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Publications FCCC publishes “10 Years: Flanders-China Chamber of Commerce 2005 – 2015”

FCCC activities Seminar: 'China Market Deregulation and Impact on Financing Solutions’ – Thursday, March 12, 2015 – 16h00 – FCCC – Gent

Notice Subscription to FCCC sectoral newsletters

Advertisement opportunities Sponsorship opportunities FCCC 10 th Anniversary publicationand Newsletters

Advertisement An Executive MBA by IMD & CKGSB

Hainan Airlines, your direct link from Belgium to China

Activities supported by FCCC “Afstudeerbeurs” – Asia Job Corner – 31 March 2015 – ICC, Ghent

EY panel: 'Doing Business in China' – 1 April 2015 – Ghent

Legal aspects of doing business with China – 2 April 2015 – Brussels

8 th China Green Companies Summit (CGCS) – 20-22 April 2015 – Shenyang

Past events FCCC 10 th Anniversary and Chinese New Year Reception – 23 February 2015 – Brussels

Automotive BYD’s profit falls 20.8% for 2014

Finance PBOC cuts interest rates second time in three months

Foreign investment U.S. Chamber says its members will reduce investment amidfears of 'unequal treatment'

Foreign trade China-South Korea free trade agreement initialed

Foreign brands dropped from government procurement

Health TCM compound effective in blocking ebola

Advertisement CrossTainer: air & sea forwarding services

IPR protection Patent applications lead the world

Macro-economy Domestic consumption surpasses investment

Mergers & acquisitions Cheung Kong shareholders approve reorganization

Real estate Real estate registration takes effect

Advertisement Ziegler Group, Your major Global Transport & Logistics player

FCCC Newsletter No 398, March 3, 2015 Page 1

Retail Yonghui Superstores sells shares to Dairy Farm

Science & technology Beijing Language and Culture University to set up Tokyo campus

Stock markets Stock index closes lower after holiday

Travel Number of Chinese tourists traveling abroad up 10%

One-line news

Announcements 5 th China (Sichuan) Imported Commodity Fair

6 th China (Guangrao) International Rubber Tire & Auto Accessory Exhibition

PUBLICATIONS

FCCC publishes “10 Years: Flanders-China Chamber of Commerce 2005 – 2015”

On the occasion of its 10th anniversary, the Flanders-China Chamber of Commerce has issuedthe publication “10 Years: Flanders-China Chamber of Commerce 2005 – 2015”. The publication bundles interviews with H.E. Qu Xing, Ambassador of the People's Republic of China to Belgium; H.E. Michel Malherbe, Ambassador of Belgium to the People's Republic of China; Mrs. Claire Tillekaerts, CEO of Flanders Investment & Trade; Mr. Stefaan Vanhooren, President Agfa Graphics; Mr. Matthew Taylor, CEO, Bekaert; Mr. Stephan Csoma, Executive Vice President and two other Executives, Umicore; Christian Dumoulin, CEO, Vitalo; Filip Goris, General Manager Asia, Recticel; Mr. Hudson Liu, CEO, Huawei; Mr. Li Shufu, Chairman, Zhejiang Geely Group; Mrs. Chai Hui, General Manager Brussels Branch, ICBC; Mr. Robert Zhao, Chief Representative of the Weihai EU Office in Ghent; Mr. David Liu, Deputy Managing Director, APM Terminals; and Mr. Ma Jian, Chairman, Tianjin Liho Group.

Mr. Geert Bourgeois, Minister-President of the Government of Flanders, wrote the foreword to the publication. Chairman of the FCCC, Mr. Bert De Graeve, provided the introduction and Mrs. Gwenn Sonck, Executive Director of the FCCC, provided some more details about the FCCC.

The publication is available to Members of the FCCC free of charge.

Here is the link to the brochure online.

FCCC Newsletter No 398, March 3, 2015 Page 2

FCCC ACTIVITIES

Seminar: 'China Market Deregulation and Impact on Financing Solutions’ – Thursday, March 12,2015 – 16h00 – FCCC – Gent

The Flanders-China Chamber of Commerce (FCCC) is organizing a seminar focused on 'China Market Deregulation and Impact on Financing Solutions'. This event will take place at 16h00 on Thursday March 12, 2015, at the Flanders-China Chamber of Commerce/Voka, Lammerstraat 18, 9000 Gent.

China is currently going through a transitional phase, moving away from an investment driven to a consumption driven economy. This transition is proving to be disruptive, as it is expected to allow for a greater role for free market forces in the economy. As such, it is impacting China’s economic policies and regulatory framework, not in the least for financial services.

During the seminar, Mr Jason Lee, General Manager, KBC Bank NV Shanghai and Mr Yvan Jonckheere, Manager Trade Credit Finance, Picanol, will be providing further background on recent developments and how it will impact the financing of your operations in China. Mr Constant Pompen, Investment Officer, Belgian Corporation for International Investment, will present alternative financing solutions for foreign investments of Belgian companies in China.

Programme:

15h3016h00

16h30

17h00

17h30

17h30 - 18h00

RegistrationWelcome by Ms Gwenn Sonck, Executive Director – Flanders-ChinaChamber of CommerceChina Market Deregulation and Impact on Financing Solutions’ by Mr Jason Lee, General Manager – KBC Bank ShanghaiAlternative Financing Solutions for Foreign Investments of Belgian Companies in China’ by Mr Constant Pompen, Investment Officer – Belgian Corporation for International Investment SBI-BMIPanel discussion and Question & Answer session with Mr Yvan Jonckheere, Mr Jason Lee and Mr Constant PompenNetworking reception

If you are interested in attending this event, please register online before Monday March 9, 2015. Participation fee for FCCC members: €65, non-members: €95.

NOTICE

Subscription to FCCC sectoral newsletters

In 2015, The Flanders-China Chamber of Commerce will continue to publish its China sectorialreports in order to keep you up to date on the developments in China in the sector that you areactive in.

