In a few years, China's overseas investment may surpass the foreign direct investment it attracts

"Compared with inbound investment, China's outbound investment is expected to take off in the coming years," said Commerce Minister Gao Husheng.

China's foreign trade grew at its weakest pace in the past two years since the opening-up of the economy began some three decades ago, but its share of global trade and outbound investment is still rising, a senior commerce official said.

"Compared with inbound investment, China's outbound investment is expected to take off in the coming years," said Commerce Minister Gao Hucheng during an interview at the ministry's annual meeting on Friday.

Gao said China's total outbound investment is expected to reach $90 billion this year, a year-on-year increase of 15 percent.

Trade has given Chinese enterprises the money, technology and management skills to invest abroad.

"With the economic recovery, developed countries are in need of updated infrastructure. In developing countries, there are markets for Chinese companies to build entirely new infrastructure projects," said Gao.

In a few years, China's overseas investment may surpass the foreign direct investment it attracts, experts said.

In the January-November period, Chinese investors splashed out $80.24 billion in nonfinancial direct investment, up 28 percent from the same period last year.

During the same period, China's actual use of foreign capital was $105.5 billion, up 5.48 percent, according to the ministry.

The trend of rising Chinese ODI "will be pulled up by China's high savings rate and Chinese enterprises' stronger competitiveness," said Mei Xinyu, a foreign trade expert at the Chinese Academy of International Trade and Economic Cooperation, a think tank of the Ministry of Commerce.

"More Chinese investment will flow into global infrastructure, manufacturing and so on," Mei said.

However, Gao said that to protect the interests of Chinese enterprises in the process of going global, more legal support is necessary.

Despite criticism of China's investment environment, Gao said foreign investment in the country has been edging up, and more of it will shift away from industry and into the service sector. The total trade in services surpassed $520 billion in 2013.

"Of course, we will further standardize measures on attracting investment, clarify preferential policies and promote fairer competition between foreign and domestic companies," said Gao.

As for this year's 8 percent growth target for foreign trade, Gao said the actual outcome will be close. Total foreign trade is predicted to climb to $4.14 trillion, which would be an increase of more than 7 percent.

"Although we are moving at a slower pace, we are playing a bigger role in the international trading markets," said Gao.

Echoing the Chinese government's call for adjusting the economic structure and stimulating domestic demand, which came at the annual Central Economic Work Conference earlier this month, Gao stressed that China should maintain its competitive edge in traditional industries, such as textiles, furniture, and toys.

"As China is losing its cheap labor and material costs, it is important to cultivate brands and improve the quality of our products," Gao added.

At the same time, it is urgent for the country to create new comparative advantages in emerging industries, including water and electric power, construction equipment, high-speed rail transport and nuclear energy, according to Gao.

Source:China Daily

CEBR: China to Become World Largest Economy in 15 Years

The London-based Center for Economics and Business Research (CEBR) said China's gross domestic product (GDP) in US dollars would overtake the United States in 2028.

China is expected to overtake the United States in 2028 to become the world's largest economy, according to a research report released Thursday.

The London-based Center for Economics and Business Research (CEBR) said in its annual report 2013 that China's gross domestic product (GDP) in US dollars would overtake the United States in 2028.

"This is later than some analysts have suggested and reflects the continuing performance of the US as the West's strongest economy and the slowing down of the Chinese economy," the report said.

Based on CEBR's forecasts, India will overtake Japan in 2028 to become the world's third largest economy.

It said: "Japan is likely to follow a weak currency policy for the foreseeable future which means that its GDP in dollar terms gets overtaken by India earlier than we had previously expected."

Brazil overtook the UK in 2011 to become the world's 6th largest economy. But CEBR said that the country had since fallen back but would overtake both the UK and Germany to become the world's fifth largest economy in 2023.

"In 2014, while the Football World Cup is held in Brazil, it still looks likely that Britain will have a larger economy than Brazil," it said.

What Makes Girls Fall In Love With Computers And Code?

The perennial discussion about women in technology is in high gear once again , this time after remarks made by Y Combinator co-founder Paul Graham about the relative dearth of female tech founders and the perks of starting to code at a young age in an interview with The Information were picked up by Valleywag.

Discussions about career, gender and age with a dash of the inherent class associations that often accompany them are always dicey topics, so it makes sense that this interview hit a nerve. For his part, Graham (who, it should be mentioned, in interviews with TechCrunch has always expressed a very strong interest in funding more female founders and voiced pride inshifting the gender ratio  in Y Combinator’s founder classes) says he’s been misquoted and misunderstood, and there are some very eloquent  arguments being made that at least some of the pile-on seems to be unwarranted. That said, people on all sides of the debate are making good points, and will probably continue to do so for a while.

The real upshot of all this may be that more people are talking about solutions to the inequalities in tech. Because putting the controversy aside, there is one thing that isn’t really up for debate: There are still far fewer females in the technology industry than there are men. 

Wilson offers up some examples of initiatives tackling the problem full time, including Girls Who Code and Black GirlsCode. He also referenced TechCrunch’s interview from this past October’s Grace Hopper Celebration of Women in computing  with Dr. Maria Klawe, who has nearly closed the gender gap at the elite Harvey Mudd computer science department since she joined the college as president in 2006.

In fact, the Hopper conference was teeming with women who had fallen in love with computers and engineering, and anyone interested in learning how to welcome more women into tech should make it a priority to attend. While there this past fall, I asked a number of Hopper attendees to talk about what they love about the act of building things through code, and we’ve edited a number of those responses together for the video embedded at the bottom of this post. It’s interesting to watch today in relation to the current discussion about girls in tech, because many of the Hopper attendees I talked to had discovered their interest in computer science around the age of 13 or younger.

The thing that’s most striking about all of these responses is that there’s really nothing overtly gendered about them. They could have just as easily come from a group of males.

So perhaps the best way to get a girl interested in computers is simply to put them in front of her as often and as early in life as we do for her male counterparts and even more importantly, encourage her to approach computers as a producer, rather than as a consumer. As Maria Klawe put it in the video, “One of the things I hate about the current state of things is people think of technology as something you use, but not something you create.”

