Learn Chinese Online: December 2007

Monday, December 31, 2007

Chinese Mandarin - Stocks break record 5,400 points despite interest hike

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BIZCHINA / Index & Statistics

Stocks break record 5,400 points despite interest hike

By Li Zengxin (chinadaily.com.cn)
Updated: 2007-09-17 17:37

Chinese stocks were unaffected by the fifth interest rate hike this year,
announced last Friday, and grew today to close at a new record high. The
Shanghai Composite Index finished at 5,421.39, its first-ever close above
the 5,400-point mark. The Shenzhen Component Index also finished on a
record-high close.

The most recent tightening measures, the diversion of capital to overseas
markets and the accelerated initial public offerings (IPOs) process
couldn't rein in the crazy bull run, representing the market's affluent
liquidity and capital-driven feature, said analysts.

In the short term, these pressures are expected to slow market growth or
result in a price correction period. In the longer term, however, it is
ultimately the liquidity situation or demand-supply for stocks and
capital that decides the share prices and the direction of the whole
market, they said.

Turnover of stocks in the major indices grew to 253 billion yuan, the
highest in the last four trading days when the stocks recovered from a
4.5 percent plunge last Tuesday.

Shanghai Composite Index
Source: sina.com.cn

The benchmark Shanghai index opened lower at 5,309.06 and slid to a low
of 5,307.77 immediately after the opening, as a response to the weekend's
27 basis-points interest hike. The index then turned upward and, soon
before the close, it hit the day's highest at 5,427.17 and turned down
slightly to 5,427.17, 109.21 points or 2.06 percent higher than the
previous close.

Of the A shares listed in Shanghai, as many as 658 went up, while 106
closed down and 78 remained unchanged. Xinjiang Friendship Group grew
10.05 percent to 10.62 yuan on top of the gainer's list, followed by
another 34 stocks reaching the maximum growth cap of 10 percent.

Inner Mongolian Baotou Steel Union was the most actively traded stock
today both in terms of trading volume and transaction value. It rocketed
9.96 percent to 9.94 yuan in a wave of buying bids targeting
"under-valued" stocks with particularly low price to earnings ratios.

Shenzhen Component?Index
Source: sina.com.cn

The Shenzhen Component Index, tracking the smaller Shenzhen Stock
Exchange, finished at 18,494.38, also a record-high close and 280.67
points or 1.54 percent up than last Friday. Opening lower at 18,131.08,
it went through the day within a range of between 18,092.15 and 18,553.89.

Of the A shares, 436 rose, 124 fell and 82 ended flat. Beijing Shougang,
with the largest trading volume, went up 9.96 percent to 10.05 yuan.

(For more biz stories, please visit Industry Updates)

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Chinese School - Stored-value cards problem

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BIZCHINA / Review & Analysis

Stored-value cards problem

By Hong Liang (China Daily)
Updated: 2007-09-15 16:39

One of the things about Hong Kong that seems to impress my mainland
friends most is the Octopus stored-value card, which allows the holder to
conveniently move around the city on various modes of public transport,
other than taxis.

For years, Octopus has had a virtual monopoly on Hong Kong's stored-value
card business. It was perhaps for this reason that the real potential of
stored-value card has never been fully exploited in Hong Kong. Popular as
it is, Octopus' reach in the retail sector is still limited to
convenience stores and a few shopping outlets.

The monopoly issue was brought to the forefront in recent months when
holders complained about the failure to add value to their Octopus cards
through the Electronic Payment System. Such complaints, which indicated
Hong Kong people's diminishing tolerance toward the limitations of
monopolies, moved the city's monetary chief Joseph Yam to write: "It is
becoming increasingly clear that whether there is a need for separation
of the management of the platform and the issue of stored-value cards is
an important issue to be considered and debated."

The free market approach, long cherished by the Hong Kong government,
has, ironically, produced monopolies in both the processing of
stored-value cards and issuing the cards. Although Octopus has been
widely seen as a success, the lack of competition can inhibit Hong Kong's
ambition to develop what Yam describes as "the most efficient electronic
money system in the world."

Of course, it all comes down to a matter of choice. "They (Hong Kong
people) probably do not mind choosing between different stored-value
cards, if offered a choice, to suit their own preferences," Yam noted in
his latest column published on the Hong Kong Monetary Authority's website.

Many users are happy with Octopus because they don't intend to use it for
any other purpose than paying for a ride in the subway or the bus. But,
as Yam notes, there are those who want to use "one card for multiple
non-financial purposes, while others (are) more interested in the
convenience of uploading money easily and safely in the card from their
bank accounts."

Some people might want to have a variety of stored-value cards for no
other purpose than to show off their economic status. In that respect,
stored-value cards are "arguably superior," according to Yam, to credit
cards that don't necessarily say anything about the holder's net worth.

As consumers, we would want to be able to use any stored-value card we
may choose at any store or restaurant we care to patronize. But we
wouldn't be able to do that unless there is a common platform for
processing the cards by different issuers.

Such a platform would also be welcomed by retailers because they would
not be required to keep multiple devices needed to process the many
different cards at each point of sale.

The logical approach would be to expand the present limited platform into
an universal retail payment system, which would, in turn, encourage
competition in card issuing. On this, the government has maintained an
open mind. "I have no pre-conceived idea on the ownership and management
of the common platform, provided that there are adequate checks and
balances, transparently observed and monitored, to protect the public
interest," Yam wrote.

It is not clear whether the cost of establishing a common stored-card
processing platform, which could be undertaken by a consortium of banks,
can be recovered from interest saved in money stored in the cards rather
than in deposit accounts. Even if there is going to be a charge for using
the service, the Hong Kong public is not going to fret too much about
paying a reasonable price for the convenience of electronic money.

(For more biz stories, please visit Industry Updates)

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Chinesepod - Stocks climb 1.95% in absence of immediate tightening

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BIZCHINA / Index & Statistics

Stocks climb 1.95% in absence of immediate tightening

By Li Zengxin (chinadaily.com.cn)
Updated: 2007-09-13 16:41

Although growth of the money supply slowed in August compared with July,
the country is still under pressure to control its bank loans.

Annual growth in the broad measure of money supply, or M2, was 18.09
percent in August from the same period last year, according to the
People's Bank of China (PBOC). The narrow measure of money supply, or M1,
continued to grow in August at 22.77 percent year-on-year, PBOC said.

In August, new bank loans increased 302.9 billion yuan as total bank
loans rose to 27.1 trillion yuan, an increase of 16.96 percent
year-on-year. Total bank deposits increased 646.2 billion yuan in August.
However, household bank deposits continued to slide, falling 41.8 billion
yuan from July.

The excessive liquidity, when it comes to the stock market, is most
recently reflected by a new record-high subscription for a new share.
Bank of Beijing, the third city-level commercial bank to list in the
A-share market, reported frozen subscription funds of 1.896 billion yuan,
surpassing the previous record of 1.629 billion yuan in the initial
public offering of China COSCO Holdings.

The share price was set at 12.5 yuan, representing a 36.38 price to
earnings ratio. Some 1.442 billion yuan was frozen in online
subscriptions. The huge amount of capital for the application pressed
down the acquirement rate to 0.78 percent.

In order to address excessive liquidity and inflation problems, China
stepped up efforts to build a multi-layer capital market for both the
fund-raisers and investors.

Tu Guangshao, vice chairman of the China Securities Regulatory Commission
(CSRC) said yesterday that the country is ready to develop a bond market.

The banking and securities regulators are working on the integration of
the inter-bank and the securities exchange markets.

The scope of participants in the market will also be enlarged to include
insurance companies and commercial banks. Tu also said China may allow
overseas institutions to issue bonds in the mainland in the future.

(For more biz stories, please visit Industry Updates)

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Learn Chinese online - Trade: Technical barriers cost China US$36b in export

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BIZCHINA / Biz Media Digest

Trade: Technical barriers cost China US$36b in export

(Xinhua)
Updated: 2007-09-12 15:04

China suffered direct economic losses of US$35.9 billion in export last
year due to technical measures set by foreign countries, according to a
government report.

The figure was equivalent to 3.71 percent of China's 2006 export volume,
said the report from the General Administration of Quality Supervision,
Inspection and Quarantine (GAQSIQ).

Technical measures has become the third biggest obstacle to China's
export, next to the appreciation of the Chinese currency and tariff
measures, said the report

About 31.4 percent of export companies in China were affected by trade
barrier in 2006, up 6.3 percentage points as compared with the previous
year.

The electronic, agricultural, mineral, chemical and textile industries
were the most affected.

Technical measures set by the European Union, the United States, Japan,
Russia and the Association of Southeast Asian Nations (ASEAN) caused the
greatest losses, with the EU accounting for 43.6 percent, the US 23.7
percent and Japan 19.1 percent of the total.

