Hong Kong shares slip as ICBC drags, China climbs to highest since mid-2012 (Reuters) ............................................................................................................................................ 4

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Business & Economics


Hong Kong shares slip as ICBC drags, China clim
bs to highest since mid




xChina averts local government defaults (The Financial Times)



China’s banks are too big to manage (The Financial Times)



China anger at EU telecoms demands (The Financial Times)




China Tests a Small Smart Electric Grid (mashable.com)



Facebook looks more like WeChat every day (pandodaily.com)


Top China Developer Vanke Looking Offshore for Growth (THE WSJ CHINA REAL



China Investors: We Don’t Need No Edukation (THE WSJ CHINA REAL TIME



Nigeria to China: we want to climb up the value chain (The FT Beyond BRICs Blog)



China: first cross
border rmb loans (The FT Beyond BRICs Blog)



Shanghai Authorities Confirm Apple Ope
ning R&D Center in China This Summer



What is the Difference Between Chinese Netizens and US Net Users?



Qihoo Double Blow as iOS Apps Banned by Apple, China
Warns of Anti
Practices (techinasia.com)



Chinese People Are Sending Fewer Text Messages Than They Used To



Social media landscape for luxury brands in China. (res



SCDMA Devices Selling Well In China (chinasourcingnews.com)


Monster Sold ChinaHR.com for $30M, Pulling back from China (technode.com)



Mobile Already Plateau
ing? (technode.com)



Gome Exiting Hong Kong Retail Market By March 2013 (chinatechnews.com)



Politics & Law


China appoints new Tibet governor, hardline policie
s to remain (Reuters)




Chinese Courts Turn a Blind Eye to Abuse (The New York Times)



Chinese officials urged not to execute domestic violence victim (The Guardian)



Outcry over Sichuan woman's death sentence for killing abusive husband (South
China Morning Post)



Xi says China will not waive its legitimate international rights (South China
Morning Post)




Survey of China’s 24 most corrupt officials in 2012 (danwei.com)



Service Companies In China. How To Get Paid. (chinalawblog.com)



Why Do Chinese Billionaires Keep Ending Up

in Prison? (theatlantic.com)



Here’s A Petition To The White House To Block China’s Great Firewall Architects
And Scholars (beijingcream.com)



China’s Ministry of Culture: We’re NOT Consideri
ng Lifting the Game Console Ban





Smog Thick Enough to Cancel Flights Hits Beijing (The Associated Press)



The biggest book craze in China right now? Ja
mes Joyce’s Finnegans Wake (AFP)




Canned air for sale in China, as blanket of smog returns (The Sydney Morning



Celine Dion to perform on CCTV’s Spring Festival Gala (cfen
si blog)






Differences Between Chinese Men and ‘Laowai’ Foreign Men (chinasmack.com)


ng the China Air: Technology and Protectionism (chinahearsay.com)



How I am Surviving the Great Smog
oloypse of 2013 (chinacartimes.com)



China's Pollution: The Birth Defect Angle (theatlantic



China Is Polluted. We Get It Already (beijingcream.com)


Chinese Web Erupts With Widespread Calls for Change as Beijing Endures
Airpocalypse 2.0 (tealeafnation.com)



Talk, A Ming Dynasty
Era Art Form, Returns From the Brink

And Goes
International (tealeafnation.com)



Seven cities in China listed among the ten most polluted cities in the world



Business & Economics


Hong Kong shares slip as ICBC drags, China climbs to highest since mid

Tue Jan 29, 2013

By Clement Tan


HONG KONG, Jan 29 (Reuters)

Hong Kong shares came off the previous day's 20
month high on Tuesday, as
weakness in heavyweight Industrial and Commercial Bank of China (ICBC), following a $1 billion stake sale

Goldman Sachs, offset strength in its smaller rivals.

The Hang Seng Index inched down 0.1 percent to 23,655.2 on Tuesday, slipping from its highest closing levels
since May 31, 2011. The China Enterprises Index of the top Chinese listings in Hong Kong

fell 0.2 percent.

In the mainland though, benchmark indexes rose to their highest since mid
2012. The CSI300 of the top Shanghai
and Shenzhen listings climbed 0.9 percent. The Shanghai Composite Index gained 0.5 percent.

Volume in Shanghai was above its

day moving average for the first time in three sessions, but Hong Kong
turnover was still about 3 percent below average.

"The Chinese banking sector is actually holding up quite well, but the Goldman sale is triggering some profit taking
and rotation
from the larger banks into some laggard energy names today," said Jackson Wong, Tanrich
Securities' vice
president for equity sales.

After the market closed on Monday, Goldman Sachs offered shares of ICBC in Hong Kong at HK$5.77, a 3 percent
discount to t
he day's near 2
year close at HK$5.95.

On Tuesday, the shares slid 2.2 percent to HK$5.82 which pointed to a healthy demand for the stake sale, given
that the stock dropped less than 3 percent.

Most of the Chinese banking sector reversed early losses as
investors chased gains particularly in mid
sized banks
in the mainland on hopes that regulators may relax loan
deposit ratio limits as interest rates are gradually

China Minsheng Bank added another 2 percent to a record closing high in Hon
g Kong and 2.6 percent to a
successive five
year closing high in Shanghai on Tuesday, following its market leading gains on Monday.

Minsheng Bank's Shanghai shares have surged 88 percent from a Sept. 5 nadir, while its Hong Kong listing have
bounced 98 pe
rcent over the same time period.

A China Business News report said the China Banking Regulatory Commission Chairman Shang Fulin told a recent
internal meeting that extensive research would be carried out on current rules on loan
deposit ratios and the
methodology would be enhanced.

The report did not specify how the regulator would reform the ratio, which many bankers say should be raised, or
if it would simply be replaced with a new measurement tool.

"In the current mood, the market will probably tak
e a relaxation as positive because this will allow banks to keep
injecting credit into the economy," Credit Suisse analysts said in a note on Tuesday.

The note, which identified Minsheng as a likely beneficiary of any relaxation of the current 75 percent
deposit limit, however said credit quality will re
emerge as a concern if growth starts to slow in the
mainland in a few months.


Investors chased gains for Chinese brokerages in afternoon trade, anticipating more for
eign interest in the
share market as the country's top securities regulator visited Taiwan. Reports in official newspapers on Tuesday
said foreign investors have accounted for most of the surge from December lows.

After markets closed, Guo Shuqing, the
chairman of the China Securities Regulatory Commission said the country
will give investment quotas for Taiwanese seeking to put money into its financial markets under the Renminbi
Qualified Foreign Institutional Investor (RQFII) programme.

In Shanghai, s
hares of China's second
largest listed brokerage Haitong Securities surged 7.3 percent to its
highest close since November 2010, while its larger rival Citic Securities jumped 4.3 percent.

Energy counters were also strong after China's National Energy Adm
inistration said investment in the country's
energy sector is expected to total 13.5 trillion yuan during the 12th five
year development plan (2011

The agency also added that the government will encourage direct financing of energy companies

and also loosen
the threshold for investment.

Chinese shale gas producer Kunlun Energy climbed 2.3 percent, while the country's oil giants also saw gains.
CNOOC Ltd gained 1.3 percent, also helped by rising oil prices.


xChina averts local governm
ent defaults (The Financial Times)

By Simon Rabinovitch in Beijing


Chinese banks have rolled over at least three
quarters of all loans to local governments that were du
e to mature
by the end of 2012, an indication of the immense challenge facing China in working down its debt load.

Local governments borrowed heavily from banks to fuel China’s stimulus programme during the global financial
crisis and are now struggling t
o generate the revenue to pay them back, a shortfall that could cast a shadow over
Chinese economic growth.

