Certification system protectionist: EU envoy

Certification system protectionist: EU envoy

Industry experts refute charge, say label also used for domestic goods
A top envoy of the European Union on Wednesday labeled as \”protectionist\” a compulsory certification system that is required before goods enter the Chinese market.
Speaking at a press conference in the capital, the EU\’s Ambassador to China, Serge Abou said the EU would like to see more products by small and medium-sized enterprises in Europe entering the Chinese market, but that the China Compulsory Certification (CCC) mark was \”discouraging\” them from doing so.
Abou said companies that want to export products to China face several years\’ delay before they obtain the certification.
\”This system is more and more complex and it is the main obstacle to imports in China and I don\’t hesitate to qualify it as protectionist,\” Abou said.
\”We are more and more worried because the mood seems to be not to simplify these procedures which are very cumbersome but to make them even more complex.\”
The CCC mark is a compulsory safety standard for many products, ranging from toys and machinery to electrical equipment, that are sold in the Chinese market. It came into effect on May 1, 2002.
On its part, Chinese industry experts refuted the criticism, saying the CCC applied to both imported and domestically-made products, and urged the EU to open up its market further to Chinese enterprises.
Industries in Europe have experienced problems with the CCC system and have been suffering from serious financial and administrative costs, according to Orgalime, a Brussels-based European federation representing the interests of the European engineering industry.
As the largest industrial branch in the EU, engineering accounts for some 27 percent of the EU\’s manufactured output and a third of manufactured exports.

Zhang Tong, an EU studies expert at the Beijing-based China University of Political Science and Law, said the CCC was not protectionist.
Since it applied to both domestically manufactured and imported goods, the CCC was in accordance with WTO requirements, Zhang said.
\”The quality of EU products is generally higher than that of China. So the CCC is actually restrictive for domestic products,\” Zhang said. \”All countries have the right to set such standards to better protect consumers.\”
She said Abou was using the CCC as \”an excuse\”. In fact, Zhang added, the EU has stricter regulations for imported products, such as toys from China.
Guan Chengyuan, a former Chinese ambassador to the 27-nation bloc, also said the EU itself should be more open to China. Even though the EU was China\’s biggest trade partner, Guan said Chinese firms found it \”hard to adapt\” to its labor and welfare policies.
\”We hope the EU market can be more open and create a better investment environment for China,\” Guan said.
Bilateral trade between China and EU touched $360 billion in 2009. Yet, only 1.3 percent of the EU\’s investments globally were in China, and only 0.5 percent of foreign investments the 27-nation bloc received was from China, Abou said.
Abou said a team led by European Commission President Jose Manuel Barroso would visit Beijing on April 29.
The EU\’s High Representative for Foreign Affairs Catherine Ashton and European Trade Commissioner Karel de Gucht would accompany Barroso to China, he said.
Abou said he hoped a EU-China Energy Center, located in Beijing\’s Tsinghua University, would be launched during the visit. Barroso is also expected to meet Premier Wen Jiabao when in China next month.

Chinas fastrack to the high speed era

China\’s fastrack to the high speed era

News that China is developing high speed trains with a maximum speed up to 500km/h may arouse the interests of frequent rail travelers in the country.

