US firms in China set for greater competition ahead: survey

Profitability and sales are harder to come by in China as U.S. firms face increasing competition from domestic and foreign players, said a U.S. business group survey on Thursday.


An annual survey by the American Chamber of Commerce in Shanghai showed a majority of firms believed that competition had intensified, while the number who said they were profitable in 2012 dropped to 73 percent from 78 percent in 2011.


This reflects the challenge for global firms looking to boost profits in faster-growing economies such as China, and underlines the impact of China’s slowdown in 2012, where GDP grew at its slowest pace in 13 years.


The 420 U.S. firms surveyed identified rising costs, human resources constraints and heightened domestic competition as the main business challenges, said the report.


“We accept these are going to be the rule rather than the exception in the years to come,” said Brenda Foster, president of the chamber at the report’s Shanghai launch on Thursday.


Seventy-one percent of firms said revenue had increased versus last year, down from 80 percent in 2011, while those who reported operating margin growth edged down to 48 percent from 51 percent.


As the Chinese boom years of 10 percent-plus GDP growth recede, international firms are preparing themselves for a ‘new normal’ in China – one less reliant on exports and investment, and more tied to the domestic Chinese market, the survey said.


This meant retail and service sector firms scored higher on the survey’s Shanghai Business Confidence Index, measuring confidence in future business opportunities.


The survey also said many U.S. firms feel China has not done enough to level the playing field for foreign firms, with 54 percent of respondents saying a lack of transparency favored domestic companies, up from 46 percent in 2011.


But despite the challenges of setting up and operating in China, U.S. businesses are still keen to be on the inside of China’s growing domestic market, set to grow 9 percent a year through 2030, according to estimates from consulting firm McKinsey & Co.


The survey data shows that firms making over 10 percent of total global revenue from China rose to 45.5 percent from 41.2 percent, while nearly three-quarters of respondents said they plan to increase investment over 2013, a three-year high.


Intellectual property rights – a topic flagged dramatically by a recent U.S. report linking the Chinese government to international hacking of private information – remained high on the agenda.


Around 70 percent of firms said IPR was “critically important” or “very important” to their business in 2012, up from 68 percent in 2011.


Source: Reuters “US firms in China set for greater competition ahead: survey”

China nears approval of $16 billion domestic jet-engine plan: Xinhua

China’s cabinet may soon approve an aircraft engine development program that will require investment of at least 100 billion yuan ($16 billion), state-run Xinhua news agency quoted unidentified industry sources as saying.

China is determined to reduce its dependency on foreign companies like Boeing Co (BA.N), EADS-owned Airbus (EAD.PA), General Electric Co (GE.N) and Rolls Royce Plc (RR.L) for the country’s soaring demand for planes and engines.

So far the domestic aerospace industry has failed to build a reliable, high-performance jet engine to end its dependence on Russian and Western makers for equipping its military and commercial aircraft.

Xinhua on Thursday quoted an unidentified professor at the Beijing University of Aeronautics and Astronautics (BUAA) with knowledge of the project as saying the investment would be used mainly for research on technology, designs and materials related to aircraft engine manufacturing.

The project was going through approval procedures in the State Council and may be approved shortly, the professor was quoted as saying.

Participants in the project include Shenyang Liming Aero-Engine Group Corp, AVIC Xi’an Aero-Engine (Group) Ltd (600893.SS) and research institutes including the BUAA, Xinhua reported.

Aviation Industry Corporation of China (AVIC), the country’s dominant military and commercial aviation contractor, had lobbied the government to back a multi-billion dollar plan to build a high-performance jet engine.

China’s military and aerospace industries have suffered from bans on the sale of military equipment imposed by Western governments after the Tiananmen Square crackdown and foreign engine-makers are reluctant to transfer costly technology.

Some Chinese aviation industry specialists forecast Beijing will eventually spend up to 300 billion yuan ($49 billion) on jet-engine development over the next two decades.

