Twofish's Blog

May 24, 2007

Response to Lung Ying-Tai

Filed under: china, politics, taiwan — twofish @ 3:17 am

Here is a good link to Lung Ying-Tai’s speech at Cambridge University.  While Lung argues that the international community does not understand Taiwan, I think that one major problem is that many in Taiwan do not understand the constraints of the international community.

The international order is based on relations between “states” and “statehood” is a status that involves recognition by other states and it is something that is rarely given.  The problem is that if you look at any international boundary, it is one that is the result of historical accident and random circumstance.  Question one boundary, and they all are questioned.  Recognize one state over the objections of another state then this opens the door to all groups which aspire to statehood to have their claims recognized.  Taiwan can come up with some good arguments why it should be recognized as a state, but so can hundreds of other groups.  Recognize Taiwan, then this gives the green light for everyone else to press their claims, and since almost every existing state has some secessionist claim, this would create a threat to existing states.

The second issue is that international law is an effort to create some global rules that prevents raw power from constantly being used.  The trouble is that the rules that are created while they can regulate and the direct raw power, they cannot ignore power, and to create rules of international behavior that ignores the political, military, and economic strength of the People’s Republic of China simply ignores reality.  What many in Taiwan would like to see is an appeal to abstract international rules that ignore these political realities, and this is unworkable.

Finally, in trying to appeal to the international community but yet ignoring the real concerns of the community, Taiwan is increasing finding its position more and more ignored.  By insisting on participation in the global community on terms that unambigiously recognize Taiwanese statehood, and rejecting forms of participation that leave the status of Taiwan ambigous, Taiwan presents itself as simply unwilling or unable to understand the real concerns of the international community, and that decreases sympathy for Taiwan in diplomatic circles.  Participation in the international community involves not only rights but also responsibilities, and many of the actions of the government on Taiwan give the impression that Taiwan does not recognize the serious responsibilities that being a global citizen involves.

What I find disturbing is the existence of a bad cycle.  Because Taiwan is isolated from the international community, Taiwan is unable to understand the concerns and realities of the international community, and this leads to further isolation.  To be blunt, Taiwan thinks that is it more important than it really is, and that abstract principles of “human rights” and “democracy” carry more weight in the international community than they do, and underestimates the importance of political, military, and economic power in determning what actually happens.

The truth is not that the international community does not understand Taiwan, the truth is that they do not care that much about its aspirations.  Taiwan is merely one of dozens of flashpoints and hundreds of regions with aspirations to statehood.  Any effort to unilaterally push statehood upon the world rather than undertake joint problem solving will only add to Taiwan isolation, and people on Taiwan really need to understand this.

May 19, 2007

Jim Mann’s commentary on Washington Post

Filed under: china, new york city, politics — twofish @ 3:43 pm

A few comments:

1) First of all, it isn’t clear to me that people who believe that markets and capitalism will lead to political liberalization are wrong.  Something that Mann doesn’t mention is that during the 1970’s, economic growth in Latin America, South Korea and Taiwan managed to increase the power of the authoritarian governments there.  What happens is that either the economic growth continues (South Korea and Taiwan), in which case you end up with a middle class which pushes for political liberalization, or it stalls (Latin America) in which case you end up with demands for political change.  There is one example where economic growth *didn’t* lead to political change and that is Singapore.

My own belief is that history is not determinstic, whether mainland China ends up with a multi-party political system like Taiwan or a one-party authoritarian system like Singapore will be determined by accidents and choices that cannot be forseen.  What I’m trying to do is to do whatever little part I can to develop institutions and frameworks so that whatever happens, mainland China will be able to cope with whatever history throws at it without falling apart.

2) I think that Mann for overestimates the degree to which the rhetoric of democracy has actually influences US foreign policy.  Sure there are a lot of people who were arguing that trade will advance democracy in China, but there were equally large numbers of people who were arguing that trade would retard democracy in China.  The interesting thing is that for the most part, these groups were just putting a spin on their own self-interest.

