CHINA PLUS MAGAZINE: LOOKING FORWARD

CONTENTS PAGE 4: A MONUMENTAL TARGET FOR INNOVATION PAGE 7: AT THE LEADING EDGE OF QUANTUM COMMUNICATIONS PAGE 8: AN UNEXPECTED MERGER PAGE 10: A LEGAL LANDMARK FOR TAXI HAILING APPS PAGE 11: AN EDUCATION IN NATURAL DISASTERS PAGE 13: AN INNOVATION IN INSURANCE PAGE 14: MAKING THE HARD CHOICES - CHINA’S SOEs PAGE 15: CHINA, THE EU & BREXIT PAGE 16: SAVAGELY GROWING - CHINA’S REALITY SHOW PAGE 20-21: WATCH THIS SPACE, MARS AND OTHER MISSIONS PAGE 22: VR - IS THIS THE END? PLUS

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2049

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2049

hina Plus spoke to Liu Baocheng, Associate professor of the University of International Business and Economics in Beijing, seeking his opinion on the 2049 target that China has set for itself with regards to being a world leader in technological innovation.

How realistic is the 2049 target that has been set by the Chinese government?

These are very ambitious goals but these are necessary at the critical juncture of Chinese development history to source for new engines of growth. When the Chinese economy is slowing down, we need to tap into new propellers as how to move forward. Right now, China is really taking advantage of skill operation, but for innovation operation, this is still far behind.

For example, we have been facing a lot of anti-dumping cases from western countries simply because the quality doesn’t really match the market, hence we have to sell at very low prices.

So, to add value to the products and services we need innovation and we need sustainable innovation instead of ad hoc and piecemeal contributions to the innovation structure.

How should China prevent its best and brightest minds from seeking opportunities and positions elsewhere?

A Monumental Target for Innovation

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peaking to a major science and technology meeting, Chinese president Xi Jinping said China should build itself into one of the most innovative countries by 2020, a leading innovator by 2030, and the best country in the world in the development of science and technology by the 100th anniversary of the founding of the PRC in 2049.

Among the five priorities in the countr y’s innovation drive, Xi Jinping stressed the establishment of a rich talent pool. He promised to resp e c t t he cre at iv it y of s cient ists and supp or t f re e and b old s cient if ic explorat ion.

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“Scientists should be allowed to freely explore and test the bold hypotheses they put forward. Leading scientists should be given more power and liberty to decide upon the direction of their research and greater management of research funds and resources.”

The other four priorities are developing cutting edge science and technology, launching key projects to create a world class research network, benefitting economic and social development, and reforming the management and operation of the sciences. The president said China should strive to take a leading role in scientific and technological research. Xi says the country should have a global vision, establish development strategies in a timely manner, be confident in innovation and be known for regional theories and discoveries.

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China is not really intending to build a penthouse to simply keep scientist in isolated surroundings. Therefore, they need not only to have a global vision but they also need to have a constant global interaction with cutting edge research development so that they will be able to keep abreast with what is going on.

To own those scientists is really not important.

But to access through those scientists interaction to the leading technology; that’s something very important. And of course to retain the interest and commitment, we not only need to give them the right kind of package in terms of welfare and payment etcetera, it is important for them to feel that they have a sense of achievement.

That needs to be matched by manufacturing capacity so that they are not simply inventing for patents, but rather inventing for commercialisation and then they get the right kind of reward as a result of commercialisation.

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2049 The scientists will be given full liberty in their imagination, in their trial and error efforts and we have to be able to build a tolerant culture where we can tolerate failure because innovation will result most likely in failure but with an accumulation of failures that may lead to a breakthrough. The other part is we need to have the right type of support. Scientists do not really survive on their own.

You need the services to them, you need the people who are running around to build the prototype and you need the response from companies, so that their prototypes can be tested and be run on pilot skills. So we need to create a holistic environment where scientists feel comfortable and excited to move ahead, with a sense of achievement and also with a sense of commitment to commercial contracts and also to the projects designed by the governments.

Having said that, the government will have a really limited role; a draconian type or patriarchal (governmental role) will not really lead to decisive innovation. It is really the market that can offer the best drive because need is the mother of invention. If we look at those top innovation countries, it is really consumer spending that demands new products and new products will be channeled into the need for new innovation in the area of R&D. How does China address institutional obstacles, such as an inefficient system of research fund allocation & outdated talent evaluation systems?

I feel R&D expenditure at the government level is very ostentatious and I should say so far not really very many decisive measures (in terms of institutional reform) have been carried out. People are really looking forward to decisive measures, for example in terms of the credentials of those top scientists, and also in terms of the accreditation of the agencies or institutions, in terms of the rank and file.

(Institutions) are not really fully inclusive and open so far and there is still a sort of discriminative practice between top research institutes versus some polytechnic schools, etc. I should say the priority is to give equal compensation amongst different research organisations and also to give equal treatment, for example in terms of the hukou, in terms of whether you are a senior engineer or a junior engineer and this type of accreditation; they need to be treated not only on status based also on (the basis of) achievement and merit.

China is second in the world for the number of scientific papers published; behind the US. However, the level of innovation on the ground in China lags far behind the US. How do you explain this discrepancy?

If we look at the 5 factors listed by Bloomberg, which rates the national innovation capacity, of course R&D spending is very important; manufacturing capability which is able to translate the research result into commercial viability, that’s very important; the third one is hi-tech companies and how many a 6

QUANTUM country really has; and also do we have the innovative educational system, how many research personnel we take; and also the number of patents filed.

