Influenced by the worst US drought in 50 years, corn and soybean prices surged to record highs on July 19. Wheat prices are not yet at record levels but have rallied more than 50 percent in five weeks, reported by Financial Times on July 19.
　　The drought in the US, which supplies nearly half the world’s exports of corn and much of its soybeans and wheat, will reverberate well beyond its borders, affecting consumers from Egypt to China, said by Financial Times. According to the statistics released by the Ministry of Agriculture of the People’s Republic of China, the prices of wheat and corn have increased in the 28th week (From July 9 to 15) by 20% and 8% respectively, and the price of beans is up 19% over the same period last year.
　　However, the sharp rise of international agricultural commodity prices would have little effect on China’s domestic market because of the sufficient grain reserves. According to the statistics from the National Bureau of Statistics (NBS), the output of summer grain crops increased 3.56 million tons by 2.8% year on year, to a total of 129.95 million tons, and specifically, the output of winter wheat increased 3.34 million tons by 3%, to a total of 114.30 million tons. Moreover, the harvests of corn and strict reorganization in corn deepprocessing industry have guaranteed steady imports of corn from abroad.
　　According to Ma Wenfeng, an analyst from Beijing Orient Agribusiness Consultant Ltd. (CnAgri), the high yield of wheat in China reduced the degree of dependency on corn imports, which provided great possibility for stable prices of agricultural commodity in domestic market.
　　 Comment
　　Bracing for the new food crisis glob
　　ally, people should count on suitable weather, as well as a strong government, and expect technology-oriented reforms of the agriculture in the near future.
　　 175 billion yuan to solve rural drinking water safety problems
　　 People’s Daily Online reported on June 29 that the investment from the central government will be doubled in the“12th five-year” period to solve the safety problems of drinking water in rural area, said by Du Ying, Deputy Director of National Development and Reform Commission, in the meeting about the report by the State Council on the work of guaranteeing drinking water safety on June 29.
　　Li Guoying, Deputy Director of the Ministry of Water Resources, pointed out that all the investment needed in this project was 175 billion yuan, 68% of which, that is 118.8 billion yuan, was from the central government and the rest would be disbursed from the local finance and beneficiaries, according to the present investment management system.
　　During the “11th five-year” period, the government concentrated on centralized and decentralized water-supply project construction and extended water supply pipelines from cities and towns to rural areas. Clear and safe water is now available in minority-populated areas, reservoir resettlement regions, schistosomiasis-affected areas, and most contaminated areas. More and more schools can get access to safe drinking water, and the proportion of residents benefiting from centralized water supply increased from 40% to 58%. This achievement is significant, but still far from enough.
　　According to People’s Daily on July 7, three preferential policies has been introduced including land, electricity and tax to support the rural drinking water safety construction project. Departments including the Ministry of Health, Ministry of Land and Resources, Ministry of Water Resources, Ministry of Agriculture and Ministry of Environmental Protection have introduced a sequence of policies and taken measures from various aspects to ensure the construction of this project.
　　In the next five years, the government will balance the financial investment in different regions, and make efforts to set up comprehensive safeguard and management mechanisms. By the end of 2015, problems of drinking water safety in rural areas will be solved according to the plan.
　　 Comment
　　 Following potential threats in the process of construction should be highlighted: unqualified water, inflexible adjustment mechanism of electricity price, lagging disposal system of sewage and garbage, contaminated soil and water resources, inefficient management mechanism, etc. There is still a lot of work to do. Never too late to start improving.
　　 Firms see a new gold rush in shale gas
　　With China having put shale gas near the top of the government agenda for energy security concerns, the scramble for this game-changing unconventional gas is gathering momentum, China Daily reported.
　　The Ministry of Land and Resources said that more than 70 companies have shown their interest in participating in the country’s much talked about second tender for domestic shale gas blocks, which is estimated to kick off in July or August.
　　China opened four blocks for the first round bidding to selected State-owned companies last June. China Petroleum& Chemical Corp and a provincial coal bed methane company won the bid for two blocks.
　　Compared with the first auction to test the water, the second one may offer about 17 blocks, located in areas including the provinces of Hunan and Anhui, for bidding, said Jiang Xinmin, deputy director of the Energy Research Institute, a think tank of the National Development and Reform Commission.