Mann has been criticized (rightly) for not presenting any concrete policies.  He argues that he is calling for the US to merely interact with China on the basis of self-interest rather than flawed abstract ideas.  I don’t see how this is fundamentally different from the policies that the US has followed for the last hundred years.  People figure out what their self-interest is, and then adopt “democracy” and “freedom” to sell their self-interest.

Take Mann’s suggestion that the US should be tougher about the revaluation of the RMB.  This neglects the fact that there are some groups in the United States that benefit from a cheap RMB, the housing market, Walmart, the electronics industry.  There are also groups in the United States that lose from a cheap RMB, organized labor, manufacturing states, and so forth.  When you add together all of these different interests together, I don’t think that you end up with a policy that is very different than what the US has been doing.  This is because US policy *has* been based largely on self-interest, and the democracy and freedom talk is there just for marketing.

However, Mann misses the *real* problem with US foreign policy and that is that by using the concepts of “democracy” and “freedom” to justify self-interest, the US has brought those concepts into disrepute.  US interests in the Middle East are to prevent a terrorist attack on the American homeland, and to insure a secure supply of oil to the US economy.  These are basically self-interested goals.  Nothing wrong with a little self-interest.  But by trying to *deny* that those are self-interested goals and by using the democracy and freedom to justify that, the US has damaged those ideals globally.

Let me give an example, of how national self-interest makes the US look bad.  Cheney’s justification of the Iraq War that we are fighting in Iraq so that we don’t have to fight on the streets of NYC.  Can you imagine how awful that sounds to the typical Iraqi?  The elaborate lengths that the Bush administration has gone through in order to make sure that the detainees in Guantanamo don’t have the legal protections of American citizens.  What is the average Zimbabwean supposed to make of that?  And then the US talks about democracy and freedom?

So what do I think the United States should do?  I think that first of all, the United States should stop talking about democracy and freedom.  At this point, anything the United States does to *talk* about democracy and freedom is just going to make the situation worse.  Rather, I think that the United States should act in ways that are consistent with its stated principles.  People are smart and if the United States acts in a way that protects democracy and freedom within the United States, there is no need to promote oneself.   Resolving the Guantanamo detainees is a good start.  Having a real national debate on what to do with the mess in Iraq in which the common man in the United States is treated intelligently is another.

Finally, I leave with one troubling question.  One crucial difference between China and the old Soviet Union is that China has no interest in exporting it’s political model.  Yes, China deals with dictators in Burma, but it also deals with democracies like Japan.  It tries to have good relations with North Korea, but it also tries to have good relations with South Korea.  China claims that it’s system is the best system for China, but it’s ideology explicitly states that different countries have different historical circumstances and that the political system of a country must respect those different historical circumstances.  Even within its borders, China “practices what it preaches” and has a political system in Hong Kong which is very different from the one in Shanghai which it justifies based on special historical circumstances.

Meanwhile, the United States insists that the only correct development model is one that involves multi-party democracy and that the rest of the world has to adopt a political system similar to the United States in order to be considered civilized.

So I ask this question.  Which viewpoint is more consistent with the ideals of freedom and democracy?

May 7, 2007

Returning to New York City

Filed under: new york city, quantitative finance — twofish @ 4:32 am

Back in New York City after travelling from MIT via FungWah Bus.  I’ve been rather quiet about what has happened to me over the last month, and that’s because adjusting to a new life is difficult and stressful (although it’s mostly fun difficult and fun stressful).  The other thing is that the rules about what I can say and what I can’t have changed a bit, and while I’m figuring out what the new rules are, I’d like to stay on the quiet side about my work.  Once things settle down a bit more, I’ll talk more.