Indeed, that’s a mindset people of all ages and genders would do well to change.

Source: Techcrunch, by Colleen Taylor 

China's Xi Factor

HONG KONG - Before China's leadership transition earlier this year, experts said that the Chinese Communist Party was intent on preventing a larger-than-life personality from assuming power.

Yet the new president and CCP leader, Xi Jinping, is hardly dull. He began his term by paying homage to Deng Xiaoping at his statue in Shenzhen, where, more than three decades ago, the former Communist Party leader had launched the campaign to convert a reluctant Party to free-market reforms. In a top-level November meeting, Xi set out the details of a fundamental change in economic direction, overshadowing his colleagues.

Xi now leads a new economic group that will coordinate and impose his reforms on fractious colleagues. And, unlike Hu, he immediately became head of the military and now runs a parallel national security council. At first glance, a new "paramount leader" appears to be emerging.

Recent history explains this re-concentration of power. In 1993, central-government leaders enjoyed relatively limited powers: they did not control the money supply and had difficulty firing provincial governors or relocating top generals. Central government revenue was low; indeed, proportionately smaller than that of central governments in any other major economy.

This changed when then-Party leader Jiang Zemin and his prime minister, Zhu Rongji, centralized authority in order to stave off economic crisis at a time of growing risk to China's banks. In the process, the labor force of China's state enterprises declined by 50 million, China lost 25 million manufacturing jobs, and central-government employment was slashed. These measures saved China's economy, but at the price of widespread social stress, which made Zhu widely disliked when he left office.

Riding a wave of resentment against inequality and social tensions, Hu and his prime minister, Wen Jiabao, promised a "harmonious society," without the stresses of Zhu's agenda. They slowed economic reform and ceased political reforms. The bureaucracy expanded from 40 million to 70 million, and power devolved to provinces, bureaucracies, and state-owned enterprises (SOEs).

The somnolent Hu/Wen era, fortunately, did not dampen the economic growth triggered by the earlier reforms undertaken by Jiang and Zhu. But the economic-growth model that those reforms created was running out of steam. Low-cost exports were struggling as labor costs rose. Investment in infrastructure was shifting from growth-enhancing projects, such as inter-city highways, to less productive shopping malls in second- and third-tier cities. Productivity plummeted in SOEs, whose privileged access to financing crowded out private-sector investment. Local-government funding, through the seizure and resale of property, was reaching its limits.

Thus, it became essential to launch a new wave of far-reaching reforms, including liberalization of interest rates, securities markets, and foreign-exchange controls, in order to fund the more productive private sector and reduce excess capacity in SOEs. In particular, the reforms were needed to deflate an emerging property bubble resulting from huge savings and foreign capital inflows that had no other profitable investment outlet.

The government planned to liberalize interest rates and the capital account to encourage investment in modern, high-value industries, rather than continue to subsidize low-value exports. It started to shift the economy's base from export-oriented industries to domestic growth, and from manufacturing to services. And it announced its intention to slow local governments' seizures of farmland and excessive borrowing through captive enterprises.

Unsurprisingly, opposition to reform was implacable. SOEs were determined to defend their privileges. Highly leveraged local governments could not tolerate higher interest rates or an appreciating currency, and they were adamant about continuing land sales and opposing property taxes. They feared the financial burden of new requirements to provide social services to urban migrants.

As a result, a new, lean leadership team had to be mobilized. The number of top leaders was cut from nine to seven.

Moreover, a leading economic group was established to enforce bureaucratic compliance, as was a national security council (similar to that in the United States) to coordinate foreign policy. Previously, the military often kept the foreign ministry in the dark; and the party's foreign-affairs office, which handled North Korea, often failed to coordinate its activities with the foreign ministry, which handled South Korea. An anti-corruption campaign weakened opposition, and Zhu re-emerged as a hero. This set the stage for Xi's arrival.

In short, the new-style leadership, a form of managed charisma, was collectively designed to serve national needs. And it implies that Xi is unlikely to emerge as paramount leader. The Chinese presidency's authority has certainly increased; but Xi is powerful only when he has the votes. On contentious issues, he has but one of seven.

Source: Project Syndicate, by By William H. Overholt*                                                                          *Senior Fellow at the Fung Global Institute and Harvard University's Asia Center.

China's PM Li Drops in to Help Realize Home Dreams

Premier Li paid a surprising visit to Li Zongyi's home in the Xiyuzhuang community, one of the oldest shantytowns in the city, and promised residents that they will be able to move into new apartments next year.

For Li Zongyi, 77, an unexpected visitor to her home has realized her decades-long dream.

The guest was Premier Li Keqiang. During a one-day trip to Tianjin on Friday, he paid a surprising visit to Li Zongyi's home in the Xiyuzhuang community, one of the oldest shantytowns in the city, and promised residents that they will be able to move into new apartments in the next year.

Han Huixia, Li Zongyi's daughter, said: "I have been waiting for this moment for so long. I dare not burn coal to keep warm in winter, in case there is a gas leak or a fire."

Like families in the Xiyuzhuang community, hundreds of millions of residents in shantytowns nationwide are expected to move into new apartments, analysts said, as the country pushes ahead with renovation projects for these areas.

Huang Xiaohu, a researcher at a consultancy center affiliated to the Ministry of Land and Resources, said the renovation of some shanty areas can be very difficult, due to the complexity of the local population, a lack of financial support, and disagreements among residents on the relocation plan.

The Xiyuzhuang community, covering 64 hectares and with low-income residents comprising 20 percent of its households, is a typical case, Huang said, as the cost of compensation is too high.

"The only way out in this case is to let the government play the dominant role and provide residents with low-cost houses, instead of costly commercial apartments," he said.

A State Council meeting in June pledged to improve housing conditions for the underprivileged and to promote urbanization by accelerating shantytown reform.

Urbanization will also be pushed for another 100 million people living in the country's less developed western areas.

