China, Russia sign oil supply deal

Russia will supply an additional 10 million tonnes of crude oil to China each year over the next decade under a latest agreement signed between Russia and China, visiting Russian Prime Minister Dmitry Medvedev said Tuesday in Beijing.

Medvedev said Russia's biggest oil producer Rosneft will fulfill the deal, which worth a total of 85 billion U.S. dollars.

"It is a big sum of money to any country, even to China. It testifies to the fact that we have reached a higher and a brand new level of cooperation," he said during an online forum with Internet users, according to Xinhua.

The two governments also agreed to jointly construct an oil refinery in Tianjin, which will be able to refine 16 million tonnes of crude oil each year, Medvedev said.

"It is a high-tech project, which will employ the most advanced oil refinery technologies," he said.

The Tianjin refinery is jointly set up by China National Petroleum Corporation (CNPC), the country's largest oil and gas producer and supplier, and Rosneft. CNPC holds a 49 percent stake while Rosneft holds the remaining 51 percent.

Chinese official statistics showed China imported 24.33 million tonnes of crude oil from Russia in 2012.

In June, CNPC and Rosneft signed a long-term agreement in St Petersburg for oil deliveries, involving supplies of 365 million tonnes of oil to China in the next 25 years, with an estimated value of 270 billion U.S. dollars.

Energy cooperation is an important part of Russian-Sino cooperation, he said. "Russia has a lot of energy resources, while China is a huge market."

Medvedev said Russia and China will also cooperate over natural gas supply. The two countries had agreed on a price-setting formula for Russian gas which is to be exported to China, and both sides were negotiating the price itself, he said.

"Although this issue is relatively tough, we will reach consensus soon. (Russia) will supply natural gas to China via a pipeline as soon as possible," he said.

On the nuclear front, the Russian prime minister said Russian-Sino cooperation over nuclear energy had a bright future and Russia was willing to continue such cooperation with China.

Tianwan nuclear power plant in eastern China's Jiangsu Province, which now has four reactors, was a good example of bilateral cooperation over nuclear energy, he said.

Low Prices, High Quality, and Huge Savings: Get It All From Abcsources.com!

ABCSources.com is a registered online wholesaler which is also the biggest B2R(Business to Retail) company in Yiwu China, They have online store that caters for small wholesale orders, It has a superior supplier management system to maximize products and suppliers’ info to their database. The website offers worldwide free shipping on selected items and does cater to the world. They sell mostly electronics, school and office supplies, accessories, home and garden tools and others.So the only thing you need to do, is to search on our web site the products you are interested in, put into your container, after confirmation then submit. Their customer service will email you PI and Packing list in hours or one working day. Your order would be placed timely after we receive the deposit. 

Yes, this is a little story for ABC sources, one typical Yiwu mode purchasing agent. We bring traditional procurement process online to save time for buyers and maximize the profit on small budget. 

What are the Qualities of the Products?

 Actually they have all the products you can think of especially in their small commodity . They really look inviting and they could be mistaken for the famous branded qualities. However, as a Chinese buyer, we know that China wholesalers do not carry branded items. They have their own non-branded items or copied items bearing different brand names. The same goes with the apparels. They do not carry the famous brands of clothing however, like their electronic products they vouch that they are made from high quality materials. Abcsources have made it a point to make a thorough verification of their suppliers to ensure high quality products.

Good Reasons to Buy From Abcsources.

1. Exciting and Inexpensive Products: If you are in the e-commerce business and you are selling items too on your website, you will be able to entice more clients to come by featuring the interesting products of this company. It currently has a very wide range of small commodity that are cheaply priced but have high quality. Their product gallery pages feature jewelry, computers, toys, sports and outdoor equipment, home tools, jewelry and watches, and even gift and party supplies. Their suppliers are readily accessible and this is the reason why they are able to really offer these items at factory prices.

2. Free Wholesale Membership Registration: Unlike any other wholesale websites out there in the internet these days, we don’t really charge anything for membership registrations. Abcsources is dedicated to make its services even more accessible for those who are just starting out in the buy and sell business in the internet. Registration takes not more than a minute and there are fewer requirements to deal with.

3. International Warehouses: Even those orders that are placed by international buyers and clients are priced the same. These items are shipped in the same time frame as those that are locally ordered. This is due to the fact that Abcsources has international warehouses which contain all the stocks of items that can be seen on their web based site these days. These warehouses are found in the United States, United Kingdom, and Australia. Each warehouse is updated regularly in terms of stocks.

4. Easy Ordering Process: All clients will receive full access to the purchasing privileges after a simple registration process. There are no complicated steps involved in the ordering process. Their shopping cart platform is user-friendly and really simplifies the tasks of selecting which goods to purchase and paying for the orders.  PayPal and major credit cards are accepted. Additional charges are computed right away when using credit cards and this is an assurance that there will be no unwanted surprises on the part of the buyer later.

5. Special Offers and Saving Zones:  If you are a budget shopper, you will find out that Abcsources  website will be a good place to see special offers and excellent promos. They have a dedicated webpage that contains all the items that are offered up for great discounts.  Buyers can enjoy up to 50% on selected items. There are also items that are priced $1 and below. The best prices can be seen on this page and there is even that search feature which allows buyers to see items that fit on their shopping budget range.

 Abcsources  as  a wholesaler, Online Shop, and a Money-Making Partner

The best dropshippers are there in China and this is one thing that must really lead us to be randomly choosing one. Abcsources is a wise choice when it comes to being a wholesaler, an online shopping site, and an affiliate program partner. It simplifies the process of e-commerce for those who are investing with its updated and client-friendly systems.  One of the best things about this company is that it never stops in looking for ways to provide buyers with new and updated product lines. It qualifies to be one of the best wholesaler websites out there in the online world today!

Buying online becoming a global craze

The United States is the biggest online buyer of Chinese goods with China set to sell more than $10 billion of products through the Internet in the top five global markets, a report showed on Wednesday.

"As online shopping becomes increasingly popular in both emerging and developed markets, merchants in China are poised to embrace rapid business growth in the next five years," said PayPal, publisher of the report.

US Internet users will spend nearly 50 billion yuan ($8 billion) on purchasing goods made in China this year, making the country the top spender on Chinese goods, according to the report.

Other top buyers include the United Kingdom (expected to spend 7.4 billion yuan on Chinese products this year) and Australia, which it is anticipated will spend 5.2 billion yuan.

Investors and the nation's Internet giants are fully aware of the increasing demand for Chinese goods on the Web.

Last month, LightInTheBox Holding Ltd, a Beijing-based online retailer targeting international buyers, raised $78.9 million after an initial public offering in New York. In the meantime, Tencent Holdings Ltd and Alibaba Group Holding Ltd are hurriedly mapping out cross-border payment services for Chinese retailers.

China's cross-border online shopping sales are on track to hit 144 billion yuan by 2018, more than double this year's amount, PayPal estimated.

The nation is the world's third-largest exporter in the cross-border online shopping sector, after the US and the United Kingdom.

Data from the China E-commerce Research Center showed turnover of cross-border online trade increased more than 25 percent year-on-year in 2012. The market size will continue to enjoy double-digit growth this year despite the gross domestic product growth of China slowing down, said the center.

