NE WS LE TT E R|2 9 O C T O B E R 2 0 1 4

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FCCC activities China SME Session: ‘Understanding China’s Business Mind’ – 6 November 2014 – Gent

China Seminar: Financing Your Business in China – Thursday 13 November 2014 – 16h – Gent

Activities EPO-SIPO Conference: Recent Developments in the European and the Chinese Patent Systems Procedural Harmonization and Accessibility in Support of Innovation – Thursday 13 November 2014 – Brussels

Past events Mission for Growth to Chengdu – 21-23 October 2014

China Information Session: Current Immigration and social security landscape and recent corporate tax developments inBelgium – Wednesday 15 October 2014 – Deloitte, Diegem

China SME Session: ‘Negotiating with the Chinese’ – 8 October 2014 – Gent

Seminar: Corporate compliance in China: why is your management in China not sleeping so well anymore at night?– 24 September 2014 – Gent

Publications FCCC publishes “FCCC Members' Portraits in China Vol.2”

Call for tenders Air purifiers for the Delegation of the EU to China

Expat corner China has biggest share of high-earning expats, HSBC survey reveals

Finance Policy draft allows local governments to issue bonds

Cross-border yuan settlements on the rise

Asian Infrastructure Investment Bank (AIIB) set up

Foreign investment UK offering investment opportunities to Chinese companies

Shanghai sees big rise in FDI

Foreign trade Australia hopes its coal will be exempted from new import tariffs

Health China to start testing for hepatitis C

Macro-economy China’s biggest cities need to expand even more

FCCC Newsletter No 382, October 29, 2014 Page 1

Third quarter GDP growth slowest in five years

China to develop sports industry

Mergers & acquisitions China's MOFCOM speeds up approval of deals

Petrochemicals Value of oil stockpiles plunges as crude oil prices drop

Sinopec Star Petroleum to commercialize geothermal energy

Real estate Richest Chinese women active in real estate

Hope worst is over for property sector

Retail Shanghai world's leading city for shopping center construction

Science & technology Professional institute to determine research funding

Chinese spacecraft to fly around the moon and back

Stock markets Banks request to delay Shanghai-Hong Kong Stock Connect

Travel CNR Corp eager to sell high-speed trains to California

Shanghai International Tourism and Resorts Zone (SIRTZ) set up

One-line news

Jobs Operations Manager Reynaers Aluminium

Representative China Platform (Province of East Flanders – University Ghent) Beijing office

Advertisements Hainan Airlines, your direct link from Belgium to China

ADVERTISEMENT OPPORTUNITIES

Interested to promote your services/products to potential Chinese or Belgian clients?

We would like to offer you the opportunity to promote your services/ products to potential Chinese and/or Belgian clients. We can promote these in many different ways via advertisement on our website, newsletters and events.

Below you can find the different possibilities: • FCCC Weekly. This newsletter is published in English and contains economic & trade

information on China, a calendar with China-events and career opportunities. It is sentevery Monday to 2,700 Belgian business leaders doing business with China and to relevant institutions, embassies, federal and regional authorities as well as the Belgianand Chinese press. It is also sent to Chinese officials and companies based in Belgium.

• News from Flanders: Europe's Smart Hub. This is a quarterly newsletter published in Chinese and English. It contains articles on Flanders' business news, education and tourism. It is sent to over 2,000 Chinese and Belgian companies, Chinese national andlocal authorities, Chinese companies based in Belgium, Chinese press in Belgium. It isalso sent to all FCCC member companies and Belgian and regional institutions.

• The FCCC website, contains publications, newsletters, activities, and a broad range ofinterviews with Chinese and Flemish companies sharing their experiences.

If you’d like to advertise on our website, newsletters and events, please check out our advertising opportunities and send your interest to gwenn.sonck@flanders-china.be Please beinformed that the advertisement opportunities are limited.

FCCC Newsletter No 382, October 29, 2014 Page 2

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FCCC Newsletter No 382, October 29, 2014 Page 3

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FCCC ACTIVITIES

China SME Session: ‘Understanding China’s Business Mind’ – 6 November 2014 – Gent

The Flanders-China Chamber of Commerce (FCCC) is organizing a seminar focusing on “Ten tips to understand China’s business mind”. This event will take place at 16h00 on Thursday 6 November 2014 at the Flanders-China Chamber of Commerce, Lammerstraat 18, 9000 Gent, Belgium.

Over the last thirty years China has risen to become the world’s second largest economy. By the end of the decade it is expected to become the world’s largest. The cultural influences of those driving this economic miracle are largely unfamiliar in the West. But how can you recognize the cultural contexts in which your Chinese partners are making their business choices – and how can you best respond? CKGSB Europe presents ten guiding principles thatcontinue to inform China’s business leaders today and will continue to do so in the future.

Program:16h00 Introduction by Mrs Gwenn Sonck, Executive Director, Flanders-China

FCCC Newsletter No 382, October 29, 2014 Page 4

16h10

17h1017h30

Chamber of Commerce‘Understanding China’s business mind’ by Mr Neil Selby, Director of Education CKGSB Europe, former International Director of Oxford UniversityMr Oliver Shiell, Chief Representative of CKGSB Europe, Board Member of China Britain Business Council, former Director of Oxford UniversityExchange of viewsNetworking reception

During this session you will receive the publication “FCCC Members’ Portraits in China’. The booklet includes 17 portraits of member companies active in China. The China-based managers of those companies talk about how their firms became active in the country and the difficulties and pitfalls they faced on their way to success in the largest and most challenging market on earth.

This event is organized with the support of Flanders Investment & Trade.

If you are interested to attend this event, please register online.

China Seminar: Financing Your Business in China – Thursday 13 November 2014 – 16h – Gent

The Flanders-China Chamber of Commerce (FCCC) is organizing a seminar focused on ‘Financing Your Business in China’. This event will take place at 16h00 on November 13 at ‘Het Pand’, Onderbergen 1, 9000 Gent.

The seminar will focus on two topics, followed by a practical experience on doing business with China:

Topic 1: Financing your business in ChinaGrowing your business in China often also brings the need to grow your sources of financing in China. Access to bank financing can be challenging, especially in Mainland China. Mr Jo Vander Stuyft, General Manager KBC Hong Kong Branch, will inform you which solutions they offer in Mainland China and Hong Kong.

Topic 2: Renminbi: an opportunity for Belgian importers and exporters.Undeniably, the Renminbi is gaining ground as an international currency. An increasing number of Belgian entrepreneurs is also turning to RMB as currency for their trade with China. If you are still confused by ‘CNY’ and ‘CNH’ and all the other fancy terms in the story, this presentation will bring you some practical information on the use of the currency for international trade.

Programme :

16h00

16h05

16h45

17h1017h30

Introduction by Mrs Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce“Financing your business in China”“Renminbi: an opportunity for Belgian importers and exporters”by Mr Jo Vander Stuyft, General Manager KBC Bank – Hong Kong Branch‘Experiences of Recticel in China’by Mr Filip Goris, General Manager Asia, RecticelQuestion and answer sessionReception

If you are interested to attend this event, please register online before 6 November 2014. Members FCCC: 65 €. Non-Members FCCC 95 €.

This event is organized with the support of Flanders Investment & Trade.

FCCC Newsletter No 382, October 29, 2014 Page 5

ACTIVITIES

EPO-SIPO Conference: Recent Developments in the European and the Chinese Patent Systems Procedural Harmonization and Accessibility in Support of Innovation – Thursday 13 November 2014 – Brussels

The European Patent Office (EPO) is organizing a public information event on the occasion of the 8th meeting of the heads of the European Patent Office (EPO) and the State Intellectual Property Office of China (SIPO) on Thursday 13 November 2014 in Brussels. The President ofthe EPO, Mr Benoit Battistelli, and the Commissioner of the SIPO, Mr Shen Changyu, will outline the latest developments in the patent system in Europe and in China. The presentations will be followed by a question and answer and a discussion round directly with the two heads of offices.

