3_6_5_PQ365

State-owned restructuring pace quickens
The local government is seeking to speed up restructuring of Shanghai\’s State-owned enterprises by pushing them to go public, Shanghai Vice-Mayor Ai Baojun said yesterday.
The city is targeting a securitization ratio of up to 90 percent for State-owned companies, Ai said on local radio. Ai didn\’t elaborate on when the target would be reached.
Securitization is the process by which a company packages its financial assets and then markets them to investors.
The purpose of the securitization effort is to diversify the shareholders of State-operated assets, said Ai. "We encourage capital investment from some funds, including private equities, in our State-owned enterprises," he said.
With the city\’s exports down, Shanghai officials believe the timing is right to further restructure State-owned enterprises.
Just last week, Yang Guoxiong, director of the Shanghai Municipal State-owned Assets Supervision and Administration Commission, said over 30 percent of State-owned assets in the city – valued between 20.3 billion and 23.7 billion yuan – will realize securitization this year, up some 7 percentage points from 2009.
"The main goal in 2010 is to push assets held by the State-owned conglomerates to go public, making their listed units the major platform for them," said Yang.
Official figures show Shanghai\’s State-run firms contributed 352.8 billion yuan to the nation\’s gross domestic product in 2009.
According to Ai, 50 percent of Shanghai\’s economic output was generated by State-owned firms, for a combined profit of 40.9 billion yuan in 2009, up 53.3 percent from a year earlier.
According to reports from the Securities Times, one-quarter of Shanghai\’s 72 State-owned firms has undergone restructuring during the past year. These include Shanghai Airlines and financial services provider Aijian Corp.
Debt-laden electronics giant SVS Group Co completed its restructuring last December by selling its entire stake in its two listed units to another government-owned assets management company, Shanghai Yidian Holdings, to alleviate cash flow problems. The two listed firms both reported huge losses in 2008.

Google pullout threat \’a pressure tactic\’
Google\’s threat to pull out of China over what it claims to be cyber attacks has left millions of Chinese users concerned – and analysts described the move as the company\’s strategy to put pressure on the Chinese government.
Google – the world\’s largest search engine – said in a statement yesterday that it is considering exiting China after the company had been hit in December with major cyber attacks that it believes originated in the country.
It is not clear whether users in China, including many foreigners, would continue to access services such as Gmail and Google Map, should the company shut its service.
David Drummond, Google\’s chief legal officer, said in an unusual statement posted online that the company had detected a highly sophisticated and targeted attack from China that resulted in the theft of the company\’s intellectual property.
"These attacks … led us to conclude that we review the feasibility of our business operations in China."
He said Google will no longer continue censoring results on Google.cn, a Chinese-language website it launched in 2006, and is discussing with the Chinese government the possibility that it operate an unfiltered search engine within the law.
"We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China," he added.
The statement marks a shift in the company\’s China strategy for the past five years, which is to provide censored results under Chinese law through its domestic search engine in exchange for a presence in the world\’s largest online population.
That strategy helped Google take about 35 percent of China\’s search engine market in the fourth quarter of last year, according to domestic research firm Analysys International.
Jiao Jian, an office worker who uses both Baidu and Google every day, said the possible shutdown of the Google search engine will have little impact on his life as many other firms provide similar services. "But it\’s hard to find alternatives to Google\’s other services, such as Google Map, Google Earth and Gmail," he said.
He also expressed concerns over the availability and safety of his Gmail account if Google exited the country.
Google started a Chinese-language search service as early as 2000 but the company did not have a significant presence in the country until it established a China team in 2005 and launched Google.cn the following year.
Google\’s possible retreat from China has prompted the company\’s 700 China staff to fear for their jobs.
"At a general meeting on Wednesday, we were told that Google might quit China, and all of us feel very sad," said an employee with Google\’s Beijing office on condition of anonymity.
Drummond\’s post also said Google would try to negotiate with the Chinese government for more favorable operating conditions in China.
However, the anonymous employee told Xinhua that most Google employees are pessimistic about the outcome of the negotiations.
"No agreement will be reached with both sides refusing to give in," he said.
But Guo Ke, a professor on mass communication at Shanghai International Studies University, said it was "almost impossible" for Google to quit China but the Chinese government would not put an end to censorship either.
"It will not make any difference to the government if Google quits China; however, Google will suffer a huge economic loss by leaving the Chinese market," Guo said.
"Chinese Internet users are the real victims if Google quits China. I think Google is just playing cat and mouse, and trying to use netizens\’ anger or disappointment as leverage," Guo said.
An unnamed official from the State Council Information Office said yesterday that the government is seeking more information on Google\’s statement.
The official, cited by Xinhua, said it is hard to say whether Google will quit China.
Ever since Lee Kifu quit as head of Google\’s China operations six months ago, there have been rumors that the company was rethinking its China strategy and even move its servers out of the country after being involved in a series of government-led Internet crackdowns last year.
It was reported that many employees left Google after Lee\’s resignation in September and the company has not recruited any new staff since October, according to a Google employee who declined to be named.
Dozens of Google users gathered at the company\’s headquarters in Beijing yesterday afternoon, some bringing flowers to say farewell.
Most of them were university students who came to pay tribute to the IT giant, expressing disappointment at its withdrawal from China.
Google is one of the few Internet giants that have a significant presence in China. Other firms such as Yahoo! and eBay Inc have given up on the China market after years of sluggish performance.
Millions of Chinese are fans and loyal users of Google and its services such as Gmail, Gtalk and Picasa.
If Google quits China, all its users may have to move their emails and other documents and pictures in advance.
According to the latest official figures, China had 338 million Internet users by the end of June last year.
Google\’s major competitor Baidu had a 58-percent market share in the last quarter, according to Analysys International.