Banks extended at least Rmb3tn ($482bn)

and perhaps more

of the roughly Rmb4tn in loans plus interest that
local governments were to have paid
them by the end of last year, according to Financial Times calculations based
on official data.

The calculations are imprecise because the Chinese bank regulator only announces figures for total outstanding
loans to local governments, and does not publish

details about interest payments or refinancing arrangements.

Nevertheless, three separate economists said the numbers confirmed that Chinese banks had implemented
rollovers on a massive scale to stave off defaults.

“That’s a correct observation and expl
anation,” said Stanley Li, a banking analyst with Mirae Asset Securities.
“Based on the payback period for the infrastructure projects [started by local governments], it will take more than
10 years to pay these loans back.”

Huang Yiping, an economist wit
h Barclays, agreed: “Rollovers were really the only option available to the
government and to the banks. What can you do when three
year bank loans mature while the highway is still
being built?”

Ken Peng with BNP Paribas said: “Rollovers have been the co
mmon practice and this is an indication of that.”

Concerns about China’s indebtedness have faded in recent months as the economy has rebounded, but many
analysts expect growth to slow again later this year, a potential trigger for renewed worries.

Fulin, China’s top bank regulator, said total outstanding loans to local governments were Rmb9.2tn at the
end of 2012, according to reports in local media on Tuesday. At the end of 2010 such loans had reached

In the intervening two years, 41 per

cent of all local government debts had been scheduled to mature, according
to the national audit office. Moreover, Beijing had effectively blocked all new lending to local governments.

The implication of a stable outstanding loan volume is that the vast
majority of local government loans that were
to come due over the past two years have simply been extended. Accounting for interest payments of 6 per cent
a year, local governments have paid back a maximum of about Rmb1tn.

Stabilising the level of local g
overnment borrowing from banks has been touted by the Chinese government as an
achievement. “The government debt level is under control, and is safe,” Wen Jiabao, the outgoing premier, said
at the national parliament last year.

He added at the time that m
ost of the existing debt was backed by “high
quality assets with stable cash flows and
promising returns”, and that the money would be gradually paid back.

With banks all but refusing to lend to local governments, cities and provinces have turned in incre
asing numbers
to non
bank financial institutions, especially trust companies, and to the bond market to raise new debt.

“As the regulators have gotten more careful, they have been able to shift the risk to other sources of financing
such as trusts and bon
ds,” Mr Peng said. “The risk has not gone away. It’s just been spread.”

Official public debt in China is extremely low, at less than 20 per cent of gross domestic product. But Mr Huang
said Beijing might eventually have to pick up the tab for the local go
vernments’ debt

about 25 per cent of GDP

since it had directed them to spend the money in the first place.

“The ultimate responsibility will rest with the central government,” he said.

China’s banks are too big to manage (The Financial Times)

By Yuk
on Huang

January 29, 2013


A radical action would be to break up the big four into three regional bank
s, writes Yukon Huang

It is easier to make money than sense out of China’s banks. The four big state
owned commercial lenders make
huge profits, but many who see vulnerabilities in China’s economy think these banks are the problem when they
reflect distor
tions elsewhere. China’s banks are in fact too secure

and their performance could be improved by
breaking up the “too big to manage” entities.

Many critics cite inflexible interest rates, that are deemed too low relative to inflation, as the issue. Othe
rs point
to government interventions encouraging risks such as a property bubble. Still others remind us the banks are
sitting on a mountain of deposits that feed into temptations to misuse captive funds given lax governance

But China’s intere
st rates are high in real terms compared with other major economies. Its capital markets lack
the depth for interest rates to be shaped by market forces and the dominance of the big four banks reduces the
benefits of having more flexible rates. The emergen
ce of a property bubble has more to do with capital controls
that discourage investors from moving their savings abroad, thus encouraging speculation in domestic property.
And these huge deposits are a consequence of an economy with limited investment opti

Further concern has been caused by the emergence of wealth management products and shadow banking
facilities that allow for higher returns but at the cost of introducing riskier financial instruments. In fact, these
initiatives are to be welcomed. Th
ey provide more diversified options for savers and are shaking up a system that
has relied on just channelling funds to state entities, leaving unmet the needs of private enterprises.

Some borrowers may not meet the right lending criteria and there will b
e defaults, and probably a mini
crisis or
two. But these are the costs of learning in a regimented system. Greater transparency, along with an appropriate
regulatory, framework will need to emerge but trying to regulate such activities prematurely could st
ifle the
learning process.

One is hard pressed to come up with indicators that would reveal an imminent banking crisis in China. After all,
the big four banks pay high dividends; their non
performing loan ratios are low (even if flawed); their control ove
an immense volume of deposits would be the envy of other banking systems; their lending for mortgages is not
highly leveraged; and, since so much of their activity is geared to state entities , the risks are ultimately about the
creditworthiness of the s

So what, then, is the problem with China’s banks?

Governance is the issue in a state
dominated activity that provides the glue for much of China’s economy. The
incentives for prudent risk

taking and adherence to commercial objectives are weak.

e challenge is to introduce more competition in a system that will continue to be dominated by the state and
where vested interests are strong. Given this reality, there are nevertheless actions that could help to improve
performance. One would be liberali
sing entry of foreign banks. This would spur competition and innovation and,
contrary to what is believed in China, strengthen the performance of state
owned banks.

A more radical action would be to break up the big four into three regional banks each as
a powerful means to
foster competition and improve governance. This has been a process that has worked well before when China split
its national airline into numerous regional entities, which then resulted in a manageable number of more efficient

These split
up banks would be headquartered in various provinces rather than in Beijing and thus less influenced
by politically driven mandates. They would not be restricted to operating only in their originating regions but could
expand elsewhere. They

would, however, need to become more commercially oriented to survive. In this process,
some would be motivated to seek external partners and this would provide support for further, much

The writer is senior associate at the Carnegi
e Endowment and a former World Bank country director for China

China anger at EU telecoms demands (The Financial Times)

By Joshua Chaffin in Brussels

January 29, 2013


Europe’s top trade official has demanded a bigger share of the Chinese market in telecoms network equipment in
an increasingly heated dispute that risks escalating into a full
blown trade war.

Chinese diplomats privately complained about the EU’s demands

this week with at least one EU capital,
expressing frustration at what they believed were unreasonable

and possibly illegal

demands, officials and
diplomats said.

They claimed that Karel De Gucht, the trade commissioner, requested that EU suppliers b
e given a 30 per cent
share of China’s telecoms market in return for dropping a highly contentious EU investigation into alleged
subsidies to Chinese companies.

Mr Gucht also insisted that the Chinese companies, Huawei Technologies and ZTE Corp, raise the

price of their
exports by 29 per cent as part of the agreement, these people said.

The row is expected to come to a head on Friday when top Chinese meet Mr De Gucht in Brussels. “The Chinese
clearly, as you can understand, are not going to go along with
this,” said a European diplomat.

Mr De Gucht declined to comment on Beijing’s concerns. A senior EU official acknowledged that the commissioner
had outlined his views with the Chinese in December, but suggested Beijing had either mistaken or
d the exchange.

“The summary of the discussions put forward by the Chinese authorities is not accurate,” the senior official said,
“but we are not commenting on the content because we are in a negotiating process.”

A spokesman for the Chinese mission to
the EU in Brussels said: “We hope that through consultation and
negotiation that we could reach an agreement settling this issue without going to a trade war.”

The case centres on Brussels’ contention that Beijing has funnelled illegal export subsidies to

Huawei and ZTE

particularly in the form of export credits

in order to fuel their growth in foreign markets.

In May, the commission told member states at a closed
door meeting that it had gathered “solid evidence” that
China had given illegal subsidie
s to the companies, allowing them to sell their equipment at prices below their
European competitors. Since then, the two governments have been locked in a high
stakes showdown.

