Yahoo buys mobile start-up

(Reuters) - Yahoo Inc said on Thursday it bought a small, mobile start-up company in New York, marking one of new Chief Executive Marissa Mayer's first moves to revamp the struggling Web pioneer by acquiring outside products and technology.
Yahoo purchased Stamped, which makes a product that lets consumers share favourite restaurants and music on their smart-phones. It did not disclose financial details.
In a blog on the Stamped website, Stamped co-founders wrote that Yahoo would discontinue the Stamped product by the end of the year and that the team would be working on something "big, mobile and new."
"As a team of mostly former Googlers, we've all worked with and are big fans of Marissa. So when an opportunity arose to become a part of the team at Yahoo!, we jumped," read the blog post, which featured a picture of the three co-founders alongside Mayer.
A former Google Inc executive, Mayer took over as Yahoo CEO in July, becoming the latest in a string of executives to try to revive revenue growth at the Web portal.
During Yahoo's quarterly earnings conference call on Monday - her first public remarks since taking the helm - Mayer said that her top priority was to create a coherent mobile strategy for Yahoo.
Yahoo said the Stamped team consists of nine employees.
The company, with not quite two years of history under its belt, has already won seed funding from celebrities such as pop star Justin Bieber and The New York Times, according to Crunch-base, an online blog and database of venture capital transactions.

Read more »