Programme:

09h3010h0010h3010h5011h45

Registration and welcome coffeeRecent developments in the Chinese patent system by SIPO CommissionerRecent developments in the European patent system by EPO PresidentQ&A, DiscussionLight networking lunch

Venue: Renaissance Hotel, Rue du Parnasse 19, B-1050 Brussels.

Registration by e-mail to brussels@epo.org by 3 November 2014.

PAST EVENTS

Mission for Growth to Chengdu – 21-23 October 2014

Following the successful Mission for Green Growth to China of Vice-President Antonio Tajani and Commissioner Potočnik on 18-19 July 2013, Mr. Antti Peltomäki, Deputy Director-General – Directorate-General Enterprise and Industry, EU Commission, led a technical Mission for Growth to Chengdu from 21 to 23 October 2014. The purpose of this visit was to confirm the strong political relationship between the EU and China and to strengthen their cooperation in strategic fields. Director-General Mr. Daniel Calleja Crespo was accompanied by a delegation of representatives of business associations and entrepreneurs to discuss with Chinese politicians and entrepreneurs how to foster European industrial cooperation. During this mission, the Flanders-China Chamber of Commerce was represented by Mrs Gwenn Sonck, Executive Director, and Secretary-General EU-China Business Association.

The Mission took place in conjunction with the IX EU-China Business and Technology Cooperation Fair. This event has been held for eight editions attracting 3,255 Chinese companies and 1,572 European companies. More than 10,000 bilateral meetings took place with one third of successful matches. The IX fair gathered 800 to 1000 representatives of SMEs, clusters, business associations, R&D institutions and government bodies.More information on the Chengdu Hi-Tech Industrial Development Zone is available in Chinese at www.cdht.gov.cn and in English at www.chengduhitech.co.uk

China Information Session: Current Immigration and social security landscape and recent corporate tax developments in Belgium – Wednesday 15 October 2014 – Deloitte, Diegem

The Flanders-China Chamber of Commerce, the Chinese Association of Entrepreneurs in Belgium and Deloitte, organized a China information session focused on the current immigration and social security landscape and the recent corporate tax developments in Belgium. It was divided into two parts:

Part one: Current immigration and social security landscape and how this will evolve. Deloitte and Laga specialists will bring their views and results of the European comparative immigration study which was executed in 2014 and will elaborate on the Single Permit Directive, the EU Blue Card, the Intra Corporate Transfer Directive and the regionalization of the Belgian immigration rules. Furthermore, the social security treatment of seconded and locally hired employees will be discussed whereby the eventual conclusion of a social security treaty between Belgium and China will be debated. Speakers were Mr Erwin Vandervelde,

FCCC Newsletter No 382, October 29, 2014 Page 6

Deloitte, and Mr Filip Van Overmeiren, Laga.Part two: Recent corporate tax developments in Belgium – unknotting of the Gordian knot. The Belgian corporate tax landscape has very much evolved over the past year(s). Inspired bybudgetary constraints while aiming to boost the Belgian economy, many new and sometimes complex measures have been implemented and existing ones have been revisited to ensure proper implementation by taxpayers. During this roundtable, an illuminating overview will be given of most relevant changes in tax law, court rulings, circular letters and parliamentary questions affecting your day-to-day business. The Speaker was Mr Coen Ysebaert, Deloitte.

This event was organized with the support of Flanders Investment & Trade.

China SME Session: ‘Negotiating with the Chinese’ – 8 October 2014 – Gent

The Flanders-China Chamber of Commerce (FCCC) organized a seminar focusing on ‘Negotiating with the Chinese: Three ‘Make or Break’ differences’. This event took place on 8 October 2014 in Gent.

To a Westerner, the word ‘negotiation’ retains its Latin meaning of ‘coming to an agreement’. To a Chinese person,’negotiation’ is represented by the two characters of ‘discussion’ and ‘judgement’. During this session you will learn why the approach to ‘negotiation’ has been historically so very different and what you need to know to negotiate more effectively with your Chinese counterparts.

Following an introduction by Mrs Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce, Mr Neil Selby, Director of Education Cheung Kong Graduate School of Business (CHGSB) Europe: former International Director of Oxford University, and Mr Oliver Shiell, Chief Representative of CKGSB Europe, Board Member of China Britain Business Council, former Director of Oxford University, talked about ‘Negotiating with the Chinese: Three ‘Make or Break’ differences’.

The event was concluded by an exchange of views and a networking reception. The next sessions will deal with: Managing Risk in China and 10 ways to better understand your Chinese partners. These events are organized with the support of Flanders Investment & Trade.

Seminar: Corporate compliance in China: why is your management in China not sleeping so wellanymore at night? – 24 September 2014 – Gent

The Flanders-China Chamber of Commerce and the Province of East-Flanders have organized the interesting seminar: Corporate compliance in China: why is your management inChina not sleeping so well anymore at night? on 24 September 2014 in Gent.

Philippe Snel, lawyer and chief representative of De Wolf & Partners Shanghai Office, who hasbeen advising foreign companies in China for over 10 years, shared his insights on the currentconcerns of foreign investors in China, in particular with regard to corporate legal compliance.

Corporate compliance has indeed become the main topic of concern for foreign businesses in China in recent months. More and more companies (including a few Belgian companies) are confronted with compliance issues and some are finding out “the hard way” what the consequences of compliance breaches can be. At the same time, it still remains quite challenging to maintain and monitor corporate compliance programs in China.

This event was organized with the support of Flanders Investment & Trade.

PUBLICATIONS

FCCC publishes “FCCC Members' Portraits in China Vol.2”

See FCCC Members' Portraits on the FCCC website.

FCCC Newsletter No 382, October 29, 2014 Page 7

CALL FOR TENDERS

Air purifiers for the Delegation of the EU to China

Delegation of the European Union to China call for tenders for air purifiers supply and maintenance. Reference number EEAS-249-DELCHNP-SUP-FWC. Contract notice S 201-353920-2014 of 18/10/2014.

The Delegation of the European Union to China has launched a call for tender for air purifiers supply and maintenance. Please find under the link below all the information you need in orderto participate: http://eeas.europa.eu/delegations/china/grants_tenders/tenders/index_en.htm (click on folder “Administration”)

EXPAT CORNER

China has biggest share of high-earning expats, HSBC survey reveals

Expatriates in Asia are most likely to earn over a quarter of a million U.S. dollars a year, an HSBC survey said, and even more so if they work in mainland China. According to the survey of quality of life among overseas workers, mainland China has the biggest share of high-earning expats in the world, accounting for 29% of those who earn more than USD250,000 a year. Overall, Hong Kong ranks 10th in a list of favored expatriate destinations. Switzerland is first, followed by Singapore and mainland China. Six of the top 10 expat locations are in Asia. Market research firm YouGov polled nearly 9,300 expats in some 100 countries for the HSBC-commissioned Expat Explorer survey, asking people about their financial well-being, quality of life and the ease of raising family in the locations. In China, 65% of expat parents said the quality of their children's education had improved since the move. They also said they spent less on day-to-day expenses and leisure, which, when coupled with higher salaries, added up to greater disposable income than back home. Over two-fifths said they have a more active social life since moving to China, compared with the global average of 28%. 14% of expats in Asia earn over USD250,000 a year, compared with only 5% in Europe, the South China Morning Post reports.

FINANCE

Policy draft allows local governments to issue bonds

A draft document circulated by the Ministry of Finance on local government debt proposes letting local governments issue bonds to replace borrowings taken through local government financing vehicles (LGFV). This would require a massive expansion of China's fledgling municipal bond market. Regulators are struggling to manage a massive USD3 trillion of outstanding local government debt, much of it raised by LGFVs to finance infrastructure and real estate projects. This month, Beijing cut local governments' ability to use LGFVs for future fundraising, as these have been criticized for facilitating irresponsible borrowing and investment that now is a drag on growth. Two people with direct knowledge of the draft document said the central government wants to precisely measure the amount of local government debt currently outstanding, classify it, and assign responsibility for it to appropriategovernment bodies. The Ministry of Finance declined to comment on the draft, which has beendistributed to officials to seek opinions. Formal rules are expected to be published in a few months. China's current quota for the municipal bond market remains extremely small at CNY109.2 billion for all of 2014.