So these are the 5 indicators that can depict where China has a loose connection. So right now, education needs more innovation; we produce more than 30,000 PhDs but not all that spending is really channeled to innovation. Right now the manufacturing does not really match; we have a very much a big technical operation, for example we currently face anti-dumping issues over Chinese steel but China imports a lot of steel at a price three times higher than we export.

So, how to improve the quality of this should be dictated by the market. Plus there needs to be a division of labour. The state will fund big research institutions and universities for basic discoveries but the state cannot go as far as commercialisation. In the US, it is really the NASDAQ, venture capitalists, that are supporting R&D and big companies will also support that R&D because they have close connectivity and they are well informed of what is going on in certain R&D labs. So government R&D firms are supported by the financial market and also big multinational companies, so they play a different role in supporting a type of integrated innovation process.

I feel R&D expenditure at the government level is very ostentatious and I should say so far not really very many decisive measures (in terms of institutional reform) have been carried out.

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At the Leading Edge of Quantum Communications

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hinese scientists are ready to conduct experiments on quantum communications after the country launched the world’s first quantum satellite at the end of August. Quantum communication boasts ultra-high security as a quantum photon can neither be separated nor duplicated.

It is hence impossible to wiretap, intercept or crack the information transmitted through it.

Anton Zeilinger, an Austrian physicist at the Institute for Quantum Optics and Quantum Information, says that the upcoming experiment is of great significance as it is related to long-distance data transmission and communication, which will form a future quantum internet safer and faster than the current one.

Zeilinger states that, “This satellite will be the first one worldwide, which tests this new technology, and I’m sure we will learn a lot about how the data rates are, how the quality of the data is, how the messages can really be sent and things like that. You know, there has been quantum communication tested on the ground, but this is the first experiment in space, which will allow us to cover larger distances than you can do on ground. It is the very first experiment of this kind, so this is really a pioneering project.”

Researcher Zhang Wenzhuo told China Plus that in terms of operation and coordination, “The sub-control centres are like the limbs of a person, and the main control centre is like the brain. So the brain sends directions to the limbs, and the limbs respond by doing a series of movements. In the experiment, the satellite transmits data to the earth, and the main control centre would collect and analyse the data before giving orders to sub-control centres about what to do next.”

Professor Zeilinger and his team will work at a telescope observatory in Vienna when the satellite is launched, in coordination with their Chinese counterparts to observe and track the satellite.

However, according to Zeilinger, the Chinese researchers still face a number of challenges such as, “(Making) sure that the equipment works up there. You cannot go there and fix it. You know it has to be working all the time.

There are some challenges maybe due to cosmic background radiation. The main challenge is to really be able to communicate all the time. This telescope will have to follow very precisely the satellite; the satellite has a telescope which sends down the photons precisely. To have all this working is not simple.”

Quantum communication has been listed as a prioritised area in the country’s five-year plan for technological innovation from 2016 to 2020. The plan also made it clear that both basic and cutting-edge scientific research will be strengthened, with better facilities, new national research bases, more innovative researchers and improved global cooperation.

The project includes the launch of a satellite and the building of four ground stations for quantum communication and one space quantum teleportation experiment station. Upon completion, the satellite will be able to establish quantum optical links simultaneously with two ground bases thousands of kilometres apart.

The Shanghai Control Centre for Quantum Secure Communications has been running test operations in coordination with five other sub-control centres in Beijing, Xinjiang Uyghur Autonomous Region, Qinghai Province, Yunnan Province and Tibet Autonomous Region.

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DID/UBER

DIDI/UBER

An Unexpected Merger: Didi & Uber

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he unexpected merger of the two largest ride-hailing businesses operating in China, Didi and Uber, stoked concerns over the possible rise of a monopoly and potential damage caused to the sharing economy business model. The move brought an end to the bruising competition between the two companies, with Didi taking over its US rivals business in China, and in the process, creating a business worth 35 billion US dollars.

But the competition created cheaper prices for customers, with both companies subsidising drivers.

After the merger, social media in China was abuzz with chatter concerning the deal, with some customers claiming that prices had immediately soared.

In a message to its staff, Didi CEO Cheng Wei and President Jean Liu said the intense rivalry between the two parties had helped them grow quickly and contribute to soaring market growth, making China the world’s largest On Demand ride hailing market.

Hans Tung, from GGV Capital was an early investor in Didi Chuxing. He believes the tie-up was inevitable, stating that, “It doesn’t make sense for a US startup to go into China late and try to do a lot on its own. It’s a completely different market. The way it operates and how it deals with government are completely different.

I think Uber boss Travis Kalanick is also very strategic in doing this deal, because he knows that there are other markets beyond car sharing that he can go after. And he also knows at some point in the future, it is possible that a Google or an Amazon will aggressively go into this market.”

Bill Gurley, of Benchmark Capital, is also an Uber Board Member and was an early investor in the company. “I look at it this way,” says Gurley, “if any other startup in Silicon Valley was selling today for 7 billion dollars, everyone would be writing about what an amazing outcome it was.

There is a strong likelihood that China will be the biggest ride sharing market in the world, but on top of that the US market has evolved to a place where car ownership is pervasive. In China, that’s not true at all. So you have an opportunity to leapfrog car ownership.”

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Apart from a possible price hike, drivers are concerned about lower incomes. There are also industry fears that the two companies could form a monopoly that could disrupt market competition. The combined market share of Didi and Uber is estimated at over 93 percent.

