ENGLISH EDITION OF THE WEEKLY CHINESE NEWSPAPER, IN-DEPTH AND INDEPENDENT
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Issue 599 17-12-2012
Summary:Real Estate Developers Betting on 2013, Making WeChat Pay and North Korea


Highlights from the EO print edition, No. 599, Dec 17, 2012

Real Estate Developers Betting on 2013
News, cover
~ Guangzhou's land transfer revenue over the past three months exceeded the total from the first half of the year.
~ In October, the Guangzhou Municipal Bureau of Land and Resources put 11 pieces of land up for sale. After two months, Guangzhou's residential land transfers exceeded 6.4 billion yuan and commercial land transfers exceeded 9.4 billion yuan, according to statistics provided by Centaline Property.
~ During the entire first six months of 2012, Guangzhou's land transfer revenue was 9.5 billion yuan, according to data from Yuan Jinxia (袁锦霞), head of Guangzhou Municipal Bureau of Finance.
~ A pickup in land sales isn't only happening in Guangzhou. On Nov 27, Beijing put 6 parcels of land up for sale and Shanghai plans to launch 36 plots in the Pudong New Area with a total area of close to 100 hectares. Likewise, Nanjing has launched 20 plots of land, Kunming 35 and Wuhan 48.
~ Developers have also started investing in land again. As of Dec 14, Vanke Co., Ltd, China's largest real estate developer, had bought a total of 19 plots of land in the fourth quarter of 2012 with a total construction area of 9.9 million square meters for 19 billion yuan.
~ As of Oct 20, China Overseas Property (中海地产) had purchased 10 plots of lands in Tianjin, Chengdu, Dalian, Kunming, Foshan, Yantai, Hangzhou and other cities, with total investment reaching 12.6 billion yuan. Also in the fourth quarter, Poly Real Estate Group Co., Ltd purchased 16 plots of lands and China Merchants Property Development Co., Ltd (招商地产) invested 6.5 billion yuan in 6 plots.
~ It's worth noting that in this round of land purchasing, centrally-administered state-owned enterprises (COEs) have especially shown their enthusiasm. According to collected data by Centaline Group Research Center, from September to November, among the 20 major cities monitored, COEs purchased a total of 32 plots altogether worth 36.5 billion yuan.
~ The attitude of COEs has inspired private developers. "COEs' are certainly more in tune with policy direction than we are," said a private real estate developer. "They've started to hoard land at a large-scale, which has obviously given clear market signals."
Original article: [Chinese]

Ministry of Commerce Looks to Expand Consumption
News, page 4
~ The Economic Observer has learned that the Ministry of Commerce is studying new programs aimed at increasing consumption. New measures will reduce direct subsidies and put a greater emphasis on financial infrastructure construction. Government guarantee funds for enterprises will also be increased and income distribution reform will be pushed.
~ "The new policies might make people a little disappointed," said an official from the Ministry of Commerce. "This time the policy mainly focuses on some long-term infrastructure construction. Direct subsidies will be reduced significantly."
~ "We've had several seminars," the official continued. "Most experts agree that, although subsidies produce an immediate effect, relying on them is not a solution. At present, the rate of consumption growth isn't bad. It can certainly reach more than 14 percent this year."
~ The first step is to strengthen construction of data systems, integrity building systems and other systems. The third is to increase government guarantee funds for enterprises. Many banks are afraid to lend to small and medium-sized enterprises because they have no guarantee. If the government can provide guarantees for more businesses, then it will be very helpful.
~ Huo Jianguo (霍建国), head of the Research Institute of the Ministry of Commerce, also suggested that the next step needs to be speeding up income distribution reform, which will promote the rapid growth of consumption.
Original article: [Chinese]


Special Feature: Investing in North Korea
Nation, page 9-12
~ This week's paper includes a special feature on North Korea based on the experience of an EO reporter who recently accompanied a group of Chinese business people on a trip to Pyongyang.
~ The feature includes a profile of one of the businessmen who went to North Korea and presents his views on North Korea's investment potential.
~ The second story is a profile of a 21-year-old North Korean girl.
~ The third story maps the various potential investments opportunities in the country and also draws attention to the potential pitfalls.
~ The feature is accompanied by photographs taken by the journalist.
Original article: [Chinese], [Chinese], [Chinese], [Chinese]


Protest Against Beijing-Shenyang High-speed Rail
Nation, page 13
~ On Dec 9, hundreds of residents from dozens of communities in Beijing protested the construction of a high-speed railway line that will Beijing and the city of Shenyang in China's north east.
~ According to the protesters, the environment of up to 34 communities with over 100,000 residents will be affected if the rail line passes through the area.
~ Last month, the Ministry of Environmental Protection released a third environmental impact assessment of the project. According to the report, the public is supposed to be informed of relevant information about the construction and be allowed to voice their opinions.
~ While the residents said that there were indeed researchers doing surveys in the communities, they still say most residents didn't know that a railway line was under discussion because the researchers went door-to-door while young people were away at work.
~ Surveyors gave presents to the elderly at home in exchange for completing the survey. This allegedly led to a false result where 94.8 percent of the 2,782 questionnaires that were completed appeared to be in favor of the project.
~ In response to the protesters' concerns of noise pollution, a professional said that the government is going to spend 1.15 billion yuan on noise control - 1.03 billion yuan of which is going to be spent on building noise barriers like sound-proof windows for households. No announcement has been made regarding electromagnetic radiation.
~ The Ministry of Railways disagrees with the Beijing local government on the planning of the line. The Ministry of Railways suggests the line go through Xinghuo Station (星火站) in Chaoyang District to meet both Beijing and Hebei's needs for development.
~ However, the Beijing local government decided it should go through Beijing East Railway Station in Tongzhou (通州).
~ Officials from Beijing Municipal Planning Commission promised that, whatever the plan ends up being, it won't be approved if the public doesn't support it.
Original article: [Chinese]

Making Tencent's WeChat Pay
Corporation, page 25
~ Wechat - known as Weixin (微信) in Chinese - is a popular mobile phone text and voice messaging communication service developed by the same Chinese telecommuncation company that runs that ubiquitous QQ instant messaging software.
~ Unlike the "one-to-many" mode of China's popular microblogs (Weibo) and the "one-to-one" mode of QQ, Tencent's Wechat allows users to create a closed "circle of friends" based on the connections that people have built up on QQ.
~ Many industry analysts are saying that the rise of Wechat marks a new era for China's social networking platforms.
~ "If the commercialization of Wechat and Tencent's (腾讯) e-commerce ventures both succeed, the share price of [Tencent's subsidary on the Hong Kong stock exchange] should be able to double to 500 HKD," an industry insider confidently told the Economic Observer recently.
~ Wu Xiaoguang (吴宵光), the CEO of a subsidary of Tencent's E-commerce arm, says that online retail is already mature and now more off-line businesses are moving online. Tencent plans to explore this new O2O (Online-to-Offline) mode.
~ As the person in charge of Wechat member card services, Geng Zhijun's (耿志军) idea is to build up a huge membership network. Geng says right now there are over a thousand brands with tens of thousands of stores registered online in Wechat. In the future, users will be able to simply shake their phones in order to locate the nearest store that stocks what they're looking for.
~ What's more, WeChat can replace discount cards, VIP cards and even eventually door cards and identification cards. It connects businesses and customers, leaving out the intermediaries.
~ A user can currently link his debit cards and credit cards with his Wechat account. In the future, Wechat will be able to bypass third-party payment services and users will be able to pay with goods with their Wechat account directly.
Original article: [Chinese]

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