Dollar pressured, shares supported by Bernanke comments

The dollar was under pressure but global shares found support on Wednesday after Federal Reserve Chairman Ben Bernanke reiterated the Fed's commitment to easy policy, cementing expectations its stimulus will stay for the rest of year.

Chinese policymakers set the yuan's midpoint at the highest level since the 2005 revaluation, a day after China's central bank said it would gradually withdraw from regular intervention in the foreign exchange market.

Asset prices were boosted slightly when Bernanke said the Fed would maintain its ultra-easy policy for as long as needed and would taper bond-buying only when it was sure that labour market improvements would continue.

Bernanke's comments boosted the euro to a three-week high of $1.3584. The common currency last traded at $1.3549, up slightly from late U.S. levels.

While a slight pullback in Wall Street shares on Tuesday was a damper on shares across Asia, many markets showed resilience even after hefty gains in the past couple of days on optimism on Beijing's ambitious reform plans.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent but was still up 1.3 percent from the start of week, outperforming the 0.6 percent fall in the Standard & Poor's 500 Index.

Hong Kong shares, which have gained 2.7 percent so far this week, extended gains while mainland shares were mostly flat.

"I think Hong Kong shares are best-placed at the moment, as they are likely to benefit from easy U.S. monetary policy as well as hopes on reforms in China," said Hirokazu Yuihama, senior strategist at Daiwa Securities.

Japan's Nikkei share average rose as much as 0.5 percent before ceding some gains.

Source: Reuters

Expanding Sino-African cooperation on infrastructure of great significance

This year is the fiftieth anniversary of the foundation of the Organization of African Unity, and also the tenth anniversary of the foundation of the African Union. At this important historical juncture, international society is paying much attention to the issue of the peaceful development of Africa and its road to rejuvenation. A conference on the theme of “Africa: 54 Countries, One Union—Integration and Infrastructure” was held in Beijing on the 24th and 25th of October. The conference was co-hosted by the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences (CASS), the Foundation for World Wide Cooperation (FWWC), the School of Advanced International Studies of Johns Hopkins University and the Wilson Center. Zhao Shengxuan (Vice President of CASS), Romano Prodi (President of FWWC) and Erastus Mwencha (Deputy Chairperson of the African Union Commission) attended the opening ceremony and each delivered a speech. Yang Guang, Director of the Institute of West-Asian and African Studies, presided over the opening ceremony.

In his opening speech, Zhao addressed the fact that strength in unity is a long-term dream for African countries, and integration is a significant way to realize this unity. During the last twenty years, Africa has maintained rapid economic growth, thus becoming one of the fastest-growing regions of the world. The international status of Africa has gradually improved; however, infrastructure has become a main obstacle for its development. The lack of interconnection between different African countries not only increases the difficulties in African integration, but also creates a high cost for the movement of the factors of production. It is therefore of great significance for African countries to break out of this infrastructure bottleneck.

Zhao pointed out that China has long regarded Africa as its common destiny. Since the creation of the forum on China-Africa Cooperation in 2000, both sides have built up a new type of strategic partnership. As a fast-developing country, China has a profound understanding of the active role of infrastructure in economic development and has paid increased attention to the construction of infrastructure in Africa.

Zhao emphasized that the Chinese people are currently working hard for the great rejuvenation of the Chinese nation, and meanwhile the African people are devoting themselves to realizing their dreams of unity and self-improvement. It is necessary to boost cooperation between the two sides in the construction of infrastructure so as to realize their common dreams, as well as promoting peace and development throughout the world.

Mr. Prodi claimed in his speech that China is the most important player in boosting African development and cooperation. China’s decisions play an important role in the development of Africa, and meanwhile Africa’s speed of development is closely related to China’s participation.

Discussing the development prospects of Africa, Prodi pointed out that many small African countries are short of a complete market and cannot engage in international economic competition on their own. Realizing integration is therefore the only way to promote the development of the African continent. It is necessary to build a union for realizing integration, and improving the basic infrastructure has to be its primary requirement. If there is no basic interconnecting infrastructure, the costs of Africa’s economic development could increase by thirty to fourty times.

Mr. Mwencha claimed that Africa is now facing the challenges of economic transition. There is therefore huge space for Sino-African cooperation in different fields, including promoting the transition from the export of primary goods to the export of high value-added products, introducing advanced scientific technology, and improving educational levels.

Source: CSSN

China: More security challenges

Largely due to its modern history, which is full of sufferings from foreign invasions, China used to have a deep-rooted opinion that links national security tightly with national strength, and concludes that a powerful nation has fewer challenges and security concerns.

However, the idea is changing as China meets growing challenges and security problems on its rising path, a fact that is increasingly realized by more leaders and scholars. In a speech at the Central Party School this January, Xi Jinping, general secretary of the Communist Party of China who has since also become the president of China, said that "the further our common cause progresses, the more risks and challenges we will face", and "the more unexpected situations will come".

He is right. A rising China will only meet more security problems. An obvious example is Chinese tourists, whose numbers reached 80 million last year. With more Chinese citizens traveling abroad, problems involving their security - turmoil, kidnapping, or earthquakes - are appearing more frequently as headlines. The retreat of over 30,000 nationals during the civil war in Libya best exemplifies this issue. Growing overseas investment is also bringing about new challenges. How to protect the security of investments, transportation and personnel is a new problem in China's national security strategy.

On the macro level, a more serious security concern that comes together with China's rise is the structural dilemma with the US, currently the only global superpower. China might not boast, but to the rest of the world, it is No. 2, with the gap with No. 1 narrowing.

The alarm from the US and its reaction are both obvious. When Turkey tried to purchase missiles from China weeks ago, US President Barack Obama personally gave Turkish Prime Minister Recep Tayyip Erdogan a call persuading him to give up the idea. More recently, the US refused applicants from the Chinese mainland who wished to attend an astronomy conference that will be at the Ames Research Center in California, because the conference is funded by the US National Aeronautics and Space Administration.