Clothes, shoes and accessories are among the most popular items for overseas buyers. Global shoppers will spend $12.5 billion on these products, said PayPal after interviewing more than 5,000 buyers.

"Despite the world suffering from a massive economic slowdown, online shoppers' enthusiasm for foreign goods continues to surge over the years," said Patrick Foo, head of cross-border trade at PayPal China.

Demand for made-in-China products from emerging markets will also witness rapid expansion in the coming years, he added.

Brazil, the fifth-biggest buyer, is expected to spend 1.8 billion yuan this year. It will be spending 11.4 billion yuan on Chinese goods five years later, said the report.

However, doing business with buyers outside China is not a way to earn easy money, the report warned.

Language barriers, cultural differences and transaction security remain the top obstacles for Chinese e-commerce vendors.

Chinese vendors need to carefully study the target market before tapping into it because every country's online shopping market is different from another, said Foo.

"In the UK, people are used to booking flight tickets on the Web while Brazilians are used to buying computers online," he added.

The report also showed the mobile cross-border e-commerce sector is outgrowing the overall market in size, another big trend that merchants in China don't want to miss out on.

Transactions on mobile devices will reach $51 billion globally in 2018 while the amount may not exceed $20 billion this year, said the report.

China's B2C market grows 82% in Q2

Transactions in China's booming online business-to-consumer (B2C) market reached 157.2 billion yuan ($25.6 billion) in the second quarter this year, according to a report released Wednesday by Analysys International.

The number represents an 82 percent increase from the same period last year. B2C sales bounced from a mild first quarter as promotions by major e-retailers spurred consumption.

Competition in the fresh produce segment of China's B2C market turned fierce in the second quarter. Companies with bricks-and-mortar chain stores are more likely to succeed in the segment, the report said.

It also noted cross-border e-commerce made a breakthrough as Beijing-based e-retailer Lightinthebox went public on June 6 on the New York Stock Exchange.

The internet research company also estimated B2C sales during July-September period would grow by 65 percent from the second quarter as retailers continue their aggressive sales push.

China endures worst heat in half-century

A fountain provides respite for a child in Sanlitun.

BEIJING - The sweltering summer of 2013 is going on record as the hottest summer in China since 1961.

According to a Monday microblog post by the National Meteorological Center (NMC),temperatures have reached or exceeded 35 degrees Celsius for an average of 25.3 days ineight provinces and municipalities since July 1, marking the greatest number of hot daysrecorded during the period since 1961.

Extreme heat has resulted in at least 40 deaths in south China, according to local governmentreports. Over ten people died from heatstroke in Shanghai during the period.

Outdoor laborers like sanitation workers are most vulnerable to the scorching heat. In centralChina's Hunan Province, three sanitation workers died of heatstroke within less than onemonth. Another municipal worker in east China's city of Hangzhou died while returning after anentire day of working under the blazing sun.

Authorities have for the first time declared the heat to be a second-level weather emergency, alabel normally used for typhoons and floods. The NMC issued a second-level heat alert onTuesday for the next 20 days.

In southwest China's Chongqing Municipality, high temperatures and scarce rainfall have all butobliterated the local mosquito population, according to a local resident surnamed Lei.

The municipal disease control center said the area's mosquito density in June was down 57.1 percent compared to the previous year.

Local residents who lack air conditioning have had to get creative in order to beat the heat.Computer saleswoman Wang Jing splashes water on her floor to cool her bedroom down before she goes to sleep, while her neighbor has chosen to sleep on the balcony at night.

In rural areas across south China, a worsening drought that has accompanied the persistentheat has taken a heavy toll on agriculture and made drinking water increasingly difficult toobtain.

A Tuesday report from the Hunan provincial government said 3.06 million people have sufferedfrom drinking water shortages, with the drought affecting 85.6 percent of the province'svillages.

Drinking water scarcity is also affecting 1.17 million people in the neighboring province of Hubei, where authorities said they do not expect significant rainfall until August 22.

The heat has also caused damage to the vast bamboo forests of Hunan's Taojiang County, ashigh temperatures have increased the appetites of locusts and therefore hastened theirreproduction.

The highest temperature recorded in the country was seen in the city of Fenghua in eastChina's Zhejiang Province, which recorded a historic high temperature of 43 degrees Celsiusover the last few days.

Local resident Wang Gengdi is unaccustomed to the shortage of drinking water beingexperienced in the area, as the city is close to numerous rivers and lakes.

"We haven't seen a lack of water in many years, but right now the only source of drinking waterin my village is a pond with limited supplies," she said.

Yang Jinbao, a honey peach farmer in Fenghua, has seen his honey peaches wither to the sizeof a ping-pong ball. About 800 of his honey peach trees have died.

The heat is also causing unexpected accidents. A billboard in Zhejiang mysteriously caught fireduring the heat, while in Hangzhou, 236 instances of car tires blowing out have been reported.

The NMA said Tuesday that the range and intensity of the heat will decrease over the nextthree days, although temperatures over 35 degree Celsius will persist in some areas.

On Monday, Vice Premier Wang Yang called for greater efforts to fight droughts and floods toensure the safety of those affected by the disasters.

The central government had allocated 460 million yuan ($74.6 million) to ease droughts andprevent floods by August 9.

China's FDI is set for a comeback, after months in the dolddrums

International investors, after wrestling with economic woes at home, have regained their appetite

In the middle of every month the spokesman for the Ministry of Commerce, Shen Danyang, addresses a news briefing at which he announces the foreign direct investment figures.

After the announcement, one of his signature remarks is along these lines: the drop in China's FDI is temporary and will eventually rebound.

He has said that since November 2011, when FDI fell, on a yearly basis, for the first time since the end of the 2008-09 financial crisis.

In fact, China's FDI continued its losing streak in the 12 months to the end of November in 2012, except for negligible growth of 0.05 percent in May.

So it seems that Shen has had to eat his words for more than a year. But hopefully not for much longer, because China's lure as a world top investment destination is showing signs of recovery.

First, the recovery of economic growth in the world's second-largest economy will renew global investors' confidence in the market.

Economic indicators published over the past two months have confirmed that recovery is on the horizon. Clearly, the Chinese economy is emerging from its three-year trough and is beginning to gain solid footing once again.

The recovery is sustainable because it was achieved without the government introducing huge stimulus on big projects or support for the export sector.

As economic growth recovers, new opportunities will present themselves, and international capital will no doubt flow back to China.

Second, some overseas investors who parked their money at home as they wrestled with domestic economic problems have gradually regained an interest in international investment as their businesses have ridden out the storms that have buffeted them.

Among them are investors in the United States. The worst for the US economy is essentially over, especially now that the so-called fiscal cliff has been averted. In addition, US investors, with the country's ultra-low interest rate and loose monetary policy, have not exactly been short of capital. But they have been hamstrung by a loss of confidence, having nowhere to invest their money as the economy has ailed.

Now, as the US economy gains momentum, these investors will have regained their confidence in investing, whether it be at home or abroad. The fact that US investment in China has grown over the past few months is the best evidence of that trend.

Third, the foreign exchange advantages that China has offered are becoming clear as its currency renews its trend of appreciation. That trend stalled as the Chinese economy struggled in the second and third quarters.

