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China’s FM Wang Meets With U.S. Sec. of State Kerry

“I have come to the United States to implement the agreement reached between our top leaders to strengthen the mutually beneficial cooperation between our two countries to enhance the China-U.S. friendship” China FM, Wang Yi

Chinese Foreign Minister Wang Yi met with the top U.S. leadership on Friday 19 September 2013 including Vice President Joe Biden and U.S. Secretary of State John Kerry. Wang also met with U.S. National Security Advisor Susan Rice, Senate Minority Leader Mitch McConnell and House Foreign Affairs Committee Chair Ed Royce.

In remarks before their meeting, Kerry welcomed Wang back to the U.S., noting that he had been at Georgetown University 15 years before as a visiting scholar. Kerry added:

“China and the United States have also agreed to a new model of relations, and that was worked on and announced at the Sunnylands summit with our presidents. It is based on practical cooperation and constructive management of differences. We recognized the need to avoid falling into a trap of seeing one another as strategic rivals, and that recognition is now driving our partnership on issues from climate change to wildlife trafficking to military consultations and the promotion of balanced growth around the world.”

In his own remarks, the Foreign Minister touched upon the key point to be covered from the Chinese side:

“At the same time, we are also ready to have in-depth communication with the United States with an open mind on those issues, including Syria, issues on the Korean Peninsula, climate change, and cyber security. We also want to discuss with the United States the relevant issues in the Asia-Pacific region, to work with the U.S. side for sound interaction in the Asia-Pacific between our two countries.”

In addition to the pressing Syria question, the de-nuclearization of the Korean peninsula and the re-starting of Six Party talks were on the agenda.

http://www.state.gov/secretary/remarks/2013/09/214419.htm

Kaesong Economic Zone To Reopen September 16th

North and South Korea have agreed to reopen the Kaesong economic zone on September 16, 2013. The Zone, located 10km inside the North, has been closed since April of 2013 when tensions between the two neighbors heated up. Korean managers left and the doors have been locked ever since. Nearly 100 South Korean firms are represented in Kaesong. The Zone reportedly employs 53,000 North Korean workers who earn an estimated 80 million USD. This week’s questions are “why?” and “how long?” Why did the DPRK agree to the reopening, and how long will it stay open this time? Post your answers below.

Shanghai Free Trade Zone-Just The Beginning?

Pudong Night.jpg

(Photo by Sarmu, Panaramio, CC)

by David Parmer

In July 2013, China’s State Council announced the formation of the Shanghai Free Trade Zone (SFTZ), a Hong-Kong like free trade area. Tentatively set to open around September 29, the SFTZ will cover an area of some 29Km (11square miles). Reports say this project is the special interest of premier Li Keqiang, and could lead to a rapid replication of FTZs in other Chinese ports.

Changes in policies and services in the FTZs will include:

Freer Yuan conversion
Liberalization of interest rates
Relaxing restrictions on foreign investment

CCTV reports China’s big five banks have all set up branches in the SFTZ. Chinese banks may offer offshore services while under the new regulations qualified foreign banks may set up branches or joint ventures. Foreign financial institutions mentioned as participants include Citigroup, Standard Chartered and HSBC. The PayPal division of Internet market eBay has also been mentioned. Meanwhile, Focus Taiwan reports that Taiwan Offshore Banking Units (OBUs) have been invited to participate in the plan.

The South China Morning Post reported that Shanghai Vice-Mayor Ai Baojin will head the new commission to oversee the development of the SFTZ. The City of Shanghai has already sent officials to Singapore for training to learn from Singapore’s experience as a free-trade port and financial and shipping center.

Some observers see the establishment of the Shanghai Free Trade Zone as an advance equal to the creation of the Shenzhen FTZ under Deng Xaioping in the 1980s, or China’s joining of the World Trade Organization in 2001.

Fukushima Redux

News reports of water leakage at the Fukushima nuclear plant have again brought the question of nuclear safety to the forefront. It appears that TEPCO continues to struggle with the clean-up and management of the disaster site. Finding a good, long-term outcome seems to be a real problem. Which brings up this week’s question: With the ever-increasing global demand for power, how will the industrialized world get its energy? Is nuclear energy a thing of the past? Will alternative energy sources such as solar and wind free the world from its reliance on fossil fuels and nuclear energy? What does the future look like energy-wise? Post your comments here.

Not So Sunny: PRC Invokes Anti-Dumping for Polysilicon

(Photo: China Daily)

Only July 18, 2013, the Ministry of Commerce of the People’s Republic of China issued announcement No. 48,2013 which laid out the results of its year-long anti-dumping investigation into imports of solar-grade polysilicon originating in the U.S.A. and the Republic of Korea. The report concluded that:

It is preliminarily ruled by the Investigation Authority that, during the investigation period of this case, the products under investigation were involved in dumping and the solar-Grade polysilicon industry of China was materially injured, and there was causality between the dumping and injury. (Ministry of Commerce Website)

New tariffs range from 53-57% for U.S. companies and from 2.4-48 % for South Korean companies. The new tariffs are aimed at solar-grade polysilicon; electronic-grade polysilicon is not covered. Solar market research and analysis organization, Solarbuzz states that in 2012 China accounted for 76% of the world’s solar wafer production, and produced 40% of the world’s polysilicon. Sources say falling prices of foreign- produced product forced Chinese manufactures to seek protection under anti-dumping regulations. Polysilicon, due to its semiconductor-like properties is used as a basic material in most solar energy applications.