If these are not enough, the US has joint declarations with Japan and Australia on coping with challenges in the Asia-Pacific region. All these have sent the world a clear message that the US is wary of China's growing national strength.

The structural dilemma exists not only between China and US. Other countries, like Japan and the Philippines, also are confronting China, and seek to obtain benefits from the antagonism.

For example, Japanese Prime Minister Shinzo Abe could well take use of worsening relations with China to persuade the Japanese Parliament to edit Japan's current "peace Constitution", Article 9 of which renounces war and forbids Japan from maintaining a war footing. The Philippines government could also benefit from rising nationalism.

To cope with these challenges, China needs to adjust its national security strategy. Actually, that's what China has been doing. Since the 18th Party Congress in November, official documents began to list China's foreign strategy as "sovereignty, security and development", which means that China is paying more attention to security. Being aware of its structural dilemma with the US, China does not want any unnecessary confrontation. As a solution, China's leaders have raised the idea of establishing a new type of major-power relationship with the US, the central value of which would be to keep their competition "healthy", peaceful, and, if possible, mutually beneficial.

China's security strategy also places emphasis on its relations with its neighbors. During his visit to Central Asian and Southeast Asian countries, Xi has mentioned both the "new Silk Road" and the "maritime Silk Road", and expressed China's sincere wishes of improving relations with its neighbors.

Further, Xi said that China should consider politics more in diplomacy and consider more help to countries that support China but still have difficulties developing their economies. Mutual help is essential to the community of common destiny that China and ASEAN countries are building; China will send more help to those in need for the common good of all.

Of course, these diplomatic endeavors don't mean China will give up national defense construction. On the contrary, China needs military potential as the bottom line. China's national defense construction experienced decades of stagnation in the latter half of the last century; even now its percentage of military spending in terms of GDP is still much lower than that of the US. It is rational and just for China to strengthen its national defense construction as a remedy.

Another job China is doing is establishing a new international model. In last year's World Peace Forum, held in Tsinghua University, Xi, then still the vice-president, raised the principle of win-win relations. Being extended to diplomacy, the initially economic phrase contains new meanings that both sides should be secure in a relationship and benefit from the security.

A new, universally accepted international norm is necessary for the win-win relations. The power of all can prevent any member from breaking the norm - and that's also necessary for peace in the future.

The author is dean of Institute of Modern International Relations, Tsinghua University. This is an excerpt of his speech at a recent press salon, held by the All-China Journalists Association.

Editor：Yu Hui,Source CSSN

A quantum leap forward , by Tian Huifang

China's economic restructuring is not short-term expediency, but rather a profound transition to sustainable growth

China's economic development is at the critical crossroads. Since the launch of reform and opening-up, the Chinese economy has undergone earthshaking changes. With its annual GDP growth rate averaging 9.5 percent, China's accelerated expansion greatly narrowed the gap between it and the world's major developed countries. But the thick smog and haze that frequently shroud central and northern parts of China have made everyone aware of the urgency of reducing emissions and bringing pollution under control, and many other problems, such as excessive investment, excess production capacity, high energy consumption, a widening wealth gap, and under-investment in social security, education and healthcare, are also hindering the country's healthy development.

A more sustainable development path is essential for the country's future, and the National Congress of the Communist Party of China marked a shift in policy priority from pursuing high-speed growth to sustainable economic growth, economic restructuring and reform, and the improvement of people's well-being. 

However, more efforts are needed to realize economic restructuring, the key to which is optimizing the demand structure, industrial structure, regional structure and urban-rural structure.

To optimize the demand structure, the government should shift its policy focus from investment and real estate to the expansion of domestic demand and maintain a reasonable ratio between consumption and investment, bringing into being a consumption-oriented economic structure. Optimizing the industrial structure requires upgrading and encouraging innovation to ensure the long-term capability to create new competitive advantages for Chinese industries. Optimizing the regional structure means narrowing gap between the coastal and inland areas and promoting balanced development. While optimizing the urban-rural structure needs accelerated, higher quality urbanization and improvements in people's livelihoods.

As China's economic growth prospects subject to resources and environmental constraints and air and water pollution are at dangerous levels, China has to build an environmentally friendly and resources saving society as the foundation for better quality growth.

There are also a number of other challenges that cannot be ignored. One of them is that in the short term it will be difficult for China to wean itself off its over-dependence on real estate. If property prices continue to soar it will inhibit urbanization and hinder the optimization of the demand structure. The long-term boom of the real estate industry has attracted excessive investment and human resources, which has been detrimental to the upgrading of enterprises' products and their independent innovation capabilities. High housing prices also curb consumption and are detrimental to social fairness and stability.

The ever-increasing flow of funds to the virtual economy instead of the real economy is another major problem. The flow of funds to the real economy should be guaranteed through regulatory requirements, credit guides and adjusting the government spending structure. Over the years, many industries and enterprises have witnessed a sharp rise in their debt ratios, excess production capacities, declines in profitability and rising debt pressures. In addition, monopolies, the local government financing platform, real estate's extrusion on the private sector and the real economy restrict the efficient allocation of resources.

There is also growing pressure, as a result of the economic slowdown, to create jobs. In this regard, decision-makers need to strengthen their policy fine-tuning to achieve a steady growth in employment opportunities.

The government has introduced a series of policies and measures this year to ensure that funds flow from the financial departments, credit and capital markets to small businesses, emerging industries, service industries, shantytown renovation, municipal construction, environmental protection, the agricultural sector and other real economy sectors, while eliminating enterprises with high energy consumption, high pollution and excess capacity. And it will accelerate the pace of reform in a lot of important areas, ranging from reform of the rural land system and social security to reducing the number of administrative examinations and approvals, adjusting fiscal and taxation policies, opening-up the financial system, liberalizing capital accounts, and reforming the mechanism of resource prices.

The new Chinese leadership's calm and confidence while facing this year's economic slowdown shows it is determined to place more emphasis on green growth, domestic consumption, and improving urban and rural residents' livelihoods. This is a genuine people-centered development mode.