To achieve the target, the government will encourage private capital and enterprises to invest in the shantytown transformation, and will allow local authorities to use corporate bonds to solve the financing problem.

As of 2013, China has solved the housing problems of 2.18 million households living in shantytown areas and embarked on projects that could solve such problems for another 3.23 million households, 6 percent higher than planned.

Tao Ran, a professor at Renmin University of China, said the government has looked to the resettlement of residents in shanty areas to be one of its key economic drives in coming years.

But some fundamental work should be addressed before any steps are taken, he said.

Tao suggested that a universal guideline be introduced for local governments to follow during demolition of homes to avoid misconduct and conflicts. 

Source: China Daily

China PM Li Says Economy "Smooth and Stable" in 2014

China's economy and financial market will be on a steady path in 2014, Premier Li Keqiang said on Friday during a trip to Tianjin.

The country has the conditions in place to maintain the "smooth running of its economy and the general stability of its financial market" in the year to come, Li said.

He added that this could be achieved by pushing ahead with economic reforms and opening up the market, according to an article released on Sunday.

Li also said the government will keep a stable fiscal policy in 2014, maintain liquidity at an appropriate level, maintain reasonable growth of monetary credit and social financing, and keep the basic stability of the overall price level.

Li highlighted the supporting role of the financial industry in China's real economy during the one-day trip in Tianjin.

During his time in the city, he visited a sub-branch of the Industrial and Commercial Bank of China Limited, one of the bank’s financial leasing companies, a café-like incubation center that provides services for start-up companies, and an impoverished downtown area.

The premier pledged to push forward with financial reforms and improve the financial market's ability to support the real economy in 2014.

"Financial industry should collaborate with real economy to achieve a win-win situation. It must develop according to the need of real economy," Li said.

"Real economy requires the support of the financial market, while the smooth operation of real economy benefits the financial market in return."

Source: China Daily

China Energy Giant Inks Deal with US Shale Gas Company

China Shenhua Energy Co Ltd. announced it will join with an energy firm called Energy Corp of America to develop a shale gas project located in the state of Pennsylvania.

The booming US shale gas industry is to embrace a new partner - China's Shenhua Energy Co Ltd, the biggest coal producer in the world.

The Chinese energy giant announced that it will join with an energy firm called Energy Corp of America to develop a shale gas project located in the state of Pennsylvania.

According to a statement released by Shenhua, the company plans to invest $90 million to set up a subsidiary for the new project.

The project, which includes 25 shale gas wells, is expected to produce 3.8 billion cubic meters of gas in its first 30 years of operation.

Shenhua had already secured a gas project in Central China's Hunan province at the beginning of this year. It plans to expand its shale gas business in Southwest China's Guizhou province, the statement said.

However, Shenhua has never been involved in foreign shale gas projects before, and neither have other coal firms in China.

Spurred by the application of new technology, including hydraulic fracturing and horizontal drilling, US unconventional gas production has been on a continuous rise starting from 2007.

David Sandalow, assistant secretary for policy and international affairs at the US Energy Department, said earlier this year that the US spent 20 years before the shale gas industry achieved commercialized production driven by investment from the government.

Like other industries, innovation is the key to solving environmental problems during shale gas exploration, he said.

Earlier this month, the National Energy Administration said China has made much progress in shale gas development in Chongqing city, which is expected to reach a capacity of 5 billion cubic meters of the energy source by 2015.

Source: China Daily

UN chief regrets Abe's Yasukuni visit

UN Secretary-General Ban Ki-moon has expressed regret over Japanese Prime Minister Shinzo Abe's visit to Yasukuni Shrine.

The shrine honors Japan's war dead. Those remembered include military and political leaders convicted of war crimes after World War Two.

Ban said in a statement issued on Saturday by his spokesperson that he is aware of the visit by Prime Minister Abe and the strong reaction to it by China and South Korea.

The secretary general added that it is highly regrettable that tension from the past is still plaguing the region.

Source: NHK

War shrine shows limit in US support to Japan

The United States on Thursday criticized Prime Minister Shinzo Abe for a war shrine visit that infuriated Japan's neighbors, in a rare break to usually unstinting US support to its ally.

US advocacy of a stronger Japan -- including a more active security role by the officially pacifist country -- has been a core principle for Washington in a region marked by the rise of China and an increasingly worrisome North Korea.But Abe, known for his passionate belief that Japan should take greater pride in its history, defied US admonitions -- until now voiced quietly -- to stay away from the Yasukuni shrine, which venerates the souls of 2.5 million Japanese war dead.
"Japan is a valued ally and friend. Nevertheless, the United States is disappointed that Japan's leadership has taken an action that will exacerbate tensions with Japan's neighbors," a State Department statement said.
The US executive branch virtually never rebukes Japan, which Washington is bound by treaty to protect, except on trade issues.
China and fellow US ally South Korea voiced outrage over Abe's visit to the Yasukuni shrine, which in addition to common soldiers honors officials executed by a US-backed war crimes tribunal after World War II.
Abe made clear he did not intend to promote militarism, saying that he sought friendship with Chinese and Koreans, and had visited the shrine "to renew the pledge that Japan must never wage a war again."

SOURCE : AFP

Byron Wien*: Reflections at Year-End *Vice Chairman of Blackstone Advisory Partners LP

I think most investors would agree that as the year began they did not expect the Standard & Poor's 500 to have risen 27% by Thanksgiving.  Stocks have continually worked their way higher with the only meaningful corrections occurring in June, August and October when the talk of reducing the $85 billion a month monetary easing program picked up (June, August) and the government shut down (October).  All of this has taken place without the help of especially strong earnings or declining interest rates.  The U.S. economy has struggled to grow at 2% and the much-anticipated year-end acceleration has failed to materialize.  The individual investor has become less enchanted with bonds and has been buying stocks, but it has not yet become a tumultuous shift.  Corporations have been purchasing their own stock back, but nothing much beyond normal levels.  Washington continues to be dysfunctional so nothing has happened there to increase confidence.  Geopolitical issues have improved, but we are not yet at a point where we can feel comfortable about the Middle East, Europe or the South China Sea.