However, we are going to change from free sectoral newsletters to paid newsletters. The pricewill be 125 € per sector. These fees will help cover our costs of research and development.

We currently produce newsletters in the following sectors:

• Automotive, metal & minerals• Environment• Logistics• Healthcare• ICT

Past newsletters can we viewed on the FCCC website: http://www.flanders-china.be/en/publications/fccc_newsletters.

If you are interested in continuing to receive one of these sectorial reports, we kindly invite youto subscribe via the following subscription formula before 31 March 2015:

FCCC Newsletter No 398, March 3, 2015 Page 3

Register now

If you are interested in a sector not listed above, please send an e-mail to info@flanders-china.be.

We hope you will enjoy reading these publications and thank you for subscribing.

ADVERTISEMENT OPPORTUNITIES

Sponsorship opportunities FCCC 10th Anniversary publication and Newsletters

This year, the Flanders-China Chamber of Commerce celebrated its 10th anniversary! We would like to give your company the opportunity to give more exposure about your companies' activities to Belgian companies active on the Chinese market and Chinese companies present in Belgium.

There are still opportunities to advertise in the second printing of the 10th anniversary publication.

In the link below you can find further information and a proposal for sponsorship as well as advertisement opportunities on our website and newsletters.

Link a dvertisement opportunities

ADVERTISEMENT

An Executive MBA by IMD & CKGSB

All over the world, people are beginning to do business with China. All over China, people have been doing it for centuries. So, who better to help prepare you for China’s increasing influence on the global marketplace? While the Chinese economy continues to grow, gaining expert knowledge from the other side of the business fence can give you an unquestionableadvantage in leading the way between China and he world.

CKGSB: Cheung Kong Graduate School of Business and IMD business school can help youdevelop your understanding of China with a fully global perspective. CKGSB is recognized as China’s world-class business school with an alumni base that accounts for 13.7% of China’s GDP. Our world-class faculty represents many of the best minds from the U.S. and Europe’s

FCCC Newsletter No 398, March 3, 2015 Page 4

top business schools. IMD is a top-ranked business school.100% focused on executive education, IMD offers Swiss excellence with a global perspective. Together these twoleading business schools have devised the Executive MBA program.

The Executive MBA by IMD & CKGSB is designed in two stages – the foundation stage and the mastery stage. The program will allow you to master Eastern and Western business concepts and practices whilst gaining all-important international connections. The program will also strengthen leadership, strategy and general management skills.

Made up of equal numbers of participants from both Eastern and Western businesses, theprogram will include 11 weeks of face-to-face learning. The program is scheduled to take place from February 2015 until September 2016 with a unique split of 50/50 program delivery across Eastern and Western locations. Delivered by two world-class business schools, the IMD-CKGSB Executive MBA is the ideal answer for fast-rising executives who want to create value for their organizations by spanning both East and West. You’ll go beyond the basics to atrue understanding of the forces that will be shaping the world of business in the future.

For admission details or further information visit imd.ckgsb.info

Hainan Airlines, your direct link from Belgium to China

Hainan Airlines, your direct link from Belgium to China.

Hainan Airlines is your 5 Star Airline awarded by Skytrax, operating direct flights from Brussels to Beijing.

FCCC Newsletter No 398, March 3, 2015 Page 5

Save time, fly in comfort and have the possibility to connectto 50 domestic destinations including Hong Kong and Taipei.

A seamless connection and a convenient transfer service will bring youvia Beijing to your destination in Hong Kong.

ACTIVITIES SUPPORTED BY FCCC

“Afstudeerbeurs” – Asia Job Corner – 31 March 2015 – ICC, Ghent

Registration is now open for the 2015 edition of the Afstudeerbeurs / Job Market for Young Researchers (31 March 2015). Click http://afstudeerbeurs.augent.be/ or go directly to the registration page.

After last year's roaring success of the China Job Corner, we are now organizing an Asia Job Corner on the 2nd floor of the ICC. Occupying a booth, you will have direct access to Asian (Chinese, Indian, ...) final-year Master students, doctoral students and postdoctoral fellows in all academic disciplines. The purpose of the Job Corner is to help Asian job seekers find a (first) job and make it easier for Belgian employers to network with these young professionals and introduce them to their businesses in Asia.

Interested in participating in the Asia Job Corner? Please indicate 'Asia Job Corner' in the comments section of the registration form.

Should you have any further questions about the Asia Job Corner, please contact Katrien Daemen-de Gelder (katrien.degelder@UGent.be)

EY panel: 'Doing Business in China' – 1 April 2015 - Ghent

EU is the largest trading partner of China and China is the second largest trading partner of the EU. China is also a dominant trading partner of many other countries.Next to being the biggest factory in the world, China’s economy, when measured by purchasing power parity, surpassed that of the United States to become the world’s largest. China’s global economic power cannot be denied anymore. Many Belgian entrepreneurs have successfully set up businesses in China.

During our panel discussion “Doing Business in China”, Simon Barker, Geert Roelens and Patrick Keereman want to share with you recent China business trends and opportunities, but also some of the pitfalls and challenges they have faced while trying to achieve their endeavours. This forum, which is focusing on mid-sized companies with an ambition to do business in China, will allow you to raise any question you may have.

Date: 1 April 2015, Location: EY, Moutstraat 54 – 9000 GentRegistration: To register click here before 23 March 2015.

Legal aspects of doing business with China – 2 April 2015 – Brussels

China’s economic impact is constantly increasing. In that respect, both Belgian and Chinese companies are looking for market opportunities to guaranty their growth.

As an attorney, legal practitioner or business person you are without doubt often confronted with the legal issues of these cross-border developments. In order to make you more confidentwith the different aspects of such cases, the following topics will be dealt with during the seminar organized during two afternoons.

The day 1 theoretical seminar took place on 26 February 2015.