Besides stabilizing economic growth, China needs to reform its income distribution system to increase the incomes of low-income groups and release consumption potential, reform the technological innovation mechanism to release the potential of enterprises, and reform the urban and rural management system to release the labor potential.

The author is a senior research fellow with the Institute of World Economics and Politics, Chinese Academy of Social Sciences.

· The Asia-Europe Economic Forum 2013 held in Beijing

"The Asia-Europe Economic Forum 2013 was held in Beijing on the 28-29 of October, with the theme of “Challenges and Prospects for the Asian and European Economies”".

The forum was sponsored by the Chinese Academy of Social Sciences (CASS) and organized by the Institute of World Economics and Politics of CASS jointly with internationally-renowned institutions such as the Asia-Europe Foundation and the Kiel Institute for World Economics.

Li Yang, the Vice-President of CASS, attended and addressed the opening ceremony.

While talking about the world economic situation from 2007 to date, Li Yang claimed that the global financial crisis is far from over, and has in fact entered a new stage. In this new stage, the decline of the world economy has been effectively curbed and countries around the world have successively begun to undertake reforms in accordance with the underlying causes of the crisis, but they are confronted with greater difficulties than ever before in carrying out these reforms.

China surely cannot detach itself from this changing world. Li noted that the current Chinese economy has also entered a new period, characterized most strikingly by the decline of economic growth from 9.8% on average over the past 33 years to around 7.5% currently. This fall of 2.3% will undoubtedly weigh heavily on China’s economy, so how to ensure a smooth transition for the Chinese economy is a topic worthy of in-depth discussion.

Although there are some obstacles ahead, Li added, the Chinese economy still has much to look forward to. In order to better expose the world to the particularity and complexity of China’s economy, Chinese scholars should take up the responsibility to explain them to the outside world.

The European debt crisis has triggered alarm in Europe and the world. The participants in the Forum therefore actively reflected on how to fend off financial risks and further improve the European economic situation.

Lorenzo Codogno, the Director of the Financial Department of the Ministry of Economy and Finance of Italy, claimed that “we have to enhance financial regulation to fix the holes between sovereign countries and banks”.

In the meantime, the clamor for the enhancement of inter-state coordination is growing ever louder within the European Union. Both the measures to prevent crises and the formulation of relevant policies call for closer coordination between the countries concerned, said the French economist Jean Pisani-Ferry during the forum.

Since 2009, although the world has seen increasingly active coordination between countries, its quality and effect are dwindling. “Many countries tend to take care of themselves alone, so their decision-makers hesitate when negotiating with other countries, something which has wasted a lot of time and energy”, Pisani-Ferry said.

In order to bolster their economy, all countries are trying to work on “financial expenditures”. “Developed countries should put more of their money into infrastructures to stimulate production, while countries with high levels of savings should attach more importance to supporting consumption,” said Zou Jiayi, the Director of the International Department of the Chinese Ministry of Finance.

Besides the sovereign debt crisis of the developed economies and the euro zone, the participants also conducted heated discussions over topics including monetary and exchange rate policies, the new agenda of the WTO and regional trade negotiation, and China’s economic prospects.

Xinhua Insight: Chinese property market needs long-term mechanism

Six weeks until year end and city governments in China are struggling to meet their goal of preventing house prices from rising too quickly.

Statistics and experts agree that their chances of success are slim.

Guangzhou in south China is a megacity which has just rolled out detailed rules to slow house price inflation, including raising down payments on second homes. Beijing, Shanghai and Shenzhen all raised the threshold to 70 percent recently. These four cities have also restricted unregistered residents from buying apartments, but the rules have not yet yielded fruit as expected.

Of a statistical pool of 70 major cities, 65 saw month-on-month rises in new home prices in October, and 62 reported price gains in existing and second-hand homes, according to the National Bureau of Statistics (NBS).

First-tier cities continued to lead rises, with the prices of new homes in Beijing and Shanghai over 20 percent higher than a year ago, said NBS.

SHORT TERM CURBS VS LONG-TERM MECHANISM

The rules have a limited stabilizing effect on commercial housing prices because they are short-term policies.

By the end of the year, housing projects that sell for more than 40,000 yuan (6,564 U.S. dollars) per square meter are not allowed for advance sale, according to Beijing municipal commission for housing and urban-rural development.

Regulations to curb demand may put a brake on prices for the rest of the year but their effects won't last long, said Chen Guoqiang, deputy head of the China Real Estate Society.

In Shanghai, only 20 percent of current home loans have gone to people purchasing a second home, according to Gu Mingde, deputy director of investigation and research at Shanghai head office of the People's Bank of China. Raising down payments for second-home purchases only affected a small group of people.

If the rules were carried out only to meet the yearly goal, they may further add to supply and demand contradiction, said Ma Guangyuan, an economist.

Industry insiders have noticed that purchasers have been holding back to see if prices drop after the regulations take force, and wonder how long will take for purchasers to start buying again and a new round of price rises.

The market is in urgent need of a long-term mechanism that will allow market to adjust by itself, said Zhang Dawei, director of Centaline Property's research center.

MANAGING SUPPLY-DEMAND CONTRADICTIONS

While previous regulations to restrain demand have been effective, policy needs to focus more on the supply side to ease the supply-demand contradiction.

With stricter home purchase quota policies, investment demand has receded dramatically, and first-home purchasers are a major force in the marketplace.

"A great many first-home purchasers are young people who have just married and started their career. Their income is too high to enjoy low cost housing and too low to afford an apartment in commercial residential buildings," said Zhu Zhongyi, deputy head of the China real estate industry association.

They will become pillars of society and tend to complain about high prices. The government should address their problems by all possible means, said Zhu.

In October, Beijing announced that it will encourage commercial residential building projects with apartments under 90 square meters at 70 percent of the market price. The apartments will be sold to those who intend to own and live in them rather than investors.

"We think too little of the supply side. We should have taken into account the needs of people of different income levels," said Wang Rongwu, deputy head of Beijing municipal commission of housing and urban-rural development.

He added that not enough housing was offered to purchasers with specific requirements in the past.