Miners take "rail-veyors" and robots to automated future

(Reuters) - In an office trailer parked outside a mine shaft in northern Ontario, operator Carolyn St-Jean leans back in her chair and monitors a machine loading nickel-rich ore into rail cars deep underground.
Once filled, the automated train will snake through a series of narrow tunnels, emerge from a rocky outcropping, then loop past St-Jean's window and dump its payload for sorting.
Vale SA, the Brazilian company that owns the mine near this nickel-rich Canadian town, has spent nearly $50 million in two years to install and test the "rail-veyor." The company believes the transport system will revolutionize how it builds and extracts new mineral deposits.
The equipment is made locally by Rail-Veyor Technologies Global Inc. It is one of many mining technologies that developers hope will allow future production to be run almost entirely by people safely above ground.
Such advances may prove crucial as easy-to-exploit deposits run dry and miners drill deeper in more remote places to supply China, India and other emerging economies. The technology could make mining cheaper and safer, avoiding the need to dig wide tunnels and hire large numbers of expensive, skilled workers.
"As we go deeper, if we continue to apply existing thinking and existing technologies, it's a death spiral" for company profits, said Alex Henderson, who heads Vale's technology team in Sudbury.
"We need to begin to look at a step-change in mining rather than just incrementally improving our existing processes."
The rail-veyor is one such step-change. At the test site, it has halved the time to build a mine, and Vale expects a 150 percent boost in production rates before year end.
In Australia, Rio Tinto Ltd, one of the world's largest miners and an automation pioneer, is rolling out a fleet of self-driving trucks and trains at its iron ore operations. Vale, BHP Billiton and Chile's Codelco are in hot pursuit.
Gold miner AngloGold Ashanti is eyeing automation in South Africa, where miners spend hours each shift traveling up and down shafts and ounces of gold are left behind in support pillars each year.
Organized labor has made its peace with the automation drive, although there were some concerns that robots would displace humans.
"We're ok with automation, it's part of the changing times and it's a good thing for productivity," said Myles Sullivan of the United Steelworkers Canada, whose workers ended a year-long strike at Vale over bonuses and wages in 2010.
700 STORIES UNDERGROUND
New challenges in mining are driving technological changes. Large, accessible deposits have all but disappeared. Resources of tomorrow are in far-flung corners of the globe or hundreds of meters beneath the surface.
Add a shortage of skilled labor - expected to worsen as the baby-boom generation retires - and mining costs have surged.
While soaring demand means higher metal prices, rising costs are crimping profits. Canada's S&P/TSX Mining share index has fallen more than 38 percent since the beginning of 2011.
Experts say mining companies must change how they operate.
Making that shift is not easy for an industry steeped in tradition, especially when change doesn't come cheap. Rio Tinto is spending more than $500 million on train automation alone.
"This is a very conservative industry that has been very productive over the last 30 years doing it the way they're doing it now," said Douglas Morrison, chief executive of the Centre for Excellence in Mining Innovation (CEMI), an industry-funded research center in Sudbury.
"But is the old way going to work for us into the future? I think probably not, so we need to make some changes."