Technical measures affecting China's exports of industrial products are
mainly related to certificate requirements, technical standards, toxic
materials, packaging and environmental requirements, said the report.

Those set on agricultural products included limitations of chemical
residue, heavy metal and bacteria and other sanitary requirements.

(For more biz stories, please visit Industry Updates)

Related Stories ?

� Green barrier disguises face of protectionism
===========================================================================
� Trade barriers used as excuse for protectionism
===========================================================================
� Exporters face more technical barriers
===========================================================================

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Sunday, December 30, 2007

Learn Mandarin online - Bank of Beijing sets IPO target?at 15b yuan

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BIZCHINA / Top Biz News

Bank of Beijing sets IPO target?at 15b yuan

By Mao Lijun (China Daily)
Updated: 2007-09-11 09:48

Bank of Beijing said yesterday it will raise as much as 15 billion yuan
(US$1.99 billion)?in a Shanghai initial public offering (IPO).

The bank will sell 1.2 billion shares at 11.5 yuan to 12.5 yuan each, it
said in a statement to the Shanghai Stock Exchange.

The lender said in the statement its equity issue will account for 19.27
percent of its enlarged stock base after it lists in Shanghai. Its stock
was valued at 1.96 yuan per share before the listing and its assets
totaled 263.98 billion yuan.

It said China Securities Co and CITIC Securities Co will underwrite the
IPO.

Bank of Beijing plans to use funds raised in the offer to boost its risk
control, profit-making and capital adequacy ratio, according to its
prospectus.

The bank said it will also offer H shares after the A-share listing, but
shareholders are yet to approve the pricing and timing.

The lender plans to sell 1 billion shares on the Hong Kong stock
exchange, according to a source.

The bank posted a net profit of 550 million yuan in the first quarter
this year. Its non-performing loan ratio was 3.34 percent and capital
adequacy ratio 13.23.

Established in 1995, the bank has aggressively modernized in recent
years. It has opened branches in Tianjin and Shanghai, and has won praise
for its electronic banking service.

The listing follows a trend among China's city commercial banks. Bank of
Nanjing and Bank of Ningbo raised a combined 11.07 billion yuan from
their Shanghai IPOs in July.

China has 114 city commercial banks. Bank of Shanghai, Bank of Tianjin,
Bank of Chongqing and Hangzhou City Commercial Bank also plan to go
public.

(For more biz stories, please visit Industry Updates)

Related Stories ?

� Bank of Beijing to issue 1.2b shares in Shanghai
===========================================================================
� Bank of Beijing to issue 1.2b A shares in IPO
===========================================================================
� Bank of Beijing eyes dual IPOs
===========================================================================

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Chinese Online Class - Vice premier underscores railway innovation efforts

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BIZCHINA / Center

Vice premier underscores railway innovation efforts

(Xinhua)
Updated: 2007-09-09 10:40

China's railway departments need to boost innovation efforts to expand
the nation's rail transportation capacity, Vice Premier Zeng Peiyan said
on Saturday.

"We should crank up innovation efforts to master the designs and
construction technologies of the high speed railways and cargo arteries,"
Zeng said while visiting a railway technology exhibition in Beijing.

Learn Chinese - China becomes largest foreign supplier of parts for Boeing

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BIZCHINA / Top Biz News

China becomes largest foreign supplier of parts for Boeing

(Xinhua)
Updated: 2007-09-07 10:12

China is now Boeing company's largest foreign supplier of parts, with
US$2.5 billion of live contracts for aircraft products, a senior Boeing
official said?in Hong Kong?on Thursday.

John Burns, vice president China operations of Boeing, said at the Asian
Aerospace International Expo and Congress held Monday through Thursday
that China is an "exciting proposition", and offers greater opportunity
for OEMs than "just selling airplanes".

Related readings:
?AVIC I branch lands Boeing parts deal
?China Southern Airlines orders 55 Boeing 737s
?Xiamen Airlines, Boeing confirm 25 planes order
?China orders checks on Boeing 737 jets

"Liberalization is creating a more competitive environment and airline
strategies are assisting with this growth by responding to the customer's
desire to save time by flying point-to-point," he said at the congress.

China will need more than 2,900 new aircraft to satisfy the growth of the
industry, Burns said, adding this will inevitably lead to more investment
on the Chinese mainland.

According to Burns, Boeing currently has 170 direct Boeing employees in
China and 3,000 people working in Boeing joint ventures.

"China now has a role in all current Boeing models," he added.

The Asian Aerospace International Expo and Congress 2007 closed on
Thursday in Hong Kong. It is the first time the Expo moves its venue from
Singapore to Hong Kong.

(For more biz stories, please visit Industry Updates)

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Chinese School - Foreign firms dominate?electronic info products exports

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BIZCHINA / Top Biz News

Foreign firms dominate?electronic info products exports

(Xinhua)
Updated: 2007-09-06 11:56

Solely foreign-funded companies together with Sino-foreign joint ventures
in China contributed 83.9 percent to the country's total exports of
electronic information products in the first seven months this year,
latest figures have shown.

Figures from the Ministry of Information Industry (MII) show solely
foreign-funded firms contributed 67.4 percent with an export volume of
US$158.65 billion , while the exports by Sino-foreign joint ventures
totaled US$38.88 billion, or 16.5 percent of the country's total exports
for the January-July period.

Domestic companies by contrast made exports totaling US$37.79 billion, or
16.1 percent of the total.

As one of the major manufacturers, China's electronic information
products range from electronic components, DVDs, monitors and cellphones
to laptops and telecommunications equipment, among others.

The sector registered 416.88 billion yuan (US$55 billion)?in industrial
output in the first half, up 17.5 percent year on year and raked in 1.92
trillion yuan in sales revenue, according to figures from the National
Development and Reform Commission.

To sharpen the competitiveness of the industry, the government has
designated integrated circuit, software and new type of electronic
components as "the fundamental core sectors", and new-generation
telecommunication and high-performance computers as the "strategic growth
sectors" for the 2006-2010 period.

But there is still a long way to go for these policies to be materialized
as the MII figures show nearly 85 percent of the exports, or US$199.15
billion in value, in the first seven months remained low value-added.

The country's exports of electronic information products grew 25.9
percent year-on-year to US$235.32 billion in the first seven months this
year, accounting for 36 percent of China's total exports of all products.

The imports rose 19.3 percent year-on-year to US$182.09 billion, taking
up 35.2 percent of the country's total imports of all products.

(For more biz stories, please visit Industry Updates)

Related Stories ?

� Seminar seeks solution to country's export challenges
===========================================================================
� China to become US 3rd largest export market by year end
===========================================================================
� Steel export growth to slow down
===========================================================================
� Premier addresses meeting on export quality
===========================================================================

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Saturday, December 29, 2007

Learn Mandarin online - Brokerages housecleaning bears results

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BIZCHINA / Center

Brokerages housecleaning bears results

By Hao Zhou (chinadaily.com.cn)
Updated: 2007-09-04 11:22

Three-year prolonged housecleaning of securities brokerages has concluded
and met its targets, said Shang Fulin, chairman of the China Securities
Regulatory Commission (CSRC), the Shanghai Securities News reported today.

Changes to the entire securities industry were made during the crucial
period of fundamental system reform of the capital market amid a
collective risk explosion, Shang indicated.

During the past three years, previously accumulated risks, such as
impropriation of clients' bonds and settlement funds, illegal property
management, as well as shareholders' outstanding and over proportional
shareholdings, in the securities brokerages have been swept, and 104
normally operated dealers' risk-control indices met the standard.

Meanwhile, CSRC cleaned up 31 high-risk companies and 11.53 million
accounts, among which 27 brokerages were reshuffled.

Additionally, the securities watchdog improved a number of basic systems,
involving treasury bonds repurchase, new assets management and securities
companies' information disclosure. As part of the achievement, a
long-term mechanism for daily monitoring, market exit and investor
protection gradually took shape.

In the next step, CSRC is to promote a multi-leveled market system,
develop a corporate bonds market, and issue stock index futures, while
maintaining its primary tasks in monitoring the market, encouraging
innovations and reducing risks.

(For more biz stories, please visit Industry Updates)

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� CSRC to restrict unqualified trading accounts
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� CSRC unveils credit rating management rules
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� CSRC to launch new rules on securities credit rating
===========================================================================

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Chinesepod - Location of low-rent houses should avoid social problems

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BIZCHINA / Review & Analysis

Location of low-rent houses should avoid social problems

(China Daily)
Updated: 2007-09-03 09:51

The location of low-rent houses should be selected carefully to avoid
social problems in the future, says an article in China Youth Daily. The
following is an excerpt:

During the national working conference on urban housing held two weeks
ago, the authorities decided to take multiple measures to improve the
low-rent housing system to cover more low-income families in cities.
There are specific stipulations about the construction of low-rent houses
- their size, numbers, and the source of funding.