　　The ever-growing shale gas fever in China, buoyed by the United State’s revolutionary breakthroughs in the sector, has turned the new sector that has yet to take off into a new gold rush for companies in the country.
　　Even domestic property companies, which have generated the biggest number of billionaires in recent years before they started wobbling on the government’s tightening policies, are considering seeking a share.
　　Li Jun, board secretary of Zhongtian Urban Development Group Co, flew almost 2,000kilometers from the southwestern city of Guiyang to the eastern costal city of Shanghai just to attend a shale gas forum held in the city in July.
　　“It’s not a gamble. We hope to leverage the cash earned from the property market to invest in the energy arena,” Li said. Zhongtian is a local real estate developer in Guizhou Province with total assets of 15 billion yuan ($2.4 billion), according to its website.
　　State-owned companies strictly control the energy industry so shale gas may be the last resort for privately held companies to participate in the lucrative sector, Li said.
　　The Ministry of Land and Resources said in May that Chinese companies with more than 300million yuan of registered assets and survey licenses for natural resources, among others, are allowed to tender.
　　Zhang Dawei, head of the oil and gas strategy center of the ministry, reiterated several times in public that private investors are allowed to bid to diversify the investment bodies.
　　
　　 Comment
　　 China’s natural gas consumption will be doubled within the 12th Five-Year Plan period (2011-2015). Shale gas can be an alternate source if explored effectively with private investors taking a share.
　　 China-ASEAN new energy training center opens
　　 A technological training center on new energy and renewable energy was opened on July 18 in Southwest China as the country seeks to train more human resources professionals for the Association of Southeast Asian Nations, according to Xinhua.
　　The center in Kunming, capital of Yunnan Province, was launched after Chinese Premier Wen Jiabao proposed last November to set up 10 training centers targeting personnel from ASEAN members.
　　The center will host two to three free training sessions a year covering solar energy, biomass energy, wind energy and small hydropower, said Long Jiang, director of the provincial bureauof science and technology.
　　The center will recruit trainees from civil service workers, staff at universities and research institutes, as well as company employees in the ASEAN members, Long said.
　　Jin Xiaoming, director of the international cooperation department under the Ministry of Science and Technology, said the center will help promote regional cooperation on science and technology as well as regional technological transfer.
　　 Comment
　　 With China and ASEAN strengthening ties, new energy training is beneficial for both sides. Cooperation on science and technology is underway.
　　 Benefiting from “Made in China”
　　On July 12, United States senators expressed dismay and
　　outrage to learn that the uniforms for American Olympians were produced in China, reported by AP, which generated an extensive discussion and profound rethink about the manufacturing industry in both China and the U.S.
　　“The comments reflect either a lack of understanding of comparative advantage and how trade works,” said by an executive with a U.S. manufacturer that has operations in China.
　　In the typical production supply chain for consumer products, of which apparel production is a good example, the higher-value, pre-manufacturing activities like designing, engineering, and branding, and post-manufacturing activities like marketing, warehousing, transporting, and retailing happen in the United States, while the mostly lower-end manufacturing and assembly activities take place abroad because of lower cost. In the end, the final product is a collaborative effort.
　　The economic relationship between China and the U.S., characterized by transnational supply chains and disaggregated production sharing, is more collaborative than competitive.
　　And yet researchers at the Federal Reserve Bank of San Francisco calculate that in 2010 goods labeled “Made in China” accounted for just 2.7% of U.S. personal-consumption expenditures on goods and services — all the things Americans buy in a given year, from cars to clothing to health care.“Although globalization is widely recognized these days, the U.S. economy actually remains relatively closed,” the researchers said in their report. “The vast majority of goods and services sold in the U.S. is produced here.” In fact, U.S.-based firms benefit from collaborating with foreign firms by carving up the production process into distinct functions and processes that suit each location’s efficiencies and strengths.
　　“Across the business community there’s a recognition that we need to talk about trade in a more sophisticated way—that global value chains can’t be boiled down to three words: “ ‘Made in China’ or ‘Made in America,’ ” says John Murphy of the U.S. Chamber of Commerce.