After decades of production, the nickel mines around Sudbury are getting deeper and deeper. At Vale's Creighton mine, the No. 8 shaft drops nearly 8,000 feet into the ground - equivalent of a 700-story condo tower.
At that depth it is very hot, around 50 degrees Celsius (120 Fahrenheit), so tunnels must be pumped full of cooled air to make temperatures manageable for people and heavy machinery.
"The bigger issue is when we get much deeper we start to generate our own earthquakes - very small earthquakes - these are called 'rock bursts,'" said Morrison.
Smaller tunnels and new ways of digging can hopefully reduce the danger of these rock bursts, which create a safety concern and slow development.
Rio Tinto is working with CEMI on automated tunnel borers, currently used to build subway and sewer tunnels. By cutting through the rock instead of blasting, Rio aims to quadruple its underground advance rates to 20 meters a day.
But while automated tunnel borers will build shafts and tunnels more quickly, massive mining equipment still handicaps the industry, which is where Vale's rail-veyor comes in.
A train hauling 50 tonnes of ore uses a far smaller tunnel than a truck with the same load. By taking the massive trucks and scooptrams - large vehicles with shovels on the front - out of the equation, Vale can build more compact and stable tunnels.
The rail-veyor, built on tracks that zig-zag down to the deposit, actually eliminates the need for expensive shafts and may eventually move people and equipment, along with ore.
Vale's Henderson believes the technology - which the company plans to roll out in five upcoming projects - is a game-changer that will help usher in a new era of mining.
"Just as the scooptram was the key enabler for the mechanized era, is the rail-veyor a key enabler for the next?" he said.
MAN VS MACHINE
What that "next era" will look like is still up for debate. Some innovators believe robots will do most of the labor in mines of the future, as in automobile assembly plants. This would ease likely shortages in skilled labor in many countries.
Over the next decade Canada's mining sector will need more than 100,000 skilled new hires to sustain even modest growth, according to the Mining Industry Human Resources Council.
In Australia, the labor crunch is already so intense that truck drivers can make upwards of $100,000 a year, with turnover rates at some mines still near 40 percent.
"One of the biggest problems that the mining industry faces worldwide is trained personnel. We can't get them," said John Meech, director of CERM3, a mining research center at the University of British Columbia in Vancouver.
"One of the ways we are going to have to deal with that is to automate the systems so that the human becomes the supervisor, rather than the direct means of control."
It is a concept already used at remote open-pit mines in Australia, where Rio's new fleet of driverless trucks can be run from a control room hundreds of miles away.
Canada's Nautilus Minerals Inc is using automated rovers to explore the ocean bed for mineral deposits that underwater robots will eventually mine.
In addition to boosting productivity, the advances will enhance safety. As labor leader Sullivan says, "so long as there's underground mining, there will be women and men working underground."
Safety is the focus at a converted schoolyard just outside Sudbury, where a duo of mine rescue robots roll through a makeshift obstacle course. Their thick tires grind over logs and through mud pits.
Designed by Canada's Penguin Automated Systems Inc, the equipment is being tested by Codelco at its Andina copper mine in Chile, doing dangerous jobs like checking stability after blasting and surveying tunnels at risk of flooding.
resource:http://www.reuters.com/finance/smallBusiness

Read more »

