BEIJING, Nov. 7 — Foreign employees working in China have been required to pay into the country’s social security system since Oct. 15, according to a latest social insurance regulation.

Once the details are rolled out, more than 230,000 foreigners in China will be included in the country’s welfare system for pension, medical insurance, unemployment, work injury and maternity benefits.

The new scheme will be implemented by local governments before the end of this year, but companies will have to back-pay contributions from Oct. 15.

In Beijing, the salary cap for paying social insurance is 12,603 yuan (2,000 U.S. dollars) in 2011. For a foreign employee earning that or higher, his employer has to pay about 4,096 yuan every month, and the employee himself needs to pay about 1,326 yuan.

Some foreigners believe the implementation of the new regulation is still short on details, and worry they may not receive the benefits after joining the network.

For instance, a foreigner who loses a job in China instantly loses the right to live here, and it is still unclear how he or she is going to benefit from the unemployment insurance and retirement pension.

At a press conference held on Oct. 28, Xu Yanjun, deputy director of the National Social Security Management Center of the Ministry of Human Resources and Social Security, admitted that the system needs to be improved to function more efficiently.

However, China created its basic social security system just several years ago and is still working on strengthening the system. The imperfection of the system should not eclipse the necessity for foreigners being included, nor should it justify the rejection of the plan.

The lack of social security for foreign workers may lead to many labor disputes. It is an international norm to protect employee’s rights, regardless of whether they are foreigners or locals.

In the U.S. and Europe, it is a common practice to treat foreign and domestic workers equally and entitle them to the same social security norms, allowing foreigners the same social welfare benefits as nationals.

“There’s nothing wrong with the country making sure that everyone has basic insurance.” K. Lesli Ligorner, an attorney in Shanghai for Paul Hastings, was quoted by USA Today as saying.

Some criticize the new policy as a scheme to fill the deficit in China’s domestic social security system. This is also untrue for a country like China with such a huge population.

“We have no intention of grabbing money from foreigners, and the money of these 200,000-plus workers is insignificant when we’re talking about the welfare of China’s entire population,” Xu Yanjun explained to reporters.

Under the new rules, companies hiring foreigners, most of them foreign companies, will face more labor costs on doing business in China. Some see the raising costs for the foreign companies as a sign of a deteriorating business environment in China, which is a total misreading.

Chinese companies have been obliged to buy insurance for their Chinese employees for years. Leaving foreign employees out of the system gives their employers an unfair cost advantage in hiring.

As China is deepening reform in its market economy, the equalization of treatments for domestic and foreign businesses has become an irreversible trend. The cancellation of some favorable policies in the past for foreign firms conforms to the trend.

Besides, domestic companies hiring foreigners also need to pay contributions on top of the payments made by the employees. The new rules are not solely targeting on the foreign businesses.

Xu Yanjun vowed there would be no going-back on the scheme.

“Rather than airing grievances, they (foreign firms in China) should simply change their China strategy and share more knowledge with their Chinese partners,” a Xinhua commentary suggested last Monday. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/china/2011-11/07/c_131232672.htm

A powered-off workshop is seen empty in Wenzhou, east China’s Zhejiang Province, June 30, 2011. © Xinhua

By Wang Guanqun

BEIJING, Oct. 10 — China’s small businesses turned to be the first to ring the alarm as the country is walking a fine line between fighting inflation and maintaining growth.

Some entrepreneurs have disappeared and others have jumped off buildings almost every week since April in Wenzhou City, an entrepreneurial capital in eastern China’s Zhejiang province, Xinhua reported.

The sudden disappearance of the business owners has revealed a surprisingly gloomy picture for the small and medium-sized enterprises (SMEs) in China.

RUNAWAY BOSSES

According to a Xinhua investigation, at least 80 cash-strapped businesspeople in Wenzhou have skipped town or declared bankruptcy to invalidate more than 10 billion yuan (1.6 billion U.S. dollars) in debt.