With all these stipulations in place, we may see the rapid development of
low-rent houses. However, one aspect has been missed in the stipulations
- location. This must be selected carefully as it will play a vital role
in the long-term development of a city.

Land in downtown areas of cities command high prices, if low-cost housing
is to be built on such land, they will bring their value down, affecting
a local government's coffers.

So most local governments will choose a location away from the city
centre, where land is less expensive.

But such a location may give rise to a host of problems. Transportation
may not be convenient, the infrastructure may be less developed and
public facilities may be difficult to attain. Families living in such
locations could face such problems and at a financial cost.

(For more biz stories, please visit Industry Updates)

Related Stories ?

� House prices to continue rising in 3rd quarter: report
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� Rising house prices show no sign of stopping
===========================================================================
� House prices up 7.1 pct in major Chinese cities
===========================================================================

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Chinese Mandarin - EU extends anti-dumping duties on Chinese light bulbs

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BIZCHINA / Top Biz News

EU extends anti-dumping duties on Chinese light bulbs

(Xinhua)
Updated: 2007-08-30 15:23

Chinese energy-saving light bulbs may face anti-dumping measures from the
European Union (EU) for one more year as the European Commission made a
compromised proposal on Wednesday.

The EU's executive body agreed to the one-year extension of the
six-year-old duties when its commissioners held their first meeting after
the summer break. As a compromise, the anti-dumping measures will end
automatically after the extension.

"Following discussions within the commission and with member states the
commission will recommend that it is in the community's interest to
discontinue these measures in the next year," the commission said in a
press release.

Chinesepod - Share prices rise for 6th straight trading day

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BIZCHINA / Index & Statistics

Share prices rise for 6th straight trading day

(Xinhua)
Updated: 2007-08-27 17:47

Chinese share prices kept rising on Monday with the benchmark Shanghai
Composite Index up 0.83 percent or 42.45 points to close at a record
5,150 points.

The index has been hitting new highs since Aug. 20, up more than 450
points during a week.

The Shenzhen Component Index on the smaller stock market gained 0.11
percent or 20.16 points on Monday to close at 17,884.8 points,also a
record.

Nonferrous metal producers and steel companies led the advance. Aluminum
Corporation of China Limited rose to the daily limit of 10 percent and
closed the day at 50.62 yuan per share. Baosteel jumped 5.51 percent to
34.45 yuan per share.

Heavyweights also rose on Monday. The Industrial and Commercial Bank of
China, the country's largest State-owned commercial bank, gained one
percent to reach 7.06 yuan per share.

The combined turnover on the two bourses expanded to more than 270
billion yuan (US$35.5 billion) from 255.95 billion yuan on the previous
trading day.

In a report released last on Friday, ratings agency Standard and Poor's
said Asian economies would be able to weather the turmoil in global stock
and credit markets without "major reversals".

Chinese share prices last Thursday breached the 5,000-point mark for the
first time the stock market was established 18 years ago. After jumping
about 130 percent in 2006, the index has surged around 85 percent so far
this year despite four interest rate hikes and a slew of other measures
to cool the market.

Investors remain confident with the market and show no worries about the
soaring index. Statistics with China Securities Depository and Clearing
Corporation Limited show that around 475,582 new accounts were opened on
last Friday, the highest in eight days.

At present, the market value of the two bourses, with more than 115
million accounts so far, has exceeded China's gross domestic product and
reached 22 trillion yuan.

(For more biz stories, please visit Industry Updates)

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Friday, December 28, 2007

Chinesepod - 'Priority on enriching people' well practiced in Jiangsu

CHINA / News

'Priority on enriching people' well practiced in Jiangsu
By Tao Li (chinadaily.com.cn)
Updated: 2006-05-31 10:55

"Priority on enriching people" is no longer a slogan in Jiangsu Province,
but a self-conscious practice and a top priority among governments at all
levels, says Li Yuanchao, Party Secretary of Jiangsu Province Tuesday.

Li Yuanchao, Party Secretary of Jiangsu Province, delivers a report
during a group interview with reporters Tuesday, May 30, 2006.
[longhoo.net]

Improvement of people's living conditions and income has become a core
index in evaluating government performance, said Li.

"A serious of measures, including encouraging entrepreneurship
development, providing employment and training opportunities, and
developing a social security, have been taken to enriching the people,"
Li was quoted as saying.

He told the reporters that the province has accomplished enormous
achievements in the people-enriching campaign through these measures.

Reporters listens a report by Li Yuanchao, Party Secretary of Jiangsu
Province, May 30, 2006. [longhoo.net]

"In 2005, the per capita annual disposable income stood at 12,319 yuan,
reporting a yearly increase of 17.5%, which is the highest of all the
provinces and autonomous regions, while the farmers' net income also
reached 5,275 yuan, which is 11% higher than the previous year." said Li.

Basic social endowment, medical and labor insurance have all been
extended to cover more than 90% of the urban residents, Li told the
reporters.

Besides, people's legal rights were strictly protected in the process of
land expropriation, urban demolition and enterprise regroup, greatly
reducing social conflict, he added.

Chinese Mandarin - Interest rate hikes an effective economic tool

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BIZCHINA / Weekly Roundup

Interest rate hikes an effective economic tool

By Yi Xianrong (China Daily)
Updated: 2007-08-24 11:41

For the fourth time this year, the People's Bank of China, the central
bank, raised interests rates on Wednesday.

The interest rate on bank deposits was raised by 27 basis points, and the
lending rate by 18 basis points. After the hikes, the benchmark one-year
deposit rate is now 3.6 percent while one-year lending rate is 7.02
percent.

The central bank said it raised the interest rate to "control money
supply and credit, and stabilize inflation expectation".

Judging from the series of moves by the monetary authorities, it is not
hard to detect the new preference of the decision-makers in choosing
policy tools. The frequent adjustments of the interest rate this year
indicate that the authorities are attaching more importance to it.

It is encouraging the central bank has resorted to the strongest tool in
the market to improve the efficiency of the country's monetary policy.

After the central bank raised the interest rates earlier this year, there
had been doubts on whether it would have any effect on the economy.

Some people said stock market indexes climbed after the interest rate
hike instead of slumping on the news. Property prices had the same
response. So these people concluded that interest rate hikes do not work
in Chinese financial market.

Such an opinion does not hold water. The previous rounds of interest
hikes did not have remarkable effects in cooling the economy because the
interest rate of China is too low considering its economic growth.

Interest rates decide where the financial resources are allocated. It
would only lose its effect when the rate does not reflect the real demand
and supply of the resources. When the interest rate is lower than
reasonable, it cannot function normally to guide the flow of financial
resources.

The repeated interest hikes are actually correcting the situation,
propelling the interest rate closer toward the reasonable level. Without
these rises, the interest rate would not become an effective policy tool
for controlling the economy, nor will the Chinese financial market get
mature.

After the National Bureau of Statistics released the latest indicators of
economic operation on August 13, the market had been expecting another
interest hike. After all, the annul growth in the consumer price index
(CPI) of 5.6 percent in July is a record high in a decade.

The Shanghai Composite Index climbed 0.5 percent to 4,980.07 on
Wednesday, the first day of the interest hike. The readiness of the
market for the hike has proven that the central bank's monetary policy
has become predictable for the market. The market and the monetary
authorities are building up some kind of interaction.

This understanding between the policy-makers and the market is precious,
for it marks a start of transparent, scientific and modern policy making
here.

The central bank raised the interest rate on deposits by 27 basis points
while the bank loan interests were lifted by 18 basis points. Thus, the
current difference between the interest rates of deposits and loans is
narrowed. In other words, the banks' profit margin has been reduced.

The central bank has obviously done so in the hope that the commercial
banks could make money from sharpening their competitive edge rather than
relying on the official interest difference.

(For more biz stories, please visit Industry Updates)

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Related Stories ?

� Stocks up despite interest rate rise
===========================================================================
� Interest rate raised to curb inflation
===========================================================================
� China raises benchmark interest rate by 27 basis points
===========================================================================
� Interest rate hike affects insurance proceeds
===========================================================================

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Chinese School - Finance: HK not fazed by subprime

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BIZCHINA / Biz Media Digest

Finance: HK not fazed by subprime

By Chen Weihua (China Daily)
Updated: 2007-08-22 15:05

The US subprime housing mortgage crisis that has triggered a global
financial market panic will not heavily impact the Hong Kong economy,
despite sharp stock drops in the last two weeks, say experts and
government officials.

The crisis began when subprime mortgage defaults began to spiral, leading
investors worldwide to shed their holdings. Global market sentiments have
reached a record low, but market watchers and government officials in
Hong Kong do not believe the crisis is a financial crunch.