Day 2: practical approach (2 April 2015):14.00 – 14.3014.30 – 14.4514.45 – 15.3015.30 – 16.15

16.15 – 17.00

RegistrationWelcome Speech, Joris Roesems, President Vlaams PleitgenootschapM&A in China, Peter Goes, LinklatersChinese Partners and Due Dilligence, Koen Vanheusden, Belgian Foreign Trade AgencyTechnology Transactions and Trade in and with China, Philippe Snel, De Wolf

FCCC Newsletter No 398, March 3, 2015 Page 6

17.00 – 18.00& PartnersReception

4 legal credits per afternoon were asked at the OVB (Association of Flemish Bars).

Venue: Voka – Vlaams Netwerk van Ondernemingen, Koningsstraat 154-158, 1000 Brussel

Price: Members Vlaams Pleitgenootschap, FCCC and Voka KvK Halle-Vilvoorde: half a day – package deal: €80 / €150 Non-members Vlaams Pleitgenootschap, FCCC and Voka KvK Halle-Vilvoorde: half a day – package deal: €95 / €165

Notice: enrolment in the package deal entitles you to receiving a study book, published by Larcier.

Subscription: Subscription can be made by sending an email at info@vlaamspleitgenootschap.be with reference of your name, first name, company references, telephone number, e-mail address and the date or dates for which you would like to subscribe. We’ll send you a debit note.

The Seminar is organized with the support of the Flemish Chinese Chamber of Commerce andVoka – Chamber of Commerce Halle-Vilvoorde; fits in the Brussels Academy of China and European Studies (BACES) and has been realized by the support of the Huawei Chair.

8th China Green Companies Summit (CGCS) – 20-22 April, 2015 – Shenyang

The China Entrepreneur Club (CEC) cordially invites you to attend the 8th China Green Companies Summit (CGCS) held on the 20th-22nd of April, 2015 in Shenyang, Liaoning Province of China. CEC’s annual China Green Companies Summit (CGCS) is committed to creating a platform for the most influential business, academic and government leaders in China and around the world to engage in thought-provoking dialogues, as well as bolstering long-term collaboration between Chinese and global enterprises. The Summit promotes smart and sustainable growth, and builds partnership through matchmaking events with enterprises and organizations. Our era is being changed by drivers of innovation, game changers that put creativity into action to create values and address social challenges. They change themselves,they change others, they change the world. These innovators continuously generate new business models and entire systems, producing new business values. Innovation and change have sparked a dynamic trend that every ambitious individual – old and young – hopes to be apart of, a trend that is viewed as the key to creating new social values. The 2015 Summit will once again gather visionary entrepreneurs, leading representatives of various sectors, and members of the next generation from China and across the world to talk about their new strategies and visions. They will present their thoughts on new technological and strategic hurdles, new business opportunities that address social challenges, and new growth models that will change the future.

Those interested to participate in the Summit, please send an e-mail to gwenn.sonck@flanders-china.be

PAST EVENTS

FCCC 10th Anniversary and Chinese New Year Reception – 23 February 2015 – Brussels

The Flanders-China Chamber of Commerce (FCCC) organized the FCCC 10th Anniversary and Chinese New Year Reception on 23 February 2015 at KBC Bank in Brussels.

Speeches were delivered by:Mr Bert De Graeve, Chairman Flanders-China Chamber of CommerceHis Excellency Mr Qu Xing, Ambassador of the People's Republic of China in BelgiumMr Stephen Phillips, Chairman EU-China Business AssociationMr Mark Andries, Chief of Cabinet of the Minister-President of the Government of Flanders

There were over 220 participants.

With special thanks to KBC Bank; the Golden sponsors Ageas, Volvo and Huawei; and the

FCCC Newsletter No 398, March 3, 2015 Page 7

Silver sponsors Cosco, Recticel and Maasmechelen Village. This event was organized with the support of the Government of Flanders.

This is the link to the pictures on the FCCC website.

The Flanders-China Chamber of Commerce has about 250 members. Over the past ten years,it has organized 225 seminars with 23,720 participants. The Chamber has received 126 Chinese delegations in Flanders, and organized or supported 14 economic missions to China. FCCC has organized 50 meetings with Chinese and Belgian Ambassadors, Consuls-General and Trade Commissioners. It has published 398 weekly newsletters, 328 sectoral newsletters and 10 other publications. It’s clear from these statistics that FCCC is one of the most active trade associations in Belgium.

This has been made possible by the support of the Flemish authorities. Minister-President Bourgeois has decided to actively support the FCCC also in 2015 – as China is an important component of the strategy of the Government of Flanders – to put Flanders on the map as an investment area and to support Flemish companies on the Chinese market.

AUTOMOTIVE

BYD’s profit falls 20.8% for 2014

Chinese carmaker BYD, partly owned by Warren Buffett’s Berkshire Hathaway, has reported a20.8% year-on-year drop in preliminary net profit for last year, due to slower domestic market growth and declining profitability in its solar energy businesses. The result came in at the lowerend of the company’s prediction for a fall of between 9.59% and 22.25%. Net income of CNY437.9 million fell well short of the CNY687.5 million expected by analysts in a Bloomberg poll. BYD’s shares have tumbled 27% from a year earlier on speculation that Buffett was planning to sell his stake in the electric-car maker. The company’s operating revenue grew 10.3% to CNY58.3 billion for the year.

• Chinese car parts maker Wanxiang Group will push back its planned relaunch of the defunct Fisker Karma hybrid sports car until the middle of next year and rebrand Fisker Automotive as Elux. Wanxiang, which acquired the assets of Californian-based Fisker Automotive a year ago in a bankruptcy auction in the United States, had hoped to revive the Karma this year. The revised version of the Karma would be renamed Elux Karma and the Fisker name would be dropped.

• Volvo Cars, owned by China’s carmaker Geely, posted strong earnings for 2014 as its China performance offset a slowdown in the United States. The operating profit rose 17.4% USD302 million last year. It delivered 465,866 cars, up 8.9% from a year ago. China, its biggest market in the world, contributed to the increase with 80,000 cars sold. However, the sales figure is still a long way from realizing Volvo Cars’ ambition of boosting its global sales to 800,000 annually in the medium term.

