BEIJING, June 12 - Beijing has seen massive development in the last 20 years. International five-star hotels, Oriental plaza, Wangfujing, the central business district, SoHo, the Shangri-La-owned China World Complex, and many others area of note, all have sprung up on the east side of the city. All of this development on the east side of Beijing has meant that Tiananmen Square is no longer the center of the city. This has been a major issue now for some time amongst city planners and the traditional Chinese feng shui experts who are concerned about city harmony and the traditions of old Beijing.

Historically, the western side of Beijing was reserved for nobility. Minor royalty, advisors to the court, favored artisans, painters, poets and other artists all lived to the west. Only new money, merchants, and other lower ranks lived in the east, giving rise to the local Beijing backhanded saying: “The people living in the east are the wealthiest, while people living in the west are the most traditionally noble.” (more…)

June 6 - Although many of the regulations concerning the registration of foreign visitors to China have been in place for decades, the actual enforcement of these often draconian measures now being employed has not been seen in China since the late 1980s. This, compounded by seemingly erratic treatment of business visa applications and coupled with occasional bureaucratic entrepreneurial activities, has meant that the Beijing Olympics are becoming far less likely to be a truly global event and far more a Chinese celebration.

We have received first hand accounts from businessmen attempting to enter China on apparently legitimate commercial trips being turned away, forcing mass cancellation of hotel bookings, and of individuals with seemingly impeccable employment credentials being denied a renewal of work visa. Additional problems from reliable sources indicate Olympic events tickets are being withheld currently from main Olympic sponsors entitled to certain seats in favor of Chinese government officials from other provinces who are “potentially” attending.

The visa issue, heavily reported in the news and on various blogs recently, had previously been thought to be a crackdown on the practice of foreigners living and working in China without going through the correct work visa procedure in order to avoid taxes. While true in the majority of such cases, first hand reports from hoteliers in Beijing reveal the practice of blanket rejections of business visa issuance to legitimate businessmen—including in several cases groups of prominent international bankers due to hold regional board meetings in Beijing—have been taking place. In one instance, we have been made aware of a group of Australian bankers whose collective party was rejected for business visas at a total loss of US$300,000 to the hotel over canceled bookings, as none of the bank’s executives were able to obtain visa clearance. In other cases, we have heard directly from businessmen of certain Asian nationalities, holding legitimate work visas as chief representatives of their companies in China, also being refused entry. (more…)

June 2 - Chinese authorities are set to open the sluice gates of the country’s securities industry so that foreign companies can raise capital and list on the Shanghai stock exchange.

They also plan to allow local companies to scout globally for raising funds and listing in foreign stock exchanges, the Times of India reported.

China will let foreign investors take stakes in its publicly listed firms by buying their tradable A shares, part of an ongoing plan to do away with non-tradable State shares, according to Xinhua.

Foreign companies that want to take strategic stakes in listed Chinese firms will be able to do so by buying their non-tradable institutional State shares.

Under the State-share reform plan now being implemented, China is converting non-tradable shares, worth a collective US$250 billion, or about two-thirds of the total capitalization of China’s two stock markets, into regular tradable A shares. (more…)

June 2 - The June issue of China Briefing magazine is out now and available for download (click on the image - subscription required however this is complimentary).

In this issue we examine China’s central provinces. With costs rising in the manufacturing centers of the South China and the Yangtze River Delta, more and more multinationals are looking at China, not only as an export platform, but a growing market that will play key role in global sales and marketing strategies. We take a look at the processing trade restrictions that are causing many manufacturers to move, how Central China is increasing spending on infrastructure and promoting foreign investment, and investment strategies more and more multinationals are using in regards to China. We also highlight future trends in the six provinces of Central China and take a look at five regional second- and third-tier cities in our continuing series 3TC.

Included in this issue:

Central China’s Location Reconsidered
Government Incentives
Inland China Investment Strategies
The Future of China’s Central Provinces
The second- and third-tier cities of Shenyang, Hefei, Huizhou, Zhengzhou and Kunming

May 27 - AmCham South China released their annual report business conditions in the Greater Pearl River Delta region last month, stating that business in South China remains excellent (click on picture to download report).

The reports, conducted by AmCham South China in partnership with Hewitt Associates and Dezan Shira & Associates, collected the experiences and insights of 419 international and local companies in Guangdong, Guangxi, Fujian and Hainan according to the chamber’s press release.

“I believe that the most important thing about this report,” said AmCham South China President Harley Seyedin, “is that it is only the broadcast medium for a message coming directly from the international business community.”

Nine out of ten participating companies indicated that they were already profitable, or would be within two years or less, and vast amounts of these profits are reported as being reinvested in China, with approximately 23 percent of companies indicating that they plan to invest in excess of US$50 million in China over the coming three years, and half of that number planning to invest in a US$25 million or more—each—in that same time frame. (more…)

May 13 - Our readers will be aware of the
earthquake in Wenchuan, Sichuan province in China that struck on Monday and that has claimed over 10,000 lives to date.