Mr De Gucht, who has sought to crack down on Chinese subsidies, has ratcheted

up the tension by repeatedly
threatening to open a formal probe, which could result in tariffs against the Chinese companies.

The EU is currently carrying out its biggest ever anti
dumping investigation into Chinese solar panel exports, and
is expected t
o make a formal decision about whether to impose temporary duties by the end of May.

The telecoms equipment case is even more inflammatory because of the lucrative and strategic nature of the
industry, which stands to benefit as nations upgrade to systems

that can support a new generation of phones and
digital devices.

It is also unique in that it is not based on a formal complaint from a company or industry but by the commission
itself. Mr De Gucht has argued that such “ex officio” cases are necessary be
cause European companies have
become too fearful of retaliation by Beijing to follow the EU’s typical trade defence procedures.

Huawei and ZTE have repeatedly denied receiving improper subsidies.


China Tests a Small Smart Electric Grid (mashable.c

Phil Muncaster for MIT Technology Review


China has begun testing smart
grid technology that could eventually be deployed nationwide to make the delivery
of electricity more reliable and effic
ient. It might also serve as a way to deliver high
speed Internet, TV, and
telephony to the farthest reaches of the country.

The State Grid Corporation of China (SGCC) is running the smart
grid project using passive optical networking
(PON) technology

a h
bandwidth data wiring that can be run inside electric power cables without interference.
Around 86,000 premises in China have so far been connected to the grid; if the project goes nationwide, it would
cost around $2 billion to deploy.

Smart grids use

computer networking to let utilities monitor everything from electricity use in customers’ homes
to the performance of generators at power stations in real time. The concept has gained much attention in the
United States but has been slow to catch on. Thi
s is partly because regional utilities have different ideas about how
to best connect the last mile of the smart grid to users’ homes, says Rajit Gadh, a professor in UCLA’s School of
Engineering and Applied Sciences.

"We have about 3,000 utilities in the

United States compared to two main utilities in China," Gadh says. "In our
infrastructure, there is a mix of technologies that has been deployed for communications and that ranges from
broadband to wireless."

China’s nascent smart grid could help spur de
velopment of the underlying technology. “This is the largest utility
company in the world, covering most of China, so it could potentially have a huge influence on the opportunities
for equipment and component vendors,” says Julie Kunstler, author of a rep
ort, The Merger of China’s Smart Grid
and PON

A Potential Perfect Storm, published recently by analyst firm Ovum. “The SGCC has a lot of money."

The SGCC is certainly spending big on smart
grid technologies, announcing plans in 2011 to throw $100 billion
related projects. It has 286 million customers and plans to achieve 100% smart
meter penetration by the end of
2015, according to Ovum.

Aside from local players like Huawei, ZTE and FiberHome, U.S. companies like Broadcom, Qualcomm Atheros and
that manufacture media access controller (MAC) chips for PON systems could benefit from the venture,
according to Kunstler.

The question is whether the project will go nationwide. The SGCC has been looking at LTE and other
communications alternatives that

are cheaper than fiber for the data communications side of the effort. The use
of fiber in smart grids requires networking technology to be redesigned to meet the SGCC’s strict redundancy
requirements, adapted to interface with other parts of the power gr
id, and modified for use outdoors.

Ovum’s Kunstler describes the use of fiber as “unusual” in smart
grid rollouts, which normally employ Power Line
Communication (PLC) or some form of wireless communications, and notes that the larger bandwidth it offers
simply not necessary in most scenarios. This would seem to point to the possibility of SGCC’s plan to deliver
Internet using the same technology, she says. It could apply for a service provider license, or potentially lease to
an incumbent like China Mo
bile, which currently lacks significant fixed line infrastructure, in a bid to share costs.

Figures published in July 2012 by the China Internet Network Information Centre put the total number of Internet
users in the country at 538 million with more than


388 million

on mobile rather than fixed broadband. So
there is a huge opportunity for SGCC to improve both Internet penetration (beyond the current 40%) and the
quality of Internet services to citizens by offering fixed line fiber to its users.

entire project could also serve as a test case

showing utilities in the U.S. and elsewhere whether such a
costly, large
scale project is achievable, and perhaps pointing to a novel solution to nationwide super
broadband coverage.

“Utilities touch eve
ry home, so why not take it a step further and say, ‘If I already have a customer service
relationship with you, let’s take it to the next level and become your communications service provider,’ ” says

The main barriers in the U.S., however, are

still cost
based rather than technological. Utility EPB is using fiber for
its smart
grid network in Chattanooga, Tenn., but nothing on the scale of a potential nationwide SGCC rollout.
And utilities already have fiber cabling running alongside electrical

power cables

but only in high

voltage areas, so there are major expenses associate with adding in fiber for residential and business
subscribers, especially to underground power cabling, says Kunstler.

Some academics have also voiced skeptici
sm that the approach could work in the United States. Michael
Caramanis, a professor in Boston University’s College of Engineering, says the synergy between fiber and smart
grids is debatable. “It is not clear that the PON communications tech is a directio
n that we should mandate and
subsidize in the U.S.,” he says.

Clive Longbottom, founder of analyst firm Quocirca, goes further, arguing that America’s free market economy
may not be the right climate to foster such a radical, large
scale plan. “This is wh
ere [China’s] pseudo
centrally controlled system has its strengths, against the entrenched capitalist system we have here where the
concerned parties tend to see ownership as being power, rather than capability,” he argues.

UCLA’s Gadh is more

optimistic, however. Despite the different market conditions in the U.S., he believes utilities
there may benefit from observing the SGCC pilot

although it would be down to each individual company to
decide whether to follow suit. “I am sure there will be

research and trial and error, and there will be lessons
learned from the project in China,” he says. “Based on lessons learned, American utilities would be able to
determine if the technology is suitable for them.”

Facebook looks more like WeChat every
day (pandodaily.com)


ON JANUARY 29, 2013


If you weren’t paying close attention you might not have noticed, but this is definitely happening: Facebook is
g more like China’s WeChat with every passing day.

Yesterday, Facebook quietly updated its iOS and Android apps to let users send audio messages of up to 60
seconds in length from smartphones. The update comes a couple of weeks after the social network ad
ded the
voice feature to its Messenger app, which

thanks to its emoticons (added in August), its photo
sharing, and its
free video calls (added for iPhone users on January 16)

is starting to look like an imitation of WeChat, and other
popular mobile ch
at apps from Asia, including KakaoTalk (South Korea), LINE (Japan), and Nimbuzz (India).

Back in June, too, Facebook temporarily “tested” a friend
finding feature that was remarkably similar to what
WeChat offers. In December, it rolled out a version of i
ts Android Messenger app that doesn’t require users to
have a Facebook account, which helps position the company even more as a communications tool, much like its
Asian counterparts, which don’t require anything beyond a phone number or an email to sign up

WeChat and company all started with free SMS and audio messaging, and have since added video messages,
sharing, timelines, and gaming platforms. Emoticons, too, are hugely important to these apps. Asian users
love emoticons and “stickers” so much
that these apps, LINE especially, have been able to charge for them.

Facebook is no doubt paying close attention to these apps, which have captured huge chunks of the mobile social
media mindshare, possibly at Facebook’s expense. Tencent’s WeChat, for ins
tance, now claims more than 300
million users after just two years, and it is cutting into the popularity of China’s nearest Facebook equivalent, Sina
Weibo. (RenRen, arguably, is more like Facebook in cosmetic terms, but Weibo has the Facebook
like reach
social graph). KakaoTalk (70 million users), LINE (70 million users) and Nimbuzz (100 million users) are
occupying much of the rest of Asia, and all have designs on the fast
growing Southeast Asian markets

The Philippines, Thailand, Vietna
m, Malaysia

which so far have no strong local player in mobile chat. Facebook
is interested in those markets too. (Check out its newly renovated office in Singapore.)