"If their housing problem is properly addressed, the prices of high-quality commercial housing will be decided by the market in the future," said Wang.

The policy was carried out in accordance with government's overall guideline for solving the problem - low income parties are guaranteed places to live, the middle classes can afford to buy apartments with favorable policies, and the rich are limited in what they can buy.

According to Zhang Wei, deputy head of Beijing municipal bureau of land resources, 50,000 apartments will be offered to first home purchasers at low prices.

This will greatly change the supply-demand structure because approximately 80,000 new commercial residential apartments are offered each year in Beijing, said Zhang Dawei.

Chen Zhi, deputy head of Beijing real estate industry association, said the policy is significant in stabilizing the market because people can have a clear expectations of house prices in the near future.

Chen said most first home buyers purchased houses "irrationally" because they are afraid that their income will never keep pace that of house prices. "They now have fewer such worries," he said.

So far no other cities have similar polices and industry insiders would like to see the policy popularized in first-tier cities.

It is the fastest way to stabilize housing price without hurting local government land revenue, according to Ren Xingzhou, director of the market economy research institute of the Development Research Center of the State Council.

Source: Xinhua

China to update national economy accounting system

China's National Bureau of Statistics (NBS) plans to revise the current system of measuring the national economy in line with latest international standards, an NBS official said.

The new system will reckon spending on research and development as a form of fixed capital and calculate it into gross domestic product , NBS vice head Xu Xianchun said in an interview which was available at www.xinhuanet.com on Monday.

Other changes include the method of setting value for self-owned housing of urban residents, to count the income made from transferring land-use rights into farmers' income, as well as to create an index for employee stock options as a form of labor wage.

The proposed revisions are in accordance with a 2008 version of the United Nations System of National Accounts. China's current national economy accounting system, completed in 2002, was based on the 1993 version.

Xu said the new system will be finalized around the end of 2014 at the earliest.

Historical GDP data will be revised according to new standards and released after the ongoing third national economic census, Xu said.

Source:  Xinhua

Foreign holdings of U.S. debt rise to 5.65 trillion USD in September

Total foreign holdings of U.S. Treasury securities rose for the second consecutive month in September, indicating rising international demand for American government debt, the U.S. Treasury Department reported Monday.

Overall foreign holdings of U.S. Treasury securities reached 5.6529 trillion U.S. dollars in September, up from a revised 5.5958 trillion dollars in August.

According to the Treasury International Capital report, China, the largest foreign holder of U.S. Treasury securities, boosted its holdings to 1.2938 trillion dollars in September, from 1.2681 trillion dollars in August.

Japan, the second largest foreign holder of U.S. government debt, increased its holdings from 1.1491 trillion dollars in August to 1.1781 trillion dollars in September.

Source:  Xinhua

Wakata releases micro-satellites from ISS

Japanese astronaut Koichi Wakata has released micro-satellites from the International Space Station.

Wakata used a robotic arm to release the 3 satellites into space at around 12:15 UTC on Tuesday.

The palm-sized devices were delivered to the station by Japan's unmanned cargo carrier in August.

One of the 3 satellites was jointly developed by Japan and Vietnam. It will take photos of the Earth and will also be used for amateur radio experiments.

Source: NewsOnJapan

Japan lower house OKs social security reform bill

Japan's House of Representatives approved a bill on Tuesday that sets a timetable for reforming the country's social security system.

The bill calls for implementing medical system reform measures between fiscal 2014, which begins next April, and fiscal 2017.

Such measures include raising the proportion of out-of-pocket medical expenses by people aged 70 to 74 to the original level of 20 pct from 10 pct at present, and transferring the authority to operate the public health insurance system to prefectural governments from city, town and village governments.

Source:  JiJi Press

JAMA chief plays up Japanese tech ahead of Tokyo Motor Show

Japanese automobile industry leader Akio Toyoda on Tuesday emphasized advanced technologies held by the nation's automakers ahead of the 43rd Tokyo Motor Show scheduled to open to the public on Saturday.

Toyoda, chairman of the Japan Automobile Manufacturers Association and president of Toyota Motor Corp. , said that Japanese automakers have been making technological innovations which can carve out a future.The show will feature fuel cell vehicles and electric vehicles at a time when automakers in the world are racing to develop such next-generation eco-friendly vehicles. Also to be showcased are sport-utility vehicles and mini sports cars.

Source: NewsOnJapan

Overseas Experts: CPC plenum, reform blueprint are of great significance to China, World

The just-concluded Third Plenary Session of the 18th Communist Party of China Central Committee and its decision on major reforms have outlined the blueprint for China's future development.

Overseas experts believe that the plenum and its detailed document on "major issues concerning comprehensively deepening reforms" are of great significance both to China and the whole world.

The plenum was not only important for China, but also for the global economy, Cheng Li, director of research of the John Thornton China Center of the Brookings Institution, told Xinhua in a recent interview.

"...(the decisions) can not only uplift public confidence through new economic opportunities and new sources for growth, but also undermine criticism and fear that economic reforms will not go far without other reforms," he said.

Yukon Huang, senior researcher with Washington-based think tank Carnegie Endowment for International Peace, said in a commentary piece on Financial Times that "China's future lies as much in maintaining political stability as in sustaining rapid growth."

"Fiscal reforms and reduced dependence on banks will improve transparency and promote accountability. Rolling back the power of state enterprises and streamlining government procedures will restrain opportunities for rent seeking. Promotion of a services-oriented economy will reduce dependence on energy-intensive industries and help mitigate environmental degradation," the commentary read.

He concluded that all this will give substance to the "Chinese Dream."

The key concerns of the plenum are: breaking state monopolies, reforming land rights and intervening less in the market to release more vigor in the economy, said Alexei Maslov, head of School of Oriental Studies at State University - Higher School of Economics in Russia.

Joe Foudy at the Stern School of Business of New York University sees three challenges in China's reforms: how to overcome those vested interests, how to sequence these reforms and what the speed is going to be?