Just last month, two local entrepreneurs in Wenzhou killed themselves by jumping off the buildings and another broke his leg in a similar suicide attempt.

The tragedies in Wenzhou are extreme cases of private SMEs struggling to survive a liquidity crunch amid the country’s macro control policies set to curb inflation and cool down the over-heated property market.

In Wenzhou, one-fifth of the 360,000 small and mid-sized businesses have stopped operating due to cash shortages, according to the city’s council for small and medium-sized enterprises.

Of the 855 companies surveyed by the Wenzhou Economic and Information Commission, more than 76 percent said they are almost out of money and are struggling to continue production.

But many cash-strapped firms are unable to borrow money from banks, and some have turned to China’s underground lending market to pool money from individuals and firms.

The steep rates of the informal loans pushed some businesses to the brink of collapse.

MONETARY TIGHTENING

To curb soaring inflation, the People’s Bank of China (PBOC), the country’s central bank, has raised banks’ reserve requirement ratio six times this year and hiked interest rates three times in a bid to check excessive lending.

China’s benchmark interest rate of one-year deposits currently stands at 3.5 percent and banks have to set aside 21 percent of their deposits as reserves, mopping up about 2.1 trillion yuan (235 U.S. dollars) of liquidity otherwise available for lending.

The tightening monetary policies have bitten into China’s small businesses which create 80 percent of the nation’s jobs and generate 60 percent of the industrial output, but have difficulty securing bank loans.

Outstanding loans to small firms grew 26.6 percent year-on-year to hit 9.85 trillion yuan (1.55 trillion U.S. dollars) at the end of July, rising faster than the total outstanding loans of Chinese banks, said Xiao Yuanqi, an official from the China Banking Regulatory Commission (CBRC), late last month.

“But it (the statistics) does not touch upon the huge gap between actual bank loans and SMEs’ financing needs or whether the banking sector has narrowed that gap,” China Daily commented in an editorial.

The informal lending market between companies and individuals, which operates outside the banking industry, became a last resort for many private entrepreneurs facing a cash squeeze.

UNDERGROUND LOAN MARKET

The gap between small firms’ financing needs and the credit crunch bloomed Wenzhou’s informal lending market.

Currently, there are 186 guarantee firms, 1,088 investment companies, 431 consignment stores and 48 pawnshops in the city, data from local government departments showed.

Outstanding high-yield loans issued in the informal lending market currently totaled 110 billion yuan in Wenzhou, according to data from the PBOC’s Wenzhou branch.

And the informal loan rates are staggering. According to the PBOC’s Wenzhou branch, the composite annual interest rate in the city’s informal lending market hit a record 25.09 percent by the end of August, compared with the banking sector’s benchmark one-year lending rate of 6.56 percent.

The high rate drove the local residents in Wenzhou to lend on the informal market rather than to banks.

The PBOC estimated the market was worth 2.4 trillion yuan as of the end of March 2010, or 5.6 percent of China’s total lending.

Lian Ping, chief economist with the Bank of Communications, told Xinhua it is easy for those dealing with the informal lending market to fall into a vicious circle by taking on new debts to repay old ones, considering the system’s similarity to a Ponzi scheme.

“If there is no new funding to support such expectations, the system will collapse and creditors will suffer huge losses,” Lian said.

PREMIER’S CALL

To address the small businesses’ financing need, Chinese Premier Wen Jiabao paid a visit to Zhejiang province on Oct. 3 and Oct. 4.

Premier Wen said small enterprises should be a priority for bank credit support and enjoy more preferential tax policies.

Banks should increase their tolerance for the non-performing loan (NPL) ratios of small enterprises, set targets for the proportion and growth of loans to small companies and reduce the cost of securing credit, the premier said.

He also said bank support for small businesses must follow market principles and avoid too much administrative intervention in order to check moral hazards.

Wen said private lending activities should be better guided and regulated in order to play a positive role in boosting the country’s economy.