And don’t forget WhatsApp, which has tens of millions of users (although it has never
disclosed the actual
number), and North America
focused Kik, which claims 30 million users. The combined might of these apps now
tops 500 million users, sneaking up on Facebook’s 600 million global mobile users.

Part of what this boils down to is that Fac
ebook is realizing the handicaps of being a social network designed in the
desktop era. Zuckerberg, after all, got started on TheFacebook way back in 2004. The mobile era has different
demands, not only in terms of screen real estate, but also in terms of
monetization. The display ads that Facebook
has so far relied on aren’t going to play so well for mobile, which is why it said in its pre
IPO SEC filing: “We do
not currently directly generate any meaningful revenue from the use of Facebook mobile products
, and our ability
to do so successfully is unproven.”

WeChat and its Asian competitors, however, have figured out a workable monetization strategy for mobile.
KakaoTalk, for instance, has a “Plus Friend” feature, which allows users to add brands as “frien
ds.” The brands,
who pay Kakao for the service, can then deliver tailored messages and deals direct to their loyal fans. This is the
same approach that Silicon Valley’s Just.me, which last week launched in beta, is taking. No need for banners or
display un
its there.

KakaoTalk, meanwhile, also has a gaming platform, which allows users to play games from within the app. Early
indications are that it is doing super well

in its first three months, the platform registered 80 million downloads,
at a rate of 3.
58 games per subscriber. Those are all games that are being downloaded direct from the messaging
app, circumventing the App Store and, presumably, sending a healthy sum of revenue
share into Kakao’s pockets.
And in China, WeChat has hosted ad campaigns fro
m major brands, including Starbucks, Cadillac, and Nike.

If it wasn’t clear before, it’s downright obvious now: Asia is leading the way on innovation for mobile chat apps.
Facebook is a follower. Still, with 1 billion users, being a follower might ultimat
ely be enough. There’s still a chance
that Facebook, if it moves fast and executes well, could take over the world for mobile just as it did for social
networks in the desktop era.

Except, that is, in the world’s largest Internet market: China. WeChat has

that all but sewn up.

Top China Developer Vanke Looking Offshore for Growth (THE WSJ CHINA REAL

January 29, 2013


biggest property developer may be getting a bit too big for China.

China Vanke Co Ltd, the nation’s largest developer by market value, Thursday said it had teamed up with New
World Development Co. to buy a residential site in Hong Kong for 3.4 billion Hon
g Kong dollars ($436 million) in
its first development venture beyond the mainland. It wants to build small
sized apartments on the site in Hong
Kong’s New Territories.

That winning bid followed close on the heels of the company’s announcement of a plan t
o convert its China
B shares into Hong Kong
listed H shares, helping to raise market expectations that Vanke would boost its
presence offshore as it continues to grow at home.

The share conversion could eventually enhance Vanke’s global recognition

and let the company tap a bigger pool
of investors for future capital raising efforts, said Vanke’s board secretary Tan Huajie, speaking at a press
conference last week.

“Accessing international capital markets is a necessity for a firm which aspires to
become a multinational,” said Mr

And there are other reasons for the recent moves offshore, as many mainland companies and others consider
Hong Kong.

“Through our expansion efforts, we hope to raise Vanke’s management standards, improve our knowledg
e of the
industry and search for more global partners,” said Yu Liang, Vanke’s president, speaking at the same press

That appears to be underway. Officials disclosed they have already set up a team in the U.S., and they looking for
partners th

While the company may not plunge into the offshore waters head first, it is certainly looking for more
opportunities outside of mainland China in the residential property sector, particularly as more Chinese investors
have an appetite for an offshore

home, analysts said.

do Chinese are looking for investment opportunities in offshore property

so why not cater to them?

So far, Vanke’s focus on building smaller homes for owner
occupiers has helped its bottom line, even during a
year go
vernment property
tightening campaign that was aimed at curbing speculation. It has operations in
60 cities around the country, with sales reaching 141.2 billion yuan ($22.7 billion) in 2012, up 16.2% from 2011.

But putting all its eggs in the domestic ho
using basket has its risks, industry players say. They note that Beijing’s
policy makers could clamp down on the market more heavily if they believe that speculative activity is heating up
once again.

Vanke also has only a limited presence in commercial p
roperty development and management, and that means
it lacks a steady stream of income from office or retail rents.

But analysts said there are some potential pitfalls that Vanke needs to avoid as it steps offshore.

“Firstly, Vanke shouldn’t just replicat
e its entire business model abroad. Every place is different,” said Andrew
Kam, a valuation director at Savills Shanghai.

“Property development is a very localized business as the market dynamics and structures can be very different.
For Vanke, making acq
uisitions will be more effective and efficient,” said Mr. Kam. “They could find suitable
overseas partners, acquire local sales expertise and professionals, for a start.”

So far, that has been Vanke’s strategy. In May, well before it joined forces with Ne
w World, Vanke acquired Winsor
Properties, a Hong Kong
listed property manager that had years of experience in the commercial property
segment of the Hong Kong property market.

And it is hardly the first to make the plunge as even some of its smaller comp
etitors have already stepped into
offshore markets. In September, Zhengzhou
based developer Xinyuan Real Estate bought a site in the New York
borough of Brooklyn for $54.2 million. Nasdaq
traded Xinyuan plans to build a 216
unit condominium there, and
it t
oo noted real estate demand from China in the New York market.

based Country Garden last month (DSK: December) invested in a piece of mixed
use land in an
industrial zone in southern Malaysia. It plans to build offices, apartments and a shopping

mall on the site.

It is also not the first to shift its B share listing to Hong Kong. China International Marine Containers blazed that
trail last year when it moved its Hong Kong
dollar denominated B shares to the Hong Kong exchange.

Vanke said it plan
s to convert its 1.3 billion Shenzhen
listed Class B shares

valued around HK$16.4 billion prior
to the announcement

into Hong Kong
listed stock by without raising additional capital.

While Vanke said it has no need for more financing now, it might want to

take advantage of the solid demand for
bonds issued by Chinese property developers.

“China International Marine issued debt immediately after the conversion of its B shares to H shares. Vanke may
do something similar as well,” said Jinsong Du, an analyst

at Credit Suisse. Within weeks it had issued $600
million worth of commercial paper.

Esther Fung

China Investors: We Don’t Need No Edukation (THE WSJ CHINA REAL TIME

January 29, 2013


The amount of investment into education companies in China tumbled to $45.9 million in 2012, not even a quarter
of the amount of the year before, despite expectations that the country’s rising middle class
will continue to spend
more money on schooling, data provided by Dow Jones VentureSource show.

The poor performance of education companies in the public market has put off many investors from injecting
capital into the sector’s private companies, despite
what they say are attractive valuations. The length of time it
takes to grow such businesses is an additional deterrent.

Other investors, however, attribute the fall to a general decline in PE investment overall, not just in the education

“We bel
ieve that higher spending by a rising middle
class and increasing social demands for superior quality of
educational offerings will drive growth,” said Kosmo Kalliarekos, managing director at Baring Private Equity Asia,
which has invested around $500 milli
on over the past five years into education companies.

See more on this at Venture Capital Dispatch

Nigeria to China: we want to climb up the value chain (The FT Beyond BRICs

Jan 29, 2013

by Peter Vanham


Is the honeymoon of the unofficial Africa
China wedding over?

Last week, the Nigerian Central Bank voiced its discontent about the unfavorable trade balance with China

made it clear Nigeria was a
lready looking elsewhere for friendship (and maybe more).

Over the last decade, China built up a privileged trade and investment relationship with Africa. It invested heavily
in infrastructure, and in turn got preferential treatment for acquiring Africa’s

raw materials.