The special administrative region's economic growth rose nearly 7 percent
in the second quarter of 2007 as the city's economy continued to show
"broad-based and above trend" expansion, according to the Census and
Statistics Department, which indicated Hong Kong's?gross domestic
product?(GDP) had accelerated to 6.9 percent over a year earlier, from a
5.7 percent increase in the first quarter.

Two senior?special administration region?(SAR) officials said Hong Kong
residents should not panic because the city's economic fundamentals are
still strong.

Financial Secretary John Tsang said the economy is on a sound track and
urged investors to remain calm and rational in the choppy market.

"There are no structural risks in Hong Kong, although the stock market
will remain volatile in the coming weeks," Tsang said.

Joseph Yam, the Hong Kong Monetary Authority's chief, said Hong Kong's
financial system is stable and resilient.

"We've conducted tests and found the financial system is risk-resistant,"
he said.

The Hong Kong Monetary Authority, the city's banking regulator, said
earlier it did not see the need to pump money into the banking system
despite overwhelming cash injections by major banks across the world,
designed to prevent a financial system seizure.

The Hong Kong Association of Banks, an alliance of prestigious banks in
the SAR, has also said Hong Kong residents should not panic because the
peaks and valleys mainly reflect global market changes.

"Following the subprime housing mortgage crisis, many giant financial
institutions in the US are desperately trying to turn their investment
holdings to cash, which results in broad sell-off fever," a spokesman
from the Hong Kong Association of Banks said.

"As for Hong Kong, economic growth remains robust, helped by blue chip
enterprises with favorable earnings and dynamic banking systems securing
the city's economy," he added.

Hong Kong's economy expanded briskly in this year's second quarter, with
GDP accelerating to 6.9 percent growth in real terms over a year earlier,
up from a revised 5.7 percent in the first quarter.

(For more biz stories, please visit Industry Updates)

Related Stories ?

� Subprime rocks Shanghai boat
===========================================================================
� HK feels subprime pinch
===========================================================================
� CMB denies losses from subprime mortgage crisis
===========================================================================
� Subprime crisis not a 'direct threat'
===========================================================================

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Learn mandarin - Aviation: China Southern resumes flights to Lagos

? ?

BIZCHINA / Biz Media Digest

Aviation: China Southern resumes flights to Lagos

(People's Daily Online)
Updated: 2007-08-20 11:41

China Southern Airlines resumed flights from Beijing to Lagos via
Dubai?last week.

The two-way flight, launched on December 30 last year, is the only one
operated by a Chinese airline company between China and Africa.

China Southern suspended the flights as labor strike in Nigeria in June
paralyzed fuel oil supply in Lagos.

(For more biz stories, please visit Industry Updates)

Related Stories ?

� China Southern says to return to profit in 1st half
===========================================================================
� Continental, China Southern to start codesharing
===========================================================================
� China Southern in talks with Air France-KLM over cargo JV
===========================================================================

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Thursday, December 27, 2007

Learn Chinese online - No let-up in foreign money in real estate

? ?

BIZCHINA / Overseas Investment

No let-up in foreign money in real estate

By Hu Yuanyuan (China Daily)
Updated: 2007-08-17 07:15

Over a year has passed since six ministers jointly released Circular 171
last July to rein in foreign investment in China's sizzling property
sector.

The circular, to some extent, has slowed the entry of speculative foreign
capital, but has had almost no impact on long-term investors.

The National Bureau of Statistics said on June 19 that foreign companies
poured 22.2 billion yuan (US$2.92 billion) into China's property market
from January to May this year, a rise of 89.9 percent year-on-year.

Special coverage:
Housing in China
Related readings:
?Property prices up 6.3% in major cities in 2nd quarter
?China tightens rules on foreign property investors
?More foreign capital flows in property sector
?$924m overeseas property funds eye China

On the same day, Aetos Capital, a US hedge fund, inked a deal with the
country's largest insurer, China Life, on a $1 billion investment in
China's property sector.

Also on June 19, Glitnir Bankhf, a financial institution from Iceland,
announced cooperation with CGC Overseas Construction Co to co-develop a
residential block in Shenyang, the capital of Northeast China's Liaoning
Province.

"In the short run, macro policies increase business uncertainties. But in
the long run, China's property market will be more attractive for foreign
investors after the bubble is burst, especially with the renminbi
continuing to appreciate," said Eric Chan, deputy managing director of
Savills Property Services (Beijing) Company.

The high return, experts say, is the driving force behind foreign funds'
strong interest in China's real estate sector.

According to a report by CB Richard Ellis, an international real estate
services firm, the investment returns on office buildings in Beijing and
Shanghai hit 8 percent in 2006, the highest in the world.

RREEF, a real estate arm of Deutsche Bank, said in a recent report that
the gross profit margin of China's residential buildings could be as high
as 20 to 30 percent, which could beat that of the US in the future.

"Expecting continued appreciation of the renminbi, foreign capital is
flowing into second-tier cities such as Tianjin, Hangzhou, Chengdu,
Shenyang and Chongqing," the central bank said in a report on July 31.

Some industry insiders put the amount of foreign capital swirling in
China's second-tier cities at over 100 billion yuan.

(For more biz stories, please visit Industry Updates)

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Learn Mandarin online - China to issue 600b yuan special T-bonds

? ?

BIZCHINA / News

China to issue 600b yuan special T-bonds

By Shangguan Zhoudong (Chinadaily.com.cn)
Updated: 2007-08-15 09:31

China is planning to issue an initial tranche of 600 billion yuan in
special treasury bonds, the China Business News reported today.

The expected issuance is part of 1.55 trillion yuan in special T-bonds
sought to finance a new investment company that will help diversify the
country's huge foreign exchange holdings.

The bonds are to be issued in three tranches, with the second and third
tranches totaling 600 billion and 350 billion yuan respectively.

The bonds will be issued to the People's Bank of China, the central bank,
through an asset swap, which will increase the central bank's T-bonds
holdings.

Related readings:
?People's Bank of China buys stake in BG
?Forex company to officially open in September
?Special bonds have no grave impact on financial market
?First-batch special bond issue imminent

According to the report, the Agricultural Bank of China is likely to act
as a middleman in channeling the bonds from the Ministry of Finance to
the central bank.

The new investment company will formally open for business by the end of
September.

Insiders said that it's uncertain whether certain senior officials will
join the investment company. Candidates include Gao Xiqing, vice chairman
of the National Council for Social Security Funds, Zhang Hongli, vice
finance minister, and Su Ning, deputy central bank governor, who are
members of the preparatory team.

Officials from the Ministry of Finance said that the bond issuance won't
impact the money supply whether issued in whole or in tranches.

The central bank will use the special bonds to gradually absorb liquidity
through open market operations.

The Standing Committee of the National People's Congress, China's top
legislature, approved the massive sale of special T-bonds at the end of
June this year.

(For more biz stories, please visit Industry Updates)

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Learn Chinese online - China, Japan to co-host SMEs fair

? ?

BIZCHINA / Center

China, Japan to co-host SMEs fair

(Xinhua)
Updated: 2007-08-13 14:32

China and Japan will co-host the fourth China International Small and
Medium Enterprises Fair (CISMEF) and Japan will participate as the honor
host, organizer has said.

The fourth CISMEF will be held in Guangzhou Convention and Exhibition
Center of China's southern Guangdong Province from September 15 to
September 18, said Liu Xiaojie, director of CISMEF's Promotion Office.

Japan has confirmed reservation of 1,000 booths at the fair and about 500
Japanese companies will join the fair for trade talks, Liu said.

Companies from more than 20 countries and regions, including the United
States, the Republic of Korea (ROK) and Germany, have made reservation
for 750 booths.

About 50 Italian companies will take part in the fair and Romania will
send a delegation of 15 companies to the fair, Liu said.

The exhibition site covers 100,000 square meters with 5,000 booths.
Besides demonstrating products and technologies, the fair will hold
forums and training sessions for small and medium enterprises (SMEs).

CISMEF serves as an annual event held by Chinese government from 2004 for
deeper cooperation between overseas and domestic SMEs so as to promote
faster and better development.

France co-sponsored the second CISMEF and Italy co-sponsored the third.
Sino-Japan Small and Medium Enterprises Fair will be held at the same
time with the fourth CISMEF.

(For more biz stories, please visit Industry Updates)

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Learn mandarin - Time to restructure the CPI

? ?

BIZCHINA / Weekly Roundup

Time to restructure the CPI

By Yi Xianrong (China Daily)
Updated: 2007-08-10 13:22

Moreover, profound changes have taken place in the country's economic
set-up and climate over the last three decades. In this context, the CPI
draw-up trails new developments - and its accuracy is questionable.

The current CPI calculation is based on the calculation system of the
national economy in 1993. This explains why spending on education,
healthcare, housing, communications and transportation, which constitute
very large portions of Chinese consumers' expenses, fail to be fully
reflected in CPI.