A startup hub emerges in Chicago

(Reuters) - Bernhard Kappe, the chief executive officer of Chicago's Pathfinder Software, steps up to a dry erase board and draws a crude graph, its slope curves upward. Then he plots a point in the middle to show where the city's web entrepreneurs stand in terms of growth and progress.
"These things take 20 years to get to maturity, and they're not linear," says Kappe, who's also an executive director of the Chicago Lean Startup Circle, a group that fosters local website development. "But we're six to seven years in, and definitely in an acceleration stage."
While Chicago may not compare to Palo Alto in terms of high-tech sexiness, it's experienced enough high-profile success stories in the past few years - from Groupon to 37Signals to Trunk Club, launched by Bonobos founder Brian Spaly. Now local entrepreneurs and members of the startup community are uniting to help continue the momentum.
And that's where the Chicago Lean Startup Circle comes in. The group now claims 2,800-plus members, an 18-fold explosion since Kappe and Todd Wyder, Pathfinder's chief product officer, assumed leadership nearly three years ago.
Aside from solid growth, the group also brandishes some feisty attitude and is not afraid to self-promote, describing itself as "a group of smart and driven high-tech entrepreneurs that have learned how to discover customers and build products they want."
That's no idle boast given the numbers Kappe and Wyder produce to make their case. In a survey of Chicago Lean Startup members last year, the 20 percent who responded (about 500-plus people) reported that their companies had created 7,047 tech-sector jobs.
Of course, Chicago isn't the only city with such a circle; Kappe says about 130 such lean startup groups exist worldwide, with Chicago ranking above Boston, but behind New York in membership.
But Chicago's circle has done better work than other similar organizations in tooting its horn and marshaling creative resources. For starters, it partners with other groups such as Built In Chicago (an online community for local startups) and 1871 (a co-working center for digital startups, taking its moniker from the year of the Great Chicago Fire). Kappe and Wyder have also added incentives, offering prizes of $25,000 on cash and $50,000 in services in their annual "Lean Startup Challenge."
"If you look at the Chicago tech scene, a number of leaders and groups have emerged where we all want the same thing: making Chicago's entrepreneurial community the best in the world," Kappe says.
There's been exciting news this month as well, with the venture capital firm New Enterprise Associates establishing a new Chicago office with its $35 million investment in Braintree, an online and mobile payments company.
But can Chicago become, say, a Midwestern Silicon Valley? Kappe says that's hardly the goal, adding that, "We have a lot of great relationships in the valley." He sees Chicago building a tech scene based on its strengths as a business-to-business hub, a view supported by tech experts and observers.
So while launching another high-profile consumer site a la Groupon would bolster the area's startup scene, there's already plenty of action among portals that provide niche services to the restaurant and health care industries, for example. At Pathfinder, Kappe creates medical software solutions for institutions using lean innovation techniques.
"The sheer scale of Silicon Valley makes it difficult for any city to match," says Fred Diaz, city manager of Fremont, California, a worldwide hub for web startup activity. "But rather that replicate Silicon Valley, Chicago should strive to be the best entrepreneurial Chicago it can be. That's what will drive success."
"Chicago can become a vibrant tech hub, but in a much different way," says Leena Rao, a senior editor at TechCrunch. "We need to remember that Chicago becoming a tech hub is a marathon, not a sprint. But the signs are promising; the area has a good talent base," supplemented by top-tier universities and the support of Mayor Rahm Emanuel, who's made high-tech development a priority of his administration.
"The city is conducive to startups," says Jeffrey Harrington, who launched his restaurant-vendor service website Cardoona with plenty of help from Kappe and Wyder's group. "The culture is very collaborative. It could've taken us three years to figure out our first three business models were wrong. Through, it took us less than 3 months, preventing us from wasting huge amounts of time and money."
Kadesha Thomas attended her first meeting of the Chicago Lean Startup Circle a year ago. The freelance writer had hit on an idea for a website to create custom content for health care clients, but felt sheepish about writing a huge business proposal or hitting up a bank for funds.
"They discourage you from getting any money until you've validated the idea and come up with something solid," Thomas says of the circle members. "That made my barrier to entry a lot lower. All you have to do is talk to your customer and get to know their needs."
Thanks to the guidance of Kappe, Wyder and others, she launched her CareContent.com website on October 22 without borrowing a dime from friends or family. "We have a lot of great leads and a lot of people really interested in being our first customers," she says. "It's very exciting."
resource:http://www.reuters.com/article/2012/10/31/us-startup-hub-idUSBRE89U1DL20121031

Read more »

Asian shares fall after disappointing U.S. earnings

A visitor looks at market indices displayed at the Tokyo Stock Exchange in Tokyo September 26, 2012.