But ambitious countries like Nigeria seem less and less satisfied with the infrastructure
arrangement with China. At the World Economic Forum last week in Davos, Governor Sanusi Lamido Sanusi of the
Nigerian Central Bank (pic
tured above) hinted that Africa

or at least Nigeria

wants to alter the terms of that

The Governor, voted by Time Magazine as one of the world’s most influential people made it clear he wouldn’t
content himself with only being the produce
r of only raw materials for China. “How can we move up the value
chain? China still uses raw materials from Africa, and Africa still buys Chinese manufactured products,” Lamido
Sanusi said. “We have to get China to produce products on African soil. We have

to take advantage of the Chinese

Lamido Sanusi acknowledged that African countries still had a huge problem with productivity. But he said that
unless Nigeria and other African countries start manufacturing products themselves, it would be stuck

with 5 to
6 per cent growth at best

a rate that wouldn’t allow Africa to leapfrog towards higher levels of prosperity.

Yi Gang, the deputy governor of the People’s Bank of China, and also present in Davos last week, refused to see
Lamido Sanusi’s remar
ks as a criticism to the Sino
African relationship. “By and large, Africa
China co
over the last two decades has been very good,” he said. “I think, as labour cost increases, some manufacturers
will move to Africa and elsewhere. And we would love

to see more manufacturing in Africa.”

In any case, it seems like Nigeria is growing more confident and ambitious about itself

and isn’t just counting on
China to grow.

Nigeria sent one of the largest government delegations to Davos this year, with the

specific objective to attract
investment. Given the footprint of Chinese investors at the forum (small), and that of American, European and
Indian (large) it seems unlikely Nigeria was targeting China for those investments.

Moreover, Governor Lamido Sanu
si said he was bullish on his economy’s prospects: “double digit growth should
be no problem for us,” he said. “So far, our growth had a small base, as we lacked manufacturing. With our
planned investments in ports, airports, roads and education, we should

be able to move up the value chain.”

Yi Gang, for his part, assured China would continue to support in infrastructure and education investments in
Africa. Not everyone wants a costly divorce.

China: first cross
border rmb loans (The FT Beyond BRICs Blo

Jan 29, 2013

by Stefan Wagstyl


China has approved the first batch of cross
border renminbi loans with Hong
based banks lending a total of
Rmb2bn ($320m)
to companies in the ultra
modern Qianhai district of Shenzhen.

The scheme is part of Beijing’s programme to gradually liberalise the currency and China’s financial system. As
China Daily reported on Tuesday, “Qianhai is a $45 billion ‘mini
Hong Kong’ proj
ect approved in June to test,
among other things, freer yuan use and capital account convertibility.”

China Daily added:

The signing on Monday marks the first time that yuan loans will not be extended according to benchmark lending
rates set by the centr
al bank. Interest of the loans will be set freely by borrowers and lenders, but the loans must
fund projects from government
approved industries.

Fifteen banks were involved, included HSBC and Industrial & Commercial Bank of China.

Simon Rabinovitch wrot
e for the FT last June, when the Qianhai currency scheme was first announced:

Analysts say the experiment could prove as critical to eventually dismantling capital controls as Deng Xiaoping’s
reforms were to opening China to the world.

The Qianhai experi
ment follows a series of steps taken by the Chinese government to move towards making the
renminbi a convertible currency that analysts believe could one day vie with the US dollar for pre
eminence in
global markets.

Shanghai Authorities Confirm Apple Op
ening R&D Center in China This Summer

Jan 29, 2013

by Steven Millward


Apple (NASDAQ:AAPL) currently has eight official Apple Stores in mainland China, and now t
he Cupertino
company looks set to open a very different kind of facility in the country

a research and development lab. The
China Business News claims that this is a done deal, and that an Apple R&D and procurement management facility
will open in Shangh
ai’s Pudong district this summer. It cites the Sina Weibo account of the Shanghai Municipal
Commission of Commerce as publicly stating that this is all confirmed.

The new Apple base is said to be three buildings that cost a total of US$8 million to rent e
ach year, and will be at
397 Yuanshen Road. That seems to match a cluster of buildings on that street adjacent to Yuanshen stadium.
Browsing through jobs listings reveals a lot of Apple jobs posted on third
party HR sites on January 27th for the
ai area, including positions such as AppleCare team manager, SPS business analyst, and an admin
assistant for the Apple Online Store. So Apple’s Shanghai base could be a new customer service hub too.

Apple has not yet confirmed the move.

It might seem su
rprising not to set up this kind of base in Beijing, like in the capital’s tech
oriented Zhongguancun.
But Apple will actually be following a lot of other big names such as Motorola and Microsoft in heading towards the
younger, flashier, and much less terr
ifyingly polluted Shanghai.

We know that China snaps up 15 percent of Apple’s gadgets, and that iPhone sales in China doubled in 2012, so
we can see that Apple’s fate is tied quite strongly to wealthier Chinese consumers. Asia
Pacific will soon firmly
pass Europe as Apple’s second
largest market:

(Sources: AppleInsider and Yicai (article in Chinese))

What is the Difference Between Chinese Netizens and US Net Users?

Jan 29, 2013

by Quora


This question originally appeared on Quora, and the answer that follows was provided by Linus Chung, an avid
user of Chinese and US internet products; he has lived in China for over three years, and is a former tech/internet

me of my observations on how Chinese internet users differ from US internet users:


* Usage skews more heavily toward instant messaging (IM), entertainment, gaming: Comparing the results of a
Chinese (CNNIC) and US internet survey (Pew) will unv
eil some notable differences. Some of the top usage
categories for Chinese internet users are IM (83 percent of Chinese users vs. 46 percent of US users),
downloading music (76 percent of Chinese users vs. 37 percent of US users), and playing games (62 per
cent vs.
36 percent of US users). In contrast, US users tend to use email a lot more (48 percent of Chinese users vs. 91
percent of US users), and tend to use the internet for other productivity reasons more often.

In China, 3 of the 5 largest internet com
panies by revenue have a large portion of their revenue coming from
games (Tencent, Netease, and Shanda), with the other two as search (Baidu) and portal businesses (Sohu). None
of the top 5 internet companies in the US are gaming companies (Amazon, Google
, eBay, Liberty Interactive,
Yahoo). The reason for this difference in usage might largely be explained by demographics (see below).

* Use of mobile Internet more prominent: In China, there are 538 million internet users, but over 1b mobile phone
users. S
ome analysts estimate that the adoption of the internet lags mobile phone adoption by 4
5 years. With
this in mind, Chinese users don’t see the mobile phone as something to use to check the internet when they are
away from their computer, but many perceive

it as their primary device for communications. It’s not surprising
then, that mobile internet traffic has grown significantly in the last few years. One of the most popular internet
sites Sina Weibo (a Twitter
like product) has seen its mobile share of to
tal traffic go from 40 percent at the
beginning of 2011 to over 70 percent.

* Less frequent use of real names on profiles: Chinese users tend to use aliases for their online personas. While
this was predominantly the trend in the US over a decade ago (i.e
., when AOL Instant Messenger was a dominant
internet application), users in the US have become accustomed to using their real names online. Some will argue
the reason for the Chinese users’ unwillingness to use real names is that they are afraid of govern
ment monitoring.
I believe this rationale applies to a small minority. There has recently been talk of new legislation to require users
on Chinese internet services to register with their real names. For some services, this has already been the
standard pr
actice, and the requirement is to only use real names when registering. Public profiles can still use
aliases. I believe for the vast majority of Chinese users, it is a matter of personal preference to use an alias,
perhaps a way to express one’s individua

There are a number of real name social networks (e.g., Pengyou, RenRen), where the service dictates that the
norm is to use one’s real name. However, there are a number of services where users choose to use aliases, and
this practice is much more pre
valent in China than it is in the US.


