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

Nintendo chief executive Satoru Iwata unveiled the new system at the opening of the Electronic Entertainment Expo in Los Angeles on Tuesday, saying, “For Nintendo, the goal of innovation is to serve every player.”

Wii U takes up Nintendo’s record innovation with a controller pad that combines a 6.2-inch touch-screen with toggles and buttons.

For the first time, videogames can appear on TV in high-definition with a Nintendo device, and can be displayed simultaneously on the controller pad, but with different points of view. Some games can be played solely on the controller.

The new Wii U is expected to hit the market between April and December in 2012 to battle with Microsoft’s Xbox 360 and Sony’s PlayStation 3. The price was not yet announced.

Major videogame studios such as Ubisoft, Electronic Arts, THQ and Square Enix are already on board crafting games for the Wii U, according to Nintendo North America president Reggie Fils-Aime.

Nintendo first unveiled the Wii console in 2006, opening videogames to moms, seniors, and other “casual” players with the introduction of a motion-sensing controller. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/sci/2011-06/08/c_13916540.htm

The Windows Phone 7 is seen at the Windows Phone 7 launch news conference in New York October 11, 2010. ©Reuters

BEIJING, Jan. 27 — Software giant Microsoft said on Wednesday it sold more than 2 million copies of its new Windows Phone 7 operating system to handset makers in 2010.

That number represents the software units licensed to mobile handset makers such as Samsung, LG and HTC, not necessarily consumers.

A Wall Street Journal report said this figure is neither high nor low enough to declare the product a success or failure.

The new phone software was launched last October, and the company shipped 1.5 million units to phone makers and mobile operators late December.

Microsoft said early research suggested that 93 percent of customers are satisfied with the Windows Phone 7 devices, and 90 percent would recommend it to others.

The handset software is expected to counter Apple’s iPhone and Google’s Android system. Last week Apple declared 16.2 million iPhones were sold in the fourth quarter of last year. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/sci/2011-01/27/c_13709412.htm

Carol Bartz, chief executive of Internet company Yahoo Inc, is shown in this undated publicity photo released on January 13, 2009. ©Reuters

BEIJING, Jan. 26 — Yahoo Inc.’s quarterly earnings doubled in the last three months of 2010 despite its sales fell 4 percent, the Internet group announced Tuesday.

The company’s revenue fell to 1.2 billion U.S. dollars in the fourth quarter of 2010, but its profit doubled to 312 million dollars.

The results raised the doubt among many investors on whether Yahoo CEO Carol Bartz is the right person for the job.

Bartz signed a four-year contract with Yahoo as chief executive in January 2009, after the company’s several years of sluggish results.

Yahoo has struggled to boost earnings through layoffs and other cost-cutting measures, but the company’s revenue has fallen since Bartz’s arrival.

“We just completed a very encouraging quarter and year for Yahoo, where we saw our plans to turn round the company gain momentum,” Bartz defended herself in a conference call on Tuesday.

At the same time, Yahoo also announced that it will lay off 100 to 150 employees, roughly 1 percent of its 13,600 people on the payroll at the end of last December.

With a falling revenue, Yahoo has in fact already laid off more than 700 workers in the past two months.

Yahoo shares fell 38 cents, or 2.4 percent, to 15.64 dollars Tuesday after the results were released. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/sci/2011-01/26/c_13708005.htm

The hiring plan was announced on Tuesday by Google’s senior vice president of engineering and research Alan Eustace in a blog post.

Google, which had 24,400 people at the end of 2010, hired more than 4,500 in 2010. The company once added 6,131 employees in 2007.

Analysts say Google are trying to fight off rivals like Facebook by this hiring spree to improve services such as mobile computing, display advertising and video.

Internet social network Facebook has been growing rapidly in recent years. Now about 200 of Facebook’s roughly 2,000 employees used to work at Google.

Google’s expansion was announced on the same day when Yahoo Inc. cut 100 to 150 workers, or about 1 percent, amid pressures from falling revenue.

One week ago, Google announced that its co-founder Larry Page will take over as the company’s CEO on April 4 this year.

Google earned 8.5 billion U.S. dollars in 2010, far more than its Internet peers. The company is expected to see another 22 percent increase in revenue this year. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/sci/2011-01/26/c_13707820.htm

A man tries out Apple’s new iPad after its launch event in San Francisco, California, the United States, Jan. 27, 2010. ©Xinhua

BEIJING, Sept. 14 — Apple Inc. plans to begin official sales of its iPad tablet computer this Friday in China, the company announced on Monday.

According to a Wall Street Journal report, the Wi-Fi models of the iPad will be available to customers through two Apple stores in China and through authorized resellers.

The beginning of the sales will start on Friday at 10 a.m., according to the newspaper.

The iPad’s price will be higher in China than in the United States. It will charge from 3,988 yuan (about 590 U.S. dollars), for the 16-gigabyte iPad, to 5,588 yuan (about 827 U.S. dollars), for the 64-gigabyte model, the newspaper said.

The prices of the two models in the U.S. are 499 and 699 U.S. dollars respectively.

Before this users in China had been buying iPads brought into the country by traders on much higher prices. The Wall Street Journal said they run as much as 1,000 U.S. dollars.

The iPad first went on sale in the U.S. on April 3 this year, and became available internationally in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and Britain on May 28.

On June 21, Apple announced it had sold three million iPads worldwide. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/sci/2010-09/14/c_13493792.htm

Devine, 37, was charged in a federal grand jury indictment last Wednesday with 23 counts of wire fraud, money laundering, conspiracy and accepting kickbacks. Each count may bring him a 20-year prison sentence.

In court, Assistant U.S. Attorney Michelle Kane objected to releasing Devine on bail, saying there is a risk he will try to flee.

There are no bond conditions that can assure his appearance for trial, Kane told U.S. Magistrate Judge Howard Lloyd, who set a bail hearing for Aug. 18.

Both Kane and Devine’s lawyer declined to comment after court.

In a separate civil lawsuit, Apple accused Devine of receiving more than 1 million U.S. dollars in payments and bribes over several years from companies that supplied iPhone and iPod accessories.

An employee at Apple since 2005, Devine has used his position at the technology company to obtain confidential data that he shared with Apple suppliers to help them negotiate favorable contracts with the company, Apple’s lawsuit said.

The alleged scheme began to unravel this April, when Apple launched an internal investigation and found a cache of emails between Devine and the suppliers.

Devine used a chain of foreign and domestic bank accounts, along with one front company, to receive payments, according to court papers. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/sci/2010-08/17/c_13448610.htm

Ahead of Tuesday’s start of Computex trade show in Taipei, Asustek said its new device will be on sale in the first quarter next year.

The touch-screen tablet PC will use Microsoft’s Windows 7 operating system and Intel Corp.’s Core processor, according to Asustek.

“We looked at how we could best address the needs of users from all walks of life, and I believe this is the product,” said Asustech Chairman Jonney Shih.

Asustek was also working with Intel and Microsoft to push out its own version of an application store, trying to beef up their software offerings to compete with Apple, Shih said.

Asustek will sell a 10-inch Eee Pad for 399 to 449 U.S. dollars. No price tag was given for a 12-inch model.

Last week, the world’s second largest PC vendor Acer unveiled a 7-inch touch-screen tablet that runs on Android, an operating system distributed by Google. 

On Xinhua Web site: http://news.xinhuanet.com/english2010/sci/2010-06/01/c_13327306.htm