A high speed train is seen at Zhengzhou Railway Station, Henan Province. Picturen taken on February 6. [Xinhua]
If you have ever taken a train during the so-called \”Spring Festival travel rush\”, you will know clearly how important rail transportation is to the country and its people: Hundreds of millions of homesick students, migrant workers and those living outside their hometowns flock to railway stations around the country to board crowded trains!
Only in 1993, the average speed of China\’s commercial train service was just 48.1km/h. Since 1997, railway authorities have launched a series of \”speed up\” campaigns aiming at improving the service speed and capacity of existing railway lines and also set up an ambitious plan to develop a national high-speed rail grid.
Now having the world\’s longest high speed rail network with over 3,300 km of service routes, China has been dazzling the world with its glorious achievements in this field.
Statistics from the Ministry of Railway shows that now some 10,000 km of rail tracks are capable of carrying trains traveling at speeds of at least 200 km/h while the country\’s total railway length is about 86,000 km.
Not only specially-built rails are needed for a high speed rail network, modern trains manufactured with cutting-edge technology are also indispensible as it is almost impossible for a traditional train to travel at a speed up to 200 km/h and above.
Professor Li Heping with China Academy of Railway Sciences confirmed the report about the development of 500km/h new high speed train with the China Daily Website.
He said the prototype train is being manufactured now and they hope it could make a trail run at a speed of over 400km/h before the end of this year. However, the professor also emphasized that the new car is just for scientific research rather than going into mass production.
Currently, there are four types of high speed trains in service in China, namely the CRH1, CRH2, CRH3 and CRH5, of which CRH2 and CRH3 could reach a maximum speed of 350km/h.
China introduced up-to-date foreign technology and manufactured the above four types of train by itself.
Apart from the already in service trains and the 500km/h one, two high speed train manufactories in the country, China CNR Corporation Limited and China South Locomotive &Rolling Stock Corporation Limited, are both developing a new train with the maximum speed of up to 380km/h for the 1,318km-long on building Beijing-Shanghai High Speed Railway.
\”Both the two manufacturers will launch prototype trains within this year and their maximum test speed must exceed 420km/h so as to leave an adequate safety margin,\” said Professor Huang Qiang also from China Academy of Railway Sciences.
He revealed that with a service life of 20 years, the new trains will have better aerodynamic performance and each train set has larger power.
Saving time but you have to pay more
Taking high speed trains, you could shorten travel time significantly but have to pay a higher ticket price.
For instance, travelling from Beijing to Zhengzhou of Henan Province, price for a hard seat is 94 yuan ($13.8) in an ordinary train and the price for a second class seat (similar as hard seat) as high as 213 yuan ($31.2) in a high speed train, which is 40 minutes quicker than the fastest ordinary train.
\”The price for a high speed train is too high. I may take it if I have something urgent but I also have to take the ticket price into consideration,\” said Shangguan Zhoudong, a 28-year-old man who has travelled between the two cities many times.
But in some routes, taking a high speed train is much more time-saving. For example, you could cut your travelling time from 6 hours to 2.5 hours in the Zhengzhou-Xi\’an High Speed Railway while paying for a 3 times higher ticket price.
Many people have complained the price for a high speed train is sometimes even higher than that of discount airline ticket.
Responding to the public concern, Liu Zhijun, the railway minister, said the price of high speed trains in China is the lowest in the world and taking high speed train is the most economical way of travelling.
In fact, building high speed railway is an expensive project.
\”The cost for building ordinary railway is 30 million yuan ($4.4 million) per kilometer while the number for high speed rail is 120-150 million yuan ($17.6 million – $22 million),\” professor Li told the China Daily Website.
\”Besides, the enterprises that operate railway transportation are not non-profit organizations and have to take the cost into consideration. It is unrealistic to require the price of high speed train tickets the same as that of ordinary trains,\” he added.
Professor Huang Qiang suggests the authorities offer discounts for railway tickets during slack business seasons.
\”The original price of an airline ticket is quite high, but they offer discount, it\’s quite clever. People may make comparison between the price of high speed trains and the discount ticket price of flights, many of which depart at night and are unwelcome among passengers,\” Huang said.
Future of High Speed Rail in China
According to the new railway network expansion program unveiled in 2008, China will have 120,000-kilometer-long railway by 2020, of which 16,000 kilometers are dedicated passenger lines where trains could reach a speed of 200km/h and above.
\”By 2012, about 12,000-13,000 kilometers long dedicated passenger lines will be put into operation and I believe our transportation capacity could increase dramatically. It will not be so hard to get a railway ticket then as it is now,\” Professor Li explained.
Professor Huang has an optimistic expectation for China\’s passenger railway transportation in 2020. He believes since the transportation capacity could satisfy the huge demand then, the current pre-selling system of railway tickets could even be canceled.
\”In 2020, taking a train will be like taking a bus. You take the train directly you come to the station,\” said Huang.
China is not only endeavoring to perfect its domestic rail transportation grid but also has an ambitious plan to cooperate with other countries to connect the Eurasia with high speed railway network.
In early March, Wang Mengshu, a senior consultant on China\’s domestic high-speed rail project, told Hong Kong-based newspaper South China Morning Post that China plans to extend its domestic high speed rails to Central, East and Southeast Asia and is in negotiations with relevant countries.
If the great plan could come true, the newly-built network will connect the current high-speed rail network in Europe, which means passengers will take only two days traveling from London to Beijing, according to British Newspaper the Daily Mail.
Professor Li Heping confirmed such a plan to China Daily Website but emphasized it is just a plan and its realization relies on the cooperation and coordination with many neighboring countries.
\”Technically speaking, the plan is totally feasible. (With such a network), many (goods) could be transported via the high speed rail rather then relying on ocean shipping,\” said Li.
When asked about the problem of some countries\’ using different rail gauges, the professor answered, \”We certainly hope they could change their rail gauge so our trains will not need to change the wheel while crossing the border.\”
South China Morning Post\’s report said the construction of this huge rail network could be completed in 2025 at the earliest, if agreements could be reached among all relevant countries.

