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CBN: East Asian Foreign Exchange Reserve Will Begin Operations

China Business Network (CBN) recently reported that the East Asia 10+3 Group (the Association of South East Asian Nations plus China, Japan, and Korea) will establish an organization to run the East Asian Foreign Exchange Reserve. The 10+3 Leaders Conference, held at the end of October, made it clear that this process needs to speed up. The new organization will be called the ASEAN+3 Macroeconomic Research Office (AMRO). The primary mission of AMRO includes: (1) studying regional economics, and (2) clarifying the mechanism behind the usage of the Foreign Exchange Reserve.

It has not yet been decided who will lead this new organization. There have been several rounds of negotiations on the ratio of shares that each of the parties should hold. The primary competition is between China and Japan. Singapore was selected to be site of AMRO’s physical location.

Source: China Business Network, November 17, 2010
http://www.yicai.com/news/2010/11/602258.html

Briefings | | |   Geo-Strategic Trend

CRN: Bank Deposit-Reserve Ratio Increased Again

China’s central bank, the People’s Bank of China, announced that, starting November 16, 2010, the RMB Deposit-Reserve Ratio increased by 0.5% to 17.5%. This is the fourth time this ratio was adjusted this year. Analysts believe it is very likely the central bank will raise interest rates in a few months. Based on some estimates, every 0.5% increase freezes RMB 350 billion. Since the ratio adjustment does not ease the high inflation situation, this move is recognized as a sign of a new round of interest rate increases. China’s central bank blames the recent issuance of U.S. Dollars for China’s inflation, calling it “imported inflation.” It was also promised that “hot money” would be strictly controlled.

Source: China Review News, November 11, 2010
http://gb.chinareviewnews.com/doc/1015/0/0/7/101500716.html?coluid=45&kindid=0&docid=101500716&mdate=1111080113

Briefings | | |   Economy/Resources

Xinhua: Chinese Satellite Navigation System will have Global Coverage

Liu Lihua, Member of the Party Leadership Group in the Ministry of Industry and Information Technology, revealed on November 15 that the second generation of the Bei Dou Satellite Navigation system is under construction. Six satellites have been sent into orbit and the Asia-Pacific region will be covered by the year 2012. The system is expected to have global coverage by 2020. The goal of the system is to provide continuous and reliable navigation and short text services. The final system will have more than 30 satellites.

Source: Xinhua, November 15, 2010
http://news.xinhuanet.com/2010-11/15/c_12777521.htm

Briefings | | |   Information/Technology

Xinhua: Mainland Tourists to Taiwan will Exceed One Million

Yang Ruizong, Beijing Branch Director of the Taiwan Strait Travel and Tourism Association, recently estimated that the total number of Mainland tourists going to Taiwan would exceed one million by November 9, 2010. He also called for improving the quality and safety of tourism. Yang suggested that the number of tourists totaled 606,174 in 2009. If business groups were included, the total travelers reached 970,000 in 2009. By November 4, 2010, the number of tourists alone had already reached 978,660. According to the statistics of the Association, the most popular tourist destinations in 2009 included Taroko National Park, Chiufen, Sun Moon Lake, Alishan National Park, and Taipei National Palace Museum. Yang suggested that Taiwan very much welcomes Mainland tourists.

Source: Xinhua, November 8, 2010
http://news.xinhuanet.com/2010-11/08/c_12751405.htm

Briefings | | |   Geo-Strategic Trend

Xinhua: China Attains the Number Three Position in IMF Voting Power

On November 5, the Managing Director of the International Monetary Fund (IMF) announced that the IMF Executive Board approved the Far-Reaching Governance Reform Plan. Once implemented, China’s voting power will reach 6.07%. It will surpass Germany, France, and Britain, being behind only the U.S. and Japan. China’s current voting share is 3.65%. The planned reform will shift 6% of the overall shares to emerging markets. Europe will also give two seats on the Executive Board to emerging market countries to increase the representation of those countries. China suggested that this reform just reflects the reality of the world economy. The “historic agreement” was reached in October, during the G20 conference of treasury ministers and central bank governors.

Source: Xinhua, November 6, 2010
http://news.xinhuanet.com/2010-11/06/c_12745053.htm

Briefings | | |   Economy/Resources

China News Service: Chinese and Romanian Defense Ministers Met

On November 11, 2010, the Chinese Defense Minister, Liang Guanglie, met with the Romanian Defense Minister, Gabriel Oprea. Liang suggested that, despite international vicissitudes, since the two countries established diplomatic relations 61 years ago, the China-Romania relationship has never had any problems. Liang thought that relations between the two armies have developed rapidly over the past few years. Frequent contact among high ranking military officers of the two countries has been amiable. Oprea said he expects to expand and deepen the practical cooperation between the two armies in various ways.

Source: China News Service, November 11, 2010
http://www.chinanews.com.cn/gn/2010/11-11/2650497.shtml

Briefings | | |   Geo-Strategic Trend

Beijing to Send the Largest Ever Delegation to The 2010 Asian Games

With the 2010 Asian Games kicking off in Guangzhou, China, on November 7, Beijing is sending the largest team in Chinese history, with a total headcount of 1454. Of the 977 athletes participating, 35 are Olympic champions. The athletes are from 31 provinces all across China. Their average age is 24. 261 of them participated in the Beijing Olympic Games, and 322 of them have participated in international events like the Olympics and the Asian Games before. 

Source: Xinhua, October 26, 2010
http://news.xinhuanet.com/sports/2010-10/26/c_12703055.htm

Briefings | | |   Geo-Strategic Trend

CASS Blue Book: To Become the No. 2 Nation by 2050

The Chongqing Evening Post recently reported that the Chinese Academy of Social Sciences (CASS) announced publication of the Blue Book of National Competitiveness. The Blue Book is based on research done on more than 100 countries. It concluded that China now holds the number 17 position among all countries and is number 9 among the G20. The Blue Book also set a goal for China to become number three in terms of national competitiveness (after the U.S. and the EU) by 2030 and number two (after the U.S.) by 2050. However, it is believed that China’s current growth model relies heavily on real estate investment and massive resource consumption. This is not a competitive model. The Blue Book also pointed out that China’s lack of the ability to innovate is a primary disadvantage. China is far behind Japan and South Korea in this area. 

Source: Chongqing Evening Post, October 26, 2010
http://www.cqwb.com.cn/NewsFiles/201010/26/20100026120000399042.shtml

Briefings | | |   Economy/Resources