PRC Ministry of Commerce Announcement No. 48 http://english.mofcom.gov.cn/article/policyrelease/buwei/201308/20130800224101.shtml

Background from Solarbuzz: http://www.displaysearchblog.com/2012/05/growing-polysilicon-imports-and-falling-prices-provide-chinese-solar-manufacturers-with-anti-dumping-fodder/

China (PRC)-Japan Tourism Shows Continued Decline

The Japan Tourism Marketing Company records a steady decline of visitors from the People’s Republic of China to Japan. The June 2013 numbers show a 21.4% decrease compared with the same period in 2012. Meanwhile the number of visitors from Taiwan shows an increase of 80.4% while Singapore posts a 64.1% increase over the same one-year period. Tourism from Korea was also up a healthy 39%. This week’s question: Will PRC tourists return to Japan any time soon, or will the political climate have to improve significantly before the numbers start to go up? Post your comments below.

Japan Tourism Marketing Co. (Visitor Data April 2013) http://www.tourism.jp/en/statistics/

Chen Kaige To Head 26th Tokyo International Film Festival

Chen Toronto IFF.jpg

(Photo: Toronto International Film Festival)

by David Parmer

Chinese director Chen Kaige has been tapped to act as Jury President at the 26^th Tokyo International Film Festival to be held from October 17- 25, 2013 in Tokyo’s Roppongi Hills complex. Chen, a member of the so-called “fifth generation” (1980s) of Chinese filmmakers is best known for his films “Raise The Red Lantern,” (1991) and “Farewell My Concubine” (1993), both films having received wide international recognition. “Farewell My Concubine” was nominated for two academy awards and received the Palme d’Or at the 1993 Cannes Film Festival.

In a piece published online in the Hollywood Interview, Chen was asked about working with talent from Japan, Korea and China during the filming of The Promise, a 2005 wuxia (martial arts) film:

“It wasn’t that difficult. It’s always been my dream to work with the best talents from different countries in Asia. I don’t mean that politically, but if you look at the history of these three countries, it’s very complicated. I think at least that if we show we can work together as artists, when the politicians are fighting against each other, we’ll show what we can do. We’ll show our dream of a peaceful future for Asia.”

The 26^th TIFF will open with “Captain Philips” and close with “The Kiyosu Conference.”

TIFF Official website: http://tiff.yahoo.co.jp/2013/en/

Hollywood Interview-Chen Kaige: http://thehollywoodinterview.blogspot.jp/2008/03/chen-kaige-hollywood-interview.html

China Offers Subsidy For Purchase of Electric Cars

China’s CCTV reported on June 29, 2013 that the central government and the Beijing government would subsidize the purchase of 500 electric vehicles for qualified first-time buyers. The EV150, manufactured by BAIC Motor Vehicle Company Ltd., sells for 250,000 RMB. Subsidies would be 60,000 RMB from the central government, matched by another 60,000 RMB by Beijing, and another 20,000 RMB from the automaker. This week’s question : If you got what amounts to a 50% subsidy on the purchase price, would you buy an electric vehicle? Why or why not? Post your answer here.

America’s Hottest New (Electric) Car Heads To China

Tesla Model- S.jpg (Photo: Tesla Motors, USA)

by David Parmer

Soon affluent Chinese motorists will have a chance to test and purchase America’s hottest new car, the Tesla Model S. The Model S has gotten rave reviews from America’s top auto magazine Road and Track as well as from Consumer Reports, one of the country’s leading product review journals. Positioned as a luxury sedan and priced at $70,000 (USA) and being an electric vehicle, the Tesla Model S, might not be the car for everyone. While the questions of power and range have been addressed, the sticking point still remains the lack of charging infrastructure for electric vehicles. In the USA, charging can be done at home, but in many places (Hong Kong and Beijing for example) people tend to live in high-rise buildings which makes home charging problematic.

In addition, Tesla is not having a smooth entry into the Chinese market due to a copyright battle with a Chinese concern which has registered the Tesla name, and has set a selling price that Tesla will not meet. As a work-around,Tesla is reported to be changing the name to “Tuosule” for the mainland China market.

Tesla has also paid attention to the localization of its product. In China, people who can afford to buy and operate a luxury sedan usually have someone else drive it for them. One of the Tesla Model S’ strong points, however, is that it is a “driver’s car.” That is, the experience of the vehicle is really fully understood by driving it. Perhaps styling, scarcity value and cutting-edge technology will counter this and keep its attractiveness quotient high among prospective buyers. Tesla is also looking at modifying the rear seating area to accommodate wealthy owners who are being driven rather than driving. Marketing seems to be supporting its appeal to the newly-affluent by placing its Beijing showroom in an upscale building surrounded by luxury brand shops.

Road & Track Magazine,Tesla Model S: http://www.roadandtrack.com/car-reviews/road-tests/road-test-2013-tesla-model-s?src=soc_fcbks

Consumer reports highest-scoring car: http://www.consumerreports.org/cro/news/2013/05/video-the-tesla-model-s-is-our-top-scoring-car/index.htm

China-Viet Nam Diplomacy. What’s up?

This summer has seen three rounds of high level talks between Chinese and Vietnamese leadership. Both countries have long- standing issues and interests to be solved diplomatically, for example the islands claimed by both countries (and others) in the South China Sea, and expanding cross border trade. So why the efforts to shore-up their relationship now? What is on the short and long term horizon that has created a sense of urgency? Or is this just normal diplomatic activity? Please post your thoughts below.