A CPI that is unable to accurately mirror people's consumption,
therefore, offers an inaccurate interpretation of the country's economic
life and is also prone to leading the government, enterprises and
ordinary households to erroneous decisions.

Related readings:
?Analysts say CPI may hit 5 percent
?Economists: 4% CPI rise still healthy
?Central bank warns of inflation risks
?Asset prices may keep rising in 2nd half
?Lending in decline on tightened control
?Central bank vows to prevent overheating

This writer believes many domestic economic problems have their roots in
the low-interest policy. This finds expression in a number of phenomena.

First, the banks' interest rate is lower than that of the
non-governmental credit market.

Second, the interest-rate level of the country is very much disengaged
from the nominal GDP growth.

Third, the United States and China both started raising interest rates in
2004, with the Fed having increased the interest rate 17 times so far,
but the People's Bank of China having raised the rate merely five and a
half times. This should be considered against the fact that the Chinese
economy is growing several times faster than the US economy.

Fourth, the domestic banks' interest-rate level is widely dislocated from
the high investment-return rate. Chinese enterprises' profits rate, for
example, currently stands as high as 20 percent, thanks to the booming
Chinese economy, and the real estate sector sees particularly higher
profits rate.

In view of all this, a conclusion can be drawn: It is simply impossible
to have various kinds of distorted economic behaviors corrected if the
current low-interest policy remains unchanged.

The modern-day central-bank working mechanism emphasizes foresightedness,
rather than merely working out monetary policies according to the latest
economic data. And the data for reference should not be exclusively
confined to CPI and they should also include fluctuations of assets'
prices. Moreover, some economic data is disconnected from the economic
reality.

In short, it is high time that the nation's CPI system be restructured.
It can be said that the end of the old CPI system means the end of high
growth speed and low inflation.

(For more biz stories, please visit Industry Updates)

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Wednesday, December 26, 2007

Chinese language - More foreign firms can sell yuan bonds

? ?

BIZCHINA / Center

More foreign firms can sell yuan bonds

By Xin Zhiming (China Daily)
Updated: 2007-08-10 08:45

The government will allow more foreign institutions to sell
yuan-denominated bonds in the country and buy foreign exchange with the
proceeds to remit the money overseas, Deng Xianhong, deputy head of the
State Administration of Foreign Exchange, said yesterday.

China permitted foreign institutions to issue yuan bonds in the country
in 2005. Two international financial institutions, the Asian Development
Bank and the International Finance Corp, have got the green light to do
so but have been told it's mandatory to spend the money in China.

The new move will not only quench the capital thirst of some foreign
institutions in China, but also help reduce the country's
balance-of-payment surplus, and thus ease the pressure on the government
to revaluate the yuan, analysts said.

Related readings:
?Trade surplus up 84% in 1st half, growth set to slow
?Boost home demand to curb surplus
?M&As face security scrutiny
?Hot money: Over $100 billion in 1st half
?JP Morgan: QDII to reach US$90b next year
?Rules changed to woo long-term QFII funds

Some foreign banking institutions need to extend yuan-denominated loans,
but they are weak in absorbing yuan deposits, said professor of finance
in Renmin University of China Zhao Xijun. "The new move will add to their
source of yuan capital."

China slashed quotas for short-term overseas borrowings both by domestic
and foreign financial institutions in March. Foreign banks and
non-banking financial institutions can borrow from overseas up to only 60
percent of the 2006 level by the end of next March, increasing their
thirst for the Chinese currency if they are do renminbi business.

The move will also help reduce China's capital account surplus, Zhao
said. The surplus was $10 billion last year, which, coupled with the
country's whopping current account surplus, constitutes the pressure on
the government to revaluate the yuan and rein in liquidity in the market.

The measure is similar to China's qualified domestic institutional
investor (QDII) scheme, he said, which was launched last April to allow
domestic institutions to channel client funds overseas.

The scope of qualified institutions was expanded with the authorities
recently allowing banks, brokers, insurers and asset management companies
to invest in overseas equities using client money.

Initially, Zhao said, the yuan bonds issued by foreign institutions would
be small. But in the long run, they could become sizable to have a
substantial impact on the market. "The process should be gradual to avoid
risks and shocks."

Some financial institutions with adequate capital and high ratings will
be selected first and later other non-financial institutions will be
allowed, he said.

During the Asian financial crisis a decade ago, some foreign institutions
in Hong Kong had issued bonds to pool in the HK dollar before joining
hands with international speculators to dump the currency to attack the
financial market of the island.

"It is a lesson we should learn from," Zhao said.

(For more biz stories, please visit Industry Updates)

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Learn Mandarin online - Regional barriers embarrass medical insurance

? ?

BIZCHINA / Biz Life

Regional barriers embarrass medical insurance

By Shangguan Zhoudong (chinadaily.com.cn)
Updated: 2007-08-08 11:47

Jiangsu's Mr Xu, a cerebral thrombosis sufferer, lives in his son's home
in Beijing, but he must pay medical expenses himself because his medical
insurance in Jiangsu is unavailable in the capital city.

Xu tried to transfer his medical insurance from Jiangsu to Beijing, but
the local medical insurance authority rejected his requirements as no
regulations to abide by. Eventually he had to return back to Jiangsu.

Statistics show that by the end of 2005, there were close to 144 million
people over the age of 60 in China, accounting for 11 percent of the
entire population.

Some of them want to live with children in other provinces but they must
face the embarrassment of life without medical insurance.

At present, about 6 percent of wages of employers and 2 percent of
personal wages are required to be paid with medical insurance premiums.
Part of the insurance premiums from employing units goes into the mutual
assistance program, and the rest goes to the employees' personal
accounts. The personal insurance premiums go entirely to personal
accounts.

The mutual assistance funds and personal accounts are used to pay for
different types of medical costs.

But the medical insurance system is limited by cities. Considering local
interests, some local governments are unwilling to cover retired
immigrant workers' medical expenses, according to Han Keqing, associate
professor of Social Security Research Center of China under the Renmin
University of China.

Zheng Bingwen, head of the Institute of Latin American Studies under the
Chinese Academy of Social Science, said imbalanced economic development
in China results in situations in which some developed regions are
unwilling to accept retired workers from other places.

Some insiders and experts suggested the establishment of a nation-level
medical insurance solution, but Zheng said the time is not ripe to
establish a national medical insurance system due to the economic
imbalance among different regions.

(For more biz stories, please visit Industry Updates)

Learn Chinese, Chinese School

Chinese Online Class - Asset prices may keep rising in 2nd half

? ?

BIZCHINA / News

Asset prices may keep rising in 2nd half

By Du Xiaoli (Chinadaily.com.cn)
Updated: 2007-08-07 08:52

China's asset prices are likely to continue rising in the second half,
said Fan Jianping, director of the economic prediction department under
the State Information Center, at a forum on financial investment.

Although the stock market will not surge as much as it did in the first
half of the year, it may reach continuously new records and accumulate
increasing risk. Economic growth in the second half is predicted to be
slightly lower than the first half as the GDP growth reaches 11.3 percent
for all of 2007.

China's current price hike is not cost-push inflation due to rising wages
and the country should attach greater significance to the difficult
problem of inflation in the form of asset price bubbles, said Fan. Real
estate prices will probably also keep increasing in the second half, he
said.

Related readings:
?Property investment up 28.5% in 1st half
?Beijing average housing prices up 1,000 yuan since May
?New fund investors outnumber stock investors
?Top leadership warns on overheated economy

Fan believes the trend toward overheating is more obvious and that this
year's economic growth will be slightly higher than last year. China's
economy will still be on the climbing period in this round of economy
cycle, he said.

China's CPI growth will not reach 5.5 percent definitely this year, noted
Fan. "The whole year's price level will be within the controllable range
and there is no need to launch stricter price control policies."

Fixed assets investment maintained a high level in the past six years and
the growth rate of fixed assets will keep growing quickly in the second
half, according to analysis of combined factors such as loan interest
rate and return on investment.

Growth of consumption is accelerated following increased income and
improved psychological anticipation for urban and rural residents, Fan
said. It is predicted that the growth of total consumption this year will
be higher than that of last year.

Fan also predicted that growth in China's foreign trade surplus will slow
down in the second half as the effect of exchange rate and tax rebate
policies gradually emerge. Rapidly improving international
competitiveness of Chinese enterprises is an important reason for the
country's expanding foreign trade surplus.

(For more biz stories, please visit Industry Updates)

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Chinese Mandarin - China to build 179 transport hubs by 2020

? ?

BIZCHINA / Center

China to build 179 transport hubs by 2020

(chinadaily.com.cn)
Updated: 2007-08-03 14:36

In the newly released National Highway Hub Layout Plan, the Ministry of
Communications (MOC) announced China is to build 179 transport hubs in
196 cities, in part of a plan to construct a national transport system to
deal with increasing highway transport volume and related pressures.