Didi claims that the merger won’t significantly change prices, and they will continue to offer subsidies to passengers and drivers for some time as they still only reach about one percent of China’s 800 million urban population.

Ye Yun, Didi Chuxing’s chief public relations officer says that initially there should be no change for the various stakeholders. “After acquisition, the two brands will still operate separately so as to ensure a driver- and passenger-friendly service. And we will integrate the advantages of both sides and optimise the team management and technology to provide better services to Didi users.”

In China, if two companies planning a merger have combined China-wide annual revenue of at least 2 billion yuan - about 302 million US Dollars - with each individual company having a turnover of at least 400 million RMB, they must file an approval report to China’s anti-monopoly bureau. The Ministry of Commerce has not received such a declaration from the two parties. According to Didi, the two companies have yet to make a profit, and Uber China did not meet the declaration standards last year.

Zhu Wei, a researcher from the China University of Political Science and Law, says that many questions remain about the deal and explains that the acquisition faces two challenges; the first being the fact that, “Whether the acquisition is a monopoly or not has not been identified yet. Secondly, Uber is an American-based company. So Didi and Uber have independent capital resources, registered drivers and users. How to protect the information security will be a mutual concern for both sides.”

Ultimately, success in China means gaining access to a market of 1.3 billion people, a prize almost irresistible to businesses from across the world. But as taxi hailing giant Uber found out, simply having a market dominance elsewhere, or a good business idea, isn’t always enough to create success in China.

As Cao Can from Shengya Capital explains, having a local partner is no guarantee of success, noting that “Didi has the backing of local tech giants such as Tencent and Alibaba. But they also have the support of local governments, and the local press. So it’s very hard for Uber to compete without some support. Many of these foreign tech giants are sometimes a bit naive when they first enter China. They thought it was going to be a cake walk, because they are dominating other markets.”

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TANGSHAN

A Legal Landmark for Taxi Hailing Apps

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he country’s first nationwide regulation for on-demand mobility (ODM) services was unveiled at the end of July. The regulation formally granted legal status to companies like Didi Chuxing and Uber that had previously operated in a grey area in China.

Vice Minister of Transport Liu Xiaoming said of the regulation that, “It grants legal status to on-demand mobility services, clarifies the role and responsibility of service providers, sets out requirements for their operation and aims to promote sound and innovative development of the industry.” The latest document specifies that firms like Didi Chuxing and Uber do not need to own their vehicle fleet, effectively allowing private cars to join the party.

Vehicles and drivers need to apply for a license collectively before starting to provide services.

Companies in the sector are responsible for the qualifications and standards of their fleet and drivers. A provisional rule released by the Ministry of Transport on the same day set out detailed requirements for ODM companies and drivers.

One item within the rule release limits the operational life of private vehicles used for offering rides. Traditional taxis are banned from the road after eight years in service. However, vehicles used for ODM services fall under different re-

quirements; they are no longer allowed to offer rides after clocking up 600,000 km or if they have been in use for eight years. Nonetheless, such vehicles can still hit roads for private purposes if they do not travel this amount of distance within eight years.

At the same time, the rule also stipulates ODM drivers must have no criminal record for driving offences, drugs, alcohol or violent crimes. Liu Zhao with the Traffic Management Bureau of the Public Security Ministry explains that, “On-demand mobility services are convenient, but also have some safety risks due to the difficulty in monitoring the drivers. The requirements set out in the rules aim to ensure safe and reliable services.”

The rules also require ODM companies to pay taxes and buy insurance for passengers, while banning them from undercutting market prices, which could disrupt market order. Meanwhile, the new rule also addresses the concerns of traditional taxi cab drivers who have complained about tougher business conditions resulting from the soaring popularity of Didi Chuxing and Uber. Taxi companies are now being urged to reduce high franchise fees and encouraged to provide online-booking services or merge with ODM companies.

Official figures show close to 97 million Chinese people, or about one in every 14, hailed a taxi via online ODM services in 2015, while close to 22 million people booked private cars online. There are close to 1.4 million taxis in operation across China, carrying more than 100 million people per day on average.

The new policy has been hailed by transportation experts as a significant step forward. Chen Yanyan, assistant dean of the Urban Transport College at Beijing University of Technology believes that, “For passengers, it guarantees their safety and interests. For traditional taxi operators, it provides a fair market environment and encourages them to improve. And for the industry itself, it ensures healthy development under strict supervision.” ODM companies including Didi Chuxing and Uber, as well as traditional taxi operators, have also voiced support for the policy.

For passengers, it guarantees their safety and interests. For traditional taxi operators, it provides a fair market environment and encourages them to improve. And for the industry itself, it ensures healthy development under strict supervision.

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An Education in Natural Disasters

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uly 28 marked the 40th anniversary of the devastating Tangshan Earthquake, the epicentre of which was near Tangshan in Hebei province. The 7.8-magnitude quake that struck the city of Tangshan in 1976 killed more than 240,000 people and destroyed virtually all of the city’s buildings. Natural disasters are one of the biggest causes of human casualties and economic loss in China.

During a visit to the city of Tangshan to mark the anniversary, China’s president Xi Jinping said that the Tangshan earthquake was, “A tremendous catastrophe that left the whole nation in sorrow and caused huge losses. However, the nation gained a great spirit during its fight against the disaster and throughout the disaster relief, which has become a key part of our national

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An elderly resident walks along a memorial wall carved with some of the names of the nearly 243,000 victims who died in the devastating earthquake in Tangshan, Hebei province forty years ago. A memorial park consisting of a wall, a pool, woods, a square and two quake-themed museums was built in 2008 to commemorate the disaster. [Photo: CRI Online]

essence. It’s been 40 years. Now we need to remember it well, learn from our experiences and carry that knowledge forward.”