But the currency has begun to appreciate again in the past few months, widening the foreign exchange profit margin. Coupled with the fact that China's interest rate is far higher than those in many other countries, the lure of investing in China again becomes all the more apparent, especially for short-term speculative investors.

Finally, a group of big Hong Kong investors has large plans to invest in the Chinese mainland over the coming months.

Hong Kong is the Chinese mainland's largest FDI source, accounting for 60 percent of it. This is because many international investors invest in the mainland through their Hong Kongsubsidiaries. The Hong Kong branches of mainland-based companies account for a great many of them.

This group of companies, many of them subsidiaries of state-owned mainland conglomerates, will invest in the mainland more aggressively in the coming year now thatChinahas completed its leadership transition.

These companies tend to be conservative with expansion plans before any major leadership transition. This is understandable as a transition will usher in changes in policies and leadership style, even if those changes are minor. State companies, used to following policies drawn up by the top leadership, do not invest heavily when policy changes are taking place.

But they will surely be keen to renew their expansion plans now that the transition is done and after new policy orientation is hammered out. That will result in a spree of investment from Hong Kong to the mainland.

In all, 2013 will be a good year for China's FDI, but of course it will not all be plain sailing.

China's slow progress in market opening, partly in response to rising global protectionism against it, will dampen the confidence of a few international investors.

In addition, efforts by developed economies to lure back investment will result in the loss of FDI into China.

But as the positives outweigh the negatives, Shen of the Ministry of Commerce should be able to tell the monthly news briefing in the coming fortnight: "You see, China's FDI is on its way back. I told you so."

EU solar deal hailed as blueprint

Communication from China key to settling sales dispute: experts

The European Union's endorsement of an agreement that settled a dispute with China over solar panel sales in the EU should be credited mostly to the Chinese government's "great concerns" about the matter and "efficient communication" with the EU, Chinese trade experts said.

The settlement also sends a strong signal about Sino-EU economic and trade ties, avoiding the possibility of a trade war between the major economies worldwide, and setting a good example on how the two sides can solve future trade disagreements through consultation and communication, they said.

The European Commission, the EU's executive arm, on Friday endorsed a negotiated settlement with China that sets a minimum price and a volume limit on EU imports of Chinese solar panels through 2015.

The agreement will take effect on Tuesday. Chinese manufacturers that agree to it will avoid punitive duties that the 28-nation bloc had planned to impose.

The European Commission said an overwhelming majority of member states voted in favor of the deal and no member state voted against it.

"China's top leadership has played a key role in bringing a good solution to the dispute," said Chen Xin, director of the Institute of European Studies at the Chinese Academy of Social Sciences.

He Maochun, director of the Economy and Diplomacy Research Center at Tsinghua University, said: "All levels of the Chinese government — including the State Council, led by Premier Li Keqiang — got involved in the deal. The consultations were highly efficient, and it is the first time that such a case has raised such high concerns from the government."

After the EU announced plans to investigate China's solar exports, China repeatedly expressed opposition to the investigation and tariffs, and government officials, led by Li, sought consultations with the EU at various levels.

During his nine-day visit to four Asian and European countries in May, his first such trip since he assumed office, the premier expressed great concern about the deal on many occasions and he repeatedly said China opposes trade protectionism and any sort of abuse of trade cases.

After Li returned from Europe, he held talks with European Commission President Jose Manuel Barroso over the phone, emphasizing China's stance on the issue, and pointed out that the solar panel dispute affected China's major economic interests.

Cui Hongjian, director of European studies at the China Institute of International Studies, said, "We can say it's a new attempt at solving trade disputes through the involvement of high-level officials."

Duncan Freeman, senior researcher of Brussels Institute of Contemporary Chinese Studies, agreed. "I am impressed that Premier Li is diplomatically active and forceful in approaching the problems and that he is solution-oriented," he said.

The solar panel case is the largest trade investigation that the European Commission has undertaken. In 2011, the EU's imports of solar goods from China were valued at 21 billion euros ($27.9 billion).

China's solar panel exports rely heavily on the European market, with 80 percent of the nation's exports going to Europe. More than 1,000 industrial companies and 400,000 jobs are in the sector.

While he sought consultations with top EU officials, Li also encouraged the domestic industrial players to invest in innovation and strive to create a business-friendly environment back home.

In a visit to Hebei province in June, he chose to tour Jinglong Co, a photovoltaic company in Xingtai, when he called for Chinese companies to strengthen innovation and the domestic market while stabilizing the overseas markets.

In mid-July, the State Council launched detailed guidelines to promote domestic consumption of PV products and facilitate sustainable development of the industry.

The final settlement of the solar dispute with the EU prevented the outbreak of a trade war, and it also provides a "new model" for solving trade disputes.

"The solutions from Brussels are welcomed and appreciated, and both sides have set an example for dealing with disputes," said Chi Fulin, president of the China Institute for Reform and Development, a think tank.

Europe is China's largest trading partner, while for the EU, China is second only to the United States. Chinese statistics showed that bilateral trade reached $546 billion last year.

"Trade friction is unavoidable between China and the EU, but the key is how to solve it, and the solar panel case is a good example to follow," Chen said.

While China maintains the world's second-largest economy and pledges to expand domestic consumption, the debt-ridden EU does not want to lose out in the Chinese market, experts said.

"China and the EU are very reliant on each other, and economic cooperation will deepen in the future," Chen said.

"China is an important market for the EU, especially given the nation's commitment to expanding consumption."

