Agriculture Land Planted with Factories
Cover Story
Despite a government decree ordering the removal of illegally constructed factories on agricultural land in Tianjin municipality's Baitangkou village, illicit land seizure and constructions have persisted. The interests of multiple parties are at stake – the villagers are undercompensated, while the companies leasing the factories are ignorant of their illegality.
Original article: [Chinese]
Rethinking Personal Income Tax Deductibles
Editorial
As China progresses from a planned economy to a market system, various social costs have been transferred to the people, including education, healthcare, care of the elderly and social security. In view of that, the government should consider introducing more pre-tax deductible items when amending the Personal Income Tax Law to alleviate such pressures for its citizen. Our editorial argues that an unreasonable taxation framework would only lead to growing trend of tax evasion.
Original article: [Chinese]
Dossier No. 1 to Focus on Agricultural Issues
Cover
The EO has learnt that the 2008 central government's Dossier No.1 – which is the priority policy guideline document issued yearly – is likely to focus on agricultural issues. The dossier is expected to highlight the "three agriculture problems", namely problems face by the agricultural industry, agricultural villages and farmers. Since the introduction of reform and opening up policy 30 years ago, there have been nine such dossiers focused on agricultural themes.
Original article: [Chinese]
Commercial Bank Loan for a Movie
Cover, Human Interest
A war film entitled "The Assembly" – which is expected to be a Chinese blockbuster during the Christmas season – has already created a first before its release. The movie is a pilot model for a commercial bank, China Merchants Bank, to provide loan using an all new risk assessment framework late last year. Unlike other business ventures with fixed assets, a movie has no real value before its completion and no guarantee of returns even upon its release. The bank, however, based on the track records of the production house involved and the reputation of the film's director – Feng Xiaogang – agreed to back a 50 mil yuan loan.
Original article: [Chinese]
Finance Ministry Outlines 2008 Tax Reform
News, page 3
Chinese Ministry of Finance has provided clues to the major emphasis of next year's tax reform. Priority areas include amending laws related to value-added taxes and personal income taxes. The ministry is also going to study the feasibility of introducing environmental conservation taxes and social security taxes.
Original article: [Chinese]
Challenging Year Ahead for SOEs
News, page 3
State-owned-enterprises (SOE) under the Central Government have been warned of a challenging year ahead in view of increasing pressure from inflation and stricter macro-economic measures. State-owned Assets Supervision and Administration Commission chief Li Rongrong expresses his concerns for SOEs with huge debts and over-dependency on loans for quick expansion. Li warns that these SOEs may face liquidity problems under mounting pressures next year.
Original article: [Chinese]
Cautiously Raising the Interest Rate
News, page 6
China has raised its benchmark interest rate for the sixth time this year on December 20 in yet another attempt to cool an overheating economy and curb inflationary pressure. The Central Bank has raised the one-year deposit interest rate by 27 basis points to 4.14 percent and the lending rate by 18 basis points to 7.47 percent.
Original article: [Chinese]
Nobel Laureate's Views on Chinese Government Investment Arm
News, page 8
Robert Merton, the 1997 Nobel Laureate in Economics, suggests that China should set up a mechanism to cool suspicions and concerns over its political motives behind the state investment arm – China Investment Corporation (CIC). Merton points out that when a country makes a concentrated investment in one area it could create alarm over state interference and control. He believes one way to avoid such an impression is to maintain multiple passive investment portfolios.
Original article: [Chinese]
Xiang River in Crisis
Nation, page 9
Drought coupled with years of environmental destructions has caused the water level in the once-majestic Xiang River in Hunan province to drop to a record low, with the shallowest point at a mere one meter deep. The receding waterline has put a halt on cargo transportation in many stretches of the river, affected power generation and dried up reservoirs.
Original article: [Chinese]
The World is Polluting China
Comments, page 14
As China becomes the world's factory and churns out a myriad of goods for global consumptions, it has also borne the environmental cost at a world-scale. Commentator Hou Dongmin argues that the west especially, with its high demand for consumer goods, has indirectly polluted China. In the meantime, as Chinese are growing more affluent and are catching up with consumerism, the earth's resources are under threat to deplete at an even faster rate in the near future.
Original article: [Chinese]
CIC Injected 5 billion dollar in Morgan Stanley
Money & Investment, page 17
China Investment Corporation (CIC), the nation's sovereign wealth fund, has invested five billion dollars in the America-based financial services institution Morgan Stanley. The equity bought can be converted into 9.9% stake in Morgan Stanley in 2010. Analysts believes that the move by CIC is the first in a series of strategic investments aimed at Wall Street's financial institutions impacted by the recent sub-prime crisis in the United States.
Original article: [Chinese]
The War for Dominance in Electronics Retail
Corporation, page 25
The war for dominance in the Chinese electronics retail market has seen chain retailer Gome gaining an upper hand recently highlighted buy its purchase of Dazhong Electronics with 3.65 billion yuan on December 16. Gome has snatched the latter right under the nose of its arch rival, Suning, which was close to sealing a takeover deal that had been negotiated for over a year with Dazhong.
Original article: [Chinese]
Gloom Over Songzhuang Artists Village
Property, page 39
The first of 14 lawsuits brought against artists who have acquired property in Songzhuang, a base for artists in outskirt Beijing since the 1990s, has received a verdict. The sales and purchase agreement sealed years ago between artist Li Yulan and villager Ma Haitao is deemed null and void, as the law forbids rural property to be sold to city folks. The verdict is expected to set the precedet for subsequent cases, which may lead to an exodus of artists from the village.
Original article: [Chinese]
The Rebirth of a City
Lifestyle, page 49
The just-concluded Shenzhen Biennale Architecture and Urbanism exhibition has explored the means to rope in public participation in urban planning. The exhibition invited not only architectural professionals, but also artists and social activists to present their version of how a city is "born".
Original article: [Chinese]
