defects. The policy also offers lower
costs for property developers.
In Shanghai, developers are required
to set aside 3 percent of the total
construction cost with the local housing authority for 10 years to cover any
future repairs.
The developer is required to replenish the reserves after payouts during
that period.
Under the China Pacific policy, they
need to set aside only 1.5 percent to
1.7 percent of the construction cost,
according to Shao.
“The policy is still on a three-year
trial,” she said. “We need more data
from damage claims to improve the
product. Our underwriters are taking
a prudent stance on this policy, which
covers the buyers for 10 years.”
Premium income from the trial
policy has reached 23 million yuan
(US$3.8 million) so far, and Shao said
the company sees even bigger potential, given that Shanghai builds 2,000
hectares of commercial and residential
buildings each year.
Risk is mitigated by having the new
policy co-insured by four companies.
China Pacific assumes 47 percent of
the premium as well as the claims.
B6 COMMENTARY
Hong Kong bottleneck:
Decoupling of growth and unemployment
Chris Leung
A holistic approach to
understanding unemployment
Chris Leung
Senior economist
DBS Bank
“
While
importing
“
labor can in
theory relieve
labor shortages,
it is not very
practical in Hong
Kong’s case.
High housing and
rental costs make
significant labor
imports too costly.
Hong Kong’s GDP growth used to be
a good predictor of the unemployment
rate but this is no longer the case. The
unemployment rate has consistently
stayed between 3.1 percent and 3.5
percent since July 2011 even though
GDP growth has been fluctuating.
The main reason why Hong Kong’s
unemployment rate has stayed low
while GDP growth has been weak is
that demand for Hong Kong’s labor has
come from both local demand and explosive demand derived from China’s
mainland.
To compare, Hong Kong’s labor
supply growth was rather stable and
predictable over the years, averaging
1.1 percent in the past 10 years. On the
other hand, “derived” labor demand
— for example, that coming from
neighboring parts of the mainland —
has grown exponentially.
To put this into perspective, the
number of mainland visitors coming
to Hong Kong in 2013 is 4.8 times to
size of that in 2003, when the Individual Visits Scheme was first introduced,
but total labor supply was only 1.1
times larger over the same period. In
the retail sector, retail sales volume
growth averaged 13.4 percent annually
over 2009-2012 while the sector’s labor
force growth averaged just 2.1 percent
annually over the same period (labor
force data for the retail sales sector
only available since 2008).
Derived labor demand impacts more
than the retail sector. Closer integration with the mainland has increased
demand for labor in almost all sectors,
the more obvious ones being retail, catering, accommodation and property.
In fact, any corporation that is doing
business with the mainland would
have more derived labor demand.
Recently, even the demand for educational and medical services has risen
due to integration between Hong Kong
and nearby regions. In the past, when
Hong Kong was less integrated with the
mainland, labor demand was a simpler
function of local demand.
Besides the impact from rapid
growth in derived demand for labor,
supply-side factors can also explain
Hong Kong’s consistently low unemployment rate. Many sectors face
chronic labor shortages regardless of
the state of the economy.
According to a recent report by Manpower Group, some 57 percent of Hong
Kong employers are having trouble
finding the right staff, the most since
2008. Demographic factors, such as
an aging population, could be one of
the reasons. The percentage of male
employees aged below 50 have now
decreased to 64 percent from 77 percent back in 2005, and this may have
caused labor shortages in some sectors
requiring intensive manual work.
Fundamental changes in the labor
demand-supply equation explain why
low unemployment rates have been
consistently seen in the past two and a
half years. As Hong Kong integration
with the mainland grows, the unemployment rate will likely remain
at low levels for a prolonged period.
Nevertheless, one must be careful not
to equate this with a healthy labor
market.
The behavior of unemployment in
retail and real estate sectors
To further explore this peculiar
phenomenon, we focus on two sectors:
retail and real estate.
In the retail sector, the unemployment rate behaves differently
compared with previous cycles. The
uptick of unemployment coincided
with the drop in retail sales growth in
the past, but the unemployment rate
practically stayed flat throughout the
second half of 2012 even when retail
sales growth plummeted.
This is likely attributable to the
increasing influence of tourists on
the retail sector. Although retail sales
plunged in the second half of 2012,
tourist numbers did not — mainland
tourist arrivals grew 25.5 percent in
the second half of 2012 versus 22.7
percent in the first half of 2012.