I continue to believe that the monetary expansion of the Federal Reserve was a major factor in the appreciation of equities this year.  In my view, about three-quarters of the $85 billion a month of the bond-buying program flows into financial assets rather than the real economy, so the program is a very inefficient form of economic stimulation.  The main effect of the expansion is to move stock prices higher and keep interest rates low.  If you assume that of the $85 billion, 75% goes into financial assets, that's about $63 billion.  If 75% of that goes into equities that's $47 billion.  The average daily dollar volume for the New York Stock Exchange and the Nasdaq is about $34 billion.  Assuming 22 trading days a month that's $748 billion.  The $47 billion seems like a minor factor influencing the stock market, so it must be the confidence the monetary easing engenders that propels the market higher.  We saw a hint of that when Ben Bernanke said he was thinking of tapering and confidence declined.

"Renewed confidence has been reflected in mutual fund flows.  Up until this year investors have been more favorable toward bond funds, but the strong performance of equities in 2012 and so far this year has changed the mood.  As a result, through October flows into U.S.-oriented equity mutual funds have been $20.2 billion and international equity funds have gotten $113 billion, while bond funds have experienced withdrawals of $39 billion.  Institutional investors also have been more willing to take the cash they have had in reserves and put it into equities.  The prevailing view seems to be that as long as monetary policy is accommodative, stocks will keep rising.  In the view of most investors, valuation is not yet a problem.  The S&P 500 is selling at less than sixteen times earnings, a long way from the excessive multiple levels of 2007 and 1999.  Fifteen times is the long-term average. 

The bear market of 2008-9 was caused by the sub-prime mortgage crisis and the recession it produced.  Interest rates were low when the decline started and they stayed low throughout the rise in the market.  In this cycle, which has lasted 56 months, the S&P 500 has risen 166% with 106 points coming from earnings improvement and only 59 points from multiple expansion.  Based on history, the current bull market is already aging and with most observers expecting interest rates to rise, there is not much chance for further multiple expansion.  These factors would argue for limited upside.

While the U.S. economy has continued to plod along at a growth rate of 2%, and earnings and revenues for the S&P 500 had been increasing at 2% and 2.5% respectively, there has been some improvement since October.  Earnings and revenues are now increasing at 5% and 4%, respectively.  While this does not yet confirm the acceleration that many were expecting for the second half, it does reflect a more positive business environment.  Earnings for the S&P 500 for 2013 are running at a rate of about $105.  The consensus estimate for 2014 is about $120.  I have been skeptical about an increase of that magnitude with profit margins at a high and revenues increasing modestly, but if the present favorable trend continues, earnings may turn out to be stronger than I had thought. 

I was originally planning to write about the emerging markets this month.  Equities for these countries have been doing better since the summer, but overall, the performance in 2013 has been disappointing.  The economies are still growing, but their rate of growth has slowed down substantially and this has cooled off investor enthusiasm.  Their GDP is expanding faster than their developed country counterparts.  China is expected to grow at 7.4% in 2014, India at 4.5%, Brazil at 2.3% and Mexico at 3.5%.  Emerging markets are 45% of world GDP, however, and, in my view, they are going to increase their importance going forward.  The standard of living in these countries is rising in contrast to the developed world and that should provide numerous investment opportunities in the future.  It is just hard to know when these markets will start to perform again. 

There is reason to think important changes are taking place in China.  The November Third Plenum proposed a number of reforms.  The country is shifting toward market-driven pricing for fuel and pharmaceuticals rather than state control.  Eventually even the currency could float.  The one-child policy will be relaxed over time.  The hukou system, which deprived migrant workers of the ability to transfer social welfare benefits from their home town to their new place of employment, is in the process of change.  State-owned enterprises will set aside 30% of their profits for programs like social security and healthcare.  The result of these initiatives will be a shift in the balance of the economy from an export orientation to internal consumption.  Instead of providing favorably priced goods to the United States and buying our Treasury securities, China may become the most important customer for our manufactured products.  Xi Jinping, China's President, has the power and political base to make this happen.  Let's see how long it takes. 

After an initial surge of enthusiasm about the effects of Shinzo Abe's first two "arrows" of fiscal and monetary stimulus, investors have become skeptical about the third arrow which is a growth strategy based on deregulation, increased competitiveness and innovation.  The major impediment to the success of the growth plan is Japan's aging population and declining workforce.                               Abe has already accomplished more than his critics thought he could, so perhaps further favorable surprises are ahead.

 This is the time in the year where everyone is speculating about the prospects for equities in the year ahead.  As usual the consensus is that the market will be up 10% in 2014.  I have been an observer of strategists' estimates for half a century and I can tell you that as a group they always think the market will be up 10% in the following year whether stocks were up 20% or down 20% in the previous year.  What nobody seems to be talking about is the possibility of a "fat tail."  With the uncertainties surrounding Obama's Affordable Care Act, and the risks of the initiatives in Syria and Iran taking a turn for the worse, profit margins peaking and earnings falling short, the downside is certainly not out of the question. 

As for the positives, the tone of economies around the world is improving, individuals are coming back into the equity market, share buy-backs continue, merger and acquisition activity is picking up, growth in Europe is getting better, the decline in oil prices increasing consumer purchasing power and interest rates are likely to stay low because of a reduction in bond offerings.  This could produce another year of strong stock market gains.  At this point I don't know which of the "fat tails" is more likely.  While investor optimism is approaching extreme levels on the positive side, which is a warning signal, stocks don't appear to be melting up yet.  I just have a feeling that 10% appreciation won't be the number at year-end 2014"'.

Source: Caijing.com   Reflections at Year End, by Byron Wien

PM Abe understanding of Japan's WW II intervention and Yasukani Shrine

On Thursday, Prime Minister Shinzo Abe visited Yasukuni Shrine in Tokyo to pray, as he said, “for the souls of all those who had fought for the country and made ultimate sacrifices.”

