Locking in Geely's Vovlo Deal
Cover
~ On Dec 23, Geely and Ford revealed more details about ongoing negotiations related to the Chinese auto maker's acquisition of the Swedish brand, noting that all the important commercial agreements related to Geely's acquisition of Volvo had been settled and that they expected to sign a formal purchase agreement in the first quarter in 2010, and then, assuming all the regulatory requirements were met, the sale would likely be completed during the second quarter of 2010.
~ The EO has revealed that over the past few days, two new companies with connections to Geely have been busy going through the process of registering with the Beijing Industrial and Commercial Bureau. Though we're still not sure what the official names of these two companies are (we can guess they'll be something like China Volvo and Geely International), the two companies are going to be vital in Geely's proposed acquisition of Volvo once the ongoing negotiations are completed.
~ In the early stages of negotiations, both companies revealed that Volvo will maintain its current factories, R&D center, union agreements and dealer networks. The management team will also remain independent and the company's headquarters will still be based in Gothenburg, Sweden.
~ However, it seems that Geely also has plans to set-up a Beijing base for the Chinese headquarters of the company.
~ In addition, Geely has registered an investment company, with initial registered capital of between 8 and 9 billion yuan. Geely will control the majority of shares, though other investors, including Chinese banks, will also contribute funds. Then in 2010, the company will gradually increase its capital to the 2 billion U.S. dollars needed to acquire Volvo.
~ The EO approached both Geely and Volvo about this story, but both sides refused to comment.
Original article: [Chinese]

Professional Story Tellers: How Analysts Get Our Attention
Cover
~ The ability to "tell a story" has already become a necessary skill for any budding economic analyst.
~ Andy Xie is probably the best known example of this style of analyst with his ability to use humor and a strong narrative.
~ But Andy Xie is not the only who knows how to sell a narrative, Nomura Securities quotes Star Trek in their reports about prospects for China's A-shares and other major securities firms use equally playful language to get their point across.
~ In an era when the number of reports being produced everyday has ballooned, the growing demand for analysts to be able to "tell a good story" has spread to Chinese analysts keen to attract eyeballs to their reports
~ However, not all analysts find they have the spark they need in order to appeal to their readers, with some of the more introverted researchers being let go because they're not so accomplished at "telling a story."  
Original Article: [Chinese]

China Underlines Support for New Energy Sector
News, page 4
~ Shi Lishan, deputy director of the Office of New Energy in the National Energy Administration, revealed to the EO that China will continue to provide government support for the development of the poly-silicon and wind power industries. The country will encourage poly-silicon companies to adopt new technology and promote the production of key parts necessary for the development of wind power.
~ To further steer the new energy industry, China will speed up solar power development, upgrading the electricity grid and reforming the current energy pricing system. Greater attention will also be paid to the establishment of domestic standards in relation to wind power equipment .
~ Currently, only 25.8% of the planned eight ton capacity of poly-silicon has been really used in China. And almost all the vital parts of wind power equipment need to be imported from abroad.
Original Article: [Chinese]

Grain Law to Reshape China's Grain Industry
News, Page 4
~ The long-discussed Grain Law maybe drafted within the next 6 months and enacted in three years time, an official with the the State Administration of Grain said.
~ The proposed law is aimed at reshaping the whole grain industry in China. Currently, the industry has been divided into three parts: production, distribution and processing, consumption and trade. While the Ministry of agriculture is responsible for grain production, the other two parts fall within the responsibilities of the State Administration of Grain and the Ministry of Commerce respectively.
~ The Drafting Working Team on the proposed new Grain Law is led by the State Administration of Grain, with members from the National Development and Reform Commission, the Ministry of Agriculture, the Ministry of Commerce, the People's Bank of China and other ministries.
~ They team has been researching the grain distribution sector and quality supervision.
Original Article: [Chinese]

Central Ministry Budgets to be Made Public in Three Years
Nation, page 11
~ The State Council is planning to require all central ministries to publicly release their budgets in the coming two or three years.
~ In the future, not only the budgets but also the planning process will be opened to the public, providing an opportunity for Chinese citizens to both take part in and supervise important government decisions.
~ Local governments, represented by Jiaozuo city in Henan Province and Gugangzhou city in Guangdong Province, are leading the central government in publicizing their budgets.
Original Article: [Chinese]

Labor Shortages Return to Dongguan
Nation, page 14
~ The city of Dongguan in Guangdong had a terrible 2009, after two decades of double digit GDP growth, the city's bureau of statistic's latest data shows that as of the end of October, the city's GDP had grown by a mere 3.8%.
~ Now, as the export markets look set to pick up and orders might begin to increase, the city faces a large-scale labor shortage.
~ Some of the Migrant workers who have been working in Dongguan for a number of years have chosen to leave the city in the lead up to New Year and according to an EO reporter who spoke to some of the workers at the city's southern bus station, many will not be returning to the city after Spring Festival.
~ Because of the labour shortage, older people are being employed and higher wages are being offered with average wages rising from the original 1,200 yuan a month to 1,800 yuan or 2,000 yuan a month.
~ With the departure of a large number of migrant workers, Dongguan's population declined by about 2 million, resulting in the local service industry and also government tax revenue being hard hit.
Original article:[Chinese]

CBRC to Play Greater Role in Fine Tuning Chinese Economy
Market, page 17
~ To curb the looming inflation and banking risks brought about by the recovering Chinese economy, the China Banking Regulatory Commission (CBRC) has set a policy tone of restraint for 2010.
~ According to CBRC's requirements, the scale of new loans in 2010 will need to be "moderate" while its structure must be "reasonable", which suggests the CBRC is going to play a greater role in fine tuning China's macro-economy by controlling and supervising the credit market.
~ As estimated, to ensure the projects starting in 2009 will continue, banks should provide loans of about 5.2 trillion yuan in 2010, which means that the total amount of new loans is likely to be somewhere between 7.4 trillion and 8.6 trillion yuan.
Original article:[Chinese]

Age of Consumption
Corporation, page 25
~ With exports remaining weak and exhausted investment, the Economic Observer believes that the Chinese economy in 2010 will need to become "An Economy Driven by Consumption".
Original article:[Chinese]

Reforming Housing Demolition Management Regulations
Market, page 33
~ As the Sun Zhigang case of 2003 led to the reform of the detention and repatriation system, so Tang Fuzhen's self-immolation in November has led to a call for reform of the urban housing demolition regulations.
~ The movement has been spearheaded by five scholars from Peking University, who presented a petition on the current flaws with the "Urban Housing Demolition Management Regulations."
~ Though violence triggered by housing demolitions is not purely a legal issue and amending the law itself can not resolve many of the problems, this article examines the current system and aims to provide are few recommendations.
~ Over the coming decades hundreds of millions of Chinese rural dwellers will move to ever-expanding cities and urban centers, if a fair system that relies on the rule of law and fair procedures does not exist and rural dwellers are forced to navigate a system that relies on force, deceit and violence, then things will not go smoothly. 
~ Furthermore, if local governments turn a blind eye to the grievances of those who claim they have been unfairly treated, resentment will quickly grow.
~ The article recommends looking to the example of other East Asian countries and America for examples of how to dealing with land disputes in an urbanizing country, but also notes that the policies pursued in Hong Kong are not going to be suitable in mainland China.
~ The article also suggests that policy-makers might need to consider reforming the system of land-ownership on the mainland.
~ The illegal appropriation of land accounts for 73% of all the cases accepted by the State Bureau of Letters and Calls, the official government office in charge of receiving citizen's complaints.
Original Article: [Chinese]