The president warned that the country is entering a critical stage in flood control and relief but underscored that the lives and safety of the public were the government’s top priorities. The president also suggested that there is still room for improvement when it comes to China’s disaster relief system and urged for efforts to improve legislation and leadership, streamline mechanisms, enhance urban and rural infrastructure, and increase public awareness and training.

The importance of raising people’s awareness of such disasters and their ability to recover from them has become a priority for the authorities. Natural disasters across China this year have killed at least 1,074 people with 270 others still missing, according to the Ministry of Civil Affairs.

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TANGSHAN Deputy Head of the disaster relief department within the Ministry of Civil Affairs, Yang Xiaodong has said that the most notable events included floods, strong winds, hailstorms and a range of geological disasters. “Losses since this June account for 60 to 90 percent of the total losses caused by natural disasters this year. The provinces of east China’s Anhui, Jiangsu and Jiangxi, southeast China’s Fujian, southwest China’s Guizhou, north China’s Hebei, and Central China’s Hubei, were the hardest hit,” Yang explained.

According to the ministry, since June, natural disasters have left 833 people dead with 233 people still missing; the largest number of casualties in the same period since 2011. According to experts, the most efficient way to reduce losses caused by disasters is to increase people’s awareness and abilities in terms of disaster prevention.

Liu Chang is a police officer at Zhoushan in east China’s Zhejiang province who just gave a speech about relief and self-relief when disasters hit. According to Liu, “We continuously teach safety education to the people and organisations in the area, and carry out exercises. Once a disaster occurs, people are able to minimise their loss.”

In Altay, located in the Xinjiang Uyghur Autonomous Region in northwest China, soldiers often organise students in local schools to participate in earthquake drills. Ning Panpan, a middle school student who has participated in such drills says that as a result of such practice, “We improve our skills in self-rescue and escape. When an earthquake occurs, the most important thing is to keep calm.”

TANGSHAN Shan Chunchang, an expert at the China National Committee for Disaster Reduction is a firm believer that disaster relief exercises are an effective way of improving the ability of people in terms of self-rescue and self-protection.

“Exercises are a very good method by which to raise public awareness and improve relief headquarters staff ’s ability to handle emergencies. We propose promoting the exercises into factories, schools, countryside, communities and even households.”

China is one of the countries most prone to natural disasters. The government is now working on improving its disaster relief mechanism so as to better coordinate and integrate relief efforts whilst also improving the laws, regulations and related policies concerning disaster reduction, as well as enhancing public awareness.

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An Innovation in Insurance

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rior to this year’s 40th anniversary of the devastating Tangshan earthquake, China launched the country’s first earthquake insurance policy. Coincidentally, the very first policy was sold in Tangshan itself. So-called ‘Catastrophe Insurance’ is regarded by insurance industry-followers as a step forward in adopting a market-driven approach to compensating for losses following natural disasters.

Zhu Junsheng, an economist from Capital University of Economics and Business in Beijing, told China Plus that, “Catastrophe insurance is more like a system rather than a product; it concerns many departments including insurance and insurance regulatory departments, as well as financial and agricultural departments among others. Aid from the government is just one kind of relief. It is more efficient to let the market, i.e., insurance companies, bear the main responsibility.”

China’s first earthquake insurance policy is now being sold by Chinese insurers nationwide. According to the insurance regulator, the premium rates vary depending on factors such as the location and construction of property, as well as the probability of earthquakes.

Earthquakes often lead to a huge number of casualties and substantial economic losses. In China, the government usually assumes the role of guaranteeing the basic livelihoods of those within the disaster area and maintaining social stability after natural disasters hit. At the same time, the government also provides funds for the restoration and reconstruction of disaster areas.

The insurance regulator is also pushing for nationwide legislation on the catastrophe insurance system and it is expected to complete the legal work prior to the end of next year. Sun Fuliang of the China Earthquake Administration notes that a strong legal basis for such a system needs to be in place, pointing out that, “Insurance for earthquakes and other natural disasters relates to the property rights of citizens, legal persons and other organisations, with a strong policy consideration.”

Death toll: 243,000 The second deadliest earthquake in modern history

However, the government’s aim is to provide emergency relief. It cannot fully compensate the reconstruction of houses, apartment buildings and businesses in the aftermath of disasters. For this reason, Sun Fuliang at the China Earthquake Administration has emphasised the importance of establishing a catastrophe insurance system.

“In order to ensure its orderly development in the long term, it should be established by the basic law. We suggest, in the future, legislation be passed to clarify the responsibilities of the catastrophe insurance system; the responsibilities of the government, insurance companies and other parties; and standardise the practice of catastrophe insurance products.”

Population drops by 29.2%

According to Sun, “The establishment of an earthquake catastrophe insurance system will help to shift the original single model of relief and rescue into a multi-channel, multi-faceted one; and will lead to the integration of disaster relief and risk prevention, as well as government relief and self-help in disaster areas, so as to fully mobilise social resources, increase aid provision, improve disaster restoration and reconstruction capability, and ease the financial pressure on the government in the face of a catastrophe.”

The 7.8 magnitude quake lasts 15” and is followed by a 7.1 magnitude aftershock

Catastrophe insurance is more like a system rather than a product.

Homeowners can buy insurance policies with a maximum payout of 1 million yuan or 150 thousand US dollars covering losses and damage to residential property caused by earthquakes with a magnitude of 4.7 and above.

