July 1 - The July/August 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 take an in-depth look at Beijing, concentrating on the reemergence of the capital as the nation’s financial center. The development of Beijing’s Financial Street has largely escaped the mainstream press. Yet, astonishingly, an entirely new district, has sprung up west of Tiananmen Square. The implications for China’s financial services industry are huge. Home to government regulators, China’s largest banks, and serious global players such as JPMorgan, HSBC, and Goldman Sachs, the new wealth and power base that has been created here is astounding. We look at the history of the area, at why the shift has occurred, provide maps and guides to what’s where, and interview some of the key players.

Included in this issue:

Why Beijing’s Financial Street has the upper hand over Hong Kong and Shanghai
The global financial institutions that have already arrived
The application procedures for a banking license in China
China’s other financial centers: Hong Kong, Shanghai, Shenzhen and Taipei
China’s futures and commodity exchanges

June 30 - After much speculation and negotiation, there are reports that a Disneyland in Shanghai seems to finally be in sight. The official confirmation from the Chinese government is expected to be made after the 2008 Beijing Olympics.

As early as 2002, there were already plans to build a Disneyland in mainland China by 2010. The project was shelved in 2005 due to concerns that another Disneyland in the country would pose stiff competition to its Hong Kong counterpart.

According to Hong Kong-based Wen Wei Po, the Shanghai government will own a major stake in the park by providing the land and financing construction while Disney will be in charge of managing the park while being paid royalties and a portion of the operational income. (more…)

June 26 - Tibet reopened to tourists Wednesday, three and a half months after the Chinese government banned visits by foreigners in the wake of violent anti-government riots and protests.

The first group of foreign tourists, from Sweden, arrived at the Lhasa airport on Wednesday morning, said Tibetan Tourism Bureau spokesman Liao Lisheng.

“Tibet is open now to all travelers from home and abroad,” he said.

China threw a curtain around Tibet and areas in nearby provinces with sizable Tibetan populations after the March violence, citing the safety of foreign tourists and journalists.

But a notice on the bureau’s website said life in Lhasa had returned to normal, noting the June 21 torch relay “provided a more solid foundation for a stable society,” the Associated Press reported. (more…)

By Jennifer Wu

June 12 - Multi-colored snow art and illuminated ice sculptures greeted visitors from near and far at the Harbin Ice Festival. Held in the capital of Heilongjiang province, the annual festivities bring together everyone from ice sculpture artists and experts to fans and tourists alike. The snow and ice that draws so many tourists also helps to obscure the region’s industrial past, concealing what has become in recent years China’s largest rust belt. After years of neglect, the region is again seeing renewed government interest and incentives aimed at transforming this former industrial center into a viable economic region.

Once known as the cradle of industrialization in the 1950s, Northeast China saw its importance diminish as the country’s market-oriented reforms took hold in the late 1970s. In the last few years, the old industrial base has been on the rise again, as the government pours money and resources in. Today, the region, which consists of Heiongjiang, Jilin, and Liaoning provinces, is expected to transform into the China’s fourth economic engine, after the Pearl River Delta, the Yangtze River Delta, and the Beijing-Tianjin area. (more…)

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…)