“Effective measures should be taken to contain the trend of usury, crack down on illegal fundraising and properly handle the problems of collateral and capital shortage in order to prevent risks from spreading and evolving on a regional scale,” he said.

“Small businesses play an irreplaceable role in creating jobs and boosting economic growth,” said Wen.

“It is of overall and strategic significance to support their development,” Wen added. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/china/2011-10/10/c_131181749.htm

Photo taken on July 6, 2011, shows citizens visiting the Summer Real Estate Fair in Shenyang, capital of northeast China’s Liaoning Province. © Xinhua

By Wang Guanqun

BEIJING, Sept. 13 — New home prices, property transaction volumes and residential land prices in major Chinese cities all fell in August, suggesting the policies aiming at cooling the housing market are taking effect.

A report published by the China Index Academy (CIA) said the prices for new homes in ten first-tier cities, including Beijing and Shanghai, dropped 0.41 percent in August from July to 15,773 yuan (2,465 U.S. dollars) per sq m, the first decline since September of last year.

On a month-on-month basis, new home prices in 44 of the 100 cities monitored by the Beijing-based institution saw declines in August, up from 33 cities in July. Seven of the ten first-tier cities saw month-on-month drops, according to the CIA.

Meanwhile, the average floor price for residential land in 133 Chinese cities studied by the CIA plunged 9 percent to 1,619 yuan (253 U.S. dollars) per sq m in August, said the institution.

The transaction volumes for residential land in the cities continued to drop to 20.18 million sq m last month, down 17 percent from the same month last year and down 14 percent from a year earlier, according to the CIA.

Analysts attributed the property transaction declines in the major cities to the Chinese government’s adoption of a serious of measures earlier this year to curb soaring real estate prices. These measures included purchase restrictions, higher minimum down payment requirements, property taxes in the municipalities of Chongqing and Shanghai, and constructions of more government-subsidized apartments.

“The growing trend of the property prices in the past one year came to a halt in August, indicating that the property-cooling measures are bearing fruit now,” Liu Haibo, southern region general manager of the CIA, was quoted as saying by China News Service.

SLUGGISH MARKET

The capital’s new home sales dropped to 5,506 units in August, with daily sales of less than 200 units, according to the statistics posted on Beijing’s real estate transaction management website. Beijing’s new home transaction volume last month slumped 36.7 percent from July, or 16.4 percent from a year earlier, an all-time low in nearly three years, according to the website.

The housing prices in Beijing also saw a declining trend starting from May. According to the website, in the first five months of this year, the average new home price was 14,127 yuan per sq m.

In the first six months, the figure dropped to 13,623 yuan. The average price declined further to 13,623 yuan per sq m in the first seven months.

Xinhua reported the east Beijing’s Tongzhou District has witnessed a roller-coaster surging and plummeting of new home prices since last year.

A real estate in the district, Runfeng Lingshang, had been expected to be priced at 25,000 yuan (3,906 U.S. dollars) per sq m in 2009. But when contacted by Xinhua on Sept. 7, a saleswoman of the project said its homes will be sold at 13,000 yuan (2,031 U.S. dollars) per sq m.

“The property prices in Tongzhou District have fallen back to the level of 2009,” a manager of Yahao Real Estate Selling and Consulting Agency told Beijing Business Today.

Apart from Tongzhou District, many real estates in Beijing’s Fangshan and Daxing District also offered large discounts amid sales stagnation recently, according to Xinhua.

In Shanghai, the average home price was 22,026 yuan per sq m in August, almost the same as in July, according to China Real Estate Information Corporation. But the new home sales plummeted 25 percent from July, or 18 percent from a year earlier, hitting a new low since August 2005.

Another Xinhua report published on Sept. 9 said the 106 listed property companies’ overall asset-liability ratio increased 3.58 percent in the first half of this year to 72.25 percent. The total inventory of the 106 firms topped 964.011 billion yuan (151 billion U.S. dollars), up 38.39 percent.