Chheang Vannarith, lecturer of Asia Pacific Studies at the University of Leeds, applauded China's decision to open up the banking sector by allowing qualified private capital to set up small- and medium-sized banks.

He said that small- and medium-sized enterprises (SMEs) are the foundation of the economy, and financing is one of the key issues facing them.

"China needs also to assist the SMEs to be part of the national and international production network driven by Chinese multinational corporations," he said.

Former U.S. National Security Advisor Zbigniew Brzezinski said "it's a very encouraging turn of event, which emphasizes China's constructive leading role in the far east but also international affairs generally."

"We have to strive to infuse increasingly significant strategic content into our relationship," he said, adding that the key is working together on issues that go beyond the scope of economic ties.

"I really appreciated the decisions of the plenum that outline a commitment on the market and on the green economy as well as on the ability to handle competition with a positive perspective," Milan Mayor Giuliano Pisapia said in an interview with Xinhua, adding "which means for example avoiding situations of monopoly, that are always negative."

"Simplification and de-bureaucratization are efforts that we are all doing but only few have managed to make in a positive way and with the ability to extend it to a wider territory," he said.

To comprehensively deepen reforms not only helps China plant the seeds for development, but also provides a possible solution to global problems such as maintaining world peace and stability, eradicating poverty and protecting the environment, Chairman of the Bulgaria-China forum and former Bulgarian Vice President Angel Marin said.

One challenge facing China is how to respond to the international community's expectation of the creation of a successful society model, which can be an example of sustainable development, he said.

Source: Xinhua

Japan's solar dream shatters as projects fail

The failure of solar developers to deliver on planned projects in Japan will cost the country's utilities close to $3.5 billion annually in additional coal and gas imports to generate power.

Japan's government banked on solar power to help meet the shortfall in electricity supply after the Fukushima disaster in 2011 shattered public confidence in nuclear energy. The country's reactors are shut while the government struggles to convince the population the plants are safe to restart.To encourage solar investment Tokyo introduced generous subsidies more than a year ago, sparking a rush from developers who came forward with plans that would have supplied the equivalent to 21 nuclear reactors.
But in contrast to the experience in countries such as Spain and Britain, where subsidies sparked solar booms that strained government finances, in Japan developers are struggling to deliver.
The promise of turning a quick profit from subsidized solar power encouraged speculative developers lacking the experience and expertise needed to deliver in Japan, industry experts say.

Source: Reuters

Tokyo yakuza boss demands cash, finger from retiring gang member

Tokyo Metropolitan Police on Tuesday arrested a gang boss for allegedly extorting a member who had sought retirement from organized crime without permission.

Officers arrested Yoshihide Ono, a 63-year-old boss with the Sumiyoshi-kai, and four others for allegedly participating in the abduction and extortion of a 55-year-old member in August.The group picked the victim from a street in Shinjku Ward and confined him inside a gang office. "We can do this by cutting off your finger or you can pay up," the suspects allegedly threatened.
The suspects demanded roughly 200,000 yen from the victim, who wished to retire due to the birth of a grandchild.

Source: NewsOnJapan

Tokyo cops bust Ueno hostess club for licensing violations

Tokyo Metropolitan Police on Monday announced the arrest of the manager of a hostess club in Taito Ward for licensing irregularities.

Officers took Yuichi Eitaka, the 41-year-old manager of Club Palace, located in the Ueno district, and one other suspect into custody for allegedly registering the proprietorship of the club in his name while another person was in fact the manager - a violation of the Law Regulating Adult Entertainment Businesses.According to police, Club Palace was shut down 13 years. In an effort to evade detection, Eitaka then received 1.2 million yen each month from the previous manager for the use of his name on the license. The club has generated 1.9 billion in revenue over that period.
Eitaka has reportedly denied the allegations.
Eitaka also manages more than 10 other clubs in the Ueno and Shinjuku areas. Law enforcement is now investigating these other businesses for similar violations.

Source: NewsOnJapan

500 Durians could make Southeast Asia cool for Silicon Valley

Southeast Asia has been ignored for far too long by Western VCs. Usually, when one mentions Asia in startup circles,China usually gets brought up first.

And for good reason. In terms of market volume and size of exits, nothing beats China, with Baidu, Tencent, and Alibaba making waves at home. Their presence is starting to be felt in Silicon Valley to.

Southeast Asia, unfortunately, can feel at times like a backwater area. But that could change, thanks to a new wave of Western investors that are starting to eye opportunities in a region that has some 600 million people. Indonesia alone makes up almost half of that. 

500 Durian a US$10 million micro fund started by 500 Startups, is leading the charge. An investment by the fund can mean greater exposure to venture capitalists in Silicon Valley, and that is what Southeast Asia needs.

A mouthful of durian

Heading this fund isKhailee Ng, a Malaysian entrepreneur with two exits to his name. He ran a daily deals site that got bought by Groupon, and started social news site Says.com that was merged with Catcha Media.

For now, 500 Durians’ activities has been a mystery since it was started in May, other than aninvestment in Noonswoon , a Thai mobile dating app.

Source: TECHINASIA

OECD upgrades 2014 growth forecast for Japan

The Organization for Economic Cooperation and Development has revised upward its 2014 growth forecast for Japan.

In its latest report issued on Tuesday, the OECD said Japan's gross domestic product will grow 1.5 percent next year. That's up slightly from the projection of 1.4 percent the organization made 6 months ago.The OECD cites growing exports against the backdrop of the weaker yen, fiscal measures and recovering personal spending as the reasons for the upgrade.
The OECD expects that growth will slow to one percent in 2015, mainly because of the planned consumption tax increase.
It says regaining fiscal health is the top priority for Japan because its public debts account for 230 percent of GDP.

Source: NewsOnJapan

WeChat inks deal with Singapore telco to attract more young users

Tencent’s mobile chat app WeChat and Singapore telcoStarHub today launched a newWeChat Plan, in which pre-paid users of the telco can enjoy up to 1GB of social messaging for S$0.40 ($0.30) a day or S$6 ($4.82) per month.