MOC to support steel mills in iron ore talks

MOC to support steel mills in iron ore talks

China\’s Ministry of Commerce (MOC) will take moves to support Chinese steel mills in the iron ore talk with foreign producers, including adopting necessary trade measures, the China Securities Journal reported.
MOC spokesman Yao Jian made the remarks during Tuesday\’s regular press conference, saying the ministry will work with the Ministry of Industry and Information Technology to address the situation. But he did not reveal the specific measures.

Yao said according to the international practice of the commodity trade, the major buyer should have a say in the pricing mechanism. China, as the largest consumer of iron ore, is entitled to have its interests reflected in the price talks.
The price rise demanded by the major ore suppliers, namely BHP Billiton, Rio Tinto and Vale, has soared from 20-30 percent to 80-90 percent since the negotiation began, forcing Chinese steelmakers to appeal for government support.
The price hike of iron ore puts Chinese steelmakers in a difficult situation. Ma Honglie, former chairman of a steel mill in Gansu province, said the profit of the steel industry will be squeezed this year although the price of steel will increase by a large margin.

Lenders offer new stash for cash

Lenders offer new stash for cash

Affluent Chinese have discovered a safer place than under the mattress to keep their valuables – bank vaults.
Bank safe-deposit services have grown ever more popular as individuals accumulate wealth and seek safe storage.

Bank safe-deposit services have grown ever more popular as individuals accumulate wealth and seek safe storage. [CFP]
Businessman Yang Liming believes banks are a safer place than home to keep valuables like jewelry, gold bullion, bank-deposit books, wealth-management contracts and property-ownership certificates.
\”Bank vaults are underground and guarded,\” said Yang.
\”And banks are a lot tougher to break into than an ordinary home,\” he said.
Safe-deposit boxes are usually arranged in underground vaults, where gaining access requires customers to undergo a fingerprint check, verify their identity and provide a password to gain access to their box.
In addition, two keys are required to open each box, with one held by the customer and the other by the bank.
Rental fees vary according to box size and range from several hundred to several thousand yuan a year.
The minimum box size is small enough to store an apple, but just right for a small jewelry collection.
There are also larger options to house bigger items like paintings, antiques or other works of art.
The most popular box has about the same area of an A4 piece of paper, which is a good match for important documents. The annual rental fee for this size of box is 600 yuan ($87.9).
\”All of the boxes of this size have been rented out, so right now all we have available are smaller or larger ones,\” said a lobby manager at Beijing\’s Yayuncun branch of the Bank of Communications.
\”Anyway, not many people own antiques, so most use deposit boxes to keep important documents like property ownership certificates and bank deposit books,\” said Zhang.

Most banks in first-tier cities like Beijing and Shanghai, as well as provincial capitals in second-tier cities rent out safe-deposit boxes, but normally only in large branch offices.
Banks began offering deposit boxes several years ago, but at that time few customers expressed any real interest.
To promote their use among wealthier clients, some banks – including China Construction Bank – used to provide free safe-deposit services to VIP customers.
Starting in 2008, as these services grew in popularity, banks switched tactics and started charging VIP customers, but at reduced rates.
\”Our customers are usually rich businessmen in their 40s or 50s, so as personal wealth has grown, these individuals are willing to pay a small sum to keep their valuables safe,\” said Qu Jian, personal banking manager of a branch of Industrial and Commercial Bank of China in Shenyang, Liaoning province.

Shanghais new air terminal starts operation

Shanghai\’s new air terminal starts operation

Passengers walk through the waiting hall of Terminal 2 at Hongqiao Int\’l Airport in Shanghai on March 16, 2010. [CFP] 
Two airport terminals and two runways at Shanghai Hongqiao Airport will work together after the official opening of Terminal 2 on March 16, which increased the airport\”s capacity by 60 percent, the Oriental Morning Post reported.

The new terminal sent out its first passenger flight in early morning on March 16, according to schedule, the report said.
The airport organized the transfer on March 15, handling 65 flights involving 7,000 arriving passengers. After the flights landed on the new runway, they were parked in remote areas and passengers were taken to the old terminal by shuttle buses to get their luggage.
The new terminal has a total floor area of over 360,000 square meters, four times the size of the existing building.
According to a statement by the Shanghai Airport Authority, during the upcoming Shanghai World Expo, Shanghai Hongqiao Airport would be able to handle 45 takeoffs and landings per hour.