If many people stop shopping altogether (e.g., in the midst of a financial
crisis or epidemic), it would lead to
layoffs. However, if shoppers remain
active but are simply spending less,
retail employees are still required to
serve these customers. This is especially true now as the influx of tourists
generate high demands on retail
employment.
In addition, changing patterns of
tourist consumption can also explain
the relative stability of retail sector
employment. For instance, mainland
tourists may visit high-end stores
less amid an economic slowdown but
spend more time shopping for personal products or clothing, increasing
staffing needs in those stores.
In the real estate sector, the unemployment rate runs against intuition
even more. The sector’s unemployment
rate stood at just 2.5 percent in the
fourth quarter of 2012, even though
residential flat transactions have fallen
by more than 40 percent year on year
to 4,000 per month. In comparison,
when transactions averaged 9,000 per
month or more between the second
quarter of 2009 and 2012, the sector’s
unemployment rate was 3.2 percent.
The present low rate of unemployment is explainable: large agencies
have decided to freeze headcount
rather than lay off workers; discouraged agents went to find jobs in other
industries; potential entrants into the
industry may have been deterred by
the poor prospects.
Another reason is that real estate
agents only account for about onethird of all real estate employees in
Hong Kong.
Real estate developers have been
busily launching projects recently, and
these companies demand labor. The
situation in the real estate sector is a
good example of how industry-specific
characteristics and microeconomic
factors sometimes affect unemployment more than broad macroeconomic
indicators like GDP growth.
For now, employment
surveys offer more insights
By now it should be clear that there
are limits to conventional macroeconomics when analyzing Hong Kong’s
labor market. Microeconomic factors
are crucial to understanding hiring
decisions and job seekers’ aspirations,
particularly at the industry level.
Thus, it is worth paying more attention to employment surveys. Over the
period the third quarter of 2011 and
the first quarter of 2014, when the unemployment rate stayed flat, export/
import trade and wholesale was the
only sector that experienced notable
deterioration in the employment outlook (mostly over the first quarter of
2013 and the first quarter of 2014).
Employers in other sectors consistently expressed intentions to increase
staffing levels despite apparent swings
in Hong Kong’s growth rate over that
period. The results of these surveys
are consistent with the prognosis that
there is, indeed, a labor supply issue.
In the absence of labor shortages, one
would have expected hiring sentiment to fluctuate with the economic
situation.
Implications for
employers and policymakers
The government has started exploring long-term solutions to labor supply
shortage, including the possibility of
importing foreign labor and increasing
female participation in the labor force.
While importing labor can in theory
relieve labor shortages, it is not very
practical in Hong Kong’s case. High
housing and rental costs make significant labor imports too costly.
Firstly, it is unlikely that employers
would be willing to provide housing
subsidies to imported labor. Without
subsidies, however, foreign workers,
especially those in low-skilled sectors,
would have no incentive to work in
Hong Kong. Secondly, even if a significant inflow of workers were somehow
made possible, it would ramp up housing demand and property prices much
further.
This means releasing local labor
supply is the only viable solution to the
labor shortage problem.
One way to do this is by increasing
female labor force participation. This
is complicated by the need for supporting infrastructure such as child care
facilities. Meanwhile, to slow down
population aging, the government
needs to encourage childbirth, which
again involves detailed long-term
planning. These solutions are viable
but visible results would not be seen
for years.
For the time being, the widening
gap between labor demand and supply
will increase wage pressures. This is
already happening in the construction
sector, where the wages of steel fixers
are even higher than white-collar
professionals. Wages for menial jobs
like dishwashing have also jumped
in recent years. To minimize wage
inflation and its impact on profits and
growth, employers will have to find
ways to raise productivity.
COMMENTARY B7
A preview of People’s Congress:
Major targets and reform measures
Zhu Haibin
C
hina’s two-week-long National
People’s Congress will begin
on Wednesday. Along with
the NPC meeting, the Chinese
People’s Political Consultative Conference (CPPCC) begins today.
During the NPC meeting, the congress will review and vote on the
following reports:
Zhu Haibin
Chief China economist
JPMorgan Chase & Co
“
Judging from
the near term
impact, some
reforms, including
the removal of
government
administrative
controls and
opening private
sector investment
could generate
new sources of
growth.