　　Facing the challenges and chances in transnational trade during the process of globalization, enterprises should know how to make full use of comparative advantages and enable themselves to compete more effectively at home and abroad. Made in where is no need to be worried, because it is just for trade.
　　 Comment
　　 Trade is not a competition between “our producers” and “their producers”, but the result of fair market regulation and customers’choice. How to improve the competitive edge is the question that should be considered.
　　 Adidas to close its only factory in China
　　 According to Reuters on July 18, sporting goods and apparel maker Adidas AG is closing its only companyowned sportswear factory in China later this year to streamline manufacturing.
　　The Suzhou Adidas factory employs about 160 workers who were notified of the closure a few months ago and who will receive a benefits package, the spokeswoman Sabrina Cheung said. Though the only company-owned factory will be closed, China remains a key market for sourcing goods for Germany-based Adidas with more than 300 supplier partners in the country.
　　The sports apparel industry is becoming increasingly competitive in China, with Adidas, Nike Inc and Converse competing against up-and-coming Chinese players such as Li Ning Co Ltd, ANTA Sports Products Ltd, 361 Degrees International and China Dongxiang (Group) Co Ltd.
　　As apparel industry is labor-intensive, the rising labor cost in China is a major concern for Adidas to move to other Southeast Asian countries, who have advantages in material and processing.
　　But every coin has two sides. The present warehouse in Suzhou will be preserved, besides which, Adidas is going to build a new warehouse center in Tianjin, according to 21st Century Business Herald on July 20.
　　To Chinese textile exporting enterprises, the rising of labor and material costs is a huge shock and barrier, as well as a turning point for better marketing strategies and optimized business framework.
　　 Comment
　　T imhme r inee fonr tm. Tso f osr u t rhveiv t ee xmti e le a n in sd utos t d rye vaerl eop emerging markets, and focus on technological innovation like adopting environmental friendly materials.
　　 CSRC to further reduce exchanges fees
　　 CSRC responded to four hot issues such as reducing market exchanges fees and implementing employee stock ownership plan on July 20, Eastmoney Network reported. It is said by the official of CSRC that the exchanges fees would be further reduced by 20%, and the formulation of detailed plans was under way, which was expected to establish before September 1.
　　CSRC has concentrated on reducing marketing costs for a long time. It is reported that fee standards for A Share Market have been decreased by 25% since June 1 in stock exchange, and the figure in futures exchange was 30%.
　　On July 13, the National Development and Reform Committee and the Ministry of Finance jointly issued Notification on Reducing Supervision Fees Standards in Securities and Futures Markets, in which clearly stating the drop up to 50%. Specifically, the supervision fees in securities market will be charged from 0.04% to 0.02% of the annual turnover. It will be free of charge for securities investment funds and bonds. The supervision fees in futures market will be charged from 0.002% to 0.001% of the annual turnover.
　　“It is to reduce the burdens and boost the confidence of investors by decreasing the transactions and supervision fees successively this year,”said by the official.
　　 Comment
　　 Since the beginning of this year, stock issuing system reform has been accelerated, and detailed plans are implemented step by step. IPO P/E ratio, issue price and the amount of fund raised are all reduced. Less and less enterprises plan to carry out IPOs and the impulse of financing excessively for issuers has been refrained. To reform the issue system, means to strengthen the disciplining forces of markets gradually and give further play to the role of the market, as well as combine with supervision effectively.
　　 Central Bank to cut the benchmark interest rate by 0.25 percentage points
　　The People’s Bank of China said the benchmark interest rate in financial institutions would be cut since July 6, 2012, according to the Eastmoney Network report. China announced to cut benchmark one-year lending rate and one-year deposit rate by 31bps and 25bps respectively, lending and deposit rate of other levels and individual mortgage loans rate will also be adjusted accordingly.
　　Also since July 6, bank lending rates in financial institutions will fall to 70% of the benchmark rate. The loan interest rate floating range for individual mortgage will not be changed, which means the financial institutions should continue implementing the differentiated credit policies for housing and curbing property speculation.
　　 Comment
　　 The relaxation of interest rate cap is an unprecedented move. On the one hand, this can ease market concerns of a hard landing and meet market expectations. On the other hand, the Government can take actions to promote the interest rate market and to further promote the rationalization of the banking sector lending decisions. The latter is the main signal of the adjustment. There will be more relaxed interest rate controls, policies, and the increased role of market allocation of funds is expected in the next few years.