Cross-border yuan settlements on the rise

The use of the yuan in cross-border trade and investment has grown rapidly in the past five years, according to Hu Xiaolian, Deputy Governor of the People's Bank of China (PBOC). International renminbi settlement had exceeded CNY4.8 trillion by the end of September this year, up from CNY3.58 billion in 2009. Yuan payments between China and 174 countries now account for nearly one quarter of China's total international payments, which has helped the Chinese currency become the second most used for such payments after the U.S. dollar. Morethan 15% of imports and exports were also settled in yuan. The Industrial and Commercial Bank of China’s cross-border yuan business has grown by an average of more than 200% annually since China launched its pilot program to settle more cross-border trade in yuan in 2009. The PBOC had now signed bilateral currency swap agreements worth almost CNY2.9 trillion with 26 central banks and monetary authorities, including the setting up of clearing

FCCC Newsletter No 382, October 29, 2014 Page 8

houses for yuan-denominated transactions in Hong Kong, Singapore, London and Frankfurt. The renminbi is now directly tradable with the U.S. dollar, the euro, yen, pound, Russian rouble, Malaysian ringgit, Australian dollar and New Zealand dollar.

Asian Infrastructure Investment Bank (AIIB) set up

21 Asian nations signed a memorandum of understanding (MOU) in the Great Hall of the People in Beijing to create a new international bank. The Asian Infrastructure Investment Bank(AIIB) – with an initial capital of USD50 billion, to be expanded to USD100 billion – aims to fund the construction of roads, railways, power plants and telecommunications networks. Beijing will be the host city for the AIIB’s headquarters. It is expected that the AIIB will be formally established by the end of 2015. Chinese President Xi Jinping proposed the bank a year ago at a gathering of Asia-Pacific nations. China has said it will provide most if not all of the initial USD50 billion in capital. Private institutional lenders are expected to provide another USD50 billion. The Asian Development Bank (ADB) estimates developing Asian countries will need to invest USD8 trillion in infrastructure from 2010 to 2020 just to keep their economies moving forward, only a tiny fraction of which can be provided by the ADB. President Xi said that all countries with interest are welcome to join the bank. But major economies including Australia, South Korea and Indonesia were absent from the signing. China also is backing another USD50 billion-lending institution, the New Development Bank, sponsored by the BRICS countries.

• The Shanghai Financial Prosperity Index rose to 3,242 points by the end of June, up 164 points or 5.3% in the first half of the year, due to financial innovation, market development and the globalization of the yuan. The sub-index measuring the general development of the city’s financial industry gained 4% to 4,517 points as the foreign exchange, money, fund and gold markets ranked in the top four by market growth. Another sub-index that tracks the development of the yuan’s internationalization jumped 84% from last year to 36,024 points.

• Banks in Shanghai issued fewer mortgage loans in the third quarter on coolness in theproperty market, but loans for real estate development rose this year. The mortgages in the city rose by CNY10.3 billion in the third quarter, CNY8.58 billion below the third quarter’s level last year and half of that in the second quarter. Home sales fell 19.5% year-on-year by area in the first eight months this year, according to the Shanghai Statistics Bureau. New loans for land and real estate projects hit CNY61.06 billion in the first three quarters, up CNY27.96 billion from the same period last year.

• Liu Shiyu, Vice Governor of the People's Bank of China (PBOC), has been appointed Party Secretary of the Agricultural Bank of China (ABC) and is expected to be elected Executive Director of the Board. He holds a master's degree from the School of Economics and Management of Tsinghua University. Liu replaced Jiang Chaoliang, 57, who was named as acting Vice Governor of Jilin province after resigning from his position as Chairman of ABC on August 31.

• The People's Bank of China (PBOC) is preparing to inject between CNY200 billion andCNY400 billion into 20 joint-stock banks, as the GDP growth figure for the third quarterturned out less than expected. The PBOC supplied China's five biggest banks last month with a total of CNY500 billion in standing lending facilities, which mature in three months and are not collateralized.

• China’s central and local government revenue rose 6.3% to CNY995.3 billion in September, while expenditure totaled CNY1.4 trillion, up 9.1% from last year. A high base last year makes it difficult for the central government to raise revenue this year, while local government revenue could also rise slower, the Ministry of Finance said. Central government revenue has been hurt as export tax refunds increased while receipts of value-added tax (VAT) and tariffs declined. Local government revenue alsorose slower than last year due to a drop in real estate-related taxes.

• American International Group (AIG), the world’s largest insurance group, aims to openoffices in almost all of China’s coastal provinces. Eric Zheng, President and CEO of AIG China, predicted the cross-border business to be driven by exporter’s product liability insurance, trade credit insurance, executive liability, merger and acquisition (M&A) insurance and insurance coverage for overseas tourism services.

• Infrastructure financing was the focus of the Asia-Pacific Economic Cooperation Finance Ministers' Meeting in Beijing last week. The Ministers acknowledged that a

FCCC Newsletter No 382, October 29, 2014 Page 9

huge gap still exists between potential demand and available funds, and underlined the importance of attracting long-term private funding. They also discussed public-private partnerships (PPPs). China has set up a PPP center under the Ministry of Finance.

• The recent decline in China’s forex reserves was not a sign of capital flight out of the country, Guan Tao, Director the Department of International Payments at the State Administration of Foreign Exchange (SAFE), said. The People’s Bank of China (PBOC) had reported that the country’s foreign exchange reserves had declined by a record USD100 billion in the third quarter to USD3.89 trillion at the end of September. The decline was mainly due to the devaluation of non-U.S. assets, Guan said.

• Ding Xuedong, Chairman of the USD575 billion sovereign wealth fund China Investment Corp (CIC), will take over as Chairman of the investment bank China International Capital Corp (CICC) after the resignation of Jin Liqun. Jin, 65, is expected to be named President of the new Asian Infrastructure Investment Bank (AIIB).

• Sydney is expected to become the next offshore city to obtain a yuan clearing bank asearly as December. The central banks of the two countries are engaged in talks on ways to boost yuan liquidity in Australia. At present only 1% of trade between China and Australia is settled in yuan.

FOREIGN INVESTMENT

UK offering investment opportunities to Chinese companies

Companies from the United Kingdom showcased more than 40 investment opportunities in a variety of sectors to Chinese investors at the China Outbound Conference 2014 in Beijing last week. The conference, organized by the China-Britain Business Council, focused on investments in such sectors as infrastructure and property, advanced technology and retail. Zhou Xiaoming, Minister Counselor of the Chinese Embassy in London, said that cumulative investment by Chinese companies in the UK has reached nearly USD40 billion – twice as much as UK investment in China – making the UK the largest recipient of Chinese investment in the EU. “The first seven months of this year saw a surge of Chinese investment. Chinese companies carried out nine major mergers and acquisitions (M&As). With a total investment of more than USD5 billion, they have invested more than they did in the whole of 2013,” Zhou said. In 2013, China's outbound direct investment (ODI) reached a record high of USD108 billion. ODI reached USD74.96 billion for the first nine months of this year, up 21.6% year-on-year, and the upward trend is set to continue. The Ministry of Commerce (MOFCOM) estimates China's ODI will exceed inbound investment in 2015, the China Daily reports.