* Chinese users tend to skew younger: Chinese internet users tend to skew younger, with the average user age
being ~25 in China vs. ~42 in the US. This explains a lot when it comes to propensity to use I
M and play games
vs. email, and the kinds of services companies offer to cater to this audience.


* Different willingness to pay: An interesting dynamic exists when it comes to what many Chinese are willing to
pay for and what they are not wil
ling to pay for. I’m making generalizations here, but many Chinese are willing to
pay extra when it’s for goods that can be outwardly displayed (to show off, to explain it crudely). For goods where
there is intrinsic value but is not something that is outw
ardly displayed, there is generally an unwillingness to pay
a premium. In this case, people just want the cheapest thing that gets the job done. So on the one hand, the
Chinese love spending money on luxury goods (high end handbags, watches, jewelry), but
the cheapest brand of
home appliances (washing machines, refrigerators, etc.), which serve useful purposes but are hidden in the
privacy of the home, are often the best selling.

This phenomenon carries over to the internet. Chinese users are unwilling to
pay for software or games, so piracy
is a huge issue. Innovative gaming companies overcame this by allowing users to play the games for free, but
they would make money by selling virtual items. Chinese users are far more willing to pay for virtual goods th
they can use to show off in the digital world (e.g., special clothes for their avatar) or make them better at an online
game (e.g., special weapons). The Chinese pioneered the free
play plus virtual goods business model that
Zynga and others in the U
S adopted. Another example is music. Chinese users won’t pay for a song. Instead,
they’ll find ways to download it for free. Musicians found a way around this by charging for downloadable
ringtones or even ringback tones (when you call someone and instead
of ringing you hear a song), which Chinese
users are happy to pay for because it is something externally displayed to demonstrate uniqueness.

A popular American news aggregation website versus popular Chinese news portal Sina

* Prefer crowded, cluttered s
ites: People from the West often look at a typical Chinese website and are taken
aback by how crowded the site looks. US users tend to prefer cleaner, simpler websites with less clutter. Just
compare Amazon to 360buy and Ebay to Taobao. The layouts and str
ucture may be similar but you’ll find that the
Chinese version will cram a lot more into a small space. One reason for this is that the Chinese language is a hassle
to type on a computer, and Chinese users prefer to have all the links of things they want t
o find right there on the
home page. They can just click on what they want instead of typing into a search bar. This was especially true in
the early days of the internet. Over time, I believe users have just become accustomed to a certain look and feel
d prefer not to change. Beauty is in the eye of the beholder!

Qihoo Double Blow as iOS Apps Banned by Apple, China Warns of
Competitive Practices (techinasia.com)

Jan 29, 2013

by Steven Millward


One of China’s top web companies, Qihoo (NYSE:QIHU), has been hit with a significant double blow. First, it was
given an official warning about unfair competition with its desktop products; then, in an unrelated move, Apple
has banned every single
Qihoo app from its iOS App Store. The apps might reappear in a few days, but it’s not the
first time this has happened to Qihoo.

As reported by Bloomberg today, Qihoo’s management was summoned to the Beijing Industrial and Commercial
Administration Bureau

and given “an executive warning that its use of anti
virus software in internet browsers
was considered unfair competition.” Qihoo makes China’s top web browser in the form of ‘360 Safe Browser’ and
the company first made its name with anti
virus apps for


Chinese netizens have long raised concerns about Qihoo’s practices with its desktop apps, notably the way that
installing one of its apps often leads to a user being forced or coerced into installing others. Last year, researchers
uncovered nine das
tardly tricks that Qihoo’s web browser was using to exploit its users, including blocking the
installation of some rival browser apps on Windows.

Aside from the Bureau’s warning, no punishment was meted out.

Qihoo slapped by Apple


But the bigger

blow for Qihoo is that all of its iPhone and iPad apps have been removed by Apple from the iTunes
App Store. This is not the first time. Almost 12 months ago, all Qihoo’s iOS apps were pulled from the store, only
to be reinstated a few days later. We’ve r
eached out to Qihoo to comment on this, and will update if we hear back.

On that last occasion, Qihoo told us that the Apple ban was caused by “unusually high numbers of
positive/negative feedback by unknown sources” which triggered an automatic temporary

removal by Apple.

These kinds of vanishings happen in the iTunes App Store from time
time, often caused by Apple’s
detection systems suspecting that something untoward might be going on, such as an attempt to
manipulate app rankings.

Aside from
its apps, Qihoo runs China’s second
largest search engine, which arrived on the scene with a bang last
summer. Qihoo’s rivalry with China’s top search company, Baidu, is ramping up across numerous categories,
causing Baidu shares to suffer in the latter pa
rt of 2012. Baidu itself is pushing back, putting more resources in its
own web browsers (both desktop and mobile), and building up anti
virus apps of its own.

(Sources: Bloomberg; via TheNextWeb)

Chinese People Are Sending Fewer Text Messages Than They

Used To

Jan 29, 2013

by C. Custer


Chinese people on average sent fewer text messages in 2012 than they did in 2011, according to statistics
released by China’s Ministry of I
ndustry and Information Technology (MIIT). Yes, the total number of texts sent
rose year
year but just over two percent, but that’s because the number of mobile users grew by 11 percent
in 2012; the per
person number of texts sent actually dropped by ni
ne percent. Moreover, MIIT’s numbers show
that around 200 million Chinese mobile users don’t send text messages at all.

So why are Chinese people sending fewer texts? The short answer is WeChat. Tencent’s WeChat and other
multimedia messaging apps have ta
ken Chinese mobile phones by storm, and quite frankly, they’re just more fun
than regular texting. For example, when my wife and I got Xiaomi phones, we started using Xiaomi’s MMS app
Miliao because it allowed us to send each other dumb scribbles, audio me
ssages, and even hand
written text
easily. And when her friends started switching to WeChat, my wife (previously a big texter) did too.

Some 420 million Chinese have phones that can access the internet and thus make use of services like WeChat,
and that i
s almost certainly what is responsible for the drop in text messages. Since the number of Chinese
adopting smartphones and making use of apps like WeChat continues to climb rapidly, it’s likely that test
messaging numbers will continue to drop over the cou
rse of 2013, perhaps even more sharply than they did in
2012. The text message is dying, and WeChat killing it. I’m not so sure that’s a bad thing.

(via Sina Tech, image source)

Social media landscape for luxury brands in China. (resonancechina.com)

January 29, 2013


Aside from things like search engine OPTIMIZATION for Baidu, luxury brands in China need to get themselves on
the right withsocial platforms The L
2 report finds that social media adoption is On up on every site with
esque Sina Weibo still number one. Compared to 2011, video site Youku has the largest growth.

Remove them to do search engine optimization, the major luxury brands in China have

the right social media
channels to be seen. The L2 study found that these the basic luxury brands have a stagnation point on the major
social media. Sina microblogging is still ranked the top social platform, compared to 2011, the Youku growth most

SCDMA Devices Selling Well In China (chinasourcingnews.com)

January 30, 2013 | By Editorial Staff


Wang Hengjiang, deputy general manager for China Mobil
e's terminal subsidiary, revealed during Qualcomm's
Chinese partner summit that in 2012, the company's sales of TD
SCDMA devices were over 60 million units,
higher than the targeted 55 million units.

For the year of 2013, China Mobile has made a new goal
of selling 120 million TD
SCDMA devices, of which over
80% will be smartphones. Moreover, China Mobile will launch products of more models and frequency bands.
They hope to launch medium

and high
end mobile phones, which can support both TD

At the same time, the company will launch some products that can support TD
SCDMA and CDMA networks,
aiming to diversify sales to different users.