　　
　　 Old-for-new furniture plan takes off
　　 Fang Jianhui, a 35-year-old Beijing resident, has just bought a new dining table and chairs from Beijing Easyhome to replace his old set. “The old-for-new service saved me 800 yuan ($126) and solved the problem of how to deal with the old ones,” he said.
　　Beijing Easyhome Investment Holding Group Co was one of the pioneers in providing the service since last September.
　　The company’s business rivals, including Jimei Furnishings Co, Red Star Macalline International Furniture and Real Estate Chain, also launched similar policies.
　　According to Easyhome President Wang Linpeng, the State-owned chain retailer, with 49 outlets around China, persuaded the Beijing Municipal Bureau of Commerce and the Ministry of Commerce to undertake a trial of the service, formulate rules, organize staff training and found warehouse and facilities to help recycle items that could have uses.
　　The Ministry of Commerce had raised a proposal to promote furniture replacement around China early last year. Beijing was selected as the pilot city to offer the service as soon as possible. However, no detailed policies have been issued so far.
　　Insiders and analysts said it is government policy to stimulate furniture buying and create a platform for the green recycling of old furniture, but formulating a set of comprehensive, practical and workable policies is not proving to be easy.
　　 Comment
　　 The old-for-new furniture plan is expected to follow the success of the household appliance replacement policy carried out between September 2009 and December 2011, though it still has a long way to go.
　　 Food safety fears gnaw at intl stores
　　 Chinese parents spooked by a series of food safety scandals are importing baby formula from overseas in a trend that is causing milk powder supplies to dwindle across the globe.
　　Paranoid parents are tapping into China’s massive diaspora, asking family and friends living abroad to send milk powder and baby food. Those without international connections are paying courier services to buy and send the products to China.
　　But now Chinese expatriates in Britain and the United States say they are finding it increasingly difficult to find supplies to send home, and medical experts are warning there could be dangers in importing an unknown international product.
　　Zhou Ying, who lives in New York, said she is asked to bring baby formula every time she visits China.
　　“One time I brought 12 cans for my friend who just had a baby,” she said. “I went to five stores to buy them because each store, such as CVS or Duane Reade (two chain pharmacies), only had two or three cans.”
　　Demand is so high in some international cities with a high concentration of Chinese expatriates, that some retailers have started imposing limits on the number of cans customers can buy.
　　An online Chinese trader who wished only to be known as Ukbabee, told China Daily she sells 400 cans of baby powder a month. The 52-year-old’s store is one of more than 1,500 on Taobao — a Chinese online marketplace — that sell imported milk powder.
　　But Ukbabee said her daughter, who lives in London, was finding it increasingly difficult to find supplies, with Tesco and Boots, two major British chain stores, introducing limits for customers.
　　“Supplies are always short. Sometimes, my daughter has to visit two supermarkets to buy just six cans,” Ukbabee said.
　　In response to the growing demand, a number of mailing companies across the globe, particularly in the US, are offering to buy and send milk powder to China.
　　 Comment
　　 A series of food safety scandals leave Chinese in fear, so they seek for foreign foods which are in short supply. It is urgent for Chinese companies to learn from the lessons and produce safe food.
　　
　　 China Mobile Ltd, the world’s biggest mobile operator by subscriber base, said on July 11 that it successfully developed the first TDSCDMA 3G mobile phone supporting the Near Field Communication technology, according to China Daily.
　　NFC is a short-range communication technology that can be incorporated into mobile phones to perform functions such as paying for goods or swapping information.
　　NFC mobile phones can help China Mobile to promote its mobile payment services, as the telecom carrier tries to find new sources to boost its sluggish revenue growth.
　　China Mobile bought a 20 percent stake of Shanghai Pudong Development Bank in 2010 to strengthen its mobile payment services. The two companies held a demonstration of their mobile payments solutions at the GSMA Mobile Asia Expo in Shanghai in June. The solutions included a service similar to Google Inc’s Google Purse, which enables people to connect their bank accounts to smartphones and make payments by phone.
　　Other two Chinese telecom operators-China United Telecommunications Corp Ltd, known as China Unicom, and China Telecom Corp Ltd-have also launched mobile payment branches.