FINANCE

PBOC cuts interest rates second time in three months

The People’s Bank of China (PBOC) cut interest rates for the second time in three months as inflation cooled and the authorities stepped up stimulus measures to curb the economic slowdown. The one-year benchmark deposit rate was cut by 0.25 points to 2.5%, while the one-year lending rate dropped 0.25 points to 5.35%. In its latest move to liberate interest rates,the PBOC said banks can offer deposit rates of up to 30% above the benchmark, widening theprevious permitted margin of 20%. Under the new terms, the ceiling on the one-year deposit rate will be 3.25%, down from 3.3% before the rate cut. The reduction in the lending rate willmean lower costs for local businesses, while homeowners with a 20-year, CNY1 million mortgage will see their repayments fall by about CNY144 a month. The PBOC said it is not relaxing its monetary policies but rather is using monetary tools to keep actual interest rates at a “suitable level” to support economic growth, prices and employment. The latest reduction – the second since late November – came three weeks after the central bank lowered reserve requirements for banks, freeing up more funds to lend to companies.

FCCC Newsletter No 398, March 3, 2015 Page 8

• Hang Seng Bank Chief Executive Rose Lee said the bank has not decided whether to sell its stake in China’s Yantai City Bank. Hang Seng Bank bought 20% of Yantai City Bank for CNY800 million in 2008, becoming its single largest shareholder.

• 3.27 billion virtual red envelopes were sent and received by WeChat users between February 18 and 23, with 1.01 billion of them exchanged online on February 18, LunarNew Year's Eve. Alipay, China's largest online payment tool under an affiliate of Alibaba Group Holding, said more than 100 million of its users sent or received digital red envelopes during the Spring Festival.

• Samsung Electronics gave a big boost to Seoul's ambitions to become a global hub for the offshore yuan business, saying it was preparing to start trading the Chinese currency directly with the South Korean won. South Korea became the third country in the world to begin direct trading of the yuan with a local currency.

• Agricultural Bank of China (ABC) is planning to sell as much as CNY40 billion of securities in the domestic market to help meet Basel III standards. The offering would follow an earlier CNY40 billion issue of so-called additional tier-1 preference shares in October last year with a 6% coupon that made the lender the first Chinese bank to sellsuch debt in the domestic market.

• The Shanghai Gold Exchange is preparing to link gold markets in the city and Hong Kong to strengthen China’s gold pricing power. The link would open as early as June. It would allow foreign investors to trade yuan-denominated gold contracts in Shanghai although details were not released.

• Hong Kong’s Securities and Futures Commission (SFC) has identified about 600 Hong Kong and mainland funds for participation in the soon-to-be launched mutual recognition scheme allowing cross-border fund sales. About 100 Hong Kong funds were qualified, while there were about 500 mainland-domiciled funds that would be allowed to trade in Hong Kong. No hedge funds or derivatives funds can be sold underthis scheme, only simple bond and equities issues.

• Five city banks listed in Hong Kong and mainland China have been allowed to cut their required reserve ratio (RRR) by an extra 0.5 percentage points as part of fresh efforts to pump up liquidity and aid small firms. Shanghai-listed Bank of Beijing and Hong Kong-listed Sheng Jing Bank announced the move via stock exchange statements. The other three are Bank of Nanjing, Bank of Chongqing and Huishang Bank.

• The Postal Savings Bank of China (PSBC) is in talks over the sale of a 15% stake to strategic investors for USD6 billion this year before launching an initial public offering (IPO) next year worth up to USD25 billion. PSBC is a market leader in an environmentwhere few financial institutions have dared to tread – China's largely poor countryside.

• Taiwan has become the hottest place for international issuers to raise renminbi this year, while yuan bond issuance in Hong Kong has slumped. According to Dealogic, CNY1.84 billion worth of dim sum bonds had been offered as of February 25, down nearly 70% year-on-year. Meanwhile, CNY943 billion of yuan-denominated bonds were issued in Taiwan, triple the amount in the same period last year.

FOREIGN INVESTMENT

U.S. Chamber says its members will reduce investment amid fears of 'unequal treatment'

Multinationals worried about being targeted in government investigations are scaling back theirChina investments for the first time in a decade, according to a report on foreign-owned operations in southern China. “High-level executives in the West are very concerned about 'unequal treatment' and/or 'targeting' be it perceived or real,” said Harley Seyedin, President ofthe American Chamber of Commerce in South China, after the Chamber published a report onthe issue. “This has lowered their confidence to a point where they would rather wait and see,”he said. 24% of companies planning to invest more than USD250 million last year either cancelled or postponed their plans, while total U.S. dollar investment projections for the next three years dropped 16.9% compared to earlier estimates, the report found. Claims of unfair treatment escalated in 2014 after several high-profile multinationals, including Microsoft, were hit by antitrust probes by Chinese regulators.

• China will sign a series of agreements with countries including Kazakhstan and

FCCC Newsletter No 398, March 3, 2015 Page 9

Pakistan this month as part of Beijing's plan to stimulate economic development along the ancient Silk Road. A USD40 billion infrastructure fund was announced in February by People’s Bank of China (PBOC) Governor Zhou Xiaochuan, creating the vehicle fora New Silk Road economic corridor running overland as well as a maritime version covering key seaborne trade lanes.

FOREIGN TRADE

China-South Korea free trade agreement initialed

China and South Korea have initialed a bilateral free trade agreement (FTA). China’s Ministry of Commerce (MOFCOM) said negotiations have concluded and both sides have confirmed allthe details. The official signing is planned in the first half of this year. South Korea has set a goal of bilateral trade with China of USD300 billion in 2015. Under the FTA, South Korea will eliminate tariffs on 79% of all products, or 9,690 items, from China within 10 years after the implementation of the treaty. In return, China will remove tariffs on 71% of all South Korean products, or 5,846 items. Gu Xuebin, Vice President of the Beijing-based Chinese Academy ofInternational Trade and Economic Cooperation, said that the China-South Korea FTA will provide the impetus for progress toward a China-Japan-South Korea FTA and a Regional Comprehensive Economic Partnership.