Shanghai sees big rise in FDI

Shanghai’s foreign direct investment (FDI) in September surged 44.6% from a year earlier to USD2.7 billion. “Shanghai continues to stand at the frontline of attracting foreign investment,” said Xue Jun, Analyst with CITIC Securities Co. “With the boost from projects in the pilot free trade zone and the Disneyland park, Shanghai has seen a big increase in its foreign direct investment last month.” Comparatively, China’s inbound foreign investment rose just 1.9% lastmonth. In the first three quarters, Shanghai drew USD15.2 billion in foreign investment, up 12.9% year-on-year. In the same period, the country’s FDI fell 1.4%. As Shanghai aims to build itself into a global financial and shipping hub, the city’s services sector recorded a132% surge in FDI of USD2.5 billion in September. The manufacturing sector drew USD284 million in investment, up 20.5%. Shanghai’s pilot free trade zone (FTZ) has also become attractive to foreign investors after operating for a year. As of mid-September, 1,677 foreign-funded companies were set up in the FTZ, accounting for nearly half of the city’s total.

• South Africa's Department of Trade and Industry will sign a memorandum of understanding (MOU) with the Bank of China (BOC) during the state visit of South African President Jacob Zuma to Beijing next month in a bid to attract more Chinese investments into South Africa's troubled economy in sectors including infrastructure, minerals and green energy. From 2003 to August this year, 45 Chinese companies have invested ZAR13 billion (rand) in South Africa, creating 12,354 jobs. China is among the top 10 investors in South Africa. From 2006 to July this year, South Africa attracted the biggest share of Chinese investment among Sub-Saharan African

FCCC Newsletter No 382, October 29, 2014 Page 10

nations at 14%.

• China’s outbound direct investment (ODI) is expected to grow by at least 10% annually in the next five years, and is likely to outweigh inbound foreign investment forthe first time this year, Zhang Xiangchen, Assistant Commerce Minister, said in Beijing. In the first three quarters, China’s ODI grew 21.6% from the same period a year earlier to USD74.9 billion, while inbound FDI fell 1.4% to USD87.3 billion. In 2002, China’s ODI was only USD2.7 billion. Around 25,000 Chinese-funded companies are now operating in foreign countries, managing assets above USD3 trillion. Last year, the Ministry approved 6,608 ODI projects, but this year, it will rule ononly 100 cases, because it has ceded its control over a number of investment projects under new rules.

FOREIGN TRADE

Australia hopes its coal will be exempted from new import tariffs

Australian coal will be exempt from controversial new import tariffs imposed by China when the two countries sign a free-trade pact, Australia’s Treasurer Joe Hockey said after a meetingin China, although the timing of a deal has yet to be finalized. Australia and China are trying to seal a free-trade agreement (FTA) before the end of this year after nearly 10 years of talks, in a bid to boost two-way trade already worth more than AUD150 billion.

• Despite the emphasis on consumption, economists expect foreign trade to remain important to China’s economy, doubling by 2020 from the current CNY4 trillion even though the current trade outlook remains shaky. Export numbers in the past two months have been improving, growing at 9.4% and 15.3% year-on-year, but the mood at the Canton Fair has been far from encouraging this time, as 96,393 buyers visited during the first phase of the autumn session, down 4.7% from the spring session.

HEALTH

China to start testing for hepatitis C

China is set to start testing to curb the spread of hepatitis C. High-risk populations to be screened first in pilot areas include gays, drug users and dialysis patients, Wei Lai, President of the Chinese Society of Liver Diseases of the Chinese Medical Association, said at the 2014 Hepatitis C Prevention and Treatment Forum. Currently, fewer than half of the sufferers in the country are detected, and only 2% of those diagnosed with hepatitis C have sought treatment. Last year, more than 200,000 cases were detected, nearly a 200% increase since 2004, he said. The national prevalence of hepatitis C stands at 0.43% of the population, an estimate based on investigations conducted in 2006, but others estimated a prevalence of 2.2%. With timely detection and treatment, 90% of the infections could be cured.

• China was home to 58,789 centenarians at the end of June – up 4,600 on the same time last year. The oldest of China’s 100-plus is 128-yer-old Alimihan Seyiti from Shule in Xinjiang, according to the Geriatric Society of China, although her age is not officially recognized by Guinness World Records. Three quarters of China’s centenarians are female, and 70% live in the countryside. Hainan, Guangxi and Anhui have the largest number of centenarians.

• The World Health Organization (WHO) has praised China’s response to combat Ebola. “China took quick action to prepare for the potential spread of Ebola. For example, China strengthened its surveillance and screening systems at airports and other points of entry and took measures to quickly develop and disseminate technical guidance on infection, prevention and control to health workers,” said Dr Bernhard Schwartländer, the WHO Representative in China. He added that “China has moved fast to prepare should an imported case arise”.

• Taiwan’s Uni-President will pull 19 product lines from shop shelves over fears that the food was made using tainted cooking oil. Of the 19 products, 17 are instant noodles. The other two are snacks sold at Taiwan's 7-Eleven convenience stores. Uni-President said it bought 5.57 tons of cooking oil in June from Ting Hsin International Group that imported low-quality oil from a Vietnamese supplier. Taiwanese President

FCCC Newsletter No 382, October 29, 2014 Page 11

Ma Ying-jeou has declared the scandal a national-security issue and said the food industry could lose NTD16 billion.

• Beijing will revive anti-pollution measures used for the 2008 Olympics for next month'sAPEC summit, ordering a 40% cut in contaminants in the capital. Five surrounding provinces and municipalities were also told to reduce their emissions by 30% from November 3 to 12. 69 big polluters in the capital will have to shut down completely for the period of the APEC summit while 72 others will have to cut output. Coal-burning boilers will also be turned off.

MACRO-ECONOMY

China’s biggest cities need to expand even more

China needs a new prescription for growth: promote migration of even more people to Beijing, Shanghai, Guangzhou and Shenzhen. Failing to expand and improve the urban areas of the biggest cities could have negative consequences because they drive innovation and specialization, with easier-to-reach consumers and more cost-efficient public transport, according to Huang Yukon, a former World Bank Representative in China. “China's big cities are actually too small,” said Huang, Senior Associate at the Carnegie Endowment for International Peace's Asia Program in Washington. “If China wants to grow at 7% for the rest of this decade, it's got to find another 1 to 1.5 percentage points of productivity from somewhere.” A strategy that supported the expansion of the biggest cities would add USD2 trillion to China's output in 10 years, more than India's 2013 GDP, said Andy Xie, a former Chief Asia-Pacific Economist at Morgan Stanley. The country should have big, densely populated urban areas, Xie said. The mega cities needed to build up, not out, he added, citing Tokyo and its population of about 37 million. Beijing and Shanghai have about 20 million people each, while Guangzhou and Shenzhen both top 10 million. Even so, given China's 1.4 billion population, their concentration is low by global standards. In the United States, the largest 10 metropolitan areas account for about 38% of GDP, about double that in China. China's urbanization policy decrees that populations will be “strictly controlled” in metropolises with more than five million people while expansion is allowed in mid-sized cities and encouraged in small ones, the South China Morning Post reports. A further 4.2 million people could be added to Guangzhou and 5.3 million to Shenzhen if those cities had the same population density as Seoul, according to a March report by the World Bank and the State Council's Development Research Center.