City lenders on fundraising trail

City lenders on fundraising trail

 
 
A view of the central business district in Beijing. The banking regulator has urged banks to cap their lending activities within the stipulated norms. [Zhang Kaixin / China Foto Press]

Regulator asks banks to better manage their loan, credit risks
City banks may introduce more strategic investors or raise funds from the capital markets through initial public offerings to better manage their loan concentration and credit risks, sources familiar with the matter said on Monday.
The moves follow a recent directive by the China Banking Regulatory Commission on the need for more stringent risk management by lenders, the sources said.
Bank of Chongqing is the only lender that may launch an IPO on the mainland stock markets this year, as the Agricultural Bank of China does not have a \’fixed timetable\’ yet, another source familiar with the matter told China Daily.
The sources said the regulator has asked banks to stick to the existing rule of capping lending to a single client at 10 percent of the total loan balance of the lender, at 15 percent for related parties and 50 percent for the top 10 clients.
\”Commercial banks improved their risk management considerably last year, but there are still some who did not meet the requirements of reducing loan concentration and credit risks,\” the regulator said in a notice to lenders.
Lenders have been asked to furnish their plans in this regard by the end of March so that all of them adhere to the norms by the end of the year, the sources said. They should not lend further funds to related parties before that.
The move could have a big impact on city banks and rural credit cooperatives, which are comparatively small and have potential loan concentration risks. It may not impact listed banks much as all of them adhere to the norms already, said analysts She Minhua from Haitong Securities and Zhang Jixiu from Bohai Securities.
City banks are smaller lenders whose activities are mostly city or region specific and many have total assets of less than 20 billion yuan. There are around 100 city banks in the country like Bank of Shanghai.
\”Many of the disbursals made by city banks are for local government projects and hence carry higher risks,\” Liu Jun, an analyst with Changjiang Securities, said.
The amount of loans to related parties accounts for 4.09 percent of the total loans for 12 surveyed city banks, while loans to their top 10 clients account for 41.42 percent, compared to the 0.45 percent and 26.65 percent of the 12 nationwide joint venture commercial banks, according to a study by consulting firm Unbank.info.
Industry sources said for some smaller city banks, the figures could be even higher.
\”The move could speed up city banks\’ fund raising activities, including inviting strategic investors, merger and acquisition activities and IPOs,\” said Fu Lichun, an analyst with Southwest Securities.
Over 40 city banks have announced IPO plans. These include Bank of Shanghai, Bank of Jiujiang, Bank of Wenzhou and Bank of Chongqing.
\”Of the four city banks, Bank of Chongqing is likely to be the only one to launch an IPO this year,\” the sources said.

Land price record broken twice in day

Land price record broken twice in day

A woman walks in a community in Chaoyang district developed by Sino-Ocean Land. The group on Monday successfully bid for a piece of land, paying 4.08 billion yuan. It was among the highest in the city.    [Wang Jing / China Daily] 

The land price record for residential housing in Beijing was broken twice on Monday.
After 64 bidding rounds, a plot of residential land in Daxing district in South Beijing was sold for 5.25 billion yuan ($769 million), setting a new sales record for Beijing\’s housing market.
A real estate company, belonging to the Citic Group bought the 185,861 sq m plot of land for 17,000 yuan per sq m.
Earlier that day, a plot of residential land located at Dawangjingcun village in Chaoyang district was sold for 4.08 billion yuan to another real-estate developer, Sino-Ocean, according to information from the Beijing Land Coordination and Reserve Center.
The average price of land in the sale was 27,000 yuan per sq m, the highest in history.
Besides the land price record, the average property price in Beijing\’s real estate market continued to rise during the first two months of this year, attracting 20.49 billion yuan investment in total, a 71 percent increase compared with the same period last year.
According to statistics from the Beijing Municipal Statistics Bureau released on Monday, property prices rose 18.1 percent in February compared to January.
During the same period, Beijing started to build about 1.57 million sq m of new commercial buildings, 85 percent more than last year.
Within the Fourth Ring Road, the average house price reached 31,220 yuan per sq m, while outside the Sixth Ring Road the average price exceeded 10,000 yuan per sq m for the first time.
\”The real estate market in Beijing will probably continue to roar in the Year of the Tiger, with house prices continuing to climb in a stable way,\” said Xuchao, director of the investment consultant department of Centaline Property in Beijing.
\”House prices are a controversial and confusing issue in China. It even became a major topic during the past Two Sessions,\” said Xu.
\”However, house prices in Beijing will not fall in the long term,\” said Xu. \”The districts under development like Tongzhou, Daxing and Fangshan will see the main push in growth.
\”The policy that allows foreigners who work in Beijing for one year to buy a house will bring even more investment money into the market,\” said Xu.