Source: Reiters “China nears approval of $16 billion domestic jet-engine plan: Xinhua”

China’s first lady gives up her military perk in response to her husband’s call

De facto first lady Peng Liyuan

De facto first lady Peng Liyuan

China’s de facto first lady, famed military singer Peng Liyuan, seems to have gone out of her way to keep a low profile since her husband Xi Jinping was anointed as the Communist Party’s top leader at its 18th National Congress last November.

But as Xi pushes forward a high-profile campaign to rid the Party and military ranks of corruption and waste, Peng found herself in the news again as a model Party member more than ready to answer her husband’s marching orders.

Cai Xiaoxin, a military researcher who has a verified real-name account on China’s social media platform Weibo, wrote on Wednesday that Peng had voluntarily given a flat she owned back to her military unit. According to Cai, the flat was in a military compound in west Beijing, that had been awarded to Peng many years ago.

Free or heavily-subsidised housing is among the most coveted perks Party, government and military officials can receive, especially amid soaring property prices across the country in recent years.

“She sets a good example in answering Chairman Xi’s orders to tighten up military discipline and fight against corrupt practices,” Cai wrote, referring to Xi’s position as the head of the Central Military Commission.

Cai’s post did not give more details about Peng’s generous gesture.

Peng, 51, has been a household name in China since the early 1980s, a soprano well loved for her lusty rendering of Chinese folk songs.

She married Xi in 1987, and is now the president of the People’s Liberation Army Academy of Arts, with a rank equivalent to a major general.

Source: SCMP “China’s first lady gives marching orders to military perk”

China’s New Advanced 056 Frigate, Special for Patrol of Dispute Sea Areas

China's new Type 056 frigate

China’s new Type 056 frigate

Inside Type 056 frigate

Inside Type 056 frigate

Inside Type 056 frigate

Inside Type 056 frigate

Inside Type 056 frigate

Inside Type 056 frigate

Inside Type 056 frigate

Inside Type 056 frigate

Inside Type 056 frigate

Inside Type 056 frigate

Inside Type 056 frigate

Inside Type 056 frigate

A ceremony on delivery of China’s first new type 056 stealth frigate to the navy was held in Shanghai in the morning of February 25. Navy Commander-in-chief Wu Shengli attended and spoke at the ceremony.

According to official mouthpiece People’s Daily’s website, Cui Tieliang, a Chinese analyst serving as executing chief editor of “Modern Warships”, told its reporters in an interview that lots of such frigates will be built to replace China’s outdated Type 053 frigates and optimize China’s navy hardware in near sea defense.

The new type frigate is much better than older types in automation, technology and stealth characteristic, said.

No Chinese media has given details of the ship’s characteristics. of Global Daily affiliated to People’s Daily, only says in its report that it has better stealth function and electromagnetic compatibility and has incorporated lots of advanced technology. The size of its crew is only one third of that in an old-typed one.

It says that such frigates will mainly been assigned the tasks of patrolling the sea to safeguard China’s national security and territorial integrity, which obviously means that it will mainly be used to patrol the disputed sea areas. SCMP, however, quotes Agence France Presse’ report from Beijing as saying, “The vessels would mainly be used for escort missions and anti-submarine operations”.

Chinese Navy’s website publishes six photos of inside views of the new frigate to show off its strength.

Comprehensive post based on the reports of cn,,, SCMP and Agence France Presse

China: Petition urges NPC to ratify human rights treaty

Petition addressed to NPC ahead of annual session calls for adherence to international agreement, which Beijing signed in 1998

More than 120 influential scholars, lawyers and journalists have signed a petition urging the National People’s Congress to ratify an international human rights treaty, as part of the leadership’s pledge to promote constitutional rights and the rule of law.

The petition, addressed to the NPC Standing Committee ahead of the NPC’s annual session beginning next week, calls for the International Covenant on Civil and Political Rights (ICCPR) to be ratified “as soon as possible”.

