Issue Wrap No. 480, August 2, 2010

Highlights from the EO print edition, Issue Wrap No. 480, August 2

Wanted: On the Run with EO Reporter Qiu Ziming
Cover
~ The cover story of this week's issue of The Economic Observer has been written by the editorial board to explain the ins and outs of Qiu's experience of being a "wanted man."
~ On July 27, Qiu Ziming, one of the EO's Shanghai-based reporters called Liu Zhaoqiong, director of our newspaper's East China bureau, telling her "A friend just told me that I've been added to a wanted list by the public security bureau."
~ At first, Liu thought Qiu said was joking, but later she realized the seriousness of the matter and reported it to senior editors at our newspaper's main office in Beijing.
~ At the same time, the EO drafted a fact sheet to explain Qiu's reports and a statement in relation to Qiu's investigation and we also filed a complaint with the All-China Journalists Association and the General Administration of Press and Publication or GAPP.
~ On July 27, Southern Metropolis Daily wrote a report about the matter, and later, the four major Chinese Internet portals: Sina, Sohu, Netease and QQ all added special reports about the situation to their websites.
~ The EO received a fax from Suichang county Public Security Bureau at 4pm on July 30th, the fax acknowledged that the decision to list Qiu Ziming as a wanted person was not made in accordance with the law and went on to say that the order would be revoked. Four hours later, the deputy director of Suichang county Public Security Bureau arrived at the EO's Beijing office to apologize to Qiu Ziming and the newspaper.
Original article: [Chinese]

"CIC No.2" to Open for Business in Mid-august
Cover
~ The Guoxin Asset Management Company commonly referred to as "CIC No. 2," will formally start business in mid-August with around ten centrally-owned enterprises (COEs) to initially be put under the asset management company's control.
~ Liu Dongsheng, chairman of a supervisory body under the State-owned Asset Supervision and Administration Commission, is tipped to be awarded the post of party secretary and general manager of the new company.
~ The establishment of "CIC No.2" was initially given the green light by the State Council back in March and delays in the unveiling of the new body have been put down to a lack of  suitable applicants to head-up the company.
Original article: [Chinese]

Everything's an Asset – Funds Chase a Widening Array of Investment Options
News page 3
~ Private-sector investment retreated from Chinas manufacturing industry (driven away by negligible profit margins and stiff competition from large state-owned enterprises)and began to invest in stocks and the real estate market, now the outlook for China's real estate market and stock markets is also cloudy and investors are looking for alternative investment opportunities.
~ For instance, some investors have begun to speculate on the price of agricultural products, jade and wine while others have invested in the domestic film industry.
~ Due to the inflow of speculative funds, the price of garlic, mung bean, pork, eggs and vegetables began to pick up again recently while the prices being paid for jade and diamonds has also surged.
~ However, these investments are risky as the inflow of speculative funds in the agricultural markets is likely to distort market order.
Original article: [Chinese]

China to Allow Use of Public Housing Funds for Construction of Government-subsidized Housing
News page 5
~ The Ministry of Housing and Urban-Rural Development has allowed 28 cities,including Beijing and Changsha,to use their public housing funds to invest in the construction of government-subsidized housing starting this year.
~ This is the first time the central government has allowed these municipal public housing funds to invest in such housing projects. According to the current Public Fund Management regulations, funds are currently only allowed to be invested in low-cost rental houses not the various kinds of public housing that are covered under the banner of government-subsidized housing.
~ The Ministry of Housing and Urban-Rural Development attempted to persuade the central government to revise these regulations in 2009, but failed.
~ All the 28 pilot cities will be permitted to invest up to 50% of their funds in the construction of local "policy-based" housing.
Original article: [Chinese]

Huang Guangyu Switches Defense Team for Appeal
News, page 6
~ Huang Guangyu, founder and former chairman of China's largest home appliance retailer who was sentence to 14 years prison in May, will appeal his sentence at a second hearing to be held before early September, the EO learned.
~ Mr Huang has changed his defense team and at present, Lǜ Guoyu, a partner of the Beijing-based Han Ding United Lawyers, Zhang Shiguo, partner of Beijing Dongwei Law Firm and Li Mo, director of Beijing Chuangshi Law Firm will all jointly represent Huang.
Original article: [Chinese]

Interview with French Finance Minister – Christine Lagarde
News page 8
~ Last month the EO sent two journalists to Europe to report on the European economy in the wake of the sovereign-debt crisis. During the trip, they had a chance to interview the French Finance Minister
~ In the interview, Lagarde explains that what took place in Europe during May this year represented a major shift or as she put it "... the fact that we decided to close ranks and put money where our mouth was and decide to stand for each other – I think that was transformational."
~ When asked about what role China might play in a European recovery, Lagarde, half-jokingly urged Chinese consumers to "consume lots and lots and lots of LV bags, lots and lots of Christian Dior perfume, drink lots and lots of champagne and fly Airbus all the time."
~ The full text of the interview will be available on Wednesday, August 4.
Original article: [Chinese]