Recently, the discussion about the Business School EMBA “Circle” has been hotter than those about entertainment circles.

The “EMBA Room Card Scandal” [about male EMBA students receiving hotel room cards from their female classmates that are usually girls from the fashion circle or entertainment industry who attend EMBA schools seeking rich men, married or not], a rumor that cannot be determined to be authentic or just greatly exaggerated, has in one fell swoop damaged all EMBA students.

With regards to the EMBA “Circle” having been corrupted like the entertainment industry, a Fudan University 2010 EMBA program student told China Business News reporter that he hasn’t heard of or encountered the room card story before, and that it was rather surprising to him. In his opinion, this story is a misinterpretation of the EMBA “Circle”.

However, even if the room card story is not true, people have already changed their opinion of the circle, and If you want to join the EMBA Circle, it will cost you more and more money, .

Tuition Getting Higher and Higher

It costs people more and more money to get in this circle.

According to a previous report, a “class for the super wealthy” was planned to be opened at a southern university, whose target students are owners of giant corporations worth more than 5 billion.

The report was denied by the university, but what cannot be disputed is that the tuition for the EMBA has become very costly.

China has more than 200 business schools, among which more than 60 are qualified to open their own EMBA courses. The courses can be of different levels though, according to their tuition reputations, teaching faculty and enrollment of students. Relevant reports show that the tuition of EMBA courses in China range from more than 100,000 to 600,000 RMB, and they are getting higher each year.

As the official sites show, EMBA courses of Changjiang Business School went from 588,000 in 2010 to 658,000 in 2012; that of Zhong’ou Business School went from 458,000 in 2011 to 538,000 in 2012; that of Shanghai Jiaotong University was 458,000 this spring and rose to 538,000 this autumn.

But to be enrolled in the circle, one has to meet other requirements apart from being willing to pay the money. For instance, enrollment requirements include: working as senior management in big corporations or government departments; working experience above 10 years and management experience above 6 years.

Moreover, applicants also have to pass examinations and interviews. “Our admission process is very strict; we eliminate a lot of applicants every year.” Vice Deputy of EMBA Center of Fudan University Wang Yan said to the reporter that even though the tuition has risen to 560,000, applicants aren’t affected at all.

Judging from the “enrollment requirements”, it goes without saying what kind of people are in this “circle”. According to Forbes’ research on the EMBA Program of China’s Business School in 2010, 75% of EMBA students are senior management administrators and 8.3% are government officials.

Zhu Jianjun, Chairman of Ningbo Aotu Co.,Ltd. gave his opinion of the circle in this way: it’s not who you are that matters, it’s who you work with that matters.

China’s EMBA education does not have a long history. The first EMBA was designed in 1943 when Chicago University originated exclusive business courses for entrepreneurs and senior management administrators. While in China, it wasn’t until 2002 that 30 universities and colleges including Fudan University were approved to open EMBA courses. Even if we trace back to 1995 when the first EMBA program coordinated by China and a foreign party, the history of China’s EMBA would still be in its 17th year.

However, EMBA education has been developing rapidly. In Oct. 16, the British Financial Times published the World’s Top 100 EMBA Programs, and a Chinese EMBA program historically made the list and 4 among the top 10 programs are China-related while previously the list had always been monopolized by American and European Business Schools.

Business in the Circle

A lot of people expect the relationships and connections that EMBA courses can offer can turn to productivity.

In fact, almost every EMBA class would seek ways to set up a financing platform of its own. “There are big ‘circles’ and small ones as well.” A entrepreneur who had EMBA courses said to the reporter that classmates of EMBA courses tend to have similar social status and their own resources, and are willing to integrate and make use of these resources among them.

There are also students who are willing to invest huge money to expand interpersonal relationships. For example, one EMBA program of a distinguished university schedules regular classes in different cities in China every month and students take turns being the presiding chairman, whose position involves covering the costs. For example, this month the class will be held in Sanya, so this student will have the program office administrator book plane tickets and hotel rooms for every classmate, with him alone being responsible for covering the entire trip’s expenses.

In some “circles”, there are also frequent business interactions.

There is a well-known case of the EMBA program of an eastern university. A real-estate developer attended the program and 36 apartments of his new building were sold to his classmates.

The price was 30,000 per square meter in 2006 when the apartment building was scheduled to be open for sale. “Classmate Economy” is nothing new.

“One of our classmates did an analytic report on ‘Marketing Diagnosis of Business Union Electronic Consumer Card’ with detailed elaborated marketing strategies and project orientations.” A student of the school’s EMBA courses of 2006 said.

The project was invested in by more than 10 students of the class later with a total investment of 100 million. “The investments from classmates range from about 150 thousand to 30 million.” Wang Kang, Operation Manager and one of the original promoters of the Business Union Card Project told the reporter that the project expects to gain profit this year.

Ren Weilong, deputy of EMBA Education Center of Zhejiang University said that he believed people who attend the same EMBA courses could get to know each other and reach agreements on investment philosophy, cooperation approaches and resource integration, making better and more opportunities of business cooperation and practice among them.

Besides Business

Besides business, the lifestyles of more and more EMBA students are becoming more and more similar.

For example, the Gobi Desert Challenge of Business Schools held every year is an important event of many EMBA programs. It attracts EMBA students of more than 20 business schools in China and other Mandarin-speaking countries.

“Training and preparations for the challenge start half a year in advance.” An EMBA student of Jiaotong University said, the challenge attracts mass participation. Not every one gets to participate in the final challenge, almost every member gives it a shot though.