Foreign brands dropped from government procurement

China has dropped some of the world's leading technology brands from its approved state procurement lists in what some analysts said was a response to revelations of widespread Western cybersurveillance. The chief casualty was U.S. network equipment maker Cisco Systems, which in 2012 had 60 products on the Central Government Procurement Center's (CGPC) list, but by late 2014 had none. Apple has also been dropped, along with security software firm McAfee and network and server software firm Citrix Systems. The number of approved foreign tech brands fell by a third, while less than half of those with security-related products survived the cull. Cybersecurity has been a significant irritant in U.S.-China ties, with both sides accusing the other of abuses. The CGPC list, which details products by brand and type, is approved by China's Ministry of Finance. The affected foreign companies did not comment. The number of products on the list, which covers regular spending by central ministries, jumped by more than 2,000 in two years to just under 5,000, but the increase is almost entirely due to local companies.

• China is dangerously close to slipping into deflation, the Secretary General of the China Urban Finance Society Chan Xiangyang, said, adding that risk of deflation is greater than many appreciate. Analysts have said the People’s Bank of China (PBOC)will be forced to increase aggressive easing steps in the coming months if price and credit data continue to drift lower.

• China has imposed a one-year ban on the importation of carved ivory items acquired after July 1, 1975. It only affects ivory acquired after the Convention on International Trade in Endangered Species of Wild Fauna and Flora came into force. “The one-yearterm will also provide time for us to observe and evaluate the actual effect of this act on the elephants,” said Meng Xianlin, Executive Director General of the Endangered Species Import and Export Management Office of China.

• China has postponed the launch of its three new free trade zones (FTZs) until the middle of March. The three newly approved FTZs in Tianjin, and Fujian and Guangdong provinces, which were expected to be launched on March 1, have postponed their opening until the closing of the annual sessions of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference(CPPCC). A ceremony for the expansion of the Shanghai zone was also delayed.

• China’s imports of agricultural products are increasing. China imported 320,000 metrictons of fresh milk and 283,000 tons of mutton in 2014, up 73.5% and 9.3% year-on-year, and also purchased 71.4 million tons of soybeans and 383 million liters of wine, up 12.7% and 1.6%, respectively, from a year earlier. The value of its fruit imports reached USD9.19 billion last year, rising 6.3% on a year-on-year basis.

FCCC Newsletter No 398, March 3, 2015 Page 10

HEALTH

TCM compound effective in blocking ebola

A compound in traditional Chinese medicine (TCM) for lowering blood pressure has been found to be effective in blocking the ebola virus. Laboratory tests have shown the compound, tetrandrine, blocks infection of human white blood cells and prevented the disease in mice according to the study published in the journal Science. More research, including on primates, must be carried out before it can be tested on humans. Tetrandrine also inhibited the infection of macrophages, a type of white blood cells, by the virus. These cells are important in the immune system. A treatment based on the compound could be ready in between two and five years. Tetrandrine is found in a root-like Chinese herb called fanji. The ebola virus has killed more than 9,500 people in Guinea, Liberia and Sierra Leone in West Africa since the outbreak started in December 2013.

• A 61-year-old man has become the first person in Hong Kong to die of H7N9 bird flu this season, after contracting the virus during a visit to the mainland. The total number of flu deaths - including from seasonal influenza – now reached 307 in Hong Kong, higher than that during the Sars outbreak in 2003, which claimed the lives of 299 people.

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CrossTainer: air & sea forwarding services

FCCC Newsletter No 398, March 3, 2015 Page 11

IPR PROTECTION

Patent applications lead the world

China recorded 928,000 invention patent applications in 2014, more than that of any other country, for the fourth consecutive year, according the State Intellectual Property Office (SIPO). The office found that about 663,000 inventions had high quality and market value. About 4.9 patents per 10,000 people were filed. In 2014, about 485,000 invention patent applications were filed by enterprises, more than the number filed by individuals, academies orresearch institutes. “It shows that China has already established a new technological innovation system that is strongly bolstered by enterprises,” said Gan Shaoning, SIPO Vice Director. Huawei Technologies, the world's biggest maker of telecommunications equipment, was granted 2,409 invention patents in 2014. In 2014, applications for invention patents accounted for 39.3% of all applications, exceeding that of so-called utility model applications, which stood at 36.8%. The country also plans to set up a standardized IPR service system by 2020.

MACRO-ECONOMY

Domestic consumption surpasses investment

Domestic consumption surpassed investment to become the strongest driving force of the Chinese economy in 2014, indicating that a new growth model has already started forming as the country enters a “new normal” development era, the National Bureau of Statistics (NBS) said. Total consumption accounted for 51.2% of gross domestic product (GDP) growth last year, compared with 48.6% from investment. Net exports accounted for just 0.2% of GDP growth. NBS Deputy Director Xie Hongguang, said: “It means that the consumption-driven growth model has started taking shape, and the economic structure has started improving.” The NBS report also said that per capita GDP increased to around USD7,400 in 2014, up fromUSD6,900 in 2013. The country's leadership has said it is confident of doubling the 2010 per capita GDP of USD4,300 by 2020. Per capita disposable income was CNY20,167 last year, upby 10.1% on 2013. Economists said that an ongoing steady increase in personal income will support further growth in consumption in the near term, as investment and exports show weaker growth momentum, dragged down by domestic industrial overcapacity, property oversupply and sluggish outbound demand. International ratings agency Standard & Poor's announced it had cut China's GDP forecast to 6.9% this year, the China Daily reports.

• The official Purchasing Managers’ Index (PMI) ended at 49.9 last month, edging up from 49.8 in January, according the National Bureau of Statistics (NBS) and the ChinaFederation of Logistics and Purchasing (CFLP). The reading was again below the demarcation line of 50 which separates expansion from contraction. But as the PMI ended a four-month downward trend, it also reflected a stabilizing economy. The non-manufacturing PMI rose to 53.9 in February from 53.7 a month earlier, showing a moderate growth in the services sector.

