Highlights from the EO print edition, No. 581, Aug 6, 2012

Budget Transparency: Social Security Fund's Budget to be Made Public
News, cover
~ In another move towards more budget transparency, starting from 2013, the annual budget of the national social security fund will be made public when it's submitted to the National People's Congress for approval. The budgets of the various local social security funds will also be submitted to the local-level People's Congresses for approval.
~ The new measure applies to 9 different funds with aggreagte annual revenue of about 2.6 trillion yuan.
~ Although it doesn't cover all the cash flow of the social security funds, only opening up the insurance funds to public scrutiny, it will help ordinary people and others to monitor the funds," said an official from a local People's Congress.
Original article: [Chinese]

Blue Sky in Shenzhen
News, cover
~ Many Shenzhen residents say that the sky is distincly more blue these days, with some even claiming to have actually seen rainbows after a fall of rain in the city. According to statistics collected by an environmental NGO, the daily concentration of air pollution is well below national standards.
~ Ma Jun (马军), a well-known environmental campaigner, attributed the clean air to efforts made by the city government over the past five years. Guangzhou Environmental Protection Bureau said that between 2008 and 2011, they closed down a lot of heavily polluting factories.
~ What leads to the blue sky is the reduction in manufacturing. The economic restructuring taking place in the southern export hub, may have but the brakes on economic growth, but it's also done the city's air some good.
Original article: [Chinese]

Layoffs in Wenzhou
News, page 5
~ The unemployment situation at small a medium-sized manufacturing enterprises (SMEs) in Wenzhou is becoming more and more serious.
~ Wang Xiaocheng (汪小成) is a worker at a manufacturing firm in Wenzhou. Since Spring Festival this year, Wang has lived on edge. The firm he works for now only has about 20 people after more than 40 left. Wang worries he'll be the next.
~ Zhou Dewen (周德文), head of the Wenzhou SME Association, said currently there are more than 400,000 SMEs in Wenzhou. At their peak, they employed about two million people. However, both official and non-governmental agencies are having difficulty obtaining current unemployment statistics.
~ Zhejiang provincial economic data for the first half of 2012 collected by the Zhejiang Provincial People's Congress shows that among 3,998 enterprises in Wenzhou, 140 have shut down this year and 2,276 of them reduced production.
~ Meanwhile, Zhejiang's employment monitoring data based on 5,000 enterprises shows that since February the number of employees in small and very small enterprises had a net reduction for the first time. The decline hit 0.66 percent for the single month of June. It's estimated that a total of about 2 million people work in the 5,000 enterprises included in the data, which means a reduction of about 12,800 employees - of which 2,739 people left from small and very small enterprises.
~ Zhou said that we haven't yet seen the worst of the employment situation. It will continue to get worse.
Original article: [Chinese]

Sinopec Converting Gutter Oil to Jet Fuel
News, page 6
~ The oil giant China Petrochemical Corporation or Sinopec Group, one of China's largest companies,  is working on refining gutter oil so it can be used as jet fuel.
~ In 2009, three Sinopec subsidiaries - Research Institute of Petroleum Processing, Sinopec Engineering Incorporation and Zhenhai Refining and Chemical Company (ZRCC) - started to work jointly on aviation biofuel research and development.  
~ ZRCC has already successfully refined the fuel, producing a few hundred tons of it from late 2011.
~ This February, the Civil Aviation Administration of China (CAAC) officially accepted the application by Sinopec for the fuel to be deemed "airworthy."
~ Now Sinopec is waiting to demonstrate the aviation biofuel to the CAAC and the Aviation Oil Appraisal Committee. According to a person familiar with the issue, only when it gets approval can it go ahead with a trial flight. After it passes the trial flight it can produce the fuel on a large scale.
~ Sinopec plans to use food waste oil, sometimes also referred to as "gutter oil," in making the bio jet fuel.
~ It was learned that Sinopec is in discussions with McDonalds to use its leftover waste oil. Sinopec is also looking to source oil from other large catering enterprises.
~ A person working with ZRCC said, "Now the EU has started to collect aviation carbon taxes, but if we use bio fuel, it can't collect any more."
Original article: [Chinese]

Chengguan Scandal in Shenzhen
News, page 10
~ Chengguan (city management officers) have been linked to organized crime in Shenzhen.
~ Police recently disclosed that "gangster chengguan" have used their authority to threaten and extort vendors for money.
~ One fruit vendor reported that he repeatedly had his products confiscated or smashed by chengguan until he paid a 500 yuan per month "protection fee."
~ "Gangster chengguan" are the result of an outsourcing system where 35 security and property companies were enlisted to help make up for a shortage of chengguan officers. Many companies hired unqualified, untrained people in order to save money.
~ Public criticism of chengguan broke out with many calling on the government to bring things under control. In response, Shenzhen's chengguan bureau promised it would train future staff and make sure they all comply with the rules.
~ An anonymous professor at Shenzhen University said that more investigation is needed in order to make clear how these groups got intertwined.
~ One victim said people still feel unsafe even after the gangster chengguan have been put in prison. "Who knows what will happen in a few years after they've served their time?"
Original article: [Chinese]

Bad Loans Skyrocket
News, page 19
~ Wenzhou in Zhejiang Province and Ordos in Inner Mongolia have seen bad loans spike due to the slowing economy.
~ By June 2012, the bad loan rate of Wenzhou reached 2.69 percent - a historic high that's more than seven times the rate during the same period last year. The non-performing loan rate in Ordos reached 2.14 percent, up from 0.7 percent at the end of last year.
~ The bad foreign currency loan balance of Wenzhou by the end of June was 18.14 billion yuan; 9.447 billion more than at the beginning of the year.  
~ Ordos has suffered huge economic losses and sluggish domestic demand since regulations were initiated to cool its overheated real estate market. This has aggravated bad loans to some extent.
~ The Ordos government is feeling the pressure as loans are going bad and investors are fleeing the city. One local banker said, "The Government is very anxious. At the beginning of this year it even used its own funds to help repay bad loans."
~ Both Wenzhou and Ordos have instituted measures to mitigate risk and control those illegally fleeing bad debt. However, China International Capital Corporation has said that only when the real economy recovers will bad loans begin to subside.
Original article: [Chinese]