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A split photo shows the view in Tangshang in 1976 and 2016. The black and white section was taken on July 28, 1976 after the devastating earthquake measuring 7.8 leveled the city. The colored section of the photo was taken on July 9, 2016, from the same location. [Photo: Xinhua]

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The earthquake insurance policy is part of China’s effort to establish a catastrophe insurance system aimed at using a market-driven mechanism to support disaster relief work and to reduce the fiscal burden on the government for loss compensation.

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SOE REFORM

BREXIT

China, the EU & Brexit

Making the Hard Choices when it comes to SOEs

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hinese authorities have expressed confidence about the country’s future economic ties with Britain and the European Union, despite the result of a British referendum which has indicated that Great Britain will at some point in the near future leave the EU. China’s Ministry of Commerce says that though the news of a future Brexit has caused turbulence in the international financial markets, its impact on China will be limited.

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hina’s top economic planning agency is putting increasing pressure on local officials to make the hard choices in order to reduce excess industrial capacity in this country. Zhao Chenxin, spokesperson for the National Development and Reform Commission (NDRC), suggests local officials have been digging their heels in when it comes to making the tough cuts needed within the country’s steel and coal production sectors.

Speaking to the media back in July, Shen Danyang, spokesperson of the Ministry of Commerce (MoC), noted that the European Union remains China’s largest trading partner and an important investment partner, while Britain still holds the distinction of being China’s second largest trading partner inside the European Union - at least for now.

Speaking to reporters in August, Zhao stated, “Over 9,500 tons of coal production has been reduced by the end of July, accounting for 38 percent of the annual target. Meanwhile, 21 million tons of iron and steel have been slashed, fulfilling 47 percent of that target. Although the reduction has been sped up since July, we still failed to meet the requirement of attaining half of the annual target within half of this year.”

According to the NDRC, there are several regions where local authorities have been unwilling to cut capacity in order to protect jobs and their local economies. Officials suggest this is more evident in regions where the coal and steel industries make up a significant proportion of their local economy, saying local officials are worried about the negative impact on their GDP figures.

As such, the NDRC is calling on local governments to be more resolute in overcapacity reduction and carry out such tasks as one would an order from a military commander. Zhao says additional measures, such as accountability systems, public exposure and blacklisting could be in store for officials who are unwilling to make the tough decisions.

As Zhao explained, “The reduction target is specific to each piece of equipment and each mine, so as to ensure that we meet the goal by the end of this year. We are going to issue regular reports on the implementation as of this month in order to ensure the fulfilment of our tasks.”

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In calling out local officials, the NDRC does say the cuts to overcapacity are not going to have a major impact on the country’s growth or harm the world economy. The NDRC suggests overcapacity remains a global problem resulting from the 2008 financial crisis, claiming that it remains a major problem in areas such as crude oil, iron ore and automotive manufacturing.

Although the reduction has been sped up since July, we still failed to meet the requirement of attaining half of the annual target within half of this year.

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Despite the shock the Brexit vote delivered to global markets immediately after the referendum result, Shen has stated that China remains quite confident about ties with both the EU and Britain, reiterating that, “China always treats and develops Sino-EU and the Sino-UK trade relations from a strategic perspective. We support Europe’s choice of development path and the integration progress of Europe. China will work with the EU and the UK to deepen cooperation in various fields and we will pay close attention to the situation and influence of Brexit.”

Shen Danyang admits the turbulence in the international markets following the Brexit vote will have an impact on Chinese companies investing overseas, as the external environment has become increasingly uncertain. However, Shen has also stated that the overall impact of this will be short-term and limited.

China always treats and develops Sino-EU and the Sino-UK trade relations from a strategic perspective.

Commerce Ministry officials contend that China has been the biggest target in the world for anti-dumping investigations over the past 21 consecutive years. The government has stated that the MoC is fully prepared to safeguard the interests of Chinese companies.

Shen Dayang has stated on record that, “The Chinese government supports Chinese enterprises in dealing with trade disputes according to the legal procedure of the country of import. We encourage consultations among relevant parties to reduce trade frictions and achieve mutual benefit and a win-win result. As for the abuse of trade restrictive measures, China will resort to the dispute settlement mechanism of the World Trade Organisation if necessary in order to protect our legitimate rights and interests.”

Investigations launched by different countries through the World Trade Organisation often result in initial tariffs which are applied to products being sent into their countries. The money itself is held in a trust until the full investigation is complete. However, WTO trade disputes can take years to settle, meaning that many companies are unable to continue to afford sending their products to countries which choose to impose anti-dumping or countervailing duties, effectively creating a barrier to free trade.

“Looking from the mid-to-long term, the shortterm impacts will not last long. The international investment environment will turn for the better, and new business opportunities are still abundant.

In general, there will still be more investment and cooperation opportunities for our companies abroad. We have good reason to believe our outbound investments will remain positive and stable.”

The MoC has also addressed concerns regarding trade protectionism, confirming that Chinese companies are facing a grim situation, as new data suggests one-third of all trade remedy measures being enacted around the world are targeting China.