　　China Unicom established a mobile payment arm in 2011 with registered capital of 250 million yuan ($39.26 million).
　　 Comment
　　 In collaboration with China UnionPay, China Mobile is to extend NFC payments services to one hundred Chinese cities and service areas, transforming the way people make payments.
　　 Free apps preferred by mainland Apple users
　　 Chinese iPhone and iPad users do not seem willing to pay for applications although they may have paid several thousand yuan for the high-end mobile devices, as reported by Shanghai Daily.
　　The downloading of applications in Apple Inc’s stores has tripled in the past year and propelled the Chinese mainland to become the second-biggest App Store market but the revenue generated by the apps is limited, a report by a mobile application researcher said on July 9.
　　On the mainland, every iOS app download generates revenue about 3 US cents on average in May, only one-tenth the 28 cents in the US and half of the 6 cents in Vietnam, said App Annie, a Beijing-based mobile application tracking and analysis firm.
　　Yu Junde, business director of App Annie, said the iPhone and iPad users on the mainland “are not major consumers for paid applications.”
　　App Annie said that by the end of May, the top 10 domestic Apple app developers had to depend on overseas income, which made up nearly 90 percent of their total revenue.
　　 Comment
　　 The popular jailbreaking of iPhones and users’ preference for free apps on the mainland have crimped the revenue of paid apps. By jailbreaking, the iPhone and iPad users can install free apps from some websites and online forums offering such downloads.
　　 Nokia to cut jobs, distribution centers in China
　　 Nokia Corp, which is struggling to survive as it competes with iPhone and Android phones, will cut jobs in China, its biggest regional market, Shanghai Daily reported on July 13.
　　Its four distribution centers in Chengdu, Beijing, Shanghai and Guangzhou will be integrated into two centers in Beijing and Guangzhou. It will lay off people but the details and figures are not available, said Gao Xiang, Nokia China’s spokesperson, on July 12.
　　Wang Ying, analyst at Beijing-based research firm Analysys International, said, “Apple and Google (with Android) have changed the industry structure completely through software and a service-oriented business model.”
　　By the end of the first quarter, Nokia’s market share in China was 11.4 percent, behind Samsung’s 24.86 percent and Huawei’s 12.6 percent, said Analysys. Years ago Nokia had over 30 percent of the market.
　　In June, Nokia said it would lay off 10,000 jobs globally and close several plants in Europe and Canada by the end of 2013.
　　Boston-based Strategy Analytics said Nokia had lost global market share to Samsung, the world’s largest seller of cell phones by volume. Samsung has 25 percent against 22 percent for Nokia.
　　 Comment
　　 Suffering great market share losses in major smartphone markets, Nokia has to restructure and focus on its core strategies.
　　 Over 9.59m automobiles sold in China in the first half of 2012
　　 Automobile sales in China over the first six months of the year totaled 9.59 million units, growing 2.93 percent from the first half of 2011, National Business Daily reported on July 12, citing figures from the China Association of Automobile Manufacturers. A total of 9.52 million vehicles were manufactured during the six month period, equivalent to year-on-year growth of 4.08 percent.
　　According to CAAM Executive Vice Chairman and Secretary General Dong Yang’s analysis, sales growth in the first quarter of the year started off slowly, and eventually increased on the way to June. The CAAM maintain that total growth this year will be between five and eight percent. CAAM Deputy General Secretary Yao Jie adds that the current state of the Chinese economy is relatively complex, with the country under a great deal of macroeconomic pressure that prevented automobiles production and sales growth rates from increasing in the short-term.
　　Chinese automobile sales in June grew by 9.86 percent year on year. Dong believes that the market is currently recovering, adding that “due to stimulatory policies and other positive influences, the market should be able to grow at least five percent in the second half of this year without any problem.” He predicts that even eight percent growth is entirely possible. The CAAM expects total automobile sales this year to reach the 20 million mark.
　　Domestic manufacturers’ performance in the first half of the year still leaves much to desire, with own brand passenger automobile sales totaling 3.15 million units, 0.2 percent less than 2011. According to Mr. Dong, although own brands have made significant advances in product quality and brand competitiveness, they still lag behind their foreign joint venture rivals. He predicts their plight may grow even direr in the latter half of the year, with weaker manufacturers facing the threat of being entirely forced out of the market.