Source: Tokyo Reporter

Japan: New Year's Holidays abroad

Travelers who will spend the New Year's holidays abroad crowd into Narita Airport on Saturday, the peak of the vacation exodus.

According to Narita International Airport Corp., an estimated 1,275,900 people will use the airport between Dec. 20 and Jan. 5, a 6.5 percent increase from the same period in the previous year.

Source: Yomiuri

China: Making sense of property tax proposal

Property tax has become a hot topic of discussion in the Chinese media after figuring in the Decisions on Major Issues Concerning Comprehensively Deepening Reforms, issued by the Third Plenary Session of the 18th Communist Party of China Central Committee as a blueprint for reforms.

China has implemented many tax reforms in the past three decades but none has attracted as much public attention as property tax. The response it has generated is surprising especially because property tax in sample cities account for only a small percentage of the total tax; it is estimated to reach 152.5 billion yuan ($25.11 billion) this year, just about 5 percent of the value-added tax. Why this big interest in a "small tax"?

History tells us that property tax has always sparked disputes. When the United Kingdom tried to collect community charge poll tax in the 1980s, it met with fierce resistance from residents, and was ultimately forced to replace it by council tax in 1993.

China used to collect tax on realty in the 1950s. But after the 1986 tax reforms, property tax was applicable only to real estate used for business purpose in urban areas. The point of public debate now is whether such a tax should be extended to residential buildings as well, something that Shanghai and Chongqing municipalities did in 2011.

The reason why people are concerned about property tax lies primarily with the high and rising costs of owning a house. For a long time, many urban residents had only land-use rights on the house they lived in because of the collective land ownership system. The change came with "marketization" reform in 2000, under which a majority of residential houses became the property of residents through commercial trade or other reformatory means.

By 2012, the total area of residential houses in China had reached 19.83 billion square meters, or 14.5 sq m per person; the figure could be 30 sq m per person if the previously built houses are included. The 2012 Research Report of China Household Finance Security, jointly released by the People's Bank of China and Southwestern University of Finance and Economics, says 89.68 percent of Chinese families have their own houses, a much higher percentage than in Western countries.

For ordinary wage-earning people or families, a house is often the most prized possession, although many of them may be mortgaged in lieu of loans. Better-off or rich families also use real estate as an essential tool of investment. Therefore, property tax will have a direct impact, mainly negative, on ordinary people's investment, rents and loans. In other words, property tax might add up to a small amount for the State, but it affects the core interests of a very high percentage of people and is thus bound to raise their concern.

Besides, ordinary residents also hope that the property tax is used to bridge the widening social gap. Since China relies heavily on indirect taxes for its tax revenue, almost all the tax burden is borne by ordinary people (as consumers). But the document issued by the plenum, in principle, says that the percentage of direct tax will be increased, and the public hopes the tax on private property will help prevent the social gap from widening further.

Of course, people's opinions on property tax differ, because different people own different number of houses which they got through different channels. For example, many families have one or two houses in which they or their relatives live and it might not be fair to collect property tax from them. Hence, before introducing the realty tax, the authorities need to consider the interests of people across the social divide and allow them to express their views and reservations freely.

The heated public debate on property tax has shown that people have come to know where their interests lie. So property tax should be delicately planned and implemented to better protect people's interests and narrow the widening social gap.

Source: China Daily

Scientists grow liquid crystal "flowers" to use as lenses

Scientists at the University of Pennsylvania have grown liquid crystal flowers, making it possible to create lenses as complex as the compound eye of a dragonfly. When perfected, the technology could allow the growth of lenses on curved surfaces, and structures to be assembled out of liquid crystals to build new materials, smart surfaces, microlens arrays and advanced sensors.

To create the lenses from the liquid crystals, the researchers planted tiny silica beads in a pool of transparent liquid crystal, to obtain a pattern of defects. Petal-like shapes formed in the liquid crystal around the defects in a tiered manner, resulting in a flower-like structure that resembles an insect's compound eye.

"It's a lot like how you make rock candy as a kid," Randall Kamien, Professor in Physics and Astronomy, Penn Arts & Sciences, tells Gizmag. "The sugar naturally makes crystals, but you need to put in a seed (usually a stick or a piece of string) to get it to grow where you want. We have just done this on a smaller scale, making smaller bits of ordered material cued by smaller elements, like our silica beads."

The research represents a significant step forward in "directed assembly" nanotechnology, where scientists try to build minute structures by specifying starting conditions and letting physical and chemical processes do the assembly work, instead of doing it themselves.

"We exploit a material's tendency to form ordered structures by adding cues to the system", explains Kamien. "It is how cultured pearls are made – a seed is deliberately planted in the oyster to get it to naturally produce nacre around the seed."

Each flower petal formed out of transparent liquid crystal can act as a lens since light can interact with its curved surface. Since individual lenses can be manipulated so that they are a few microns to tens of microns in diameter, it's possible to create a flower of collective lenses which are tens of microns to millimeters in size. The technique makes it possible to grow a liquid crystal eye that's as complex as a dragonfly's eye, for example, which has millions of spherical lenses that enable it to stack lots of images into a 3D image.

"Researchers try to fabricate such compound eyes, for example, for cameras or detectors," Shu Yang, Materials Science and Engineering Professor at Penn Engineering tells us. "But it’s typically by a top-down process. So it isn't possible to fabricate millions of eyes in one-step, nor will it be cheap. Self-assembly of flower pattern of lenses will make it possible to create compound eyes in one-step. And we can control the curvature of the template, i.e., how we plant the seeds in the first place to determine how the lenses will be put together, how many of them and in what shape."

Being able to grow lenses this way opens up many exciting possibilities. Lenses could change sizes from the center to the edge, in a single eye; a feature that's very useful for certain types of applications. Biosensors could collect information from many lenses at the same time. Since the lenses form spontaneously in liquid crystal, a medium that's easily reconfigured, it may be possible to create self healing re-configurable optical devices. And all that's just for starters.