Baidu sues US company over cyber-attack
China\’s leading Internet search engine, Baidu, has filed a lawsuit in a New York court against a U.S. firm that managed its domain registration, Baidu said in a statement on Wednesday.
Baidu is seeking damages from its U.S. domain name registration service provider Register.com, Inc., following an attack on its website www.baidu.com last week, the Beijing-based company said in the statement.
Baidu\’s website was paralyzed for several hours after a cyber-attack on Jan. 12, denying users from many places around the world access.
The attackers posted on the site a message in red saying, "This site has been hacked by Iranian Cyber Army."
It is believed the unidentified "Iranian Cyber Army" changed Baidu\’s domain name server records and redirected traffic to another website.
"Register.com, Inc.\’s gross negligence resulted in severe damage to the company," said the statement.
The company declined to detail its losses and it failed to disclose the damages it is seeking.
The search engine, which claims 70 percent of China\’s Internet search market, had only been down only once previously, for half an hour in December 2006.

Hong Kong Disneyland\’s loss narrows
The volume of Hong Kong\’s goods exports in November 2009 rose by 1.4 percent year on year, while import volume rose 7.4 percent, local statistical authorities said Tuesday.
The prices of goods exports rose 0.5 percent. The prices of re-exports rose 0.7 percent, while those of domestic exports fell 1.2 percent, according to the Census and Statistics Department of the Hong Kong Special Administrative Region (HKSAR) government.
For the first 11 months a whole, the volume of goods exports fell 13.7 percent, while that of goods imports dropped 11.5 percent.
Statistics released earlier by the Census and Statistics Department had showed that the value of Hong Kong\’s goods exports in November rose 1.3 percent year on year, the first year-on-year rise since October 2008.

Nine Dragon forecasts 800% profit growth in 2009
Shares in Shanghai Nine Dragon Co Ltd, a Shanghai-based real estate company, dipped 2.97 percent to close at 8.23 yuan ($1.21) on Wednesday despite a forecast jump in annual net profits last year.
In a statement filed to the Shenzhen Stock Exchange, Nine Dragon said it expected last year\’s net profit to jump more than 800 percent from 27.7 million yuan in 2008.
The profit rise was attributable to increase of home sales and prices in the last quarter in 2009, the statement said.