On Sept. 5, China Vanke Co., the country’s largest property developer by market value, announced in a statement that its sales for August fell 12.6 percent from a year earlier.

In order to ward off risks, China Merchants Property Development Co., another giant property developer, vowed it will “actively participate in the constructions of affordable housing projects in major cities.”

MORE SUBSIDIZED HOUSES

In response to public complaints about soaring property prices, the State Council, or China’s Cabinet, has drawn up a plan to build 10 million subsidized housing units this year and 36 million more over the next five years.

These units include affordable homes, low rent homes, price-capped homes and public rental homes.

The government has allocated a total of 170.5 billion yuan (26.6 billion U.S. dollars) to build affordable homes for low-income people this year.

Up to the end of August, local authorities across China had started building or renovating 8.68 million government-subsidized housing units this year, completing 86.percent of the annual target, according to a statement issued by the Ministry of Housing and Urban-Rural Development (MOHURD) on Sept. 9.

MOHURD Minister Jiang Weixin said last month that construction of all subsidized housing units should be started before the end of October, and the main framework of at least one third of the housing projects should be finished at the same time.

Hebei, Liaoning, Fujian, Shandong and Shaanxi provinces have started building more subsidized housing units than the number as ordered by the State Council for the year.

Meanwhile, the Central Commission for Discipline Inspection (CCDI) of the Communist Party of China (CPC) tightened the supervision on the construction of affordable housing projects nationwide.

The discipline watchdog was sending 10 inspection teams to 20 provinces, autonomous regions and municipalities in the following two weeks starting from Sept. 6 to assess the implementation of the central government’s policy, check the quality of the housing, and verify the proper use of public money.

MIXED EXPECTATIONS

September and October are considered as the prime season for property sales, but the sluggish transactions across the country in August cast shadows on this year’s sale prospect.

The policies of purchase restrictions and affordable housing construction adopted by central and local governments have had a profound impact on the property market.

“The purchase restrictions can effectively curtail the speculative investment, and the affordable housing projects will ease the contradiction between supply and demand,” Chen Zhi, deputy secretary-general of Beijing Real Estate Association, was quoted as saying by Beijing Daily.

In accordance with this policy, more and more potential home buyers choose to wait and see. Now 58.82 percent of respondents are hesitant to buy a home as they are still weighing the prices and discounts, according to an online survey conducted by China’s leading property information website soufun.com.

“The policies showcase the central government’s determination on curbing housing prices,” Zhang Dawei, market research director of Beijing Centaline Property Consultants Co., told Xinhua, “This has directly influenced the consumers’ psychology, and will thus cause the sales to fall in September and October.”

Besides, China’s prudent monetary policy starting from the beginning of this year increases the housing developers’ financing costs and asset-liability ratio. The funding pressure will further increase, prompting some developers to undersell their homes for quick cash withdrawal.

“This (the prudent monetary policy) has significantly reduced developers’ bargaining chips,” an editorial on China Securities Journal commented on Sept. 9.

But Wang Xiaoqin, professor of economics with Huazhong University of Science and Technology, believed the developers will offer more discounts in the sales of coming months to push up the transaction volumes. He told Xinhua the sales may go up in September and October, though the prices will drop.

“We should still be cautious as the foundation is not solid for healthy and stable development of the property market, and the inflation is expected to remain high, so the home prices will maintain steady and relatively high,” Chen Zhi told Beijing Daily.

“Besides, the formulation of long-term policies on the supervision over the property market, such as the land law, real estate law and the property taxes, are still in progress or under study. The fundamental mechanism that can directly impact on the development mode of the real estate market is yet to come,” Chen added.

“So once the current policies are relaxed, the market would see a retaliatory rebound,” he warned. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/indepth/2011-09/13/c_131135440.htm

Last week, technology news website CNET reported that an Apple employee lost at a tequila bar in San Francisco in July a prototype of iPhone 5, a new version of the company’s mobile phone expected to be released in September or October.