China Government must bite the bullet

Further reductions in administrative costs and improvements in efficiency needed in the face of lower fiscal revenue
China's central fiscal revenue declined 0.8 percent year-on-year in the first four months of this year, and a per capita 11.3 percent monthly growth is needed in the following months if the country wants to achieve the growth target set early this year, according to a report delivered to the Standing Committee of the National People's Congress on June 27 by the Minister of Finance, Lou Jiwei.
Considering lukewarm economic growth in the latter half of this year and a possible fiscal revenue decline, as a result of the widespread implementation of the policy to convert business tax into value added tax, due on August 1, China's full-year central fiscal revenue faces gloomy prospects.
Similarly, there has been lower-than-expected growth in local fiscal revenue. China's local fiscal revenue was 4.89 trillion yuan ($798 billion) in the first five months, a 6.9 percent increase year-on-year, 2.5 percentage points lower than a year earlier. The fiscal revenue grew only 0.1 percent year-on-year in the Inner Mongolia autonomous region in the first five months, much lower than a planned 14 percent full-year growth, while Liaoning province witnessed 5.2 percent growth during the same period, compared with the planned full-year growth of 11 percent, and Shaanxi province witnessed 6.55 percent growth, in sharp contrast with a 16 percent growth planned for the whole year.
Worse, the recent "liquidity crunch" that broke out among some domestic banks makes the outlook for the country's fiscal revenues at both the central and local levels even gloomier in the context of the weak national economic momentum.
It is widely believed that the recent liquidity insufficiency was a temporary and structural monetary problem largely caused by seasonal interest rate fluctuations and panics following the changes in market expectations. However, a series of problems accumulated among domestic banks, such as huge volumes of interbank debts and their maturity mismatch, cannot be resolved within a short period. This, together with increased pressures for performance assessment at the end of every quarter, the expiry of wealth management products, the outflow of hot money and tightening financial supervision from the authorities, means that the funds in China's financial system will tend to be at a tightened balancing level in the latter half of this year.
The new leadership's unambiguous refusal to inject liquidity into the market has sounded an alarm that financial institutions should stop their previous practice of excessively using maturity mismatch for financial expansion. It is expected that domestic financial institutions will strengthen their liquidity management, accelerate deleverage of their wealth management products and optimize their credit structures in a bid to channel more funds into the real economy in the future. Such kind of funds rebalancing and the prioritizing of the real economy will facilitate the transformation of China's economic structure and its long-term growth, but it will also be a drag on its fiscal revenue growth.
The accelerated efforts for funds rebalancing to be expected within the country's banking system will possibly expose its hidden local debt risks at an earlier date. There have been concerns over its accumulated local debt risks since 2009. Due to strengthened efforts from the authorities to tighten bank loans since the start of 2012, many of the country's local financing platforms have begun to turn to trust loans and other financing forms in an attempt to borrow new money to pay off old debts, which has to some extent eased their debt-paying pressures.
However, the tightened flow of credit and trust funds to local financing platforms pushed by commercial banks following the recent liquidity crunch will inevitably aggravate short-term local debt risks. Due to their desire not to default on their debts borrowed via their financing vehicles for the sake of continuous financing in the future, local governments will possibly use some of their fiscal revenues to pay off debts, thus adding to their fiscal crisis.
The assets restructuring pushed by domestic commercial banks will negatively affect credit-driven real estate development and thus indirectly influence local fiscal revenue. A large-scale flow of funds to the property sector in recent years has continuously fueled the rise of property prices, benefiting both banks and developers. At the same time, the ever-bulging revenues from land sales and tax have also made local governments become the largest beneficiary of the real estate-dependent economic model.
The unavoidable deleverage for interbank financial and trust products following the recent liquidity crunch will inevitably reduce the funds for real estate development and thus dampen developers' enthusiasm for buying land, which will result in a decline in local land sales revenues. Money insufficiency will also foil local governments' hopes of utilizing an easy monetary policy to stimulate local economic growth and boost their fiscal revenues.
Compared with its flat purses, the country's fiscal spending has kept rocketing both at the central and local levels. In the first five months, outlays at the expense of public coffers amounted to 4.66 trillion yuan, a 13.2 percent increase from the same period last year, or 7.1 percentage points higher than the country's fiscal revenue growth.
Facing growing fiscal pressures in the context of a "money shortage" and financial and tax reforms, the government should realize that low fiscal revenue growth will be common in the future and that preparations should be made for fiscal austerity.
The government should further reduce its administrative costs and improve its administration efficiency through delegating more power to lower departments and promoting government restructuring to reduce interventions into microeconomic activities. The awareness that it should live within its fiscal capacity should be cultivated to avoid excessive spending.
The author is a professor with the School of Economics and Management, Beijing University of Science and Technology, and Chen Jinbao is an economics PhD at the school.

Xi vows to protect maritime interests

Country will enhance enforcement to match its national strength

China's top leader has vowed to protect the country's maritime interests and be fully preparedfor the complex issues in the region.

President Xi Jinping made the pledge on Wednesday while chairing a group study session ofthe Political Bureau of the Communist Party of China Central Committee to discuss a roadmapto becoming a maritime power.

Xi stressed China will stick to the principle of "shelving disputes and carrying out jointdevelopment" for areas over which China owns sovereign rights.

"We love peace and will remain on a path of peaceful development, but that doesn't meangiving up our rights, especially involving the nation's core interests," Xi said.

The country will enhance its maritime law enforcement capacity to match its overall nationalstrength, he said.

Li Guoqiang, deputy director of the Center for Chinese Borderland History and Geography atthe Chinese Academy of Social Sciences, said Xi's speech showed the country's decision toprotect its maritime interests, an important part of building China into a maritime power.

"The speech also emphasized solving maritime issues through diplomatic and political means,reflecting that China, as a responsible country, will not use force rashly," Li said.

Sea disputes between China and other countries have surged in recent years. In the SouthChina Sea, the Philippines, Vietnam, Malaysia and Brunei all have competing claims over someChinese islands, while Sino-Japanese relations have been strained since September whenTokyo "illegally purchased" three islands in the East China Sea.

Yang Baoyun, an expert on Southeast Asian Studies at Peking University, said Xi's speech signaled that China will maintain steady development in its neighboring areas and protect its maritime interests.

"It will be tough for China, but we are making all efforts," Yang said.

Xi also stressed the importance of developing the marine economy, protecting the marine environment and strengthening marine science and technology research.

"A developed marine economy is an important part of building maritime power," Xi said, addingthat China will foster and strengthen emerging high-tech marine sectors and optimize thestructure of the marine industry, while completing a general plan for innovative marinetechnology.

The emerging sectors in the marine economy include marine bio-pharmaceuticals, seawaterutilization and renewable energies, and offshore equipment manufacturing.

While boosting the country's marine economy, Xi emphasized the importance of protecting themarine environment, saying efforts will be made to control the worsening marine environment.

He said marine environmental protection will be given the same priority as marine exploration.

A mechanism to enforce compensation for marine ecological damage to protect the ocean willbe created, he said.

A welcome to China's first good Samaritan law

On Aug 1, Shenzhen will implement China's first good Samaritan law, technically called the Shenzhen Special Economic Zone Good Samaritans' Right Protection Regulation but more popularly nicknamed the "Good Person's Law". What does this have to do with President Xi Jinping's Chinese dream? In a word: "everything"!

In 700 Chinese characters, the Good Person's Law brings China back to some of its ancient core values, although — at this point — it is limited to upwards of 15 million people in one metropolis that ironically did not exist a generation ago.

I've asked many Chinese people, especially those born in the '90s, what the Chinese Dream means to them. Because Chinese people are generally patriotic, I expected them to define it along the lines that President Xi did: "realizing a prosperous and strong country, the rejuvenation of the nation and the well-being of the people".

So I was surprised that nearly all of those I asked cast the dream on personal terms such as an apartment, a car or an attractive significant other. It reminded me more of the American dream of one of our most maligned American Presidents, who presided over the early years of the Great Depression, Herbert Hoover. His campaign slogan was "a chicken in every pot and a car in every garage."

I believe that this materialistic view represents neither traditional values nor what China's new president had in mind. Starting with the humiliation suffered by China in the 1840s and for some of the 20th century, traditional bedrock values dating at least from the time of Confucius, such as being ready to help others in need and fighting for a just cause, have suffered severe erosion. It's one thing to see them on a daily basis on TV in historical dramas and quite another to observe them in practice today.

When I first came to China a decade ago, I was appalled at how aggressive and unyielding drivers were, the polar opposite to the many other countries in which I have lived or visited. At first I thought it was just because Chinese people lacked multigenerational experience driving cars, so they drove like they were rode Flying Pigeon bicycles a few years ago. But in retrospect, I see this more as a clear instance of the loss of traditional values.

I was also shocked how most Chinese people would not help those in need — so different from at home. But then, I understood after reading stories of Chinese judges finding those who came to the aid of others guilty of causing injuries to them, merely because, as in the most celebrated case, the judge concluded that nobody would do such a thing except out of guilt for causing that injury in the first place.