“There is still a substantial gap between the situation in China with respect to human rights and rule of law and the requirements of international human rights treaties … but now is the best time for our country to ratify the treaty,” the letter said.

Signatories include scholars Qin Hui, Yu Jianrong and He Weifang, liberal Communist Party veterans He Fang and Feng Lanrui, and rights lawyers Pu Zhiqiang and Xu Zhiyong .

They said they feared a society that did not value human rights or individual freedoms would plunge into “hatred and violence, division and hostility” if crises erupted.

The ICCPR is part of the International Bill of Human Rights. China signed the ICCPR in 1998 but has not ratified it.

The covenant commits its parties to respecting civil and political rights, including freedom of speech, religion and assembly and rights to a fair trial.

Professor Li Gongming , a Guangzhou-based commentator who signed the petition, said it was in the spirit of a recent push for rule of law and constitutional government by Communist Party chief Xi Jinping.

“In light of the leadership stressing that the country should be governed under the constitution and with the rule of law, I think ratification is a reasonable step,” Li said.

The petition is part of increasingly bold calls from intellectuals for political openness and government transparency. In December, dozens of scholars and lawyers urged the party’s new leaders to push ahead with political reform. Even more called on officials to disclose their family assets.

The petition said human rights were not just Western imports, but were ideals that the party itself had aspired to since its early days. The Chinese constitution says citizens enjoy freedom of the press, speech, assembly and association, and the right to demonstrate.

Professor Zhang Ming , a political scientist at RenminUniversity and a signatory, said he was sceptical about whether the new leadership would be willing to implement the necessary changes to conform to the treaty’s requirements. “The ‘stability maintenance’ regime has not ended, but then you can’t not call for ratification to happen.”

Xu Youyu, a retired professor at the China Academy of Social Sciences who is also a signatory, said: “It’s a matter of whether those in power genuinely want to safeguard human rights or not. If you want to, then you should ratify as soon as possible.”

Many copies of the open letter posted on mainland websites have been deleted.

Source: SCMP “Petition urges NPC to ratify human rights treaty”

China’s ‘world’s safest country’ claim greeted with ridicule by netizens

SCMP reports, “A new claim that China is one of the safest countries in the world, based on the number of homicides, has brought the Ministry of Public Security under criticism and ridicule by Chinese who are calling the findings into question.

“The People’s Daily yesterday cited new figures from the ministry as indicating that the number of cases related to murders, assault or robbery have been declining in recent years, and that the annual murder rate was eight people per million, while the closure rate of all murder investigations had reached 94.5 per cent.

“The report added that the rate was lower than in countries considered to have the best social order, including Japan and Switzerland, though specific figures were not given for comparison.

“Tens of thousands of microbloggers from across the country were quick yesterday to rebuke the findings, with many people calling them unbelievable.”

For details, please visit SCMP website at:

Outrage after Chinese men on Air France flight take wine bottles ‘to go’

Reblog of Amy Li’s blog at SCMP on February 26, 2012

Two Chinese men on an Air France flight recently shocked their fellow passengers by snatching eight bottles of wine from the airline service cart, ignoring objections from other travellers on board.

Wen Fei, a Chinese woman who works in Paris, wrote on weibo, China’s Twitter-like service, about her encounters with the two men who sat near her on flight AF132 from Paris to China’s central Wuhan city on Friday.

Wen said she tried to stop them after they each took at least eight bottles of wine and stowed them in their bags – without asking the flight crew.

“I explained to them it was not OK and interpreted the flight attendents’ explanation in French, but they said it was none of my business, ” Wen told on Tuesday.

The two men, apparently drunk, then shouted at Wen in the Wuhan dialect, she said.

“They asked me to back off if I ever wanted to leave Wuhan in one piece,” said Wen.

The pilot later interfered and asked the men to stop fighting with Wen, she said.