"We could make inexpensive lenses that could cover entire surfaces," says Kathleen Stebe, Chemical and Biomolecular Engineering Professor at Penn Engineering. "They could transmit images from many focal points and be reconstructed by algorithms to give improved resolution. We could have a camera on flexible substrate or curved substrates with lens that form and re-form after being bent."

Creating new synthetic metamaterials, where the arrangement and shapes of individual components determines its physical properties, also becomes a possibility.

"We are also interested in dynamically changing the physical properties of the metamaterials, which can be achieved by tuning the shape and arrangement of the seeds," Yang reveals. "Such materials will be of interest for creating superlenses that can produce flawless images much smaller than the wavelength of light, drug delivery, shape conforming mechanical metamaterials and acoustically invisible cloaks."

The team anticipates these lenses working their ways into liquid crystal displays within the next 10 years.

Source: TECHINASIA

Leaked photo of a 7-inch Xiaomi tablet surfaces on Sina Weibo

When we interviewed Xiaomi founder Lei Jun  in October 2012, he stated clearly that the startup phone-maker was not working on an Android tablet. But that was 14 months ago. A leaked image this week claims to show a 7-inch Xiaomi tablet (pictured), suggesting that Xiaomi might have been swayed by the success of budget tablets like the original Nexus 7.

The leaker, a Sina Weibo user named @PunkPanda with a fairly strong track record of sniffing out new hardware, adds that the Xiaomi Tablet – we guess it’ll be called the MiPad – has a 720p HD screen (1,280x720px resolution) and is powered by a MediaTek quad-core processor allied to a mere 1GB of RAM. That sounds a lot like the fairly basic specs of Xiaomi's budget Hongmi smartphone.

The supposed price of the Xiaomi Tablet? Nearly RMB 1,100 (about $180), which is close to the price of the Hongmi model.

This is speculation for now. It remains to be seen if Lei Jun has been convinced that Android tablets are ready to challenge the dominance of Apple’s iPad.

Rumah.com claims it’s the leading Indonesian property portal in 2013.With strong mobile presence

With the end of 2013 in front of our eyes, Rumah.com, an Indonesian online property portal, reveals its stats for the outgoing year.

Rumah, which was acquired by PropertyGuru in 2011 , rolled out its BlackBerry app last year, and followed that up with an Android and iPhones apps this year. The new Android and iPhone apps have seen 300,000 downloads, the company tells Tech in Asia , and now mobile search contributes more than 4.2 million page-views per month. That’s more than 20 percent of all visits to the website.

Jessica Effendi, the head of operations of Rumah, says that Rumah’s mobile app is proving most popular in Indonesia in terms of downloads, compared to Thailand, Malaysia, and Singapore.

On a side note, the portal has seen the number of paying real estate agents grow from 4,207 to 6,400, and active property listings have nearly doubled from 123,000 to 220,000. The team is positive that the number will keep on growing rapidly next year.

According to the latest ComScore findings in November (as quoted by the Rumah team), Rumah.com is the top property portal in the region in terms of the number of unique visitors, stronger than competitors such asRumahku ,Rumah123 ,RumahDijual , and PropertyKita . Rumah counted up two miillion visits per month on the website in September and October.

Rumah is confident in mobile uptake in Indonesia and will continue to invest in its mobile infrastructure in the country. Effendi added:

 

Indonesians want to be able to search for their desired properties on the go and in their own time. That is why we’ve incorporated their online behaviour into our development strategy to provide an inituitive and user-friendly property search experience through mobile apps, similar to what the Rumah.com website currently provides.

Mita Agustina, head of public relations at Rumah.com, reveals that the company will announce a “new, very seasoned industry heavyweight” as the new country manager for Indonesia in February.

Why did Alibaba and Jingdong apply for mobile telecom licenses?

Yesterday news broke that China’s Ministry of Industry and Information Technology (MIIT), the regulator of the country’s three state-owned telcos, announced that 11 Chinese companies had received licenses allowing them to operate as “virtual telecom service providers.” This enables these private firms to lease services from China Telecom, China Mobile, or China Unicom and repackage them for consumers, much like how Sprint licenses airwaves to Virgin Mobile, or how Walmart offers service plans using T-Mobile’s network.

It’s a watershed moment in the country’s telecom industry, marking a rare instance in which Chinese state-run firms have had to cede some power to private enterprises. However, it’s not yet clear what subsequent competition might look like.

Of the eleven firms that received licenses, two of them are major e-commerce players in China: Alibaba’s web services branch Net.cn nabbed approval (the company offers domain listings and cloud services), along with major e-store competitor Jingdong, best known for its speedy delivery service and quality control.

It’s also worth noting that two other major chinese retailers reportedly made bids for licenses Suning and Gome, both of which are companies best known for selling electronic appliances and gadgets – big bulky things like refrigerators and microwaves, in addition to sexy touchscreen phones – in their brick-and-mortar stores. But both are pushing into e-commerce as well.

Why are e-commerce firms applying for telecom licenses?

For one thing, Alibaba and Jingdong, as the country’s two largest e-commerce firms, both sell a lot of phones. In their view, selling products and services that typically accompany phones – mobile data and call minutes, mainly – could be an easy avenue through which a few extra dollars can be earned. Customers might purchase a brand-new Samsung Galaxy S4 on Taobao and subsequently select a service package from Net.cn just before the final checkout page.

Jingdong and Alibaba can also utilize their internal data to create new types of packages for consumers. In an exclusive statement given to Chinese-language media outlet Techweb, Jingdong vice president Wang Xiaosong stated that the company intends to release a phone that comes packaged completely for free along with a monthly plan – something he claims traditional carriers in China aren’t wont to doing, but that Jingdong can implement in good faith due to its existing records of customer credit ratings.

There’s also opportunity to use the increased presence on consumers’ phones to promote other company products and services. Much like traditional telcos will ink deals with hardware and software companies to pre-install apps, Alibaba and Jingdong could do the same with their own services.