　　
　　 Comment
　　 China’s auto market is growing and still has big potential. According to the NDRC survey, both domestic and imported vehicle prices keep falling. That will stimulate the consumers’ desire more. However, as the traffic getting worse and some local governments take the lottery system in vehicle purchasing, the sales will surely be influenced.
　　 New energy vehicles sales in China from January to June just over 3500 units
　　 New energy vehicles in China are still in their infancy, the most recent statistics from the China Passenger Car Association suggest. According the CPCA statistics, which appeared in a Shanghai Securities News report on July 12, total production and sales numbers for Chinese new energy vehicle in the first six months of 2012 totaled 3,167 and 3,525 units, respectively. Pure electrics accounted for 3,021 and 3,444 of the respective figures, with the remainder of the amounts being plug-in electric hybrids.
　　“The market for new energy vehicles in China is still within the beginning stages,” Deputy Ministry of the Ministry of Industry and Information Technology Su Bo said. According to Mr. Su’s calculations, there are currently only around 4,000 new energy vehicles driven in the country, with just three-quarters of those being for household use.
　　According to the recently released the Energy-Saving and New Energy Automotive Industry Development Plan, China will aim to sell and produce 500,000 new energy vehicles by 2015 and five million by 2020. The country aims to become one of the world’s leading markets for new energy vehicles.
　　The number of automobiles on China’s roads is expected to reach 200 million by 2020. That number of traditional fuel powered vehicles would require 250 million to 300 million tons of fuel to operate.
　　 Comment
　　 The new energy vehicle development relies more than technology itself, also requires the huge investment in building convenient charger stations network. China will still have a long way to go to reach its goal of world’s leader in new energy vehicles.
　　 China hopes US fairly treat ZTE probe
　　 China urged the United States to fairly resolve a case in which it accused Chinese telecommunications equipment maker ZTE of shipping banned U.S. computer products to Iran, according to China.org.cn on July 17.
　　“We hope to receive objective, just and proper treatment from the United States,” said Shen Danyang, a spokesman to China’s commerce ministry at a routine news conference.
　　A Reuters report in March said the FBI has opened a probe in Shenzhen-based ZTE over sales of hardware and software it purchased from the U.S. tech firms to Iran’s largest telecoms firm.
　　The products included a powerful surveillance system capable of monitoring landline, mobile and Internet communications, the report said.
　　According to Shen, China has kept normal, open and transparent economic and trade relations with Iran, not violating any UN Security Council resolution, and should not have to endure groundless criticisms.
　　China has clashed with the U.S. over sanctions against Iran since last year. The U.S. has used oil sanctions to force Iran to halt nuclear program.
　　China-Iran trade value reached US$45 billion in 2011 and is expected to increase to US$50 billion by 2012.
　　 Comment
　　 Chinese Premier Wen Jiabao defended China’s extensive oil trade with Iran against pressure from the west to impose sanctions in January, while also warning Tehran against any effort to acquire nuclear weapons.
　　 Microsoft set to ride a cloud on mainland
　　 Microsoft Corp is on the verge of making a “breakthrough” in providing localized cloud computing service platform in China, the United States-based software giant announced in Shanghai on July 19, according to Shanghai Daily.
　　This will impact millions of Chinese users of Microsoft products, especially those of the upcoming next generation Windows and Office products, the company said.
　　Microsoft is seeking local partners and is preparing to build data centers on the Chinese mainland on cloud computing services, which will support Windows 8 and Office 365 scheduled to be released by the end of this year, said Zhang Yaqin, Microsoft China’s chairman.
　　“We are close to landing our cloud service in China,”said Zhang, who declined to reveal more details.
　　Cloud computing allows users to save, edit, share and process data and files through various devices, including laptops, computers, and handsets, based on the online “cloud”platform. Top information technology giants, including Apple Inc, Amazon Inc and Google Inc, have invested heavily to penetrate the sector.
　　But overseas firms are presently not allowed to provide cloud services directly to the public in China, the world’s biggest dot-com market by Internet population. For example, Google now provides cloud services globally. But its user experience is limited in China since its data centers are all situated overseas.