According to StarHub’s head of personal solutions Chan Kin Hung, the move comes as a bid to attract more pre-paid users, who tend to be price-sensitive consumers. StarHub is the first local telco to partner with WeChat to offer such a service.

Charlotte Tan, on behalf of WeChat, explains that deal is geared towards the youth demographic in Singapore:

We are seeing high interest amongst youths internationally as they migrate from established social media platforms to mobile social applications and anticipate the same trend in Singapore, where tech-dependent consumers rely heavily on their mobile devices for communication and entertainment. GlobalWebIndex had recently reported in a blog post about this trend and we had referenced their findings about WeChat’s 1,021% growth in active users aged 16-19 in the press release.

Popular messaging appWhatsApp alsoinked a similar deal with local telco SingTel earlier in August, offering daily, weekly and monthly usage plans at $0.50 ($0.40), S$3 ($2.41), and S$6 ($4.82) respectively.

Source: TECHINASIA

China Plans Opening for Private Banks

   According to a report from the Wall Street Journal,"a reform program endorsed last week by the Communist Party leadership calls for letting private investors that meet certain as-yet-undefined requirements set up small and medium-size banks and other financial institutions".

The move, while vague, signals Beijing's greater willingness to support China's private sector, which has been starved for financial resources long dominated by state firms despite being an increasingly important part of the economy.

It comes after several nimble, well-known private companies have expressed interest in setting up banks, and it marks a change in strategy for the government. China's banking system has for decades effectively been the sole domain of state-owned companies, whose senior managers answer to political masters. A mainstay of China's economic growth model, the banks turned Chinese households' prodigious savings into cheap capital funneled to state-owned industrial firms.

Small and medium-size firms are major employers, but seen as a credit risk by state banks, they have traditionally relied on loans from informal sources—friends, family, other business, and underground banks—to run their businesses. Giving those firms better access to credit offers Beijing the prospect of growth, more jobs and innovation.

Slush 2013: "Get Big by thinking Small" Ilkka Paananen CEO of Supercell

Last week nearly 1,200 companies came together at a converted Cable Factory in Helsinki for the biggest startup conference in Northern Europe. The limelight went to BetterDoctor, a US doctor database with user rankings, and Weekdone, an elegant staff management tool, who won the two day Showcase demo and pitching competitions respectively.

But Slush 2013 was about far more than any individual startup. This year it preached cohesive ideologies and highlighted four key sectors which look to be ripe pickings for the savvy startup over the next few years.

Ilkka Paananen, CEO of Finnish startup sensation Supercell, and poster boy of Slush 2013 echoed Kaljundi’s words. Having sold 51 percent of the Clash of Clans creator for €1.5 billion in October, just two years after founding, Paananen was also keen to stress one point in particular: ‘the power of small’.

“Small independent cells is where the company name comes from,” he explained. “We say ‘get big by thinking small’. We value the speed of small teams and keeping things simple. Our employees don’t need layers of processes and layers of management… [just] do what is best for your team and the customer.”

Ideology

While different markets will always require different approaches, talking to numerous startups at Slush 2013 we witnessed near-consensus in the way to become a successful entrepreneur. The three key points were: treat everything as a service, put the customer at the centre of every business decision and test early.

The last of these argues it is better to trial what you are doing and pivot or fail than to invest a fortune bringing a fully realised version of the wrong concept to market.

“You must get the prototype out there and see what customers are saying,” stresses Weekdone CEO Juri Kaljundi. “I’m a big fan of [Eric Ries’] The Lean Startup model. You have to talk to customers and listen, but then you also have to make sure you don’t try to implement too many ideas. Be focused, what you don’t implement is as important as what you do.”

China Focus: Supervision urged for P2P lending as risks loom

- Chinese experts have called for better supervision of the booming online financing industry as bankrupt peer-to-peer (P2P) lending firms have put investors' money at risk.

According to "Wangdaizhijia" (home of online lending), a Chinese P2P lending portal, some 49 P2P lending companies have gone bankrupt or encountered capital chain problems this year.

P2P lending is the practice of lending money to unrelated individuals without going through a bank. This lending takes place online on P2P websites with an average interest rate of 15 to 20 percent, more than twice China's official benchmark.

As individuals and small companies in China have difficulty getting credit from banks, P2P lending with its simplified credit checks is the best way for them to get funding. It also offers a good chance for the middle classes to invest as they can normally get three or four times the return on bank deposits.

There were about 400 P2P lending companies in China at the end of 2012 with a yearly turnover of more than 20 billion yuan (3.26 billion U.S. dollars). The number of those companies is expected to exceed 800 with a yearly turnover of 100 billion yuan by the end of 2013, said Xu Hongwei, a senior executive of the Wangdaizhijia.

Competition among P2P lending firms pushed the interest rate up to 20 percent. Some firms even offer a 48 percent annual return to woo investors which increased the default risks for borrowers, said Xu.

Lack of government supervision allowed wild development of online finance. Not the central bank, nor bank regulators, nor industry and commerce authorities, have listed the online financing on their areas of supervision, said Huang Zhen, a professor of law with the Central University of Finance and Economics.

"With only tens of thousands of yuan (thousands of dollars), you can register a company as a 'consultancy' or 'e-commerce'," said Huang, "then you can establish a website doing online financing. The threshold is too low and sooner or later somebody will take the money and run."

Allwinsz, a P2P lending firm based in the southern city of Shenzhen, suspended operations only four months after its launch.

An investor surnamed Lu from the eastern province of Jiangsu invested 80,000 yuan in July on a 20-day program with an annual return of 48 percent. But so far he has received only 8,000 yuan. He opened negotiations with the company in October but failed to get his money back. "I have no hope now. Just take it as a nonperforming asset," said Lu, who has reported the case to the police.

Although most of the P2P lenders guarantee investors' loot in case of default, a small percentage of bad debt can easily swallow their registered capital completely.

Zhao Xijun, professor of finance at Renmin University of China, suggested the government set a threshold for P2P lenders as with micro-loan companies and pawnshops. The government can put restrictions on registered capital, personnel qualifications and credit records, said Zhao.