According to the plan, the hubs will be located in regional transport
centers and form the highest level inter-provincial and international
highway network in China's transport system. The planned network would
cover 60 percent of China's population, all the four municipalities, all
the provincial capitals, and 60 percent or 137 of all the county-level
cities. Passenger and goods transportation companies are to be involved
in the network.

Related readings:
?Logistics turnover surges 25.6% in 1st half
?Big hopes for urban public transportation
?Construction of rural roads a priority
?Nation plans to build more highways in 2007

The network will run through areas that, when combined, generate 87
percent of China's GDP and include 84 percent of its open ports, 56
percent of its land border ports, and 98 percent of its national
technology development areas. It will also go through regional
distribution centers for goods and passengers.

The Yangtze River Delta, the Pearl River Delta, and Bohai Rim area are
expecting more transport hubs while West China, East China, and Central
China are welcoming strategic ones to boost regional economic development.

The network will link the main sea ports, 93 percent of main river ports,
all mid-sized and large airports, all the principal train stations, and
68 percent of first-class stations.

As the pace of urbanization quickens, people have tended to travel more,
creating demand for a transport system with highway, river way, railway,
airports, and public transports connected to one another.

MOC recently has focused on building comprehensive passenger and goods
stations, container depots, modern logistics centers, and information
service systems.

(For more biz stories, please visit Industry Updates)

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Tuesday, December 25, 2007

Learn mandarin - Officials reassure foreign investors on M&As

? ?

BIZCHINA / Center

Officials reassure foreign investors on M&As

(Xinhua)
Updated: 2007-08-02 11:25

Chinese officials have reassured overseas investors that the country
still welcomes foreign investment in the form of mergers and acquisitions
(M&As), amid domestic worries that they may threaten national economic
security.

The message was sent by a string of positive comments on foreign M&As
made by Chinese officials.

Chinese businesses should neither demonize nor make light of foreign
mergers and acquisitions in a globalizing economy, the People's Daily
quoted Liao Xiaoqi, vice minister of commerce (MOC), as saying on Tuesday.

Related readings:
?M&As face security scrutiny
?Foreigners shy of Chinese M&As
?Economy fuels M&As in China
?Foreign investment grows in support of new enterprises

Backed foreign M&As at an investment forum in Beijing two weeks ago, Liao
said, "Foreign investment in the form of mergers and acquisitions could
benefit the restructuring of state-owned enterprises as well as the
national economy."

Liao said the government would like to see the healthy development of
M&As under proper regulation and management.

Minister of Commerce Bo Xilai seemed to be optimistic about the foreign
M&As, saying they could bring new opportunities to Chinese enterprises
and China was just getting started in this field.

The MOC statistics showed that foreign mergers and acquisitions account
for only 2.5 percent of all forms of foreign direct investment in China,
while the proportion averaged 80 percent worldwide.

However, foreign M&As came under scrutiny in China as foreign companies
began to acquire major State-owned enterprises or companies with famous
brands in recent years, such as private equity firm Carlyle's attempt to
buy a 45-percent stake in Xugong Construction Machinery, the country's
largest construction equipment maker.

China's top legislature has read for the second time a draft
anti-monopoly law that requires foreign purchases of Chinese companies to
go through checks to ensure there is no negative effect on China's
national security.

(For more biz stories, please visit Industry Updates)

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Chinese School - China becomes world's 3rd largest milk producer

? ?

BIZCHINA / Center

China becomes world's 3rd largest milk producer

(CRIENGLISH.com)
Updated: 2007-07-31 16:58

?
A customer chooses milk in a supermarket in Beijing. China's milk output
in 2006 amounted to 30 million tons, making?the country?the world's third
largest milk producer, following India and America. [newsphoto]

China's milk output in 2006 amounted to 30 million tons, making?the
country?the world's third largest milk producer, following India and
America, Xinhua News Agency reported on its website.

Driven by huge domestic market demand, China's milk yield has increased
by ten times in about ten years.

In the past ten years, the average yearly increase in the rate of milk
output was 14.6 percent. Especially since 2000, the rate reached 23
percent. The milk yield of 2005 totaled 27.5 million tons.

Related readings:
?Dairy producers cancel discounts as costs rise
?Nestle inaugurated new milk product factory
?Yili plans investment in milk powder
?Bright to raise milk output
?Light Industry: Per capita milk hits 21.7 litres

Due to the rapidly developing economy, improved living standards and
changed dietary habits, the production, supply, and sales of China's
dairy products have rapidly increased accordingly, said Pan Beilei,
president of the China State Commission of the International Dairy
Federation?at the opening ceremony of the first International Milk
Industry Festival, held in Inner Mongolia Autonomous Region.

Presently, the yearly increase in the volume of China's milk output
occupies 50 percent?of the world's total increasing volume. China has
become a huge market in the global dairy industry.

Though China's dairy industry is developing fast, there is still a large
gap, compared with the world's largest dairy powers. In 2006, the world's
milk output was 0.644 billion tons and the per capita volume was 100
kilograms. Meanwhile, China's per capita volume only equaled a quarter of
the world's average output.

(For more biz stories, please visit Industry Updates)

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Learn mandarin - CPI to rise?4.5% in 3Q, rate hike likely

? ?

BIZCHINA / News

CPI to rise?4.5% in 3Q, rate hike likely

(Chinadaily.com.cn)
Updated: 2007-07-30 12:45

Thirteen institutions predicated yesterday that China's consumer price
index (CPI) in the third quarter would rise a record high of 4.5 percent
and the central bank would increase the interest rate again in the
quarter, the Beijing Morning Post reported today.

The 13 research bodies include Peking University's China Center for
Economic Research, Citigroup and the State Information Center.

At an economic forum yesterday, Song Guoqing, an economist with the
Peking University's research center, expressed his opinion that the
economy is overheated.

Song's judgment is different from the official opinion that "China's
economy is operating properly." He said that the official judgment was
due to moderate levels of fixed asset investment, but if other factors
such as the trade surplus were taken into account, the growth of
investment would be higher.

Another interest rate hike is necessary to curb the overheated economy
and restrain inflation, scholars and experts said at the forum.

The 13 institutions also estimated that the nation's gross domestic
product (GDP) will see an increase of 11.8 percent year on year in the
third quarter this year.

But Song disagreed and said the GDP would grow 12.6 percent in the third
quarter.

Statistics show that China's CPI rose 4.4 percent in June compared with a
year ago, a 28-month high, while the GDP expanded 11.5 percent in the
first half of this year.

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Chinesepod - Tourism: Beijing hosts nearly 2m overseas tourists in 1st half

? ?

BIZCHINA / Biz Media Digest

Tourism: Beijing hosts nearly 2m overseas tourists in 1st half

(Xinhua)
Updated: 2007-07-27 11:41

The number of overseas tourists who visited Beijing in the first half of
the year rose 11 percent on last year to 1.97 million, the municipal
statistics bureau said on Thursday.

The capital hosted 1.7 million foreign tourists in the first six months,
up 11.9 from the same period last year, the bureau said.

Japan, the United States and the Republic of Korea are currently the top
three sources of the city's foreign tourists.

Beijing also hosted 260,000 tourists from Hong Kong, Macao and Taiwan, an
increase of 5.6 percent.

Tourism has boomed in Beijing in recent years as the 2008 Olympic Games
approaches. Last year, it hosted 3.9 million overseas tourists, up 7.5
percent from 2005, according to the Beijing Tourism Bureau.

(For more biz stories, please visit Industry Updates)

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Learn mandarin - In economics, there's no such thing as a free lunch

? ?

BIZCHINA / Weekly Roundup

In economics, there's no such thing as a free lunch

By Edward Krowitz (China Daily)
Updated: 2007-07-25 16:26

The author Edward Krowitz is a retired US foreign service economist and
former consultant to financial institutions

In the fantasyland of my wasted youth, dreams of sudden fortune and
unheard of good luck spilled out, one upon another - a lottery jackpot
worth millions; unheard of happiness and wealth; the goddesses and gods
of serendipity ruled this dreamland. Into this bubble a tiny gnomic
figure burst.

An economist named Milton Friedman insisted to everyone's derisive
hooting that there was no free lunch. One could not get something for
nothing.

This insight was not evident to everyone. On the blackboards of some
academic economists, periods of sharp increases in prices seemed to go
together with higher output and lower unemployment. Especially in the
post World War II era, increases in the price level were associated with
increases in real output, which in turn seemed to lead to lower
unemployment levels - the so-called Phillips curve.

