News on China's scientific and technological development.

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The automotive supplier Lingyun Industrial Group Corp and two other Chinese companies signed an agreement on Tuesday to acquire 100 percent of the German car-lock maker Kiekert AG, a step meant to strengthen Lingyun's technology and position it for global growth.

The Hebei-based Lingyun said in a statement it would take over 55 percent of Kiekert from a foreign consortium that includes BlueBay Asset Management, Silver Point Capital and Morgan Stanley.

The related company Henan North Xingguang Machinery and Electric Co Ltd, which is under the China North Industrial Group Corp, will have a 25 percent stake. An investment foundation from Tianjin will have the rest.

Lingyun said that the takeover will help it obtain world-class vehicle parts technologies and make it possible for the company to compete in the global market.

The financial details of the deal weren't disclosed.

The 150-year-old Kiekert said in a statement that the world's leading producer of latch systems for passenger cars "is very well prepared for the sale to the strategic investor from the automotive sector".

In 2011, Kiekert sold more than 41 million latch systems, a record for the company. Expansion in Asia helped it achieve sales of more than 500 million euros ($653 million).

Through the acquisition, a supplier company with turnover of more than 1 billion euros and massive global growth potential is emerging, said Kiekert.

"Overseas acquisitions offer an opportunity and shortcut for Chinese automotive players to obtain core vehicle technologies," said Jia Xinguang, an independent auto analyst based in Beijing.

"China perennially lacks key technologies and the ability to develop new technologies in the vehicle parts sector. Domestic parts makers are just surviving at the bottom of the supply chain."

Alex Fan, president of the Los Angeles-based merger and acquisition specialist Crestridge Consulting, said it would be smart for Chinese automakers to target foreign parts suppliers, not vehicle makers, when they invest.

Chinese vehicle parts makers have sought to expand by making overseas acquisitions.

In December 2010, Pacific Century Motors, a joint venture between Tempo Group and the Beijing municipal government, completed the acquisition of General Motors Co's steering-parts manufacturing unit, Nexteer Automotive, at an estimated price of $420 million to $450 million.

After it purchased suspension and brakes businesses from the US parts maker Delphi Automotive LLP in 2009, BeijingWest Industries Co Ltd, which is partly owned by the Beijing municipal government, acquired the brakes manufacturing unit of German automotive supplier Robert Bosch GmbH last year.

Employing 4,000 people in its production, research and development bases in Germany, the Czech Republic, the United States, Mexico and China, Kiekert is the market and technology leader for automotive side door latches. It also invented modern central locking systems. It has registered more than 850 patents.

Lingyun develops, produces and sells plastic and metal components for vehicles, such as body trim, specialized tubes, door elements and drive shafts.

With about 10,000 staff members, the State-owned company achieved sales of more than 700 million euros last year.

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Chinese scientists have made major breakthroughs in developing the country's second generation of transgenic cotton, according to Li Jiayang, vice minister of agriculture.

The first generation of genetically modified cotton generally refers to breeds developed in the 1990s with a resistance to pests.

However, the development of the new generation has been targeted at improving the quality of cotton fiber, as well as the output and resistance of the crops, said Li, who is also president of the Chinese Academy of Agricultural Sciences (CAAS).

Several "landmark" second-generation transgenic cotton breeds and germplasm materials were revealed at a Tuesday press conference.

China has over 100 million cotton farmers and 19 million textile workers, according to Yu Shuxun, director of the CAAS's Cotton Research Institute.

Cotton production is crucial to China's massive textile industry, which relies heavily on imports, Yu said at the press conference.

About 40 percent of the cotton used last year was imported, Yu noted, adding that a heavy reliance on imports, particularly for high-quality cotton, has become a bottleneck in upgrading China's textile industry.

Yu said the introduction of the new breeds will help to produce high-quality cotton and enhance the competitiveness of the entire industry.

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Beijing has welcomed Washington's decision to allow some high-tech items from the US to be exported into China.

"We welcome this move, as mutual benefit is the essence of Sino-US economic and trade relations. We hope to strengthen mutual investment for a sustainable, stable and healthy development of bilateral trade links," Foreign Ministry spokesman Hong Lei said at a regular news briefing on Wednesday.

Forty-six of the 141 high-tech items requested by China will be granted approval to enter the Chinese market, US Ambassador to China Gary Locke said on Monday during a function to commemorate the 40th anniversary of the Shanghai Communique.