The San Francisco Police Department said in a press release that after the missing device was tracked using GPS technology to a San Francisco house, four police officers and two Apple employees visited the home.

“Apple employees called Mission police station directly, wanting assistance in tracking down a lost item,” the statement said.

“The two Apple employees met with the resident and then went into the house to look for the lost item,” it said. “The Apple employees did not find the lost item and left the house.”

Police did not say exactly what Apple had lost, but media reports found the file of San Francisco police’s Friday press release about the hunt was named “iphone5.doc” — an apparent hint of the new mobile device.

A 22-year-old resident of the home, identified by SF Weekly as Sergio Calderon, told the newspaper that he has visited the bar where the phone was reportedly lost but he did not have the device.

Calderon said the search of his house took place in July when police had traced the phone to the house using satellite positioning software on the device, but did not find anything in the house.

Apple has declined to comment on the matter.

Last year, an employee of the company lost a prototype iPhone 4 in a Redwood City bar before it was released. The details of the phone ware then unveiled by technology blog Gizmodo.

Criminal charges have been filed against the man who found the prototype and another who brokered the deal to sell it to Gizmodo. Both men pleaded not guilty on Thursday. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/sci/2011-09/06/c_131103018.htm

Artist concept of GRAIL mission. Grail will fly twin spacecraft in tandem orbits around the moon for several months to measure its gravity field in unprecedented detail. © NASA/JPL

BEIJING, Sept. 6 — NASA will launch on Thursday twin lunar orbiters built to map the gravity of Earth’s moon in unprecedented detail, media reported Tuesday.

The twin lunar probes, Graili-A and Graili-B, will blast off from Florida’s Cape Canaveral Air Force Station at 8:37 a.m. EDT and at 9:16 a.m. EDT respectively Thursday, according to NASA.

The Grail twins will travel three to four months to get to the moon under a slower but more economical plan.

The two spacecrafts will reach the moon around New Year’s Day when they will begin to probe the moon’s composition from the crust to the core, according to NASA.

The data collected by the probes will be used to better understand the moon’s evolution and formation, NASA scientists said.

Researchers will also use the twin probes to pinpoint the best landing sites for future explorations.

The mission, from start to finish, costs 496 million U.S. dollars. The two Grail probes will crash into the moon after its mission. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/sci/2011-09/06/c_131103031.htm

Having a healthy diet, exercising, maintaining normal body weight, not smoking and consuming alcohol can lower the risk of developing Type 2 diabetes, according to a U.S. National Institutes of Health report published in the Sept. 6 issue of the Annals of Internal Medicine.

Doctors have long known that bad habits such as smoking, drinking and eating unhealthy foods increase the risk of developing chronic diseases, but the new study is among the first to examine how each factor — alone and in combination — contributes to a reduction in the chance a person will get the disease.

The research is the largest to date, as more than 200,000 healthy people aged from 50 to 71 when the study began in 1995 were involved in the program.

Study participants filled out questionnaires about what foods they ate, whether they were alcohol consumers or smokers, how often they exercised and whether they were overweight.

After the participants were followed for 11 years, about 10% of men in the study and 8% of women developed diabetes.

The study shows people who met all five standards had roughly 80% lower odds of a diabetes diagnosis than demographically similar people who led less healthy lifestyles.

Of all the five lifestyle factors, being overweight was linked most strongly to diabetes risk.

But the study also found that having healthy marks for the other four factors still made a difference, regardless of whether a person was normal weight, overweight or obese.

“This is good news for those individuals who have a tough time losing weight — you can still lower your risk with these other lifestyle changes,” Jared Reis, Ph.D., the lead author of the study and an epidemiologist with the National Heart, Lung, and Blood Institute in Maryland, U.S., was quoted as saying by CNN.

According to U.S. Centers for Disease Control, about 26 million Americans were diagnosed the most common diabetes Type 2, making it the seventh leading cause of death in the U.S.