For a few years, this became the fashion until the run-away inflation of
in the late 1960s and early 70s intervened and the logic of Friedman's
argument became evident. Attempts to trade off lower unemployment for
higher inflation consistently led to an accelerating rise in prices over
time. Increases in employment and output that did occur were soon eaten
up by price increases. These factors combined with public expectations of
further inflation made for an unstable economy that tumbled into boom and
bust cycles of "stop and go". Ben Bernanke, the US Federal Reserve
chairman summed up the experience nicely when he observed that policies
based on the notion that inflation can promote employment growth have led
to very bad outcomes whenever they have been applied.

Acceptance of the limits imposed by a non-accelerating inflation rate of
unemployment for the economy came to be widely accepted. Pushing for a
faster growth than could be accommodated only led to cyclical instability.

Yet a hardcore band of true believers in the Phillip's curve persists,
led by a cheerleading squad of spokesmen for Western financial interests
in China. They make periodic appearances in the pages of the China Daily
("we have a goldilocks economy, neither too hot nor too cold, but growing
just right" 20 June 2007, p.10, but also refuted in editorials).

Their fantasies of a no-fault, no-cost inflation, discredited and
rejected on their home turf have flourished in the heady sybaritic
lifestyle of the roaring Asian tigers. Blissfully unaware of the
tragedies of hyperinflation littering Chinese economic history, this
fantasy continues to be peddled to the unwary.

The enthusiasts insist additional investments, spurring additional
economic activity in excess of the economy's potential capacity can cure
poverty by putting the unemployed to work. They seem not to notice the
most obvious signs of natural limits to sudden growth, that increasing
production and supplies cannot instantaneously expand to meet demand but
often proceed at an irritatingly slow pace in overcoming structural
obstacles, such as an untrained labor force, transport and material
bottlenecks, and the financial counterparts mirrored in asset price
inflation in the real estate and stock markets, the increases in banks'
excess reserves and the siphoning of savings into speculative outcomes.
While churning economic activity might generate profits for some
businesses, it is bad for staying on a stable growth path for the country.

Most fairy tales are contrived to end happily. But even for the
delusional there is no free lunch. In the world outside of make believe,
realism is the final end state, realized it is to be hoped before the
fall rather than after a bust.

(For more biz stories, please visit Industry Updates)

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Monday, December 24, 2007

Learn Mandarin online - Jiangsu Cuisine

CHINA / About Jiangsu

Jiangsu Cuisine
(chinadaily.com.cn)
Updated: 2006-05-25 13:11

Jiangsu cuisine, also known as Su Cai for short, is one of the major
components of Chinese cuisine, and consists of the styles of Yangzhou,
Nanjing, Suzhou and Zhenjiang dishes. It is very famous in the whole
world for its distinctive style and taste. It is especially popular in
the lower reach of the Yangtze River.

Known as "a land of fish and rice" in China, Jiangsu Province has a rich
variety of ingredients available for cooking. Jiangsu cuisine has the
characteristics of strictly selected ingredients, exquisite workmanship,
elegant shape, and rich culture trait. The typical raw materials are
fresh and live aquatic products. It highlights the freshness of
ingredients. Other cooking ingredients are often carefully selected tea
leaves, bamboo shoots, mushrooms, pears, and dates. Its carving
techniques are delicate, of which the melon carving technique is
especially well known. Due to using the methods of stewing, braising,
quick-frying, warming-up, stir-frying, wine sauce pickling and adding
some sugar as condiments, Jiangsu dishes taste fresh, light and mellow.

Jiangsu dishes can be classified into that of Suzhou-Wuxi style and
Zhenjiang-Yangzhou style. The feature of Suzhou-style dishes is their
natural flavor in original stock and a mixture of salty and sweet taste.
The characteristics of Zhenjiang-Yangzhou style food are best described
by the saying that "the soup is so clear that you can see the bottom of
the bowl and the sauce is so thick that it turns creamy white".

Typical courses of Jiangsu cuisine are Jinling salted dried duck
(Nanjing's most famous dish), crystal meat (pork heals in a bright, brown
sauce), clear crab shell meatballs (pork meatballs in crab shell powder,
fatty, yet fresh), Yangzhou steamed Jerky strips (dried tofu, chicken,
ham and pea leaves), triple combo duck, dried duck, and Farewell My
Concubine (soft-shelled turtle stewed with many other ingredients such as
chicken, mushrooms and wine).

Learn Mandarin online - Tax only raises cost of housing

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BIZCHINA / Opinion

Tax only raises cost of housing

(China Daily)
Updated: 2007-07-23 08:57

The burden of the new tax on sales of previously owned houses will only
be shifted to buyers while continuing to push up housing prices, says an
article in Guangzhou Daily. The following is an excerpt:

Starting from the middle of this month, Shanghai began to impose a land
appreciation tax on the trade of previously owned houses that are less
than five years.

The move represents the Shanghai municipal government's latest attempt to
cool down the red-hot real estate market. It follows last year's
collection of a business tax and individual income tax. Combined, these
taxes account for nearly 10 percent of the cost of a secondhand home in
Shanghai.

The government's intentions are clear enough: It is looking to rein in
speculative activities in the property market by raising the costs of
making property deals.

The trouble is that housing prices will continue to go up since demand
exceeds supply. Further taxing sales of previously owned houses will do
little to cool the market because the extra costs will only be shifted to
buyers.

According to reports, the demand to supply ratio in Shanghai is 0.7:1,
which puts the seller in a relatively strong negotiating position. The
sellers of previously owned houses in Shanghai usually shift the burden
of higher taxes directly to buyers.

In fact, the failure of this attempt at macro control is exemplary of the
country's disorderly property market. The property market is now staging
a drama: "The more controls, the higher housing prices."

We should not only be thinking about tax policy, but also about macro
controlling measures in general. Though the government's intentions are
good, the direct result of the previous two rounds of new macro control
measures has been a decrease in the overall supply of housing, which has
exacerbated the gap between supply and demand. Housing prices will
definitely rise.

(For more biz stories, please visit Industry Updates)

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Learn Chinese - Regulator calls for stronger HK-Shanghai financial links

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BIZCHINA / News

Regulator calls for stronger HK-Shanghai financial links

(Shanghai Daily)
Updated: 2007-07-20 08:57

Shanghai and Hong Kong should seek more cooperation in capital markets to
build up the two cities' international financial-hub status, a senior
Hong Kong financial regulator said yesterday.

"More trials on the stock markets are expected to be made to strengthen
the link between the two sides," said Julia Leung, executive director
(external) of the Hong Kong Monetary Authority at a financial forum held
in Shanghai.

The expansion of the qualified domestic institutional investors(QDII) and
qualified foreign institutional investors(QFII) schemes will become one
of the channels to spur a closer relationship, she said.

Allowing individual investors to put money into Hong Kong's stock market
through banks' QDII programs will help mainland retail investors enjoy
the growth in Hong Kong and help trim the mainland's excess liquidity,
according to Leung,

Letting stock-portfolio products based on Hong Kong equities be traded on
the Shanghai Stock Exchange can be another aspect in the trial, she said,
without elaborating.

As capital can't flow freely between the Hong Kong and Shanghai bourses,
companies with dual listings have recently seen their stock prices differ
greatly in the two markets due to a sizzling rally on the mainland side.

At present 35 companies are listed both in Shanghai and Hong Kong, among
which 14 counters have yuan-backed A shares trading at least at a
50-percent premium to their Hong Kong-traded H shares.

Chinese mainland authorities have allowed banks, funds and brokerages to
pool investors' funds to invest in Hong Kong shares this year via the
so-called QDII scheme.

(For more biz stories, please visit Industry Updates)

Related Stories ?

� Shanghai leads Hong Kong in dual shares
===========================================================================
� CDB to sell first-ever RMB bonds in Hong Kong
===========================================================================
� Mainland and Hong Kong bourses track joint path for equities growth
===========================================================================

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Learn Mandarin online - Finance: New bank boss seen as push to hub drive

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BIZCHINA / Biz Media Digest

Finance: New bank boss seen as push to hub drive

By Chen Weihua (China Daily)
Updated: 2007-07-18 15:55

The appointment of Su Ning as new head of the central bank's Shanghai
headquarters has increased speculation about Shanghai's slowly
progressing program to establish itself as an international financial
center, according to local analysts.

Su, deputy governor of the People's Bank of China, the country's central
bank, was appointed to the new job last week, replacing Xiang Junbo, who
has taken a new position as head of the Agricultural Bank of China.

At a meeting after his appointment, Su pledged to push forward the
Shanghai international financial center program and elevate the Shanghai
headquarters to a higher level.

Sixty-year-old Su, known for his expertise in monetary policy, is still
expected to spend most of his time in Beijing.

He is 10 years older than his predecessor Xiang and is even one year
older than his boss, central bank governor Zhou Xiaochuan.