That’s why Alibaba’s license is of particular interest. Over the past year, the company has launched a mobile-social land grab that saw the company expand into messaging, cloud storage, and smart televisions. It’s not clear what Alibaba’s specific end goal is, but it appears to be aiming to build an integrated online and offline ecosystem through which users can purchase physical and virtual goods. By obtaining a larger degree of control over what comes pre-installed on users’ phones, as well as fostering long-term relationships with customers via contracts, the company can continue to push its other, newer product offerings. You can be sure, for example, that an Alibaba-sanctioned phone won’t come with WeChat pre-installed, and if it does come with a messaging app built in on the home screen, it will probably be Laiwang.

There are many unknown factors that could affect the execution of Alibaba’s and Jingdong’s newly obtained licenses. For one thing, it’s not clear what terms and stipulations the state-owned telecoms might include as they provide these 11 firms access to their resources. If the terms are unfavorable and the private companies have no choice but to offer expensive contracts to customers, the new venture into the telco sector might take time before strong revenues surface.

Source: TECHINASIA

Malaysia's price hike: Subsidy cuts, new taxes worry people

Investors are more confident about Malaysia's long-overdue steps to rein in deficit. But to most Malaysians, a string of subsidy cuts and price hikes coupled with the prospect of a new tax, are a worry and many say it's too much to hit the people with at one time.

People say they've already seen prices for essentials rise since the government slashed petrol subsidies in September. And Malaysians are bracing for a lot more of the same.

In the recent months, the government has announced it will introduce a Goods and Services tax starting in 2015. Then more recently it announced increases to electricity tariffs, public transportation fares and highway tolls.

"The next one, two years will be more difficult for the general public. When things are going up, your living standards will drop, that's for sure. And it looks like we are going in that trend," Malaysian resident Puvanathan Sabaratnam says.

Malaysia's government has been running fiscal deficits since the financial crisis of 1998.

"It's important that the government rationalize the subsidies because it now makes up more than half the fiscal deficit and that in itself is not sustainable," Yeah Kim Leng, chief economist of Rating Agency Malaysia, says.

Economists also say that the country's tax base is currently too narrow, with oil and gas revenues providing up to 40 per cent of the government's income.

"This so-called over reliance on the national oil company is actually not prudent. So that's the basis for actually implementing the long-awaited GST," Leng says.

The political opposition, though, say that before squeezing the public for more revenue, the government of Najib Razak has to curb its excesses as exposed year after year in its own auditor general's reports.

"No matter how many new taxes you implement, no matter how new stream of income you bring to the government, unless there is a discipline to get rid of wastages, corruption, to re-look at the procurement practices of the country, it's like pouring money into a black hole," Rafizi Ramly of People's Justice Party says.

Najib doesn't have to call an election for at least another four years, giving plenty of time for any public dissatisfaction to ease and for the government to convince people that all these fiscal measures were in the country's best interests. Rian Maelzer, CCTV, Kuala Lumpur.

Source: CCTV

WSJ: Don't Bank on Oil Firing Up Aluminum

According to a report from the Wall Street Journal,''it can be all too easy to dismiss conflict in a place like South Sudan as "a quarrel in a faraway country between people of whom we know nothing," as then-U.K. Prime Minister Neville Chamberlain said of Czechoslovakia in 1938".

Anyone dabbling in commodities should know that nowhere is that far away, and all sorts of unexpected linkages exist. When it comes to the impact of South Sudan's crisis, consider oil and aluminum.

Next year is shaping up to be bearish for oil prices as supply growth outpaces that of demand. But recent years have reminded the world that much oil gets produced in volatile places. Civil conflict in South Sudan puts at risk its output of about 250,000 barrels a day.

Which is not an important amount as % of total world production, but if  it coincided with, say, worse violence in Iraq or a breakdown in talks with Iran, it could help support oil prices.

Higher oil, and so energy, costs could help aluminum producers and their investors with a chronic problem: oversupply. Morgan Stanley  estimates that since 2007, the market has accumulated 11.59 million metric tons of surplus metal. That is equivalent to roughly three months of global demand, a huge overhang.

Despite healthy demand growth, the world's smelting capacity has increased too rapidly to lift prices. Promised closures rarely seem to materialize. As of mid-November, some 1.2 million metric tons of production cuts had been announced, according to Citigroup. Yet the world produced an extra 1.8 million metric tons through the first 11 months of 2013 compared with a year earlier.

Morgan Stanley estimates the highest-cost aluminum producers make the metal for north of $1 a pound. The market price today is less than 80 cents. A big reason many smelters keep running despite this: Half the world's aluminum comes from China, where economic concerns aren't always the primary driver of keeping a facility open. Rising energy prices would squeeze high-cost producers further.

   Taking in account all these facts, at the end of the day fundamentals will prevail, and because of the high stocks of aluminum, expect oversupply in this metal and  weak prices also.

2013 was a year of booming social e-commerce in Thailand

2013 was a year of booming e-commerce in Thailand. Thanks to more3G coverage , the 131 percent mobile penetration rate, and about 52 million internet users in the country, more people than ever shopped online. In fact, the Thai E-Commerce Association expects that e-shopping and online businesses will have grown by 30 percent this year, up from THB 119.64 billion ($3.65 billion) spent in 2012.

In Thailand, this boom was boosted by newer kinds of e-commerce, things that have evolved from more established channels such as general e-stores and consumer-to-consumer selling via forums. Here are four emerging social e-commerce trends we’ve seen in Thailand in 2013.

F-commerce

Now that Thailand has 24 million Facebook users , it’s only natural that people are taking advantage of the crowded social network for things other than sharing. This trend is ‘Facebook commerce’, or f-commerce for short. In Thailand, f-commerce sellers often focus on women’s products, ranging from accessories to clothes, skincare products to make-up. However, merely creating a page to sell something is so 2012; in 2013, merchants actually started using promoted posts and other types of Facebook advertising. This made the business a lot more social.