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REALITY TV

REALITY TV

Written by Cui Chaoqun Popular Chinese TV singing contest Super Girl, which in the past managed to cause quite a stir from simple bamboo-forest villages to the big metropolises, is set to make a return after a ten-year hiatus.

from Shi Tongyu, a researcher with the Chinese Academy of Social Sciences. Shi argued:

“(the show’s) live coverage of the start-up audition phase opened an unprecedented exhibition of ugly and odd behaviors from those teenage girls who presented their untrained singing skills in a TV program. In my opinion, most of the applicants possess no talent when it comes to singing or performing. And it is very irresponsible and immoral to broadcast their awkwardness, nervousness and embarrassment through a live TV program. Meanwhile, the audience’s aesthetic values as well as their interest for the arts have been misguided.”

Super Girl is an American Idol-style reality TV show, which overturned the dominance of formulaic television programs of the past whilst also hosting a television extravaganza for the program’s participants, who are for the most part ordinary people who want to sing and experience the charm of television.

In 2005, Super Girl attracted more than 120,000 young female participants for the preliminary selection stages.

In reviewing the show’s past glory, some critics praised the talent contest for giving grass-roots female singers a platform on which to display their talents; a marked departure from the majority of shows which focused on beauty-queen type contestants.

While that may be the case, in a sea of ordinary singing voices, there were still contestants who were ready to stand up and shine. Li Yuchun, also known as Chris Lee, was a music student whose tomboy looks and confidence onstage often became the talk of online chat rooms within China. After winning this nationally televised talent show in 2005, she soon became one of the country's top pop stars.

Music critic Ke'er Qinfu, one of the judges for the Super Girl contest in Chengdu in 2005, pointed out that:

“As a judge in this show, I realized that part of my work was helping young singers grow and shine on this stage in an era when the music industry is not prosperous and new singers haven’t had that chance before. This is a stage for them to show their persistency in their pursuit to realize their dreams.”

REASONS BEHIND THE SUCCESS Li Yuchun received 3.5 million votes from her fans during the show’s final in 2005.

Some eight million, mostly young, Chinese viewers were paying 0.1 yuan or 12 cents in US dollars to send a “text message of support” via cell phone for one of the three Super Girl finalists.

However, during its kick-off auditions way back when, an especially wide range of applicants met strong criticism

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REALITY TV

REALITY TV Shi Tongyu attributes Li Yuchun and some other girls' success partly to indirectly giving a voice to individual Chinese viewers through a text message vote. As Shi explains:

“The popularity of Super Girl has relied heavily on the platforms generated by new media, including mobile phones and the Internet. The 2005 Super Girl show that Li Yuchun attended features innovation in the sense that people can choose their idols through sending an SMS message.”

In 2005, Super Girl was a TV phenomenon. The audience ratings for the final reached 11.65% in terms of total share.

However, the show was forced off the air in 2006 by authorities with the official reason being that the duration of the show was too long. The 2016 season of the singing reality show kicked off this past January and according to a press conference held in early May, about 610,000 people registered to enter the contest.

At the start of this year, when the winners of 2005 Super Girl stood on the same stage once again during the 2016 New Year Gala of Hunan Satellite TV, it was announced that Super Girl would be making its long awaited return.

The announcement came right before the countdown to Chinese New Year; a bonus for all Super Girl fans. The announcement evoked memories from those who witnessed miracles back in the summer of 2005.

Sixty-six days later, applicants for the new series reached 130,000, and young girls were the ones most interested.

53% of the applicants were born between 1995-2000, and 32% of them were born between 1990-1995.

channel and its contestants. Broadcasting a similar singing show on the same channel might have been one too many, and the timing to broadcast such a show making its comeback on television wasn’t exactly perfect given the regulation environment. As a result of these factors, Mango TV became the desired choice by which to deliver the show.

LIVE SHOW ONLINE Internet live streaming has become popular in the last few years in China. Via a mix of games, singing, dancing and a number of other fields, previously unknown Internet hosts and hostesses have become wildly popular. For the girls who are able to participate in Super Girl, their lives are being documented and streamed 24/7, from the audition stages to their everyday life, right through to the final.

“I couldn't get used to Internet live broadcasting when I lived in the castle for the first week. But that wasn’t a reason to quit and everyone was trying to adapt.”

17-year-old Fang Yuan, who participated in the singing contest became one of the show’s top 20 singers this season. According to Fang, she had a great time when she finally got familiar with the contestants and her fans.

Live broadcasting is now a main selling point of the show.

Fans can watch the show and catch all the behind-thescenes footage through live streaming mobile apps. The cameras constantly follow the contestants off-stage, as they live and work together. Being under the microscope isn’t too much of a change for Fang, as she has been on the stage since she was a child. Some of her fellow contestants in the top 20 also have stage experience and some are even stars on the web.

INTERNET CELEBRITY A contestant who identified herself online as “Girl Opens the Door”, posted a critique of the show on Zhihu.com after being eliminated herself. The post read, “I participated in the Mango TV division of the show. People who have the most popularity win the game. However, popularity means people pay attention to you and give you golden coins. 1 yuan allows you to buy 10 gold coins.

If you want popularity, you need money.”

There are 3 divisions online and offline and the top 100 contestants of every division have the right to continue the game. Their ranking depends on their level of popularity; however, many have complained about the contest’s rules. If an Internet star already has fans on other Internet platforms, she is definitely at an advantage when it comes to gaining a higher ranking, regardless of talent.

Among the top 20 Super Girl singers, the stylish singer Wang Jinjin already had over 1.8 million fans on live streaming app Kuaishou prior to attending the contest.

Meanwhile, fellow contestant Huang Xiyuan had over 2 million fans on Changba, a mobile app via which people could share Karaoke videos.

