Issue Wrap No. 499, Dec 20, 2010

By English Edition Staff
Published: 2010-12-20

Highlights from the EO print edition, Issue Wrap No. 499, Dec 20, 2010

17 Years of Dismal History in Xingfu Ba Village
Cover  
~ Police have uncovered that mentally disabled workers were abused in Xinjiang province. The head of an agency that adopted mentally disabled workers in Xingfu Ba Village in Qu County, 46-year-old farmer Zeng Lingquan, was charged with running an illegal business.
~ Zeng Lingquan was the boss of "Zi Qiang Dui", a company that adopted disabled men and gave them jobs. Since the action was regarded as good deed, Zeng and his company Zi Qiang Dui was generally admired by the local government, a nearby resident told a reporter from the EO.
~ Zeng was a pig farmer until 1993 when he "adopted" his first disabled worker. For the next 17 years, Zeng adopted disabled people and sent them to work in various cities.
~ The disabled men who were adopted by Zeng Lingquan were forced to become illegal workers, and were subject to various abuses. 
Original article: [Chinese]

 

NDRC May Reduce Prices of 658 Medicines by an average of 40%
News, page 05
~According to multiple sources, the National Development and Reform Commission has drafted a measure to reduce the prices of 658 medicinal products anywhere between 10 and 87.59 percent.
~The average price reduction will be 40 percent.
~The price adjustment is based on the "Anhui Model," a bidding model known to produce low prices.
~Anhui, by calling for bids from companies, pushed prices far below market value. Many pharmaceutical companies chose to cut their losses and not participate and 20 pharmaceutical companies held a conference and petitioned the State Council.
~Analysts say that the NDRC measure has not been released because of its possible impact on pharmaceutical companies. 
Original article: [Chinese]

High Interest Lending in Wenzhou Reaches Critical Point
Nation 14
~ With Banks reducing the number of available loans, private lending in Wenzhou has increased for five consecutive months. The monthly interest rate has reached 5 percent.
~The total household savings in Wenzhou decreased by over 8 billion in October of this year.
~A commercial banking official from the Wealth Management Center said that low interest rates and high inflation have pushed many investors into the private lending business.
~Wang, a sales agent in a Wenzhou company, estimates that there are over 1,000 private lending businesses in Wenzhou, circulating capital of over 20 billion RMB.
~Additionally, credit spending in Wenzhou has skyrocketed. China Union Pay reports that this year, Wenzhou residents will have spent 250 billion in credit, up 64 percent from last year.
Original article: [Chinese]

 

Who will get Crowded Out of Beijing?
Nation, page 17
~ According to estimates by the Beijing government, the urban population capacity of Beijing is 17.50 million, but currently the capital has 19.72 million city inhabitants, which means more than 2 million people will have to be squeezed out of the city.
~ Population pressures have long been a heavy burden on resources and the healthcare system.
~ Different methods will be adopted in order to organize Beijing's floating population, permanent population, and foreigners. As for the permanent population, according to suggestions on the Twelth Five-year Plan, 0.7 million residents will be moved to the suburbs over the next 10 years.
~ Residence permits will replace current temporary residence permits for the floating population, and the population will be tracked through rent registration. Meanwhile, collaborating with Hebei Province, Beijing will adjust its industrial structure and its control of the total population.
~ The practice of sealing villages at night, meant to control traffic and restrict the floating population, has been implemented in some villages and towns on the outskirts of Beijing. These practices may be promoted in the Twelfth Five-year Plan, a researcher familiar with Beijing government said.
Original article: [Chinese]

Say Goodbye to Loose Monetary Policy
Market, page 27
~ To curb inflation and stabilize economic growth, the government has put suppressing inflation at the top of its agenda for 2011.
~ The government will also shift its monetary stance to "prudent" from "moderately loose", truncating the loose monetary policy that has been in place for two years and three months.
~ "Although the monetary policy has shifted, the central bank is still facing a number of issues on repatriating cash," according to a source from a commercial bank. To curb inflation, the central bank raised the reserve ratio and interest rates, but the actions have had inadequate effects.
~ Besides dealing with inflationary pressures, the central bank also needs to control credit in order to achieve a "soft landing."
Original article: [Chinese]

Both Dangdang and 360Buy Can Emerge as Winners from their Price Battle
Corporation, page 35
~  On Dec 16, China's biggest online book seller Dangdang.com started offering steep discounts on books to compete with its new competitor, 360Buy.com. On the same day, one of Dangdang's major rivals, 360Buy, told the EO that they are spending 80 million yuan on sales promotions.
~  360Buy is well known for its relatively low prices on home appliances and electronic items, but it began selling books in November. Their price war with Dangdang has helped them inform consumers about their new sales item while making the claim, "we have lower prices than Dangdang on books", an insider told a reporter from the EO.
~  If 360Buy manages to attract enough consumers, the losses incurred by this public relations battle between the two companies are acceptable. They can both easily turn their losses to profits.
~ The battle drew the public's attention, if we view it as a marketing event, Dangdang and 360Buy are both winners.
Original article: [Chinese]