　　In China, Microsoft will find ready partners among telecommunications carriers like China Mobile and China Telecom, each of which has several hundred million users, analysts said.
　　Meanwhile, Microsoft announced a cooperation deal with Beijing-based PPTV on Internet video. PPTV will provide paid online video services overseas through Microsoft’s cloud platform, Windows Azure.
　　Besides PPTV, Microsoft has found several small-and medium-sized enterprises in China as cloud partners.
　　In the next step, the software giant will expand cloud services to consumers, which will include the online storage tool SkyDrive.
　　 Comment
　　 Microsoft is in the process of a big change, building a new operating system for consumer hosted on cloud.
　　 Not All Gutter Oil Suitable for Aviation Fuel
　　 According to Changjiang Daily, KLM Royal Dutch Airlines has been looking to purchase China’s gutter oil for powering the air planes. It is said that they have signed a letter of intent with waste oil processing factories in Shanghai and Suzhou, with the first batch of orders reaching 2,000t.
　　Person in charge of KLM responded to the report of gutter oil purchase that “so far we have not reached any form of agreements with China’s suppliers on the use of gutter oil.”
　　However, KLM is one of the pioneer companies in the use of bio-fuel. It is seeking in partnership with SkyNRG the materials that could be refined into bio-fuel. “The Chinese market is the place where we could find part of such materials.”
　　SkyNRG has only signed letter of cooperation intents, rather than formal contracts, with its potential partners in China. “If the purchase is on the way, the gutter oil will be supplied for other purposes.” SkyNRG states that China’s gutter oil has passed special tests to be used as raw materials for bio-fuels.
　　However, the “gutter oil” used for producing bio-fuels are only waster oil after cooking and the contamination during the recycle stage is low. In China a wide range of edible oil is used for culinary purposes, and their ingredients are quite complicated. Not all of them could be used as materials of bio fuels.
　　 Comment
　　 As the airline costs keep rising, it would be a shared question for every airline company that how to lower the costs efficiently while ensuring service and safety. Although the costs of refining gutter oil into aviation fuel triple that of common aviation fuel, the mass production and rising costs of crude oil will largely increase the competiveness of aviation biofuel in the long run. Also, China will further regulate the management of gutter oil and food waste, which will bring huge benefits to China’s environmental health and energy supply.
　　 Passengers Claiming Compensation on the Blacklist of Spring Airlines
　　 In recent days the Spring Airlines, a domestic airline com-pany running on lost costs, has been caught in a whirlpool of publicity due to the “blacklist” incident, as reported by Southern Daily.
　　A number of media sources report that Mrs. Liu, a Harbin citizen, has met an 8-hour delay of her flight run by Spring Airlines. She claimed economic compensation, saying that the Spring Airlines had not provided any plausible explanation, otherwise she would refuse boarding. After negotiations the Spring Airlines gave each affected passenger 200 yuan in cash, with their names signed as confirmation. However, when Mrs. Liu went to book flights at the website of Spring Airlines at the end of June, she only found that her personal materials have been locked and she has been blacklisted, according to the customer service center.
　　However, the company spokesman Zhang Wu’an said that “passengers who have taken aggressive behaviors, such as forcible occupancy of seats, that violate other passengers’benefits, will be put on our blacklist, to prevent this violation of rights happening again.”
　　He also said that the number of people on the blacklist is very small. If these passengers submitted a written statement of non-aggressive behavior, after negotiation with the customer center, their names will be removed from the blacklist.
　　Although both sides have made sense in their argument, it is still disputable about whether such “blacklist” rule will be legally sound.
　　Legal experts say that there is no single law in China that supports airline companies to refuse passengers. On the contrary, transportation companies and departments have their obligations to provide services.
　　Other experts say that the clause 289 of the Law of Contract applies to those monopoly carriers. The Spring Airlines accounts for only 2% of the market share, which is never monopolistic. Therefore they have no binding obligations.
　　 Comment
　　 Because of the weather problem, delay of flights happens frequently. The name list of passengers beyond carrying capacity set by Spring Airlines avoids excessive rights protection, but this action is never suitable. Passengers who offense the law after purchasing the tickets should suffer punishments, but they still have the rights of purchasing tickets from airline companies.