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Why Foreign Investments “Flee” China?

International Herald Leader, a newspaper under Xinhua, published an article reporting that it became popular for foreign business invested in China to take their money and run away, abandoning their companies or factories in China and without filing for bankruptcy.

There are reasons for foreign investors to choose the “flee” strategy instead of a normal exit process. First, China has a lengthy process for foreign companies to terminate business in China. The bankruptcy process lasts 65 to 165 days. Some local governments even drag it to six months or a year. Second, China’s law requires the company to bear “unlimited liability” for its debt even after it declares bankruptcy.

“(If it is) easy to enter but hard to exit, (it) is definitely not a good investment environment.” said a Japanese trade promoter in Beijing.

Source, International Herald Leader, April 24, 2009

China Loses 160 Thousand Acres of Cultivated Land Annually Due to Soil Erosion

China News reported that on April 12, 2008, Chen Lei, the Minister of the Ministry of Water Resources said that China lost more than eight million acres of cultivated land due to soil erosion in the past fifty years, averaging an annual loss of 160 thousand acres.

Chen Lei said that the northwest region loses one centimeter of surface soil every year. In some parts of northeast China, which has always had rich soil, the depth of cultivated soil has decreased from one meter to less than twenty centimeters. 77% of the land in northern China has less than 30 centimeters of surface soil.

Soil erosion not only destroys soil resources, but it is also a main factor for pollution. China’s scientists estimate that soil erosion creates economic loss of 2.25% of the GDP. The environmental damage is immeasurable.

Source: China News, April 12, 2009

Xinhua: China Is Building up Its Satellite Navigation System

After China launched the second satellite of its Compass Navigation Satellite System (CNSS) on April 15, Xinhua published articles stating that China is building up its own satellite navigation system. Ten satellites will be launched in this year and next year, a global navigation system with over thirty satellites covering the entire world will be in place by 2015.

Xinhua stated that the global navigation system is largely for military use. It also mentioned that CNSS will help break the US’ monopoly in the world’s global positioning and navigation system business.

The positioning accuracy of the newly launched satellite is at the centimeter level.

Source: Xinhua, April 17, 2009

Xinhua: Global Times English Edition Starts Publication

Global Times English Edition will start its first publication on April 20, 2009. The Global Times English website will also start on the same day. Global Times English Edition will be the second comprehensive English newspaper published in China. It will report the world from the Chinese angle and convey Chinese people’ s stance and viewpoint on major issues around the world.

Global Times, a newspaper under the People’s Daily, began publishing in 1993 and is one of the newspapers with the largest number of subscribers in China.

Source: Xinhua, April 19, 2009

China’s New Strategy: Loan for Oil

China National Radio reported that China and Russia signed an intergovernmental agreement on oil cooperation in Beijing on Tuesday. Under the intergovernmental agreement, China will provide a $25 billion loan to Russia, Russia will use oil as collateral. Russia will sell China 15 million metric tons of oil from 2011 to 2030, using the East Siberia-Pacific Ocean (ESPO) pipeline.

Energy Resources are currently the number one target of China’s overseas investment. Since the beginning of 2009 China has signed several "loan for oil" cooperation agreements with other countries, including a $10 billion loan to Brazil on February 18, a $4 billion loan with Venezuela on February 21, and a $1 billion loan with Angola on March 13. On April 5, President Correa of Ecuador announced a possible deal of exchanging crude oil for a $1 billion loan from China.

On April 16, China National Petroleum Corporation signed a contract to provide a $5 billion loan to Kazakhstan’s KazMunaiGaz National Co. to jointly buy AO Mangistaumunaigas, an oil and gas company in Kazakhstan.

Source: China National Radio, April 21, 2009

China’s Navy Is Undergoing a Major Transformation

Xinhua published a lengthy interview with the Commander of the People’s Liberation Army Navy, Wu Shengli. Wu mentioned that the Navy is undergoing a major transformation. The transformation includes modernization from a mechanized system to an information technology based system and extension of target combating area from near sea to distant sea.

Wu stated that the Central Party Committee requested the Navy emphasize the preparation of military combat over the sea as the national security strategy and military strategy, and gradually develop a defense system over the sea to safeguard the country’s ocean security and development interests.

Source: Xinhua, April 15, 2009

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