Credit: Reuters/Yuriko Nakao

By Chikako Mogi

TOKYO | Mon Oct 22, 2012 1:36am EDT

(Reuters) - Asian shares fell on Monday as lackluster earnings from leading U.S. companies and a sharp drop in Japan's exports, a key driver of the world's third-biggest economy, dented risk appetites and prompted investors to take profits on recent gains.
The euro, however, crept higher after Spanish Prime Minister Mariano Rajoy secured backing for his austerity drive in a vote in his home region of Galicia on Sunday, a result seen taking Madrid a step closer to asking for international aid.
Asian equities followed Wall Street, which had its worst day since late June on Friday when barometers of the overall U.S. economic health, General Electric (GE.N) and McDonald's (MCD.N), disappointed investors with their results.
Analysts said this provided an excuse for profit-taking in Asian stock markets, many of which had rallied to multi-month highs recently on new global central bank easing and the European Central Bank's plan to buy bonds of struggling euro zone countries that ask for aid.
The MSCI index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.4 percent but trimmed earlier losses. South Korean shares .KS11 fell 0.2 percent, recovering from an earlier drop of over 1 percent while Australian shares AXJO. also curbed earlier losses to fall 0.6 percent.
Hong Kong shares .HSI bucked the trend and inched up 0.2 percent, hovering near a seven-month high touched last week, with bourse operator Hong Kong Exchanges (HKEx) (0388.HK) strong on expectation that further capital inflows into the territory could buoy trading activity.

U.S. stock futures were up 0.3 percent to hint at a firm Wall Street open, but European shares will likely decline, with financial spreadbetters expecting London's FTSE 100 .FTSE, Paris's CAC-40 .FCHI and Frankfurt's DAX .GDAXI to open down as much as 0.6 percent. .L .EU .N
"Profit-taking is overshadowing buying because any forward momentum has been exhausted," Oh Tae-dong, an analyst at Taurus Securities in Seoul wrote in a note to investors. He said he expects the Korea Composite Stock Price Index to hover around current levels for the time being.
The Korea's index was still up around 9 percent from lows hit in late July. The index hit a 5-month high in September.
Australian shares scaled a 15-month high last week and the benchmark index was up nearly 6 percent since a low on September 5.
"After a rally of several weeks, buying tends to run out of steam while profit takers become more trigger happy," said CMC markets analyst Ric Spooner.
Japan's Nikkei average .N225 turned positive, gaining 0.2 percent as the yen fell to a two-month low against the dollar, helping exporters. .T
The dollar hit a two-month high of 79.60 yen, as a break above a key technical level spurred further buying.
Data on Monday showed that, year-on-year, Japan's exports in September fell at their fastest rate since the February 2011 earthquake, and the mood among manufacturers was at its lowest since early 2010.
The reports reinforced concerns that Japan may slide back into recession as sales to China and Europe sag amid the global slowdown and domestic demand, led by rebuilding from last year's disaster, loses momentum.
A Reuters poll showed that China, the world's second-largest economy, could stage a tepid economic rebound in the fourth quarter on higher public infrastructure spending, though growth will remain lethargic through 2013.
U.S. crude erased earlier losses to rise 0.5 percent to $90.52 a barrel and Brent added 0.6 percent to $110.83.
Weaker equities weighed on Asian credit markets, pushing out the spread on the iTraxx Asia ex-Japan investment-grade index wider by 4 basis points.
MIXED SIGNALS IN EUROPE
The euro was resilient despite mixed signals from the euro zone over the progress of its three-year debt crisis, trading up 0.3 percent at $1.3053.
Germany raised new hurdles on Friday to using the euro zone's rescue fund to inject capital directly into ailing banks from next year, limiting the impact of a key agreement by European Union leaders on Thursday to establish a single banking supervisor from 2013.
But Spain and Greece were still expected to get aid, possibly next month and improving investor confidence was evident in government bond yields for highly-indebted Italy and Spain, which tumbled on Friday to multi-month lows after successful debt sales in both countries.
Some indicators were more cautious as investor focus turned to the corporate earnings seasons now under way in the United States.
The CBOE Volatility index .VIX, a gauge of expected volatility in the S&P, jumped 13.5 percent to close at 17.06 on Friday. It hit a five-month high earlier on Friday.
resource:http://www.reuters.com/article/2012/10/22/us-markets-global-idUSBRE88901C20121022