• The government work report (the
Politburo reviewed and discussed
this report on February 24);
• The report on the implementation of the 2013 plan for national
economic and social developments
and on the draft 2014 plan for
national economic and social
developments;
• The report on the implementation
of the central and local budgets for
2013 and on the draft central and
local budgets for 2014;
• The work report of the NPC Standing Committee;
• The work report of the Supreme
People’s Court;
• The work report of the Supreme
People’s Procuratorate.
The two main issues to watch for
at the NPC meetings are: the major
economic targets for 2014, and reform
measures to be taken in 2014.
• Economic targets
The Central Economic and Working
Conference held in December is a tonesetting economic meeting attended
by top Chinese leaders. During that
meeting top leaders vowed to seek
steady economic progress through
more reforms. It reiterated adoption of
“proactive” fiscal policy and “prudent”
monetary policy in 2014. Overall, we
expect the government will stick to
economic targets similar to those of
2013.
• GDP growth:
“about 7.5%”
Although the government has toned
down the importance of GDP growth,
it remains the most important economic indicator to watch out. The new
leaders are more willing to tolerate
slower growth for better quality. In our
view, there are good reasons to lower
the GDP growth target to 7 percent in
2014, because:
1. It is consistent with the 12th FiveYear Plan growth target (7 percent
in 2011-2015) and longer-term
target of doubling GDP between
2010 and 2020;
2. It will provide more room for
structural reform, which will support long-term growth but could
drag near-term growth.
However, based on recent observations, it is likely that the government
will keep the growth target at 7.5 percent (possibly adding “about”) in 2014.
For instance, local governments have
recently held People’s Congress. While
most of them lowered 2014 growth
targets (to below actual growth in
2013), the minimum GDP growth target
at local levels is 7.5 percent (for Beijing
and Shanghai). In addition, Premier
Li Keqiang has mentioned in various
cases that 7.2 percent is the growth
floor to ensure that unemployment
rate will stay at reasonable levels.
• CPI inflation: 3.5%
The government has reiterated the
importance of an upper bound (inflation) and a lower bound (employment)
in its economic work. In 2013, CPI
inflation averaged 2.6 percent, significantly lower than the 3.5 percent
target. We expect inflation to drift up
to 3.0 percent in 2014, still comfortably lower than the government target
(expected to remain unchanged at 3.5
percent). This means that inflation is
unlikely to become a priority policy
consideration. On the positive side,
the low inflation pressure provides
a favorable environment to proceed
on resource pricing reform and other
structural reform.
• M2 growth: 13%
M2 growth printed at 13.6 percent in
2013, exceeding the government target
of 13 percent. We expect M2 growth
will slow down to 12.8 percent in 2014,
and the target will stay unchanged.
Our interpretation of the “prudent”
monetary policy in 2014 is that policy
rates and reserve requirement ratios
(RRR) will stay unchanged, but credit
slowing that started in the second half
of 2013 will continue in 2014. Although
the People’s Bank of China no longer
announces a loan growth target, loan
quota continued to be used in its
window guidance operation. We expect
new loan creation at 9.8 trillion yuan
(US$1.6 trillion) in 2014 (vs. 8.9 trillion
yuan in 2013, or 13.8 percent vs. 14.1
percent in growth term), and total social financing at 18.5 trillion yuan (vs.
17.3 trillion in 2013, or 16.2 percent vs.
17.8 percent in growth term).
• Fiscal budget
In 2013, the government set the
fiscal deficit target at 1.2 trillion yuan.
The actual fiscal deficit came out to be
1.06 trillion yuan, about 1.86 percent
of GDP.
We expect the 2014 fiscal deficit to
stay unchanged at 1.2 trillion yuan, or
about 1.9 percent of GDP. The bias is
tilted toward upside if considering that
the quota for local government bond is
likely to be lifted (350 billion yuan in
2013).
However, it is more meaningful to
also include “fiscal deficit” at local
levels (i.e. local government debt) when
assessing the fiscal policy stance. If
adding fiscal deficit at both central
and local government levels, the socalled augmented fiscal deficit could
be as high as 8.8 percent of GDP in
2012 and 8.1 percent in 2013 (JPMorgan estimates). In 2014, we expect the
government will contain the pace of
further increase in local government
debt, bringing down the augmented
fiscal deficit to 6.5 percent of GDP
(no target will be announced). In that
sense, fiscal policy has a tightening
bias in 2014.
• Structural reforms
The Third Plenary Session of the
18th Communist Party of China Central Committee outlined an ambitious
reform agenda, with most tasks scheduled to be completed by 2020. As the
starting year of the new grand reform,
what will happen in 2014 is closely
watched out. We think reform is
serious, yet the key features of macro
policy for 2014 will evolve around the
balance between structural reforms
and near-term growth stabilization.