"As a result of our work together, the United States has indicated that 46 of these technologies can be readily exported to China, and some may not need a license at all," Locke said.

The US government is in the midst of a major reform and simplification process that will enable more high-tech goods to be exported to China, he said.

"We need additional detail from China on the remaining requested items, so that we can determine whether and under what conditions they can be exported," he said.

In May, the US embassy will bring a delegation of US companies to Shanghai to meet with Chinese companies interested in purchasing these high-tech goods, said the ambassador.

Ni Feng, deputy director of the Institute of American Studies at the Chinese Academy of Social Sciences, said this is a direct result of China's repeated requests, adding that Chinese leaders had raised this issue almost every time during high-level dialogues.

The announcement comes at a time when pressure is mounting on President Barack Obama as he prepares for a presidential election in which the economy is expected to be the biggest issue.

"Considering the sluggish domestic consumption and investment and that there are no emerging industries that could promote rapid economic growth, the only way for the US government to turn around its economy is to boost its exports," Ni said.

He said the US traditionally has had three major export markets - Europe, the Middle East and Asia.

But since Europe is suffering from a full-scale economic crisis and weapons seemed more popular in the chaotic Middle East, Asia is a good destination for US products, as it has pledged to double its exports in the next five years, he added.

"By boosting exports of mature technologies to China, which has a strong operability, the US could make its overseas trade data much more attractive," he said.

Meanwhile, Ni added that the decision might be connected with the recent lowered tone by the US on its "return to Asia" strategy, as the decision may alleviate some concerns from China.

However, analysts also said the decision by the US to allow some high-tech exports into China was symbolic, and the effect will depend on how it is implemented.

Shi Yinhong, a professor of US studies at Beijing-based Renmin University of China, said compared with the trade barriers and pressure that the US has put on China, the decision may have little impact. "We welcome this decision, but how much of an effect will a mere 46 high-tech items have?" Shi said.

Shi said he was skeptical whether the US would further ease restrictions on high-tech exports to China, as the US has always been conservative on this issue and not willing to make major adjustments.

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Vice Premier Li Keqiang urged authorities to ensure that the deadline is met to complete the South-North Water Diversion Project, the ambitious plan to optimize unbalanced water resources, to alleviate a worsening shortage facing arid northern regions.

"Drought and water shortages are severe restrictions on the country's social and economic development," Li said at a working conference of the project on Wednesday. "Especially in North China, where an ever-increasing drought has hit regions in recent years."

Precipitation fell this winter, up to mid-March, by more than 40 percent in Beijing and Tianjin and groundwater is not being replaced, Li said.

Water shortages in North China will remain a feature well into the near future, but the project will solve the situation.

Other measures should also be utilized, such as conservation and combating water pollution, he said.

The massive water diversion project is designed to take water from the country's longest river, the Yangtze, in the south via an eastern, middle and western route using both canals and pipes.

The diverted water will relieve the thirst of the arid northern regions, including Beijing and Tianjin.

According to the plan, the eastern route will transfer water from East China's Jiangsu province to Tianjin, next door to Beijing, starting in 2013.

The middle route will supply water from the Danjiangkou Reservoir in Central China's Hubei province into large cities including Beijing, Tianjin, Shijiazhuang and Zhengzhou, in 2014.

The project has stepped up its pace since last year.

By the end of 2011, 330,000 people in Henan and Hubei provinces had been relocated to make way for the central route, according to the project office.

The remaining 15,000 people will be resettled in the first half of this year. This will complete the relocations, the project office said in January.

More than 64 billion yuan ($10.13 billion) will be invested in the water diversion project this year.China invested 57.8 billion yuan in the project in 2011, bringing the total investment to 137.6 billion yuan so far, official figures showed.

Li also stressed the importance of quality management.

He emphasized the importance of making sure that people were properly resettled and local authorities should increase support to help resettled people, he said.

The project is already paying dividends. In 2008, the Beijing-Shijiazhuang section of its middle route, linking reservoirs in Hebei with Beijing, began supplying water as an emergency measure to help ease shortages in the capital.

By the end of 2011, up to 1.1 billion cubic meters of water had been transferred to the city, according to the project office.

The project will transfer at least 1 billion cubic meters of water to Beijing a year, accounting for a quarter of the city's annual water supply, when it is completed in 2014, Sun Guosheng, director of the Beijing branch of the project office, said in January.

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Royal Dutch Shell on Wednesday signed an agreement with Chinese state-run energy
company CNPC to explore, develop and produce shale gas in southwest China.