Su became central bank deputy governor in December 2003 after four years
as the deputy head of the budget committee of the National People's
Congress, the national legislature.

Su began his career in public service in 1982 at the age of 35, when he
joined the State Planning Commission, as it was then called.

Su became well known at the planning commission's economic forecast
center by proposing to build power plants near coal mines in Shanxi
Province to generate and transmit electricity to other provinces instead
of transporting coal.

While Su vows to fuel Shanghai's efforts to develop as an international
financial center, analysts believe that the city still has a long way to
go to achieve the goal.

(For more biz stories, please visit Industry Updates)

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Sunday, December 23, 2007

Chinese language - NDRC: Textiles profits to drop in 2nd half

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BIZCHINA / Impacts

NDRC: Textiles profits to drop in 2nd half

By Tu Lei (www.chinadaily.com.cn)
Updated: 2007-07-17 12:00

The textile industry?profit will likely fall by 4.8 billion yuan
(US$633.91 million) in the second half of this year, with the profit
margin down by 0.26 percent, said the National Development and Reform
Commission (NDRC) yesterday.

The growth rate of textile exports will slow down as the tax rebate is to
be reduced to 11 percent from 13 percent from September 15 of 2007.

In a textile industry report released by NDRC yesterday, the expected
growth rate of textiles export in 2007 is 16 percent year on year, lower
than the 25 percent growth rate in 2006, although the export value in
2007 is still expected to reach US$165 billion.

Yu Housheng, assistant general manager from Beijing Topnew Import &
Export Co Ltd, said the prediction from NDRC is not accurate because the
impact of the tax rebate cut on the textile industry will be beyond 0.26
percent.

Yu said orders from the first half will be exported in the second half
with lower prices, and since July firms have increased prices to offset
the cost resulted from the tax rebate cut.

Customs figures show the textile industry exported US$57.37 billion in
the first five months of this year, up 15.55 percent year on year, and
the increase rate saw a nearly 9 percent drop year on year, lower than
the 12.25 percent of the nation's export growth rate.

The textile industry is a major contributor to China's large trade
surplus. The country had a US$129.2 billion trade surplus last year,
accounting for 71 percent of the nation's total.

In the first quarter of 2007, the textile industry's trade surplus
reached US$27.28 billion, accounting for nearly 60 percent of the
country's total in this period.

(For more biz stories, please visit Industry Updates)

Chinese language

Learn Chinese - Majority says 'no' to buying property now

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BIZCHINA / Center

Majority says 'no' to buying property now

By Liu Jie (China Daily)
Updated: 2007-07-13 09:30

As property prices in China continue to increase despite government
measures to cool the market, the majority of respondents to a recent
China Daily survey said they will not buy houses amid spiraling prices.

The recent survey by the website www.chinadaily.com.cn showed that 685,
or 54.17 percent of the 1,266 respondents, said they would not purchase
property now, while 373 or 29.46 percent indicated they still want to
buy. The rest gave no comment.

Property prices in China's 70 large- and medium-sized cities jumped by
6.4 percent year-on-year in May, faster than the 5.4 percent growth in
April, despite government efforts to rein in the overheated sector.

Five cities saw a double-digit growth in prices for new homes. Shenzhen
led the pack with a 12.3 percent hike, while Beijing witnessed a 10.3
percent increase.

The majority of people choosing to not buy houses currently said they
simply could not afford the high prices.

"The price is unreasonable," said one respondent living in Beijing. "The
monthly salaries for my wife and I are around 10,000 yuan together, and
the average prices for commercial apartments on the Fourth Ring Road has
exceeded our total income."

Some said they believe that there is a bubble in the Chinese real estate
market and have adopted a wait-and-see attitude.

"I firmly believe the property bubble will be burst in two to three
years. After housing prices slump to a reasonable level, I will consider
getting my own house," one respondent said.

The reasons for people to select "no" in the survey seemed similar, while
causes for "yes" answers were more diverse.

Some of those willing to buy suggested that home values are increasing
faster than annual salaries.

"Why not buy now and increase your wealth?" asked one.

Another respondent felt lucky to buy an apartment years ago and be able
to witness prices climbing every year.

"I think buying a house as soon as possible is better - if I have the
money I will buy now of course," the respondent said.

Another participant agreed, noting that China has a large population with
limited land resources, so the conflict between land supply and
development will inevitably intensify and housing prices will certainly
increase further.

Some others chose to buy for personal reasons like marriage and
immigration.

An American respondent said that he married a woman in Dalian and would
like to settle down in China. "I am going to buy a flat in Dalian for my
new family, though it is too much money," he said.

Some respondents said they have invested in property due to recent
volatility in China's stock market, as real estate is seen as a more
stable investment channel.

Other respondents noted that current soaring property prices prevent
people who really need apartments from purchasing them.

(For more biz stories, please visit Industry Updates)

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Chinese language - Textile exports up 17% in 1st half

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BIZCHINA / Impacts

Textile exports up 17% in 1st half

By Song Hongmei (chinadaily.com.cn)
Updated: 2007-07-11 15:55

China's exports of textiles, garments, and long chemical fibers surged
17.44 percent year-on-year to US$73.53 billion in the first six months of
this year, adding to the country's trade surplus, according to Chinese
Customs statistics.

From January to June, exports of textiles including yarns and fabrics
rose 9.8 percent to US$25.22 billion while exports of garments rose 21.7
percent to US$48.31 billion.

In June, China's exports of textiles and garments surged 24.5 percent
from a year earlier to US$16.2 billion, including US$4.9 billion worth of
textiles and US$11.61 billion worth of garments.

The textile industry is a major contributor to China's big trade surplus.
The?industry saw a US$50 billion trade surplus between January and May,
while the country's trade surplus totaled US$112.53 billion in the first
half of this year.

The huge surplus has aggravated problems such as trade conflicts with
other countries, many of which pressure China to revalue the renminbi. It
has also created excessive liquidity at home, said the Ministry of
Finance in a statement, announcing the government's decisions on tariff
rebate adjustment.

China decided in recent months to do away with tax rebates for over 2,800
export items, describing them as triggering trade frictions, in a further
move to reduce the mounting trade surplus and adjust the export mix.

Rebates for textiles and garments were lowered to 11 percent from 13
percent from July 1.

To reduce losses due to the tax rebate cut, textiles and garments
enterprises rushed exports out the doors, bringing the industry's export
value to US$16.2 billion in June, an increase of 24.5 percent.

"China's textile industry will maintain a growing momentum in the second
half of this year, but it will taper off gradually," said Fan Min,
president of Webtextiles.com, "Tax rebate cut and rising labor and
material costs will propel the industry's export mix adjustment."

Fan expected exports of textiles to grow by 10 to 12 percent in the
second half of this year, and 10 to 15 percent over the whole year.

The export mix will be optimized, and quality and added value of exports
will be improved in the second half of this year, he said, adding that
"China's textile industry should not only focus on exports in quantity
but also in structure optimization and quality."

(For more biz stories, please visit Industry Updates)

Chinese language

Chinesepod - Listed companies must disclose securities investments

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BIZCHINA / Rules & Regulations

Listed companies must disclose securities investments

By Shangguan Zhoudong (Chinadaily.com.cn)
Updated: 2007-07-03 08:25

Listed companies must disclose their information on stocks they hold in
other listed companies and stakes they have in non-listed financial
companies and companies planning to go public, according to circulars
issued by theShanghai Stock Exchange(SSE) andShenzhen Stock
Exchangeyesterday.

The two exchanges also announced yesterday a timetable for the disclosure
of listed companies' interim reports of 2007.

Special coverage:
Markets Watch
Red Chips Return

Related readings:
?Regulator to focus on listed firms' management
?CSRC to launch new rules on securities credit rating
?New division set up to supervise listed firms
?QDII expanded to include securities, fund companies

As for companies that went public before June 30 of this year, their
interim reports should be announced as of August 31 this year, according
to the circulars.

If listed companies are unable to complete the disclosure before August
31, they should submit written statements to their exchanges to explain
the reason for delay and the deadline.

The two stock exchanges will stop trading stocks for those listed
companies which fail to announce their interim results by September 1;
they will resume trading once they make their reports.

If listed companies' first-half-year results are given away before the
release of their interim reports, or the trading of their stocks and
other derivatives fluctuate abnormally due to rumors on performance, they
must disclose the relevant accounting information.

SSE will allow a maximum of 50 listed companies to announce their interim
reports per day, and the Shenzhen Stock Exchange will arrange 30
companies at most to announce their half-year results daily.

The Shenzhen exchange ordered that senior executives of listed companies
be not allowed to trade their companies' stocks during the information
disclosure period. The exchange also encourage companies that are listed
on its small- and medium-sized enterprises board and plan to disclose
their interim results in August to make the disclosure before the end of
July.

(For more biz stories, please visit Industry Updates)

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