Third quarter GDP growth slowest in five years

China’s economy grew at its slowest pace in more than five years in the third quarter, but major activity indicators in September point at stabilization. Analysts said the third quarter growth of 7.3% – the weakest since the first quarter of 2009 – was led by the property sector. It compared with the rise of 7.5% in the second quarter and 7.4% in the first three months. However, massive policy easing is unlikely due to recent stabilization, and the country will stickto its efforts on economic restructuring on the road to a state of “new normal,” analysts said. Inthe first three quarters, China’s gross domestic product (GDP) amounted to CNY41.99 billion, up 7.4% on an annual basis. “Despite the slowdown in the third quarter, China’s economy managed a generally stable growth this year with relatively low inflation and high employment,”said Sheng Laiyun, Spokesman for the National Bureau of Statistics (NBS). He added that the third-quarter moderation was the result of the high comparative base last year, the deepening of economic restructuring and a weak real estate market. Wang Tao, Economist at UBS, described the third-quarter growth as “not so bad”. Industrial production expanded 8% in September from a year earlier, up from the pace of 6.9% in August. Retail sales grew 11.6%, keeping up with the increase of 11.9% a month ago. Fixed-asset investment (FAI) accelerated 18.3% in the first three quarters, faster than the gain of 16.5% in the January-August period. Tang Jianwei, Economist at the Bank of Communications (BoCom), said the rebounding trade performance, the improved industrial structure and better production efficiency in the country will sustain growth momentum in the fourth quarter at around 7.4%. In the first three quarters, people’s disposable income rose 10.5% to CNY14,986 and more than 10 million new jobs were created, the Shanghai Daily reports. Premier Li Keqiang said the economy has remainedrunning within “a reasonable range” in the first three quarters of this year, with evidence of some “positive and profound changes”. A growth rate of above 7% should be high enough for an economy the size of China, but what matters most is that the quality of growth is maintained, the World Bank's Managing Director Sri Mulyani Indrawati said. She suggested that China's social and economic policies should focus on areas such as land liberalization

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and capital reforms.

China to develop sports industry

China is aiming to raise the value of its sports industry to CNY5 trillion by 2025, the government announced, as it released a nationwide plan to develop the industry by pushing foreign investment, cutting red tape, and encouraging a new generation of sports enthusiasts. In 2012, the sports industry comprised just 0.6% of China’s gross domestic product (GDP). If the industry expands to CNY5 trillion it is expected to account for 1% of GDP in 2025. “There are great opportunities for foreign investors, particularly in areas such as sporting events, overseas sports tourism and venue management, where their strengths are clear,” Liu Fumin, Director of Finance at the General Administration of Sport told China Daily. Liu said that the number of foreign sports goods companies account for 23% of the total in China, meaning there was “great potential to increase”. The announcement calls for expanding the sports goods industry, promoting the development of competitive sports and accelerating the construction of new sports arenas. It also said that promoting fitness will become one of the government’s national strategies. The government will also encourage the involvement of private capital and the listing of sports companies on the stock exchange.

• Shanghai’s pilot free trade zone (FTZ) has released draft rules for spot trading of commodities, a step closer to establishing international trading exchanges for various commodities in the FTZ. The 48-item draft specifies requirements for market participants, trading methods, regulations on fund management and product delivery as well as risk control measures. The zone will allow the transactions of bonded commodities as well as warehouse receipts and bills of lading of underlying bonded commodities. The Shanghai government has said earlier it plans to set up eight international platforms to trade oil, gas, iron ore, cotton, liquid chemicals, silver, bulk commodities and non-ferrous metals in the zone by 2015.

• China's power output dropped for the second consecutive month. The output of 454.2 billion kilowatt-hours last month was down 8.4% from 495.9 billion kWh in August. Total power generation rose only 4.4% in the first nine months of the year, compared with 6.8% from a year ago, while coal use in total generation has dropped to about 78% from 82% last year. Power consumption rose 7.5% last year.

• Latest economic data showed that consumption contributed 48.5% to economic growth in the first three quarters of 2014, compared with 41.5% by investment and 10% by exports. “That has shifted from an excessive dependence on investment in thepast few years, reflecting an optimistic improvement in restructuring the economy toward a consumption-based growth mode,” Zhu Haibin, Chief China Economist at JPMorgan, told a media conference in Shanghai.

• Premier Li Keqiang has said several times this year that slower growth is tolerable as long as enough jobs are created, often referring to a survey-based unemployment indicator that is different from the registered urban jobless rate released every quarter.Sheng Laiyun, Spokesman for the National Bureau of Statistics (NBS), said the indicator will be published soon and would include migrant workers not covered by theofficial unemployment indicator. The surveyed rate fell for four straight months to 5.05% in June, while the official registered rate was 4.08% in the second quarter, unchanged from the previous three months.

• “Economic growth was within a reasonable range, as expected,” Vice Premier Zhang Gaoli said at the opening of the Asia-Pacific Economic Cooperation’s Finance Ministers' Meeting. “Inflation has stayed stable and the job market is in a good condition.”

• The HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) reached 50.4 in October, up from the final reading of 50.2 in September, according to HSBC and research firm Markit. Although the figure for this month pointed at only marginal growth, it marked a three-month high that surprised the market. Not all sub-indicators were encouraging. New orders edged down to 51.4 in October from 51.5 a month earlier; new export orders fell by 1.6 points to 52.8; and production dropped to 50.7 from 51.3.

• Profit growth at China’s state-owned enterprises (SOEs) slowed in the first nine months of 2014. Non-financial SOEs made combined profits of CNY1.85 trillion between January and September, up 5.9% from the same period of last year, the

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Ministry of Finance said. The increase was below the 10.5% rise seen in the January-September 2013 period. Profits of firms owned by the central government rose an annual 7.1% in the first nine months while companies owned by local governments reported a 2.6% rise in profits.

• The Development Research Center of the State Council, a major Chinese think tank, said that China's annual growth target will be around 7% in 2015. Gross domestic product (GDP) is expected to expand 7.4% in the fourth quarter, from a five-year low of 7.3% in the third quarter, said Yu Bin, Director of Research for the Department of Macro-economic Research. That result would give the country a full-year growth rate of 7.4%, lower than its annual target of 7.5%.

MERGERS & ACQUISITIONS

China's MOFCOM speeds up approval of deals

The Ministry of Commerce (MOFCOM), which has authority over mergers and acquisitions (M&As), is getting much faster at approving domestic and foreign deals, cutting legal costs for companies. While the Ministry's Anti-monopoly Bureau has blocked only two deals since its inception in 2008, MOFCOM has attracted international criticism from merger and acquisition lawyers and bankers for being slow to clear even small-sized deals and for imposing conditions, such as business divestments, on foreign-to-foreign mergers that barely touch the Chinese market and which have been unconditionally cleared by the United States and Europe. The introduction of a new procedure in April for what MOFCOM describes as “simple cases” has nearly halved the length of time it takes to win clearance. Lawyers say the move is part of a broader strategy to increase efficiency and improve MOFCOM’s professional image. This month, the Ministry also published its most comprehensive data set yet tracking transaction filing and approval dates, indicating that it is getting much better at transparency. “We did a deal recently from start to finish in three months – that was phenomenal, and would not have been possible a year ago,” said Mark Jephcott, the head of the Asia antitrust practiceat Herbert Smith Freehills. MOFCOM is making it easier for companies to plan and execute acquisitions, and that is reducing legal costs by up to 40% to about USD80,000 on average forsimple cases, lawyers say. The regulator took an average 26 days to approve deals that were filed under the new simple case procedure, according to law firm Norton Rose Fulbright's analysis of data. The data covers 20 transactions filed and cleared between May and the end of last month. The fastest clearance – Rolls-Royce Holdings' move to take full control of its joint venture Rolls Royce Power Systems – was approved in just 19 days, the South China Morning Post reports.

• Private equity firm Nepoch Capital has distanced itself from Co-founder He Jintao, the son of former Communist Party Standing Committee Member He Guoqiang, after he was questioned in connection with a corruption investigation. The case was linked to investigations into Song Lin, former Chairman of state-run conglomerate China Resources, which has been accused of overpaying for assets. There has been no indication that the younger He has been or will be charged with any offende, although he was placed under house arrest in May. Fifteen private equity firms that were either founded by a princeling or had princelings in senior roles have raised at least USD17.5 billion since 1999.