One of the things that struck me as I saw Manhattan from the Triborough Bridge this morning is how the City has an entirely different character on bright, beautiful days like today than it does on rainy days or at nights.  Most of the previous times that I’ve gone back to NYC it was on an airport shuttle from JFK or transferring from the Newark PATH train at Penn Station in the middle of the night, and the City has an omnious overwhelming feel.  Something similar akin to the movie Blade Runner.  When it rains, there is a sad grey pale over the City.  Today was one of the first times I’ve entered the City in mid-day in good weather, and from a distance the buildings of Manhattan appear in light pastel colors, mostly blue, and the City was beautiful and optimistic.  It’s been said that Superman’s Metropolis is New York in the day, and Batman’s Gotham is New York after dark, and this is rather accurate for how drastically the mood of the City changes.

When I was growing up in the 1970’s, New York City was in the depth of financial crisis, and the talk there was about “urban decay” and “suburban flight.” Before my latest series of trips here, the last time I came was in 1989 which was right before the urban renaissance.  I suppose some of the fear that I had in coming here was related to these childhood and college associations.

One curious thing is that how the internet has actually caused more centralization in some cities.  Because the world is flat, industries that require a lot of close social interaction, like finance, tend to attract people from across the world.  The internet has made it easier to transmit information, but easy transmission of information has also made it easier and more efficient to transport people and physical objects, and this
causes some centralization rather than decentralization.

Notes on MIT Economics Talent Forum Conference – May 5

Filed under: china, economics, finance, massachusetts institute of technology — twofish @ 4:07 am

Here is a dump of my notes.  Will add more comments later

China is crucial juncture – from Shanghai

next phase food -> modernization

more open
more reform

two prong
domestic harmonious society

peaceful development
common development

Stable environment for development

China talent is important

Cadres important – talent can play bigger role

Talent is important – competitive in flat world – competition is competition of talent.  Chinese government pays attention to talent.

Two elements

1) more talented people in economic development
2) absorb more talented people from overseas

Contribute to China’s development and seek more opportunities for yourself.


Enwei Xie – Microsoft China

Innovated in China ; Innovated for the world
Server and tools business (China)
Microsoft China R&D Group

Redmond – Server and tools business – $10 billion revenue rapidly growing
Started doing china several years back – moved family a year and a half ago

Globalization is everywhere.

Cauasian in Iowa – 11 year old son is studying Chinese

Mission: To enable people and businesses throughout the world to release their full potential

Level of technology is amazing

Microsoft China R&D early 1990’s – talent pool

Basic research – 20 and 30 years down the road – multimedia, server,
2003 – Development centers
2006 – Formally formed Microsoft China R&D group

China – high-end innovation – take advantage of local knowledge
importance of partnership – technology innovation

Microsoft China in the news

Lenovo – home server – people will have multi-terabytes in their hoe

Amoy – Cell phone / mobile tech

Not China-specific.  These products are global

China is open minded.  No legacy.  Good trial platform

Text to speech
Speech recognition is hard

Research – Microsoft Research Asia
Development – Microsoft Advance Technology Center

Chinese text to speech is listed as one of the top ten favorite local features

Not just technology innovation.  Business model innovation.
Operational innovation.  K-12 schools.  How do we bring technology to
them?  Software + services – China is a testing ground – China does
not have legacy IT.


US-based teams and China-based teams – Management differences

Ten years in Redmond.  Shanghai 85% teams and joint development

Management – Emphasize management on values of company.  No difference where you are at.

Cultural awareness.  The way that you deliver value might be
different.  Open respect.  Contrast Chinese/American.  US is open.
China is extremely respective.  Meetings are boring.  Not right to
challenge in open forum.  But value is the same.  More one and one
dialogue in meetings, more structure in meetings.  Lead controversial

Anchor philosophy around company culture and be aware of regional
culture to match approach.  Distributed development.  What do you do
in a joint development environment.  Lots of rotation programs.
Redmond to Shanghai and vice versa to increase awareness.

Compared to R&D development.  Strengths and weakness of the four areas.

30+ years in making.  Redmond-centric.  China feels more like a start
up.  Redmond more mature company.

