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China Prevents MasterCard from Handling RMB Transactions

Xinhua recently reported on a dispute between MasterCard and the Chinese authorities on the right to handle RMB transactions. The report is based on British media reports of a document that the Chinese central bank issued asking online payment platform EPayLinks to stop cooperating with MasterCard in conducting RMB business. About a year ago, the World Trade Organization (WTO) ruled that the Chinese government’s protection of the monopoly power of UnionPay, China’s bankcard association, in RMB credit card transactions broke the WTO agreement. Since that ruling, the Chinese central bank has not made any changes. It seems the Chinese authorities will continue to maintain a tough position on this matter. China is one of the fastest growing credit card markets in the world. China issued 46 million credit cards in 2012. According to MasterCard’s estimate, China will surpass the United States in 2020 to be the largest credit card market in the world. The Chinese RMB-based credit card monopoly, UnionPay, doubled its business volume over the past four years. EPayLinks argued in this new case that its business with MasterCard did not break any Chinese law since all operations are handled by the Hong Kong branch.

Source: Xinhua, June 3, 2013

http://finance.cankaoxiaoxi.com/2013/0603/219334.shtml

Briefings | | June 11, 2013 | Economy/Resources

Beijing News: China Started Trade Investigation of EU Wines

Beijing News recently reported that the Chinese Ministry of Commerce held a press conference on June 5, at which it announced the beginning of an anti-dumping and countervailing investigation of wines imported from the European Union (EU). The EU made a decision on June 4 to charge anti-dumping duties for photovoltaic solar products imported from China. The EU decision had a major impact on a trade volume of over US$20 billion. Several EU member countries voted against the EU decision but could not change the final outcome. The China-EU wine trade volume is relatively low (around US$1.04 billion). However this sector has enjoyed a rapid growth in the past several years. The wine industry in the EU has a long supply chain across the entire Union. Its export profit margin is much higher than that of the photovoltaic solar products. The Chinese investigation is especially damaging to wines from France, Spain, Italy, and Germany. There is still room for negotiation. The Chinese Fair Import/Export Trade Bureau insisted that the Chinese investigation has nothing to do with the EU decision on photovoltaic products. It is based solely on the requests that the the Chinese wine industry filed.

Source: Beijing News, June 6, 2013

http://epaper.bjnews.com.cn/html/2013-06/06/content_437684.htm?div=-1

Briefings | | June 11, 2013 | Economy/Resources

Global Times: Chinese Delegation Assesses Su-35 Fighter Jet

On June 6, Global Times reported that a Chinese delegation recently visited Moscow for a discussion with Russian arms export officials on negotiating the purchase of the latest Su-35 (Russian: Су-35, NATO: Flanker-E) fighter jet. The Russians agreed to present a demonstration to the Chinese delegation on June 5. The primary mission of the visit was to determine and assess the technical capabilities of the new multifunctional fighter jet. Business discussions were also planned. The two sides refused to reveal the number of jets included in the deal, but one Russian official hinted that it would be a “very sizable” number. Rumors are that the deal included at least 24 fighter jets. Russian government officials also confirmed that this will be a supply contract, not a manufacturing license. According to Russian media reports, the Chinese delegation gave high praise to the new jet model. “The political decision has already been made.” The deal is at the stage of negotiating payment schedules.

Source: Global Times, June 6, 2013

http://mil.huanqiu.com/paper/2013-06/4005371.html

Briefings | | June 11, 2013 | Defense/Military

Li Keqiang: Turning the Service Industry into an Economic Growth Engine

People’s Daily recently reported that new Chinese Premier Li Keqiang delivered a speech at The Second Beijing International Services Forum and Trade Fair & The Beijing Global Services Summit. In his speech, Li pointed out that the service industry is playing a more and more important role in international development and cooperation. The employment volume in the Chinese service industry has surpassed that in agriculture. However the contribution this industry has made to the growth of China’s GDP is lower than in other developing countries. The Chinese government is determined to develop its service industry to become the key driving force of the sustainability of the Chinese economy. Li suggested that the service industry should play a much more important role in providing employment opportunities, pushing strategic economic structural adjustments, realizing the modernization of the country, and improving the socialist market mechanism. Li also suggested that his government will give priority to expanding international services, increasing international investments in the service industry, establishing a fair services trade market, and promoting free trade in this industry.