• The weak global dairy market, hit by an oversupply and a tail-off in Chinese demand that has driven international milk prices down by about 50%, is unlikely to pick up soon, analysts say. China was one of the world's fastest-growing dairy markets, but consumption has dried up after previously high prices cut domestic demand, leaving excess stocks of imported milk powder. “It might be another six months before the outlook improves,” said Susan Kilsby, Analyst at NZX Agri.

• China will make more small and micro businesses eligible for tax breaks in an effort to encourage innovation and boost employment at a time of downward economic pressure. Businesses with annual taxable incomes below CNY200,000 will be eligible for a 50% reduction of their business income tax. The measure will be effective from January 1 of this year to the end of 2017. Tax breaks for small and micro businesses in China totaled CNY61.2 billion last year.

• Manufacturing activity in China is likely to have rebounded this month, HSBC Holdingssaid as it released the flash estimate of the Purchasing Managers Index (PMI) at a four-month high of 50.1, compared with January's level of 49.7 and December's 49.6 reading. However, new export orders contracted for the first time since April 2014, withthe sub-index sinking three points to 47.1 this month, the sharpest fall since June 2013.

• The raw materials industry in China is expected to grow around 8% this year, the

FCCC Newsletter No 398, March 3, 2015 Page 12

Ministry of Industry and Information Technology (MIIT) said in a report. The industry expanded 8.3% in 2014, 2 percentage points down from the year before. But the cement industry saw a drop of 18.7% in investment last year. In 2015, the governmentwill tackle overcapacity by pushing competent companies to seek mergers or acquisitions in sectors like steel, electrolytic aluminum, cement and chemical fertilizer.

• Women from the mainland and Hong Kong again dominated the annual Forbes list of the 50 most powerful businesswomen in Asia, with 14 top female decision-makers making the grade this year. Two of Alibaba's top businesswomen were on the list: Maggie Wu, Chief Financial Officer (CFO), and Lucy Peng, Chief Executive of the Ant Financial Services affiliate.

• The National People’s Congress Standing Committee has approved a pilot scheme to amend the rules on the sale of land in the countryside, a volatile issue that regularly sparks protests among farmers. Rural land is state-owned and controlled by village collectives. The reforms include giving farmers more compensation for land seized by local authorities for development projects. The trial scheme will also allow farmers to sell the right to use part of their land to others within their village. Buildings such as village-owned factories will also be allowed to be sold on the open market. The pilot scheme will be introduced in 33 counties.

• The National Development and Reform Commission (NDRC) has named robotic, gas turbine and ocean engineering equipment industries as priority industries for the further development of the industrial capacity of the Northeast, the economies of Liaoning, Jilin and Heilongjiang provinces. Meanwhile industries such as nuclear and coal power, railway transport, petroleum and metallurgy as well as machine tools will be upgraded to tap overseas markets.

• Guangdong is rolling out a province-wide pilot scheme that will let domestic companies invest in any part of the economy that is not clearly labeled out of bounds. The “negative lists” system is part of a push to revitalize the economy and is a departure from the usual practice of limiting investors to specific activities. It is expected to cut the approval process and reduce opportunities for corruption. From March 1, investment in areas not on the negative lists could get approval in five days, compared to the minimum 270 days.

• More than 200 million rural households around the nation will be interviewed as part ofefforts to prepare an accurate record of farmers’ rights. China will spend about CNY26billion to help identify and register the contractual rights over the nation’s arable land to pave the way for rural reforms. The Land Administration Law states that the ownership of rural land belongs to village collectives, with farmers given contractual rights to the land they farm for 30 years.

• The National Development and Reform Commission (NDRC) announced that from April 1 the city-gate price of the currently-delivered volume of gas would be raised by CNY0.04 per cubic meter, while that of incremental demand would be lowered by CNY0.44 per cu m, or around 15%. Barclays’ analysts said in a client note that the adjustments would result in a price cut of around 3% for industrial users. City-gate refers to the price at which pipeline operators pass ownership of gas to distributors at the city level.

MERGERS & ACQUISITIONS

Cheung Kong shareholders approve reorganization

Cheung Kong (Holdings) shareholders approved the reorganization proposed for the companyand associate Hutchison Whampoa. Li Ka-shing – Asia's richest man and the Chairman of both Cheung Kong and Hutchison, which have a combined market capitalization of HKD797.24 billion – announced on January 9 that his two flagship companies' non-property assets, including ports, telecommunications, retail, infrastructure and energy, would be injected into newly formed CK Hutchison Holdings, incorporated in the Cayman Islands.

• China’s Bright Food Group Co is negotiating to raise the stake it plans to buy in Israel’s largest food company, Tnuva, to over 70%, and the deal is expected to be concluded in April. Bright Food originally planned to buy a 56% stake from Apax Partners, a London-based private equity firm. Tnuva’s products, such as frozen pastries and various kinds of cheese, are sold in the Middle East, Europe and the

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United States.

REAL ESTATE

Real estate registration takes effect

The Provisional Regulation on Real Estate Registration took effect on March 1, feeding speculation that a property sell-off looms as corrupt officials scramble to unload property acquired with illicit gains. But as long as a “unified information platform” is not established, it will be difficult to levy property tax on a national scale. This is not expected before 2017, although such taxes can be imposed within cities. Li Miaoxian, Analyst with Bank of Communications International Holdings Co, said that the essential function of the regulation is to consolidate the property ownership data that has been scattered among numerous jurisdictions. Doing so will enable the authorities to trace how many properties an individual holds in different locations. By 2012 the Ministry of Housing and Urban-Rural Development had integrated housing information in 40 cities, but plans to expand it to 500 cities were delayed for various reasons, the China Daily reports.