It can also ask all the P2P lending firms to register and report their data regularly. Licensing P2P firms is also an option, he said.

Source: Xinhua

European equities markets ease

European equities ease off of multi-year highs 
After posting a more than five-year high yesterday, the European equity markets are seeing some pressure in late-day action, with traders grappling with valuation concerns in the region as well as the lingering uncertainty regarding when the U.S. Federal Reserve may begin to rein in its stimulus measures. Moreover, sentiment may be being further depressed by a reduced global growth outlook for this year and next from the Organization for Economic Cooperation and Development (OECD), citing the slowing of emerging market economies. Meanwhile, the pullback in the region comes despite an upbeat reading on German investor sentiment. The German ZEW survey of analyst investor confidence, designed to forecast economic developments six months from now, improved to 54.6 in November, from 52.8 in October, and compared to the 54.0 reading that economists had projected. This was the highest level for the index since October 2009. Additionally, the losses for stocks in the region come even as shares of easyJet Plc. (ESYJY $81) are rallying after Europe's second-largest discount air carrier, per Bloomberg, posted a 50% jump in profits and announced a special dividend. In other economic news, eurozone construction output fell in September, while growth in Italian industrial orders decelerated for September. 

Source: Schwab

The UK FTSE 100 Index is down 0.3%, France's CAC-40 Index is declining 1.0%, Germany's DAX Index is decreasing 0.2%, Italy's FTSE MIB Index is falling 1.2%, Spain's IBEX 35 Index is dropping 1.1%, and Switzerland's Swiss Market Index is trading 0.5% lower. 

China's service trade up 13.4 % Jan.-Sept.

China's service trade grew 13.4 percent year on year in the first nine months of 2013 to reach 390.5 billion U.S. dollars, official data showed on Tuesday.

According to the Ministry of Commerce, service exports rose 6.8 percent from the same period last year to 146.4 billion dollars, while imports surged 17.8 percent to 244.1 billion dollars.

The service trade deficit expanded to 97.7 billion dollars, up 39.4 percent. Tourism and transportation service sectors contributed the most to the total deficit, ending 58.3 billion and 41.7 billion dollars in the red, respectively.

Meanwhile, the trade volume of the transportation service sector totaled 98.5 billion dollars, up 6.4 percent year on year, while tourism service sector trade totaled 129.3 billion dollars, up 14.5 percent.

Source: Xinhua

OECD calls on ECB to buy euro zone assets A

The European Central Bank must consider buying government and corporate bonds to help the euro zone avoid a Japanese-style deflationary spiral, the OECD said on Tuesday.

It was a direct call for the ECB to undertake quantitative easing (QE), a policy that currently divides the bank, in the face of what the think-tank said was a risk of deflation.

Inflation in the 17-nation euro zone fell to its lowest in nearly four years in October, with the economy struggling to recover strongly after emerging from its longest ever recession.

Despite a surprise ECB rate cut this month, the Organization for Economic Co-operation and Development said in its latest economic outlook that the bank needs to take bolder measures at a time of massive unemployment and difficult credit.

"Risks of deflation may be slowly increasing," OECD chief economist Pier Carlo Padoan told Reuters. "The ECB must be very careful and be prepared to use even non-conventional measures to beat any risk of deflation becoming permanent," he said.

Under its statutes, the ECB is banned from buying bonds directly from governments but can find ways to purchase them from banks, for example, on the secondary market or accept them as security in return for finance.

Source: Reuters

Milan mayor says sustainable development "winning challenge" for whole world

Ahead of joining the European Union (EU) delegation of mayors and experts to take part in the EU-China Urbanization Forum in Beijing, Milan Mayor Giuliano Pisapia said that sustainable development was the "winning challenge" for the entire Planet.

Pisapia said in a recent exclusive interview with Xinhua that his official visit to Beijing, Shanghai and Guangzhou this week will be a precious occasion to discuss future opportunities for collaboration.

"Not only the exchange of views between different countries is important, but the positive choices of individual cities can set an example for the others," he said.

The Milan mayor said that sustainable development, which goes hand in hand with China's urbanization process, will be one of the main challenges of the country's new course, and "China is already making significant moves."

Milan, which will absorb its metropolitan area from 2014 for effect of a new law and will therefore exceed 3 million inhabitants, still has a much smaller size compared to China's metropolis.

Yet, the busiest Italian city has already experienced the development-led transformations that China is facing and can share the best practices as well as promote common agendas, Pisapia added.

Since he took power in June 2011, the Milan mayor has insisted on making citizens realize the importance of green policies. Step after step, Milan has achieved a leading role in what has been called the "Century of the Cities" in which cities will be regional catalysts of global growth.

The business capital, whose hinterland is Italy's most productive area, is part as Innovator City of the Cities Climate Leadership Group (C40), a network of cities from around the world committed to implementing sustainable actions locally. The organization has its European Regional seat in Milan.

Pisapia described the robust results with the initiatives delivered by his administration, such as the integrated mobility plan and congestion pricing, which generated a 30-percent traffic reduction and led to notable lowering by 60 percent of black carbon emissions in less than two years.

The charge, which replaced a previous limit on the most polluting vehicles, is 5 euros (6.7 U.S. dollars) per day and must be paid by motorists entering the city center. Residents are exempt for the first 40 entries but must pay a reduced fee of 2 euros per entry thereafter.

The lowered congestion also resulted in increased use of public transport as well as bike and car sharing. "The measure has the merit for arousing awareness. Many citizens who first opposed realized then the need for everybody to do their part in the fight against pollution," Pisapia said.

On the heating side, Milan has implemented "district heating." The mayor noted that around 93,000 apartments or a rough figure of 22 million cubic meters, 9.4 percent more than last year, are being treated with this system, which transfers heat from heating plants to consumers.

Energy efficiency, new technology services, collection of organic waste (that has reached a 44.6-percent level) and requalification of disused buildings and agricultural areas were among the other steps towards expanding Milan's spirit of Smart City also in light of the upcoming Expo 2015.