“This kind of behaviour is demeaning for the Chinese travelling abroad,” she said.

Wen also posted a picture she had secretly taken of one of the two men. The photo shows a middle-aged man wearing glasses and well-dressed.

Wen’s post struck a chord with many netizens who said they, too, find the behaviour of some Chinese travellers appalling.

“The Chinese are always loud and jump queues to get on a flight – even when everyone has a seat,” said a netizen.

“They are used to ‘stealing’ from people in China and now they start applying that habit elsewhere,” commented another netizen, implying the two men might be powerful Wuhan officials.

The identities of the two men remain unknown.

Air France didn’t respond to the South China Morning Post’s request for an interview on Tuesday.

In a separate incident in China’s southwestern Yunnan province, a local CPPCC member and businessman, Yan Linkun, was caught on camera throwing a temper tantrum and smashing an airport check-in counter after he missed the deadline for boarding.

Yan has apologised to the airport and was suspended from his work, said reports from Chinese media.

Related post:


Photo of China’s ‘Apache’ Carrying 4 Missiles on One Side

WZ-10 with 4 missiles being loaded on one side

WZ-10 with 4 missiles being loaded on one side

Recently, a photo of China’s new WZ-10 attack helicopter being loaded with missiles was posted on the internet. According to a comprehensive report by the website, the helicopter was seen on one side being installed with an auxiliary fuel tank and four anti-missile missiles. The website has leant that the missiles were AKD-10 anti-tank missiles that China has newly developed for its attack helicopter as an air to surface attack missile. According to analysts, AKD-10 missile is a powerful missile able to quickly identify and automatically track its target and hit it with an accuracy of 3 meters. It is able to catch its target 3,000 meters away and has a range exceeding 5,000 meters.

According to previous report by, WZ-10 is better than US AH-64D Apache. However, foreign media has questioned WZ-10’s loading capacity and believed that due to restriction of the power of its engine, it cannot carry more than 4 anti-tank missiles. However, the website says that judging by the photos and information gradually revealed, a WZ-10 military helicopter is entirely able to carry 8 anti-tank missiles for its task. There shall be no doubt about the loading capacity of that type of new military helicopter.

The above-mentioned photo is accompanied by 15 other photos of the helicopters in the report. However, no Z-10 in those photos is seen to be carrying 8 missiles.

For all the 16 photos, please visit at:

In my post “China’s Aviation Industry’s Serious Bottleneck: Lack of Powerful Engine” on December 15, 2012, I quoted as saying: the prototype of China WZ-10 attack helicopter uses 1,300KW Canadian PT-6B engine, but due to US influence, Canada refuses to sell any more PT-6B engine. To give full play to Z-10’s designed capability especially in carrying enough fuel and weapons, it shall be powered by an engine exceeding 1,200KW, but China can only produce an engine of 1,000KW.

As there has been no news that China has developed an engine with enough power, it has to be satisfied with the inadequate carrying capacity of Z-10 until more powerful China-made engine is available.


Related post:

China’s Aviation Industry’s Serious Bottleneck: Lack of Powerful Engine dated December 5, 2012


China’s WZ-10 Armed Helicopter Better than US AH-64D Apache dated November 18 at

Chinese transport ‘workhorses’ extending military’s reach

China is expanding its long-neglected fleet of supply ships and heavy-lift aircraft, bolstering its military prowess in support of missions to enforce claims over disputed territory and to defend Chinese interests abroad.

These transport workhorses are unlikely to arouse the same regional unease as the steady rollout of high performance fighters, long-range missiles or potent warships, but they are a crucial element of the People’s Liberation Army’s (PLA) three-decade military build-up, defense analysts say.

Over time, the air and sea support will give the world’s second-largest navy greater geographical reach and will enhance the PLA’s capacity to assist troops on distant battlefields, potentially including Taiwan if Beijing were to launch a military assault to take control of the self-governing island.

