CNTAC promotes social responsibility CCTV, China - Nov 18, 2008 The China National Textile and Apparel Council, or CNTAC, has been promoting and implementing a corporate social responsibility management system, or CSR, ...

China's Ministry of Human Resource and Social Security has issued a circular, asking that practical measures be taken to help enterprises get through difficulties caused by the global financial crisis and stabilize the current employment situation. MOHRSS asks any that large size staff reductions and unemployment to be reported on time and effective measures to be [...]

Hanyang Department for Industry and Commerce in Wuhan has issued a reminder to consumers, warning them that some fresh-looking meat might contain methanol. Last week, HDIC received a report that a meat seller in Hanyang Taohuadao Vegetable Market had put some unclear liquid into meat stuffing made of bad meat to make it look fresh. Following [...]

The Institute of Electrical Engineering of the Chinese Academy of Sciences has signed a memorandum of understanding with the American National Renewable Energy Laboratory for collaboration on the technology of photovoltaic electricity generation. According to the MOU signed by Xiao Liye, director-general of IEE, and Dan E. Arvizu, director of NREL, the parties will work together [...]

On Friday, November 14, I was able to catch the last section of the two-day green tech summit held in Shanghai. This summit is the companion event to the US-China Green Energy Conference, which Crossroads will be covering this week. Check out: http://ucgef.org/en/activities/beijing08/overview to look at the list of speakers. Crossroads will be taking notes on each of the presentations and offering side interviews as well.

Getting back to the Shanghai summit, I was able to catch panel 10 on “New Business and Financing Models” and a breakout session titled, “Competition & Regulation: What you need to know about China’s Green Technology Market.” Below are my notes for each the panel and breakout session.

Panel 10:
•    Government incentives are crucial in order to finance a greener economy.  Government must take the lead to help with start-up costs and the government’s policy innovation is the precursor to establishing a green market. A case in point would be San Francisco with their Solar Task Force, which cuts the cost of solar installation at different rates for residents, commercial buildings and nonprofits. If you look at the cost for solar, the only states in the US that are going for it are California and New Jersey because they have these government incentives.
•    When it comes to financing technology companies, inherent conflicts exist between: the cost of technology and the profitability of the firm and the growth of a region and meeting pollution reduction goals. There needs to be a good working relationship between government, technology businesses and investment banks in order to mitigate these conflicts.
•    There were a couple comments on the effects the financial crisis has brought to the financial sector for green tech. As a result of the crisis there is now higher equity and lower returns. In addition, it used to be all about collateral, but now it’s about the ability to re-pay: equity is not what it used to be.
•    China is showing a move away from the institutionalized banking system since they can now establish small loan companies. These small loan companies give money to SMEs (Small and Medium Enterprise).

Breakout Session:
•    Moderator David Gossack from the US Consulate General Shanghai highly recommends “Clean Energy: An Exporter’s Guide to China.” Check out www.export.gov or contact him directly to receive a copy.
•    Benjamin Pinney, from the Boston Consulting Group gave a refreshing overview of discussions at the two-day summit. He said he heard people talking about “solar collaboration” and “grid-parity.” He finds solar collaboration to be flat wrong because solar is about competition not collaboration. In addition, we are a long way off from even coming close to talking about grid-parity.
•    Mr. Pinney also had an excellent point about China’s consumer attitude about environmental protection that I think was dead-on. He said that we have to remember that alternative energies are a security issue and, thus, it is heavily financed by the defense bureau of government. Therefore, since consumers aren’t the one financing it, they only become aware of environmental protection and its importance because its being told to them from on-high. This type of “education” does not make them feel empowered because there is no role to play.
•    Regulations to achieve national goals: Renewable Energy Law (2006), Top-1000 Enterprise Energy Efficiency Action Plan (2007), Middle and Long-term Development Plan for renewable Energy (2007), tax incentives for renewables, and subsidies for renewables.
•    It is important that all sectors (wind, solar, hydro, etc.) do not have equal access to the market, government incentives, etc.
•    Charles McElwee gave a great presentation answering the often asked question: Can I do business legally in China?
1)    There is a catalog for foreign investment that is encouraged, restricted, prohibited, and other. See where you fall under these categories.
2)    What form of business? Contracting (easiest), establish a representative office (difficult), joint-venture (ok), WFOEs (ok).
3)    What about my IP (intellectual property)? Chinese businessmen do not use long contracts and the civil law system is not well developed. Also not a lot of case law to figure out ambiguous legal clauses. For dispute resolution don’t go to a Chinese court, arbitration is best. Arbitrary bodies include CIETAC, SAC and internationally Hong Kong’s HKIAC (preferred by the PRC).
4)    Major laws: Renewable Energy 2001, Conservation laws (April 2008), and be mindful of the Foreign Corrupt Practices Act (i.e. do not pay for guanxi)
“Slow, steady and wary wins the race in China”
•    According to Robert Theleen, Chairman of Chinavest, 90% of China’s bank loans go to State-owned enterprises and 10% to SME’s/private sector. Access to capital and bank funding has slowed in China, thereby changing the landscape of due diligence with commercial liability. Now, China finds the cost of capital as the most important, which is a sign of sophisticated banking.
•    An innovative technology came from the Solar Environment Technology Corporation case study. CENICOM is soon to be on the market. There technology can store solar energy for 5-10 days as opposed to the common 5-6 hours for existing solar thermal systems. There are no emissions and can be used with both local and regional grids.
•    The session closed with a recommendation to look for locally-sourced capital since it is your best bet for panicked-driven capital.
One interesting magazine distributed at the conference was called innocomm, published by the Knowledge & Innovation Community. Check the bilingual site out at: www.kic.net.cn
More to come this week from Beijing!