Wang said that in 2012, the models of TD
SCDMA devices became more diversified, representing an

increase of
65% to 451 models compared with 2011. At the same time, the ratio of smartphones continued to rise and
reached 94.4% in the fourth quarter of 2012. In December 2012 alone, the sales of TD
SCDMA devices reached
over seven million units.

He als
o revealed that during the development of TD
SCDMA devices, China Mobile has been focusing on scale
development and quality.

Monster Sold ChinaHR.com for $30M, Pulling back from China (technode.com)

By Chelsea Dong on January 28, 2013


America’s top recruiting site Monster reportedly sold ChinaHR.com at US$ 30 million as part of its move to pull
back from some of its global markets. Monster invested a total of US$ 243

million into the Chinese career service
over the past 8 years.

Monster itself wasn’t in good shape lately as the service incurred US$ 194.2 million in net loss in the third quarter
of last year. ChinaHR.com also lost US$ 233 million over the same time pe
riod. Selling the blooding arm could be
one of the quickest solution to partially shore up Monster’s financial status.

As a matter of fact, ChinaHR has been in red for seven consecutive years after acquisition, its market share was
also declining severely

in face of competition from 51job and Zhaopin.com. According to iResearch, in 2012 Q3,
ChinaHR’s revenue was only 14% of that of 51job.com.

Is Mobile Already Plateau
ing? (technode.com)

By Yang Wang on January 28, 2013


September 1993 is a time few of us remember in vivid detail, let alone commemorate. Yet it was in this “Eternal
September” that AOL made the Internet a household sensation. By making the Internet available to everyone and
pensable to most, AOL made itself wealthy enough to buy Time Warner, the biggest media conglomerate in
the world.

AOL’s rise also lifted the fortunes of others. Amazon.com and Ebay both went online in 1995; 1995 was also the
year that Yahoo incorporated.
Three years later, Google was founded. Together, these four companies emerged
as the big winners of the the Internet Era in America.

Internet in China has always had a time delay compared to the U.S., but we see pretty much the same pattern.
The Internet
craze was full blown by 1997 when Netease was founded. It was followed by more giants: Tencent,
Sina and Sohu were founded in 1998, Shanda and Alibaba were founded in 1999, Baidu was founded in 2000.
After the first five years, pretty much all the big play
ers are in place.

Of course, winners of the early stage of the Internet Era do not get to monopolize all the winnings. Other new
companies also made a lot of money, if not as much. Leftovers from another Era (Microsoft comes to mind) are
still competing h
ard as well.

Things are not set in stone either, companies can still emerge out of nowhere and stir things up. In the U.S.,
Facebook came out in 2004, and Twitter came out in 2006; in China, 360Buy and Juren came out in 2004.

However: these complexities
do not change the two things about the basic narrative. First, the first five years of
the Internet industry was very decisive in shaping the industry’s shape and future; no matter how far the likes of
Yahoo have fallen, they are still a player in the game

twenty years later. Secondly, the achievements of the
winners determined how well others did; an industry that can produce a Google means a lot smaller firms can also
make money, just like a basketball league with LeBron James as its best player probably
has a lot of other quality

Now, this March is the 5th year since the immortal Steve Jobs launched the Apple app store. If Mobile is as
disruptive and as revolutionary as the Internet, things should work out more or less in the same way. Instead,
even the big winners are the likes of Rovio, Evernote, and Instagram. Yes, these are billion dollar companies, but
compared to even Ebay, that’s just peanuts. If the winners have only (comparatively) paltry earners, think of the
average joes. That’s like a

league with a washed up Stephon Marbury as its best player (still balling, but probably
can only serve as a bench player in the NBA) probably suck.

The thing about the Mobile industry is that while everybody is playing up its hype, so far it hasn’t offer
ed up
anything that has truly changed our lives. The Iphone may be indispensable, but we can live without any single
app. It’s hard to say the same thing about Google. Like Barack Obama’s presidency, the Mobile industry is more
hype than substance. Maybe i
t’s time to declare that, yes, shifting to Mobile is a great event, but it’s a natural
extension of the Internet revolution; it’s not going to change the world.

Gome Exiting Hong Kong Retail Market By March 2013 (chinatechnews.com)

January 30, 2013


Chinese mainland electronics and home appliances retailer Gome has reportedly announced plans to withdraw
from the Hong Kong retail market and its all six stores
in the marketplace will be closed by March 2013.

According to reports in Hong Kong local media, Gome currently has six retail sites in Hong Kong's Causeway Bay,
Yuen Long, Tsuen Wan, Kwun Tong, Tuen Mun, and Tai Po, respectively. Of these six stores, five

will be closed on
February 1, 2013, and its flagship store in Causeway Bay will be closed on March 16. With this move, about 100
employees of Gome Hong Kong stores will lose their jobs before the Chinese New Year.

Commenting on the news, Gome emphasized
that this is only an adjustment of business strategy and the
company will not fully withdraw from Hong Kong. Gome Hong Kong said that the employees affected will gain
severance payments. They will later announce information about store closure and will sel
l their goods at low
prices. For customers, Gome Hong Kong will make arrangements for after
sales services to ensure consumers'
rights are maintained. Interestingly, March 15 is World Consumer Rights Day.

A spokesperson from Gome said Gome Hong Kong will
transform from a retail model to a bulk trade development

In addition, Gome Hong Kong's representative stated that the company is not part of Gome Electrical Appliances
Holding Ltd., and the operation and performance of Gome Hong Kong will not aff
ect the operation or financial
condition of Gome Electrical Appliances Holding Ltd.

Politics & Law


China appoints new Tibet governor, hardline policies to remain (Reuters)

By Ben Blanchard

BEIJING | Tue Jan 29, 2013



China appointed a new governor for remote and restive Tibet on Tuesday, naming a hardline ethnic
Tibetan in a signal that the government has no plans to ease up on its tight control on the Hi
malayan region.

Losang Gyaltsen, 55, was elected at the end of the annual meeting of Tibet's largely rubber stamp regional
assembly, and replaces previous governor Padma Choling, according to an announcement by the official Xinhua
news agency.

Losang Gya
ltsen is a former mayor of Tibetan capital Lhasa and once taught Marxist theory, according to his
official biography. His name is also spelled Losang Jamcan in English.

He reports to Tibet's top official, Communist Party chief Chen Quanguo, a position whi
ch traditionally has always
been held by a Han Chinese rather than an ethnic Tibetan.

"He's rather hardline, but all officials at that level are the same," said prominent Tibetan writer Woeser. "There will
be no real change in Tibet."

China has defended
its iron
fisted rule in Tibet, saying the mountainous region suffered from dire poverty, brutal
exploitation and economic stagnation until 1950, when Communist troops "peacefully liberated" it.

A post in Tibet is one of the most challenging positions for
Communist Party officials, but can also be a route to
higher office if they are judged to have performed well.

President Hu Jintao served as party boss in Tibet from 1988
1992, while rising star Hu Chunhua, recently
appointed party chief in booming Guangd
ong province and seen as a possible future president, has some two
decades of Tibet experience.

Speaking to Tibet's legislature on Tuesday, the new governor, Losang Gyaltsen, said the government would
"resolutely struggle" against exiled Tibetan spiritual

leader the Dalai Lama, who China accuses of promoting
violent separatism, charges he denies.

"We will unswervingly protect the unity of the motherland and ethnic harmony ... and maintain harmony and
stability in Tibet," the China News Service quoted him
as saying.

"Harmony and stability are the basic guarantee of Tibet's development and prosperity," he added.

China has tightened already strict controls in Tibet since an upsurge in self
immolations by Tibetans protesting
Chinese rule over the past two ye
ars, though most of the burnings have happened in heavily Tibetan areas outside
of what China calls the Tibet Autonomous Region.

Almost 100 Tibetans have set themselves alight since the protests began in 2009, most of whom have died.