The sequencing in economic reforms
will affect the growth outlook in 2014.
Judging from the near term impact,
some reforms, including the removal
of government administrative controls
and opening private sector investment
(e.g. in the service sector, financial
services, telecommunications), could
generate new sources of growth.
However, credit slowing, tightening
on local government debt/expenditure,
production adjustments to correct for
overcapacity in a few key manufacturing sectors, among others, could drag
on near-term growth momentum (as
have been reflected in recent data). The
tradeoff between reform and growth
implies that those reforms with neutral or positive near-term impact could
progress faster, including administrative reform, fiscal reform, financial
reform, resource pricing reform and
easing the one-child policy. By contrast, for other challenging tasks (such
as rising debt and overcapacity) it is
less likely to make significant progress
in 2014, and the near-term objective
will focus more on containing the tail
risk rather than problem-solving.
The Central Economic Working Conference held last December confirms
the above understanding. The top leaders listed six major tasks in 2014:
1. Ensuring stable supply and quality
of agricultural products and food
safety;
2. Speeding up industrial structural
adjustment and resolving overcapacity problems;
3. Preventing and containing risks
from local government debt;
4. Pushing for coordinative regional
developments;
5. Raising average living standard
and improving social welfare;
6. Further opening up the economy
and pushing ahead with free trade
zone negotiations.
These tasks have two main purposes:
to foster new sources of growth (task
2, 4, 6) and to maintain stability and
contain downside risks (task 1, 2, 3, 5).
In addition to economic issues, the
NPC will also touch on other issues,
such as anti-corruption, environmental
protection, improving the legal system,
B8 COMMENTARY
Policy to boost offshore fundraising
“
An explicit
guarantee from
an onshore
company with
stronger credit
gives investors
more assurance
that they would
recover their
principal if the
offshore bond
issuer defaults.
“
Chasing hot
valuations is
understandable,
but investors
should be wary of
what looks like an
attempt to create
something from
nothing.
Hu Kai, Cindy Yang and
Gary Lau
Moody’s Investors Service
C
hina’s State Administration
of Foreign Exchange (SAFE) is
seeking comments on proposed changes to the country’s
cross-border guarantee policies that, if
implemented, would help companies
incorporated in China raise funds in
the offshore markets and support their
overseas expansion.
One important change included
in the February 13 proposal on
SAFE’s website would allow onshore
companies to register cross-border
payment guarantees with SAFE rather
than seeking the foreign exchange
regulator’s approval. This proposal is
another step in the Chinese government’s efforts to relax the country’s
capital controls.
It is difficult for Chinese corporates
to obtain cross-border guarantee approval from SAFE. Among the offshore
bonds issued by Chinese corporates,
only a small number used cross-border
guarantees from onshore parents,
including high profile state-owned enterprises (SOEs) State Grid Corporation
of China, China Petrochemical Corporation and Baosteel Group Corporation.
These SOEs obtained SAFE’s approval
to support offshore bonds raised for
strategic overseas acquisitions or
offshore funding needs.
As a result, Chinese corporates do
not have many options for supporting
their offshore debt, which is sometimes issued by a thinly capitalized
offshore subsidiary. Such offshore
subsidiaries usually have much weaker
credit quality than their onshore
parents, meaning they need to pay a
higher credit premium or may even
be unable to obtain offshore funding to pursue overseas development
opportunities.
An explicit guarantee from an
onshore company with stronger credit
gives investors more assurance that
they would recover their principal if
the offshore bond issuer defaults. And
that in turn should enable the offshore
subsidiary to obtain lower funding
costs and capture acquisition opportunities in a more timely manner.
For some strategically important
SOEs that have received cross-border
guarantee approval in the past, the
proposed policy change should enable
them to make overseas acquisition
decisions in a more flexible way.
The existing approval process for
cross-border guarantees, which are
used to support offshore funding for
acquisitions, is time consuming and
cumbersome.
Another proposed change would
replace preapproved annual quotas
with quantitative limits for financial
institutions. Though the proposed
quantitative limits would not deviate materially from the maximum
quota a bank could acquire based on
current calculation standard, the current actual quota approved could be
smaller than theoretical maximum due
to regulators’ intention to incorporate
policy directions. In this sense, we
expect the change could give Chinese
banks more flexibility to provide
cross-border guarantees to meet their
clients’ needs.