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The Civil Affairs Department of the Tibetan Autonomous Region plans to invest CNY29.85 million to build a new children's welfare center to meet the increasing demand of orphaned and disabled children. The existing Tibetan Children's Welfare Center, which was built in 1999, is now no longer able to meet the needs of orphaned and disabled [...]

China's Ministry of Health has issued an emergency circular, asking all medical institutions across the country to halt the use of disposable vein transfusion needles made by Shanghai Damei Medical Plastic Factory. The MOH circular is a direct outcome of an accident in Duanzhou District Women's and Children's Hospital, Zhaoqing City, Guangdong Province where a needle [...]

The Federation of Trade Unions of Yiwu in Zhejiang Province is making preparations for the trial implementation of a corporate social responsibility standard. Drafted by FTUYC in cooperation with such departments as Yiwu Department for Industry and Commerce, Yiwu Taxation Department, Yiwu Environment Protection Department, Yiwu Labor and Social Insurance Department, and Yiwu Health Department, the [...]

For many in China, the costs of health care are simply too high.  It was a cost that the state itself bore for many years, however as the country has grown the Chinese citizens themselves now carry the burden of paying for health care.

China’s wealthiest have access to the best money can buy of course, but for China’s vast majority, access to healthcare often does not come so easy. In fact, given China’s policy of pay as you go, for many who are at the bottom of the pyramid, gaining access to even some of the basics is a luxury that many cannot afford.

A point that was hammered home to me while visiting the children at a Shanghai children’s hospital, I found that many of the parents who had children with leukemia and other ailments were having to making huge sacrifices to get the proper care and medications.  Quitting jobs and moving to Shanghai as a first step, many families were actually selling their homes, selling their possessions, and taking out huge loans to pay for the treatments.

Sadly, efforts to raise money though were rarely enough and parents would simply pull their child out of the program until they were able to afford the treatments again…

This is a situation that the recent Shanghai Daily article Cancer pair’s orange lifeline that described the efforts of one couple to be able to afford their own health care treatments

The Chongming couple, who suffer from cancer, are depending on their Mandarin orange harvest to fund their treatment. And it just might not be enough.

To help them raise money, the Jing’an District Cancer Rehabilitation Club recently bought 1,500 kilograms of oranges from Shen for 2,000 yuan (US$293).

and worse yet, they seemed resigned to their fate:

“It’s very hard for us to continue living. We can afford only in half doses of our medicine,” Li said.

“We are doomed to lose money this year. We had planned on my surgery after we raised money from the sale of oranges. But now, I don’t think we can earn enough.”

As a westerner living in China, the above situations are hard for me to understand. that to ride in an ambulance you must pay first, that to see a doctor you must pay first, to have surgery pay first, and so on.

There is no credit. There is not life over limb. It simply is a cash based process that one needs to be able to afford in order to gain access.

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China-based Huawei Technologies, a global telecommunications network solutions supplier, has joined the Global e-Sustainability Initiative, an environmental protection organization in the information and communication technology sector. As the only Asian member in GeSI, Huawei hopes to play a strategic role in driving environmental protection strategies, implementation measures, technical standards, and public policies that may affect the [...]