Basic research – very good in China – Microsoft research is young – Application/customer focused.

Product development – many differnces – Shanghai challenge – lots of
raw talent – end to end – program managers – customer connection
interactions.  Lacking programing managers and lacking design
capability.  Weaker design capability.  Leadership is interesting.  US
based recruiting team – reaching out to leadership talent.  Newly
development society


Technical innovation – great

Strategic partnership – great – CEO in China.  Corporate VP.  Strong
in local relationship.  Used to run Motorola China.  Great.  Better
than US.

Continuous development.  Continuous maturity.

High demand.


Xie Weihe – VP Qinghua University.

Higher education – Why does China develop so fast these years?  A lot
of factors.  Open policy.  Long term reform in political economy and
total system.  But not in this area.

Talent is one factor to improve development.  Develop very fast in
higher education and basic education.  Also promotes economic

1911 – School
1928 – NTU
1937-1947 – Southwest Associated University

1952 – Became a multi-disciplinary university of technology –
non-technology moved to Beijing

1978 – 2000 back to comprehensive

Management – close relationship to Sloan school

2000+ facultyry

26000+ total students

2000+ international students from 75 countrial

Education concept

Knowledge, Ability, quality

* solid and broad fundamental for future careers
* learning by doing
* dealing with practical
* creatity

Actions in improving education quality

Salvendy -> operational management  (roundtable)

English Summer Camp

Recruiting best teaching staff

* chair professors
* 100 talents recruiting project
* senior visiting scholar program

Motivating potential young talents in our faculties

* awards to junior faculty


Research-oriented teaching system

– Reduce undergraduate credits from 200 to 170 – get students to do what they like
* Early research training – Student Research Training for undergraduates
* Freshman seminar – small size classes for freshmen
* doctoral student’s forum – a lot of international

Tailored programs from students who have specific interests

science class on math-physics
social science

* Second bachelor degree
* subsidiary major


Practical training

* credits for social practice and internship
* initiated challenge cup in 1989
* innovative design competitions participated in all students in China every year
* participate in worked

Student creative work


Internationalize of education

* joint degree programs
* 1500 students/year going abroad
* English summer camp


English Masters Programs (2007-2008) in nine disciplines


Lots of research projects – Interested in numbers

Research fund – 14.9 yi RMB Yuan


Fuel cell city bus
clean combustion in coal
first biochip with electric and magnetic
largest ipv6 in the world
architecture design

reconstruction old city – how to keep old style

dams and reservious
technology transfer – container development


distance education program: aiding the poor

* 113 distance education stations
* trained 300000 local people

volunteer to rural areas in summers

450 volunteers to teach

70-80 American students

2006-2010 Five year plans

1994-2002 adjusting disclipline structure
2003-2011 making breaking throughts in some fields
2012-2020 overall upgrading to world levels

Developing key disciplines

Information science
material science

* Fostering new research areas
* brain and recognition

Research original teaching systems

* Student scale – Qinghua cannot increase. 20 years ago Qinghua was
biggest.  Today Qinghua is 20th place

* Promoting the advantages
* teaching students according to aptitude
* encourage English
* two more

* Uplifting the level of graduate students

* developing international student programs

Talent strategy


Balance between research and teaching

* More attention to teaching

Not to divide the two !!!!  Even at the undergraduate level – emphasis
research oriented teaching.  Offer opportunities for students to do
student research training.  Students apply for student 1500


Peter Wang

To start a sucessful venture

Program or service

How to start a successful venture
– combination
– complement
– compatibility

Good venture – need all four
* product and service
* finance
* marketing
* management execution

Not just three engineers

What type of company?

Inc or LLC

What kind of business.  There is no answer.  You need friendly
pro-business support.  Delaware – very good pro-business and
administrative support in filing.