Only students of the world’s Top 100, Asia’s Top 30 or China’s Top 10 EMBA programs are qualified to register for the challenge.

Such a high threshold is one of the main reasons why EMBA students are so crazy about this game.

“It’s difficult to describe how ‘challengers’ feel when we finally arrive at the finish. We couldn’t help but cry together.” A student of Zhong’ou Business School said that the challenge has become a yearly tradition of theirs.

EMBA students will also volunteer as village teachers in remote areas of Guizhou Province. Yaoyuan, a EMBA student of Zhong’ou Business School’s 2011 program, went to Guizhou with a few classmates in Mar. 2011, and they taught there for 1 or 2 weeks.

They worked harder and with more responsibility than their own jobs.

Wang Yan said to the reporter that a lot of people still come just to attend the courses. Some corporation owners, after years of running business, came to realize that business courses lectured by experienced teachers might be helpful if they want further development for their corporations. And EMBA courses can be their choice.

But then again, all of the above is based on the expensive tuition and high price of being in the “circle”.

This column published three analytical articles focusing on Foxconn in three months, because Foxconn, the world’s largest factory and China’s biggest private corporation that originated in Taiwan, is far too deeply related to China. Among the 1.2 million employees of Foxconn around the world, 95% are from Mainland China and only 5000 are from Taiwan. However, ever since the “Foxconn suicides” (where eighteen Foxconn employees attempted suicide resulting in fourteen deaths) happened in 2010, Chinese people have come to see what’s under the veil at Foxconn. But unfortunately, the media still has too many false impressions of the company, making it possible for Gou Tai-Ming, the Board Chairman of Foxconn Group, to bring up more than his fair share of “pseudo-propositions”, make empty promises both domestically and abroad, and manipulate the social mood.

The most distinct and timely example is the riots at Foxconn’s Shanxi factory. Is it really more suitable for post-60s and post-70s to be factory blue-collar workers and post-90s generation to be white-collar office workers? Everybody has their own personality and aspiration, therefore each manufacturing or service company has to find appropriate employees, offer them professional training, a long-term development space, and opportunities for growth within the company. And this is what we call “human-based management”.

You’re probably thinking “Human-based management?!” Aren’t they just sitting by the production line all day assembling iPhones and iPads? Previously Guo Tai-Ming believed that workers are synonymous with machines, why would they need human-based management?

For the past 30 years, Guo Tai-Ming has pursued production efficiency to the extreme. He has turned himself into a profit-making machine, and has treated all his workers like machines. Foxconn’s management system has reached the peak of Taylor’s “Scientific Management” system, which was invented more than 100 years ago to pursue production efficiency. A lot of western enterprise management experts have criticized and reflected on the “Scientific Management” system because they believe humans are not machines and are not able to repeat one single and simple action day in and day out. They also believe that more ways of human-based management should be adopted.

We all know that militarized management is not appropriate for modern corporations, but Guo Tai-Ming has been taking advantage of the ignorance and servility of the lower class Chinese people, and has been dizzy with success for years. Steve Jobs, co-founder of Apple, was very supportive of Foxconn, “You go there and visit their factories, but, God, there’re restaurants, movie theatres, hospitals and swimming pools. As far as factories go, it’s pretty good!” However, a joke on the internet goes something like this, “I don’t care how good the entertainment facilities are at Foxconn, swimming pools, theatres, and such, but if there is no time for swimming or watching movies, what good is all that stuff?” And there is still another joke: “It’s like in the military, if the general doesn’t go swimming, does a mere soldier dare to swim?” It revealed the problem of how lower class migrant workers balance their physical and mental status, but the fact is that they cannot be satisfied in a militarized system. It was not until the suicides that Guo Tai-Ming came to realize that internet information was spreading so fast that lower class employees had opened up their mind and had become less easy to manipulate, forcing Foxconn to change their working conditions and adopt human-based management.

The result, as it happened, is that his factory workers in Shanxi struck a heavy blow. Because it proves that his newly-adopted human resources reformation policies have failed, taking employees to street dance and raising salaries aren’t enough to change the fact that workers are not satisfied. It has been more than 20 years but the Foxconn security guards are still insufferably arrogant to other employees, and are given great power in the factory like the secret police of East Germany, and Dongchang, the secret service of China’s Ming Dysnasty, or even worse prison guards. Do the security guards really understand the human-based management promoted by Guo Tai-Ming? The answer obviously is no. They lack integrated management training, and they have to deal with front-line employee issues every single day. Therefore things can go wrong.

As we have read, Foxconn can still be closely tied to key words such as death, suicide, riot and chaos. A corporation that takes away the happiness of its employees and does not treat them as its important property cannot sustain itself, no matter how high its revenue or shipment scale can be.

Unsustainable? The high production efficiency of Foxconn is mainly due to its economic scale. Normally a production line of five to six thousand people could make a rather big factory in Japan and other developed countries in Europe and America. In China, a production line of 40,000 to 60,000 people is considered huge, but Foxconn’s Hualong Factory in Shenzhen has 420,000 employees which can make the population of a small or medium-sized city. With so many employees and such a small proportion of administrative staff, the span of control makes it challengeable and difficult to manage.