PETROCHEMICALS

Value of oil stockpiles plunges as crude oil prices drop

A drop in crude oil prices is adding a new challenge for China's refiners – a plunge in the valueof their stockpiles. They are already facing slowing economic growth and state controls on prices. A fall in crude prices should typically reduce expenditure and raise profits for refiners, but weak demand is driving down fuel prices and narrowing margins. China Petroleum & Chemical Corp (Sinopec) made about 9% of its revenue in the six months ended June 30 fromprocessing crude oil. PetroChina had almost 8% of sales from refining operations. China National Petroleum Corp (CNPC), PetroChina's parent, said it would have difficulty in meeting its profit targets this year because of crude oil's slump, citing high stockpiles. It said it expectedoil prices to decline further this quarter. Falling prices could “crush Asian refiners' margins” if demand for oil remains weak, said Gordon Kwan, Nomura's head of regional oil and gas research. UOB's Hong Kong-based Analyst Yan Shi downgraded PetroChina's stock to sell

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from buy and its target price to HKD7 from HKD11.60. She kept Sinopec at hold and cut its target price 11% to HKD6.60. Oil demand growth in China is expected this year to be the weakest since 1990 as economic growth slows, Sanford C Bernstein Analyst Oswald Clint wrote in a report.

Sinopec Star Petroleum to commercialize geothermal energy

China Petrochemical Corp, China's second-largest oil and gas producer, is seeking to commercialize geothermal energy after spending about CNY1 billion in the past few years to develop more than 10 pilot projects. Zhou Zongying, Researcher at Sinopec Star Petroleum – China Petrochemical's geothermal energy development arm – said the renewable energy had good potential to partially replace coal-fired heat and electricity generation in big cities. China Petrochemical is the parent firm of China Petroleum & Chemical Corp (Sinopec). “So far, geothermal energy's development has been limited by the high initial investment required, but as more local governments are imposing restrictions on coal-fired heat and power generation, geothermal energy will have more room for development,” Zhou said on the sidelines of the China Mining conference. Since July, Beijing has implemented tougher emission reduction requirements on coal-fired power plants that are similar to those in developed nations. Geothermal energy is expensive to develop, but Zhou said projects in locations with good resources were modestly profitable. The best geothermal resources are found in Tibet, Yunnan and Sichuan provinces.

• PetroChina Co is on course to surpass its target of 2.6 billion cubic meters of shale gas production in 2015 from fields in Sichuan province. China halved its target of producing 60 BCM by 2020 because of geological challenges. It plans to produce 6.5 BCM of shale gas by 2015. PetroChina aims to produce 5 BCM by 2017 and 12 BCM by the end of the decade. Output this year may reach 200 million cubic meters and large-scale commercial production will begin in the first quarter of next year.

REAL ESTATE

Richest Chinese women active in real estate

Three of the top five richest women in China are in the property sector, which has been suffering from a prolonged market downturn, according to the Hurun list. Yang Huiyan, who controls Country Garden Holdings, remained at the top, but her wealth shrank 14% to CNY44 billion. She was followed by Chen Lihua, Chairman of Fu Wah International Group, whose wealth rose 8% to CNY40 billion. Fourth-richest Wu Yajun earned her fortune from Longfor Properties. She suffered a 7% decline in wealth to CNY26 billion. Despite falling sales and share prices, the property sector still accounted for 28% of the 50 richest women in the Hurun list. The financial sector took 14%. Among the top 10 richest women from the property sector were Soho China Chief Executive Zhang Xin; Fion Luk, acting Co-chairman of Agile Property Holdings; and Zhang Jing, Co-founder of Maoye Group. The list is based on a calculation of their fortunes as of August 15 and by using an exchange rate of CNY6 to the U.S. dollar. New to the top 10 list is Ma Dongmin, the wife of Robin Li and Co-founder of search engine Baidu. Her wealth surged to CNY22.5 billion, given the rising valuations of internet companies. The women's average wealth is only a quarter when compared with China's top 50 richest men. In terms of location, nine are from Shenzhen, another nine are from Beijing and five are from Shanghai.

Hope worst is over for property sector

Property sales and investment activity fell to fresh lows last month, but stimulus measures from the central bank have given rise to hopes that the worst will soon be over. The National Bureau of Statistics (NBS) said that residential property sales in the first nine months of the year slumped 10.8% year-on-year, the largest fall since April 2012. Investment growth in the same period was just 12.5%, the same as in August 2009 when the world was in the grips of the financial crisis. With house price declines spreading to a record number of cities and new construction tumbling, the government took aim at reversing the housing slowdown in September, cutting mortgage rates for some homebuyers for the first time since the global financial crisis. Developers said that move might have marked the end of the downturn because it changed buyers' expectations. Home sales in October seemed to bear that out. TheChina Index Academy said that from October 13 to 19, sales rose week-on-week in 34 cities.

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Those cities represent 83% of all the cities it monitors. Total sales in the 41 cities it monitors rose 20% over the previous week. First-tier cities posted bigger rises－ for example, Beijing had the largest gain of 134%. Data from another private institution, Centaline Group, confirmed the trend. “The market kept warming up. After the National Day holidays, sales in 54cities had risen for three consecutive weeks,” said Zhang Dawei, Chief Analyst with the group. Developers have rolled out more units for sale, helping boost transactions. In Beijing, 3,879 new apartments were offered from October 13 to 19, a nearly six-fold surge from the previous week, according to Yahao Real Estate Service Corp. The current home sales decline has lasted for nine months, while the last such streak lasted for seven months (January-July 2012).Prior to that, there was a decline of eight months from May to December 2008, the China Dailyreports.

• The value of new houses sold in China fell 10.8% in the January-September period from a year earlier to CNY4.05 trillion, while in area 676.7 million square meters of new homes were sold in the first three quarters, down 10.3% from a year ago.

• Australian lenders and property developers are gaining from surging demand from China. Chinese purchasers overtook Americans to become the biggest buyers of real estate in Australia in the 12 months to June 2013, ploughing AUD5.9 billion into commercial and residential property, a 42% increase from the previous 12 months, said Australia's Foreign Investment Review Board.

• Outbound investment in commercial property rose more than 200-fold from 2008 to June 2014, reaching a total of USD33.7 billion during the period. The United States was the top destination for investment from the Chinese mainland, followed by the United Kingdom, Hong Kong, Singapore, Australia and Malaysia, according to research by Cushman & Wakefield. Most of China's investments in U.S. property are concentrated in the “gateway cities” in the eastern and western coastal areas as well as the Great Lakes region. The UK is the first choice for Chinese real estate investors in Europe, with London alone accounting for 62.7% of the European total.

• The number of Chinese cities where prices fell month-on-month rose to 69 last month from 68 in August, the National Bureau of Statistics (NBS), which tracks housing prices in the 70 major cities, said. Prices were flat in Xiamen in Fujian province. New home prices in Luzhou, Guilin and Bengbu led decliners countrywide, with a 1.9% fall from August. Of the four first-tier cities, prices in Guangzhou fell 1.4% month-on-month, followed by a 1.1% decrease in Shanghai and a 0.9% drop in both Beijing and Shenzhen. New home sales rebounded in September, up about 8% from August in the 70 cities.

RETAIL

Shanghai world's leading city for shopping center construction

Eight of the 10 busiest cities for shopping center construction around the world are in China, according to property firm CBRE, which warns that Shenyang and Wuxi are at high risk of suffering from oversupply. In its latest Marketscore report, which focuses on China's retail market, it said Shanghai was leading the world in building shopping centers, with 3.3 million square meters under construction, followed by Chengdu, the capital of Sichuan province, with 3.2 million sq m. It said Shenyang was “one of the first cities in China where the retail market has become exposed to oversupply risk”. Shenyang's total retail stock amounted to 5.1 million sq m at the end of June, the most in any second-tier city. “By the end of the second quarter of this year, the overall vacancy rate in Shenyang stood at 19%, a relatively high figure comparedto other major cities in China,” the report said. The study said Shanghai, Beijing and Hangzhouoffered the brightest prospects for investors in retail real estate, while advising investors to exercise caution when considering opportunities in second-tier cities such as Shenyang and Wuxi. The new report analyses 17 city markets in terms of 14 key indicators that influence the performance of the retail property market. In Shanghai, retail rents had been increasing at a compound annual growth rate of about 7.9% and vacancy rates remaining well below 10%. Shanghai also topped the rankings with 30 luxury outlets and 83 fast fashion stores. A numberof high-profile international brands, such as Old Navy and Abercrombie & Fitch, have made their mainland debuts in Shanghai this year. Beijing ranked highest in China in terms of overallretail consumption, with spending on high-end goods accounting for a considerable proportion,the study said. The report said the retail stock in Beijing was relatively dispersed, with only 20% of it in central hubs and the remaining 80% distributed among a range of secondary submarkets. Beijing's retail market was expected to continue evolving in a decentralized

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fashion, the South China Morning Post reports.