NJ new stock – five days to get stock
Delaware – one minute – filing is done
close – file – one minute is done

Huge mistake – Delaware company – audit should move overseas.  China
gives good tax incentives, but US doesn’t recognize since there is no

US – sales immediate recognize profit

Move out to overseas – Can’t do this because reason is for tax purpose.

This is why all US-based company for China is based in Cayman.  This
separates tax code.  legal code separate.  mix legal code is a big


Most people want to create wonder product – Very, very rare to create
miracle product

Type of product:

– new venture is vulnerable to high risk product

* Starbucks – successful – traditional – very good management and execution
* Starbucks get people in China to drink coffee

* Tea – one year after starbuck failed

* new product – add very little component to be successful.  Scully
bad.  Jobs back.  Only thing he did was to change color and triple
sales.  Appeals to students and artists.

Ipod is just an MP3 product.  Iphone just put an I in front.

Add a little bit.  Marketing.  Jobs is a marketing guy.

Start on giant shoulders.  Do everything high risk

* Don’t be copycat.  No copycat wins.  Wahaha.  Feichang Cola –
exactly same design five stars.  collapse failed.  What is this?

* Copy McDonald’s and KFC – exactly American Eagle, Texas Fried
Chicken. Overnight foreign once every one disappears. Nancy same
design – three months gone  Don’t copy.  It doesn’t work.

* New concept.  Very few suceess.  The man that said no to bill gates.
Just moved to Redmond, Bill Gates rode bicycle.  Got offer.  Basic
compiler.  Bad.  Lousy salary $20,000 + options.  What is options?

Not going to do it.  Bill Gates is good businessman.  1990 – Bill
Gates lousy window system.  Why?  Timing.  Very good time.  PC
started populating.

* Marines or Army – Marines take beach.  Sooner or later you get

* Cost of waiting.  When you create a new product.  You don’t know
when people will accept.  This will kill you.

City Vehicle – Very successful – Local codes – noise and dust

Seyour Cray – successful developer – never successful – no market –
can’t sell outside the US

Hupao – spring very good mineral water.

Qingdao hu – license – Nongfu sanquan – Water very good marketing

**** How do we enter into market?

Santong – gift

Naobaijing – Manatoni – starch with highly manatoni

HongtaoK – Iron – Geritol – ethics-wise suspect – good business – iron
is undigestible

Marketing – name brand makes a difference

Second brother —–> Xiao lingtong



+ out of packet
+ angel investment
+ friend and family
+ venture captial
+ private equity/ bank loan
+ public listing

+ Dilution and valuation

Take the money and run.  Money today is better than money tomorrow

Don’t get greedy.

Already got money so they survive when they cash.


Don’t be venture if you want to make money.  Risk is too high.  You
need challenge, enjoyment and challenge, and effort.

Hunan Weishi – no just copy – No real time broadcasting.  American

Cell phone
Huge political issues

Implementation and execution – plan and ground work –


Finance and Venture Capital

Charles Wang

Global liquidity flush

* Rising equity markets around the world
* Increasing M&A activities
* Booming Asian economics
* Global economic integration

Asian financial crisis – And now outforming

China has done the worst – Strong economics does not translate into stock

Reversion to mean

Base for other financial activities

Increasing trend in M&A

Surge in volume.  How long it will last?

FDI into China.  $60 billion/year

Increasing Business and Capital market efficient

* Compnaies more focused and more efficient

* Cross-border capital flows make large scale corporate transactions possible

* Increasing global talent pool and management expertise

* Global VC firms tends to have higher risk tolerance and require
lower expected returns: investment portfolio theory

* China local firms – systematic risk higher lower capital base.  But
small is neautiful

Requirement for successful venture capitalists

* science and technology expertise
* knowledge about business operations
* financial resources
* extensive business and social networks – information asymmetry greater


* Be curious
* Be critical
* Be creative
* Be open-minded
* Know how to deal with failures – normal in equity / log normal in VC


Michael Ma

Chinese Reverse Merger Mania – Is there a better way?