Read more »

Analysis: Most companies won't be early adopters of Windows 8

SEATTLE | Mon Oct 22, 2012 12:11am EDT

(Reuters) - There was once a time when the launch of a new Windows operating system was a huge deal for the technology departments in many businesses. Not anymore. Microsoft Corp's release of Windows 8 on Friday is likely to be a non-event for most companies -- and some experts say many may never adopt it.
The system may appear to offer something for everyone: touch-screen functionality for tablet enthusiasts, a slick new interface for the younger set, and multiple versions to make it compatible with traditional desktop PC software.
Many businesses, though, say there is no compelling reason to adopt. Indeed, a large number have yet to make the transition to Windows 7 from Windows XP.
"Windows 8 is, frankly, more of a consumer platform than it is a business platform, so it's not something that makes any sense from a business perspective at this juncture," said Doug Johnson, head of risk management policy at the American Bankers Association, whose members are among the world's biggest technology buyers. "There is really no additional business functionality that Windows 8 gives you that I see."
For most of the past two decades, that sort of comment about a new version of Windows might have set off panic in Microsoft's Redmond, Washington, headquarters. Not now. Windows 8, in a stark reflection of how the technology business is changing, will rise or fall on how it is received in the consumer market.
That doesn't mean Microsoft executives are publicly saying they won't be going after enterprise customers with the radical new version of its flagship product.
"The lines between the consumer and the enterprise are blurring," said Ron Markezich, head of Microsoft's Enterprise & Partner Group. "Business customers are looking forward to Windows 8 because they don't have to compromise between tablet and PC."
But Microsoft's main goal is to show it can master the new touch-optimized, mobile forms of computing pioneered by Apple Inc and Google Inc. Its colorful, action-packed advertising for the system are aimed at a young, free-wheeling audience, and its new Surface tablets are being positioned squarely as consumer devices.
LUKEWARM
Corporate customers have been lukewarm about the product even after test versions have been available for more than a year.
Car maker Volkswagen, which only last year moved 60,000 PCs onto Windows 7, is not planning to make another drastic shift anytime soon.
VW's head of IT, Martin Eickhoff, said his team was "excited to evaluate the new tablet features" but would wait until Windows 8's release to assess its potential benefits.
That's not unusual, as corporations generally test a new system for 12-18 months before planning to adopt it, meaning enterprise take-up of most versions of Windows -- except for the unpopular Vista -- have only usually happened two or three years after launch.
This time even that pattern might not happen.
Michael Silver, an analyst at technology research firm Gartner, expects minimal corporate adoption over the life of the new system: "We believe 90 percent of large organizations will not deploy Windows 8 broadly, and at its peak, we expect about 20 percent of PCs in large organizations will run Windows 8," he said.
WINDOWS RECEDES
This may not be a huge problem for Microsoft.
For one thing, the company gets 40 percent of its overall revenue from multi-year licensing deals with enterprises -- companies, government departments and universities -- which typically give customers rights to the newest version of its software.
Essentially, Microsoft gets paid regardless of what version of Windows many big customers actually use.
And Windows is also declining in financial importance for Microsoft, although the sales of PCs often determine the strength of Microsoft's earnings. Five years ago, it accounted for almost 30 percent of Microsoft's sales. Last year it was 25 percent.
Microsoft's success in selling to businesses, in the short term at least, depends less on Windows than on its Office products and its fast-growing server and tools division.
One institution that has made an early move to Windows 8 is Seton Hall University in New Jersey. The school has already deployed tablets and laptops running pre-release versions of Windows 8 to its freshman and junior classes -- with help from Microsoft, which subsidized the effort with free consulting time.
"The benefit of the upgrade to Windows 8 for me is that it's touch friendly. Lots of the devices that we have in the community could benefit," said Stephen Landry, Seton Hall's chief information officer.
Landry said his students overwhelmingly liked the new system, after a brief training session, but he acknowledged that many of his peers in higher education were not ready to move so fast.
"Talking to a lot of CIOs, they are not ready to jump into Windows 8 with both feet yet. They are taking a wait-and-see attitude. They are thinking 'That's a lot of work, I need to upgrade System Center (Microsoft's IT management platform), I need to have a little different process for managing the back end.' A lot of CIOs I've talked to, they are saying I'm not really seeing a benefit."
Steven Hanna, chief information officer of Kennametal Inc, an industrial parts and tools manufacturer based in Latrobe, Pennsylvania, said his company has only just moved onto Windows 7, and has no plans to introduce Windows 8 broadly in the near future. But he may deploy it selectively for employees who can make use of the touch-screen, such as traveling sales reps.
"The mobility for the sales force, to put all the material and the ability to do basic transactions in their hands, is going to be a phenomenal driver for us," said Hanna. "We're doing some piloting with iPads, but I'm excited to see the Windows stuff come out."
This appears to be the most likely route for Windows 8 into the workplace. But even this will not be simple because Windows 8 is really two operating systems.
The standard Windows 8 for devices with Intel Corp x86 chips will run old Microsoft applications and generally fit seamlessly into companies' networks and security systems, just like any Windows PC. But Windows RT, the version for devices powered by ARM Holdings chips -- such as Microsoft's new Surface tablet -- will not run legacy applications and require more work to integrate.
MOVING FROM XP
Even as it launches Windows 8, a key priority for Microsoft is to get customers off the decade-old Windows XP -- which still runs on 41 percent of the world's 1.5 billion PCs. For the last three years, it has urged enterprise customers to move to Windows 7, and it has said it does not expect organizations to drop those plans because of Windows 8.
That effectively means many companies will downgrade new PCs to run on Windows 7, not 8, over the next few years.
But if people start bringing Microsoft's new Surface tablet to work, or any of the other new Windows 8 devices, Microsoft is hoping corporate IT managers will welcome them with open arms.
resource:http://www.reuters.com/article/2012/10/22/us-microsoft-windows8-business-idUSBRE89L03N20121022