So looking at the situation in the best possible light, I concluded that while people might have wanted to assist those in need, they were afraid to do so. This was because they might themselves become the innocent victim in the course of coming to the assistance of someone in need.

I can empathize with them. As a foreigner, I think I am even more at risk if I were to do so. My heart actually feels pain to just walk on by.

The new Good Person's Law in Shenzhen has the potential to help rejuvenate the nation and the well-being of the people by promoting traditional Chinese values. The law frees good persons from worrying about their liability when coming to the assistance of those who appear to be in difficulty.

First, the law liberates good Samaritans from any legal responsibility for the condition of the person they assist, except in cases of gross negligence. And importantly, the law shifts the burden of proof from the helper, to where it should be: the person in need of assistance.

The law also provides significant punishment for those who falsely accuse those who come to their aid. This includes both fines and imprisonment.

As originally debated, there was discussion of the offer of cash or other rewards to good Samaritans. Unfortunately, this was not included, but the law does include legal aid.

While in the ocean of China's vast population, Shenzhen's few million people are just a drop in the bucket. I'll be rooting for the law to be a success and used as a model for a national law to help fulfill the Chinese Dream and build a more harmonious society at the same time.

China, EU reach deal on solar panel dispute

The China Chamber of Commerce for Import and Export of Machinery and Electronic Products and the European Commission have reached a deal to resolve a dispute involving solar panels.

"After weeks of intensive talks, I can announce today that I am satisfied with the offer of a price under taking submitted by China's solar panel exporters," EU Trade Commissioner Karel DeGucht said in a statement, referring to an agreement for a minimum price for China's imports.

"We found an amicable solution ... that will lead to a new market equilibrium at sustainable prices," De Gucht said.

The Commissioner said the next step for him is to table this offer for approval by the EuropeanCommission.

Further details of the legal acts concerning the undertaking arrangement can only be releasedfollowing their adoption by the Commission.

The Chinese Ministry of Commerce, meanwhile, said China welcomes the deal which"showcased pragmatic and flexible attitudes from both sides and the wisdom to resolve theissue."

According to the Ministry of Commerce spokesman Shen Danyang, resolving the trade dispute is conducive to an open, cooperative, stable and sustainable economic and trade relationship between China and the EU.

He added that China is willing to further promote exchanges and cooperation with the EU sidein the photovoltaic industry field.

Chinese solar panel production quadrupled between 2009 and 2011 to more than the entireglobal demand, and the Commission accused China of dumping its solar panels at below thecost of production in Europe.

The European Commission on June 4 decided to impose provisional anti-dumping duties onimports of solar panels, cells and wafers from China.

Starting from June 6, EU imports of Chinese solar products was subject to a punitive duty of11.8 percent until August 6, from when on, the duty would have been raised to 47.6 percent ifthe two sides could not sort out the dispute through negotiations.

China, Russia boost ties with joint drills

China and Russia will start a joint counter-terrorism drill, known as Peace Mission 2013, on Saturday, less than one month after the two sides completed their largest-ever naval drill in the Sea of Japan.

Observers said this is the first time that the two countries have conducted so many drills in ashort period of time and sent military forces from bases that are geographically so close to oneanother, indicating a high level of mutual trust.

The drill, which involves 1,500 soldiers, will be held in Chelyabinsk, in Russia's Ural Mountainsregion, from Saturday until Aug 15.

It will be the ninth time that the two countries have participated in bilateral or multilateralexercises since 2003, and the move comes two weeks after they held the Joint Sea 2013 navaldrill in Peter the Great Gulf near Russia's Far East port city of Vladivostok.

Starting on Saturday morning, 646 Chinese soldiers from the Shenyang military division of thePeople's Liberation Army will be deployed by air and rail. They are expected to arrive in the drillareas by Aug 2, according to the military region.

It will be the first time that the military division, which is in northeastern China near the borderwith Russia, will participate in drills abroad, it said.

The move shows ever-growing mutual trust between the two sides, said Chen Xuehui, a Beijing-based military expert. "Traditionally, military forces that are geographically close are supposed to be each other's opponent in defense policies.

"Such cooperation is important given that forces near to each other usually face similar threats and conduct similar exercises in daily training," said Chen, adding that counter-terrorism has been a main subject of military cooperation under the framework of the Shanghai Cooperation Organization that groups China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

The deployment of troops will be followed by two phases of war planning and campaign drills.

According to the Ministry of National Defense, the Chinese troops will include a planning panel,a command, an infantry combat group, an air force combat group and a logistics group. They will be equipped with various models of armed vehicles, self-propelled guns, and fixed-wing and rotating-wing aircraft, including Z-9 and M-171 helicopters.

"The size of the drill is not much larger than those held before, but it's rare that the two countries hold two drills within a month," said Li Shuyin, a researcher on Central Asian and Russian military studies at the PLA Academy of Military Sciences.

"Both sides have been holding such drills regularly, further strengthening military ties, a keypart of their comprehensive strategic partnership," Li said.

"And this does not target any third party," she said.

The first Peace Mission joint counter-terrorism drill involving the two countries was held 2005.Since then, the two countries have held similar drills every one or two years in China or Russia.

Guangzhou to launch 72-hour visa-free stays

City to follow Beijing and Shanghai in introducing convenient policy

Guangzhou is to allow transit passengers 72-hour stays from August, the third Chinese city tointroduce the visa-free policy.

Travelers from 45 countries, who intend to visit a third country and who hold air tickets, will be able to stay in the Guang dong provincial capital for three days without a visa and will be allowed to visit anywhere in the province during their trips.

Guangzhou is following Beijing and Shanghai in introducing the visa-free stays, which covervisitors from countries including France, Germany, the United States and Japan.

Zhao Yufang, deputy governor of Guangdong, said on Tuesday that Guangzhou is expectingmore foreign visitors after the policy is introduced.

She promised to continue simplifying exit and entry procedures and to improve traveler-friendlyfacilities and the shopping environment.

"The visa-free policy will cement Guangzhou's status as a key metropolis of China, aninternational aviation hub and a world-renowned tourist destination," she said.

Yang Rongsen, director of the Guangdong Tourism Administration, sees the policy as a boonfor tourists and the province. "It will help boost the tourism industry," Yang said.

Zhang Yumin, general manager of Guangzhou Baiyun Airport Co, said the airport will see 1million transit passengers this year, rising to more than 1.5 million in 2015.

It will join Shanghai Pudong International Airport and Beijing Capital International Airport as thecountry's top entry points for foreigners.

Chen Baiyu, president of GZL International Travel Service, said the policy will benefit not onlyGuangzhou, but also other cities in the province.

An official from Window of the World, a leading attraction in Shenzhen, speaking on condition ofanonymity, said the tourist spot expects the new policy to draw more visitors from Europe andthe US.

About 20 percent of its visitors are foreigners.

Jill Collins, Australia consul-general in Guangzhou, said, "The visa policy will encourage moreAustralians to come and experience Cantonese morning tea, go up the colorful Canton Towerand enjoy the sun as it rises over Guangzhou's Baiyun Mountain."

Kevin McGeary, 29, from Northern Ireland, said the visa-free policy is even more useful forvisiting family members and for having short holidays.