Royal Dutch Shell on Wednesday signed an agreement with Chinese state-run energy company CNPC to explore, develop and produce shale gas in southwest China, the Anglo-Dutch company said.

The production-sharing contract with China National Petroleum Corporation centres on a 3,500 square-kilometre (2,170 square-mile) area in Sichuan province, Shell said in a statement.

"We are delighted about this new milestone in our strategic cooperation with CNPC," the statement quoted Shell's chief executive Peter Voser as saying.

"China has huge shale gas potential and we are committed to making a contribution in bringing that potential into reality."

The oil giant did not provide a value for the agreement, which still needs government approval.

Shale gas, a cleaner alternative to coal and oil, comes from deep reserves that were thought inaccessible until the advent of new drilling methods, but extraction costs are high.

Beijing is investing billions of dollars to develop clean energy as it seeks to meet a target of generating 10 percent of its fuel needs from natural gas and 15 percent from renewable sources by 2020.

It has already been investing heavily in Canadian and US reserves of shale gas as it seeks to reduce its reliance on coal and oil imports.

But experts say China's lack of technical expertise in shale gas extraction poses a challenge to the industry's domestic development.

Click to expand...

Not only that, but China has one of the toughest and most complex geography to extract shale gas.

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Twenty-three years ago, there was no city named Shuozhou in China.
In the mid-1980s, former Chinese leader Deng Xiaoping met with Armand Hammer, a US industrialist and founder of Occidental Petroleum, and decided to set up one of China's first joint ventures in North China's Shanxi province.

Since then, the region has been world-known for its coal production, and the joint project, Antaibu, the country's biggest open-pit coal mine, is considered a milestone in China's opening-up.

The city of Shuozhou was born in 1989. Last year, it produced 186 million tons of coal, about 20 percent of the total in Shanxi, a major powerhouse of China.

More than 20 years of massive coal exploration has brought the city wealth, but has also taken a toll on its environment, leaving huge piles of coal waste and causing sandstorms.

"Coal excavation brings soil erosion and destroys forests, and we don't want that. We want the city to be green, to be a good place to live," said Wang Maoshe, Party chief of Shuozhou, who was in Beijing for the National People's Congress this month.

Consequently, planting trees has been high on the city government's agenda, he said.

Since the late 2000s, Shuozhou has invested about 1 billion yuan ($158 million) a year to plant 22,000 hectares of forest, an area about 25 percent larger than Washington, DC.Now, 35 percent of the city area is green, and Wang has an ambitious plan to increase that area by 2 percentage points a year.

It is no easy task, considering the harsh natural conditions and huge investment.

Shuozhou, situated near the Ordos Desert, sees an annual average temperature of 6.4 C and has limited rainfall, about 450 mm a year. Last year, Beijing had about 720 mm of precipitation, according to the China Meteorological Administration.

"So we plant mostly Mongolian pines, which easily adapt to sandy soil, and we've successfully brought water from the Yellow River through diversion channels," Wang said.

As for the 1 billion yuan annual investment, Wang said about one-third is from the provincial or city government, one-third from the district government and one-third from enterprises, especially coal mine companies.

"One tree for 1 ton of coal, that's our requirement for coal mines," he said. "Coal exploration hurts the environment, so it has to pay the price."

The city is also going green by making better use of the coal waste.

About 20 percent of each ton of raw coal excavated is waste, or gangue. In the past, the gangue was thought to be worthless, local officials said.

But Shuozhou has found that with advanced technology, gangue can be processed for use in generating power, Wang said.
The city now produces 36 million tons of coal gangue a year, almost all of which could be used to generate electricity. That provides a power generation capacity of 2.67 million kWh, the largest amount of all cities in China, according to figures from the city government.

After power generation, coal and coal gangue turn into coal ash, which was also thought to be useless in the past. But the ash contains metals, including alumina and silica, which can be extracted.

To make better use of coal ash, an industrial park, focusing primarily on processing coal ash, is under construction.

To diversify its economy, the city is vigorously developing non-coal industries, such as agriculture and animal husbandry. Among the planned projects to be launched before 2016, about 70 percent are not related to coal, according to the city government.

"Shuozhou was born for coal, but coal should not be the only key word for it," Wang said.

"Instead, it should be a natural, green, modern and happy home for our 1.8 million residents."

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China's Ministry of Commerce imposed five-year anti-dumping duties of 16.2 to 28.8 percent on photographic paper and paperboard from the United States, the European Union and Japan in a final ruling on Thursday.