XAIC extends contract with Boeing
?

A Boeing 737 aircraft parked at Jinan Yaoqiang International Airport. The deal will help XAIC in its efforts to become a strategic partner for Boeing. [China Daily]
Xi\’an Aircraft International Corporation (XAIC) yesterday delivered the 1,500th vertical fin for Boeing\’s best-selling B737 aircraft and signed an extended contract to supply another 1,500 units to the US aircraft manufacturer.
The new order is the largest subcontracting agreement in terms of volume the Chinese aviation manufacturing industry has ever received.
"The extension of the contract showed that XAIC is capable of producing large-size aircraft components in large volume for leading international aviation manufacturers. It is a milestone in XAIC\’s efforts to become a strategic partner for Boeing and Airbus," said Meng Xiangkai, president of XAIC.
Vertical fins are typically found on the aft end of the fuselage and are intended to reduce aerodynamic sideslip.
XAIC, a subsidiary of Aviation Industry Corporation of China (AVIC), signed the first contract for producing 1,500 units of B737 vertical fins in 1996 and is currently able to produce 21 to 24 units of vertical fins per month.
Boeing manufactures 31 B737 planes per month. Nearly two-thirds of the B737 worldwide fleet are equipped with vertical fins produced by XAIC.
Boeing and XAIC did not reveal the total value of the contract.
"Since the 1980s, Boeing has purchased parts and components worth more than $1.5 billion from China. That (the purchasing volume) will more than double in the coming years," said George Maffeo, vice-president for supplier management, airplane programs, Boeing Commercial Airplanes.

CSIC posts 18.5% increase in profit in \’09
One of China\’s two leading State-owned shipbuilders, China Shipbuilding Industry Corporation (CSIC), said Sunday that its profit in 2009 jumped 18.5 percent to 7.39 billion yuan (1.1 billion U.S. dollars).
The Beijing-based conglomerate, which consists nearly 50 industrial subsidiaries and about 30 R&D institutes in northern China, also said its operating income rose 17 percent in 2009 to 120.9 billion yuan.
General manager Li Changyin said the CSIC had overcome the impact of the global financial crisis, which crippled the global sea-based trade and brought down ship orders.
Li said technological innovations had enabled the CSIC to build 180,000-dwt bulkers, 320,000-dwt oil tankers, 13,000-TEU containers as well as new types of drilling platform which can be used in water depths up to 400 feet (120 meters).
According to Li, CSIC had also been actively engaged in non-ship businesses including manufacturing of wind power and nuclear power equipment, accounting for 40 percent of the CSIC\’s business volume.
Li said the CSIC profit target for 2010 was 8 billion yuan. The operating income was expected to surpass 140 billion yuan and the CSIC output in 2010 was likely to break 10 million dwt (deadweight tonnage), he added.
The CSIC, which has more than 140,000 manpower, launched an initial public share offer at the Shanghai Stock Exchange in December 2009 and raised some 6.4 billion yuan.
The CSIC\’s main shipbuilding and industrial enterprises are based in cities of Dalian, Qingdao, Tianjin, Shanhaiguan and Wuchang.
The other major shipbuilding conglomerate in China — the China State Shipbuilding Corporation (CSSC) is based in Shanghai, whose turf is mainly in eastern and southern China.

SOHO China seeks M&As
Cash-rich commercial property developer SOHO China will continue to seek merger and acquisition (M&A) opportunities in Beijing and Shanghai this year to expand its business, Chairman Pan Shiyi said.
"We will acquire existing commercial properties from institutional investors and offer custom-tailored marketing and leasing services to make them more profitable," Pan said.
SOHO Nexus Centre, a prime commercial and retail complex that SOHO acquired for 2.34 billion yuan ($342.8 milllion) in November, attracted a transaction of 2.09 billion yuan on its first day of trading this month, with a unit price of 43,100 yuan per sq m.
In 2009, SOHO made four acquisitions with a total consideration of approximately 10.6 billion yuan, adding commercial land banks totaling 740,000 sq m in Beijing and Shanghai city centers.