On Xinhua Web site: http://news.xinhuanet.com/english2010/health/2011-09/06/c_131105748.htm

Licitra had been in a coma since the Aug. 27 accident in which he crashed his scooter into a wall in southern Sicily.

The tenor made his international fame in 2002, when he stepped in for Pavarotti in Giacomo Puccini’s “Tosca” at the Metropolitan Opera in New York. His performance won huge ovations and the putative title of “Pavarotti’s heir.”

“If this was not to be the farewell of a faded superstar, then at least it would be the starry anointing of a potential successor,” the New York Times commented after Licitra’s performance.

Licitra was born in Switzerland in 1968 and grew up in Milan. He came to opera late in life.

Doctors at the hospital where Licitra died said his family had agreed to make his organs available for transplant.

They said a news conference would be held later Tuesday.

On Xinhua Web site: http://news.xinhuanet.com/english2010/entertainment/2011-09/06/c_131105735.htm

Cast member Eddie Murphy attends the premiere of the film “Imagine That” in Los Angeles June 6, 2009. ©Reuters

BEIJING, Sept. 6 — Renowned U.S. Actor Eddie Murphy is now the front-runner to host the 84th Academy Awards in 2012, according to media reports Tuesday.

Eddie Murphy is said to be favored by Brett Ratner, a producer of the awards broadcast who just finished directing Murphy in the soon-to-be-released thriller “Tower Heist,” according to Hollywood Reporter.

Brett Ratner is expected to meet with Academy president Tom Sherak after the Labor Day holiday to discuss potential hosts, the magazine said.

Murphy has never acted as Oscars host before. Watchers say his onstage reputation for unpredictability, as well as high-profile public scandal has most likely made Oscars organizers reluctant in the past.

Murphy might have some competition from Billy Crystal, a successful Oscar host who recently said he would like to host the show again.

A final decision is reportedly expected by mid-September.

On Xinhua Web site: http://news.xinhuanet.com/english2010/entertainment/2011-09/06/c_131103083.htm

Cast member Matthew Fox poses for the cameras on the red carpet before the premiere of the sixth and final season of the television series “Lost” on Waikiki beach in Honolulu, Hawaii January 30, 2010. (Xinhua/Reuters Photo)

BEIJING, Aug. 30 — “Lost” star Matthew Fox was detained early Monday after allegedly assaulting a female bus driver, according to media reports.

It is reported that Fox attempted to hitch a ride to his hotel via a private party bus early Sunday morning, but the female driver of the bus refused to let him enter.

Fox then allegedly punched the driver in the chest and stomach before receiving a blow to the mouth in return.

Fox was detained by police but was eventually released to “a friend” and took a taxi to his hotel, according to the police report.

The alleged victim in the case, Heather Boormann, is considering pressing charges in the case.

“I don’t care that he is a celebrity,” Bormann said. “Assault is against the law.”

On Xinhua Web site: http://news.xinhuanet.com/english2010/entertainment/2011-08/30/c_131083171.htm

Stephanie Sautner, Los Angeles Superior Court Judge, has warned Lindsay Lohan of not having gatherings while living under house arrest. She also said that she did not think Lohan violated her probation by testing positive for alcohol early last week.

Sautner said that the court record is a little bit unclear about whether Lohan was ordered to refrain from drinking. The court order demanding alcohol tests expired Feb. 25.

“What you are guilty of is extremely poor judgment, having parties on the roof,” Sauter said, “however, poor judgment is not a violation of your probation.”

Sautner continued Lohan can have just one friend at her house at a time. She set another hearing for July 21.
Lohan gained her fame with leading roles in the films “Freaky Friday”, “Mean Girls” and “Herbie: Fully Loaded”, later appearing in independent films including “A Prairie Home Companion” and “Bobby.”

In 2007, two driving-under-the-influence (DUI) incidents and three visits to rehabilitation facilities damaged Lohan’s reputation and resulted in loss of several movie deals. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/entertainment/2011-06/24/c_13948078.htm