"Business travelers on a short trip to China, for example attending the Canton Fair or visitingfactories, will be glad that the policy saves them the trouble of going through complicated visaapplication procedures," said McGeary, who works for a newspaper in Shenzhen. The CantonFair is China's largest trade fair.

Many other Chinese cities are expected to introduce visa-free visits.

The State Council recently granted approval for Chengdu, the provincial capital of Sichuan, tobecome the first city in western China to launch 72-hour visa-free stays, but local authoritiessay they need time to prepare before the policy can be introduced.

In May, Tianjin said it has applied to launch the policy, but is still awaiting central governmentapproval.

Chao Xiaohui, an official in charge of inbound tourism with the Shanghai tourism administration,said the visa-free policy introduced in the city in January benefited 5,700 people in the first sixmonths of 2013. The most visitors came from the United States, with Australians in secondplace.

"Most of them were individual travelers and a lot were business travelers," she said.

Beijing introduced the 72-hour visa-free policy for visitors from 45 countries on Jan 1.

The capital's tourism authority said the exact number of travelers benefiting from the policy is still unclear, but the city is expecting about 2 million overseas visitors on transit visas in 2013.

Ma Yiliang, a researcher at the China Tourism Academy, said although the number offoreigners applying for visa-free stays has increased in major cities, it accounts for a smallproportion of total foreign arrivals.

He said China must promote the policy overseas so that travelers can plan their trips beforearriving in the country.

Ma said the policy so far has been symbolic, rather than bringing significant changes to thecountry's inbound tourism industry.

He also suggests that authorities introduce visas that allow longer stays, to attract overseastravelers.

China received about 12.8 million foreign tourists in the first half of this year, 5 percent down ona year ago, according to the exit-entry authority under the Ministry of Public Security.

Xu Jingxi in Guangzhou and Chen Hong in Shenzhen contributed to this story.

Timeline

• 1994

Shenzhen becomes first Chinese city to introduce 72-hour convenient-visa policy for foreignersvia Hong Kong. Visa procedures are streamlined but not scrapped entirely.

• 2000

Convenient-visa trial in Shenzhen extended to nine cities in Guangdong province, with limit ofstay increased to 144 hours.

• January 2013

Beijing and Shanghai introduce 72-hour visa-free stay for citizens of 45 countries.

• June

State Council approves launch of visa-free policy in Chengdu, provincial capital of Sichuan. Butlocal tourism authority says it needs time to prepare for it.

• August

Guangdong introduces 72-hour visa-free policy.

Huawei tells US to shut up

In recent years, concerns on national security have become an excuse some Western countries used to block Huawei's business expansion.

The latest episode is some media reports on July 19, saying the US and the UK blamed Huaweifor security issues again.

In a statement for The Verge, a Manhattan-based technology news website, William Plummer,the vice president responsible for Huawei's external affairs demanded both countries "shut up"if they were unable to put up evidence.

Despite of barriers, Hua wei has left remarkable footprints on the way of its international development.

In 2010, Huawei's nearly $21.8 billion in revenues made it the 397th largest company in the Fortune Global 500 list. In 2013, Huawei ranked 315th in the Fortune 500 with revenue of$34.9 billion. It surpassed Ericsson, which ranked 333th with $33.6 billion in revenue, for the first time.

In the global telecommunication equipment market, Ericsson and Huawei, as each other's majorrival, contest against each other intensely. Nevertheless, with "cold winter" oftelecommunication equipment market at present, the two firms present different trends.

According to the financial reports last year, incomes of the two firms remain the same, but netprofit of Huawei was three times than that of Ericsson. At global analyst conference 2013,Huawei revealed that it would achieve annual revenues of $38.9 billion with compound annualgrowth rate of 10 percent in next five years. It is expected that Huawei would surpass Ericssonto become the world's biggest equipment maker in 2013.

Huawei focuses not only on market share, but also on strategic layout. Enterprise and consumer business will become the main source of motivation in the future according to annual report 2012. The sales revenue of Huawei terminals which include mobile phones, MBB and family terminals was 48.4 yuan in 2012. The production of smartphones which rose by 60 percent was 32 million among these 127 million terminals. What's more, the profit of Huawei experienced a year-on-year growth of 80 percent in 2012.

Obviously, Huawei, which has dominated around half of the mobile broadband market, isdeveloping its mobile phone business through intelligent terminal "east wind".

Yu Chengdong, CEO of Huawei Consumer Business Group hoped that when saying the word"smartphone", consumers can immediately think of Huawei. He also said that Huawei wasexpected to ascend into one of the top three smartphone brands in 2015.

China Financial reform move

As the country continues its much-needed market-oriented reform of the financial sector, the central bank made a milestone move on Friday to remove controls on the lending rates of commercial banks.

The move, which allows the banks to lend at a rate lower than the previous floor of 70 percent of the benchmark rate, shows the resolve of the authorities to press ahead with financial reforms.

As GDP growth has slowed to 7.5 percent year-on-year in the second quarter, a low rate of growth rarely seen in the past three decades, calls for bailout measures, such as a major monetary stimulus, have been on the rise.

The authorities have, however, opted to abandon their previous monetary expansion-based philosophy in their attempt to boost the economy. Instead, they have made efforts to improve the efficiency of the financial sector, in order to lay the groundwork for future economic restructuring.

As shown by the refusal to offer a helping hand during the temporary money crunch in the interbank market in June, it is clear that policymakers will not repeat the past practice of injecting money into the economy to keep it growing.

The elimination of the lending rate floor is another unequivocal sign that policymakers will remain on the track of reform.

After the removal of the floor, commercial banks will become more independent players in deciding the rates for their loans in accordance with their operational strategies and market conditions. This will help improve their credit allocation efficiency and make them more capable of pricing risks. They will have to compete with each other to win the favor of big enterprises.

It is only the first step in China's interest rate liberalization drive. Policymakers are yet to remove the ceiling for deposit rates.

With the deposit rates kept under an officially set ceiling of 1.1 times the benchmark rates, commercial banks can still benefit from the large gap between lending and deposit rates and lack an incentive to improve their competitive edge.

It is understandable that policymakers have chosen a gradual approach to interest rate liberalization. But it is advisable that they make preparations, such as the establishment of a deposit insurance system, before they move to free up the deposit rates, because such a reform could cause uncompetitive financial institutions to go bankrupt.

Xi eyes 'golden water route'

President calls for cooperation among Yangtze River ports


President Xi Jinping called for increased cooperation among Yangtze River ports to transform the region into a"golden water route", during a surprise visit to the Yangluo Container Port, in Wuhan New Port, on Sundaymorning.

Photos showed him holding an umbrella, his trousers legs rolled up, during a downpour.

"We were not informed about President Xi's visit in advance, so our workers at the harbor wereworking as usual when he arrived," said Pu Jun, director of the publicity office of Wuhan PortContainer Co Ltd in the Hubei provincial capital.

Pu said Xi was at the port for about half an hour, visiting the central control room and talking tothe company general manager and a worker about logistics at the dock — even after his shirtgot wet in the torrential rain.

Xi urged Wuhan New Port workers and officials to strengthen cooperation with other ports alongthe Yangtze River and build a "golden water route".

Wuhan New Port is made up of ports in four cities in Hubei — Wuhan, Ezhou, Huanggang andXianning. Yangluo container port, a major harbor in Wuhan, handled more than 400,000containers in the first half of 2013, an increase of more than 8.9 percent year-on-year, XinhuaNews Agency reported.