China’s state-owned shipyards last year launched two 23,000-tonne type 903 replenishment ships, according to reports and photographs published on Chinese military affairs websites and blogs, with further orders in the pipeline.

Defense analysts say the state-of-the-art ships are undergoing sea trials and should be commissioned into the Chinese navy later this year.

China also confirmed last month that the PLA had conducted the first test flight of its Y-20 heavy lift aircraft from the Yanliang airbase near Xi’an in ShaanxiProvince.

State-run television showed footage of the four-engine Y-20, the biggest aircraft built in China, taking off and landing. The Y-20, built by AVIC Xi’an Aircraft Industry (Group) Co Ltd, would have a 66-tonne payload, according to official media reports.


The impending delivery of these support ships and aircraft is further evidence China intends to become a more ambitious global military power in a decisive break with its traditional security priorities of expanding or defending its extensive land borders.

“They are beginning to develop their capacity for power projection, there is no question about that,” says Li Nan, an expert on the Chinese military and a professor at the U.S. Naval War College in Newport, Rhode Island.

Steep increases in military outlays over three decades have allowed China to build an advanced navy that now ranks second to the United States fleet in terms of raw numbers.

The Chinese navy now has about 80 major surface warships including its first aircraft carrier, the Liaoning. It also deploys more than 50 submarines, about 50 landing ships and more than 80 missile attack boats, according to Pentagon estimates of PLA military strength.

However, construction of support and replenishment vessels in Chinese shipyards has lagged far behind the output of combatants.

China has only five major supply ships to support a fleet that is conducting increasingly intense patrolling and exercises around disputed territory in the South China Sea and East China Sea.

These vessels are also called upon to support the Chinese navy on a growing number of deployments far into the Indian and Pacific oceans.

By comparison, the U.S. navy has 34 big replenishment ships to support about 140 major surface warships, according to Pentagon figures.

The Chinese navy’s extended missions include regular deployments of naval task forces to the Gulf of Aden and waters off the horn of Africa as part of United Nations authorized anti-piracy operations.


These operations have stretched the logistics capacity of the China’s navy with its three most capable supply ships on almost permanent duty, according to details of the deployments announced by the Chinese military.

However, these deployments have provided an opportunity for the ships and crews to practice and refine the ongoing resupply of warships, highly skilled maneuvers that are essential to keeping warships at sea for long periods, naval experts say.

China’s defense ministry said that the frigate Mianyang, destroyer Harbin and the supply ship Weishanhu sailed on February 16 from Qingdao on the 14th of these anti-piracy deployments.

While extra supply ships will extend the range and endurance of Chinese fleets, Beijing’s strategic objectives still remain relatively limited outside the nearby seas where it is locked in territorial disputes with some of its neighbors.

“They are focusing on securing sea lanes, counter piracy and evacuating Chinese nationals in times of crisis,” says Li.

China’s expanding military transport capability is unlikely to have an immediate impact on its tense standoff with Japan over disputed islands in the East China Sea that are close to logistics bases on the Chinese mainland, naval analysts say.

“Support ships will not change the nature of operations in the East China Sea but will have an impact on the ability of the Chinese navy to conduct operations at sea, if the support ships are used to grow its professionalism and seamanship,” says Alessio Patalano, a Japanese military expert at King’s College in London.


For China’s top brass, the first test flight of the Y-20 was an important milestone as the PLA continues its transformation from a predominantly mass, ground army to a leaner, more mobile force.

“These aircraft are vital if you need to move a lot of people and a lot of equipment some place very, very fast,” says Reuben Johnson, a Kiev-based military analyst and correspondent for Jane’s Information Group, who has studied the Y-20 program.

Reports in the official Chinese media said the Y-20 could land and take off from restricted airstrips and had the capacity to carry most PLA combat and support vehicles.

Chinese military planners have drawn lessons from the importance of heavy-lift aircraft in recent U.S. and other Western military operations where the capacity to shift troops and supplies to distant battlefields or trouble spots has delivered an overwhelming advantage, military analysts say.