• Country Garden plans to raise an undisclosed amount in senior notes to refinance its existing USD900 bond that will mature in 2018, the Chinese property developer said ina filing with the Hong Kong stock exchange. The latest fund-raising plan by the property developer comes shortly after it raised HKD3.2 billion in a rights offering last year, when the company announced it would cut its funding cost by half to 4%.

• Hong Kong homebuyers will have to pay a higher down payment for properties under HKD7 million in a new measures taken by the Hong Kong Monetary Authority (HKMA) after prices in the city's residential market hit an all-time high. It is the seventh lot of measures introduced to cool the market since February 2013.

• New home prices in China fell in February again amid slack sentiment among buyers and real estate developers during the festive season. The average price of new houses in 100 cities dipped 0.24% from a month earlier to CNY10,539 per square meter, the China Index Academy said. That followed a 0.21% rise in January, which was the first gain in nine months. The Spring Festival holiday period is a traditional lowseason for property purchases.

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RETAIL

Yonghui Superstores sells shares to Dairy Farm

Yonghui Superstores Co, a Fuzhou-based supermarket chain and one of China's Fortune 500 companies, has completed the sale of CNY5.7 billion worth of shares, around 20%, to Dairy Farm International Holdings to fund various expansion projects including the setting up of an e-commerce platform. It is the second time Yonghui has raised funds by selling stock after it went public on the Shanghai Stock Exchange in 2010.

• Anta, the largest Chinese sportswear firm, posted full-year profit growth of nearly 30%.Anta Executive Director James Zheng said its goal was to become the No 2 sports brand in China by 2020, surpassing either Nike or Adidas. “Based on our understanding, right now Nike's market share is more or less 18%, and Adidas 15% to16%,” Zheng said. “We are about 13%. The closest Chinese firm would be Li Ning with about 8%.”

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SCIENCE & TECHNOLOGY

Beijing Language and Culture University to set up Tokyo campus

Beijing Language and Culture University (BLCU) is set to open a campus in April in Ikebukuro,a commercial district of Tokyo. One of the reasons behind the move is that air pollution is deterring Japanese students from studying in Beijing. Students in Japan will be able to obtain the same degrees and diplomas as in Beijing. The Tokyo campus will be the first Japanese venture by a Chinese university since Tianjin University of Traditional Chinese Medicine set upa school in Kobe in 2006. More than 150,000 foreigners have studied at the university, which designed the standard HSK (Hanyu Shuiping Kaoshi) test system for learning Chinese.

• The Standing Committee of the National People’s Congress (NPC) has reviewed a draft law amendment that aims to facilitate the transfer of inventions made in research institutes and universities to commercial development. The revision aims to introduce incentive mechanisms that motivate research establishments and scientists, and ensure enterprises play a leading role in the process of making academic inventions more market-oriented.

• The amount of Chinese Government Scholarships for foreign students has been raised. The amount for undergraduates has been increased to a maximum of CNY66,200 a year. Master's students receive up to CNY79,200, while doctoral students collect up to CNY99,800. Universities keep part of the scholarships for expenses such a lodging. The amount for living expenses ranges from CNY2,500 to CNY3,500 a month.

• Argentina has approved the installation of a Chinese satellite tracking station in Patagonia. President Cristina Fernandez de Kirchner's government has said the project is part of China's plans to reach the moon in 2020. The satellite station will be used for monitoring and downloading data through an antenna with a 35-meter diameter. It is expected to cost some USD300 million and will be operational next year.

STOCK MARKETS

Stock index closes lower after holiday

China's main share index overlooked positive manufacturing data, and instead focused on the absence of any new monetary policy stimulus, to close 0.56% lower on the first day of trading after a week-long Lunar New Year holiday. Concerns about the health of the wider economy, growing at its slowest pace in 24 years, took center stage, with the Shanghai market erasing its gains for the year. The Shenzhen Composite Index also finished in the red, by 0.77%.

• The Hong Kong Securities and Futures Commission (SFC) has banned He Zhihua, a former head of Ping An Securities (Hong Kong), from regulated activities in the securities industry for a year for failing to ensure the company had enough measures against money-laundering in place. The regulator had fined Ping An HKD6 million in July last year over the same issues.

• The boost to Hong Kong Exchanges and Clearing's turnover from the Shanghai stock connect scheme in recent months has brokers expecting good profit growth figures when the bourse operator announces its results later this week. Credit Suisse expects HKEx to report net profit of HKD5.08 billion for last year, up 12% from 2013.

• Luxembourg's financial regulator has approved four funds to invest through the Shanghai-Hong Kong stock through train scheme and more approvals may be grantedsoon. Luxembourg, the world's leading fund-domicile center, has more than 3,900 active equity funds with €3 trillion in assets under management.

TRAVEL

Number of Chinese tourists traveling abroad up 10%

Chinese tourists made more than five million trips abroad during the Lunar New Year holiday, a 10% rise on the same period last year. The most popular destinations were neighboring

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Asian countries including Thailand, Japan and South Korea, the China National Tourism Administration (CNT) said at the end of the holiday period. The increase was partly prompted by favorable exchange rates and eased visa policies for Chinese visitors. The number of passengers flying in and out of Shanghai's Hongqiao International Airport during the main holiday period, February 17 to 23, rose by 40% compared with the same period last year. Taiwan meanwhile hopes to become a transit point for mainland Chinese traveling abroad. If an agreement can be reached, Taoyuan International Airport in Taipei expects to receive an extra one million passengers a year. The number of mainland tourists who came to Hong Kong in the first five days of the Lunar New Year public holiday fell this year for the first time innearly 20 years. Immigration Department figures showed that 675,155 mainlanders entered Hong Kong during the five days, down 0.16% from last year. By contrast, the 676,297 mainlanders who visited Hong Kong in the same period last year represented a 13.7% jump from 594,302 in 2013. The Hong Kong government wants to further limit the numbers. The individual visit program involving 49 mainland cities should not be expanded but tightened up, Hong Kong Chief Executive Leung Chun-ying said.