Chinese manufacturer do reverse merger into shell corporation.

Reverse mergers have bad reputation associated with pump and dump schemes.

Most Chinese companies linger.

The Real opportunity

Lenovo and Haier figured it is possible to build a real business in

Among the various forms are through acquisation.

Strong sales networks and operations in decline because of high
manufacturing costs.

They are willing to fund acquisitions by Chinese manufacturers.
Software development, automotive components, textiles and plastics to
name a few sectors.  Structure operations through American companies.

BVI Caymans, now Barbodos.  Chinese operations invest a US business.

American firms excels at sales, marketing, management – as well as
investor relations.

Comparative advantage resides mainly in highly efficient and (more and
more) high quality manufactyuring.

Unfortunately, over-competitation in China has led in many cases to
the trap of low margin OEM manufacturing.

Chinese manufacturers can play from their strength and acquire capabilities in the area their greatest weakness by acquiring US companies.

Fastest and most reliable way to develop effective markets in the US
is to buy companies who already established in the US.

Guangxi is important in the United States.

Mason Zhou

Growth capital fund

Private equity fund – investing in non-listed companies

Blackstone, CPG, KKR – Leverage buyout funds.

GP and LP

1% and 99%


20% – 80%

How do you add values?  Operational enhancement.

Who invests in.  Endowments/Foundations.  Yale is investing in PE.

What invest in PE?  S&P 500 – 10% (20 year) and 14%

PE starting from scratch.

Blackstone KKR – $20-$30 billion buyout

Xindi Qui

BTU – A private equity firm in China’s energy industry

BTU Asset portfolio.

Waltham, Dubai, UAE


leverage energy and capital to meeting demand of energy markets

CPC – Power company in Tunisia
TAPCO – Abu Dhubai – largest desalization in the world
MPC – 18 power plants

MPC – 8322 Megawatt from PESG

Capacity increased 78%.  Revnue growth 50%.

Project pipeline – install capacity to 20,000 MW

– per capita 20% of the US, 30% of Japan in 2005

– elasticity/GDP growth in 1

– petrochemical complex

China ethylene

China LLDPE demand and supply

Downstream integration into Asian gas market

LNG regasification and gas distribution


Masthead – Venture capital trends in China

* manufacturing giant
* large market with an exciting pace of growth
* long term


* Engineering theory as opposed to application
* Poor English skills

* Amount and depth of quality management is sorely lacking.  Few good
teams.  Entrepreneurs tend to be technical strong
* Lack of IP protection
* immature economy – inability to invest and divest
* legal enviroment

27 IPO
14 overseas IPO’s

62 M&A 161.2 million
* technology media telecom
* moving to energy/educaqtion

* VC look for team, market, differentiation
* vc target millde class
* In Beijing and Shanghai starting to move to other areas

* Continued improvements in exit. Partnership Enterprise Law of PRC legal
* Shenzhen GEM.

3i – global investor, local partner

technology is a global business
venture capital is a local cottage industry

$2m to $1 billion buyout.

Focused media

FTSE 100 with $11 billion assets
Formed in 1945, invested in $31 billion over 14000 business

Venture capital
Growth capital

15M to 150M in growth capital – professionalize board

Value add.  Global network.  We can get companies to get from one area
to another.

Why 3i is in China.  Based in UK.  China is the fastest growing.

Ambitious, high-calibre management teams to grow their businesses.

Open to co-investing, prefer lead or co-lead involving representation
on the board.


CNOOC – negative case

Areas that would be difficult to acquire

+ Whirlpool

Competition within the market in the United States

+ Huawei entry

Business takes place using hardball lawyers advancing business
interests.  Lawyers not only structuring, but also offensively.  IP
case easy to make politically regardless of merits.