Read more »

China cabinet seeks ambitious economic reform agenda: advisers

China's Premier Wen Jiabao waits for a question at his annual news conference following the closing session of the National People's Congress (NPC), or parliament, at the Great Hall of the People in Beijing March 14, 2011.

Credit: Reuters/Jason Lee/Files

By Kevin Yao

BEIJING | Sun Oct 21, 2012 5:34pm EDT

(Reuters) - China's top leaders have asked policy think-tanks to draw up their most ambitious economic reform proposals in decades that could curb the power of state firms and give more freedom to the setting of interest rates and the yuan currency.
But after almost 10 years of delay to painful structural reforms by the outgoing leadership, some of the authors of the proposals told Reuters they fear a nascent rebound in economic growth could derail the recommended agenda.
"China is approaching a stage when the government must embrace more fundamental reforms," said Shi Xiaomin, vice president of the China Society of Economic Reform, a think-tank under the National Development and Reform Commission, the top economic planning body.
China's once-in-a-decade leadership change will be finalized next month at the ruling Communist Party's 18th congress. Vice President Xi Jinping is set to take over from Hu Jintao as president and Li Keqiang will replace Wen Jiabao as premier at the meeting, which opens on November 8.
The congress convenes as the economy heads for its weakest annual growth rate in at least 13 years after three decades of near 10 percent annual expansion in the wake of sweeping reforms launched by former leader Deng Xiaoping.
Reuters interviewed five policy advisers involved in drawing up the reform proposals. They said the order for the agenda came from members of the State Council, or cabinet, although they declined to give specifics for fear of repercussions.
Significantly, planning sources said cabinet members had signaled an interest in seeing proposals from policy advisers outside Beijing, in the provincial hinterland, implying that a nationwide consensus is being sought on the content and timetable for painful structural reform.
High on the list drawn up by the advisers is how to contain the government's meddling in the economy and clip the wings of more than 100,000 state-owned enterprises (SOEs) which enjoy enormous privileges, including preferential access to bank lending and government contracts.
Other reforms include allowing the market to set the cost of bank credit, land and various natural resources.
Credit is currently basically allocated by the central government. It tells state-backed banks how much to lend and when - mainly to other big state-controlled businesses and projects. Meanwhile all land and basic resources are owned by the state, with private ownership limited to temporary leased rights to usage.
Analysts say reform of these two areas would bring fundamental change to China's economic structure, even more so than making the yuan currency more convertible - also on the table as part of a package of proposals to liberalize capital markets and boost the yuan's use in global trade settlement.
Reform to China's complex tax structures, under which the central government commands the lion's share of receipts while local governments do most of the spending, is needed if serious progress is to be made cleaning up local government debt that stood at 10.7 trillion yuan ($1.7 trillion) at the end of 2010.
"I think a consensus on reforms has been formed at the central level, even though people may have different considerations on when and how to implement reforms," said Wang Jun, senior economist at the China Centre for International Economic Exchanges, a top government think-tank in Beijing.
UNFINISHED BUSINESS
Experts say Chinese leaders must unlock fresh growth potential and put the economy on a more sustainable path to avoid the "middle-income trap", where wealth creation stagnates as market share is lost to lower cost competitors and the attainment of high-income country status stays out of reach.
The World Bank says China's GDP per capita was $5,500 last year, versus $22,400 in South Korea, $34,500 in Hong Kong and $46,200 in Singapore, which all avoided the middle-income trap.
There has been soul searching among Chinese academics about the 4 trillion yuan ($640 billion) stimulus package unveiled in late 2008, which led to excessive investment in white elephant projects, created mountains of local government debt and sent house prices rocketing in big cities.
The stimulus helped state-owned firms stage a comeback at the cost of private businesses.
SOEs have repeatedly fought off Beijing's plans to get them to pay higher dividends to state coffers and have sought to delay reforms on income distribution systems, which could imply capping hefty wages in monopoly sectors, government sources say.
The reforms aim to require SOEs to pay more dividends to the government to meet a funding shortfall in social welfare.
"We could see serious problems if we don't reform," said Zuo Xuejin, head of the Institute of Economics at the Shanghai Academy of Social Sciences, which advises the local government in China's financial hub.
Still, some government advisers fear signs of a recovery in the economy could ease the pressure to act.
China's annual economic growth slowed to 7.4 percent in the third quarter from 7.6 percent in the second - the seventh consecutive quarter of slower expansion, but government officials have flagged signs of a modest rebound in September.
Industrial production, retail sales and investment data were all slightly ahead of forecasts in September and quarter-on-quarter GDP growth was strong, suggesting the worst may be over and the world's No.2 economy will pick up in the final quarter.
"They may have to change if there is an economic crisis, but they may choose to muddle through if the economy recovers," said an economist with a top government think-tank in Beijing, who requested anonymity due to the sensitivity of the issue.
TRAJECTORY OF CHANGE
Past changes tend to support the anonymous economist's view.
Deng Xiaoping launched economic reforms in the late 1970s to rescue an economy on the verge of collapse after Mao Zedong's disastrous Cultural Revolution.
He made his famous tour of southern China in 1992 to jumpstart the second stage of reforms when the economy nosedived in the aftermath of the 1989 Tiananmen Square crackdown. And sweeping market measures spearheaded by former Premier Zhu Rongji were introduced after the Asian financial crisis in the late 1990s.
Chinese leaders have acknowledged that three decades of 10 percent average annual GDP expansion are over and that the economy needs fresh drivers, analysts say.
In February, the World Bank said in a report with the cabinet think-tank, endorsed by presumptive-premier Li, that Beijing must implement deep reforms to avert a crisis.
The World Bank said China's annual economic growth may slow to 5 percent a year by 2026-2030, from 8.5 percent in 2011-2015.
The mainstream view in Beijing is to blame the global financial crisis for China's slowdown, which also reflects diminishing gains from past reforms and market opening spurred by China's entry into the World Trade Organisation a decade ago.
resource:http://www.reuters.com/article/2012/10/21/us-china-economy-reforms-idUSBRE89K0GS20121021

Read more »