Foxconn’s success mainly lies in its ability to integrate such a huge population into a highly efficient operating system. It is like the military, each platoon, company, battalion and division fight for the same goal at the same time, maximizing the efficiency. By introducing this highly efficient operating system, Foxconn outdoes many other international factories, resulting in its surprising development as the leading OEM of the world that none can compare to. However, it isn’t the first time that a riot happened among employees in the Shanxi or other Foxconn’s factories, which proves that there is something wrong with its span of control, making it unsustainable. Guo Tai-Ming hasn’t learned yet and the newly opened large factories of 50,000 to 100,000 employees in Chengdu, Chongqing and Zhengzhou proves it. We see it every day in the media that the local government is trying to help find employees, offering subsidies as high as 500 per person, but management of the factory is still a difficult job. If it wasn’t for the investment policy preferences of land, logistics, labor and taxes and all the pollution left on the land of China, would a laptop or tabet PC still be so cheap? All the enthusiasm of the Chinese taxpayer is doing a favor for 3C product customers all around the world.

Then again Foxconn has never been a frank and forthright corporation, young people find it hard to get used to the atmosphere where employees are suspicious and jealous of each other and where entering and exiting the factory require strict examinations. For example, when Cisco and Huawei, two of its major clients, both authorized Foxconn to manufacture communication equipment, products made in the same factory would suddenly become rivals once labeled with different brands and sent into the market. To guarantee that both Cisco and Huawei rest assured, Foxconn made its rules: the two clients’ products were to be made in two factory buildings by two groups of workers, one group wearing red uniforms and the other green. The two groups were not allowed to exchange any information or have any conversation in restaurants or dormitories. Anyone who broke the rule would be severely punished by the security guards. If you walk into Longhua Factory, you will feel like you are in a giant maze, because every factory building looks exactly the same except the tiny building number. It is probable that workers of building A would never set foot in building B, because of the strict entering and exiting registrations. Such severe “military discipline” can earn clients’ trust and avoid mistakes, but there is the problem too: employees of the same corporation are keeping secrets from each other as if they are enemies. To make it worse, Foxconn’s administrative staff would often deliberately put defective products into the production line to test the alertness of front-line workers. It could make sense, but in a factory where award and punishment is so clear and strict, it only overwhelms workers with severe insecurities, constant pressure, anxiety and fear.

We might be able to get some understanding of the Foxconn suicides by adopting the theory of Abraham Maslow’s hierarchy of needs. According to Maslow, human motivations can be categorized into five types or five layers, and they are, from the bottom to the top: physiological, safety, love and belongingness, esteem and self-actualization needs. Each person, when a lower motivation has been realized, starts to pursue one from the higher layer. Maslow’s theory drew a distinct line between humans and animals. Maslow’s hierarchy of needs help Management Science to derive many management theories that are aimed to motivate employees. However, lower-class workers in Foxconn will only ever be in the lower-class. They cannot fulfill their needs of safety because the atmosphere of being suspicious, indifferent and distrustful. They cannot fulfill their needs of belongingness because they have never been treated the way they should, not to mention their needs of self-actualization.

One of Guo Tai-Ming’s “pseudo-propositions” that he keeps talking about is the robot.

After the suicides, Guo Tai-Ming claimed that he would introduce 1,000,000,000 robot arms and hands to replace that of human’s, but two years have passed, and what we see is that Foxconn’s employees in China went from 800,000 to more than 1,100,000. Why does he have to hire so many more employees and build more factory sites in Henan, Sichuan and Shanxi, when he claimed to use robot arms?

The key is that robot arms and hands can never entirely replace human labor, especially when dealing with 3 or 4 inch smart phones, where most of the work depends on human fingers. Robot arms can work precisely in handling single parts such as putting CPUs in slots and polishing cases, but the production of iPhones and iPads is a complicated assembling process. The logic is easy, if the whole process can be automatic, why doesn’t Apple do it itself then, when its CEO Tim Cook knows the best way to manage the production and supply chain.

Over the past 20 years, Japanese corporations have been actively adopting ways of automating production after labor costs rose. But their experience shows that the yield rate is considerably low when producing small amounts of complex products, which led to Japan’s 20 years of economic downturn and proved that a fully automated process is not possible. In Japan and Germany indeed, the ratio of automation in automobile industry is rather high, because manufacturing company owners will choose robots over human labor without hesitation when the cost is lower. Cost of blue-collar workers in Japan and Europe is 5 times as high as it is in China. Robot techniques are easy to adopt, but the problem now is whether robots are appropriate for the industry and whether the cost is competitive.

So please do not argue whether robots will replace post-90s workers, because what can be replaced has long been replaced while what cannot is still irreplaceable. The important thing to do is provide migrant post-90s workers an environment where they can develop their lives appropriately and not be tormented by the painful factory culture as it was in the last century.

The operating situation for some foreign manufacturing companies is also similarly troubled. Toshiba, Sony, Sanyo, etc. have all one after another put their businesses on sale, and thus some have lamented “the Japanese manufacturing industry is currently in decline”. The once glorious mobile phone major players Motorola and Nokia have likewise one after another cut staff this year, shrinking their business operations.

Industrial upgrading and transformation has been the consistent prescription that various levels of government have been giving manufacturers, with some even suggesting “overturning the cage to change the bird” [exchanging existing businesses and processes for new, advanced businesses and processes]. Many businesses believe this is “crossing the river and burning bridges” and as a result are relatively perplexed, at a loss for just how they’re supposed to achieve the goal of climbing up the value chain.