In early 2011, the State Council, China's cabinet, issued guidelines for accelerating thedevelopment of inland navigation to build a modern inland water traffic system within 10 yearsthat is smooth, efficient, safe and environmentally friendly.

Song Dexing, director of the Water Transportation Department of the Ministry of Transport, hassaid that inland navigation offers unprecedented opportunities for development, given thegrowing trend of industrial relocation from coastal areas to inland cities; the emphasis onurbanization; and the ongoing national "Go West" campaign.

Shou Jianmin, a Shanghai Maritime University professor who specializes in shipping and portresearch, said Xi's visit to Wuhan New Port shows that the central government is planning to letinland shipping along the Yangtze River play a more important role in driving the growth of localeconomies and boosting China's logistical and shipping capacity.

Shou said there are four pivotal Yangtze ports — Chong-qing, Wuhan, Nanjing and Shanghai. "The idea of developing the Yangtze River into a ‘golden water route' requires efficientcooperation among the ports rather than vicious competition," he said.

Shou called for making a full-scale evaluation on the logistical situation of the Yangtze River,and he suggested the central government create a concrete blueprint for the river'sdevelopment.

"Local ports would gain a clear idea of how to play their roles in the ‘golden water route'," hesaid.

Zhou Dequan, deputy director of the shipping market research department at the ShanghaiInternational Shipping Institute, said Wuhan New Port will face a lot of competition as it builds aport with a capacity of 100 million tons.

"After the global economic meltdown in 2008, a lot of local governments realized the greatcontribution that ports make to the economy, sparking a wave of port construction across thenation," Zhou said.

Zhou added that he has concerns about a potential oversupply behind the ambitious targets.

Xi also visited Wuhan Dong-hu High-tech Development Zone on Sunday and saw the latestdevelopments in 3-D printing, optical fiber communication and biomass energy, Xinhuareported on its micro blog.

The zone is home to more than 2,000 registered companies with gross revenues of nearly 501billion yuan ($81.6 billion) in 2012, Xinhua said.

Xi said a nation's prosperity relies on innovation, technology and talent,

Tokyo's 'big leap' aimed at China

Japan took a "big leap" in using its defense forces to target China last year as the United States at the same time listed China as its greatest potential security challenge, according to a report from a Chinese think tank on Friday.

Observers said the military tension arose from territorial disputes, unease over China's rapid growth and attempts to use China as a scapegoat to justify a military buildup by Tokyo and Washington.

The annual report on Japanese military power, released by the China Strategic Culture Promotion Association, said two of the most eye-catching changes in Japan's defense forces in 2012 were Tokyo's efforts to normalize its defense power and to use it against China.

Last year, then-Japanese prime minister Yoshihiko Noda became the first Japanese government leader to make "strong military-related statements" on the Diaoyu Islands on public occasions, the report said.

Noda and current Prime Minister Shinzo Abe visited branches of the Japan Coast Guard and the Japan Self-Defense Forces in Okinawa. Such visits have rarely been made by Japanese prime ministers since the end of World War II, it said.

Since tensions over the Diaoyu Islands increased in mid-2012, Japan's military deployment, equipment upgrading, military drills and construction of military facilities have all been accelerated, it added.

"Although this is not meant to provoke China into military action, it has undoubtedly complicated and endangered the situation in which accidents might be triggered and the dispute that already existed might escalate out of control," the report stated.

Japan's national defense budget for the 2012 fiscal year "not only reveals Japan's ambition to step up efforts to become a major military power, but also explains its efforts to continue stirring up the so-called China threat", it said.

The budget lists a string of objectives, including "improving the security environment in the Asia-Pacific region and the world".

The report said Noda had been ambitious in "normalizing" Japan's national defense and had acted to achieve that aim since 2011, while the Abe administration is even "more enthusiastic" about this.

For instance, since Abe took office in December, the Japanese government has taken "historic steps" in attempting to revise the constitution, establish national defense forces, amend the national defense program guidelines, exercise collective self-defense, set up the National Security Council, raise military spending and build up military strength, according to the report.

Luo Yuan, deputy executive of the association, said, "China-Japan relations are also disturbed by growing right-wing forces in Japan, which stir up the China threat to justify their ambition to get rid of the shackles of the post-war system."

Fan Gaoyue, a researcher from the association, said tensions over the Diaoyu Islands can hardly be eased in the short term as the Abe administration further strengthens its hawkish stance.

"If the ruling party led by the conservative Abe wins the Senate elections this month, it is likely to make more provocative moves over the Diaoyu Islands to seek public support to amend the constitution and upgrade self-defense forces to an army," Fan said.

It is the second time the think tank has issued reports on Japanese and US military power. In 2012, it became the first Chinese non-governmental body to touch upon the topic.

In its report on US military power last year, the association said the US national defense budget in the 2012 fiscal year had been increased despite appearing to have been cut.

The entire budget for that year saw a slight decrease due to a cut in the overseas contingency operations budget in Pakistan and Afghanistan. However, the base budget was $553.1 billion, an increase of $4.2 billion from the 2011 fiscal year, the report said.

It also said that according to the new US guidance for defense strategy, issued in January 2012, China and Iran are of particular concern for the US.

"In terms of threat assessment, the US takes China as its greatest potential security challenge," the report said.

A series of US-led joint military exercises, such as Rim of the Pacific 2012 and Exercise Gold Cobra 2012, apparently had China as a target, it said.

Rim of the Pacific 2012, which was expanded to cover 22 participant countries including India and Russia, did not invite China, one of the major nations in the region, the report added.

Luo Yuan said Washington is concerned that a rising China may challenge its leading role in global affairs.

"China is willing to enhance trust with the two countries (Japan and the US) through cooperation and improving its military transparency," Luo said. "But Beijing also has to prepare itself economically and defensively for any emergency triggered by outside provocation."

The Day of the Glass

Ever since Google first unveiled the Google Glass project, the bleeding edge technology that aims to introduce an exciting new form factor for mobile data consumption and creation, tech watchers and bleeding edge early adopters have been clamoring for whatever news they could get about its release. Sergey Brin, Google’s co-founder and director for special projects, was in attendance at TED Talks 2013 this last month and got the invitation from the conference’s moderator to make an impromptu presentation of the device.

While most of his presentation didn’t reveal anything new about the device that they hadn’t already revealed in the past, Sergey mentioned that Google Glass will likely go on sale before the end of this year. Google’s internet-enabled eyepiece was originally slated to go to market early in 2014, but several reliable internet sources are reporting that the gadget’s development schedule is indeed running ahead of time and the likelihood that we will see the device in stores before the end of the year is high. This, of course, is good news for early adopters who are eager to get their hands on the device as soon as possible.

So with the age of the Google Glass form factor getting ever closer everyday, what kind of changes will this bring to those of us who might still be stuck with the form factors common to the mobile devices available today? Will Google Glass-type form factors become the norm for mobile communications in the future?

The general consensus on whether Google Glass will become successful is that it’s too early to be absolutely sure. However, there are early signs that the new form factor is already starting to be taken seriously. Sony has been rumored to be working on and has filed a patent for their own version of the form factor and a consortium of Japanese demonstrated their entry, Telepathy One, during the recently concluded SXSW conference in Austin, Texas. A number of other potential competitors are also expected to release their own versions within the next two years.