SCIENCE & TECHNOLOGY

Professional institute to determine research funding

In a reform to be announced soon to curb academic corruption and encourage research innovation, the government will step back from managing the State Research Fund and hand over that power to a third-party agency. “Researchers will no longer need to make frequent visits to the government to gain funding,” said Zhang Xiaoyuan, Director of the Department of Facilities and Financial Support of the Ministry of Science and Technology (MST). Professionalinstitutes will decide which researchers gain funds. At present, the government has the power to both distribute state research funds and supervise their use, which easily leads to corruption. In addition, more than one Ministry may be involved and, due to the lack of a communication mechanism, some corrupt researchers use one project to apply for multiple funds from different sources, which leads to the abuse of government funds, the China Daily reports. Last year, the central government invested CNY236.5 billion in science and technology, accounting for 11.55% of total state investment for the year.

Chinese spacecraft to fly around the moon and back

China has launched an experimental spacecraft to fly around the moon and back to earth in preparation for an unmanned mission in 2017 to bring back moon rock samples to earth. The mission will last 8 days. The spacecraft lifted off from the Xichang satellite launch center in Sichuan province. Last year a Chinese lunar probe landed on the moon with a rover onboard. The rover sent pictures to earth but also experienced a mechanical malfunction. It was not designed to return to earth. The latest mission is to “obtain experimental data and validate re-entry technologies such as guidance, navigation and control, heat shield and trajectory design”for the future moonlander, Chang’e 5, Xinhua news agency reported. Alongside its manned program, China is also developing the Long March 5 heavier-lift rocket needed to launch the components of a space station.

• The Fudan University Management School has lost 10% of its Executive Master of Business Administration (EMBA) students following a ban on government officials using public funds to take expensive training courses. The school currently has between 700 and 800 EMBA students and has trained some 3,300 EMBA graduates. Fudan’s EMBA program with Washington University ranked first on China’s mainland and seventh in the world on the latest Financial Times 2014 EMBA ranking.

• Construction of Xiamen University's Malaysia branch campus began last week, marking the first overseas outreach by Chinese higher education institutions. The Malaysia campus is located a 15-minute drive from Putrajaya, the federal administrative center of Malaysia. Construction will be finished in about two years, andstudent enrollment will begin in the autumn of 2015. The first class will have 500 students, and the student population is expected to reach 5,000 by 2020. The campusaims to eventually have 10,000 students, including undergraduate and graduate students.

• Attending international departments of Chinese high schools, which education specialists and insiders have called “study overseas without going abroad”, has become increasingly popular among Chinese students in recent years. At least one-third of public high schools in big cities like Beijing and Shanghai have launched their own international departments, which are separated from the domestic departments and offer international courses to students preparing for study overseas after they graduate. 2% to 5% of all students choose to study at international departments, and the proportion may grow in the future.

STOCK MARKETS

Banks request to delay Shanghai-Hong Kong Stock Connect

Some of the world’s biggest banks and asset managers, united in the Asia Securities Industry & Financial Markets Association (ASIFMA), have asked the Hong Kong securities regulator to delay a landmark stock trading link with China’s mainland due to uncertainty over the

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scheme’s rules. The Shanghai-Hong Kong Stock Connect scheme was widely expected to be launched on October 27, but will now be delayed till November or December. The trading link will for the first time allow international investors to trade Shanghai-listed shares via the Hong Kong stock exchange, while mainland investors will be able to trade Hong Kong-listed shares via the Shanghai bourse. The scheme could push up the average daily value of stock trading in Hong Kong by about 38% to HKD93 billion by 2015, French bank BNP Paribas estimated. The Shanghai exchange did not immediately respond to requests for comment but HKEx said its market infrastructure and operations were ready. ASIFMA said its members could not begintrading because of uncertainty surrounding some technical issues and a lack of clarity over taxation of capital gains, dividends and other corporate profit. The Association asked for its members to be given a month’s notice before launch. Banks would need time to calibrate trading systems and prepare client documentation, the Shanghai Daily reports. The Shanghai-Hong Kong Stock Connect is also expected to create a market for new over the counter (OTC)derivative products with underlying A-share assets.

• Private firms have overtaken state-owned companies this year for the first time as the biggest drivers of investment banking revenues in China. So far this year, about 78% of the total value of Chinese stock market listings, rights issues and other deals has come from the private sector, up from last year, when it was less than half.

TRAVEL

CNR Corp eager to sell high-speed trains to California

Train maker China CNR Corp is trying to sell its high-speed trains to California. The U.S. state’s USD68 billion high-speed rail project includes a contract to supply up to 95 trains that can travel up to 354 kilometers per hour. About a dozen firms, including from Japan and Spain, are expected to compete. China has made no secret of its desire to export its high-speed technology abroad, having built over 12,000 kilometers of track at home in less than a decade. While China Railway Construction and China Railway Group has helped or indicated their interest to build thousands of kilometers of high-speed track in countries such asTurkey, Saudi Arabia and Venezuela, Chinese companies have yet to sell high-speed trains abroad. Premier Li Keqiang has led a drive to promote the technology in Thailand, Britain, Russia and India. A Chinese consortium was the only competitor to present a bid for a tender to build a 210-kilometer high-speed line in Mexico.

Shanghai International Tourism and Resorts Zone (SITRZ) set up

The setting up of the Shanghai International Tourism and Resorts Zone (SITRZ) is part of the 12th Five Year Plan (2011-2015) to develop the tertiary industry. The top attraction in the zone is the Disney Resort Shanghai which is scheduled to be opened at the end of 2015. The majorshareholder in the project is the Shanghai Shendi Group. A second phase of “functions clustering” will take place from 2016 to 2020. One of the complementary projects is a cultural and tourism zone of 89,100 sq m. It is slated to attract companies in the cultural and entertainment sectors, but also support industries such as logistics, hospitality and finance.

• The National Development and Reform Commission (NDRC) has approved feasibility reports on five airport and three railway projects, with a total investment of CNY150 billion. The five airports, with planned investments of CNY5.49 billion, are located in the provinces of Jilin, Qinghai, Yunnan and Guizhou, and in Inner Mongolia. The threerailway projects are worth CNY144.52 billion. China’s urban fixed-asset investment (FAI) grew only 16.1% year-on-year to CNY35.78 trillion in the first nine months.

• Boeing and the Commercial Aircraft Corp of China (COMAC) opened a demonstration facility that will turn waste cooking oil into sustainable aviation biofuel. The two companies estimate that the Hangzhou-based facility – the China-U.S. Aviation Biofuel Pilot Project – is able to produce 500 million gallons of biofuel in China annually from used “gutter oil.” Biofuel produced by the facility will meet international specifications approved in 2011 for jet fuel made from plant oils and animal fats.

• A new taxi industry regulation will allow passengers to refuse to pay fares if drivers break certain rules. The regulation comes into effect on January 1. If drivers don't use meters properly, don't get passengers to destinations on time, don't give receipts or

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don't accept payment by transport cards, passengers can refuse to pay the fare.