Super Girl has attracted a lot of Internet celebrities, but it also creates new Internet stars. Fang Yuan now has nearly 300 thousand fans on her Sina Weibo page. Obviously, the making of a star has shifted from traditional media towards the Internet. Shen Yang, Professor at the School of Journalism and Communication, Tsinghua University, has stated that from the view of making an idol, this change brings us one step closer to the ideal situation.

“In the traditional way of making stars, the interaction only occurs on TV. With the growth of the Internet, fans can know what their idols are doing through live shows. Through direct interactions between fans and these new stars, they can share the feeling of fame.”

Furthermore, Internet celebrities have themselves become an industry in their own right and the influence of Internet stars can convert attention into cash.

MAKING PREDICTIONS

Professor Shen Yang said when com-

“It is impossible to have a national icon today. China is different from ten years ago. China has now become a consumption society and this consumption is personalized. Ten years ago super girls would catch people’s attention, but today consumers are divided.” menting on the challenges that traditionally ground breaking shows like Super Girl face in the modern era. Shen predicts that this year’s contest is unlikely to produce a national icon like Li Yuchun.

However, the numbers do prove that Super Girl is still a successful entertainment show, though viewing figures are by no means phenomenal.

Entering the final stages, the competition is due to be broadcast every Friday, but the schedule of the competition has not yet been set. Hosts and guests are announced days before the competition and there is a “Coming Soon” tag on the Super Girl’s schedule. This element of uncertainty for both competitors and fans helps generate a sense of togetherness, which in turn helps to cement the idea that fans are closer to their idols than ever before.

And aside from a younger pool of contestants, this year the competition is being broadcast live on Mango TV, a video streaming website belonging to Hunan Satellite TV. Some have said that the decision to broadcast via an online platform allowed the production team to get around regulations passed by China’s television watchdog.

Last year the State Administration of Press, Publication, Radio, Film and TV restricted the number of reality shows on China’s television channels. As a result, each satellite service is only allowed to broadcast one reality show per season. Earlier regulations regarding entertainment programs also limited the length of such programs and the broadcasting times available to them.

In 2016, Li Yuchun released a new album “Ye Man Sheng Zhang (Savagely Growing)”. It has been 11 years since Li Yuchun’s debut on Super Girl and this is the first album produced by her own studio. Like the name of this album, both Li Yuchun and her fellow super girls are growing in unpredictable ways.

Aside from Super Girl, in recent years Hunan Satellite TV has produced similar singing contests such as X Factor (Zhong Guo Zui Qiang Yin) and I Am A Singer (Wo Shi Ge Shou), which earned both fame and fortune for the

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No Race, Just a Steady March

A Mission to Mars

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o much excitement, the official design for China’s Mars probe and rover was unveiled earlier this year. It is expected to be launched within the next 5-years.

Scientists hope the mission will send back important data on the red planet’s soil, atmosphere and possibly ice or water that it finds. China’s first Mars voyager mission is expected to be launched around 2020 and reach the Red Planet a year or so later.

Mars, it deploys its landing legs which helps it further decelerate, aiding its deceleration systems.”

The computer generated images unveiled by the Chinese State Administration of Science, Technology and Industry for National Defence show a six-wheeled rover which will explore the surface of Mars, along with orbiter and lander that will deliver it onto the surface.

It is an earth-like planet with a thin atmosphere. It is often referred to as the “Red Planet” because the iron oxide prevalent on its surface gives it a reddish appearance. The rotational period and seasonal cycles of Mars are quite similar to those of Earth, as is the tilt that produces the seasons.

Chief designer Zhang Rongqiao says that, “The voyager is an all-in-one composite. We need an orbiter to orbit Mars; we need a landing capsule and a rover for after-landing manoeuvres. The landing capsule makes sure that the rover lands safely through the atmosphere of Mars. We call the rover Mars vehicle.”

The chief designer went on to give further details of the landing capsule and how it will descend onto the planet’s surface, explaining that, “In appearance, it looks like the re-entry capsule of the manned spacecraft; in effect, it deploys parachutes after the atmosphere slows it down; it then drops off its bottom cover and uses its bottom thrusters to apply the braking effect. When it gets close enough to the surface of 20

SPACE

The rover will carry 13 payloads including a remote sensing camera and a ground penetrating radar which could be used to study the soil, environment, atmosphere of Mars, as well as the planet’s physical fields and its inner structure. Mars is the fourth planet from the Sun, and the second-smallest planet in the Solar System, after Mercury.

There have been 43 Mars exploration missions so far, conducted by the United States, Russia, the European Space Agency, India and Japan. Only half of these missions were successful, with the United States having both orbited and landed on Mars whilst Russia only managed to conduct a landing.

Zhang Rongqiao claims that China has gained a lot of experience and technological know-how from its manned and unmanned space missions, and said that the experience gained from China’s Moon exploration missions may also help with the Mars mission. However, the chief designer also points out that a Mars mission presents risks as the planet is still an unknown quantity, adding, “We need a combination of different deceleration mechanisms for our Mars exploration mission; the key is how to coordinate them, which we’re not quite sure of right now. It poses a tricky question to our mission.”

CHINA

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hina’s lunar probe Chang’e 3 has been roaming around the moon for more than two and a half years.

Working for 33 lunar nights, it now has the honour of being the probe which has operated the longest on the moon’s surface.

It has collected 7 terabytes of data including pictures and videos that have been sent to over 1,000 colleges, universities and scientific institutions on the Chinese mainland, in Hong Kong and Macao.

Chang’e-3, with China’s first moon rover aboard, successfully landed on the moon in December 2013, marking China’s first successful soft-landing on the surface of an extraterrestrial body. However, its rover Jade Rabbit became faulty and shut down in early 2014.