Dezan Shira & Associates supports the international charity Care for Children (CFC) in China. CFC works with the Sichuan and Chengdu Civil Affairs government for disadvantaged children in: Chengdu, Guangyuan, Deyang, Zamtang, Maoxian, Neijiang, Zigong, Bazhong, Mianyang and Yibin in Sichuan Province in addition to Chongqing City.

We have heard from their project worker in Chengdu, Ms. Tang Yisu, that there were thankfully no fatalities in the Chengdu orphanage. We have an update on the damage to orphanages in the region as follows from their China Director, Robert Glover. The quake aftermath poses dangers due to lack of sanitation, clean water and concerns over disease outbreaks as well as major construction work required to repair damaged facilities and replace supplies.

A CFC report from Robert Glover in Sichuan on the status of the 13 orphanages located around the epicenter of the quake showed six of them had sustained damage to their buildings: cracked walls, weakened foundations and broken facilities. There were no accounts of death or injury to any of the children or their foster families. The 66 children staying at the Mianyang orphanage have been moved to a military outdoor shelter. CFC has not been able to contact the remaining seven orphanages located in closer to the epicenter of the Wenchuan earthquake due to interrupted telecommunications services. Please click here for the full report. (more…)

May 13 – The death toll from the 7.8 magnitude quake that hit southwest China’s Sichuan province has reached 9,219. Those killed numbered 8,993 in Sichuan, 132 in Gansu, 85 in Shaanxi, eight in Chongqing and one in Yunnan, according to sources.The death toll is expected to increase as earthquake relief and rescue efforts progress.

Chinese president Hu Jintao has made earthquake rescue and relief top priority at all government levels with the army, armed police, paramilitary forces, and medical personnel deployed to quake-hit areas.

The State Disaster Relief Commission and the Civil Affairs Ministry has issued a Level I emergency response plan to deal with the disaster. The Level I emergency plan is for the highest degree of natural disasters.

(more…)

May 12 – Thousands are feared dead in the aftermath of a massive earthquake that struck Southwestern China’s Sichuan province on Monday. The 7.8 magnitude quake struck Wenchuan county at 2:28 p.m., leveling buildings and trapping those inside. Xinhua reported that 3,000 to 5,000 people were feared dead in Beichuan county near the quake’s epicenter. Roughly 80 percent of buildings in the county had been detroyed according to disaster relief officials. Current estimates are placing the dead at over 7,600 with as many as 10,000 injured, though that figure is expected to rise throughout the night as relief efforts intensify.

Earlier in the day, China’s Ministry of Civil Affairs said that the earthquake killed at least 107 people in the provincial capital of Chengdu, neighboring Chongqing, Gansu and Yunnan provinces. Up to 900 teenagers were feared buried when their high school buildings in suburban Chengdu collapsed. By the evening, at least 50 bodies have been pulled from the rubble. (more…)

May 12 (Updated 17:00) - A major earthquake measuring 7.8 on the Richter scale struck Sichuan province in Southwest China at 2:28 p.m. on Monday.

The earthquake, centered in Wenchuan county – 146 kilometers northwest of the provincial capital of Chengdu – was felt as far away as Taiwan and Bangkok.

The U. S. Geological reported that aftershocks measuring 6.0 and 5.4 on the Richter scale followed the initial quake. On CNN, Bonnie Thie, country director for the Peace Corps, said that the aftershocks continued throughout the afternoon. State media is reporting that the aftershocks could continue into the evening, measuring from 2.2 to 6.0 in size.

The magnitude of the quake virtually assures that damage will be extensive and Chinese Premier Wen Jiabao is on his way to the area to personally oversee the relief effort. The government has already pledged aid for quake victims and the military has been deployed.

The remoteness of the region has limited damage and death reports, though Xinhua is now reporting that four primary students were killed and more than 100 injured when two schools collapsed in Chongqing.

May 12 - A major earthquake measuring 7.8 on the Richter scale struck Sichuan province in Southwest China at 2:28 p.m. on Monday.

The earthquake, centered 146 kilometers northwest of the provincial capital of Chengdu, was felt as far away as Taiwan and Bangkok. There have been no reports of damage yet, but the magnitude of the quake would suggest that it could be extensive.

Office buildings in both Beijing and Shanghai – which swayed for up to three minutes following the quake – were evacuated as a precaution against further aftershocks.

Land line and mobile communication networks throughout the country have been erratic for the hour following the quake. Public street announcements in Beijing are urging people to continue to evacuate office buildings and all offices along Jianguomen and Chang An Avenues appear to have been evacuated.

More to come as this story develops.