The move indicated that China is warning its trading partners about the intensifying trade investigations into Chinese goods and challenges to China's export regulations, according to experts.

The anti-dumping investigation was launched in December 2010 in response to complaints by domestic producers, including Lucky Film Co Ltd.

Under the final ruling, Kodak Ltd faces a duty of 19.4 percent, while Fujifilm Manufacturing Europe BV has a rate of 17.5 percent.

Other producers from Japan and the US face duties as high as 28.8 percent.

Li Qiang, president of Kodak China, said that "he regrets the ruling", and he said the company did not dump, because Kodak's prices for photographic paper and paperboard products are the highest in the domestic market.

Fujifilm did not comment.

Imports from the US, the EU and Japan accounted for more than 99 percent of China's total imports of these products since the investigation began. The imports took up 76 percent of the domestic market in the first half of 2010, according to the ruling.

"The ruling is, to some degree, related to recent frequent trade investigations (against Chinese exporters) by the US. But it is reasonable and supported by sufficient evidence," said Song Hong, an economist from the Institute of World Economics and Politics under the Chinese Academy of Social Sciences.

Sang Baichuan, dean of the Institute of International Business at the University of International Business and Economics, said "the anti-dumping ruling is in line with (World Trade Organization) rules and can serve as a warning against the abuse of trade protection measures from developed economies".

Sang added: "China has no intention of trade retaliation or a trade war (with) the US. But the imports of photographic paper and paperboard did hurt the domestic industry and caused bankruptcies and unemployment," Sang said.

The final ruling came a day after the US announced anti-subsidy duties against Chinese solar panel exporters in a preliminary ruling.

On the same day, the US imposed anti-dumping duties as high as 235 percent and anti-subsidy duties of up to 223.27 percent on galvanized steel wire from China.

While Song suggested the ministry conduct more investigations into US exports, including agriculture products, aircraft and automobiles, Jin Baisong, deputy director of the department of Chinese trade and studies under the Chinese Academy of International Trade and Economic Cooperation, a think tank for the ministry, said that "trade protection moves will hurt both".

Gary Locke, US ambassador to China, said on Wednesday that the US government is in the midst of a major reform and simplification process that will enable more high-technology goods to be exported to China.

Jin said that domestic producers need to seize the chance to enhance their competitiveness through investment in research and development and improvements in technology.

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- Chinese scientists have sequenced the genome of the sweet orange (Citrus sinensis), an achievement expected to help scientists understand the complex genetic make-up of the crop in order to improve its quality and yield, according to researchers with Central China Agricultural University in Wuhan, capital of Hubei province.

After a year's effort, a team of horticulture, genomics and bioinformatics experts from the university successfully assembled and annotated the genome sequence of the plant, marking the first time that Chinese scientists have independently determined the genome sequence of a fruit crop.

Deng Xiuxin, an academician with the Chinese Academy of Engineering and the leader of the research team, said that the sequencing of the genome marks the establishment of an ideal research platform for biotechnology and genetic engineering in China, and it is also gravely important for improving breeding and upgrading the crop's industrial competitiveness.

Breeds of citrus are among the most widely grown fruit crops in the world. The sweet orange, which originated in China, is the most commonly grown fruit tree in the world, and its production accounts for about 60 percent of total citrus production.

The sweet orange, mostly poly-embryonic, is highly heterozygous, which means it has dissimilar pairs of genes for any hereditary characteristic, and is plagued by sterility. Therefore, determining its genetic make-up can provide a sound scientific basis for genetic and breed development work, according to Xu Qiang, an expert with Central China Agricultural University.

China is the world's largest grower of citrus, and Chinese people have been cultivating citrus crops for 4,000 years. Statistics from the Ministry of Agriculture show that China produced 26.45 million tonnes of citrus across 2.21 million hectares in 2010.

Of the more than 80 types of citrus species grown in China, 40 percent are not native to China, and half of the country's fruit production is generated from foreign breeds, Deng said, adding that China has been eager to see breakthroughs in the genetic research of citrus in order to speed up the improvement of China's own citrus breeds.

Deng compared sequencing the genome of the sweet orange to opening the "black box" of the crop's life activities, a move that could facilitate the improvement of many of the fruit's traits, including color, taste, yields and disease resistance.

Xu said the researchers launched a website for the sweet orange genome sequence () on Wednesday to provide free data analysis for academic research.