• Taiwan is to increase the number of tourist visas it offers to mainlanders, targeting richvisitors who can afford to spend at least NTD11,000 a day during their trip to the island. Under the program, mainland tourists must fly directly to Taiwan and stay in at least four-star hotels, said David Hsieh, Director General of the Taiwan Tourism Bureau. Taiwan now allows in 5,000 mainland visitors in tour groups and 4,000 solo tourists each day. Some 3.4 million mainlanders visited Taiwan last year, making up 44.3% of the total number of tourists.

• The number of tourists visiting Shanghai over the week-long Spring Festival holiday rose 4.8% year-on-year to 3.8 million, while tourist revenue in the period gained 4.9% from last year to CNY3.75 billion, the Shanghai Tourism Administration said. Admissions at the 120 tourist attractions monitored by the Administration rose 6% from last year to more than 3.5 million.

• Beijing plans to introduce electronic payment for roadside parking to regulate the market and collect all the fees it is owed. The capital has more than 40,000 parking spaces, which should have generated more than CNY300 million last year for the government. However, less than half of the fees collected by companies has been turned in as government revenue in a number of major cities.

• Chinese airlines operated over 60,000 flights during the week-long Spring Festival holiday, up 7.8% from last year. They carried more than 1.35 million passengers on February 23 and on February 24, hitting an all-time daily high. Chinese passengers made 8.25 million trips by air during the week-long holiday, up 7.3% year-on-year.

• Japan’s tourism industry is taking a 3,000-strong delegation to China on May 22-24 to try to attract Chinese tourists. China has been the world’s fastest growing source of tourists over the past decade and more than 100 million of its nationals are expected to make trips this year.

ONE-LINE NEWS

• The Central Commission for Discipline Inspection (CCDI) has pledged to persist with its iron-handed crackdown against corruption and other misconduct. It cited President Xi Jinping's recent remarks that the situation in the anti-graft campaign is still “grim and complicated” and that although corruption levels are falling, the problem remains.

• Shares in China Petroleum and Chemical Corp (Sinopec) and PetroChina Co rose on the first trading day after the Spring Festival holiday following rumors the two companies were about to be merged. The combined company would be twice the sizeof Exxon.

• China (including the mainland, Hong Kong and Taiwan) maintained its place as the top of market for arts sales, according to the annual report by Artprice. The area realized USD5.6 billion in sales, closely followed by the United States.

• As a result of the national anti-graft drive, 31 newly elected Deputies to the NPC and 13 new CPPCC Deputies will fill vacancies following the dismissal of Deputies being investigated for corruption. Those dismissed include Ling Jihua, a former Vice Chairman of the CPPCC.

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• A train running on the Yiwu-Xinjiang-Europe cargo line from Yiwu in Zhejiang provinceto Madrid has completed its first round trip. Yiwu is the world's biggest market for smallcommodities, and the line will boost trade between the city and Europe. The train set off from China to Spain on November 18 carrying 82 containers and arrived in Madrid 21 days later. It returned to Yiwu on February 22.

• Shanghai had 24.3 million residents at the end of last year, of which 14.3 million were registered citizens and 10 million were migrants who had been in the city for more than six months. The population increased by 105,300 in the year. The average life expectancy was 80 for men and 84.6 for women.

• The Duke of Cambridge, Prince William, has begun a four-day visit to China, the first one by a senior British royal in almost three decades. The last such visit was by Queen Elizabeth II and Prince Philip in 1986. Chinese President Xi Jinping met Prince William.

• A documentary about air pollution has gone viral online, attracting more than 100 million viewers within 24 hours. Chai Jing, a former reporter and anchor at China Central Television, spent more than CNY1 million on making “Under the Dome”. The 103-minute film is divided into three sections－ what smog is, what causes the heavy smog in China, and what can be done to control it.

ANNOUNCEMENTS

5th China (Sichuan) Imported Commodity Fair

The 5th China (Sichuan) Imported Commodity Fair (SICF) will be held inChengdu on June 19 –22, 2015. The exhibition area will cover 20,000 square meters, and the scope of exhibits includes fashion & featured products, food & beverages, consumer electronics, outdoor products, international famous brands and service trade etc. China will import about USD10 trillion of goods and services in the next five years. This could provide unprecedented opportunities for foreign enterprises to expand on the Chinese market. The SICF is the professional exhibition platform built by Sichuan province for foreign enterprises to exploit the market in western China. The Sichuan CCPIT could offer a discount for booth fees, help to organize B2B workshop, provide one year’s free display opportunity for the exhibits’ samples in the Sichuan Provincial International Commodity Display Center, and provide the legal services of intellectual property protection and assistance on exhibits' custom clearance. Now, more than 10 countries have confirmed their participation in the fair, including France, Italy, Canada, South Korea, Thailand, Malaysia, Vietnam, Cambodia, and Nigeria. For more information, visit the official website: http://www.westimportfair.com/

6th China (Guangrao) International Rubber Tire & Auto Accessory Exhibition

As one of the most professional and most influential rubber tire expos, the 6th China (Guangrao) International Rubber Tire & Auto Accessory Exhibition will be held in the Guangrao International Expo Center in Shandong province on May 15-17, 2015. it will offer thebest platform to get in touch with the global tire industry. As a world famous rubber tire industrybase, Guangrao has more than 100 rubber tire enterprises with one-fourth of China's tire production capacity. The total expo area will reach 40,000 square meters and 150 tire companies have already applied as exhibitors. Nine of them are in the world's top 500 (American Emerson, Japanese Mitsubishi, Gemany's Lanxess, CNPC , FAW etc.) and 25 are in the global top 75 rubber tire companies. The exhibition will also organize a series of on-site activities like visiting tire & auto parts production bases.

E-mail: wp7677@chinagr.gov.cn wp7677@163.com website: www.chinagr.gov.cn

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The FCCC Newsletters are edited by Michel Lens, who is based in Beijing and can be contacted by e-mail michel.jc.lens@gmail.com . Disclaimer: the views expressed in this newsletter are not necessarily those of the FCCCor its Board of Directors.

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