• Airbus Helicopters expects China to become its biggest market within six years as Beijing starts to lift restrictions on the use of low altitude airspace from next year. Airbus Group's helicopter division expected to increase its annual sales in China to 150 units by 2020 from 30 to 40 now, its China President, Norbert Ducrot, said. Sales in the United States average 120 to 150 aircraft per year. The use of helicopters and small aircraft has been constrained by the military's control of low altitude airspace.

• China CNR Corp has signed a CNY3.5 billion contract with the Massachusetts Department of Transportation to deliver 284 subway cars for the Boston subway network, the oldest in the United States. The trainmaker beat competitors including Bombardier, Hyundai Rotem Co, Kawasaki Rail Car and CSR Qingdao Sifang. CNR plans to build a new manufacturing facility for final assembly of the vehicles in Boston, which will serve as the company’s U.S. headquarters.

ONE-LINE NEWS

• Police in Australia and China are to cooperate on the extradition of Chinese economic fugitives, including many corrupt officials, the Ministry of Public Security said. The jointoperation will make its first confiscation of assets in Australia in the coming weeks. Beijing faces difficulties over the return of fugitives due to a lack of bilateral extradition treaties, and political and legal problems with some countries, such as the United States, Canada and Australia.

• Vehicle sales in China will probably miss a revised growth forecast for the year as demand slows. Dong Yang, Secretary General of the China Association of AutomobileManufacturers (CAAM), said passenger and commercial vehicle sales for the full year were likely to hit 23 million units, an increase of about 4.6%. In July, the group loweredits growth projection to 8.3%, or 23.83 million units, down from a 10% rise it predicted in January.

• Guangdong province plans to bar officials who have spouses and children living overseas from playing leading roles in government departments, public institutions, people's organizations and state-owned enterprises (SOEs). “Naked officials” also will not be allowed to work in “important or sensitive” posts.

• The Chinese Communist Party unveiled legal reforms aimed at giving judges more independence and limiting officials’ influence over courts. The decisions were made atthe Fourth Plenary Session of the 18th CPC Central Committee in Beijing, which focused on the rule of law. The Plenum also said it will assess cadres based on their “compliance with the law.”

• Zhao Houlin is to become the first Chinese Secretary General of the International Telecommunication Union (ITU), the United Nations agency that deals with information and communication technology. He won the backing of 152 member states, and will take office in January. He is the third Chinese to be elected to head a UN organization. The others are Hong Kong’s Margaret Chan, Director General of the World Health Organization (WHO), and Li Yong, Director General of the Industrial Development Organization (UNIDO).

• Auction house Christie’s says that it now takes just a few days to bring over art pieces through the Shanghai Free Trade Zone (FTZ) for display in Shanghai, compared with weeks spent on customs procedures and warehousing arrangements before the FTZ was launched. There has been speculation that auctions of Western art pieces could be held in the zone, with Chinese collectors exempted from import duties if they keep the items there.

JOBS

Operations Manager Reynaers Aluminium

Working at Reynaers. A challenge worth taking up.

Reynaers Aluminium was established in 1965 in Belgium and specialises in the development and marketing of innovative aluminium systems for building industry: windows, doors, sliding systems, conservatories, curtain walls and brise-soleil. We develop, market and distribute aluminium systems for new-build and renovation projects worldwide. Reynaers in China is a

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fully operational entity with local sourcing and sales in since 2005. Currently more than 20 people, HQ in Shanghai with warehouse & insulation plant in Jiangsu province.

To support our growth strategy in China we are looking for an Operations Manager.

Duties & responsibilitiesThe successful candidate will report directly to the General Manager with a dotted line into the Global purchasing structure and will be responsible for:

• Local sourcing, supply chain and logistics, Quality Control, customer• services,• Warehouse and production,• ERP,• Daily management of his team,• Developing and managing supplier base for sourcing aluminium• extrusions, accessories, gaskets, surface treatment, find new suppliers,• Developing and implementing strategies and principles to drive

cost/quality/service/KPI of suppliers in close collaboration with Global• purchasing team,• Implement and manage Quality Control system,• Communication with customers,• Monitor and constantly improve performance towards customers,• Communication with related departments HQ in Belgium.

RequirementsEducation:

• You are a master, or engineer, or equal experience in manufacturing and supply chain.

Experience:• At least 6 year managerial experience in the field of operations or supply chain

preferably in windows and doors, building materials or construction related industries. Experience in the aluminium industry is a plus.

Knowledge, skills and abilities:• Proven record in logistics organizations, operations, supply chain and people

management• Ambitious and positively assertive in your approach• You are skilled in planning & follow up• You handle projects and manage people in a result oriented and communicative way

and are able to make decisions quickly from a helicopter point of view,• Negotiation is a key skill together with analysis capabilities,• You are able to work in a team and proficient in using standard IT tools• The face to face contact in the field is important for your function• Frequent travel is expected both within as outside China• Entrepreneurial attitude

Languages:• Fluent knowledge of English is a requirement. Knowledge of Chinese will be

considered a big advantage.

The selected candidate will be part of local senior management team, based in Shanghai and will be traveling within country and abroad according to the business needs. Interested to apply? Please send your CV to albertas.jerusevicius@reynaers.com

Representative China Platform (Province of East Flanders – University Ghent) Beijing office

The University of Ghent has a full-time vacancy for a representative in Beijing pursuant to the “Agreement between the Province of East Flanders and UGhent on a common representation in Beijing (China)”. The tasks of the representative include acting as a liaison in China for the University of Ghent and the Province of East Flanders and to identify opportunities for companies of East Flanders, among others. Candidates are requested to send their cv and motivation letter by e-mail by October 31, 2014 to: Isabelle De Coen (isabelle.decoen@ugent.be), tel. 09 264 70 30, Peter De Steur (peter.de.steur@oost-vlaanderen.be), tel. 09 267 86 85. More information about this vacancy is available on the FCCC website.

FCCC Newsletter No 382, October 29, 2014 Page 20

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FCCC Newsletter No 382, October 29, 2014 Page 21

Organisation and founding members FCCCPresident: Mr. Bert De Graeve, Chairman of the Board, NV BEKAERT SAVice-President: Mr. Stefaan Vanhooren, President Agfa Graphics, Member of the Executive Committee of the Agfa Gevaert Group, NV THE AGFA-GEVAERT GROUP SASecretary and Treasurer: Wim Eraly, Senior General Manager, NV KBC Bank SAExecutive Director: Ms. Gwenn SonckMembers of the Board of Directors and Founding Members:Mr. Bert De Graeve, Chairman of the Board, NV BEKAERT SAMr. Jozef De Mey, Chairman of the Board, NV AGEAS SAMr Philippe Vandeuren, Legal & Corporate Affairs Director Benelux & France, NV AB INBEVMr. Carl Peeters, CFO, NV BARCO SAMr. Kris Verheye, Vice President Corporate Division, NV BELGACOM SAMr. Johan Verstraete, Vice-President Marketing, Sales & Services Weaving Solutions, NV PICANOL SAMr. Luc Maton, General Manager Asia Region, NV AHLERS SAMr. Philip Hermans, Director General, NV DEME SAMr. Egbert Lox, Vice-President Government Relations, NV UMICORE SAMr. Wim Eraly, Senior General Manager, KBC Bank SA

Membership rates for the period September – December 2014:● SMEs: €150● Large enterprises: €325

Contact:Flanders-China Chamber of CommerceLammerstraat 18, B-9000 GentTel.: +32 9 266 14 60/61 – Fax: +32 9 266 14 41E-mail: info@flanders-china.be Website: www.flanders-china.be

Share your story:To send your input for publication in a future newsletter mail to: info@flanders-china.be

This newsletter is realized with the support of Flanders Investment & Trade.

The FCCC Newsletters are edited by Michel Lens, who is based in Beijing and can be contacted by e-mail michel.jc.lens@gmail.com . Disclaimer: the views expressed in this newsletter are not necessarily those of the FCCCor its Board of Directors.

FCCC Newsletter No 382, October 29, 2014 Page 22