Many people therefore have turned their eyes towards IBM’s successful transformation: Selling their PC manufacturing business and reinventing themselves as a pure IT software and consulting business. This transformation to the service industry appears to be one option for manufacturers. However, while the room for growth in the service industry is very large, for most Chinese manufacturers, they lack the foundation and genes for completely transforming themselves into a service business, like a weigh-lifting athlete trying to participate in a gymnastics competition, so not knowing what to do is inevitable.

Just as people were seriously questioning “where the future of manufacturing is”, the United States has been calling for and encouraging the return of the manufacturing industry. The occurrence of financial crisis has made the United States aware of the negative results of an over reliance on the financial services industry, whereas manufacturing after all is the foundation of economic development, demonstrating that “deep roots allow full blooms, and the lack of strong roots ultimately prevents a tree from long-term survival”.

Jeremy Rifkin, the author of The Third Industrial Revolution, believes that the third industrial revolution will be a transformation jointly powered by information technology and energy systems. This line of thinking provides inspiration for the strategic transformation of the manufacturing industry, namely a development model where the manufacturing and services industry are blended together that possesses great future vitality. The United States, as the world’s foremost scientific and technologically innovative country, firmly believes its scientific and technological strength is capable of meeting the new demands of the information age market changes upon the manufacturing industry, and therefore spares no effort in encouraging “re-industrialization” and the return of the manufacturing industry.

In the age of the internet, the fragmentation of marketing has brought about a personalization of customer value and consumer demand so that companies are no longer simply facing a mass market but also a richly personalized niche markets. A business’s production methods can cater to multiple personalized demands, rather than the large-scale manufacturing methods of the traditional economic age.

As a result, the line separating the manufacturing industry and the services industry is no longer as clear as it once was. Google through the purchase of the Motorola mobile phone business has entered the manufacturing industry, because Google believes there is synergy between its internet technology and mobile phones manufacturing business. Apple’s success lies in transforming a high-technology handheld device into a platform for connecting and interacting with innumerable service providers. Nokia and Motorola stuck to manufacturing, not realizing the industry changes were forcing manufacturers to expand their businesses into the service industry.

In China, the best-selling smartphone did not necessarily come from traditional mobile phone companies but rather from Xiaomi, a company with an internet service background. In this most traditional furniture market, there are also no lack of Chinese companies beginning to use customization, home delivery service, and other after-sale service as their primary methods of setting themselves apart from the competition. Japan’s manufacturers are also exploring this path. For example, Japanese household electronics and appliances companies have been moving from providing low-profit complete units to providing high-profit core technology and components, signifying their current transformation from selling products to selling programs and services.

Demands are changing, technology is changing, and large-scale merchandize manufacturing companies must begin thinking about how to strategically transform themselves. When a platform business like Apple or a services business like IBM surpasses the previous IT giants Microsoft and Intel, people no longer question the necessity of bringing together product manufacturing and services.

Of course, completely leaving the manufacturing industry definitely won’t work, but rather you should use the manufacturing industry as a base and then gradually adopt an innovative “manufacturing + service provider” business model. This is the general trend of product manufacturers transforming into systems solutions providers, which will be a primary line of change for the global industry in the future.

The move, which followed three consecutive cuts from May to July, marks the third such increase this year, due to a rebound in international crude oil prices.

The benchmark retail price of gasoline will be lifted by 0.29 yuan per liter and diesel by 0.32 yuan per liter, the National Development and Reform Commission (NDRC) said in a statement on its website.

Under China’s oil product pricing system introduced in 2009, domestic fuel prices may be adjusted when international crude oil prices change by more than 4 percent over 22 working days.

The NDRC last cut the retail prices of gas and diesel on July 11. Since then, the average crude price on three crude markets the system tracked had recorded a 7.28 percent increase as of Wednesday.

Although oil consumption has remained weak amid a global economic slump, export bans on Iranian oil and intensifying conflicts in the oil-rich Middle East have driven up crude prices over the past month, analysts said.

Unlike previous hikes, the government did not delay the price increase this time because of significantly reduced inflationary pressure and the need to ease refineries’ losses, said Chen Qing, an analyst with Zhuochuang Information Services, a commodity information service provider.

Official data released early Thursday showed that prices have fallen across the Chinese economy, with the consumer price index (CPI), the main gauge of inflation, up by a 30-month low of 1.8 percent in July from a year earlier.

But the new price hike will nevertheless drive up domestic production costs, Chen said, estimating that the hike will push up the CPI by about 0.01 percentage point.

The logistics sector will be affected the most. As transportation fees account for 70 percent of total costs in the logistics sector, the sector will see a 1.79-percent increase in costs after the hike, according to Chen.

Opinions were divided on future price changes. Niu Li, an economist with the State Information Center, a government think tank, said continued price rebounds in the global oil market are less likely, as the world economy has shown little improvement.

However, Li Hong, an analyst with 100PPI.com, a major Chinese commodity data provider, said there will be another price hike in the domestic oil market in September if the current boom continues in the global oil markets.

Yan Jiehe’s view has a macroeconomic context: 30 years after the Reform and Opening up, China’s economy is in a period of major transformation. This transformation is the transformation of the economy from disorder to order, from pursuing quantity to pursuing quality. It is precisely against this backdrop that the “Labor Contract Law” was passed and the country has begun vigorously advocating the conservation of energy and reduction of emissions. SMEs, without exception, will be severely impacted.