Striking a balance
With that being said, whether
Chinese banks would fully explore
this flexibility hinges on some other
considerations. For instance, banks
have to take capital charges and make
loss provisions to off-balance sheet
items, including financial guarantees.
So ultimately they need to strike a
balance between factors such as client
relationship, premium income and
regulatory requirements in the guarantee business.
We have seen an increasing number
of China-incorporated companies,
mostly large SOEs and property companies, using keepwell agreements and
other credit support mechanisms such
as equity interest purchase undertakings to enhance the credit quality of
offshore bonds issued and/or guaranteed by their offshore subsidiaries.
One of the key considerations in
assessing a keepwell agreeement structure is the strategic importance of
the offshore subsidiary to its onshore
parent. For Chinese corporates without meaningful offshore operations,
simply setting up an offshore borrowing vehicle and using a keepwell
agreement would make it difficult to
establish the strategic linkage and get
the rating of the offshore entity and/
or offshore bond closer to the onshore
parent’s rating.
In addition, owing to the legal
uncertainty of keepwell agreements,
the credit quality of bonds supported
by these agreements is weaker than
that of bonds with explicit guarantees
from the bond issuer’s parent company. This weakness is reflected in the
lower ratings of offshore bonds using
the keepwell agreement structure
compared to their onshore support
provider. The difference in credit quality and ratings would likely result in
higher funding costs for bonds using
the keepwell agreement structure than
those guaranteed or issued directly by
the ultimate support provider.
It is noteworthy that, under SAFE’s
proposed changes, the proceeds that
Chinese corporates receive from the
guaranteed bonds cannot be transferred to the onshore parent for equity
or debt investments, unless approved
by SAFE. Thus, the removal of the
cross-border guarantee approval
requirement would not immediately
benefit corporates, such as property
developers, that raise offshore debt
primarily to support their onshore
operations.
SAFE’s proposed policy changes
follow a separate new policy it released
on January 24, which loosens certain
restrictions on intercompany loans
between Chinese corporates’ onshore
and offshore entities, and simplifies
the documentation requirements and
removes certain limitations on the
amount of dividends that a foreign
invested company can repatriate to its
foreign shareholders. These changes
also reflect the government’s efforts to
further relax capital controls.
Weibo IPO plan stretches financial logic
Robyn Mak
SINA Weibo’s planned initial public
offering stretches financial logic. Listing a US$500 million stake in China’s
version of Twitter looks like a response
to sky-high tech valuations — most
recently Facebook’s US$19 billion
acquisition of messaging service
WhatsApp.
But investors can already buy shares
in parent Sina, whose value is mostly
made up of Weibo already. They should
be skeptical about the idea that two
plus two is five.
With over 61 million active users
a day, Weibo is one of China’s most
hyped social networks. Yet owner Sina
Corp, which also operates web portals,
has only lately started to try and monetize it. Revenue from the microblog
grew 34 percent in the quarter ending December 31 to US$71.4 million,
compared with the previous three
months. A chunk of that came from a
tie-up with e-commerce giant Alibaba,
which owns 18 percent of the microblog, with the option to increase to 30
percent.
Sina is now seizing on red-hot tech
valuations to plan a listing of a minority stake in Weibo. Indeed, since
Alibaba bought its stake in April
2013, valuing the microblog at US$3.3
billion, Weibo’s prospects may have
increased dramatically.
Assume Weibo’s revenue continues
to grow at about a third, quarter on
quarter, for the next year. It could potentially make around US$620 million
in revenues for 2014. Apply an earnings margin of 30 percent, comparable
to gaming group Tencent and search
engine Baidu, and the same valuation
multiple investors give to parent Sina,
and Weibo could be worth over US$5.5
billion — an increase of 67 percent in
less than a year. Sina’s own share price
over that time has increased by just a
third.
The question is why investors would
give a higher value to Weibo after
a partial spin-off. Sina’s 70 percent
share of a theoretically listed Weibo is
already the lion’s share of its market
capitalization, which increased just
4 percent on February 24 to US$5.1
billion. And Sina’s structure isn’t
complex — its only other business is a
shrinking web portal division, so it’s
unlikely investors are missing something important.
Chasing hot valuations is understandable, but investors should be
wary of what looks like an attempt to
create something from nothing.
The author is a Reuters Breakingviews
columnist.

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