Consumer complaints hit new high in 2009

Consumer complaints hit new high in 2009

More than 223,000 Chinese consumers filed complaints on consumer electronics last year, almost double the record in 2008, according to a survey released by www.315ts.net under the China Electronic Chamber of Commerce (CECC).
\”Four out of five products that topped the complaints list last year were consumer electronics,\” Liu Zhuohui, a senior official of the General Administration of Quality Supervision, Inspection and Quarantine, said over the weekend.
She said her administration accepted a total of 19,303 quality complaints last year, of which 24 percent were about consumer

electronics.
The largest number of complaints concerned mobile phones, microcomputers, air conditioners and televisions, she said.
Liu stressed that consumers urgently need a professional body to identify the reasons for so many faults with electronic products, in case sellers seek to avoid their responsibility for the defects.
\”The high-speed upgrade of consumer electronics increases the instability of products,\” she said.
 
 
He Xiaolong, the chief of the quality department under the Ministry of Industry and Information Technology, said after-sales service needs to be integrated into chain stores in China.
\”We have modern, consumer electronic products, but we do not have modern after-sales services,\” he said.
Wang Fushan, an official with the CECC, said the soaring number of complaints on www.315ts.net is due to an increased number of visitors to the site, which doubled from 2008 to 2009.
\”Consumers are concerned with how sellers deal with their complaints, rather than with the number of complaints,\” he said.
Around 94 percent of consumers had received feedback after they registered their complaints on www.315ts.net, according to the 2009 Blue Book on After-sales Service of Consumer Electronics released by the CECC on March 12.
The site listed the top 10 consumer complaints about electronics last year. In one case, a consumer surnamed Zheng complained about buying a product from an established brand and then needing to spend money on having it repaired.
\”I pay for a television with a good reputation for quality, but I could not afford the money to repair it,\” Zheng said.
\”I was shocked to have received a bill for nearly 3,000 yuan after having it repaired for a second time,\” she said, adding it was expensive.

None tainted milk powder found in market

None tainted milk powder found in market

Almost all of the 25,100 tonnes of defective milk powder seized in the 2008 toxic baby food probe had been incinerated and buried, and none had been found to have re-entered the market, China\’s National Food Safety Rectification Office said Monday.
Only a small amount of tainted milk powder was kept for specific purposes, such as for evidence in judicial procedures, an official with the office said.
The milk powder destroyed was sealed by local authorities or quality supervision and inspection administrative organs in 2008, who suspected it was contaminated or likely to be tainted with melamine, the office said.
After a nationwide crackdown against the \”toxic milk powder\” in 2008,some melamine-tainted dairy products had resurfaced in several Chinese provinces in 2009.

The office had urged local authorities to launch another special investigation from February 1 to 10 to ascertain the precise amount of tainted milk powder and to seal it immediately upon discovery.
Three executives of Shanghai Panda Dairy Company were jailed for terms of three to five years earlier this month for their roles in the production and sale of melamine-tainted dairy products last year.
In December last year, police detained the general manager and two workers at Shaanxi Jinqiao Dairy Co. Ltd. in connection with tainted milk powder.
The 2008 milk scandal, in which milk laced with melamine led to the deaths of at least six babies and sickened 300,000 others, and resulted in the collapse of the Sanlu dairy group.
China\’s dairy industry saw a recovery in 2009, when production increased by 12.9 percent, reaching about 19.35 million tonnes.

Sky-high salary sparks debate

Sky-high salary sparks debate

The sky-high salary of Frank Newman, chairman of Shenzhen Development Bank (SDB) sparked a debate, International Finance News reported on Monday.
Newman\’s pre-tax salary went from 15.98 million yuan in 2008 to 17.41 million yuan ($2.55 million) in 2009, an increase of 8.9 percent, according to SDB\’s annual report disclosed Friday. However, SDB\’s capital adequacy ratio and core capital adequacy ratio were 8.88 percent and 5.52 percent respectively, lower than the required standard of 10 percent and 7 percent.

The China Banking Regulatory Commission issued a guideline on top executives\’ salary adjustment in commercial banks, which took effective from March 1, banning payment increases for executives in commercial banks when risk control cost indicators did not reach the standard.
Newman said he was not ready to comment, as the bank would look into the details of the guidelines and discuss the issue in a general meeting of shareholders, but he said the final decision would be made according to the guidelines.
The annual report also revealed that 24 senior executives\’ salaries amounted to as much as 48.98 million yuan, with 11 executives receiving more than 1 million in 2009.