There is already a case that supports Yan Jiehe’s viewpoint. China’s home appliances industry at one time was vast, with over 40,000 companies in 1992, but by 2002, only around 400 companies were left, and by 2007, there were only around 100 companies. The survival rate is 0.2%, with 99.8% of companies having died off. With this many enterprises gone, is there any shortage of home appliances in the market? No, and it remains a buyer’s market. Henceforth, China’s SMEs will all face the same predicament the home appliances industry has gone through, where the vast majority of SMEs will die in the midst of of intense market competition.

During Yan Jiehe’s lecture, both guests and reporters asked the same question: Under 2008′s tightening monetary policy, financing for SMEs will be even more difficult, so how should this difficulty be solved? In the face of this question, Yan Jiehe’s response was very blunt, “There’s nothing you can do, don’t harbor any delusions.”

What do you think of Yan JIehe’s views?

This February, Proview launched a lawsuit against Apple in the United States, accusing Apple of deceptive practices when Apple purchased the iPad trademark several years ago, and as a result should not enjoy the rights over this trademark. May 4th, a high-level United States California court rejected Proview’s lawsuit at the request of Apple, because both parties originally agreed that legal disputes would be resolved in Hong Kong.

During an interview with Sina Technology yesterday, Yang Rongshan said Proview’s American lawyers are leaning towards an appeal but concrete plans are still under research. At the same time, he indicated that the dispute surrounding the iPad trademark has hope of being resolved within 1-2 months.

According to reports, the China iPad trademark case that has been going on for two years at present has already entered court-supervised mediation procedures with both Proview and Apple expressing willingness to settle. However, both parties are still very far apart on the sum of settlement.

Yang Rongshan refused to disclose Proview’s asking price, but indicated that it must get as much as possible, because Proview must consider multiple factors. Yang Rongshan indicated that he hopes the iPad trademark dispute can be resolved as soon as possible.

The lawyer representing Proview, Xie Xianghui, disclosed that the Guangdong provincial high court is currently doing a lot of mediation work, so that both parties can come to an agreement on the settlement sum, but at present the gap between the sums is still “relatively large”.

He continued to say that at present both parties have hopes of a successful mediation, but is unable to predict a specific time for when it will be resolved.

This weekend, Apple’s new iPad will go on sale in Brazil and 30 other countries and regions, bringing this kind of product to nearly 90 countries and regions. Although the new iPad had obtained approval for sale within China in March, it remains missing from the latest list of products to be released onto the market.

At present, the Guangdong high court announced that it will fully consider social benefits, legal benefits, and other various factors in this iPad trademark dispute and handle this matter justly in accordance with law, seeking to maximize both parties’ interests.

A man walks out of an ATM of a branch of China’s banking giant Industrial and Commercial Bank of China (ICBC) in Shanghai on January 18, 2011. According reports, ICBC plans to open branches in Europe to expands its network in the region. (Image credit: AFP/Getty Images via @daylife)

The Federal Reserve’s decision this week to green light the expansion plans of three massive state-owned Chinese banks, including the first-ever takeover of a group of U.S. bank branches by a Chinese lender, got tremendous media attention and seemed to play into general fears about China flexing its muscles in America’s backyard.

But while China’s big banks and some parts of China’s government appear to be trying to play a bigger role in the global financial system, China’s banks will not play a meaningful role in the U.S. any time soon. Here are five reasons why:

1. China is going through its once-in-a-decade power transfer and things are not going smoothly. The Chinese Communist Party is dealing with the downfall of Bo Xilai, being embarrassed by a single blind activist, Chen Guangcheng, and an economy that might require more government spending to keep humming. This is not the time in Beijing for a big U.S. banking push.

How U.S. Banks Flipped Their Investments In China’s Big BanksNathan VardiForbes Staff

2. China’s banks really don’t know how to operate in foreign markets like the U.S. They lack the manpower to adequately staff U.S. branches and assess credit risk. It will take a very long time for them to build up these capabilities.

3. Industrial & Commercial Bank of China might be the world’s most profitable lender, but its deal for 80% of the U.S. unit of Bank of East Asia is tiny. It’s a $140 million transaction and the whole retail network ICBC is acquiring has less than $800 million in assets. This is a symbolic gesture at best and totally meaningless to ICBC, which has $2.5 trillion in assets.

4. China’s banks are huge and very profitable, but it’s unclear that they are strong enough for a big U.S. move. Carl Walter, who spent 20 years manning banking outposts in China for companies like JPMorgan Chase & Co.,recently even said that “their capitalization is insufficient to move from where they are now to something else.” China’s banks will soon have to deal with the fall out from the $3 trillion in loans they put into China’s economy on the government’s orders following the financial crisis. And Walter likes to remind people that China’s banking profits are artificially generated by government-administered interest rates and the fact that China’s savers have nowhere else to put their money.

5. There is a growing domestic backlash against China’s big banks in China that will both limit their growth and force them to lend more domestically to Chinese entrepreneurs in the private sector. China’s big banks have shunned the nation’s own entrepreneurs, resulting in a huge and highly-priced gray lending market in China. Wen Jiabao himself, China’s outgoing Premier, complained in April that China’s banks make money “far too easily” and should be broken up. “To allow private capital to flow into finance,” he said, “basically we need to break up the monopoly.”

China’s big banks will try to follow their customers, Chinese companies, in foreign markets like the U.S. and provide them with financing. To be sure, Jamie Dimon and even Vikram Pandit are not worrying about competition in America from China’s banks.