The U.S. military has a fleet of more than 300 heavy lift Galaxy and Globemaster aircraft in service along with more than 400 smaller-capacity transport aircraft.

Many of these aircraft can operate from short, uneven landing strips in remote and rugged terrain.

The PLA’s air-lift capacity is much smaller. It currently operates about 20 Russian-built Il-76 transport aircraft. The Il-76 has a 50-tonne payload compared with the Globemaster’s 77 tonnes and 118 tonnes for the Galaxy.

Additional Il-76 aircraft are reportedly on order from Russia but production bottlenecks are holding up deliveries, according to Russian military experts.

If China can introduce a sizeable fleet of Y-20 aircraft over the next decade, it will sharply enhance the PLA’s capacity to land troops and equipment on distant battlefields.

Military experts say this capability would be particularly important in an invasion of Taiwan should Beijing decide to use force to establish control there.

Some analysts predict the Chinese military will order hundreds of Y-20s benefiting the group’s listed unit, AVIC Aircraft Co Ltd, in coming decades if the aircraft can deliver acceptable performance.

They expect the PLA will also use the Y-20 as the basic airframe for its proposed fleet of in-flight refueling tankers and airborne early warning aircraft.

Source: Reuters “Chinese transport “workhorses” extending military’s reach”

Development of China-made Engine for Y-20 Close to Success


Photo posted on internet of the turbofan engine with big bypass ratio called “WS-20”

Photo posted on internet of the turbofan engine with big bypass ratio called “WS-20”

Photo of the metal real-size model of China-made turbofan engine with big bypass ratio displayed at Airshow China 2012

Photo of the metal real-size model of China-made turbofan engine with big bypass ratio displayed at Airshow China 2012

The successive maiden flight of Y-20 was indeed exciting news for Chinese people, however people shall be aware that the development of a large transport aircraft is very difficult and will take a lot of time. China cannot rely on import for the development of its air force as neither the US nor Russia is willing to sell their most advanced large transport aircrafts to China. Y-20 is better than Russian Il-76 in various indexes, but still faces many challenges

Major General Qiao Liang of Chinese air force was very excited at the successful maiden flight of Y-2 as he has the experience of flying on various Chinese transport aircrafts during his 40 years of career in the air force. He said none of the China-made Y-8 and Y7H or the Il-76 imported from Russia is enough for the development of Chinese air force.

In spite of rooms for improvement, the successful maiden flight of Y-20 was a stride in China’s efforts to enter the “elite aviation club” in the world.

Qiao said that the most challenging parts in developing an aircraft are the wings, alloy/synthetic material and engine.

Wings are one of the key parts which few top enterprises contract the development to outside contractor. Still the Aviation Industry Corporation of China seeks Ukrainian Antonov’s help in developing the wings of its ARJ-21 (jet).

The development of alloy is a very demanding job. Russia has invested huge resources in it. China seems to still lack knowledge in that area.

Finally, engine remains the weakest area of China’s aircraft industry, in fact, a bottleneck in China’s aircraft development.

For a military transport aircraft, turbofan has been proved the best choice of engines due to its low consumption of fuel.

Li Jie, research fellow of China Naval Military Studies Research Institute, told media that like other aircraft projects, Y-20 project faces the same difficult problem–engine. However, if China is able to resolve that problem, its capability to send troops to the battle field and relief materials to disaster-affected areas will be greatly enhanced.

“The cycle of engine development is 5 to 6 or even more years longer than that of fuselage development. Engine development has always been a bottleneck in China’s aircraft industry. There is Western technology blockage in that area against China,” said Qiao Liang.

Y-20 is now equipped with 4 Russian D-30 engines, but their thrust is not big enough. However, Qiao said China is developing China-made engines for Y-20 and close to success. In the future, Y-20 may carry 10 tons more load with such engines.