Pisapia noted that in a moment of trouble for the national industrial system, many young Italians have turned back to food production in the Milan territory, which has strong agriculture roots.

It was not by chance that the Milan Expo's theme "Feeding the Planet, Energy for Life" was aimed at raising an alarm regarding unacceptable wasting of food in a world where around 1 billion people are suffering from malnutrition while another billion are suffering from obesity.

In the wake of the successful Shanghai Expo 2010, the food-and-agriculture-themed event will further highlight the necessity of "sharing knowledge and technologies" at all levels to fight global hunger.

A total of 138 participants have signed up so far and a record number of 60 countries will build their own pavilions. China's pavilion will be second in size only to the Germany pavilion.

"We have different strengths but if we build cultural ties we find that we also have the same fundamental values: above all, we share the goal to achieve a better quality of life for our peoples," Pisapia pointed out.

The Milan mayor said he will bring to China his will to strengthen mutual confidence so to join efforts for sustainable development that he defined as "the winning challenge for Italy, for China and for the rest of the world."

Source: Xinhua

EU-China partnership essential to growth, prosperity: Barroso

The EU-China partnership is essential to growth and prosperity on both sides and the two should take a long-term approach to enhance their ties, European Commission President Jose Manuel Barroso told Xinhua.

"The EU-China relationship must continue to be a major source of economic growth, jobs, development and innovation for both sides," Barroso said in an exclusive interview with Xinhua before leaving for an EU-China summit in Beijing.

At Thursday's summit, top leaders of China and the European Union (EU) will celebrate the 10th anniversary of their comprehensive strategic partnership and set the tone for future cooperation.

The two sides, for the past decade, have kept closer ties as they strengthen political dialogues, economic cooperation and culture exchanges.

"We are at an important juncture and the summit is of special significance ... It will be an important moment to look forward to the next decade of cooperation between the EU and China," Barroso said.

Source:  Xinhua

Alibaba's Chief Technology Officer present at Slush, Annual Startup event in Helsinski.

As the Slush conference, an annual startup event in Helsinski, attracted thousands more participants than last year, a top Chinese IT developer has seen the opportunity of emerging independent internet ecosystem rather than the current one dominated by Americans.

Wang Jian, Chief Technology Officer (CTO) of Alibaba group, made the remarks in an interview with Xinhua, after he briefed the Slush audience about China's e-commerce businesses.

The Slush, a unique interacting platform in Europe for technical business startups which saw its sixth annual gathering Wednesday and Thursday at a wider venue, proved successful as it received 5,000 participants, a number that surprised Finnish media considering merely about 300 people came to the event in 2008.

The Slush 2013 also drew 60 billion U.S. dollars worth of venture capital, almost twice the value last year.

Believing the global internet is still largely dominated by U.S. technology, Wang said the well-sold Slush entrance tickets gave him confidence to expect a non-American ecosystem to emerge.

He said, "80 percent of netizens are outside America, whereas 80 percent of internet services are provided in America. This is ... not only ... a huge challenge ... but an opportunity as well."

Wang said he was impressed by the "enthusiasm, determination and solidarity" at the Slush venue. "They are similar to us," referring to a recent conference in China organized by Aliyun, a cloud platform of e-commerce set up by Alibaba group.

Wang chaired the conference, which was held earlier this month in Zhejiang Province in eastern China, and attended by some 5,000 developers, customers and investors.

Like Europe, thousands of Chinese business startups began to generate huge revenues through internet and to provide services to millions of users beyond China. "This is a development thanks to the global internet," said Wang.

He noted that many of Chinese successful startups are gaming companies, just like Finland, a nordic country that saw its gaming industry the fastest growing sector in 2012.

Although a senior IT person, Wang said he just heard of Slush not long ago, and he described his negligence as "a result of blind spot."

After his first speech at the Blue Stage, where Finnish Prime Minister Jyrki Katainen voiced his optimism about European startups, Wang said he felt committed to persuading more Chinese developers and investors to attend Slush in order to know the latest development in Europe.

Chinese developers are "more of grassroot" compared with their European fellow entrepreneurs, said Wang.

Meanwhile, he believed the limited scale of market is an obstacle for European developers to better test their products and services, and therefore their Chinese partners can offer help in context of the huge, fast growing market.

Moreover, Wang said business startups are relatively easier to grow due to the better-organized financing systems in European countries like Finland, which is an opportunity for those Chinese companies eager to acquire internet know-how and upgrade their product lines.

Source: Xinhua

China: Official residence system

To "explore how to implement an official residence system" was among the decisions at the Third Plenary Session last week. Although there have been no details of when and how this will be implemented, it has caught the attention of the public. A signed article in Jinghua Times says this would be a concrete measure to restrict the power of cadres so that the housing benefits they enjoy will be transparent and based on rules.

It is a common practice in some Western countries that officials at certain levels live in a government-provided and maintained residence when they take office and move out after finishing their terms. But this concept is relatively new in China. Some corrupt officials acquire free or subsidized apartments at one place, and accumulate more houses as they move to serve in another place or get promoted, which they then pass to families, relatives, or even mistresses. Some officials sell the properties, which they have obtained for free or which are subsidized, at the market price and then keep the profits. There have been cases in recent years in which officials have been found to own dozens or even hundreds of apartments.

An official residence system would help prevent this kind of corruption and could save public money, since local governments would not have to build a new house each time a new leader entered office. It could also help prevent the loss of State assets and official corruption.

The Party has launched a campaign to clean up undesirable work styles including formalism, bureaucracy, hedonism and extravagance. However, what makes a good practice stick is a rigorous system to ensure it is followed. An official residence system would be a step in the right direction, but it will need top-level design to restrict and supervise official power, and it will also require concrete measures to implement it and ensure it is not abused.

The size, expense and maintenance of official residences should be kept strictly within official limits and who can live in them should be restricted. The name of the occupant, his or her official tenure, and changes of occupancy should be made known to the public. More transparency of the properties owned by officials is also needed to decide whether they are qualified to enjoy the benefits of official residence.

Source: China Daily