The rankings show that as of April 26th, the highest monthly minimum wage is in Shenzhen at 1500 yuan, the second is in Shanghai at 1450 yuan, and Tianjin and Zhejiang both at 1310 yuan in third place; The four provinces/cities of Heilongjiang, Chongqing, Jiangxi, and Hainan are in the bottom four spots, all lower than 900 yuan. For hourly minimum wage, the highest is in Beijing at 14 yuan, with second and third place being Shenzhen and Tianjin, and the bottom three places belonging to Jilin, Heilongjiang, and Hainan all under 8 yuan. Worth nothing is that the monthly minimum wage in Hainan has not been adjusted since 2011, and its current 830 yuan monthly minimum wage and 7.2 yuan hourly minimum wage are both ranked last.

14 provinces and cities adjusted their minimum wages in 2012

From 2012 January 1st, Beijing, Sichuan, Jiangxi, and Shaanxi took the lead in adjusting their minimum wages. Beijing city’s minimum wage was adjusted from 1160 yuan each month to 1260 yuan, with non-full-time employee hourly minimum wages increased from 13 yuan per hour to 14 yuan. Sichuan province’s monthly minimum wage was adjusted from 850 yuan each month to 1050 yuan, with non-full-time employee hourly minimum wages adjusted from 8.9 yuan to 11 yuan. Jiangxi province’s minimum wage was adjusted to 870 yuan/month and 8.7 yuan/hour for part-time workers. Shaanxi province adjusted the minimum wage upwards with full-time workers earning 1000 yuan/month and part-time workers earning 10.0 yuan/hour.

From February 1st, the minimum wage for full-time workers in Shenzhen was raised to 1500 yuan/month while the hourly minimum wage for part-time workers was increased to 13.3 yuan/hour.

From March 1st, the monthly minimum wage in Shandong province was increased from the previous 1100 yuan, 950 yuan, and 800 yuan to 1240 yuan, 1100 yuan, and 950 yuan. Hourly minimum wages have been set at 13 yuan, 11 yuan, and 10 yuan.

From April 1st, the monthly minimum wage for Shanghai city workers was adjusted from 1280 yuan to 1450 yuan, while the minimum hourly wage from adjusted from 11 yuan to 12.5 yuan. The monthly minimum wage in Tianjin city increased from 1160 yuan to 1310 yuan, and the minimum hourly wage was adjusted from 11.6 yuan to 13.1 yuan. The monthly minimum wage in Guangxi was increased from 820 yuan to 1000 yuan, and the minimum hourly wage was also increased from the original 6 yuan to 8.5 yuan. The monthly minimum wage in Ningxia was adjusted from 900 yuan to 1100 yuan, while the hourly minimum wage was adjusted from 9 yuan to 11 yuan. The monthly minimum wage in Gansu province was increased to 980 yuan, and its hourly minimum wage was increased to 10.3 yuan. The monthly minimum wage in Shanxi province was adjusted upward to 1125 yuan, while its hourly minimum wage was increased to to 6.5 yuan.

No further adjustments for Hainan and 3 other provinces/cities since 2010

2011 December 29th, Ministry of Human Resources and Social Security Minister Yin Weimin said in a national human resources and social security conference that a total of 24 provinces adjusted their minimum wage during the year with an average increase of 22%.

However, Hainan, Heilongjiang, and Tibet did not join in. At present, the minimum wages in effect for Hainan, Heilongjiang, and Tibet are still those following the 2010 July 1st adjustment.

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Among them, the current monthly minimum wage in Hainan is 830 yuan while the hourly minimum wage is 7.5 yuan, ranked at the very bottom. Heilongjiang’s current monthly minimum wage is 880 yuan, and its hourly minimum wage is 8.5 yuan. Tibet’s current monthly minimum wage is 950 yuan, and its hourly minimum wage is 8.5 yuan.

According to reports, Hainan has already put raising the minimum wage on its agenda. Heilongjian too has proposed a normalizing wage growth mechanism where worker income levels are to reasonably and quickly increase, with over 13% annual average minimum wage increases, so that the minimum wage will reach 40% or more of the average wages of local urban workers.

According to China’s “Minimum Wage Regulations”, the minimum wage of every region must be adjusted at least once every two years.

According to a Lhasa Evening News report, the Tibet Autonomous Region released in February the “Tibet Autonomous Region Minimum Wage Regulations” requiring that the minimum wage be timely adjusted when change occurs in the factors used to determine the minimum wage. The minimum wage must be adjusted at least once every two years.

According to a Hebei Youth Daily report, Hebei Province will timely formulate and release guidance on the minimum wage and wage growth this year. Preliminary considerations have the minimum wage to be adjusted upward no less than 15% to progressively reach 40% of the average wages of local urban workers. It is reported that the last adjustment in Hebei was made 2011 July 1st. (China News Service Finance Channel)

It is found by the reporter via his exposure to college campuses, government officials and entrepreneurs that these groups of people often consciously or unconsciously speak more truth.

The Deputy Director of the Chinese Development and Reform Commission Zhang Xiaoqiang states that in 2011 China consumed 50% of the world’s steel, cement and 20% of the world’s energy while its GDP only accounted for 9.5% share of the world’s economy.

China has become the largest country for carbon dioxide and sulfur dioxide emission in the world due to the fact that 70% of China’s energy comes from coal. The current way that China needs large quantities of natural resources for its development is unsustainable.

The seven major industries that China is focusing on developing have accounted for less than 4% of China’s GDP in 2010 and are striving to take an about 8% share in 2015 and around 15% share in 2020.