Luckily, it awoke shortly after and has lasted beyond its life expectancy.

The Chang’e 3 mission has provided scientists with an enormous number of images which have revealed valuable details about the surface of the moon. Furthermore, it created the first ever geological map of the moon with lunar penetrating radar, providing an insight into the evolution of the moon and the basis to explore its resources.

Lin Yangting, a researcher from the Chinese Academy of Sciences, says the rover even discovered a new type of rock - the Lunar Basalt. “The radar detected three layers of basalt under the

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WATCH THIS SPACE ground. The top layer is 195 meters deep. This indicates that until the late period, about two billion years since it was born, there were still huge amounts of magma that were erupting. This shows that the activity of the magma on the moon lasted longer than expected.”

In addition, Chang’e 3’s optical telescope made observations of the moon in the ultraviolet range at its north pole to provide information for comparison studies in the future. Equipped with the world’s first extreme ultraviolet imager, Chang’e 3 has been able to study changes in the plasmasphere to monitor solar storms that could disrupt telecommunications on earth.

Liu Tongjie, deputy director of the moon exploration centre at the State Administration of Science, Technology and Industry for National Defence, says the success of the Chang’e 3 has guaranteed China a leading role in moon exploration.

“Since the 1990s, the international community has conducted 13 lunar explorations, including five by the United States and four by China. China ranks second in terms of both the frequency of exploration and the scientific achievements.

We can say that China has reached the advanced level in some areas of lunar exploration, and this has stimulated the development of moon exploration throughout the world.”

China is planning to send another probe to the moon, the Chang’e 5 robotic lunar sample return mission, which is due to be launched in 2017 from the new Wenchang Satellite Launch Centre. Furthermore, the Tiangong 2 orbiting space lab has been delivered to the Jiuquan Satellite Launch Centre where it will lift-off later this year; it will dock with the crewed Shenzhou 11 spacecraft and a Tianzhou cargo vessel which are slated for launch later.

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Virtual Reality, A Challenge to Humanity or a Blessing?

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By Bob Jones

e’re going to hear a lot about innovation in the coming weeks.

It’s one of the key themes of the upcoming G20 Summit being held in China’s Hangzhou. As the economies of just about every nation in the world go through painful transition, there’s a realisation that maybe now is the time for a ‘fourth industrial revolution.’ The era of the third is grinding to a halt with the growing realisation that we can no longer squander the resources of the planet as we have done for the last four hundred years.

The ‘Third Industrial Revolution’ has been characterised by the domination of primary industries like mining, and mass manufacturing based on iron and steel, and plastics. But as concerns grow for the environment, and sustainability becomes a priority, people are looking to technology for the answers.

China’s vision is that technology and Big Data hold the key. As part of a series of reports on the G20 summit, I have been visiting companies in Beijing which epitomise Innovation, and herald the way to this brave new world.

Tucked away inside an anonymous looking office block, just a few kilometres to the northwest of the ancient Forbidden City, is a company called Noitom. Its location belies the fact that it is a global leader in ‘motion capture technology.’

That’s tech jargon for the nuts and bolts that will make Virtual Reality the next big thing. Here, 200 souls are imagining, designing, and building that future. Visitors are happily taken to see the ‘The Experience.’ This is an unremarkable room where they proudly show off their achievements.

Wearing a headset, within the space of ten minutes, you travel effortlessly into outer space; Sit on a beach on a distant world; Stand on the deck of a pirate ship at sea in the moonlight, and are shown every little detail of the latest car in a virtual showroom.

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You can’t help but be blown away by what this Chinese tech start-up has created. You soon begin to mull over the possibilities. You could visit the hotel room you will stay in on holiday; wander round that museum you have always wanted to visit; watch an operation you may need being carried out, to put your mind at ease; and hold business meetings with people on the other side of the world, all without leaving the comfort of your own home.

It’s clear Virtual Reality is unstoppable, and if companies like Noitom are anything to go by, it will come very soon indeed. But with this technological development comes a whole new set of problems. Or if not problems, then challenges that we must face as human beings.

Imagine a world where we need never move again. We don’t have to travel, or go to work, or go to the supermarket. We just simply put on a head set – or in the future maybe even simply get an implant - and we can do all these things from our beds.

Take it a stage further and maybe we can use the technology to replace human contact altogether. Meeting people, caring for people, loving someone even. And surely the experiences that Virtual Reality will give us will end up being far better that the real physical thing. In this virtual new world, the weather will always be good on holiday, the supermarket choice almost infinite, and the friends we meet will be designed to perfection.

Even now, mobile phones and the burgeoning choices they bring have made individuality king. In many cases you can have what you want whenever you want it. There is no one to tell you that you can’t have perfection, right now. So reality will get relegated to second best. It’ll become something that doesn’t quite come up to expectations. And surely, real people – if we can actually tell the difference any more – may become dispensable. Who needs them?

There was an English King called Canute, about a thousand years ago, who thought he was all powerful, and set up his chair on the beach to prove that he could tell the tide to turn and simply go away. Of course it didn’t, and the tide came, in knocking him physically and philosophically off his chair.

Some tides we cannot hold back. Virtual Reality, I think is one of them. But as we explore this amazing new technology – which undoubtedly will become a driver for the economy of the future – we must begin to explore how we relate to it, and how we preserve what it is to be human.

If not, who knows, the virtual world will become reality and we flesh and blood people will simply cease to exist.

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