This new trend – across Asia as a whole, not just Thailand – was also a chance for startups to offer services to these sellers. And so we saw things like Page365, Instapps, and Bentoweb emerge as services dedicated to building solutions for Facebook vendors in this region. Those all offers an analytics dashboard for sellers to monitor their customers’ behavior, product requests, purchases, and view how items are being shared socially within Facebook.

In some cases, these Facebook stores in Thailand are making over $100,000 per month in revenue.

Source: TECHINASIA

Millions of Tons of Metals Stashed in Shadow Warehouses

According to a report published today on the Wall Street Journal, "the world's metal is slipping into the shadows.

Banks, hedge funds, commodity merchants and others are stashing tens of millions of tons of aluminum, copper, nickel and zinc in a hidden system of warehouses that span the globe.

These facilities are known to some in the industry as "shadow warehouses" because they are unregulated and don't disclose their holdings.

They operate outside the London Metal Exchange system of warehouses, the traditional home for these metals".

As of October, a record seven million to 10 million tons of aluminum were being housed in these facilities, in countries as far apart as Malaysia and the Netherlands, according to estimates from several analysts.

The amount dwarfs the 5.5 million tons of aluminum in the LME-licensed warehouses, based on LME figures as of Tuesday. Just 12 months ago, the figures were about equal.

A similar shift is taking place with other industrial metals, analysts say.

As a result, producers and consumers are bracing for potentially wild swings in metals prices as market participants have difficulty accurately gauging supplies of these metals. With no clear insight into how much metal is in the shadow system, setting prices will become increasingly difficult, they say.

Turbulent raw-materials prices can make it more expensive to produce everyday goods when prices spike or limit output from mines and smelters when prices drop below their cost of production.

The lack of transparency is making this shadow system increasingly attractive to institutions seeking to profit from information that other buyers and sellers don't have. Some companies also are seeking a cheaper alternative to the LME warehouses, which can be 10 times as expensive as the unregulated storage, analysts and traders say.

However, metal owners can face higher interest rates from banks if they wish to use metal stored in shadow warehouses as collateral for loans, because banks see the LME system as less risky, analysts say.

Five companies operate 75% of the LME's 778 licensed warehouses. All own shadow facilities as well, people familiar with the companies said.

In some instances, a single firm runs licensed and unlicensed warehouses in the same building, with the metal counted by the LME separated from hidden stockpiles by a chain-link fence, said David Wilson, a commodities analyst with Citigroup.

After five Years from the Great Recession,UK recovery is still slow.

Five years after the collapse of Lehman Brothers almost tipped the global economy into the abyss, recovery has been slow and halting. Meanwhile the UK's 'Alice in Wongaland' economy has been coasting on easy money, its growth propelled by shopping sprees and property prices. It was a phrase which struck a chord in a year when many things were not quite what they seemed.
The UK was braced for a triple-dip recession in spring,but by summer even the double-dip
recession of 2011/12 has been pushed from headlines by statitistical updates. Growth accelerated,unemployment dropped.But many economists saw little to celebrate in a recovery driven by consumer spending and an overheating housing market. While the chancellor boasted of upward revisions to growth forecasts,the economy remains 2.5% smaller than its pre-recession peak.

Source: theguardian

Brasil : Operação para segurar dólar custa R$ 8 bilhões ao governo em novembro

O governo teve um gasto extra de R$ 8 bilhões em novembro  -o equivalente a quatro meses de Bolsa Família- na tentativa de conter a alta das cotações do dólar.

A perda foi contabilizada em operações nas quais  o Banco Central ofereceu uma espécie de seguro ao mercado contra a valorização da moeda norte-americana. Como ela subiu, o BC ficou com o prejuízo.

Chamadas de swap cambial, essas operações haviam gerado um ganho de R$ 4,7 bilhões em outubro ao BC. O objetivo, porém, não é ganhar ou perder dinheiro: é tranquilizar empresários e investidores que temem a desvalorização do real.

O dólar está em tendência de aumento em razão das perspectivas de recuperação da economia dos Estados Unidos, o que pode gerar perdas para quem tem dívida externa e elevação dos preços dos produtos importados.

Sem o seguro oferecido pelo BC, o mercado buscaria proteção comprando dólares à vista, o que elevaria ainda mais as cotações.

As perdas do mês passado foram incorporadas às despesas financeiras do governo federal, que, somadas às dos Estados e municípios, chegaram a R$ 29,9 bilhões.

Com isso, as contas públicas fecharam o mês com despesas acima das receitas, mesmo com a poupança recorde de R$ 29,7 bilhões  puxada pelo governo federal.

Fonte : Fohla de São Paulo

Foreign Warplanes Active in China’s Defense Zone

According to a report from the Wall Street Journal,"after China announced an air defense zone in November, the U.S.demonstrated its displeasure by deliberately entering the air space with an unannounced incursion by a pair of B-52 bombers. As with that dramatic gesture, new Chinese figures suggest the air zone did not deter activity by foreign militaries".

"China’s Defense Ministry said this week it monitored nearly 800 foreign warplanes within the East China Sea Air Defense Identification Zone during its first month. At a press conference Thursday, Defense Ministry spokesman Geng Yansheng also said China sent  87 of its own aircraft into the area on 51 missions during the period, both for routine patrols and “emergency identification missions.”

“We have had effective monitoring and management of the East China ADIZ and will take corresponding measures in accordance with different air threats to safeguard national air security,” Mr. Geng said.

Countries set up air defense zones as early-warning buffer areas; planes flying through them may be required to identify themselves to distinguish potentially hostile incursions. China says its zone is needed because of evolving military risks in the region  , stressing that it doesn’t reflect any new territorial claims by Beijing.

But the U.S. and China’s Asian neighbors charged China with raising risks in an already tense region, in part because its zone overlaps with ones previously declared by Japan and South Korea.

Washington regularly warns that stepped up military activity in and above the East China Sea raises the possibility of accidents and miscalculations.

In the press conference, "the Chinese defense ministry spokesman made no suggestion any dangerous incidents arose from the foreign military flights into the zone. He didn’t characterize any communication with intruding aircraft, or say which sections of the zone were entered".

Source: WSJ