But Zhang Xiaoqiang also points out that the current system has not yet met the requirements of innovation or developing new industries and it is because Chinese enterprises have not become the drivers of innovation. In 2010, the R&D investment for large and medium-sized industrial enterprises was only at 0.9% of their main business revenue which was far behind the 5% of R&D investment of large enterprises in developed countries. China has not yet formed proper mechanisms of integrating manufacturing, learning and R&D. Additionally, only about one-tenth of China’s scientific research achievements can be converted to industrial applications.

The Vice Minister from Ministry of Science and Technology Zhang Laiwu thinks that China has now reached historical crossroads. Two extreme views are existing. There is strong theoretical support that makes people hard to deny raised by the same person who forecasted the U.S. financial crisis (in 2008) that China is in line for a hard landing in 2013. However, others are saying China will overtake the United States and the time is already predicted to be 2018 which is also considered authoritative.

Zhang indirectly responded to the two views by saying that China’s economy is developing rapidly and a lot of people have blind faith in the government forces. Wasn’t Chinese government strong 30 years ago? It was because of the immature market that it was necessary for the government to intervene however, it can not be always done this way. Government is not the main force of innovation, the market and entrepreneurs are. The Chinese government should first of all deepen the reform to drive the market to a mature level while forego certain power.

Even if the government acts properly, the Angel investor Xue Manzi says, venture failure is inevitable, otherwise it would be “Li Yanhong” everywhere. Success is accidental and it requires enduring efforts, high intelligence and luck at the end.

This article is originally  from China entrepreneur magazine in Chinese.

Italian Government Department Cracks Down on Counterfeiting Activities in China for Fear of Damaging the Country’s Image

Foreigners are joining the Chinese counterfeit crackdown team.

Starting from the second half of 2011, the Intellectual Property Department of the Italian Trade Commission (ITC) has submitted to the Chinese Intellectual Property Office 3 lists of a total of 30 “pseudo-Italian” product brands. These pseudo-Italian brands claim their products are manufactured in Italy and use the country identity including cities in Italy and the Italian national flag to advertise their products, which misleads Chinese consumers of the origin of the products. The ITC is calling on the Chinese government to take specific measures against such actions.

Recently, the head of the ITC office in Beijing Dai Shengqiao, accepted an exclusive interview with a reporter from China Youth Daily.

Who loses from “pseudo-Italian” brands?

“Made in Italy, the world’s JAJEMON…”, such advertisements sound quite exciting. The bedding company JAJEMON claims its products are from Italy and its trademark is clearly marked with Italian characters.

However, JAJEMON is by no means an Italian brand. According to Dai Shengqiao, after investigation it was found that the JAJEMON trademark is registered in China by the company name “Italian Louis Trading Co., Ltd.” located at Room 5014, No. 2 Bu Ao Ci Road, Florence, Italy. The ITC has confirmed with the Chamber of Commerce in Florence, Italy that no such company or address exists and the actual manufacturer of the brand is “Shanghai Jia Li Bedding Co., Ltd.”.

According to the ITC, there are many more pseudo-Italian brands existing. Their high prices even startle Dai Shengqiao who is from Italy. He states, “during an exhibition in China, a mattress was priced at 34,000 yuan (€ 6,000) for its retail price and was more expensive than a car. An actual Italian made luxury brand-name mattress is no more than 600 euros which is only one tenth of the cost of a pseudo-Italian mattress being sold in China. ”

In July of 2010, the Foreign Trade Commission under the leadership of the Italian Ministry of Economic Development set up its Intellectual Property Office in Beijing. After about one year of investigation and data collection, there were more than 60 fake Italian brand enterprises found in the Chinese market. The main markets for these brands included mainland China, Hong Kong, Taiwan and South Korea. They were advertised as brands from Italy, but in fact were non-existent in Italy.

“The Italian ‘origin’ of these brands has been carefully fabricated to make people believe”, says Dai Shengqiao, “there was one company who put down its Italian headquarters phone number on the brochure, but it was proved that it was a number belonging to a local house in Italy.”

Such enterprises have deceived the Chinese consumers by using the name of Italy to charge prices as much as 10 times higher than similar products made in China and sold in the Chinese market. These prices are even higher than the real imports of similar products from Italy. Their actions have also disrupted the market order, created unfair competition and damaged the interests of their business counterparts who sell with integrity.

In July of 2011, the Intellectual Property Division of the ITC submitted to the Chinese Intellectual Property Office the first set of pseudo-Italian cases that included ten enterprises. This was followed shortly after by the second and third case sets filed to the Chinese government.

According to Dai Shengqiao, the reason for filing complaints to the China Intellectual Property Office on behalf of the Italian government departments is that such fictional pseudo-Italian brands do not exist in Italy and there are no actual Italian companies involved. The pseudo-Italian brands that are rampant in Chinese market have distorted the image of Italy and Italian manufacturing industry, therefore, it is only right for the Italian government department to handle such situation.

Products made at small workshops are “transformed” into international brands

What are the true stories of these enterprises blacklisted by the Italian Trade Commission? On March 16, the China Youth Daily reporter traveled to “The Exhibition of 2012 International Gifts, Premium & Household Goods (Spring) in Beijing, China” to find out more.