The world's first human genome sequence map was finished in June 2000. From 2000 to 2009, scientists across the world have drawn whole genome sequence maps for 1,100 species, averaging 118 a year.

Chinese scientists have completed genome sequencing for rice, domesticated silkworms, chickens, oysters as well as endangered animals such as the giant panda and Tibetan antelope.

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China consolidated its position as the world's wind power leader in both newly and cumulative installed capacities in 2011, according to official figures released by the China Wind Energy Association (CWEA) on Friday.

The CWEA says that China had 17.6 gigawatts (GW) of wind turbines installed in 2011.

Though this was down 6.9 percent from the previous year, it took China' s cumulative wind power installed capacity amount to 62.4GW, up 39.4 percent year-on-year, by the end of 2011. The country, therefore, remains the global leader in wind power, in terms of newly and cumulative installed capacities.

According to the Global Wind Energy Council, the United States, which previously led the world in installed wind power capacity, had only 6.8GW of wind turbines installed in 2011, making its cumulative total 46.9GW by the end of the year.

Li Junfeng, director of the China Renewable Energy Industries Association, said the Chinese wind power industry met with many challenges in 2011,including slower wind farm construction and many accidents in the sector, but nevertheless managed to overcome all the hardships and demonstrated excellent performance by the end of the year.

The top five Chinese provincial regions for newly installed wind turbines were Inner Mongolia, Hebei, Shandong, Ningxia and Liaoning, which added 3.7GW, 2.1GW, 1.9GW, 1.7GW and 1.2GW, respectively.

The newly installed capacity adjusted the ranking of China's top five wind-power-developing regions, in terms of cumulative wind turbine installation, to Inner Mongolia with 17.6GW, Hebei with 6.9GW, Gansu with 5.4GW, Liaoning with 5.2GW and Shandong with 4.6GW.

In 2011, the ranking of top wind turbine makers was reshuffled, too. Goldwind replaced Sinovel as the largest in newly installed capacity, totaling 3.6GW of turbines. Goldwind held a 20.4 percent share of the Chinese market.

Sinovel, with 2.9GW of newly installed capacity, took up a 16.7 percent share.

Goldwind and Sinovel both attributed their poorer performances in 2011, compared with the previous year, to the Chinese government's delay in approving new wind farms and a cyclical fluctuation of the macro economy, which led to postponed wind farm construction and subsequently less demand for their turbines.

Goldwind had 3.7GW of wind turbines and Sinovel had 4.4GW of wind turbines installed in 2010.

Guodian United Power surpassed Dongfang Electric to be the third largest, seizing a 16.1 percent market share with 2.8GW of turbines newly installed.

However, the new top three took up only 53.2 percent of the Chinese market in 2011, where as the old top three held 56.8 percent in 2010. According to industry officials, this shows the big players in the Chinese wind turbine manufacturing sector have met with violent competition from more rising companies.

Foreign turbine makers in China continued to face strong challenges from local manufacturers, though they previously dominated in the country. In 2004, when China had few local operators in the sector, foreign-branded wind turbines occupied a 75 percent share of the Chinese market.

Foreign turbine makers, except for GE, occupied smaller market shares in newly installed capacity in 2011. Vestas dropped from the 6th largest in 2010 to the 8th largest in 2011. It had 661.9MW of wind turbines installed in China in 2011, holding 3.8 percent of the Chinese market.

GE climbed from 14th largest in 2010 to 11th largest in 2011. It had 408.5MW of turbines installed in China in 2011, taking a 2.3 percent market share.

In terms of cumulative total in 2011, the top three wind turbine makers remained Sinovel, Goldwind and Dongfang Electric, as in 2010.

The top three had 13GW, 12.7GW, and 6.9GW of cumulative installed capacity by the end of 2011, taking 20.8 percent, 20.3 percent and 11.1 percent of the Chinese market, respectively. But their market shares reduced from 56 percent in 2010 to 52.2 percent in 2011.

According to latest statistics from HIS Emerging Energy Research, a globally leading industry advisory company, four Chinese wind turbine makers -- Sinovel, Goldwind, Guodian United Power and Mingyang -- edged into the world top 10 list in 2011.

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The Ministry of Commerce announced Friday it will launch an anti-dumping probe into resorcinol imported from Japan and the United States.

A brief statement on the MOC's website said it will start investigating the dumping margin and possible damage to similar products and industries in China starting from March 23.

Resorcinol, or M-dihydroxybenzene, is an essential component used to manufacture tires and other fiber-reinforced rubber goods.