Source: People’s Daily, June 2, 2013

http://politics.people.com.cn/n/2013/0602/c1024-21701819.html

Briefings | | June 4, 2013 | Economy/Resources

Xinhua: China’s Response to U.S. Accusations of Chinese Military Hacking

Xinhua recently reported on Chinese General Yao Yunzhu’s response to the accusations that U.S. Secretary of Defense Chuck Hagel made at the recent Shangri-La Dialogue that both of them had attended. General Yao thanked Secretory Hagel for his “multiple mentions of China” and suggested that China never believed that the daily expansion of U.S. Asia-Pacific presence is not against China. At the Shangri-La Dialogue, Yao expressed the belief that there is no value in stealing U.S. hardware technologies, as China is fully capable of developing its own. Hagel publicly accused China of “invading” U.S. network systems . He suggested that some of the hacking activities are related to the Chinese government and the Chinese military. The U.S. media recently referred to some latest investigation reports that showed Chinese hackers’ success in obtaining over twenty secret U.S. combat system designs. The Chinese government has already called these reports “baseless.” The U.S. Department of Defense recently announce detailed plans for deploying significantly more resources in the Asia-Pacific region to support the so-called “rebalancing strategy.”

Source: Xinhua, June 2, 2013

http://news.xinhuanet.com/world/2013-06/02/c_124797952.htm

Briefings | | June 4, 2013 | Defense/Military

China Net: China Plans to Enhance National Accreditation Systems

China Net recently reported that the State Council has just announced a plan to enhance a number of different national accreditation systems. Of all of the systems planned, the accreditation standard for information security products was given a top priority. The plan also required a “breakthrough” in the technologies used to establish and enhance the accreditation systems in other key fields, including food safety, carbon emissions, new energy, environmental protection, transportation vehicles, agriculture, biology, medicine, and contemporary services. The plan also called for establishing complete and strengthened national or industry standards, as well as improving China’s capability of participating in the processes of building international standards. The plan also included requirements to expand the technology for measuring and tracing capacities, which should be fully compliant with international metrological standards.

Source: China Net, May 29, 2013

http://www.china.com.cn/news/txt/2013-05/29/content_28970217.htm

Briefings | | June 4, 2013 | Information/Technology

Xinhua: China and Switzerland Sign MOU on Free Trade Agreement

Xinhua reported that China and Switzerland signed a Free Trade Agreement (FTA) Memorandum of Understanding (MOU) on May 24. This concluded the FTA negotiations that started in 2010. The signing of the MOU is the last step before the final agreement is officially established. This action marked the top agenda item for China’s new Premier Li Keqiang’s visit to Switzerland. The China-Swiss FTA, after nine rounds of negotiations, will be the first FTA between China and a European country. It is also the first FTA China has with one of the World’s Top-Twenty Developed Countries. China is currently Switzerland’s largest trade partner in Asia and Switzerland is China’s seventh largest trade partner in Europe as well as its sixth largest source of foreign investments.

Source: Xinhua, May 24, 2013

http://news.xinhuanet.com/world/2013-05/25/c_115905331.htm

Briefings | | May 28, 2013 | Economy/Resources

Xinhua: HSBC Chinese PMI Initial Value Broke the Redline

Xinhua recently reported that the HSBC PMI (Purchasing Managers Index) number for the Chinese manufacturing industry had an initial value of 49.6 for the month of May. The new number is the lowest in seven months. The breakdown numbers for new orders, new exports, and the employment index are all below fifty. Experts expressed the belief that these numbers indicated a decline in the manufacturing industry. The outlook for the second quarter is not optimistic. Low export levels seems to have had a direct impact on the overall decline of manufacturing activities. However the domestic demand side is weak as well. The central government investment in April was weakened and manufacturers faced inventory pressure. In addition to PMI numbers, the growth rate of the generated electrical energy in May also suffered a decline. PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.