It is, therefore, likely that we will see the new form factor and other augmented reality concepts become popular in the coming years; however, analysts are quick to point out that we shouldn’t expect everyone to embrace it as the gold standard form factor for mobile communications for at least a few years more. One reliable indicator of this the significant social resistance that the new form factor seems to be getting; several parodies exist that strongly criticize the device, a few groups have been formed to resist its adoption, and a dive bar in Seattle has even banned Google Glass from being used on their premises in advance of its release.

As Sergey Brin put it during the his presentation at TED Talks 2013, Google Glass is a form factor that is new for most people and no social norms yet exist to regulate its use. He went on the note that just like during the early days of the mobile phone, modern societies will still have to undergo changes that will determine whether this new direction in design will be accepted in the long run or not.

With that in mind, it isn’t likely that the introduction of Google Glass will have a negative effect on mobile gadgets that still use traditional form factor for quite a while. So whether you’re a businessperson concerned about whether Google Glass will pose a problem to your mobile phone retail or wholesale business, or a consumer trying to decide whether making the transition will be worth it or not, you can rest assured that the day when the new form factor will be the norm is still a significant way away.

Time to change China monetary policy

China's social financing volume has increased rapidly in the past 10 months, but it has not been transferred to the real economy for several reasons. Factors such as high financing costs and rapid currency appreciation have made banks and businesses lose confidence in the real economy and thus obstructed the circulation of money. Also, rampant arbitrage has resulted in over-estimation of the social financing volume and thus the growth rate.

Moreover, the "net increase" in the flow of money into the real economy through social financing has also been overestimated, because some enterprises and local governments use it to get additional loans to repay old loans.

Premier Li Keqiang has said the stock of money and credit has been unleashed and activated in response to the recent decline in circulation of money, which can be attributed to investors' and consumers' lack of confidence in the real economy.

If the "cash crunch" in inter-bank loan market cannot be overcome soon, enterprises, banks and other financial institutions will start hoarding more liquidity, which, in turn will further obstruct the circulation of money, creating larger amounts of idle funds. As experts will tell us, considering a cash crunch to be a constant risk, banks tend to invest more funds in high-liquidity assets in order to prevent abrupt liquidity squeeze in the future.

Also, a lingering cash crunch will make it difficult for enterprises to get financing and prevent them from starting new projects in the real economy. Consequently, the demand for loans from the real economy will fall.

The cash crunch has substantially increased the yields of some short-term wealth management products, enticing some financial institutions into indulging in arbitrage. Quite a few financial institutions and enterprises have dropped their plans to issue bonds, which will cause a decline in the flow of funds from the bond market to the real economy.

Many people fear that the cash crunch will stem the growth of bank credit, projecting a gloomy outlook for enterprises as far as new orders are concerned - which again will slow down the circulation of money.

Given the current volume of money supply, some analysts believe the government ought to tighten the monetary policy to drive up economic growth. Others think that the government should raise inter-bank interest rates to punish financial institutions and enterprises indulging in excessive arbitrage, and force capital to flow into the real economy by issuing more money. But neither argument appears effective. A prudent monetary policy is bound to backfire. For one, such a policy cannot boost the stock of money and thus will further reduce the circulation of money. So the central bank has to ultimately change its policy and issue more money to maintain economic growth.

A moderately loose monetary policy will boost banks' and businesses' confidence, and increase the circulation and supply of money. In contrast, a tight monetary policy will result in sluggish economic growth and reduce the circulation of money. In other words, the supply of money cannot be increased amid an economic slowdown.

A moderately loose monetary policy is needed to solve three major economic problems. These problems are: the downward trend of the real economy, the much lower growth of capital in the real economy than that suggested by the volume of social financing, and the floating of the producer price index in deflation territory and the consumer price index in a region just below the government's inflation target.

Perhaps China's policymakers could do with the suggestions that follow.

First, the central bank should make it clear that it is committed to stabilizing inter-bank interest rates in order to restore the confidence of banks and businesses. If commercial banks are convinced that the cash crunch is over, they will no longer hoard liquidity.

Second, interest rates have to be further liberalized by expanding the range of deposit and loan rates, and allowing banks to issue negotiable certificates of deposits.

Instead of focusing on the volume of social financing, China should increase the new credit, say, by 300-500 billion yuan ($49-81 billion) in new bank lending in the second half of the year. But it should refrain from increasing the effective exchange rate of the yuan during the rest of the year.

Instead of allowing signs of a deepening deflation and growth slowdown to become obvious, the authorities should adopt more relaxed credit policies to show their commitment to steady growth in order to boost banks' and businesses' confidence in the real economy.

They also need to differentiate between effects of structural reforms and trade cycles. Structural reforms, such as channeling social capital into various fields, are conducive to medium- and long-term economic growth. But they cannot produce tangible results in some areas, especially in boosting investors' confidence. So in the short term, the authorities should not expect to see steady growth by simply pinning their hopes on reforms while delaying the opportunity to issue macro regulations to counter the trade cycle.

The author is chief economist, Deutsche Bank, Greater China.

Alibaba earnings tripled in first quarter

Alibaba's earnings nearly tripled in the first quarter, according to Yahoo Inc, a major shareholder in the Chinese e-commerce company.

Earnings of the world's biggest online retailer surged to $669 million in the first quarter compared with $220 million a year ago, Yahoo said during a financial presentation on Wednesday.

Alibaba's revenue jumped to $1.38 billion, an increase of 71 percent year-on-year. Yahoo acquired a 40 percent stake in Alibaba for $1 billion in 2005. Currently, Yahoo owns about 24 percent of Alibaba, valued at $8.1 billion.

Alibaba's net income has beaten its rival Tencent, China's largest listed Internet company, for the second consecutive quarter since the fourth quarter of last year. Meanwhile, China's leading search engine Baidu's net profit is $330 million in the first quarter.

The available data suggests that Alibaba has become the most profitable Internet company in China.

The earnings report came a week after Hangzhou-based Alibaba confirmed that it is preparing an initial public offering, which could be worth $100 billion.

Jonathan Lu, Alibaba's newly appointed CEO, said last week that the company is seeking an IPO in New York or Hong Kong.

Alibaba's founder Jack Ma said the company is likely to go public within five years.

However, some industry analysts expect it could come much earlier.

According to Hong Kong financial website AASTOCKS, Alibaba already has a timetable for an IPO, which is likely to be completed by September or no later than the end of this year.

The most logical place to go would be Hong Kong.

Investment bankers say Alibaba Group is expected to raise about $16 billion by issuing 20 percent new shares through the IPO.

The projected IPO will be the largest since Facebook's massive $104 billion offering in May 2012.

Alibaba has just gotten $8 billion in syndicated loans from 13 banks last month. In April, the company spent $586 million for an 18 percent share of Sina Weibo.

According to the McKinsey report, China's online retail sales have more than doubled year on year from 2003-2011. From 2011 to 2015, it is estimated the increase will triple, up to $ 395 billion.

Transactions made on Taobao and Tmall, the customer-to-customer and business-to-customer websites owned by Alibaba, reached 1 trillion yuan (about $161 billion) last year.