Highlights from the EO print edition, No. 568, May 7, 2012

Superstar’s Departure Spells New Era for Fund Management Industry
News, cover
~ Fan Yonghong and Wang Yawei, the general manager and “superstar fund manager” of China Asset Management Co., Ltd. (ChinaAMC), have left the company, signaling a new era for China’s public fund industry, when compensation will be more directly linked to performance.
~ The resignation has been attributed to conflict between the original executives at China AMC and China CITIC Securities, which is now the asset manager’s largest shareholder. The executives wanted the right to choose new recruits and set incentives. They even wanted to become a direct subsidiary of CITIC Group rather than answering to CITIC Securities. But they failed, highlighting how the Fund Law, which will be released shortly, will have to address to balance between investors, shareholders and managers.
~ Fan Yonghong will reportedly become deputy president of the China Fund Regulatory Committee, a governmental watchdog that is due to launch soon, and Wang Yawei may go to Hong Kong to work for a private fund company.
Original article: [Chinese]

 
Sales Ban Rocks Makers of Poisoned Capsules
News, page 2
~ Nine pharmaceutical firms who were involved in the poisoned capsule scandal have been banned from submitting capsule drugs for public distribution, a person familiar with the matter said on May 4th. 
~ The first ban was applied to Xiuzheng Group’s Beijing business, causing a loss estimated at 1.2 billion yuan.
~ A person working in the industry said that the ban shows the supervisory department's strict position on the episode and its determination to clean up the industry.  
~ The bans have been spreading across the country, with Shandong and Jiangsu also banning drug sales by the nine firms.
~ According to an employee of the State Food and Drug Administration person, the investigation into medicine security is still in progress. Shaanxi province for example is carrying out random inspections, and immediately investigating factories that fail the tests.
Original article: [Chinese]

Seven Provinces and City Promise 10 Percent Foreign Trade Growth Rate
News, page 4
~ Zhejiang, Shanghai, Jiangsu, Anhui, Fujian, Shandong and Jiangxi provinces all pledged to keep foreign trade growing at 10 percent this year, at an eastern China trade forum attended by Vice Premier Wang Qishang,   
~ Over the past three years, China tried to reduce its dependence on foreign trade, and shift to investment and consumption, but the results have been less than hoped and commerce ministry researcher Li Jian (李健) said that “this year foreign trade will play a critical role in maintaining economic growth.”
~ In the first three months of the year, foreign trade grew by 14.8 percent in Jujian, in Shanghai by 3.9 percent, in Shandong by 3.1 percent, in Zhejiang by 5.2 percent, in Jiangsu by 0.3 percent. In Jiangxi it fell by 1.9 percent and in Anhui by 6.4 percent.
~ An official from Jiangsu province’s Department of Commerce said “10 percent target is quite tough; the situation this year is very difficult. We have already seen the data for the first three months. The April data seems also to be relatively bad. However, we’re still confident of achieving the goal."
~ The total trade volume of these eight regions accounted for more than 80 percent of China’s total in 2011.

 
Developers Cut Land Purchases
News, page 5
~ Almost all of developers have reduced their land purchases in the first three months of the year, and some even stopped buying.
~ The top ten listed developers only spent 14.3 billion yuan on new land purchases in the first quarter, down 70 percent from the same period in 2011.
~ In fact, at the current rate of sales, large developers have enough land for all new projects for the next few years.
~ For example, Shimao Property (世茂地产) recorded sales of 7 billion yuan in the first quarter, and at the current rate of sales, it has enough land reserves to last 17 years. Its situation isn’t unsual.
~ At the end of 2011, housing ministry data showed that there were 480,000 hectares under development  or awaiting development.
Original article: [Chinese]

 
Angel Investors
Corporation, page 25
~ More and more wealthy Chinese are becoming Angel Investors – some 600 of them gathered at the Park Hyatt in Beijing for a recent conference, where experienced investors set out their unwritten rules such as: don't oppose each other, especially when competing for an investment; don't look at Angel Investment as a way of making a fast buck and be aware that there's a large risk of losing everything.
Original article: [Chinese]

Developer Compromised Building’s Safety with Thinner Steel Bars
Property, page 33
~ Home buyers and local government officials have criticized Greenland Group, one of China’s largest developers, for using substandard reinforcing steel bars, or rebars, in projects in Anhui Province’s Ma’anshang City.
~ According to the local bureau of construction management, the group risked people’s safety by constructing buildings using rebars with a diameter of 8 millimeters instead of 12mm. The bureau then required the company to rectify the problem and accept "public monitoring". 
~ People who had bought homes in the development weren’t allowed to monitor the process themselves. They have said that they don’t trust the government’s monitors and want a role in the process themselves, but their requests have been rejected by both city-level government and the Greenland Group. 
~ UPDATE:  On Monday, Greenland published a notice on its website saying that the Ma’anshang project being inspected by the government and that it will correct its “mistake” at soon as possible.
Original article: [Chinese]