Highlights from the EO print edition, No. 602, Jan 7, 2013

Ten-Year Urbanization Plan To Launch This Year
News, page 2
~ The Economic Observer learned that a program for promoting healthy development of urbanization in China until 2020 will be launched around the time that the annual "Two Sessions" are held in March this year.
~ The program will provide development direction and specific requirements for new urbanization. It will involve the construction of more than 20 city groups, more than 180 prefecture-level cities and more than 10,000 cities and towns.
~ According to the program, China's new urbanization construction in the future will follow the three principles of "fairness and sharing," "intensiveness and efficiency" and "sustainability." The aim is to transform urbanization development from speedy expansion to quality improvement.
~ Some industry experts think the existing land system and household registration (hukou) system are two major obstacles to reform of China's urbanization.
~ Preparation of the program was led by the National Development and Reform Commission. More than ten ministries and departments like the Ministry of Finance, Ministry of Land and Resources, and Ministry of Housing and Urban-Rural Development have also been involved in preparation.
Original article: [Chinese]

Disputes over the Yellow River Allocation Scheme
Nation, page 9
~ After a decade of work, the South-to-North Water Diversion Project is coming to completion. Apart from the provinces and cities slated to benefit from the project, such as Tianjin, Shandong, Beijing, Hebei and Henan, there are 11 other provinces lobbying for some of the water.
~ The upper and middle reaches of the Yellow River are suffering from severe water shortages. Per capita water resources in this area are only about one-eighth of the national average. Moreover, the Yellow River supplies water for 15 percent of the farmland and 50 large and medium-sized cities in China.
~ The two billion cubic meters of water to be allocated to Tianjin and Hebei is the focus of attention. Officials from Inner Mongolia and Ningxia have proposed diverting some of that water west. Wang Baolin (王宝林), head of the Water Resources Department of Inner Mongolia, said that without water, they won't be able to launch any projects locally.
~ However, Hebei and Tianjin are not willing to divert water to other provinces. According to a water expert from Hebei, the cost of water is very high in the province, yet the cost of diverting new water there is relatively low. These areas also have urgent needs for more water in order to increase industrial production.
~ Pei Yong (裴勇) from the Yellow River Conservation Commission (黄河水利委员会), said that it's very difficult to divert water. The scheme they have now may not be the most equitable, but it is the most workable one.
~ The former Minister of Water Resources, Yang Zhenhuai (杨振怀), told The Economic Observer that the proposals made by each province make sense respectively, but it's impossible to satisfy everyone.
Original article: [Chinese]

China's Largest Nuclear Power Project Launched in Shandong    
Nation, page 13
~ On Dec 21, 2012, the construction of a nuclear power plant in Shidao Bay (石岛湾), Shandong began under Huaneng Shandong Shidao Bay Nuclear Power Co., Ltd. (华能山东石岛湾核电有限公司).
~ According to the plan, it will be the largest nuclear project ever in China both in terms of investment scale and generating capacity. Investment in the project will reach 100 billion yuan over 20 years, with about 3 billion yuan slated for the first phase of construction. It's expected to begin operation by 2017 with generating capacity reaching 6.6 gigawats.
~ China's nuclear power has historically relied on imported technology, but the Shidao Bay Project is being developed with Tsinghua University (清华大学) domestically.
~ After the Fukishima nuclear disaster of 2011 in Japan, China's nuclear ambitions came to a halt out of safety concerns. The Shidao Bay project is the first to begin construction since the Fukishima disaster, but public doubts about nuclear safety remain. A source from the Shidao Bay nuclear power plant addressed these fears saying, "We don’t give up on civil aviation just because of one air crash. We should look at the nuclear crisis in Japan comprehensively. Aviation technology gets improved significantly each time there's an air crash. Instead of being so easily put off by a slight risk, what we can do is learn from the accident and perfect our technology."
~ One of the new technologies developed by Tsinghua for the project allows reactors to safely shut down during an emergency like an earthquake.
~ Vice President of Shandong Academy of Social Sciences (山东社科院) Zheng Guibin (郑贵宾) says the public's opposition to some nuclear projects is often caused by their lack of knowledge in nuclear power.
~ Near the plant site, an exhibition center on nuclear power has opened to help address public concerns.  
Original article: [Chinese]

Trouble at Procter & Gamble
Corporation, page 25
~ During 2012, American consumer goods company Procter & Gamble (P&G) was beset with problems like global layoffs and reduced innovative capability.
~ P&G has announced plans to cut 5,700 jobs in non-production departments, with layoffs to be completed by June 30 this year.
~ When asked whether the global layoff plan will involve P&G China, Shannan Stevenson, president of P&G China, said that the layoffs are a global plan, but the company will continue to invest in China.
~ P&G's October financial statement didn't give data specific to China, but Stevenson said P&G China's sales volume grew more than 30 percent over the past two years.
~ One of the major challenges P&G faces in China is increasing competition, as well difficulty meeting high-end demands with its products.
Original article: [Chinese]

Ten Things to Look Out for in China's Auto Industry in 2013
Automobile, page 33
~ What are the issues and who are the people that are going to matter in China's auto industry this year, editors and journalists from the EO's auto section have put together a list of 10 things to watch out for.
~ In terms of policy, the question of whether the government chooses to encourage sales of certain types of vehicles or limit the sales of others will be of central concern. New rules that limit government car purchases also have the potential to have a big impact on the industry, especially on domestic brands. The other big policy issue is which cities are likely to limit the growth in car sales in order to cope with both pollution and traffic congestion.
~ In terms of individuals, we urge readers to keep an eye on Xu Xianping (许宪平), newly appointed general manager of the FAW Group(一汽集团) and Wang Chuanfu (王传福), the Chairman of BYD (比亚迪). The first works for a state-owned company and he's officially occupies a "vice-ministerial" position, the 49-year-old will be anxious to prove that FAW's dream of establishing a stand alone domestic brand can come true. Wang Chuanfu is a private businessman who has pinned his hopes on the success of new energy vehicles, his success will largely be determined by how well hybrid and battery-powered vehicles sell in China.
~ In terms of technology, although there are likely to be a whole flock of new SUV models released this year, we instead decided that "smart transportation" (智能交通) tools. Over the coming years, this kind of technology will change the way that people drive and interact with their cars.
~ In terms of domestic brands, pay attention to SAIC (上汽) and Chang'an (长安)
~ In terms of general industry trends, a lot of people have their eyes on whether Japanese-branded cars will be able to recover their market position after diplomatic tensions over the Diaoyu Islands dispute led to a substantial drop in sales in the final few months of this year.
Original article: [Chinese]