Despite expectations

for improvement, the crackdown inside Tibet could become even worse once Chinese
Communist Party boss Xi Jinping becomes president in March as he seeks to cement his rule, said an overseas
Tibetan rights advocate.

"I wouldn't be surprised if at the begin
ning of his tenure things might get worse before they get better, because
he will want to stamp his authority early on," said Kate Saunders of the International Campaign for Tibet.

Xi's late father, Xi Zhongxun, a liberal
minded former vice premier, had a

close bond with the Dalai Lama before
the monk fled into exile in 1959 following a failed uprising against Chinese rule.

(Reporting by Ben Blanchard; Editing by Sanjeev Miglani)


Chinese Courts Turn a Blind Eye to Abuse (The New York Times)


Published: January 29, 2013



Before they married in 2009, Tan Yong admitted to Li Yan that he had beaten his three previous wives.
e promised to change.

The promises didn’t last, said Li Dehuai, Ms. Li’s brother. Soon after the wedding, Mr. Tan began abusing his wife.

“He stubbed out cigarettes on her face and legs. He would take her hair and hit her head against the wall. He
d her on the balcony for hours in the winter,” said Mr. Li, speaking by telephone from Chongqing in
southwestern China. The abuse went on for more than a year.

Today, Mr. Tan is dead, beaten to death by Ms. Li with the barrel of his air gun during an argu
ment in November
2010, and Mr. Li is trying to save his sister’s life as she sits in a jail in Sichuan Province awaiting execution for
murder. The case has caused an outcry among Chinese legal experts and feminists, who say it underscores the
severe senten
ces often imposed on women who fight back, injuring or killing abusive husbands.

“Li Yan’s case tells people that extreme tragedy will happen if an abused woman cannot get effective help from the
neighborhood committee, the women’s federation, the police,
” said Feng Yuan, of the Anti
Domestic Violence
Network, based in Beijing.

“When power cannot deliver justice, abused women will find their own way of achieving justice, sadly and
wrongly,” Ms. Feng said.

Chinese law requires that a history of domestic a
buse be considered in such cases. Ms. Li’s was especially
gruesome: After killing her husband (which she confessed to early, asking a neighbor to call the police), she cut
him up and boiled some of the parts. If that is hard to excuse, consider this, said
Ms. Feng: She wasn’t in her right

“There’s something called abused women’s syndrome, and she had it. A woman like that may lose her reason and
lose control,” said Ms. Feng, one of hundreds of people petitioning the courts to retry Ms. Li, this time
taking the
abuse into proper consideration. This was not done the first time, making Ms. Li’s case a miscarriage of justice,
they say.

Others who have joined the appeal include lawyers, deputies to the National People’s Congress and Amnesty

which last week issued an urgent action call for the Chinese authorities not to execute Ms. Li. The
sentence could be carried out any day now, activists say, probably before the Lunar New Year’s Eve on Feb. 9.

Women’s jails are filled with women who have

injured or killed abusive husbands, according to the Anti
Violence Network, citing studies by local women’s federations and scholars. They account for 60 percent of
inmates in one jail in Anshan, in Liaoning Province, and 80 percent of women serv
ing heavy sentences in a jail in
Fuzhou, in Fujian Province.

In a study by Xing Hongmei of China Women’s University, of 121 female inmates in a Sichuan jail who were
serving time for attacking or killing abusive partners, 71 were originally sentenced to l
ife in prison or to death
(sometimes commuted, delayed or overturned on appeal), and 28 more were sentenced to at least 10 years. This
means more than 80 percent received the heaviest possible sentences for murder or bodily harm, the study said.

For month
s before she killed Mr. Tan, Ms. Li sought help from the authorities in Anyue County, in Sichuan Province,
where they lived, her brother said.

“She telephoned the police in, I think, May 2010, after a beating, but they said it was an affair between marrie
people and hung up,” he said.

She went to her neighborhood committee. “They told her to go to the women’s association. The women’s
association told her to go to the police. The police told her to go to the neighborhood committee,” and so it
continued, h
e said. “She was sent from place to place and didn’t know what to do.”

Officials at the local justice department whom she asked about divorce told her that unless Mr. Tan agreed, she
could be left destitute. She was better off tolerating the abuse, they a

There was some documentation of the abuse, including police photographs of injuries and a medical report after
hospital treatment, said Mr. Li. But both the Sichuan court that sentenced her and the Supreme Court in Beijing,
which reviews all death


Mr. Li and activists say it upheld his sister’s sentence last week

failed to
take this into account when sentencing her, Mr. Li said.

“We all hoped the court would recognize the torture she’d suffered in those years,” he said. “But it didn’

“I know what my sister did was wrong, but since this happened, I have studied many cases of domestic abuse, and
I know her situation is not uncommon,” he said.

He has not yet been able to tell their mother, or Ms. Li’s 18
old daughter from a pre
vious marriage, that Ms.
Li faces imminent execution.

“I think my niece knows, somehow,” he said. “But my mother couldn’t take it.”

Their father, who died last year, had worked in the same silk factory as Ms. Li and Mr. Tan, and had disliked the
man from

the start, Mr. Li said.

“He was so depressed at her situation,” he said. “I think he died of grief.”

Chinese officials urged not to execute domestic violence victim (The Guardian)

Call comes after supreme people's court reportedly upholds death sentenc
e for Li Yan who killed her abusive

Tania Branigan in Beijing

The Guardian, Monday 28 January 2013


Li Yan had begged authorities to protect her from her hus
band who stubbed out cigarettes on her face and cut off
part of her finger. Photograph: Hand out

Chinese scholars and lawyers have urged officials to spare the life of a woman who could be executed within days
for murdering her abusive husband.


say a reprieve for Li Yan would send the message that authorities are serious about confronting
domestic violence. The 41
old from Sichuan had repeatedly begged for protection from her spouse.

According to Amnesty International, Li's husband, Tan Yo
ng, stubbed out cigarettes on her face, cut off part of her
finger and locked her out on the balcony of their home in wintertime while she was only partially clothed.

She killed him in November 2010 by repeatedly hitting him over the head with an airgun t
o stop him from beating
her. More than 100 legal experts and academics have signed an open letter calling for her sentence to be

The supreme people's court has reportedly upheld Li's death sentence, but her lawyer, Guo Jianmei, a well
n's rights advocate, said the defence team had not received formal notification. "Even if there is only a little
hope, we want to fight for her to have a chance to live," she said. "She killed her husband in fear that her life was
seriously threatened."

i's supporters say she tried to save Tan when she saw his injuries, then panicked when she realised he was dead.
She attempted to dispose of his body by dismembering and boiling it.

Guo said that as horrifying as that act was, Li did not deserve to die. "
We give mercy to [those who have
committed] many extreme crimes; why can't we give mercy to a woman who committed her crime in fear and
after torment?

"She used violence against violence; she did not pose an extreme danger to society."

A study by the All

China Women's Federation suggests around one in four women will experience domestic
violence at some point in her life

similar to the rates indicated in European research. Other studies have
suggested that as many as two in three women could be affected

in some rural areas.

Addressing such abuse is difficult in every country, but campaigners in China say it is particularly hard because of
the belief that family conflicts should remain private and because of inadequate laws and services.

Activists have
tried to highlight the issue through symbolic protests in recent years

last Valentine's Day, women
in Beijing demonstrated in bridal gowns spattered with fake blood

and a broader public debate was sparked
when the American wife of the famous entreprene
ur Li Yang publicly accused him of beating her. He later admitted
doing so.

But Feng Yuan, director of the Anti
Domestic Violence Network, warned: "More and more people agree that public
power should play a role in curbing domestic violence, but many peop
le still have not realised how serious the
issue is."

She added: "We don't have a [specific] law against domestic violence and many services cannot provide female