Higher profile – more difficult

Lower profile – relatively straightforward

Sensitive – defense
Less senstive – auto parts

Appliance have good futures

Auto – PR, consumer expectations

Strategic understand markets – good advisors

– Cui

Renewable energy

Better than other development countries – 1.0 elasticity versus 1.5


Evil stories in VC.  Looking for China.  How do get to VC company?
What do you expect from VC.

We are VC.  Certain things they look for.  We have websites.  Through
networks afriends of friends.  We will try to help.  Get in.  Start
talking to people.

Lots of rhetoric.  VC stealing companies.  Some good.  Some bad.  Do
your due dilegience.

I get two questions

1) I want to VC
2) I want to startup

PE is not something you study.  Go out and do it.  People.  People.
People.  Business plan and talk to investors.  Swamped with business
plans is our jobs, and we like it.

Balance between expartiates and local.  Vetcorp.  Find blend is the
best.  Requires a lot of different type of people.  We need to change
people quickly if necessary.  We changed director operations, and we
didn’t need to change them quickly.

Brand management of acquired company.  Not the same in every case.
But see if the target company will help you market your products.  Are
there any companies I’m currently an OEM for.

Importance of working with advisors.  Chinese companies weakness,
reluctance to hire consultants.  Look at how people in field.

If it a sunset industry is this a good strategy.  Lenovo did they pay
too much money.  Important for Chinese to develop their own brand.
Understand value chain and get higher margin from brand management and
strong financing, that Chinese companies have less of.  Hard to teach
elephant to dance.


What do we need to be IBM and google.

Talk part of capital markets.  Next google, In new media, not too much
regulation.  New media.

Regulation, favor you need to Chinese company.

Grow up intelligently.  Pay people at exit markets.  Reverse merger
get too big too fast.

Starting to happen with Lenovo.  Brand management.  Professional
management.  Stubborness.


China Economy and Societal Development

Rose Luwei Luqiu

Shengyao Jiang

Deng Wei

In Chinese

Starbucks and VT killing

Starbucks in Forbidden City

Dannone vs Zong Qinghou

VT killing and China

Chicago Sun-Times thought this was Chinese

* Self-confident or nationalism
* pride or inferiority
* populist nationalism

What are Chinese most concerned?

* Health care
* Housing
* Education
** Environment
** Affordability

Rich and poor

What Chinese need?

Social justice and equality

Media = Watchdog ?

The power of bloggers in China

– One other outlet for people’s responses
– need portal to back you

Jiang Shengyao

Energy and Nuclear Energy program in China

1) Quick view on Energy in China

High energy intensity

1) low high value added products
2) high proporation of industries in high energy
3) efficiency low

energy consumption per capita only half of world average

fast increasin

* car and houosing
* urbanization`
* growth of heavy and chemical industries

increase of oil import

2) Nuclear power strategy

1) Advanced PWR technologies
2) development of generation IV nuclear reactor
3) R7D on fusion

operating 5 plants, 9 units 6.7 gw


10 units with capacity of 9.3 GW

2020 – 4% – 40 GW
2035 – 16%

24 units of 1GMe level to come onlie

R&D of HTR

10 MW HTGCR – 863 (Follow)

HTR-GT 0 Under construction

HTR-10 with Gas Turbine  – 863 (innovate)

HTR-PM – peeble bed

Key experiment: trip of helium circulator

HTR-10GT 2008 operation

HTR-PM – 2012 National key project

Inhrent safety
Economic competition
Standard design and proven technology

Need different kind of energy needed to couple with economic developo

Nuclear energy has to play more improtant role and has bright future

China is making great contribution to the development of advanced
nuclear technology


Way of Urbanization in China – Deng Wei

Everyone needs owns a house.  Everyone rents a house.

House ownership very high. Because transfer of ownership from

Land is not property, but building is property.

House price from low wages


Price of the houses will rise due to urbanization.  Not limit prices.


Media gives people a realistic view of the world, and that will give
turn nationalism to patriotism.


Non-market mechanisms don’t work.  What the government should do is to
sell houses and use income to fund low include.

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