“Our company is registered in Hong Kong by the Italian side and its factory is in Guangzhou which is the manufacturer of Toskany in China.” In the booth of “Italian Toskany (Hong Kong) International Industrial Co., Ltd” which was on the complaint list filed by the ITC, the staff introduced to the reporter their Toskany men’s bag products by stating, “All of our products are designed by Italian designers and all the leather (cowhide) raw materials are imported from Italy. Where do you think China has so much real leather to offer?” The brand name “TOSKANY” was clearly printed on the wall in the colorfully decorated exhibition booth followed by “TOSKANY ITALY FEELINGDE” (meant “Italian taste”—report note). According to the staff, Toskany in Italy is famous for high-end men’s bags. In the Chinese market its price is relatively high and the price of a leather trolley case is about 4,000 yuan and a leather handbag is between 1,500 and 3,500 yuan.

The staff gave the reporter a product brochure, its cover had the printed product logo and characters of TOSKANY ITALY FEELINGDE. The words on the title page were read as “Originated from the spirit and dream of the Italian Leisure city Toskany, with its low profile and luxurious spirit, sincere Toskany illustrates the charm and soul return of men.”

Italian Trade Commission found after investigation that the so-called “Italian Toskany (Hong Kong) International Industrial Co., Ltd.” had no registration information in Hong Kong and the phone number was also fake. Additionally, the Toskany brand was not registered in Italy either. Its trademark was registered in China with the Chinese owner surnamed Xiao. Additionally, its real company name was Beijing Shi Dai Wei Yi Leather Co., Ltd. with its office located in Dongcheng District in Beijing.

“We are an enterprise in Huadu, Guangzhou. This is an international brand and we are the Original Equipment Manufacturer.” In the exhibition booth of Guangzhou Rong Wei Handbag Products Co., Ltd., the sales staff briefed the reporter on a “OBOSI” trolley case made by them. This company was also on the complaint list filed by the ITC. The reporter did not see any “Italian” words on the wall or any of the salesman’s name cards of the OBOSI brand which was different from Toskany that carried a very high profile in every place claiming it was from Italy. Only when the reporter asked where this international brand came from for a certain product, the sales staff said “it was registered in Italy”. However, according to Dai Shengqiao, “OBOSI” trademark was only registered in China, not Italy.

The next stop that the reporter went to was SABO kitchenware showroom with a display of glass bowls, stainless steel pots and other kitchen commodities. The single product price ranged from over 100 to 300 yuan. The booth was crowded with consumers and its business was going very well. The reporter saw the words “SABO Life Kitchenware Co., Ltd.” and “SABO (China) Life Kitchenware Co., Ltd.” on a “product certification”. A sales staff told the reporter that SABO was an Italian brand and it had authorized a Chinese company to manufacture its products.

According to the Italian Trade Commission, a trademark search in both China and Italy did not find SABO kitchenware registration information. The so-called Chinese company was just someone called ” Sabo kitchenware gift sales department in Feng Xi District, Chaozhou City” and the owner was a self-employed individual and there was no company named SABO kitchenware production company in Florence, Italy either.

The reporter then went to another enterprise that was on the “list”, the San Marco clock and watch showroom of Shenzhen Rui Lang Precision Timing Co., Ltd. The sales staff told the reporter, “We are a Shenzhen enterprise and we do all the R&D and production work.” The reporter found that their watch prices were not “luxurious”, a normal watch was 200 yuan and a more appealing one was at a selling price of about 400 yuan. But talking about their very “Western Style” international brands, the sales staff told the reporter, “This brand was registered in Italy by our company.”

According to Dai Shengqiao, trademarks such as “San Marco” and “Shen Ma Ke” were registered in China with a Chinese owner called Zhang Zuoren who was self-employed. San Marco did submit an application for registration in Italy by a Chinese applicant named Wang Sitong who was self-employed as well, but was rejected by the Italian Patent and Trademark Office.

China responded: a portion of the trademark applications have been turned down and the related problems are under investigation

Deputy Director of the Protection and Coordination Division of Chinese Intellectual Property Office Zhang Zhicheng told the reporter that the information provided by Dai Shengqiao has been well received. Because it involves different sectors such as the Administrative Department for Industry and Commerce and Quality Control Department, therefore, the relevant information has been timely transferred to the functional departments. “As far as I know, the relevant departments have contacted and communicated with the owners of those enterprises.” says Zhang Zhicheng, “The whole process would take some time. Meanwhile, certain information is related to the responsibilities of local government authorities.”

Upon the first batch of infringement list submitted by the Italian Trade Commission, the Chinese Administration Central Office for Industry and Commerce responded on October 12, 2011 that the Chinese Trademark General Office had rejected two registration applications which are Nino Ferletti Italy and Bestibelli Milan. For the action of adding Italian place names during the use of one’s own trademark, the Italian government agency could file complaints to the local Administrative Department for Industry and Commerce in accordance with the relevant provisions of the Trademark Law. Additionally, for those who claimed themselves Italian brands or enterprises, to find out if they were using false propaganda or misleading consumers, it is required to involve the related industrial and commercial authorities with administration power to identify the case after investigation conducted in accordance with the law.

The deputy director Zhang Zhicheng also highlighted that China pays great attention to Intellectual Property(IP) protection. In addition to the continually-strengthened daily law enforcement, the “double crackdown” action to combat IP infringement as well as counterfeit and shoddy goods is taking place in depth which has achieved good results. The intellectual properties of Italy and other trading partners will be protected as long as they are in line with Chinese law. The Chinese government is very serious in regards to the protection of intellectual property. ”

this article is originally from This article is originally from Southern Metropolitan Daily in Chinese.